Internal Revenue Bulletin 2019-35 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2019–35
August 26, 2019
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
REV. PROC. 2019-34, page 669.
Rev. Proc. 2019-34 provides simplified procedures for an in-
surance company to obtain automatic consent to change its
methods of accounting for life insurance reserves, amounts
under § 807(c)(3), and specified policy acquisition expenses
under § 848, as applicable, to comply with §§ 807 and 848,
as amended by sections 13517 and 13519 of the Tax Cuts
and Jobs Act, for the first taxable year beginning after De-
cember 31, 2017.
ESTATE TAX
REV RUL 2019-18, page 668.
The 2019 interest rates to be used in computing the special
use value of farm real property for which an election is made
under section 2032A of the Code are listed for estate of
decedents.
Finding Lists begin on page ii.

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Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
August 26, 2019 Bulletin No. 2019–35

Part I.
Section 2032A.—
Valuation of Certain Farm,
etc., Real Property
26 CFR 20.2032A-4: Method of valuing farm real
property.
Rev. Rul. 2019-18
This revenue ruling contains a list of
the average annual effective interest rates
on new loans under the Farm Credit Sys-
tem. This revenue ruling also contains a
list of the states within each Farm Credit
System Bank Territory.
Under § 2032A(e)(7)(A)(ii) of the In-
ternal Revenue Code, rates on new Farm
Credit System Bank loans are used in
computing the special use value of real
property used as a farm for which an elec-
tion is made under § 2032A. The rates in
Table 1 of this revenue ruling may be used
by estates that value farmland under §
2032A as of a date in 2019.
Average annual effective interest rates,
calculated in accordance with
§ 2032A(e)(7)(A) and § 20.2032A-4(e)
of the Estate Tax Regulations, to be used
under § 2032A(e)(7)(A)(ii), are set forth
in the accompanying Table of Interest
Rates (Table 1). The states within each
Farm Credit System Bank Territory are
set forth in the accompanying Table of
Farm Credit System Bank Territories
(Table 2).
Rev. Rul. 81-170, 1981-1 C.B. 454, con-
tains an illustrative computation of an aver-
age annual effective interest rate. The rates
applicable for valuation in 2018 are in Rev.
Rul. 2018-22, 2018-34 I.R.B. 308. For rate
information for years prior to 2018, see Rev.
Rul. 2017-16, 2017-35 I.R.B. 215, and other
revenue rulings that are referenced therein.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Lane Damazo of the Office of the
Associate Chief Counsel (Passthroughs
and Special Industries). For further infor-
mation regarding this revenue ruling, con-
tact Lane Damazo at (202) 317-4628 (not
a toll-free number).
REV. RUL. 2019-18 TABLE 1
TABLE OF INTEREST RATES
Year of Valuation 2019)
Farm Credit System Bank Servicing State in
Which Property is Located Rate
AgFirst, FCB ......................... 5.27
AgriBank, FCB ......................... 4.68
CoBank, ACB .......................... 4.37
Texas, FCB ........................... 5.00
REV. RUL. 2019-18 TABLE 2
TABLE OF FARM CREDIT SYSTEM BANK TERRITORIES
Farm Credit System BankLocation of Property
AgFirst, FCB................ Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, Pennsylvania,
South Carolina, Virginia, West Virginia.
AgriBank, FCB............... Arkansas, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North
Dakota, Ohio, South Dakota, Tennessee, Wisconsin, Wyoming.
CoBank, ACB................Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Idaho, Kansas, Maine, Massachu-
setts, Montana, New Hampshire, New Jersey, New Mexico, New York, Nevada, Oklahoma,
Oregon, Rhode Island, Utah, Vermont, Washington.
Texas, FCB................Alabama, Louisiana, Mississippi, Texas.
August 26, 2019 668 Bulletin No. 2019–35

Part III.
26 CFR 601.204: Changes in accounting periods
and in methods of accounting.
(Also: Part I, Sections 446, 807, 848.)
Rev. Proc. 2019-34
SECTION 1. PURPOSE
This revenue procedure provides sim-
plified procedures under § 446 of the Inter-
nal Revenue Code and § 1.446-1(e) of the
Income Tax Regulations for an insurance
company to obtain the automatic consent
of the Commissioner of Internal Revenue
(Commissioner) to change its methods of
accounting to comply with amendments
to §§ 807 and 848 made by Pub. L. No.
115-97 (131 Stat. 2054, 2144, 2148), com-
monly referred to as the Tax Cuts and Jobs
Act (TCJA), for the first taxable year be-
ginning after December 31, 2017. Except
as provided in sections 3.02 and 10 of this
revenue procedure, these simplified pro-
cedures are the exclusive procedures for
an insurance company within the scope
of section 3 of this revenue procedure to
obtain the consent of the Commissioner to
change a method of accounting described
in this revenue procedure.
This revenue procedure generally is
consistent with the simplified procedures
provided in Rev. Proc. 2019-30, 2019-
33 I.R.B. 638, for an insurance company
to obtain the automatic consent of the
Commissioner to change its method of
accounting for discounting unpaid losses
and expenses unpaid, estimated salvage
recoverable, and unearned premiums at-
tributable to title insurance to comply with
§ 846 as amended by the TCJA. This reve-
nue procedure is, however, only available
for one taxable year. As a result, the tim-
ing of the issuance of this revenue proce-
dure may pose challenges to an insurance
company that has already prepared its tax
return for the first taxable year beginning
after December 31, 2017, and this revenue
procedure provides accommodations for
such an insurance company.
SECTION 2. BACKGROUND
.01 Life Insurance Reserves.
(1) Section 801(a) imposes a tax on the
life insurance company taxable income
of a life insurance company. For purpos-
es of computing life insurance company
taxable income, §§ 803(a)(2) and 807(a)
include in gross income a decrease over
the taxable year in reserves described in
§ 807(c). Sections 805(a)(2) and 807(b)
permit a deduction for an increase over the
taxable year in such reserves. Life insur-
ance reserves are described in § 807(c)(1).
(2) Section 831(a) imposes a tax on
the taxable income of a non-life (property
and casualty) insurance company. For pur-
poses of computing taxable income of a
property and casualty company, § 832(b)
(4) provides that an increase in life insur-
ance reserves over the taxable year reduc-
es premiums earned and a decrease in life
insurance reserves over the taxable year
increases premiums earned.
(3) In general, the amount of life insur-
ance reserves is required to be computed
as provided in § 807(d). Section 13517 of
the TCJA amended § 807(d) to provide a
new method for computing the amount of
life insurance reserves, effective for tax-
able years beginning after December 31,
2017.
(4) A transition rule in section 13517(c)
(2) of the TCJA provides that for the first
taxable year beginning after December
31, 2017, the reserve with respect to any
contract (as determined under § 807(d))
at the end of the preceding taxable year
is determined as if the amendments made
by section 13517 of the TCJA had applied
to such reserve in such preceding taxable
year.
(5) Section 13517(c)(3) of the TCJA
provides a transition relief rule that re-
quires an insurance company to take into
account the difference between (a) the
amount of life insurance reserves with
respect to any contract as of the close of
the taxable year preceding the first taxable
year beginning after December 31, 2017,
computed using the method prescribed
by the TCJA and (b) the amount of such
reserves computed using the method pri-
or to the amendments by the TCJA (such
difference is the TCJA Transition Adjust-
ment). The TCJA Transition Adjustment
for any contract is positive if the amount
described in clause (b) of the preceding
sentence exceeds the amount described in
clause (a) of the preceding sentence and is
negative if the amount described in clause
(a) of the preceding sentence exceeds the
amount described in clause (b) of the pre-
ceding sentence. The TCJA Transition Ad-
justment must be taken into account rat-
ably over each of the eight taxable years
following that preceding taxable year
under § 803(a)(2) or § 832(b)(1)(C), as
applicable, if income, and under § 805(a)
(2) or § 832(c)(4), as applicable, if a de-
duction.
.02 Section 807(c)(3) Reserves.
(1) Section 807(c) describes items that
a life insurance company must account for
on a reserve basis and take into account
under § 807(a) and (b). Section 807(c)
(3) describes amounts (discounted at the
appropriate rate of interest) necessary to
satisfy the obligations under insurance
and annuity contracts if the obligation
does not involve (at the time with respect
to which the computation is made) life,
accident, or health contingencies. Such
amount for any contract, however, may
not be less than the net surrender value of
such contract.
(2) Section 13517(a)(1) of the TCJA
amended § 807(c) to provide that the ap-
propriate rate of interest to discount the
amounts in § 807(c)(3) is the highest rate
or rates permitted to be used to discount
the obligations by the National Associ-
ation of Insurance Commissioners as of
the date the reserve is determined. This
amendment applies to taxable years be-
ginning after December 31, 2017.
.03 Capitalization of Specified Policy
Acquisition Expenses.
(1) Section 848 generally requires
specified policy acquisition expenses for
a taxable year to be capitalized and amor-
tized over a defined period. Specified pol-
icy acquisition expenses are calculated
as a certain percentage of net premiums
on specified insurance contracts for the
taxable year. Special rules may apply if
the specified policy acquisition expens-
es of an insurance company (determined
on a controlled group basis) are less than
$15,000,000.
(2) Section 13519 of the TCJA amend-
ed § 848 by extending the general amor-
tization period from 120 months to 180
Bulletin No. 2019–35 669 August 26, 2019

August 26, 2019 670 Bulletin No. 2019–35
months and changing the percentage of
net premiums that are determined to be
specified policy acquisition expenses.
These amendments apply to net premi-
ums for taxable years beginning after
December 31, 2017. A transition rule in
section 13519 provides that specified
policy acquisition expenses required to
be capitalized in a taxable year beginning
before January 1, 2018, will continue to
be amortized ratably over the 120 month
period.
.04 Changes in Method of Accounting.
(1) A change in the method of com-
puting life insurance reserves or amounts
under § 807(c)(3) to comply with amend-
ments to § 807 made by the TCJA chang-
es the proper time for the inclusion of the
item in income or the taking of the item
as a deduction and is a change in meth-
od of accounting subject to § 446(e) and
§ 1.446-1.
(2) A change in the method of calcu-
lating the amount of specified policy ac-
quisition expenses to be capitalized and
a change in the period over which such
capitalized amounts are to be amortized to
comply with amendments to § 848 made
by the TCJA changes the proper time for
taking the item as a deduction and is a
change in method of accounting subject to
§ 446(e) and § 1.446-1.
(3) Section 446(e) and § 1.446-1(e)
(2)(i) state that, except as otherwise pro-
vided, a taxpayer must secure the con-
sent of the Commissioner before chang-
ing a method of accounting for any item
for Federal income tax purposes. Under
§ 1.446-1(e)(3), to obtain the Commis-
sioner’s consent to change a method of ac-
counting, a taxpayer generally must file a
Form 3115, Application for Change in Ac-
counting Method, during the taxable year
for which the taxpayer desires to make the
proposed change in method of accounting
(year of change). Section 1.446-1(e)(3)
provides that the Commissioner may pre-
scribe terms and conditions for effecting
a change in method of accounting. Rev.
Proc. 2015-13, 2015-5 I.R.B. 419, as clar-
ified and modified by Rev. Proc. 2015-33,
2015-24 I.R.B. 1067, as modified by Rev.
Proc. 2017-59, 2017-48 I.R.B. 543, and
as modified by Rev. Proc. 2019-1, 2019-1
I.R.B. 1, provides the current general pro-
cedures, including terms and conditions by
which an insurance company may obtain
consent of the Commissioner to change its
method of accounting through the filing of
a Form 3115. Unless specifically autho-
rized by the Commissioner or by statute,
a taxpayer may not change an established
method of accounting by amending any
prior Federal income tax return. See Rev.
Rul. 90-38, 1990-1 C.B. 57.
(4) Section 481(a) provides that in
computing the taxpayer’s taxable income
for any taxable year, if such computation
is under a method of accounting different
from the method under which the tax-
payer’s taxable income for the preceding
taxable year was computed, those adjust-
ments that are determined to be necessary
solely by reason of the change in order to
prevent amounts from being duplicated or
omitted must be taken into account. The
§ 481(a) adjustment is taken into account
over the § 481(a) adjustment period pro-
vided in the applicable administrative
guidance.
(5) In the interest of sound tax admin-
istration and in order to reduce the ad-
ministrative and tax compliance burdens
on insurance companies affected by the
amendments to § 807 or § 848 made by
the TCJA, this revenue procedure pro-
vides simplified procedures for an insur-
ance company to obtain consent of the
Commissioner to (i) change its methods
of computing life insurance reserves to
comply with amendments to § 807 made
by the TCJA, (ii) change its methods of
computing amounts under § 807(c)(3) to
comply with amendments to § 807 made
by the TCJA, and (iii) change its methods
of capitalizing and amortizing specified
policy acquisition expenses to comply
with amendments to § 848 made by the
TCJA.
.05 Revenue Procedure 2019-10.
On January 7, 2019, the Treasury De-
partment and the IRS published Rev.
Proc. 2019-10, 2019-02 I.R.B. 296, which
modified Rev. Proc. 2018-31, 2018-22
I.R.B. 637, to provide procedures under
§ 446 and § 1.446-1(e) for an insurance
company to obtain automatic consent of
the Commissioner to change its method
of accounting to comply with § 807(f), as
amended by the TCJA.
SECTION 3. SCOPE
.01 Life Insurance Reserve Method
Change. This revenue procedure applies
to any insurance company that changes
its method of computing life insurance
reserves to comply with amendments to
§ 807 made by the TCJA for the first tax-
able year beginning after December 31,
2017, provided the insurance company
takes into account the § 481(a) adjustment
described in section 6.01(1) of this reve-
nue procedure in the manner prescribed in
sections 6.02(1) and 6.02(3) of this reve-
nue procedure and follows the procedures
prescribed in section 7 of this revenue pro-
cedure.
.02 Section 807(c)(3) Method Change.
This revenue procedure applies to any in-
surance company that changes its method
of computing amounts under § 807(c)(3)
to comply with amendments to § 807 made
by the TCJA for the first taxable year be-
ginning after December 31, 2017, provided
the insurance company takes into account
the § 481(a) adjustment described in sec-
tion 6.01(2) of this revenue procedure in
the manner prescribed in sections 6.02(2)
and 6.02(3) of this revenue procedure and
follows the procedures prescribed in sec-
tion 7 of this revenue procedure. However,
the portions of this revenue procedure re-
lated to § 807(c)(3) do not apply to an in-
surance company that changes its method
of computing amounts under § 807(c)(3)
to comply with amendments to § 807 made
by the TCJA by complying with the proce-
dures in section 26.04 of Rev. Proc. 2018-
31 (as modified by Rev. Proc. 2019-10) (or
its successor) to obtain the consent of the
Commissioner for such change.
.03 Capitalization of Specified Policy
Acquisition Expenses Method Change.
This revenue procedure applies to any in-
surance company that changes its methods
of capitalizing and amortizing specified
policy acquisition expenses to comply
with amendments to § 848 made by the
TCJA for the first taxable year beginning
after December 31, 2017, provided the in-
surance company follows the procedures
prescribed in sections 6.01(3) and 7 of this
revenue procedure.

Bulletin No. 2019–35 671 August 26, 2019
SECTION 4. CONSENT TO
CHANGE
Under § 1.446-1(e)(2)(i), the consent
of the Commissioner is hereby grant-
ed to any insurance company within the
scope of section 3 of this revenue proce-
dure to change its method of accounting
for life insurance reserves, amounts under
§ 807(c)(3), and specified policy acqui-
sition expenses, as applicable, to comply
with amendments to §§ 807 and 848, as
applicable, made by the TCJA, provided
the insurance company complies with the
provisions of this revenue procedure and
the applicable provisions of Rev. Proc.
2015-13.
SECTION 5. APPLICABILITY OF
REV. PROC. 2015-13
.01 Except as otherwise provided in
this revenue procedure, the provisions of
Rev. Proc. 2015-13 apply to an insurance
company within the scope of section 3 of
this revenue procedure.
.02 The limitations in section 5 of Rev.
Proc. 2015-13 do not apply to a change
in method of accounting made under this
revenue procedure. Therefore, an insur-
ance company within the scope of this
revenue procedure is eligible to make a
change in method of accounting under
this revenue procedure even if the request-
ed year of change is the final year of the
insurance company’s trade or business as
described in section 5.03(1) of Rev. Proc.
2015-13 or the insurance company engag-
es in a liquidation or reorganization trans-
action to which § 381 applies as described
in section 5.02(1) of Rev. Proc. 2015-13.
SECTION 6. TERMS AND
CONDITIONS OF CHANGE
.01 Year of Change and Section 481(a)
Adjustment.
(1) Life Insurance Reserve Method
Change. For an insurance company de-
scribed in section 3.01 of this revenue
procedure, the year of change is the first
taxable year beginning after December
31, 2017, and the § 481(a) adjustment is
the sum of the TCJA Transition Adjust-
ments. The insurance company must take
the § 481(a) adjustment into account in the
manner provided in section 6.02(1) of this
revenue procedure.
(2) Section 807(c)(3) Method Change.
For an insurance company described in
section 3.02 of this revenue procedure,
the year of change is the first taxable year
beginning after December 31, 2017, and
the § 481(a) adjustment is the difference
between (a) the amount determined under
§ 807(c)(3) as of the close of the taxable
year preceding the first taxable year be-
ginning after December 31, 2017, deter-
mined using the appropriate rate of in-
terest required after the amendments to
§ 807(c) by the TCJA and (b) such amount
determined at such time using the appro-
priate rate of interest required prior to the
amendments to § 807(c) by the TCJA.
The § 481(a) adjustment is positive if
the amount described in clause (b) of the
preceding sentence exceeds the amount
described in clause (a) of the preceding
sentence and is negative if the amount
described in clause (a) of the preceding
sentence exceeds the amount described in
clause (b) of the preceding sentence. The
insurance company must take the § 481(a)
adjustment into account in the manner
provided in section 6.02(2) of this revenue
procedure.
(3) Capitalization of Specified Policy
Acquisition Expenses Method Change. For
an insurance company described in section
3.03 of this revenue procedure, the year of
change is the first taxable year beginning
after December 31, 2017. The change in
method of accounting is made using a cut-
off method because the TCJA amendments
to § 848 apply to net premiums for taxable
years beginning after December 31, 2017.
Accordingly, a § 481(a) adjustment is nei-
ther required nor permitted.
.02 Section 481(a) Adjustment Period.
(1) Life Insurance Reserve Method
Change. For an insurance company de-
scribed in section 3.01 of this revenue
procedure, the § 481(a) adjustment period
is eight taxable years (the year of change
and the seven succeeding taxable years).
Any negative § 481(a) adjustment must
be taken into account under § 805(a)(2) or
§ 832(c)(4), as applicable, and any posi-
tive § 481(a) adjustment must be taken
into account under § 803(a)(2) or § 832(b)
(1)(C), as applicable.
(2) Section 807(c)(3) Method Change.
For an insurance company described in
section 3.02 of this revenue procedure, the
§ 481(a) adjustment period is one taxable
year (the year of change) for a negative
§ 481(a) adjustment and four taxable years
(the year of change and the three succeed-
ing taxable years) for a positive § 481(a)
adjustment. Alternatively, such insurance
company may take a positive § 481(a) ad-
justment into account entirely in the year
of change.
(3) General Rules. For purposes of this
revenue procedure, with respect to any
§ 481(a) adjustment described in section
6.01 of this revenue procedure:
(a) The insurance company must take
the § 481(a) adjustment into account rat-
ably over the § 481(a) adjustment period
specified in this revenue procedure.
(b) If the year of change or any other
taxable year during the § 481(a) adjust-
ment period is a short taxable year, the
insurance company must take the appli-
cable § 481(a) adjustment described in
section 6.01 of this revenue procedure into
account as if that short taxable year were a
full 12-month year. See Rev. Rul. 78-165,
1978-1 C.B. 276.
(c) The applicable § 481(a) adjustment
period described in section 6.02 of this
revenue procedure may not be shortened
under the provisions of section 7.03(3) of
Rev. Proc. 2015-13.
(d) The applicable § 481(a) adjustment
period described in section 6.02 of this
revenue procedure is accelerated in the
situations described in section 7.03(4)(a)
and (d) of Rev. Proc. 2015-13.
(e) The applicable § 481(a) adjustment
period described in section 6.02(1) of this
revenue procedure is accelerated if the in-
surance company ceases to qualify as an
insurance company, and any remaining
§ 481(a) adjustment must be taken into ac-
count in the last year the insurance compa-
ny qualifies as an insurance company. See
section 13517(c)(3)(B) of the TCJA.
SECTION 7. PROCEDURE FOR
MAKING THE CHANGE
In accordance with § 1.446-1(e)(3)
(ii), the requirement of § 1.446-1(e)(3)
(i) to file a Form 3115 is waived for an
insurance company making a change in
method of accounting under this revenue

August 26, 2019 672 Bulletin No. 2019–35
procedure, provided the insurance com-
pany satisfies all of the applicable terms
and conditions set forth in section 6 of this
revenue procedure; properly reports the
amount of any § 481 adjustment described
in section 6.01 of this revenue procedure,
as applicable, on its Federal income tax
returns; and, except as otherwise provid-
ed in this revenue procedure, satisfies all
of the applicable terms and conditions set
forth in Rev. Proc. 2015-13.
SECTION 8. AUDIT PROTECTION
.01 No Audit Protection for Life Insur-
ance Reserve Method Changes. The audit
protection in section 8 of Rev. Proc. 2015-
13 does not apply to a change in method
of accounting that is within the scope of
section 3.01 of this revenue procedure.
.02 Audit Protection for Section 807(c)
(3) and Capitalization of Specified Policy
Acquisition Expenses Method Changes.
Except as otherwise provided herein, the
IRS will not require an insurance compa-
ny that makes a change in method of ac-
counting that is within the scope of section
3.02 or section 3.03 of this revenue proce-
dure to change its method of accounting
for the same item (that is, for discounting
amounts under § 807(c)(3) or capitalizing
and amortizing specified policy acqui-
sition expenses under § 848, as applica-
ble) for taxable years prior to the year of
change, provided the insurance company
complies with the applicable provisions
of this revenue procedure. The IRS may
change an insurance company’s method
of accounting for the same item that is the
subject of a change in method of account-
ing described in section 3.02 or section
3.03 of this revenue procedure if the in-
surance company’s method of accounting
for the same item (that is, for discounting
amounts under § 807(c)(3) or capitalizing
and amortizing specified policy acquisi-
tion expenses under § 848, as applicable)
is an issue under consideration (whether
under examination, before an Appeals
office, or before a federal court), within
the meaning of section 3.08 of Rev. Proc.
2015-13, on August 6, 2019. The excep-
tions in section 8.02 of Rev. Proc. 2015-
13 do not apply to an insurance company
within the scope of section 3.02 or section
3.03 of this revenue procedure with re-
spect to the insurance company’s method
of accounting for the same item that is the
subject of a change in method of account-
ing described in section 3.02 or section
3.03 of this revenue procedure (that is, for
discounting amounts under § 807(c)(3) or
capitalizing and amortizing specified pol-
icy acquisition expenses under § 848, as
applicable).
SECTION 9. EFFECT ON OTHER
REVENUE PROCEDURES
Section 26.04(1) of Rev. Proc. 2018-
31 (as modified by Rev. Proc. 2019-10),
is modified by adding a second sentence
to read as follows: “However, this section
26.04 does not apply to any change in
method of accounting to which Rev. Proc.
2019-30, 2019-33 I.R.B. 638 or Rev. Proc.
2019-34, 2019-35 I.R.B. 669, applies.”
Accordingly, a change in a method
of accounting subject to section 26.04
of Rev. Proc. 2018-31 (or its successor)
to which this Rev. Proc. 2019-34 does
not apply continues to be subject to sec-
tion 26.04 of Rev. Proc. 2018-31 (or its
successor). For example, if in its first
taxable year beginning after December
31, 2017, a taxpayer changes its meth-
od of computing life insurance reserves
in a manner in addition to that required
to comply with the amendments to § 807
made by the TCJA, such additional
change is not subject to this Rev. Proc.
2019-34 and continues to be subject to
section 26.04 of Rev. Proc. 2018-31 (or
its successor).
SECTION 10. FORM 3115
TRANSITION RULE
If before August 26, 2019, a taxpay-
er properly filed a Form 3115 under the
non-automatic change procedures in Rev.
Proc. 2015-13 requesting the Commis-
sioner’s consent for a change in method
of accounting described in section 3 of
this revenue procedure, and the Form
3115 is pending with the national office
on August 26, 2019, the taxpayer may
choose to make the change in method of
accounting under the automatic change
procedures in this revenue procedure
and Rev. Proc. 2015-13 if the taxpayer
is otherwise eligible to use this revenue
procedure and the automatic change
procedures in Rev. Proc. 2015-13. The
taxpayer must notify the national office
contact person for the Form 3115 (if un-
known, see section 9.08(6) of Rev. Proc.
2019-1 (or any successor)) of the taxpay-
er’s intent to make the change in method
of accounting under the automatic change
procedures in Rev. Proc. 2015-13 before
the later of (a) September 25, 2019, or (b)
the issuance of a letter ruling granting or
denying consent for the change. The noti-
fication should indicate that the taxpayer
chooses to convert the Form 3115 to the
automatic change procedures in this reve-
nue procedure and Rev. Proc. 2015-13. If
the taxpayer timely notifies the national
office that it chooses to convert the Form
3115 to the automatic change procedures
in this revenue procedure and Rev. Proc.
2015-13, the national office will send a
letter to the taxpayer acknowledging its
request and will return the user fee sub-
mitted with the Form 3115.
SECTION 11. EFFECTIVE DATE
This revenue procedure is effective for
an insurance company’s first taxable year
beginning after December 31, 2017.
SECTION 12. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Dan Phillips of the Office of
Associate Chief Counsel (Financial Insti-
tutions & Products). For further informa-
tion regarding this revenue procedure con-
tact Mr. Phillips at (202) 317-6995 (not a
toll-free number).

Bulletin No. 2019–35 673 August 26, 2019
Section 848.—
Capitalization of Certain
Policy Acquisition
Expenses
Rev. Proc. 2019-34 provides simplified pro-
cedures for an insurance company to obtain auto-
matic consent to change its method of accounting
for specified policy acquisition expenses under
§ 848, as amended by section 13519 of the Tax
Cuts and Jobs Act, for the first taxable year be-
ginning after December 31, 2017. See Rev. Proc.
2019-34, page 669.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI
—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2019–35 i August 26, 2019

Numerical Finding List
1
Bulletin 2019–35
Announcements:
2019-07, 2019-27 I.R.B. 62
2019-08, 2019-32 I.R.B. 621
Notices:
2019-12, 2019-27 I.R.B. 57
2019-40, 2019-27 I.R.B. 59
2019-41, 2019-28 I.R.B. 256
2019-42, 2019-29 I.R.B. 352
2019-27, 2019-31 I.R.B. 484
2019-43, 2019-31 I.R.B. 487
2019-24, 2019-31 I.R.B. 489
2019-45, 2019-32 I.R.B. 593
Proposed Regulations:
REG-105476-18, 2019-27 I.R.B. 63
REG-106282-18, 2019-28 I.R.B. 259
REG-101828-19, 2019-29 I.R.B. 412
REG-106877-18, 2019-30 I.R.B. 441
REG-121508-18, 2019-30 I.R.B. 456
REG-105474-18, 2019-31 I.R.B. 493
REG-118425-18, 2019-31 I.R.B. 539
Revenue Rulings:
2019-16, 2019-28 I.R.B. 96
2019-17, 2019-32 I.R.B. 583
2019-18, 2019-35 I.R.B. 668
Revenue Procedures:
2019-24, 2019-29 I.R.B. 353
2019-28, 2019-32 I.R.B. 596
2019-29, 2019-32 I.R.B. 620
2019-30, 2019-33 I.R.B. 638
2019-31, 2019-33 I.R.B. 643
2019-32, 2019-33 I.R.B. 659
2019-33, 2019-34 I.R.B. 662
2019-34, 2019-35 I.R.B. 669
Treasury Decisions:
9863, 2019-27 I.R.B. 1
9864, 2019-27 I.R.B. 6
9865, 2019-27 I.R.B. 27
9867, 2019-28 I.R.B. 98
9868, 2019-28 I.R.B. 252
9866, 2019-29 I.R.B. 261
9861, 2019-30 I.R.B. 433
9869, 2019-30 I.R.B. 438
9862, 2019-31 I.R.B. 477
9872, 2019-32 I.R.B. 585
9871, 2019-33 I.R.B. 624
9873, 2019-33 I.R.B. 630
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.
August 26, 2019 ii Bulletin No. 2019–35

Bulletin No. 2019–35 iii August 26, 2019
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2019–35
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

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