Internal Revenue Bulletin 2020-6 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2020–6
February 3, 2020
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.
INCOME TAX
Rev. Proc. 2020-11, page 406.
Revenue Procedure 2020-11 provides relief to additional
taxpayers who took out Federal or private student loans to
finance attendance at a nonprofit or for-profit school. The
IRS will not assert that taxpayers within the scope of the
revenue procedure must recognize gross income as a re-
sult of the discharge of their student loans. Additionally,
the IRS will not assert that a creditor must file information
returns and furnish payee statements for the discharge of
any indebtedness within the scope of the revenue proce-
dure. To avoid confusion, the IRS strongly recommends that
these creditors not furnish students nor the IRS with a Form
1099-C.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
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.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
February 3, 2020 Bulletin No. 2020–6

Part III
26 CFR 1.61-12
(Also Part III, §§ 25A, 61, 108, 221, 222, 6511,
1.6050P-1.)
Rev. Proc. 2020-11
SECTION 1. PURPOSE
This revenue procedure establishes a
safe harbor extending the relief provided
under Rev. Proc. 2015-57, 2015-51 I.R.B.
863, Rev. Proc. 2017-24, 2017-7 I.R.B.
916, and Rev. Proc. 2018-39, 2018-34
I.R.B. 319, to additional taxpayers who
took out Federal or private student loans
to finance attendance at a nonprofit or
for-profit school. Relief is also extended
to any creditor that is an applicable entity,
as defined by section 6050P of the Internal
Revenue Code (Code) and the regulations
thereunder, that otherwise would be re-
quired to file information returns and fur-
nish payee statements pursuant to section
6050P of the Code for the discharge of any
indebtedness within the scope of this reve-
nue procedure.
SECTION 2. BACKGROUND
.01 Under the Higher Education Act of
1965 (HEA), Pub. L. 89-329, the Closed
School discharge process allows the De-
partment of Education (ED) to discharge a
Federal student loan obtained by a student,
or by a parent on behalf of a student, who
was attending a school at the time it closed
or who withdrew from the school within a
certain period prior to the closing date. The
HEA provides statutory exclusions from
gross income for Federal student loans
discharged under the Closed School dis-
charge process. See generally, 20 U.S.C.
§ 1087(c) (Federal Family Education
Loan); 20 U.S.C. § 1087dd(g) (Federal
Perkins Loan); and 20 U.S.C. § 1087e(a)
(1) (Federal Direct Loan).
.02 Under the HEA, the Defense to Re-
payment process allows ED to discharge
a Federal Direct Loan obtained by a stu-
dent, or by a parent on behalf of a student,
if the borrower establishes, as a defense
against repayment, that a school’s ac-
tions would give rise to a cause of action
against the school under applicable state
law. See generally, 20 U.S.C. § 1087e(h),
34 C.F.R. § 685.206(c), § 685.222, and
§ 685.212(k)(2).
.03 Rev. Proc. 2015-57 and Rev. Proc.
2017-24 provide relief for taxpayers who
took out Federal student loans to finance
attendance at a school owned by Corin-
thian College, Inc. (CCI) or American
Career Institutes, Inc. (ACI), respectively,
and whose loans were discharged by ED
under the “Closed School” or “Defense to
Repayment” discharge process.
.04 Rev. Proc. 2018-39 provides relief
for taxpayers who took out private student
loans to finance attendance at a school
owned by CCI or ACI and whose loans
were discharged based on a settlement of
a legal cause of action resolving various
allegations of unlawful business practices,
including unfair, deceptive, and abusive
acts and practices against CCI, ACI, and
certain private lenders.
.05 Rev. Proc. 2015-57, Rev. Proc.
2017-24, and Rev. Proc. 2018-39 provide
the following relief: (1) the Internal Reve-
nue Service (IRS) will not assert that these
taxpayers must recognize gross income
resulting from the discharge of these Fed-
eral and private student loans; (2) the IRS
will not assert that these taxpayers must
increase their gross income by the amount
of certain tax credits or deductions related
to the discharged Federal and private stu-
dent loans; and (3) the IRS will not assert
that the creditors of these discharged loans
must file information returns and furnish
payee statements under section 6050P of
the Code as a result of discharging these
Federal and private student loans.
.06 Rev. Proc. 2015-57, Rev. Proc.
2017-24, and Rev. Proc. 2018-39 are lim-
ited in application to schools owned by
CCI or ACI.
.07 The Department of the Treasury
(Treasury Department) and the IRS are
aware that additional taxpayers may
have Federal and private student loans
discharged under the circumstances de-
scribed in Rev. Proc. 2015-57, Rev. Proc.
2017-24, and Rev. Proc. 2018-39.
.08 The Treasury Department and the
IRS have determined that it is appropri-
ate to extend the relief provided in Rev.
Proc. 2015-57, Rev. Proc. 2017-24, and
Rev. Proc. 2018-39 to taxpayers who took
out Federal and private student loans to
finance attendance at nonprofit or oth-
er for-profit schools not owned by CCI
or ACI where the Federal loans are dis-
charged by ED under the Closed School
or Defense to Repayment discharge pro-
cess, or where the private loans are dis-
charged based on a settlement of a legal
cause of action against nonprofit or oth-
er for-profit schools and certain private
lenders. As in Rev. Proc. 2015-57, Rev.
Proc. 2017-24, and Rev. Proc. 2018-39,
the Treasury Department and the IRS be-
lieve that most Federal and private student
loan borrowers would be able to exclude
from gross income all or substantially all
of the discharged amounts based on the
insolvency exclusion under section 108(a)
(1)(B) of the Code; fraudulent or material
misrepresentations made by such nonprof-
it or for-profit schools or certain private
lenders to the students; or other tax law
authority. However, determining whether
one or more of these exclusions is avail-
able to each affected borrower would re-
quire a fact intensive analysis of the par-
ticular borrower’s situation to determine
the extent to which the discharged amount
is eligible for exclusion under each of
the potentially available exceptions. The
Treasury Department and the IRS are con-
cerned that such an analysis would impose
a compliance burden on taxpayers, as well
as an administrative burden on the IRS,
that is excessive in relation to the amount
of taxable income that would result. Ac-
cordingly, the IRS will not assert that a
taxpayer within the scope of the safe har-
bor in this revenue procedure recognizes
gross income as a result of the discharge.
SECTION 3. SCOPE
.01 The treatment provided in section
4 of this revenue procedure applies to any
taxpayer who took out Federal or private
student loans to finance attendance at a
nonprofit or for-profit school described in
section 3.02 of this revenue procedure and
(a) whose Federal loans are discharged by
ED based on the Closed School or De-
fense to Repayment discharge process,
or (b) whose private loans are discharged
based on a settlement of a legal cause of
action resolving various allegations of
unlawful business practices, including
February 3, 2020 406 Bulletin No. 2020–6

unfair, deceptive, and abusive acts and
practices against a nonprofit or for-profit
school or private lenders that made stu-
dent loans to finance attendance at these
schools. This revenue procedure also ap-
plies to any applicable entity, as defined
by section 6050P of the Code and the reg-
ulations thereunder, that discharges these
loans.
.02 Section 3.01 of this revenue proce-
dure applies to nonprofit schools that meet
the definition of an “institution of higher
education” under 20 U.S.C. § 1001(a) or
(b), or for-profit schools that meet the defi-
nition of a “proprietary institution of high-
er education” under 20 U.S.C. § 1002(b).
SECTION 4. SAFE HARBOR FOR
DISCHARGED STUDENT LOANS
.01 This section 4 describes the safe
harbor available for certain discharged
student loans. Taxpayers are eligible to
use the safe harbor if they are within the
scope of section 3 of this revenue proce-
dure and one of the following paragraphs
of this section 4.01.
(a) Borrowers participating in Closed
School discharge process.
The Closed School discharge process
allows ED to discharge a Federal student
loan obtained by a student, or by a parent
on behalf of a student, who was attend-
ing a school at the time it closed or who
withdrew from the school within a cer-
tain period prior to the closing date. The
HEA provides statutory exclusions from
gross income for Federal student loans
discharged under the Closed School dis-
charge process.
A taxpayer whose Federal student loan
is discharged under the Closed School dis-
charge process will not recognize gross in-
come as a result of the discharge, and the
taxpayer should not report the amount of
the discharged loan in gross income on his
or her Federal income tax return.
(b) Borrowers participating in Defense
to Repayment discharge process.
The Defense to Repayment process
allows ED to discharge a Federal Direct
Loan obtained by a student, or by a par-
ent on behalf of a student, if the borrower
establishes, as a defense against repay-
ment, that a school’s actions would give
rise to a cause of action against the school
under applicable state law. Most of these
borrowers would be able to exclude from
gross income the discharged amounts
based on the insolvency exclusion, fraud-
ulent or material misrepresentations, or
other tax law authority.
A taxpayer whose Federal student loan
is discharged under the Defense to Repay-
ment discharge process will not recognize
gross income as a result of the discharge,
and the taxpayer should not report the
amount of the discharged loan in gross
income on his or her Federal income tax
return.
(c) Borrowers participating in legal
settlement discharge actions.
Federal and state governmental agen-
cies have brought legal causes of action
that have resulted in settlements resolving
various allegations of unlawful business
practices, including unfair, deceptive,
and abusive acts and practices, against
for-profit schools and certain private lend-
ers that made student loans to finance at-
tendance at these schools. Most of these
borrowers would be able to exclude
amounts discharged as a result of these
settlements from gross income based on
the insolvency exclusion, fraudulent or
material misrepresentations, or other tax
law authority.
A taxpayer whose private student loan
is discharged based on a settlement of a
legal cause of action resolving various al-
legations of unlawful business practices
against nonprofit or for-profit schools or
private lenders that made student loans to
finance attendance at these schools will
not recognize gross income as a result of
the discharge, and the taxpayer should not
report the amount of the discharged loan
in gross income on his or her Federal in-
come tax return.
.02 Recapture of tax credits and deduc-
tions under the tax benefit rule.
The IRS will not assert that a taxpayer
within the scope of this revenue procedure
must increase his or her taxes owed in the
year of a discharge, or in a prior year, as
a result of a discharge described in sec-
tion 4.01 of this revenue procedure, if in
a prior taxable year he or she received an
education tax credit under section 25A of
the Code attributable to payments made
with proceeds of the discharged loan. In
addition, the IRS also will not assert that a
taxpayer within the scope of this revenue
procedure must increase his or her gross
income in the year of the discharge as a
result of a discharge described in section
4.01 of this revenue procedure, if in a pri-
or taxable year he or she took a deduction
under section 221 of the Code attributable
to interest paid on a discharged loan or a
deduction in a prior taxable year under
section 222 of the Code attributable to
payments of qualified tuition and related
expenses made with proceeds of the dis-
charged loan.
.03 Information reporting.
The IRS will not assert that a creditor
that is an applicable entity, as defined by
section 6050P of the Code and the regu-
lations thereunder, must file information
returns and furnish payee statements
pursuant to section 6050P of the Code
for the discharge of any indebtedness
within the scope of this revenue pro-
cedure. The filing of such information
returns with the IRS could result in the
issuance of underreporter notices to tax-
payers and the furnishing of such pay-
ee statements to taxpayers could cause
confusion.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2015-57, Rev. Proc. 2017-
24, and Rev. Proc. 2018-39 are amplified.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective for
Federal student loans discharged by ED in
taxable years beginning on or after Janu-
ary 1, 2016, under the Closed School or
Defense to Repayment discharge process,
and for private student loans discharged in
taxable years beginning on or after Jan-
uary 1, 2016, based on a settlement of a
legal cause of action resolving various al-
legations of unlawful business practices,
including unfair, deceptive, and abusive
acts and practices against the nonprofit or
for-profit schools or certain private lend-
ers. Taxpayers to whom this revenue pro-
cedure applies may claim a credit or re-
fund for an overpayment of tax for taxable
years for which the period of limitations
under section 6511 of the Code has not
expired.
Bulletin No. 2020–6 407 February 3, 2020

February 3, 2020 408 Bulletin No. 2020–6
SECTION 7. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Suzanne R. Sinno and Craig
R. Wojay of the Office of Associate Chief
Counsel (Income Tax and Accounting).
For further information regarding dis-
charge of indebtedness income and exclu-
sions, contact Ms. Sinno or Mr. Wojay at
(202) 317-4718 (not a toll-free number),
and for further information regarding
information reporting, contact Danielle
Pierce at (202) 317-5150 (not a toll-free
number).

Bulletin No. 2020–6 i February 3, 2020
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.

February 3, 2020 ii Bulletin No. 2020–6
Numerical Finding List
1
Bulletin 2020–6
Announcements:
2020-1, 2020-5 I.R.B. 552
Notices:
2020-1, 2020-2 I.R.B. 290
2020-2, 2020-3 I.R.B. 327
2020-3, 2020-3 I.R.B. 330
2020-4, 2020-4 I.R.B. 380
2020-5, 2020-4 I.R.B. 380
Proposed Regulations:
REG-107431-19, 2020-3 I.R.B. 332
REG-122180-18, 2020-3 I.R.B. 342
REG-100956-19, 2020-4 I.R.B. 383
REG-125710-18, 2020-5 I.R.B. 554
Treasury Decisions:
9886, 2020-2 I.R.B. 285
9887, 2020-3 I.R.B. 302
9888, 2020-3 I.R.B. 306
Revenue Procedures:
2020-1, 2020-01 I.R.B. 1
2020-2, 2020-01 I.R.B. 107
2020-3, 2020-01 I.R.B. 131
2020-4, 2020-01 I.R.B. 148
2020-5, 2020-01 I.R.B. 241
2020-7, 2020-01 I.R.B. 281
2020-9, 2020-02 I.R.B. 294
2020-10, 2020-02 I.R.B. 295
2020-11, 2020-06 I.R.B. 406
Revenue Rulings:
2020-1, 2020-3 I.R.B. 296
2020-2, 2020-3 I.R.B. 298
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.

Bulletin No. 2020–6 iii February 3, 2020
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2020–6
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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