Internal Revenue Bulletin 2012-42 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 201
2-42
October 15, 2012
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. Rul. 2012–28, page 476.
Federal rates; adjusted federal rates; adjusted federal
long-term rate and the long-term exempt rate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for October 2012.
Notice 2012–62, page 489.
Extension of replacement period for livestock sold on
account of drought.This notice explains the circumstances
under which the 4-year replacement period under section
1033(e)(2) of the Code is extended for livestock sold on
account of drought. The Appendix to this notice contains a
list of the counties that experienced exceptional, extreme, or
severe drought during the preceding 12-month period ending
August 31, 2012. Taxpayers may use this list to determine if
an extension is available.
EMPLOYEE PLANS
Notice 2012–61, page 479.
This notice provides guidance on the special rules relating to
pension funding stabilization for single employer defined ben-
efit pension plans under amendments to the Internal Revenue
Code (Code) and the Employee Retirement Income Security Act
of 1974 (ERISA) made by the Moving Ahead for Progress in the
21st Century Act (MAP-21), Pub. L. No. 112-141. MAP-21,
which was enacted July 6, 2012, contains a number of pen-
sion provisions in Division D (Finance).
EXCISE TAX
Rev. Rul. 2012–29, page 475.
Capital loss carryforward effective date.This ruling holds
that the effective date of section 101 of the Regulated Invest-
ment Company Modernization Act of 2010, Pub. L. 111-325
(2010), for excise tax purposes is the calendar year follow-
ing the date of enactment, or the calendar year beginning
January 1, 2011.
ADMINISTRATIVE
Notice 2012–63, page 496.
Optional special per diem rates.This notice provides the
2012-2013 specialper diemrates for taxpayers to use in sub-
stantiating the amount of ordinary and necessary business ex-
penses incurred while traveling away from home, specifically
(1) the special transportation industry rates, (2) the rate for the
incidental expenses only deduction, and (3) the rates and list
of high-cost localities for the high-low substantiation method.
This notice also announces a change in the definition of inci-
dental expenses under the Federal Travel Regulations. Notice
2011–81 superseded.
Announcement 2012–29, page 500.
This document provides notice of public hearing on proposed
regulations (REG–13066–11, 2012–32 I.R.B. 126) that pro-
vide guidance regarding the requirements for charitable hospi-
tal organizations relating to financial assistance and emergency
medical care policies, charges for certain care provided to in-
dividuals eligible for financial assistance, and billing and collec-
tions. A public hearing is scheduled for October 29, 2012.
Actions Relating to Court Decisions is on the page following the Introduction.
Finding Lists begin on page ii.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
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, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement 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 rulings 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.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al 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, Leg-
islation 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 Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d 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 c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
October 15, 20122012–42 I.R.B.

Actions Relati
ng to Decisions of the Tax Court
It is the policy
of the Internal Rev-
enue Service t
o announce at an early date
whether it wil
l follow the holdings in cer-
tain cases. An
Action on Decision is the
document maki
ng such an announcement.
An Action on De
cision will be issued at
the discreti
on of the Service only on unap-
pealed issue
s decided adverse to the gov-
ernment. Gen
erally, an Action on Decision
is issued whe
re its guidance would be help-
ful to Servi
ce personnel working with the
same or simi
lar issues. Unlike a Treasury
Regulation
or a Revenue Ruling, an Action
on Decision
is not an affirmative statement
of Service
position. It is not intended to
serve as pu
blic guidance and may not be
cited as pr
ecedent.
Actions on
Decisions shall be relied
upon withi
n the Service only as conclu-
sions appl
ying the law to the facts in the
particul
ar case at the time the Action on
Decision
was issued. Caution should be
exercise
d in extending the recommenda-
tion of th
e Action on Decision to similar
cases whe
re the facts are different. More-
over, th
e recommendation in the Action on
Decisio
n may be superseded by new legis-
lation,
regulations, rulings, cases, or Ac-
tions on
Decisions.
Prior to 1991, t
he Service published
acquiescence
or nonacquiescence only in
certain regul
ar Tax Court opinions. The
Service has ex
panded its acquiescence
program to inc
lude other civil tax cases
where guidanc
e is determined to be help-
ful. Accordi
ngly, the Service now may
acquiesce or
nonacquiesce in the holdings
of memorandu
m Tax Court opinions, as
well as those
of the United States District
Courts, Cla
ims Court, and Circuit Courts
of Appeal. R
egardless of the court decid-
ing the case
, the recommendation of any
ActiononDe
cision will be published in
the Intern
al Revenue Bulletin.
The recomme
ndation in every Action
on Decisio
n will be summarized as ac-
quiescenc
e, acquiescence in result only,
or nonacqu
iescence. Both “acquiescence”
and “acqui
escence in result only” mean
that the S
ervice accepts the holding of
the court
in a case and that the Service
will foll
ow it in disposing of cases with
thesamec
ontrolling facts. However, “ac-
quiescen
ce” indicates neither approval
nor disa
pproval of the reasons assigned
by the co
urt for its conclusions; whereas,
“acquie
scence in result only” indicates
disagre
ement or concern with some or all
of those reason
s. “Nonacquiescence” sig-
nifies that, a
lthough no further review was
sought, the Se
rvice does not agree with
the holding of
the court and, generally,
will not follo
w the decision in disposing
of cases invol
ving other taxpayers. In
reference to
an opinion of a circuit court
of appeals, a
“nonacquiescence” indicates
that the Serv
ice will not follow the hold-
ingonanatio
nwide basis. However, the
Service wil
l recognize the precedential
impact of th
e opinion on cases arising
within the v
enue of the deciding circuit.
The Actions
on Decisions published in
the weekly I
nternal Revenue Bulletin are
consolidat
ed semiannually and appear in
the first B
ulletin for July and the Cumula-
tive Bulle
tin for the first half of the year. A
semiannua
l consolidation also appears in
the first B
ulletin for the following January
andinthe
Cumulative Bulletin for the last
half of th
e year.
The Commi
ssioner does NOT ACQUI-
ESCE in th
e following decision:
L & S Indu
strial & Marine, Inc. v.
United S
tates,
1
633 F.Su
pp.2d 727 (D. Minn.2009)
1
Nonacquiescence to the District Court’s decision that the parenthetical language in § 4042(d)(1)(B) regarding fish must also exempt a vessel’s fishing equipment and, by analogy, dredging
equipment.
2012–42 I.R.B.October 15, 2012

October 15, 20122012–42 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of October 201
2. See Rev. Rul. 2012-28, page 476.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of October 2012. See Rev.
Rul. 2012-28, page 476.
Section 382.—Limitation
on Net Operating Loss
Carryforwa
rds and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of October 2012. See Rev.
Rul. 2012-28, page 476.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 468.—Special
Rules for Mining and Solid
Waste
Reclamation and
Closi
ng Costs
The ad
justed applicable federal short-term, mid-
term,
and long-term rates are set forth for the month
of Oct
ober 2012. See Rev. Rul. 2012-28, page 476.
Section 482.—
Allocation
of Income and D
eductions
Among Taxpaye
rs
Federal short
-term, mid-term, and long-term rates
are set forth f
or the month of October 2012. See Rev.
Rul. 2012-28
, page 476.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 642.—Special
Rules for Cr
edits and
Deductions
Federal sho
rt-term, mid-term, and long-term rates
are set fort
h for the month of October 2012. See Rev.
Rul. 2012-2
8, page 476.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 12
12.—Capital
Loss Carrybacks and
Carryove
rs
A revenue
ruling holds that the effective date of
section
101 of the Regulated Investment Company
Moderni
zation Act of 2010, Pub. L. 111–325 (2010),
for exci
se tax purposes is the calendar year following
the date
of enactment, or the calendar year beginning
January
1, 2011. See Rev. Rul. 2012-29, page 475.
(Also Section 4982.)
Capital loss carryforward effective
date.This ruling holds that the effective
date of section 101 of the Regulated In-
vestment Company Modernization Act of
2010, Pub. L. 111-325 (2010), for excise
tax purposes is the calendar year following
thedateofena
ctment, or the calendar year
beginning Jan
uary 1, 2011.
Rev. Rul. 2012–29
ISSUE
How does the effective date provision
of section 101(c) of the Regulated In-
vestment Company Modernization Act of
2010, Pub. L. 111–325 (2010) (“Act”),
pertaining to the Act’s amendments to
section 1212(a) of the Internal Revenue
Code, apply for purposes of the excise tax
imposed by section 4982?
FACTS
CorporationRis taxed as a regulated in-
vestment company (“RIC”) under part I of
subchapter M of the Code and uses a tax-
able year ending on June 30 for income tax
purposes.Rrecognized long-term capital
losses on November 1, 2010, January 3,
2011, and July 1, 2011, but recognized no
other capital gains or losses from July 1,
2010, through June 30, 2012.
LAW AND ANALYSIS
Section 4982(a) of the Code imposes
“on every regulated investment company
for each calendar year” an excise tax equal
to 4 percent of the excess, if any, of (1) the
required distribution for the calendar year,
over (2) the distributed amount for that
same calendar year. Section 4982(b)(1)
defines “required distribution” to mean,
with respect to any calendar year, the sum
of (A) 98 percent of the RIC’s ordinary in-
come for that calendar year, plus (B) 98.2
percent of the RIC’s “capital gain net in-
come for the 1-year period ending on Oc-
tober 31 of such calendar year.” Section
4982(e)(2)(A) defines “capital gain net in-
come” as having the same meaning given
to that term by section 1222(9), “deter-
mined by treating the one-year period end-
ing on October 31 of any calendar year
as the company’s taxable year.” Section
1222(9) provides that “[t]he term ‘capital
gain net income’ means the excess of the
gains from sales or exchanges of capital as-
sets over the losses from such sales or ex-
changes.”
2012–42 I.R.B.475October 15, 2012

Section 101 of the Act amended sec-
tion 1212(a) to allow RICs to carry forward
net capital losses indefinitely and to pre-
serve the treatment of components of those
losses as long-term or short-term. Sec-
tion 101(c) of the Act provides that “[t]he
amendments made by [section 101 of the
Act] shall apply to net capital losses for
taxable years beginning after the date of
the enactment of [the] Act.” The date of
enactment was December 22, 2010. Be-
fore the Act, RICs could carry net capital
losses forward only for eight years, with
any losses carried forward being treated as
short-term capital losses in the year of use.
This previous rule continues to apply to net
capital losses recognized by RICs in tax-
able years beginning on or before Decem-
ber 22, 2010. Thus, for Federal income
tax purposes,R’s July 1, 2011, net capi-
tal loss carries forward indefinitely, but R’s
net capital losses recognized before that
date are subject to prior law and can only
be carried forward for eight years (treated
as short-term capital losses).
Section 101(c) of the Act does not spec-
ify how its effective date rule applies for
purposes of the excise tax under section
4982. The section 4982 excise tax is im-
posed on the basis of whether sufficient
dividends are paid during a calendar year.
Thus, for any RIC, the taxable year for pur-
poses of the excise tax is the calendar year.
The calendar year beginning on January 1,
2011, is the first excise tax period that be-
gins after the December 22, 2010, date of
enactment.
The sufficiency of dividends paid dur-
ing a calendar year for excise tax purposes
is measured by taking into account both a
RIC’s ordinary income for that calendar
year and (absent an election under sec-
tion 4982(e)(4) for a RIC eligible to make
such an election) the RIC’s capital gain
net income, determined with regard to
any carried-forward capital losses, for the
November 1–October 31 period that ends
within that calendar year. Thus, the excise
tax distribution requirements for calendar
year 2011 (the first excise tax period
beginning after the date of enactment of
the Act) are determined based in part on
capital gains and losses that are recognized
for the period that runs from November 1,
2010, to October 31, 2011. Accordingly,
to the extent that the capital gains and
losses recognized for the November 1,
2010–October 31, 2011, period result in
a net capital loss, the net capital loss is
carried forward indefinitely for purposes
of section 4982. The carryforward is
effected in a manner consistent with
section 1212(a), as amended by Section
101 of the Act.
As applied toR, all three ofR’s capital
losses (including the November 1, 2010,
loss) are taken into account for the first ex-
cise tax period that begins after the date
of enactment (calendar year 2011). Ac-
cordingly, the net capital loss composed of
those three capital losses is carried forward
indefinitely for excise tax purposes.
HOLDING
For purposes of the excise tax imposed
by section 4982, the Act’s amendments to
the loss carryover rules in section 1212(a)
apply beginning with any net capital loss
recognized in the period that determines
a RIC’s required distribution for calendar
year 2011. Accordingly, the amendments
apply to net capital losses recognized dur-
ing the one year period that (absent an elec-
tion under section 4982(e)(4)) begins on
November 1, 2010.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Andrea M. Hoffenson of the Of-
fice of Associate Chief Counsel (Financial
Institutions & Products). For further in-
formation regarding this revenue ruling,
contact Andrea M. Hoffenson at (202)
622–2930 (not a toll-free call).
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382, 642, 1274, 1288, and other
sections of the Code, tables set forth the
rates for October 2012.
Rev. Rul. 2012–28
This revenue ruling provides various
prescribed rates for federal income tax
purposes for October 2012 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
for purposes of section 1274(d) of the
Internal Revenue Code. Table 2 contains
the short-term, mid-term, and long-term
adjusted applicable federal rates (ad-
justed AFR) for the current month for
purposes of section 1288(b). Table 3 sets
forth the adjusted federal long-term rate
and the long-term tax-exempt rate de-
scribed in section 382(f). Table 4 contains
the appropriate percentages for deter-
mining the low-income housing credit
described in section 42(b)(1) for build-
ings placed in service during the current
month. However, under section 42(b)(2),
the applicable percentage for non-feder-
ally subsidized new buildings placed in
service after July 30, 2008, and before
December 31, 2013, shall not be less than
9%. Finally, Table 5 contains the federal
rate for determining the present value of
an annuity, an interest for life or for a term
of years, or a remainder or a reversionary
interest for purposes of section 7520.
October 15, 20124762012–42 I.R.B.

REV. RUL. 2012–28 TABLE 1
Applicable Federal Rates (AFR) for October 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.23%.23%.23%.23%
110% AFR
.25%.25%.25%.25%
120% AFR.28%.28%.28%.28%
130% AFR.30%.30%.30%.30%
Mid-term
AFR.93%.93%.93%.93%
110% AFR1.02%1.02%1.02%1.02%
120% AFR1.12%1.12%1.12%1.12%
130% AFR1.21%1.21%1.21%1.21%
150% AFR
1.40%1.40%1.40%1.40%
175% AFR
1.64%1.63%1.63%1.62%
Long-term
AFR2.36%
2.35%
2.34%2.34%
110% AFR2.61%
2.59%2.58%2.58%
120% AFR2.84%2.82%2.81%2.80%
130% AFR3.08%3.06%
3.05%
3.04%
REV. RUL. 2012–28 TABLE 2
Adjusted AFR for October 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted
AFR
.23%.23%.23%.23%
Mid-term adjusted AFR1.04%1.04%1.04%1.04%
Long-term adjusted
AFR
2.87%
2.85%
2.84%2.83%
REV. RUL. 2012–28 TABLE 3
Rates Under Section 382 for October 2012
Adjusted federal long-term rate for the current month2.87%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)3.01%
REV. RUL. 2012–28 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for October 2012
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.38%
Appropriate percentage for the 30% present value low-income housing credit3.16%
2012–42 I.R.B.477October 15, 2012

REV. RUL. 2012–28 TABLE 5
Rate Under Section 7520 for October 2012
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest1.2%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 4982.—Excise Tax
on Undistributed Income
of Regulated Investment
Companies
A revenue ruling holds that the effective date of
section 101 of the Regulated Investment Company
Modernization Act of 2010, Pub. L. 111–325 (2010),
for excise tax purposes is the calendar year following
the date of enactment, or the calendar year beginning
January 1, 2011. See Rev. Rul. 2012-29, page 475.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2012. See Rev. Rul. 2012-28, page 476.
October 15, 20124782012–42 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Guidance on Pension Funding
Stabilization Under the Moving
Ahead for Progress in the 21st
Century Act (MAP–21)
Notice 2012–61
I. PURPOSE
This notice provides guidance on the
special rules relating to pension funding
stabilization for single-employer defined
benefit pension plans under amendments
to the Internal Revenue Code (Code) and
the Employee Retirement Income Security
Act of 1974 (ERISA)
1
made by the Mov-
ing Ahead for Progress in the 21st Cen-
tury Act (MAP–21), Pub. L. No.112–141.
MAP–21 was enacted July 6, 2012, and
contains a number of pension provisions in
Division D (Finance).
II. BACKGROUND
Section 430 specifies the minimum
funding requirements that generally ap-
ply to single-employer defined benefit
pension plans pursuant to § 412. Section
430(h)(2) specifies interest rates that are
used for purposes of calculating the min-
imum required contribution. The interest
rates that are used for this purpose are
a set of three segment rates described in
§ 430(h)(2)(C)(i), (ii), and (iii), or, alter-
natively, a full yield curve described in
§ 430(h)(2)(D)(ii). These rates are used
for a number of purposes under § 430,
including:
•The calculation of target normal cost
and funding target under §§ 430(b) and
430(d), in accordance with the rules of
§ 1.430(d)–1 of the Income Tax Regu-
lations;
•The calculation of the present value of
remaining shortfall and waiver amor-
tization installments for purposes of
determining any shortfall amortization
base established in the current plan
year under § 430(c)(3);
•The determination of amortization in-
stallments with respect to a shortfall
or waiver amortization base under
§ 430(c)(2) or § 430(e)(2); and
•The limitation on the assumed rate of
return when determining the average
value of assets under § 430(g)(3)(B).
The segment rates under § 430(h)(2)(C)
are used for other purposes as well. Sec-
tions 104 and 105 of the Pension Protec-
tion Act of 2006, Pub. L. No. 109–280,
as amended (PPA ’06), provide that the
effective dates for the minimum fund-
ing rules under § 430 and funding-based
benefit restrictions under § 436 are de-
layed for certain plans.
2
Sections 104 and
105 of PPA ’06 provide that in applying
§ 412(b)(5)(B) (as in effect prior to amend-
ment by PPA ’06) for plan years beginning
after December 31, 2007, and before the
first plan year to which §§ 430 and 436
apply, the third segment rate determined
under § 430(h)(2)(C)(iii) is to be used in
lieu of the interest rate otherwise used to
determine current liability.
The third segment interest rate un-
der § 430(h)(2)(C)(iii) is also specified
as an interest crediting rate not in ex-
cess of a market rate of return for a
statutory hybrid benefit formula un-
der § 1.411(b)(5)–1(d)(3). In addition,
§ 1.411(b)(5)–1(d)(4) provides that the
first and second segment rates under
§§ 430(h)(2)(C)(i) and (ii) are deemed not
to exceed a market rate of return.
Section 40211(a) of MAP–21 adds
§ 430(h)(2)(C)(iv), generally effective
for plan years beginning on or after
January 1, 2012. Section 430(h)(2)(C)(iv)
provides that each of the three segment
rates described in § 430(h)(2)(C)(i),
(ii), and (iii) for a plan year is adjusted
as necessary to fall within a specified
range that is determined based on an
average of the corresponding segment
rates for the 25-year period ending
on September 30 of the calendar year
preceding the first day of that plan year.
Under § 430(h)(2)(C)(iv)(II), for plan
years beginning in 2012, each segment rate
is adjusted so that it is no less than 90% and
no more than 110% of the corresponding
25-year average segment rate. For
later plan years, this range is gradually
increased, so that the segment rates for
plan years beginning after 2015 are no less
than 70% and no more than 130% of the
corresponding 25-year average segment
rates. Notice 2012–55, 2012–36 I.R.B.
332, sets forth the initial set of MAP–21
segment rates under § 430(h)(2)(C)(iv)(II)
for plan years beginning in 2012.
Sections 40211(a)(2) and 40211(b)(3)
of MAP–21 amend the Code and ERISA
to provide that the adjustments based on
the 25-year average segment rates under
§ 430(h)(2)(C)(iv) do not apply for certain
purposes involving:
•Section 404(o) (relating to the deter-
mination of the maximum deductible
limit under § 404);
•Section 417(e)(3) (relating to the cal-
culation of the minimum present value
requirement for distributions);
•Section 420 (relating to the determi-
nation of the amount of excess assets
that can be transferred to retiree health
and retiree group term life insurance
accounts);
•Section 4006 of ERISA (relating to the
calculation of PBGC variable-rate pre-
miums); and
•Section 4010 of ERISA (relating to the
requirement to report additional infor-
mation to the PBGC that applies to
contributing sponsors of certain under-
funded plans).
In addition, section 40211(b)(2)(A) of
MAP–21 amends section 101(f) of ERISA
to require additional disclosures for certain
plans as part of the annual funding notice
to participants. These additional disclo-
sures relate to the effect of the application
of the 25-year average segment rates.
Section 40211(c)(1) of MAP–21 pro-
vides that the amendments to the Code
and ERISA made by section 40211 of
MAP–21 are generally effective for plan
years beginning after December 31, 2011.
However, under section 40211(c)(2)(A) of
MAP–21, a plan sponsor may elect not to
1
Under section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713) and section 3002(c) of ERISA, the Secretary of the Treasury has interpretive jurisdiction over the subject matter
addressed in this notice for purposes of ERISA, as well as the Code. Thus, theprovisions of this notice pertaining to sections 430 and 436 of the Code also apply for purposes of sections
206(g) and 303 of ERISA.
2
For plans described in section 106 of PPA ‘06, the provisions of §§ 430 and 436apply for plan years beginning on or after January 1, 2011, which is before the effective date of section 40211
of MAP–21. Therefore, the amendments made by section 40211 of MAP–21 apply to these plans in the same manner as for other plans that are subject to §§ 430 and 436.
2012–42 I.R.B.479October 15, 2012

have these amendments apply to any plan
year beginning before January 1, 2013,
either (i) for all purposes, or (ii) solely for
purposes of determining the adjusted fund-
ing target attainment percentage (AFTAP)
under § 436. Section 40211(c)(2)(A) also
provides that a plan shall not be treated
as failing to meet the requirements of
§ 411(d)(6) and section 204(g) of ERISA
solely by reason of such an election.
Section 40211(c)(2)(B) of MAP–21
provides that if, as of the date of enactment
of MAP–21 (July 6, 2012), an election
is in effect with respect to a plan to use
the full yield curve as provided under
§ 430(h)(2)(D)(ii), a plan sponsor may
revoke that election without the consent
of the Secretary of the Treasury. This
revocation may be made any time before
the date that is one year after the date of
enactment of MAP–21, and is effective for
the first plan year to which the MAP–21
amendments apply.
III. QUESTIONS AND ANSWERS
The questions and answers in this notice
relate to the following topics:
G - General guidance relative to application of MAP–21 segment rates
NA - Measurements for which MAP–21 segment rates do not apply
H - Statutory hybrid plans
T-Transiti
on issues
E - MAP–21 elections
R - Schedule SB reporting
G — GENERAL
GUIDANCE
RELATIVE T
O APPLICATION OF
MAP–21 SE
GMENT RATES
Q G–1: How
are the adjusted segment
rates und
er § 430(h)(2)(C)(iv) (“MAP–21
segment r
ates”) determined for a plan
year?
A G–1: (a) F
or determinations for
which the M
AP–21 segment rates apply,
each segm
ent rate for the plan year that
is determ
ined under § 430(h)(2)(C)(i),
§ 430(h)(
2)(C)(ii), or § 430(h)(2)(C)(iii)
is adjust
ed to the extent necessary so that
it is no le
ss than the applicable minimum
percenta
ge of the corresponding 25-year
average se
gment rate for the calendar year
that conta
ins the first day of the plan year
andnomor
e than the applicable maximum
percenta
ge of that 25-year average seg-
ment rate
.
(b) The ap
plicable minimum and max-
imum perc
entages of the 25-year average
segment r
ates are as follows:
For plan years beginning inApplicable minimum percentageApplicable maximum percentage
201290%110%
2013
85%115%
201480%120%
201575%125%
2016 and l
ater
70%130%
(c) The 25-year average segment rates
for a calendar year are the rates published
by the Service based on the average of the
segment rates for the 25-year period end-
ing on September 30 of the prior calen-
dar year. The applicable corridors around
the 25-year average segment rates apply
for plan years beginning in a given calen-
dar year, regardless of the valuation date
and regardless of whether an election to
use the segment rates for a lookback month
is in effect for the plan year. The Service
will publish the resulting MAP–21 seg-
ment rates each month.
Example G
–1:Plan A has a calendar year plan
year and a January 1 valuation date. For the Jan-
uary 1, 2015 valuation, the plan sponsor has elected
to use th
e segment rates for December 2014. As-
sume for the purposes of this example that the un-
adjusted first, second and third segment rates for De-
cember 2
014 are 2.50%, 5.75%, and 6.90%, respec-
tively. Further assume thatthe first, second and third
25-year a
verage segment rates as of September 30,
2014, are 6.00%, 7.50%, and 8.15%, respectively.
The MAP–21 first, second and third segment rates for
the Janu
ary 1, 2015 valuation are 4.50%, 5.75%, and
6.90%, respectively, determined as shown in the fol-
lowing table:
October 15, 20124802012–42 I.R.B.

(1) Segment rate(2) Unadjusted rate for
December 2014
(3) 25-year average
segment rate
(4) Applicable minimum
rate for 2015 (75% of
column (3))
(5) Applicable maximum
rate for 2015 (125% of
column (3))
(6) MAP–21 segment
rate for 2015 plan year
First
2.50%
6.00%
4.50%7.50%4.50%
Second
5.75%7.50%5.63%
9.38%
5.75%
Third6.90%
8.15%
6.11%10.19%6.90%
Example G–2:Plan B, which is a small plan de-
scribed in § 430(g)(2)(B), has a plan year beginning
November 1 and ending October 31. Plan B’s val-
uation date is October 31, and the plan sponsor has
elected to use the segment rates under § 430(h)(2)(C)
for the month including the valuation date. The
MAP–21 segment rates for the plan year beginning
November 1, 2013, are determined based on the
unadjusted segment rates for the month of October
2014, limited to no less than 85% and no more than
115% of the 25-year average segment rates as of
September 30, 2012.
Q G–2: For what purposes do the
MAP–21 segment rates apply?
A G–2: (a) Except as provided un-
der the amendments made by MAP–21
and applicable guidance, the MAP–21 seg-
ment rates apply to all measurements that
are based on the segment rates described
in § 430(h)(2)(C)(i), (ii) and (iii). Ac-
cordingly, once the amendments made by
MAP–21 are effective for a plan year:
(1) The MAP–21 segment rates ap-
ply for the purpose of determining the
minimum required contribution under
§ 430, including the calculation of tar-
get normal cost and funding target under
§§ 430(b) and 430(d) and § 1.430(d)–1,
the calculation of the present value of
remaining shortfall and waiver amortiza-
tion installments for purposes of deter-
mining any shortfallamortization base
established in the current plan year under
§ 430(c)(3), the determination of shortfall
and waiver amortization installments un-
der § 430(c)(2) and §430(e)(2), and the
limitation on the assumed rate of return
for purposes of determining the average
value of assets under § 430(g)(3)(B), as
described in section III.B. or III.C. of No-
tice 2009–22, 2009–14 I.R.B. 741.
(2) The MAP–21 segment rates apply
for purposes of applying the benefit re-
strictions under § 436, including the calcu-
lation of the adjusted funding target under
§ 1.436–1(j)(1)(iii), the adjusted plan as-
sets under § 1.436–1(j)(1)(ii), and the re-
sulting adjusted funding target attainment
percentage (AFTAP) under § 436(j)(2) and
§ 1.436–1(j)(1).
(3) Under sections 104 and 105 of
PPA ’06, when applying § 412(b)(5)(B)
(as in effect before PPA ’06) for plan
years beginning after December 31, 2007,
and before the first year to which § 430
applies to the plan, current liability is de-
termined using the third segment interest
rate under § 430(h)(2)(C)(iii) in lieu of the
interest rate otherwise used. For purposes
of determining the minimum contribution
requirements under § 412 (as in effect
before PPA ’06), current liability is deter-
mined reflecting the MAP–21 adjustments
to the third segment rate in accordance
with § 430(h)(2)(C)(iv).
(b) The MAP–21 segment rates donot
apply for purposes for which they are
specifically excluded under the provisions
of MAP–21 or related guidance. See Q&A
NA–1 through NA–3 of this notice for a
list of those purposes and related guidance.
(c) See Q&A H–1 and H–2 of this no-
tice for guidance regarding the effect of
§ 430(h)(2)(C)(iv) on interest crediting
rates for a statutory hybrid plan pursuant
to § 1.411(b)(5)–1(d).
Q G–3: Do the amendments made
by MAP–21 affect the application of the
interest rates for a plan for which an
election to use the full yield curve under
§ 430(h)(2)(D)(ii) is in effect for the plan
year?
A G–3: (a) Generally, no. However, if
the plan uses an average value of assets un-
der § 430(g)(3)(B), the assumed rate of re-
turn is limited by the MAP–21 third seg-
ment rate. See Q&A G–5(c)(2) of this no-
tice.
(b) The plan sponsor may elect to re-
voke the election to use the full yield curve
without the approval of the Secretary,
as provided in section 40211(c)(2)(B) of
MAP–21 and described in Q&A E–4 and
E–5 of this notice.
Q G–4: Do the amendments made by
MAP–21 affect the annuity substitution
rule in § 1.430(d)–1(f)(4)(iii) used to de-
termine the value of expected distributions
subject to § 417(e)(3) that are included in
the funding target and target normal cost?
AG–4:(a)Section
§ 1.430(d)–1(f)(4)(iii) generally provides
that, for purposes of calculating the
funding target and target normal cost,
the present value of a distribution that
is subject to § 417(e)(3) is determined
as the present value, using specified
assumptions, of the annuity that is used
under the plan to determine the amount of
the distribution (the “annuity substitution
rule”). This rule is applied using the
valuation interest rates under § 430(h)(2)
for purposes of discounting the projected
annuity payments from their expected
payment dates to the valuation date.
(b) MAP–21 does not change the an-
nuity substitution rule. Accordingly, for
purposes of measurements to which the
MAP–21 segment rates apply, the present
value of a distribution that is subject
to § 417(e)(3) is determined using the
MAP–21 segment rates to discount the
projected annuity payments in accordance
with § 1.430(d)–1(f)(4)(iii).
Q G–5: How do the MAP–21 segment
rates affect the value of plan assets for
purposes for which the MAP–21 segment
rates apply?
A G–5: (a) The value of plan assets is
calculated in accordance with §§ 430(g)(3)
and (g)(4), § 1.430(g)–1, and Notice
2009–22, based on the interest rates used
for the relevant plan years and the purpose
for which the asset value is calculated.
This Q&A G–5 describes the calculation
of the value of plan assets for purposes for
which MAP–21 segment rates apply. See
Q&A NA–3 of this notice for guidance
on calculating the value of plan assets for
purposes for which the MAP–21 segment
rates do not apply.
(b)(1) Under § 430(g)(4), the value
of plan assets as of a valuation date re-
flects contributions for the prior year that
were made after the current year’s valu-
ation date, adjusted to the current year’s
valuation date using the plan’s effective
2012–42 I.R.B.481October 15, 2012

interest rate for the prior year as defined in
§ 430(h)(2)(A). The effective interest rate
is generally based on the segment rates or
rates from the full yield curve, whichever
is used to determine the funding target
for the plan. Accordingly, if the MAP–21
segment rates were used to determine the
funding target for the plan for the prior
plan year, the effective interest rate used
to adjust these contributions receivable
reflects the MAP–21 segment rates for the
prior year.
(2) For a plan with a valuation date that
is not the first day of the plan year, the
value of assets for purposes of § 430 ex-
cludes contributions for the current plan
year that were made prior to the valua-
tion date. The value of contributions so
excluded is adjustedfor interest from the
date of payment to the valuation date us-
ing the effective interest rate for the current
plan year. Accordingly, if the MAP–21
segment rates are used to determine the
funding target for the current plan year,
the effective interest rate used to adjust
these contributions reflects the MAP–21
segment rates.
(c)(1) If the actuarial value of assets
is calculated as the average value of as-
sets under § 430(g)(3)(B) and either the
funding target or the target normal cost
for a plan year is determined using the
three segment rates, section III.B. of No-
tice 2009–22 provides that for purposes
of calculating the expected earnings for a
plan year, the assumed rate of earnings
is limited to the third segment rate used
for that determination. Therefore, if the
MAP–21 segment rates are used to deter-
mine the funding target or target normal
cost for a plan year, then the assumed rate
of return used to determine the expected
earnings for that plan year is limited to the
MAP–21 third segment rate used for the
plan for that plan year.
(2) Pursuant to section III.C of Notice
2009–22, if neither the funding target nor
the target normal cost for a plan year is
determined using the segment rates, and
the value of plan assets is determined
using the average value of assets under
§ 430(g)(3)(B), then for purposes of cal-
culating the expected earnings for a plan
year, the assumed rate of return for peri-
ods within the plan year generally must
be limited so that it does not exceed the
average of the spot third segment rates
for the 24-month period ending with the
month preceding the month that contains
the valuation date for the plan year. Ac-
cordingly, if the amendments made by
MAP–21 apply to the plan for a plan year,
the assumed rate of return used to calculate
the expected earnings for that plan year is
limited to the MAP–21 third segment rate
for the month that contains the valuation
date for that plan year.
Q G–6: How do the MAP–21 segment
rates affect the determination of the fund-
ing standard carryover balance and pre-
funding balance for purposes for which the
MAP–21 segment rates apply?
A G–6: For certain purposes, the value
of plan assets is reduced by the funding
standard carryover balance and the pre-
funding balance. Applying the MAP–21
segment rates can have both direct and in-
direct impacts on these balances.
(a) Applying the MAP–21 segment
rates has an impact on the calculation of
the minimum required contribution for
a year, and hence on the determination
of the excess contributions that may be
added to the prefunding balance under
§ 430(f)(6)(B).
(b) Under § 430(f)(6)(B)(ii) and
§ 1.430(f)–1(b)(1)(iv), contributions are
generally adjusted for interest based on the
effective interest rate for purposes of deter-
mining the amount of excess contributions
that may be credited to the prefunding
balance. If the MAP–21 segment rates are
used to calculate the funding target (or the
target normal cost in the case of a plan
with a zero funding target) for the plan
year to which the contributions relate, then
the effective interest rate used to make
these adjustments reflects the MAP–21
segment rates.
(c) In addition, § 430(f)(5),
§ 1.430(f)–1(e), § 436(f), § 1.436–1(a)(5),
and § 1.436–1(f)(1) provide that the
funding standard carryover balance and
the prefunding balance may be reduced
by voluntary or deemed elections to avoid
benefit restrictions based on the certified
AFTAP for the plan year or to increase
the value of plan assets (for example, so
that the plan can reach various funding
thresholds). Also, plan sponsors may elect
to use these balances to offset minimum
required contributions. These adjustments
are made in accordance with the rules
of § 430(f), § 436(f)(3), § 1.430(f)–1(d),
§ 1.430(f)–1(e) and § 1.436–1(a)(5),
and reflect whichever interest rates are
in effect for the plan for the applicable
measurements.
Q G–7: To the extent that this notice
describes expected changes in the existing
regulations that will conform to the provi-
sions of this notice that conflict with those
regulations, can these provisions be relied
upon before the regulations are issued?
A G–7: The changes described in the
sections of this notice listed below may be
relied upon pending issuance of proposed
regulations that reflect such changes:
(a) Q&A T–2(c)(1) and Q&A
T–3(e)(2), relating to an additional ex-
ception to the rule in § 1.430(f)–1(f)(3)
generally requiring elections to reduce a
plan’s funding standard carryover balance
or prefunding balance to be irrevocable;
(b) Q&A T–3(d), relating to the ad-
dition to the list of deemed immaterial
changes in § 1.436–1(h)(4)(iii)(C); and
(c) Q&A T–3(e)(3), relating to an
additional exception to the rule under
§ 1.436–1(f)(2)(ii)(A) generally pro-
hibiting the application of section 436
contributions toward minimum required
contributions.
NA — MEASUREMENTS FOR
WHICH MAP–21 SEGMENT RATES
DO NOT APPLY
Q NA–1: For what purposes do the
MAP–21 segment ratesnotapply?
A NA–1: The MAP–21 segment rates
do not apply for purposes for which
they are specificallyexcluded under the
provisions of sections 40211(a)(2) and
40211(b)(3) of MAP–21 or related guid-
ance (including this notice). Accordingly,
except as provided in Q&A NA–3 of this
notice, the MAP–21 segment rates should
not be used for the purpose of applying
§ 404(o) to determine the maximum de-
ductible limit under § 404; calculating
the minimum present value requirement
for distributions subject to § 417(e)(3);
determining the amount of excess assets
that can be transferred to retiree health or
retiree group term life insurance accounts
under § 420; or calculating the FTAP used
to determine whether certain information
must be reported to the PBGC relative
to a plan under section 4010 of ERISA.
See Q&A NA–2 and NA–3 of this notice
for additional details. (See also section
40211(b)(3)(C) of MAP–21 regarding the
October 15, 20124822012–42 I.R.B.

determination of variable-rate PBGC pre-
miums.)
Q NA–2: How do the MAP–21 seg-
ment rates affect the application of the
rules regarding at-risk status under § 430(i)
for purposes for which the MAP–21 seg-
ment rates do not apply?
A NA–2: (a) Section 430(i) and
§ 1.430(i)–1 define special “at-risk” as-
sumptions that apply if a plan is in at-risk
status for a given plan year. A plan is
in at-risk status for a plan year if both
(1) the funding target attainment per-
centage described in § 430(d)(2) for the
preceding plan year (without reflecting
the special at-risk assumptions) was less
than 80% and (2) the funding target attain-
ment percentage for the preceding plan
year (reflecting the special at-risk assump-
tions) was less than 70%. If a plan is in
at-risk status, the funding target and target
normal cost may reflect a loading factor
under § 430(i)(1)(C) and may also reflect
a transition adjustment under § 430(i)(5),
depending on whether the plan was in
at-risk status for past years.
(b) The determination of whether a plan
is in at-risk status for a given plan year
(and the extent to which the § 430(i)(1)(C)
load and § 430(i)(5) transition adjustment
apply) is made separately for purposes for
which the MAP–21 segment rates apply
and for purposes for which the MAP–21
segment rates do not apply, based on the
segment rates or rates from the full yield
curve that were used to calculate the fund-
ing target for that specific purpose for the
preceding plan year. For example, a plan
maybeinat-riskstatusforagivenplan
year for purposes of determining the de-
ductible limit under § 404(o), but not be
in at-risk status for purposes of determin-
ing the minimum required contribution for
that same plan year.
(c) See PBGC Technical Update 12–1
with respect to the determination of at-risk
status for the purpose of calculating vari-
able-rate premiums.
Q NA–3: How is the value of plan as-
sets determined for purposes for which the
MAP–21 segment rates do not apply?
A NA–3: (a) Except as otherwise per-
mitted under paragraph (b) of this Q&A
NA–3, when determining the value of plan
assets for a purpose for which the MAP–21
segment rates do not apply: (1) the inter-
est adjustments for contributions receiv-
able (and contributions made for the plan
year that are made before the valuation
date) are determined using the effective in-
terest rate that does not reflect the MAP–21
segment rates; and (2) the limit on the as-
sumed rate of return used to calculate ex-
pected earnings under § 430(g)(3) must be
the unadjusted third segment rate. There-
fore, the value of plan assets used for a pur-
pose for which the MAP–21 segment rates
do not apply may differ from the value of
plan assets used for purposes for which the
MAP–21 segment rates apply. Note that
this rule applies to a plan for which an
election to use the full yield curve under
§ 430(h)(2)(D)(ii) is in effect, even though
the funding target and target normal cost
are not affected by the changes made by
MAP–21.
(b) For purposes of determining the
maximum deductible limit on pension
contributions under § 404, a taxpayer is
permitted instead to determine the maxi-
mum deductible limit under § 404 using
the value of plan assets based on a limit
on the expected earnings that reflects the
MAP–21 third segment rate and adjust-
ing contributions at the plan’s effective
interest rate determined based on the in-
terest rates used to calculate the minimum
required contribution under § 430. Tax-
payers are permitted to use this approach
only for determinations for which the
MAP–21 third segment rate is higher than
the unadjusted third segment rate.
(c) Certain measurements (such as the
determination of excess assets under § 420
and the funding target attainment percent-
age) are based on the value of the plan’s
assets reduced by the funding standard car-
ryover balance and the prefunding balance.
A plan’s funding standard carryover bal-
ance and prefunding balance depend on
voluntary and deemed elections made by
the plan sponsor (1) to add excess contri-
butions to the prefunding balance, (2) to
reduce the balances (usually to attain cer-
tain funding benchmarks or to avoid ben-
efit restrictions), or (3) to use the fund-
ing balances to offset minimum required
contributions. Accordingly, it would be
complex to determine what these balances
would have been had MAP–21 not been
enacted. Furthermore, if separate tracking
were required, it is not clear whether the
balances would be smaller or larger than
the actual balance.
3
Therefore, the actual
balances developed for purposes of de-
termining the minimum funding require-
ments under § 430 must be used for mea-
surements in which the assets are deter-
mined by subtracting the funding balances,
even if the MAP–21 segment rates are not
otherwise used for that measurement.
(d) See PBGC Technical Update 12–1
with respect to the determination of the
value of plan assets for the purpose of
calculating variable-rate premiums. See
PBGC Technical Update 12–2 for informa-
tion about how the asset calculation noted
in this Q&A NA–3 affects reporting re-
quirements under section 4010 of ERISA.
H — STATUTORY HYBRID PLANS
Q H–1: How do the changes made by
MAP–21 affect the interest crediting rates
for statutory hybrid plans?
A H–1: (a) In order to comply with
§ 411(b)(1)(H), a statutory hybrid plan
cannot provide for interest credits at an in-
terest crediting rate that exceeds a market
rate of return. Section 1.411(b)(5)–1(d)(3)
provides that the third segment rate under
§ 430(h)(2)(C)(iii) is an interest crediting
rate that is not in excess of a market rate of
return. In addition, § 1.411(b)(5)–1(d)(4)
specifies that the first and second segment
rates under §§ 430(h)(2)(C)(i) and (ii) are
safe harbor rates that are deemed not to
exceed a market rate of return.
(b) Section 1.411(b)(5)–1(d)(1)(iii)
provides that an interest crediting
rate is not in excess of a market rate
of return only if it is described in
§ 1.411(b)(5)–1(d)(3), (d)(4), or (d)(5).
Section 1.411(b)(5)–1(f)(2)(i)(B) pro-
vides that § 1.411(b)(5)–1(d)(1)(iii) is
effective for plan years beginning on or
after January 1, 2012. However, Notice
2011–85, 2011–44 I.R.B. 605, indicates
that the Treasury Department and the Ser-
vice intend to amend the regulations to
postpone the effective/applicability date
of § 1.411(b)(5)–1(d)(1)(iii) to match the
applicability date that will apply to reg-
ulations finalizing other rules regarding
the market rate of return requirement.
Those final regulations will not be ef-
3
For example, the operation of rules which requirereductions in those balances if the reduction would be sufficient to avoid certain benefit limitations under § 436 means that a smaller
funding standard carryover balance and prefunding balance could be retained if it were insufficient to avoid the benefit limitation, while a larger one would be required to be reduced.
2012–42 I.R.B.483October 15, 2012

fective for plan years beginning before
January 1, 2014.
(c) For a plan that currently defines
the interest crediting rate by reference to
a segment rate under §§ 430(h)(2)(C)(i),
(ii), or (iii), prior to the effective date of
the regulations that are described in No-
tice 2011–85, a plan administrator’s rea-
sonable interpretation of plan terms that
provide for interest credits by reference to
one of the § 430(h)(2)(C) segment rates
could reflect either of the following: (1)
that the plan terms provide an interest cred-
iting rate by reference to the segment rate
without reflecting the changes made by
MAP–21; or (2) that the plan terms provide
an interest crediting rate by reference to the
corresponding MAP–21 segment rate.
(d) If a plan that currently defines the in-
terest crediting rate by reference to a seg-
ment rate under § 430(h)(2)(C)(i), (ii), or
(iii) is amended to reflect the plan admin-
istrator’s reasonable interpretation of plan
terms to specify that the reference is to
the unadjusted segment rate (or, alterna-
tively, to specify that the reference is to the
MAP–21 segment rate) by the deadline for
amending the plan to comply with the reg-
ulations described in Notice 2011–85, then
the amendment is not considered to reduce
section 411(d)(6) protected benefits. In ad-
dition, the amendment would not trigger
the requirement to furnish a notice to par-
ticipants under section 204(h) of ERISA.
(e) Whether any of the MAP–21 seg-
ment rates will be specified in the regula-
tions described in Notice 2011–85 as in-
terest crediting rates that do not exceed a
market rate of return has not yet been de-
termined, and this determination will be
made when those regulations are finalized.
If those regulations do not permit a statu-
tory hybrid plan to use an interest crediting
rate by reference to the MAP–21 segment
rates, a plan that is crediting interest by
reference to such rates will be required to
change the interest crediting rate in accor-
dance with the applicable transition rules
that will apply to other plans that have an
interest crediting rate in excess of a mar-
ket rate of return. As provided in para-
graph (b) of this Q&A H–1, those regula-
tions will not be effective for plan years be-
ginning before January 1, 2014.
Q H–2: If a plan currently defines the
interest crediting rate by reference to a seg-
ment rate under § 430(h)(2)(C)(i), (ii), or
(iii), and the plan administrator reasonably
interprets plan terms as providing an inter-
est crediting rate by reference to the cor-
responding MAP–21 segment rate, when
must interest credits reflect the changes
made by MAP–21?
A H–2: If the plan administrator rea-
sonably interprets plan terms as providing
an interest crediting rate by reference to
a MAP–21 segment rate, then the interest
credits under the plan must be increased to
reflect the MAP–21 segment rate for inter-
est credited after the first day of the plan
year for which the MAP–21 segment rates
apply to the plan for purposes of § 430. Al-
ternatively, such a plan administrator may
interpret the plan as providing for the use
of the MAP–21 segment rate for deter-
mining interest credits under the plan be-
ginning the first day of a plan year be-
ginning in 2012, even if the plan spon-
sor has elected to delay the application
of MAP–21 segment rates for purposes of
§ 430. Once a plan administrator rea-
sonably interprets plan terms as providing
an interest crediting rate by reference to a
MAP–21 segment rate, the plan terms can-
not subsequently be interpreted to provide
an interest crediting rate by reference to
the corresponding unadjusted segment rate
without creating the need to protect the ac-
crued benefit as required under § 411(d)(6)
(unless the regulations or other guidance
provide otherwise).
T — TRANSITION ISSUES
Q T–1: When are the MAP–21 segment
rates effective?
A T–1: The MAP–21 segment rates are
generally effective for plan years begin-
ning after December 31, 2011. However,
the plan sponsor may elect to defer the
application of the MAP–21 segment rates
to plan years beginning on or after Jan-
uary 1, 2013, either (a) for all purposes, or
(b) solely for purposes of determining the
AFTAP when applying the funding-based
benefit restrictions under § 436. See Q&A
E–1 of this notice for additional details.
Q T–2: If the MAP–21 segment rates
are used for purposes of determining the
minimum required contribution under
§ 430 for a plan year beginning in 2012,
when are the changes in the minimum
funding requirements effective?
A T–2: (a) If the MAP–21 segment
rates are used to determine the minimum
required contribution for a plan year begin-
ning in 2012, the change in the minimum
fundingrequirementsiseffectiveasofthe
first day of that plan year. For example,
if reflecting the MAP–21 segment rates in
the calculation of the minimum required
contribution for the plan year beginning
January 1, 2012, would reduce the required
quarterly installments for that plan year,
the required quarterly installments for that
plan year are retroactively reduced for in-
stallments due prior to the enactment of
MAP–21.
(b) A plan sponsor may not reverse
an election under § 1.430(f)–1(d) to use
a plan’s funding standard carryover bal-
ance or prefunding balance to offset the
minimum required contribution for a plan
year beginning in 2012, except as pro-
vided by § 1.430(f)–1(f)(3)(ii) and (iii)
(relating to elections to use the funding
standard carryover balance or prefunding
balance that exceed the amount of the min-
imum required contribution for the plan
year). This rule applies even if applying
the MAP–21 segment rates retroactively
reduces the required quarterly contribu-
tions for that plan year. However, see
the special rule for excess contributions
attributable to the use of funding balances
in § 1.430(f)–1(b)(3)(iii).
(c) (1) A plan sponsor may elect to
reverse all or part of any election under
§1.430(f)–1(e) to reduce the plan’s fund-
ing standard carryover balance or prefund-
ing balance as of the first day of a plan year
beginning in 2012 if (i) the reduction elec-
tion was made on or before September 30,
2012, and (ii) the MAP–21 segment rates
apply for purposes of determining the min-
imum required contribution for that plan
year. It is expected that the regulations un-
der § 430(f) will be revised to reflect this
exception to the general rule that such an
election is irrevocable.
(2) In addition, despite the general posi-
tion of the Service that a contribution des-
ignated for a particular plan year cannot
be redesignated to apply for another plan
year after the Schedule SB is filed, the plan
sponsor may choose to redesignate all or
a portion of a contribution that was orig-
inally designated as applying to the plan
year beginning in 2011 to apply to a plan
year that begins in 2012. This rule ap-
plies only to contributions made after the
end of the 2011 plan year but on or be-
fore September 30, 2012, and applies even
October 15, 20124842012–42 I.R.B.

if the 2011 Schedule SB had already been
filed on or before September 30, 2012.
(3) However, any reversal of an elec-
tion or redesignation of contributions un-
der paragraph (c)(1) or (c)(2) of this Q&A
T–2 is not permitted to the extent it would
result in the imposition of benefit restric-
tions under § 436 for the plan year begin-
ning in 2012 that would not otherwise be
imposedorwouldresultinanunpaidmin-
imum required contribution for any plan
year.
(4) See Q&A E–3, Q&A R–3, and
Q&A R–4 of this notice for further in-
formation on how to make and report the
elections described in this Q&A T–2.
Q T–3: If the MAP–21 segment rates
are used for purposes of applying the fund-
ing-based benefit restrictions under § 436
for a plan year beginning in 2012, when
are changes in the plan’s benefit restric-
tions effective?
A T–3: (a) (1) The application of the
MAP–21 segment rates does not affect the
application of the presumption rules un-
der § 436(h) for the first plan year that
MAP–21 segment rates apply to the plan
for purposes of § 436. Accordingly, the
restrictions for a plan year beginning in
2012 must be applied based on the pre-
sumed AFTAP before the date, if any, that
the AFTAP is certified for the plan year.
(2) Consistent with § 1.436–1(h)(4)(ii),
the rules of this Q&A T–3 apply to a range
certification in the same way they would
apply to the certification of a specific
AFTAP.
(b) If the first AFTAP certification for
a plan year beginning in 2012 uses the
MAP–21 segment rates, the benefit re-
strictions under § 436 apply based on that
AFTAP in accordance with the rules of
§§ 1.436–1(g) and (h).
(c) (1) If, on or before Septem-
ber 30, 2012, the AFTAP was certified for
a plan year beginning in 2012 using the
unadjusted segment rates or the full yield
curve, and the plan sponsor subsequently
uses the MAP–21 segment rates for pur-
poses of the § 436 benefit restrictions
for that plan year, then the plan sponsor
can either choose to apply any change in
those restrictions either (i) prospectively,
as described in paragraph (d) of this Q&A
T–3 or (ii) retroactively to the date that
the 2012 AFTAP was originally certified,
as described in paragraph (e) of this Q&A
T–3. In the absence of an affirmative
election to apply the changes retroac-
tively as described in paragraph (e) of this
Q&A T–3, the plan sponsor will be treated
as having elected to apply any changes
prospectively as described in paragraph
(d) of this Q&A T–3. In either case, all
plan operations and elections must be
consistent with this choice, and any plan
operations that were inconsistent with this
choice must be corrected as described in
Q&A T–4 of this notice.
(2) If any AFTAP certification for
a plan year beginning in 2012 using
the unadjusted segment rates or the full
yield curve is made after September 30,
2012, then the rules regarding a mate-
rial change in the AFTAP set forth in
§ 1.436–1(h)(4)(iii) and (iv) apply with
respect to any subsequent certification for
that plan year (including a certification
that is based on the MAP–21 segment
rates).
(d) (1) If, on or before Septem-
ber 30, 2012, the AFTAP was certified for
a plan year beginning in 2012 using the
unadjusted segment rates or the full yield
curve, the plan sponsor subsequently uses
the MAP–21 segment rates for purposes
of calculating the AFTAP that is used to
apply the § 436 benefit restrictions for
that plan year, and the plan sponsor does
not choose to apply any change in those
restrictions retroactively as described in
paragraph (e) of this Q&A T–3, then any
subsequent certification for that plan year
that is based on the MAP–21 segment
rates is subject to the rules regarding a
material change in the AFTAP set forth in
§1.436–1(h)(4)(iii) and (iv).
(2) Section 1.436–1(h)(4)(iii) sets
forth rules relating to changes in certified
AFTAPs and provides a special rule that
deems a change in the AFTAP attributable
to certain events as “immaterial,” even
if the change would otherwise be a
material change. The effect of having an
event for which the change in AFTAP
is deemed immaterial is that a plan
administrator can reflect the event on a
prospective basis beginning with the date
of the event, provided that the AFTAP
is recertified as soon as practicable
thereafter. The Service and the Treasury
intend to propose amendments to the list
of deemed immaterial changes set forth in
§1.436–1(h)(4)(iii)(C) that would provide
that additional events can be added to
the list of deemed immaterial events in
guidance of general applicability. One
such event is the event described in this
paragraph (d) of Q&A T–3.
(3) Pursuant to this planned change in
the regulations, the event that would be
treated as a deemed immaterial change is
the change in AFTAP attributable to the
use of the MAP–21 rate segments for a
plan year beginning in 2012. The date of
the event would be October 1, 2012, (or
the date of the revised AFTAP certifica-
tion, if earlier). Accordingly, if the plan
sponsor chooses to apply any changes in
the § 436 restrictions prospectively for a
plan year beginning in 2012 as described
in this paragraph (d) of Q&A T–3, any
change in benefit restrictions resulting
from the updated AFTAP determination
using MAP–21 segment rates must be
effective as of the earlier of (i) Octo-
ber 1, 2012, or (ii) the date of certification
of the 2012 AFTAP determined using
MAP–21 segment rates. In such a case,
all elections relative to funding balances
remain in place and all section 436 contri-
butions remain as originally designated.
(4) The requirement that the AFTAP
be recertified to reflect the MAP–21 seg-
ment rates as soon as practicable after the
event giving rise to the deemed immaterial
change as described in paragraph (d)(3) of
this Q&A T–3 will not be satisfied if the
recertification occurs later than Decem-
ber 31, 2012.
(e) (1) If, on or before September 30,
2012, the AFTAP had been certified for
a plan year beginning in 2012 using the
unadjusted segment rates or the full yield
curve, the plan sponsor subsequently uses
the MAP–21 segment rates for purposes of
calculating the AFTAP that is used to apply
the § 436 benefit restrictions to that plan
year, and the plan sponsor elects to apply
the AFTAP determined using the MAP–21
segment rates retroactively as described in
this paragraph (e) of Q&A T–3, then the
operations of the plan must be conformed
to that updated AFTAP for the period be-
ginning when the AFTAP for the plan year
was originally certified. See Q&A E–2 of
this notice for additional details as to how
to elect to apply the AFTAP determined
using MAP–21 rates retroactively as de-
scribed in this paragraph (e) of Q&A T–3.
(2) If the MAP–21 segment rates are
applied retroactively for purposes of § 436
for a plan year beginning in 2012 as de-
scribed in this paragraph (e) of Q&A
2012–42 I.R.B.485October 15, 2012

T–3, the plan sponsor may elect to re-
verse all or a portion of any voluntary or
deemed elections toreduce the funding
standard carryover balance or prefund-
ing balance that were made to avoid or
remove benefit restrictions under § 436.
Because §1.436(g)(5)(i)(C) provides that
any reductions in prefunding and funding
standard account balances made prior to
the AFTAP certification continue to apply,
no reversal is permitted with respect to
elections that were made in connection
with the presumed AFTAP for a plan year
beginning in 2012. In addition, no reversal
of an election under this paragraph (e)(2)
is permitted to the extent it would result in
the imposition of benefit restrictions under
§ 436 for the plan year that would not oth-
erwise be imposed or if it would result in
an unpaid minimum required contribution
under § 430 for any plan year.
(3) If the MAP–21 segment rates are
applied retroactively for purposes of § 436
for a plan year beginning in 2012 as de-
scribedinthisparagraph(e)ofQ&A
T–3, any section 436 contribution that
was made in connection with the certi-
fied AFTAP is applied toward a minimum
required contribution to the extent the
contribution is no longer required to re-
move the benefit restriction. However, no
change is permitted with respect to sec-
tion 436 contributions that were made in
connection with the presumed AFTAP for
a plan year beginning in 2012.
(4) It is expected that the applicable reg-
ulations will be amended to conform to the
provisions of this paragraph (e) of Q&A
T–3, permitting certain reversals of elec-
tions and redesignation of section 436 con-
tributions if an AFTAP based on MAP–21
segment rates is applied retroactively.
Q T–4: What actions must be taken if a
certification of a plan’s AFTAP reflecting
MAP–21 segment rates for a plan year be-
ginning in 2012 creates the need to correct
for prior operations as described in Q&A
T–3(d)(3) and Q&A T–3(e) of this notice?
A T–4: (a) (1) If the MAP–21 segment
rates are used for purposes of applying the
funding-based restrictions under § 436 for
a plan year beginning in 2012, a plan must
take any corrective actions necessary to
conform plan operations to the AFTAP re-
flecting MAP–21 segment rates, if apply-
ing the MAP–21 segment rates would have
changed the application of the § 436 re-
strictions for the period (i) beginning with
the date of the immaterial event described
in Q&A T–3(d)(3) of this notice or (ii)
beginning with the date the AFTAP for
the year was first certified, as described in
Q&A T–3(e) of this notice, as applicable.
(2) If the corrective actions described
in paragraphs (b) through (f) of this Q&A
T–4 are taken to reflect the application of
MAP–21, then the plan’s operations are
treated as having been consistent with the
provisions of the plan document relative
to the requirements of § 436. For this pur-
pose, the provisions of the Employee Plans
Compliance Resolution System (EPCRS),
as set forth in Rev. Proc. 2008–50,
2008–35 I.R.B. 464, apply, except that a
plan is eligible for self-correction under
sections 7, 8, and 9 of Rev. Proc. 2008–50
without regard to the requirements of
sections 4.03 (requiring a favorable IRS
determination letter) and 4.04 (requiring
certain established practices and proce-
dures) of that revenue procedure.
(b) Consistent with § 1.436–1(a)(4)(iii),
if unpredictable contingent event benefits
due to an event occurring during a plan
year beginning in 2012 are not permitted
to be paid because of restrictions under
§ 436, but are permitted to be paid later in
that plan year as a result of a new certifi-
cation of the AFTAP reflecting MAP–21
segment rates, then those unpredictable
contingent event benefits must become
payable, retroactive to the period those
benefits would have been payable under
the terms of the plan (other than plan
terms implementing the requirements of
§ 436(b)).
(c) Consistent with § 1.436–1(a)(4)(iv),
if a plan amendment with an effective date
during a plan year beginning in 2012 does
not take effect because of the limitations
of § 436(c), but is permitted to take ef-
fect later in that plan year as a result of
a new certification of the AFTAP reflect-
ing MAP–21 segment rates, then the plan
amendment must automatically take effect
as of the first day of that plan year begin-
ning in 2012 (or, if later, the original effec-
tive date of the amendment).
(d) For any prohibited payment that
was not permitted to be paid during a
plan year beginning in 2012 because
of restrictions under § 436, but is per-
mitted to be paid on or after the dates
described in Q&A T–3(d)(3) and Q&A
T–3(e) of this notice as a result of a new
certification of theAFTAP reflecting
MAP–21 segment rates, the plan has
taken adequate corrective action if it
makes the prohibited payment available
to participants or beneficiaries who would
have been eligible for the prohibited
payment (including a prohibited payment
that is available on a restricted basis under
§ 436(d)(3)).
(e) For any accruals that were not per-
mitted during the period for which § 436(e)
retroactively ceases to apply by reason of
the change made by MAP–21 as described
in Q&A T–3(d)(3) and Q&A T–3(e) of this
notice, the plan has taken adequate correc-
tive action if it restores benefits that accrue
during the period to which the MAP–21
segment rates are retroactively applied.
(f) In the case of a participant or benefi-
ciary who, as a result of any of the changes
described in paragraphs (b) through (e) of
this Q&A T–4, is entitled to increased ben-
efits, to benefits payable at a special early
retirement date, or to benefits payable in
a different form of payment (and who
elects such different form of payment,
with spousal consent, if applicable), the
required correction is to provide the ben-
efit payments in the increased amount
or other form of payment commencing
with a new prospective annuity starting
date. However, if payments have already
commenced, the correction is to provide
the participant with (1) future benefit pay-
ments that are paid in the same manner
and amount as if the participant had begun
receiving the corrected payment at his or
her original annuity starting date, and (2)
a make-up for past underpayments. The
make-up for past underpayments is equal
to the aggregate difference between the
past payments actually received and the
amounts that would have been received
had the benefit commenced in the correct
form of payment at the participant’s orig-
inal annuity starting date, plus interest to
the date of the correction (in accordance
with EPCRS), and may be paid as either
(i) a single-sum payment, or (ii) an actuar-
ially equivalent increase in the amount of
future benefit payments.
E — MAP–21 ELECTIONS
Q E–1: How does the plan sponsor elect
to defer the use of MAP–21 segment rates
until the first plan year beginning on or
after January 1, 2013?
October 15, 20124862012–42 I.R.B.

A E–1: (a) A plan sponsor elects to
defer the use of MAP–21 segment rates
until the first plan year beginning on or
after January 1, 2013, by providing writ-
ten notice to the enrolled actuary for the
plan and to the plan administrator. The
notice must specify the name of the plan,
employer identification number and plan
number, and whether the use of MAP–21
segment rates is deferred for all purposes
or only for determination of the AFTAP
used to apply benefitrestrictions under
§ 436.
(b) The election described in paragraph
(a) of this Q&A E–1 is irrevocable, and
must be made no later than the deadline for
filing the Form 5500, Form 5500–SF, or
Form 5500–EZ (including extensions) for
a plan year beginning in 2012, or the date
the applicable form is actually filed, if ear-
lier. However, the decision as to whether
to defer the use of MAP–21 segment rates
may have to be made earlier if it affects
the application of benefit restrictions un-
der § 436. See Q&A R–1 and R–2 of this
notice for information on reporting infor-
mation on Schedule SB of Form 5500 if
the MAP–21 segment rates are applied for
a plan year beginning in 2012 for purposes
of determining the minimum required con-
tribution under § 430 but not for purposes
ofdeterminingtheAFTAPusedtoapply
the benefit restrictions under § 436.
Q E–2: How does a plan sponsor elect
toapplyanAFTAPbasedonMAP–21seg-
ment rates retroactively for a plan year
beginning in 2012 as described in Q&A
T–3(e) of this notice?
A E–2: (a) A plan sponsor elects
toapplyanAFTAPbasedonMAP–21
segment rates retroactively as described
in paragraph Q&A T–3(e) (rather than
prospectively as described in paragraph
Q&A T–3(d)) of this notice by providing
written notice to the enrolled actuary for
the plan and to the plan administrator.
The notice must specify the name of the
plan, employer identification number and
plan number, and the date as of which the
AFTAP based on MAP–21 segment rates
is retroactively effective, as determined
under Q&A T–3(e) of this notice.
(b) The election described in paragraph
(a) of this Q&A E–2 is irrevocable, and
must be made no later than the deadline
for filing the Form 5500, Form 5500–SF,
or Form 5500–EZ (including extensions)
for a plan year beginning in 2012, or the
date the applicable form is actually filed,
if earlier. However, see paragraph Q&A
T–3(d)(4) of this notice regarding the
timing requirement for eligibility for the
deemed immaterial change rule described
in paragraph Q&A T–3(d) of this notice.
Q E–3: How does a plan sponsor elect
to reverse elections made to reduce the
funding standard carryover balance or pre-
funding balance, or to redesignate contri-
butions originally intended for the 2011
plan year, as permitted under Q&A T–2(c)
and Q&A T–3(e)(2) of this notice?
A E–3: (a) Any election to reverse an
election to reduce a funding standard car-
ryover balance or prefunding balance that
was made before October 1, 2012, or to re-
designate a contribution made before Oc-
tober 1, 2012, that was originally desig-
natedasapplyingtothe2011planyearso
that it applies to the 2012 plan year (tak-
ing into account the requirements of Q&A
T–2 and Q&A T–3 of this notice) is made
by the plan sponsor by providing written
notification to the plan’s enrolled actuary
and plan administrator. The written notifi-
cation must specify the name of the plan,
employer identification number and plan
number, and must set forth the relevant de-
tails of the election, including the specific
dollar amount involved in the election. A
conditional or formula-based election does
not satisfy this requirement.
(b) Any election to reverse a previous
election to reduce the funding standard car-
ryover balance or prefunding balance must
be made by the last day of the plan year be-
ginningin2012towhichtheelectionre-
lates.
(c) Any election to redesignate contri-
butions that were originally designated for
the 2011 plan year to the 2012 plan year as
a result of the changes made by MAP–21
must be made by the deadline for filing
the Form 5500, Form 5500–SF, or Form
5500–EZ (including extensions) for the
2012 plan year or the date the applicable
form is actually filed, if earlier.
Q E–4: How does a plan sponsor re-
voke an election to use the full yield curve
under § 430(h)(2)(D)(ii), pursuant to sec-
tion 40211(c)(2)(B) of MAP–21?
A E–4: (a) The sponsor of a plan for
whichanelectiontousethefullyield
curve under § 430(h)(2)(D)(ii) is in effect
as of July 6, 2012, revokes that election
by providing written notice to the enrolled
actuary for the plan and to the plan ad-
ministrator no later than July 5, 2013. The
notice must specify the name of the plan,
employer identification number and plan
number, the first plan year for which the
election is revoked, and (if applicable)
the lookback month used to determine
the segment rates in accordance with
§ 430(h)(2)–1(e)(2).
(b) Once a plan sponsor has revoked
the election to use the full yield curve for
a plan for a plan year pursuant to section
40211(c)(2)(B) of MAP–21, that revoca-
tion cannot be changed for that plan year.
Q E–5: What additional rules apply to
a plan sponsor who elects to revoke an
election to use the full yield curve under
§ 430(h)(2)(D)(ii) that is in effect for a plan
as of July 6, 2012?
A E–5: (a) If an election to use the full
yield curve under § 430(h)(2)(D)(ii) is in
effect for a plan as of July 6, 2012, the
plan sponsor may revoke the election to
use the full yield curve for the first plan
year to which MAP–21 segment rates are
used under the plan without the approval of
the Secretary of the Treasury. This could
apply to a plan year beginning in 2012 or
2013 depending on the employer’s election
to defer the application of MAP–21 seg-
ment rates under 40211(c)(2)(A) and Q&A
E–1 of this notice. For this purpose, if a
plan sponsor elects to defer the application
of MAP–21 segment rates for a plan to the
firstplanyearbeginningonorafterJan-
uary 1, 2013, solely for purposes of calcu-
lating the AFTAP used to apply the fund-
ing-based benefit restrictions under § 436,
then the amendments made by MAP–21
apply (1) to the first plan year beginning
on or after January 1, 2013, for purposes of
determiningtheAFTAPusedtoapplythe
benefit restrictions under § 436, and (2) to
aplanyearbeginningin2012forallother
purposes. In such a case, the election de-
scribed in Q&A E–4 of this notice would
specify those separate plan years for those
separate purposes.
(b) If the plan sponsor revokes the
election to use the full yield curve for a
plan year beginning in 2012 and applies
the MAP–21 segment rates for that plan
year, then that revocation also applies for
purpose of applying the benefit restric-
tions under § 436. However, if a plan
sponsor elects to defer the application
of MAP–21 segment rates for a plan to
the first plan year beginning on or after
January 1, 2013, solely for purposes of
2012–42 I.R.B.487October 15, 2012

calculating the AFTAP used to apply the
funding-based benefit restrictions under
§ 436, then the full yield curve continues
to apply to the plan for such purpose for
the plan year beginning in 2012.
R—SCHEDULESBREPORTING
Q R–1: Should the information re-
ported on the 2012 Schedule SB reflect
the MAP–21 segment rates?
A R–1: (a) The information reported
on the 2012 Schedule SB should generally
reflect the assumptions used to determine
the minimum required contribution under
§ 430. Therefore, for example, the fund-
ing target, effective interest rate and target
normal cost reported on lines 3 through 6
and the assumed discount rates reported on
line 21 of the 2012 Schedule SB must re-
flect the MAP–21 segment rates if those
are used to determine the minimum re-
quired contribution for 2012. Otherwise,
the information reported should generally
be based on the unadjusted segment rates
or the full yield curve, whichever is used
to determine the 2012 minimum required
contribution.
Q R–2: Should the AFTAP reported on
line 15 of the 2012 Schedule SB reflect the
MAP–21 segment rates?
A R–2: (a) The AFTAP reported on line
15 of the 2012 Schedule SB is the final
certified AFTAP for the plan year, reflect-
ing any adjustments to reflect the MAP–21
rates, if applicable, and any adjustments
pertaining to the plan year made subse-
quent to the valuation.
(b) (1) If the plan sponsor elects to defer
the effective date of MAP–21 for purposes
of applying the funding-based benefit re-
strictions under § 436 until the plan year
beginning on or after January 1, 2013, as
permitted under section 40211(c)(2)(A) of
MAP–21, the AFTAP reported on line 15
of the 2012 Schedule SB must not reflect
the MAP–21 segment rates.
(2) For plans with valuation dates other
than the first day of the plan year, the
instructions to Schedule SB generally re-
quire that the AFTAP reported on line
15 of Schedule SB be the final certified
AFTAP based on the valuation results for
the plan year for which the Schedule SB
is prepared, reflecting other adjustments
as defined in applicable guidance, even
if that AFTAP is not used to apply the
restrictions under § 436 until the following
plan year.
(3) If the segment rates used to deter-
mine the AFTAP reported on line 15 of
the Schedule SB differ from those used to
determine the minimum required contribu-
tion, include in the attachment for line 15 a
description of the segment rates or the full
yield curve in the same level of detail as
the information reported on line 21 of the
2012 Schedule SB.
Q R–3: How are any elections to re-
verse previous elections to reduce the
funding standard carryover balance or the
prefunding balance as permitted under
Q&A T–2(c) and Q&A T–3(e)(2) of this
notice reported on the 2012 Schedule SB?
A R–3: If an election is made to re-
verse earlier elections to reduce the fund-
ing standard carryover balance or prefund-
ing balance for a 2012 plan year, complete
the entries on line 12 of the 2012 Schedule
SB reflecting the net effect of the original
election and the election to reverse all or
part of that election, as if the net amount
of the reduction was the amount of the
original election. Include a reconciliation
of the reductions under the original elec-
tion and subsequent reversal of all or part
of that election in the attachment to line
9, “Schedule SB, line 9 –Explanation of
Credit Balance Discrepancy.”
Example R–1. Plan sponsor A elected (or was
deemed to have elected, under § 436(f)(3) and
§ 1.436–1(a)(5)) to reduce a plan’s funding standard
carryover account balance by $100,000 in connec-
tion with the certification of an AFTAP on or before
September 30, 2012, and prior to the application of
the MAP–21 segment rates. If A chooses to apply the
MAP–21 segment rates retroactively in accordance
with Q&A T–3(e) of this notice and elects to reverse
$25,000 of the reduction after reflecting the MAP–21
segment rates, then line 12, column (a) of the 2012
Schedule SB would reflect the net $75,000 reduction
in the funding standard carryover balance as if that
had been the amount reduced by the original election.
The attachment to line 9 would include a reconcil-
iation showing the date and amount of the original
$100,000 reduction in the plan’s funding standard
carryover balance and the date and amount of the
subsequent reversal of $25,000 after the application
of the MAP–21 segment rates.
Q R–4: How does Schedule SB re-
flect (1) any elections to redesignate
contributions made on or before Septem-
ber 30, 2012, to the 2012 plan year which
were originally designated as applying
to the 2011 plan year in accordance with
Q&A T–2(c)(2) of this notice or (2) any
section 436 contributions that were made
on or before September 30, 2012, that are
applied to the minimum required contri-
bution for 2012 in accordance with Q&A
T–3(e)(3) of this notice?
A R–4: If any contributions originally
designated as applying to the 2011 plan
year that were paid on or before Septem-
ber 30, 2012, are redesignated as applying
to a plan year beginning in 2012 as pro-
vided in Q&A T–2(c)(2) of this notice, or
if any section 436 contributions that were
made on or before September 30, 2012,
are applied to the minimum required con-
tribution for 2012 as provided in Q&A
T–3(e)(3) of this notice, complete the 2012
Schedule SB as if such contributions had
originally been intended to apply toward
the minimum required contribution for the
2012 plan year. Accordingly:
(a) Exclude the interest-adjusted contri-
butions redesignated from the 2011 plan
year from the entries on line 11a through
11c of the 2012 Schedule SB, instead of
reporting the present value of excess con-
tributions reported on lines 38a and 38b
of the 2011 Schedule SB. Include a recon-
ciliation of the difference between the en-
tries in lines 11a through 11c on the 2012
Schedule SB and the information on lines
38a and 38b of the 2011 Schedule SB in
the attachment to line 9, “Schedule SB,
line 9 –Explanation of Credit Balance Dis-
crepancy”. Alternatively, the plan sponsor
may file an amended 2011 Schedule SB,
excluding any contributions that are redes-
ignated for a 2012 plan year.
(b) Include the amount of the contribu-
tions redesignated from the 2011 plan year
and section 436 contributions applied to
the minimum required contribution on the
2012 Schedule SB, in line 18 and in the
interest-adjusted contributions in line 19c
(adjustedwithinteresttothevaluationdate
for the 2012 plan year). Report these con-
tributions in the schedule described in the
attachment to line 19, “Schedule SB, line
19 –Discounted Employer Contributions,”
and include the fact that these contribu-
tions were originally credited to the 2011
plan year when reporting the plan year to
which these contributions (or the portions
of individual contributions) are applied.
IV. PAPERWORK REDUCTION ACT
The collections of information con-
tained in this notice have been reviewed
and approved by the Office of Manage-
ment and Budget in accordance with the
October 15, 20124882012–42 I.R.B.

Paperwork Reduction Act (44 U.S.C.
§ 3507) under control number 1545–1610.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in section III of this notice. The
collections of information are required to
implement the application of the funding
relief under section 40211 of MAP–21.
The collections of information are manda-
tory for those plan sponsors making var-
ious elections when applying the amend-
ments made by MAP–21 to a plan.
The likely respondents are sponsors
of approximately 39,000 single-employer
defined benefit plans, including one-par-
ticipant plans. Currently, it is estimated
that any effect on burden as previously
reported to OMB will not be significant.
Any potential changes on burden will
be reported through the renewal of the cur-
rent OMB approval numbers.
Estimates of the annualized cost to re-
spondents are not available at this time.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by § 6103.
V. DRAFTING INFORMATION
The principal author of this no-
tice is Carolyn Zimmerman of the
Employee Plans, Tax Exempt and
Government Entities Division.For
further information regarding this
notice, please contact the Employee
Plans taxpayer assistance answering
service at 1–877–829–5500 (a toll-free
number) or e-mail Ms. Zimmerman at
RetirementPlanQuestions@irs.gov.
Extension of Replacement
Period for Livestock Sold on
Account of Drought
Notice 2012–62
SECTION 1. PURPOSE
This notice provides guidance regard-
ing an extension of the replacement pe-
riod under § 1033(e) of the Internal Rev-
enue Code for livestock sold on account of
drought in specified counties.
SECTION 2. BACKGROUND
.01Nonrecognition of Gain on Invol-
untary Conversion of Livestock. Section
1033(a) generally provides for nonrecog-
nition of gain when property is involuntar-
ily converted and replaced with property
that is similar or related in service or use.
Section 1033(e)(1) provides that a sale or
exchange of livestock(other than poultry)
held by a taxpayer for draft, breeding, or
dairy purposes in excess of the number
that would be sold following the taxpayer’s
usual business practices is treated as an
involuntary conversion if the livestock is
sold or exchanged solely on account of
drought, flood, or other weather-related
conditions.
.02Replacement Period. Section
1033(a)(2)(A) generally provides that gain
from an involuntary conversion is rec-
ognized only to the extent the amount
realized on the conversion exceeds the
cost of replacement property purchased
during the replacement period. If a sale
or exchange of livestock is treated as an
involuntary conversion under § 1033(e)(1)
and is solely on account of drought, flood,
or other weather-related conditions that re-
sult in the area being designated as eligible
for assistance by the federal government,
§ 1033(e)(2)(A) provides that the replace-
ment period ends four years after the close
of the first taxable year in which any part
of the gain from the conversion is realized.
Section 1033(e)(2)(B) provides that the
Secretary may extend this replacement pe-
riod on a regional basis for such additional
time as the Secretary determines appro-
priate if the weather-related conditions
that resulted in the area being designated
as eligible for assistance by the federal
government continue for more than three
years. Section 1033(e)(2) is effective for
any taxable year withrespect to which the
due date (without regard to extensions) for
a taxpayer’s return is after December 31,
2002.
SECTION 3. EXTENSION OF
REPLACEMENT PERIOD UNDER
§ 1033(e)(2)(B)
Notice 2006–82, 2006–2 C.B. 529, pro-
vides for extensions of the replacement pe-
riod under § 1033(e)(2)(B). If a sale or ex-
change of livestock is treated as an invol-
untary conversion on account of drought
and the taxpayer’s replacement period is
determined under § 1033(e)(2)(A), the re-
placement period will be extended under
§ 1033(e)(2)(B) and Notice 2006–82 until
the end of the taxpayer’s first taxable year
ending after the first drought-free year for
the applicable region. For this purpose, the
first drought-free year for the applicable
region is the first 12-month period that (1)
ends August 31; (2) ends in or after the last
year of the taxpayer’s 4-year replacement
period determined under § 1033(e)(2)(A);
and (3) does not include any weekly period
for which exceptional, extreme, or severe
drought is reported for any location in the
applicable region. The applicable region
is the county that experienced the drought
conditions on account of which the live-
stock was sold or exchanged and all coun-
ties that are contiguous to that county.
A taxpayer may determine whether
exceptional, extreme,or severe drought is
reported for any location in the applica-
ble region by reference to U.S. Drought
Monitor maps that are produced on a
weekly basis by the National Drought
Mitigation Center. U.S. Drought Monitor
maps are archived athttp://droughtmoni-
tor.unl.edu/archive.html.
In addition, Notice 2006–82 provides
that the Internal Revenue Service will
publish in September of each year a list
of counties, districts, cities, or parishes
(hereinafter “counties”) for which excep-
tional, extreme, or severe drought was
reported during the preceding 12 months.
Taxpayers may use this list instead of
U.S. Drought Monitor maps to determine
whether exceptional, extreme, or severe
drought has been reported for any location
in the applicable region.
The Appendix to this notice contains
the list of counties for which exceptional,
extreme, or severe drought was reported
2012–42 I.R.B.489October 15, 2012

during the 12-month period ending Au-
gust 31, 2012. Under Notice 2006–82,
the 12-month period ending on August 31,
2012, is not a drought-free year for an ap-
plicable region that includes any county on
this list. Accordingly, for a taxpayer who
qualified for a four-year replacement pe-
riod for livestock sold or exchanged on ac-
count of drought and whose replacement
period is scheduled to expire at the end of
2012 (or, in the case of a fiscal year tax-
payer, at the end of the taxable year that in-
cludes August 31, 2012), the replacement
period will be extended under § 1033(e)(2)
and Notice 2006–82 if the applicable re-
gion includes any county on this list. This
extension will continue until the end of the
taxpayer’s first taxable year ending after a
drought-free year for the applicable region.
SECTION 4. DRAFTING
INFORMATION
The principal author of this notice is
Sue-Jean Kim of the Office of Associate
Chief Counsel (Income Tax & Account-
ing). For further information regarding
this notice, contact Ms. Kim at (202)
622–4960 (not a toll-free call).
A
PPEND
IX
Alabam
a
Counties of Autauga, Baldwin, Barbour, Bibb, Blount, Bullock, Butler, Calhoun, Chambers, Cherokee, Chilton, Clarke, Clay,
Cleburne, Coffee, Colbert, Conecuh, Coosa, Covington, Crenshaw, Dale, Dallas,Elmore, Escambia, Etowah, Franklin, Geneva,
Hale, Henry, Houston, Jackson, Jefferson, Lauderdale, Lawrence, Lee, Limestone, Lowndes, Macon, Madison, Marengo,
Mobile, Monroe, Montgomery, Morgan, Perry, Pike, Randolph, Russell, Saint Clair, Shelby, Talladega, Tallapoosa, Tuscaloosa,
Walker, Washington, Wilcox.
Ariz
ona
Counties of Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa
Cruz, Yavapai, Yuma.
Arka
nsas
Counties of Arkansas, Ashley, Baxter, Benton, Boone, Bradley, Calhoun, Carroll, Chicot, Clark, Clay, Cleburne, Cleveland,
Columbia, Conway, Craighead, Crawford, Crittenden, Cross, Dallas, Desha, Drew, Faulkner, Franklin, Fulton, Garland, Grant,
Greene, Hempstead, Hot Spring, Howard, Independence, Izard, Jackson, Jefferson, Johnson, Lafayette, Lawrence, Lee, Lincoln,
Little River, Logan, Lonoke, Madison, Marion, Miller, Mississippi, Monroe, Montgomery, Nevada, Newton, Ouachita, Perry,
Phillips, Pike, Poinsett, Polk, Pope, Prairie, Pulaski, Randolph, Saint Francis, Saline, Scott, Searcy, Sebastian, Sevier, Sharp,
Stone, Union, Van Buren, Washington, White, Woodruff, Yell.
Ca
lifornia
Counties of Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings,
Lake, Lassen, Madera, Marin, Mariposa, Merced, Modoc, Mono, Monterey, Napa, Nevada, Placer, Plumas, Riverside,
Sacramento, San Benito, San Bernardino, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Clara, Santa Cruz,
Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Tuolumne, Yolo, Yuba.
C
olorado
Counties of Adams, Alamosa, Arapahoe, Archuleta, Baca, Bent, Boulder, Broomfield, Chaffee, Cheyenne, Clear Creek, Conejos,
Costilla, Crowley, Custer, Delta, Denver, Dolores, Douglas, Eagle, El Paso, Elbert, Fremont, Garfield, Gilpin, Grand, Gunnison,
Hinsdale, Huerfano, Jackson, Jefferson, Kiowa, Kit Carson, La Plata, Lake, Larimer, Las Animas, Lincoln, Logan, Mesa, Mineral,
Moffat, Montezuma, Montrose, Morgan, Otero, Ouray, Park, Phillips, Pitkin, Prowers, Pueblo, Rio Blanco, Rio Grande, Routt,
Saguache, San Juan, San Miguel, Sedgwick, Summit, Teller, Washington, Weld, Yuma.
Connecticut
Counties of Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland, Windham.
Delaware
Counties of Kent, New Castle, Sussex.
October 15, 20124902012–42 I.R.B.

Florida
Counties of Alachua, Baker, Bay, Bradford, Brevard, Broward, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto,
Dixie, Duval, Escambia, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands,
Hillsborough, Holmes, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Martin,
Miami-Dade, Monroe, Nassau, Okaloosa, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Saint Johns,
Saint Lucie, Santa Rosa, Sarasota, Seminole, Sumter, Suwannee, Taylor, Union, Volusia, Wakulla, Walton, Washington.
Georgia
Counties of Appling, Atkinson, Bacon, Baker, Baldwin, Banks,Barrow, Bartow, Ben Hill, Berrien, Bibb, Bleckley, Brantley,
Brooks, Bryan, Bulloch, Burke, Butts, Calhoun, Camden, Candler,Carroll, Charlton, Chatham, Chattahoochee, Cherokee, Clarke,
Clay, Clayton, Clinch, Cobb, Coffee, Colquitt, Columbia, Cook, Coweta, Crawford, Crisp, Decatur, DeKalb, Dodge, Dooly,
Dougherty, Douglas, Early, Echols, Effingham, Elbert, Emanuel,Evans, Fayette, Floyd, Forsyth, Franklin, Fulton, Glascock,
Glynn, Grady, Greene, Gwinnett, Habersham, Hall, Hancock, Haralson, Harris, Hart, Heard, Henry, Houston, Irwin, Jackson,
Jasper, Jeff Davis, Jefferson, Jenkins, Johnson, Jones, Lamar, Lanier, Laurens, Lee, Liberty, Lincoln, Long, Lowndes, Macon,
Madison, Marion, McDuffie, McIntosh, Meriwether, Miller, Mitchell, Monroe, Montgomery, Morgan, Muscogee, Newton,
Oconee, Oglethorpe, Paulding,Peach, Pierce, Pike, Polk, Pulaski, Putnam, Quitman, Rabun, Randolph,Richmond, Rockdale,
Schley, Screven, Seminole, Spalding, Stephens, Stewart, Sumter, Talbot, Taliaferro, Tattnall, Taylor, Telfair, Terrell, Thomas,
Tift, Toombs, Treutlen, Troup, Turner, Twiggs, Upson, Walton,Ware, Warren, Washington, Wayne, Webster, Wheeler, White,
Wilcox, Wilkes, Wilkinson, Worth.
Hawaii
Counties of Hawaii, Honolulu, Kauai, Maui.
Idaho
Counties of Bear Lake, Caribou, Franklin, Lemhi, Oneida.
Illinois
Counties of Adams, Alexander, Bond, Boone, Brown, Bureau, Calhoun, Carroll, Cass, Champaign, Christian, Clark, Clay,
Clinton, Coles, Cook, Crawford, Cumberland, De Witt, DeKalb, Douglas, DuPage, Edgar, Edwards, Effingham, Fayette,
Ford, Franklin, Fulton, Gallatin, Greene, Grundy, Hamilton, Hancock, Hardin, Henderson, Henry, Iroquois, Jackson, Jasper,
Jefferson, Jersey, Jo Daviess, Johnson, Kane, Kankakee, Kendall, Knox, La Salle, Lake, Lawrence, Lee, Livingston, Logan,
Macon, Macoupin, Madison, Marion, Marshall, Mason, Massac, McDonough, McHenry, McLean, Menard, Mercer, Monroe,
Montgomery, Morgan, Moultrie, Ogle, Peoria, Perry, Piatt, Pike,Pope, Pulaski, Putnam, Randolph, Richland, Rock Island, Saint
Clair, Saline, Sangamon, Schuyler, Scott, Shelby, Stark, Stephenson, Tazewell, Union, Vermilion, Wabash, Warren, Washington,
Wayne, White, Whiteside, Will, Williamson, Winnebago, Woodford.
Indiana
Counties of Adams, Allen, Bartholomew, Benton, Blackford, Boone, Brown, Carroll, Cass, Clark, Clay, Clinton, Crawford,
Daviess, Dearborn, Decatur, DeKalb, Delaware, Dubois, Elkhart, Fayette, Floyd, Fountain, Franklin, Fulton, Gibson, Grant,
Greene, Hamilton, Hancock, Harrison, Hendricks, Henry, Howard, Huntington, Jackson, Jasper, Jay, Jefferson, Jennings, Johnson,
Knox, Kosciusko, LaGrange, LaPorte, Lawrence, Madison, Marion, Marshall, Martin, Miami, Monroe, Montgomery, Morgan,
Newton, Noble, Ohio, Orange, Owen, Parke, Perry, Pike, Porter, Posey, Pulaski, Putnam, Randolph, Ripley, Rush, Saint Joseph,
Scott, Shelby, Spencer, Starke, Steuben, Sullivan, Switzerland, Tippecanoe, Tipton, Union,Vanderburgh, Vermillion, Vigo,
Wabash, Warren, Warrick, Washington, Wayne, Wells, White, Whitley.
2012–42 I.R.B.491October 15, 2012

Iowa
Counties of Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Buena Vista,
Butler, Calhoun, Carroll, Cass, Cedar, Cerro Gordo, Cherokee,Chickasaw, Clarke, Clay, Clayton, Clinton, Crawford, Dallas,
Davis, Decatur, Delaware, Des Moines,Dickinson, Dubuque, Emmet,Fayette, Floyd, Franklin, Fremont, Greene, Grundy,
Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Ida, Iowa, Jackson, Jasper, Jefferson, Johnson, Jones,
Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Lyon, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe,
Montgomery, Muscatine, O’Brien, Osceola, Page, Palo Alto, Plymouth, Pocahontas, Polk, Pottawattamie, Poweshiek, Ringgold,
Sac, Scott, Shelby, Sioux, Story, Tama, Taylor, Union, Van Buren, Wapello, Warren, Washington, Wayne, Webster, Winnebago,
Winneshiek, Woodbury, Worth, Wright.
Kansas
Counties of Allen, Anderson, Atchison, Barber, Barton, Bourbon, Brown, Butler, Chase, Chautauqua, Cherokee, Cheyenne, Clark,
Clay, Cloud, Coffey, Comanche, Cowley, Crawford, Decatur, Dickinson, Doniphan, Douglas, Edwards, Elk, Ellis, Ellsworth,
Finney, Ford, Franklin, Geary, Gove, Graham, Grant, Gray, Greeley, Greenwood, Hamilton, Harper, Harvey, Haskell, Hodgeman,
Jackson, Jefferson, Jewell, Johnson, Kearny, Kingman, Kiowa, Labette, Lane, Leavenworth,Lincoln, Linn, Logan, Lyon,
Marion, Marshall, McPherson, Meade, Miami, Mitchell, Montgomery, Morris, Morton, Nemaha, Neosho, Ness, Norton, Osage,
Osborne, Ottawa, Pawnee, Phillips, Pottawatomie, Pratt, Rawlins, Reno, Republic,Rice, Riley, Rooks, Rush, Russell, Saline,
Scott, Sedgwick, Seward, Shawnee, Sheridan, Sherman, Smith, Stafford, Stanton, Stevens, Sumner, Thomas, Trego, Wabaunsee,
Wallace, Washington, Wichita,Wilson, Woodson, Wyandotte.
Kentucky
Counties of Adair, Allen, Anderson, Ballard, Barren, Bell, Boone, Bourbon, Breckinridge, Bullitt, Butler, Caldwell, Calloway,
Campbell, Carlisle, Carroll, Casey, Christian, Clark, Clay, Clinton, Crittenden, Cumberland, Daviess, Edmonson, Estill, Fayette,
Fulton, Gallatin, Garrard, Grant, Graves, Grayson, Green, Hancock, Hardin, Hart, Henderson, Henry, Hickman, Hopkins,
Jefferson, Jessamine, Kenton, Knox, Larue, Laurel, Lincoln, Livingston, Logan, Lyon, Madison, Marion, Marshall, McCracken,
McCreary, McLean, Meade, Mercer, Metcalfe, Monroe, Montgomery, Muhlenberg, Nelson, Ohio, Oldham, Owen, Powell,
Pulaski, Rockcastle, Russell, Scott, Simpson, Spencer, Taylor, Todd, Trigg, Trimble, Union, Warren, Washington, Wayne,
Webster, Whitley, Woodford.
Louisiana
Parishes of Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell,
Cameron, Catahoula, Claiborne, Concordia, De Soto, East Carroll, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson,
Jefferson Davis, Jefferson, La Salle, Lafayette, Lafourche, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Orleans,
Ouachita, Plaquemines, Pointe Coupee, Rapides, Red River, Richland, Sabine, Saint Bernard, Saint Charles, Saint James, Saint
John the Baptist, Saint Landry, Saint Martin, Saint Mary, Saint Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion,
Vernon, Webster, West Carroll, West Feliciana, Winn.
Maryland
Counties of Anne Arundel, Calvert, Caroline, Charles, Dorchester, Kent, Prince George’s, Queen Anne’s, Saint Mary’s, Somerset,
Talbot, Wicomico, Worcester.
Massachusetts
Counties of Barnstable, Bristol, Dukes, Essex, Hampden, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk, Worcester.
Michigan
Counties of Allegan, Baraga, Barry, Berrien, Branch, Calhoun, Cass, Clinton, Eaton, Genesee, Hillsdale, Houghton, Huron,
Ingham, Ionia, Jackson, Kalamazoo, Kent, Keweenaw, Lapeer, Lenawee, Livingston, Marquette, Monroe, Muskegon, Oakland,
Ottawa, Saint Clair, Saint Joseph, Sanilac, Shiawassee, Tuscola, Van Buren, Washtenaw, Wayne.
October 15, 20124922012–42 I.R.B.

Minnesota
Counties of Becker, Beltrami, Blue Earth, Brown, Carver, Chippewa, Clay, Cook, Cottonwood, Dakota, Dodge, Faribault,
Fillmore, Freeborn, Goodhue, Hennepin, Houston, Jackson, Kittson, Lac qui Parle, Lake, Lake of the Woods, Le Sueur, Lincoln,
Lyon, Mahnomen, Marshall, Martin, McLeod, Mower, Murray, Nicollet, Nobles, Norman, Olmsted, Pennington, Pipestone,
Polk, Red Lake, Redwood, Renville, Rice,Rock, Roseau, Saint Louis,Scott, Sibley, Steele, Wabasha, Waseca, Watonwan,
Wilkin, Winona, Yellow Medicine.
Mississippi
Counties of Benton, Coahoma, DeSoto, George, Greene, Hancock,Harrison, Issaquena, Jackson, Lafayette, Marshall, Panola,
Pearl River, Quitman, Stone, Sunflower, Tallahatchie, Tate, Tippah, Tunica, Washington, Yalobusha.
Missouri
City of Saint Louis. Counties of Adair, Andrew, Atchison, Audrain, Barry, Barton, Bates, Benton, Bollinger, Boone, Buchanan,
Butler, Caldwell, Callaway, Camden, CapeGirardeau, Carroll, Carter, Cass, Cedar, Chariton, Christian, Clark, Clay, Clinton,
Cole, Cooper, Crawford, Dade, Dallas, Daviess, DeKalb, Dent, Douglas, Dunklin, Franklin, Gasconade, Gentry, Greene, Grundy,
Harrison,Henry,Hickory,Holt,Howard,Howell,Iron,Jackson,Jasper, Jefferson, Johnson, Knox, Laclede, Lafayette, Lawrence,
Lewis, Lincoln, Linn, Livingston, Macon, Madison, Maries, Marion, McDonald, Mercer, Miller, Mississippi,Moniteau, Monroe,
Montgomery, Morgan, New Madrid, Newton, Nodaway, Oregon, Osage, Ozark, Pemiscot, Perry, Pettis, Phelps, Pike, Platte,
Polk, Pulaski, Putnam, Ralls, Randolph, Ray, Reynolds, Ripley, Saint Charles, Saint Clair, Saint Francois, Saint Louis, Sainte
Genevieve, Saline, Schuyler, Scotland, Scott, Shannon, Shelby, Stoddard, Stone, Sullivan, Taney, Texas, Vernon, Warren,
Washington,Wayne,Webster,Worth,Wright.
Montana
Counties of Beaverhead, Big Horn, Broadwater, Carbon, Carter,Cascade, Custer, Fallon, Fergus, Gallatin, Garfield, Golden
Valley, Jefferson, Judith Basin, Madison, Meagher, Musselshell, Park, Petroleum, Powder River, Rosebud, Silver Bow, Stillwater,
Sweet Grass, Treasure, Wheatland, Wibaux, Yellowstone.
Nebraska
Counties of Adams, Antelope, Arthur, Banner, Blaine, Boone, Box Butte, Boyd, Brown, Buffalo, Burt, Butler, Cass, Cedar,
Chase, Cherry, Cheyenne, Clay, Colfax, Cuming, Custer, Dakota, Dawes, Dawson, Deuel, Dixon, Dodge, Douglas, Dundy,
Fillmore, Franklin, Frontier, Furnas, Gage,Garden, Garfield, Gosper, Grant, Greeley, Hall, Hamilton, Harlan, Hayes, Hitchcock,
Holt, Hooker, Howard, Jefferson, Johnson, Kearney, Keith, Keya Paha, Kimball, Knox, Lancaster, Lincoln, Logan, Loup,
Madison, McPherson, Merrick, Morrill, Nance, Nemaha, Nuckolls, Otoe, Pawnee, Perkins, Phelps, Pierce, Platte, Polk, Red
Willow, Richardson, Rock, Saline, Sarpy, Saunders, Scotts Bluff, Seward, Sheridan, Sherman, Sioux, Stanton, Thayer, Thomas,
Thurston, Valley, Washington, Wayne, Webster, Wheeler, York.
Nevada
Carson City. Counties of Churchill, Clark, Douglas, Elko, Esmeralda, Eureka, Humboldt, Lander, Lincoln, Lyon, Mineral,
Nye, Pershing, Storey, Washoe, White Pine.
New Hampshire
Counties of Hillsborough, Rockingham.
New Mexico
Counties of Bernalillo, Catron, Chaves, Cibola, Colfax, Curry, DeBaca, Dona Ana, Eddy, Grant, Guadalupe, Harding, Hidalgo,
Lea, Lincoln, Los Alamos, Luna, McKinley, Mora, Otero, Quay, Rio Arriba, Roosevelt, San Juan, San Miguel, Sandoval,
Santa Fe, Sierra, Socorro, Taos, Torrance, Union, Valencia.
2012–42 I.R.B.493October 15, 2012

New York
Counties of Dutchess, Nassau, Putnam, Rockland, Suffolk, Westchester.
North Carolina
Counties of Bladen, Brunswick, Cleveland, Columbus, Gaston, Henderson, Jackson, Lincoln, Macon, Mecklenburg, New
Hanover, Onslow, Pender, Polk, Rutherford, Sampson.
North Dakota
Counties of Barnes, Benson, Billings, Bowman, Cass, Dickey, Eddy, Foster, Golden Valley, Grand Forks, Griggs, LaMoure,
Logan, McIntosh, Nelson, Ramsey, Ransom, Richland, Sargent, Slope, Stark, Steele, Stutsman, Traill, Walsh.
Ohio
Counties of Allen, Auglaize, Brown, Butler, Clermont, Clinton,Darke, Defiance, Fayette, Franklin, Fulton, Greene, Hamilton,
Hancock, Hardin, Henry, Logan, Lucas, Madison, Mercer, Miami, Montgomery, Paulding, Pickaway, Preble, Putnam, Ross,
Shelby, Van Wert, Warren, Williams, Wood.
Oklahoma
Counties of Adair, Alfalfa, Atoka, Beaver, Beckham, Blaine, Bryan, Caddo, Canadian, Carter, Cherokee, Choctaw, Cimarron,
Cleveland, Coal, Comanche, Cotton, Craig, Creek, Custer, Delaware, Dewey, Ellis,Garfield, Garvin, Grady, Grant, Greer,
Harmon, Harper, Haskell, Hughes, Jackson, Jefferson, Johnston, Kay, Kingfisher, Kiowa, Latimer, Le Flore, Lincoln, Logan,
Love, Major, Marshall, Mayes, McClain, McCurtain, McIntosh, Murray, Muskogee, Noble, Nowata, Okfuskee, Oklahoma,
Okmulgee, Osage, Ottawa, Pawnee, Payne, Pittsburg, Pontotoc, Pottawatomie, Pushmataha, Roger Mills, Rogers, Seminole,
Sequoyah, Stephens, Texas, Tillman, Tulsa, Wagoner, Washington, Washita, Woods, Woodward.
Oregon
Counties of Harney, Klamath, Lake, Malheur.
Rhode Island
Counties of Bristol, Kent, Newport, Providence, Washington.
South Carolina
Counties of Abbeville, Aiken, Allendale, Anderson, Bamberg, Barnwell, Beaufort, Berkeley,Calhoun, Charleston, Cherokee,
Chester, Clarendon, Colleton, Dorchester,Edgefield, Fairfield, Florence, Georgetown, Greenville, Greenwood, Hampton, Horry,
Jasper, Kershaw, Lancaster, Laurens, Lexington, Marion, McCormick, Newberry, Oconee, Orangeburg, Pickens, Richland,
Saluda, Spartanburg, Sumter, Union, Williamsburg, York.
South Dakota
CountiesofAurora,Beadle,Bennett,BonHomme,Brookings,Brown,Brule,Buffalo,Butte,CharlesMix,Clay,Codington,
Custer, Davison, Deuel, Dewey, Douglas, Fall River, Faulk, Grant, Gregory, Haakon, Hamlin, Hand, Hanson, Harding, Hughes,
Hutchinson, Hyde, Jackson, Jerauld, Jones, Kingsbury, Lake, Lawrence, Lincoln, Lyman, Marshall, McCook, Meade, Mellette,
Miner, Minnehaha, Moody, Pennington, Perkins, Potter, Sanborn, Shannon, Stanley, Sully, Todd, Tripp, Turner, Union, Walworth,
Yankton, Ziebach.
October 15, 20124942012–42 I.R.B.

Tennessee
Counties of Bedford, Benton, Campbell, Cannon, Carroll, Cheatham, Chester, Clay, Coffee, Crockett, Cumberland, Davidson,
Decatur, DeKalb, Dickson, Dyer, Fayette, Fentress, Franklin, Gibson, Giles, Grundy, Hardeman, Hardin, Haywood, Henderson,
Henry, Hickman, Houston, Humphreys, Jackson, Lake, Lauderdale, Lawrence, Lewis, Lincoln, Macon, Madison, Marshall,
Maury, McNairy, Montgomery, Moore, Morgan, Obion, Overton,Perry, Pickett, Putnam, Robertson, Rutherford, Scott,
Sequatchie, Shelby, Smith, Stewart, Sumner, Tipton, Trousdale, Van Buren, Warren,Wayne, Weakley, White, Williamson, Wilson.
Texas
Counties of Anderson, Andrews, Angelina, Aransas, Archer, Armstrong, Atascosa, Austin, Bailey,Bandera, Bastrop, Baylor, Bee,
Bell, Bexar, Blanco, Borden, Bosque, Bowie, Brazoria, Brazos, Brewster, Briscoe, Brooks, Brown, Burleson, Burnet, Caldwell,
Calhoun, Callahan, Cameron, Camp, Carson, Cass, Castro, Chambers, Cherokee, Childress, Clay, Cochran, Coke, Coleman,
Collin, Collingsworth, Colorado, Comal, Comanche, Concho, Cooke, Coryell, Cottle, Crane, Crockett, Crosby, Culberson,
Dallam, Dallas, Dawson, Deaf Smith, Delta, Denton, DeWitt, Dickens, Dimmit, Donley, Duval, Eastland, Ector, Edwards, El Paso,
Ellis, Erath, Falls, Fannin, Fayette, Fisher, Floyd, Foard, Fort Bend, Franklin, Freestone, Frio, Gaines, Galveston, Garza, Gillespie,
Glasscock, Goliad, Gonzales, Gray, Grayson, Gregg, Grimes, Guadalupe, Hale, Hall, Hamilton, Hansford, Hardeman, Hardin,
Harris, Harrison, Hartley, Haskell, Hays, Hemphill, Henderson, Hidalgo, Hill, Hockley, Hood, Hopkins, Houston, Howard,
Hudspeth, Hunt, Hutchinson, Irion, Jack, Jackson, Jasper, Jeff Davis,Jefferson,JimHogg,JimWells,Johnson,Jones,Karnes,
Kaufman, Kendall, Kenedy, Kent, Kerr, Kimble, King, Kinney, Kleberg, Knox, La Salle, Lamar, Lamb, Lampasas, Lavaca, Lee,
Leon, Liberty, Limestone, Lipscomb, Live Oak, Llano, Loving, Lubbock, Lynn, Madison, Marion, Martin, Mason, Matagorda,
Maverick, McCulloch, McLennan, McMullen, Medina, Menard, Midland, Milam, Mills, Mitchell, Montague, Montgomery,
Moore, Morris, Motley, Nacogdoches, Navarro, Newton, Nolan,Nueces, Ochiltree, Oldham, Orange, Palo Pinto, Panola, Parker,
Parmer, Pecos, Polk, Potter, Presidio, Rains, Randall, Reagan, Real, Red River, Reeves, Refugio, Roberts, Robertson, Rockwall,
Runnels, Rusk, Sabine, San Augustine, SanJacinto, San Patricio, San Saba, Schleicher, Scurry, Shackelford, Shelby, Sherman,
Smith, Somervell, Starr, Stephens, Sterling, Stonewall, Sutton, Swisher, Tarrant, Taylor, Terrell, Terry, Throckmorton, Titus, Tom
Green, Travis, Trinity, Tyler, Upshur, Upton, Uvalde, Val Verde, Van Zandt, Victoria, Walker, Waller, Ward, Washington, Webb,
Wharton, Wheeler, Wichita, Wilbarger, Willacy, Williamson, Wilson, Winkler, Wise, Wood, Yoakum, Young, Zapata, Zavala.
Utah
Counties of Beaver, Box Elder, Cache, Carbon, Daggett, Davis, Duchesne, Emery, Garfield, Grand, Iron, Juab, Kane, Millard,
Morgan, Piute, Rich, Salt Lake, San Juan, Sanpete, Sevier, Summit, Tooele, Uintah, Utah, Wasatch, Washington, Wayne, Weber.
Virginia
County of Accomack.
Wisconsin
Counties of Adams, Calumet, Clark, Columbia, Crawford, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jackson,
Jefferson, Juneau, Kenosha, La Crosse, Lafayette, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Portage, Racine,
Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha,Waupaca, Waushara, Winnebago, Wood.
Wyoming
Counties of Albany, Big Horn, Campbell, Carbon, Converse, Crook, Fremont, Goshen, Hot Springs, Johnson, Laramie, Lincoln,
Natrona, Niobrara, Park, Platte, Sheridan, Sublette, Sweetwater, Uinta, Washakie, Weston.
2012–42 I.R.B.495October 15, 2012

2012–2013 Special Per Diem
Rates
Notice 2012–63
SECTION 1. PURPOSE
This annual notice provides the
2012–2013 specialper diemrates for tax-
payers to use in substantiating the amount
of ordinary and necessary business ex-
penses incurred whiletraveling away from
home, specifically (1) the special trans-
portation industry meal and incidental
expenses (M&IE) rates, (2) the rate for the
incidental expenses only deduction, and
(3) the rates and list of high-cost localities
for purposes of the high-low substantia-
tion method.
SECTION 2. BACKGROUND
Rev. Proc. 2011–47, 2011–42 I.R.B.
520, provides rules for using aper diem
rate to substantiate, under § 274(d) of the
Internal Revenue Code and § 1.274–5 of
the Income Tax Regulations, the amount of
ordinary and necessary business expenses
paid or incurred while traveling away from
home. Taxpayers using the rates and list of
high-cost localities provided in this notice
must comply with Rev. Proc. 2011–47.
Notice 2011–81, 2011–42 I.R.B. 513, pro-
vides the rates and list of high-cost local-
ities for the period October 1, 2011, to
September 30, 2012.
Section 3.02(3) of Rev. Proc. 2011–47
provides that the term “incidental ex-
penses” has the same meaning as in the
Federal Travel Regulations, 41 C.F.R.
300–3.1, and that future changes to the
definition of incidental expenses in the
Federal Travel Regulations would be an-
nounced in the annualper diemnotice. On
September 7, 2011, the General Services
Administration published interim (tempo-
rary) regulations revising the definition
of incidental expenses under the Federal
Travel Regulations to include only fees
and tips given to porters, baggage carriers,
hotel staff, and staff on ships. Transporta-
tion between places of lodging or business
and places where meals are taken, and
the mailing cost of filing travel vouchers
and paying employer-sponsored charge
card billings, are no longer included in
incidental expenses. Accordingly, taxpay-
ers usingper diemrates may separately
deduct or be reimbursed for transportation
and mailing expenses.
SECTION 3. SPECIAL M&IE RATES
FOR TRANSPORTATION INDUSTRY
The special M&IE rates for taxpayers
in the transportation industry are $59 for
any locality of travel in the continental
United States (CONUS) and $65 for any
locality of travel outside the continental
United States (OCONUS). See section
4.04 of Rev. Proc. 2011–47.
SECTION 4. RATE FOR INCIDENTAL
EXPENSES ONLY DEDUCTION
The rate for any CONUS or OCONUS
locality of travel for the incidental ex-
penses only deduction is $5 per day. See
section 4.05 of Rev. Proc. 2011–47.
SECTION 5. HIGH-LOW
SUBSTANTIATION METHOD
1.Annual high-low rates. For purposes
of the high-low substantiation method, the
per diemrates in lieu of the rates described
in section 4.01 of Rev. Proc. 2011–47
(theper diemsubstantiation method) are
$242 for travel to any high-cost locality
and $163 for travel to any other locality
within CONUS. The amount of the $242
high rate and $163 low rate that is treated
as paid for meals for purposes of § 274(n)
is $65 for travel to any high-cost local-
ity and $52 for travel to any other locality
within CONUS. See section 5.02 of Rev.
Proc. 2011–47. Theper diemrates in lieu
of the rates described in section 4.02 of
Rev. Proc. 2011–47 (the meal and inciden-
tal expenses only substantiation method)
are $65 for travel to any high-cost local-
ity and $52 for travel to any other locality
within CONUS.
2.High-cost localities. The following
localities have a federalper diemrate of
$202 or more, and are high-cost localities
for all of the calendar year or the portion of
the calendar year specified in parentheses
under the key city name.
Key CityCounty or other defined location
Arizona
SedonaCity limits of Sedona
(March 1-April 30)
California
MontereyMonterey
NapaNapa
(October 1-November 30 and April 1-September 30)
San DiegoSan Diego
San F
rancisco
San F
rancisco
Santa BarbaraSanta Barbara
Santa MonicaCity limits of Santa Monica
Yosemite National ParkMariposa
(June 1-August 31)
October 15, 20124962012–42 I.R.B.

Key CityCounty or other defined location
Colorado
AspenPitkin
(December 1-March 31 and June 1-August 31)
Denver/AuroraDenver, Adams, Arapahoe, and Jefferson
Steamboat SpringsRoutt
(December 1-M
arch 31)
TellurideSan Miguel
(December 1-March 31)
VailEagle
(December 1-August 31)
District of
Columbia
Washington D.C. (also the cities of Alexandria, Falls Church,and Fairfax, and the counties of Arlington and Fairfax, in
Virginia; and the counties of Montgomery and Prince George’s in Maryland) (See also Maryland and Virginia)
Florida
Fort LauderdaleBroward
(January 1-May 31)
Fort Walton Beach/De Funiak SpringsOkaloosa and Walton
(June 1-
July 31)
Key WestMonroe
MiamiMiami-Dade
(December 1-March 31)
NaplesCollier
(January 1-April 30)
Illinois
ChicagoCook and Lake
(October 1-November 30 and April 1-September 30)
Louisiana
New
Orleans
Orl
eans, St. Bernard, Jefferson and
Pla
quemine Parishes
(October 1-June 30)
Maine
Bar HarborHancock
(July 1-August 31)
Maryland
Baltimore CityBaltimore City
(October 1-November 30 and March 1-September 30)
Cambridge/St. MichaelsDorchester and Talbot
(June 1-August 31)
Ocean CityWorcester
(June 1-August 31)
Washington, DC Metro AreaMontgomery and Prince George’s
Massachusetts
Boston/CambridgeSuffolk, City of Cambridge
FalmouthCity limits of Falmouth
(July 1-August 31)
2012–42 I.R.B.497October 15, 2012

Key CityCounty or other defined location
Martha’s VineyardDukes
(July 1-August 31)
NantucketNantucket
(June 1-September 30)
New Hampshire
ConwayCarroll
(July 1-August 31)
New York
Floral Park/Garden City/Great NeckNassau
Glens FallsWarren
(July 1-August 31)
Lake PlacidEssex
(July 1-August 31)
Manhattan (includes the boroughs of Manhattan, Brooklyn, the Bronx, Queens
andStatenIsland)
Bronx, Kings, New York, Queens,
Richmond
Saratoga Springs/SchenectadySaratoga and Schenectady
(July 1-August 31)
Tarrytown/White Plains/New RochelleWestchester
North Carolina
Kill De
vil
Dare
(June 1-August 31)
Pennsylvania
PhiladelphiaPhiladelphia
Rhod
eIsland
Jamestown/Middletown/NewportNewport
(October 1-October 31 and May 1-September 30)
Utah
Park CitySummit
(J
anuary 1-March 31)
Virginia
Washington, DC Metro AreaCities of Alexandria, Fairfax, and Falls
Church; counties of Arlington and Fairfax
Virginia BeachCity of Virginia Beach
(June 1-August 31)
Washington
SeattleKing
Wyoming
Jackson/PinedaleTeton and Sublette
(July 1-August 31)
3.Changes in high-cost localities.
There are no changes in the list of
high-cost localities in this notice from the list of high-cost localities in section 5 of
Notice 2011–81.
October 15, 20124982012–42 I.R.B.

SECTION 6. EFFECTIVE DATE
This notice is effective forper diemal-
lowances for lodging,meal and inciden-
tal expenses, or for meal and incidental
expenses only, that are paid to any em-
ployee on or after October 1, 2012, for
travel away from home on or after Octo-
ber 1, 2012. For purposes of computing the
amount allowable as a deduction for travel
away from home, this notice is effective
for meal and incidental expenses or for in-
cidental expenses only paid or incurred on
or after October 1, 2012. See sections 4.06
and 5.04 of Rev. Proc. 2011–47 for transi-
tion rules for the last 3 months of calendar
year 2012.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Notice 2011–81 is superseded.
DRAFTING INFORMATION
The principal author of this notice is
Eric D. Brauer of the Office of Associate
Chief Counsel (Income Tax & Account-
ing). For further information regarding
this notice, contact Mr. Brauer at (202)
622–4970 (not a toll-free call).
2012–42 I.R.B.499October 15, 2012

Part IV. Items o
fGeneralInterest
Additional Re
quirements for
Charitable Ho
spitals; Hearing
Announcement 2012–29
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Noti
ce of public hearing on no-
tice propose
d rulemaking.
SUMMARY: This document provides
notice of public hearing on proposed regu-
lations (REG–130266–11, 2012–32 I.R.B.
126) that provide guidance regarding the
requirements for charitable hospital orga-
nizations relating to financial assistance
and emergency medical care policies,
charges for certain care provided to indi-
viduals eligible for financial assistance,
and billing and collections.
DATES: The public hearing is being
held on Monday, October 29, 2012, at
10:00 a.m. The IRS must receive outlines
of the topics to be discussed at the public
hearing by Friday, October 12, 2012.
ADDRESSE
S: The public hearing is be-
ingheldi
n the IRS Auditorium, Internal
Revenue
Service Building, 1111 Constitu-
tion Ave
nue, NW, Washington, DC 20224.
Due to bu
ilding security procedures, vis-
itors mu
st enter at the Constitution Av-
enue ent
rance. In addition, all visitors
must present p
hoto identification to enter
the building.
Send Submissi
ons to CC:PA:LPD:PR
(REG–130266–
11), room 5205, Internal
Revenue Servi
ce, P.O. Box 7604, Ben
Franklin Stat
ion, Washington, DC 20044.
Submissions m
ay be hand-delivered Mon-
day through F
ridaytoCC:PA:LPD:PR
(REG–130266
–11), Couriers Desk, In-
ternal Reven
ue Service, 1111 Constitu-
tion Avenue,
NW, Washington, DC or
sent electr
onically via the Federal eRule-
making Port
al atwww.regulations.gov
(REG–13026
6–11).
FOR FURTHER
INFORMATION
CONTACT: Co
ncerning the reg-
ulations,
Amber L. Mackenzie or
Preston J.
Quesenberry at (202) 622–6070;
concernin
g submissions of comments,
the hearin
g and/or to be placed on
the build
ing access list to attend the
hearing O
luwafunmilayo Taylor at (202)
622–7180
(not toll-free numbers).
SUPPLEME
NTARY INFORMATION:
The subje
ct of the public hearing
is the not
ice of proposed rulemaking
(REG–130
266–11) that was published in
theFede
ral Registeron Tuesday, June 26,
2012 (77
FR 38148).
The rule
s of 26 CFR 601.601(a)(3)
apply to
the hearing. Persons who wish
to prese
nt oral comments at the hear-
ing that submi
tted written comments by
September 24,
2012, must submit an
outline of the
topics to be addressed and
the amount of t
ime to be denoted to each
topic.
Aperiodof10m
inutes is allotted to
each person fo
r presenting oral comments.
After the dea
dline for receiving out-
lines has pas
sed, the IRS will prepare an
agenda conta
ining the schedule of speak-
ers. Copies o
f the agenda will be made
available,
free of charge, at the hearing or
in the Freed
om of Information Reading
Room (FOIA R
R) (Room 1621) which
is located a
t the 11th and Pennsylvania
Avenue, NW
, entrance, 1111 constitution
Avenue, NW
, Washington, DC.
Because of
access restrictions, the IRS
will not ad
mit visitors beyond the imme-
diate entr
ance area more than 30 minutes
before the
hearing starts. For informa-
tion abou
t having your name placed on
the build
ing access list to attend the hear-
ing, see t
he “FOR FURTHER INFORMA-
TION CONT
ACT” section of this docu-
ment.
LaNita Va
nDyke,
Chief, P
ublications and
Regulat
ions Branch,
Legal Pr
ocessing Division,
Associa
te Chief Counsel
(Proced
ure and Administration).
October 15, 20125002012–42 I.R.B.

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 ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
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 withmodi-
fied,below).
Clarifiedis 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
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis 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
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings 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.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes 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 previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis 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 rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis 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 cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
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—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2012–42 I.R.B.iOctober 15, 2012

Numerical Finding List
1
Bulletins 2012–27 through 2012–42
Announcements:
2012-26, 2012-27 I.R.B.8
2012-27, 2012-27 I.R.B.10
2012-28, 2012-27 I.R.B.10
2012-29, 2012-42 I.R.B.500
2012-30, 2012-34 I.R.B.314
2012-31, 2012-34 I.R.B.315
2012-32, 2012-35 I.R.B.325
2012-33, 2012-35 I.R.B.325
2012-34, 2012-36 I.R.B.334
2012-35, 2012-38 I.R.B.356
Notices:
2012-39, 2012-31 I.R.B.95
2012-44, 2012-28 I.R.B.45
2012-45, 2012-29 I.R.B.59
2012-46, 2012-30 I.R.B.86
2012-47, 2012-31 I.R.B.98
2012-48, 2012-31 I.R.B.102
2012-49, 2012-31 I.R.B.119
2012-50, 2012-31 I.R.B.121
2012-51, 2012-33 I.R.B.150
2012-52, 2012-35 I.R.B.317
2012-53, 2012-35 I.R.B.317
2012-55, 2012-36 I.R.B.332
2012-56, 2012-39 I.R.B.370
2012-57, 2012-40 I.R.B.424
2012-58, 2012-41 I.R.B.436
2012-59, 2012-41 I.R.B.443
2012-60, 2012-41 I.R.B.445
2012-61, 2012-42 I.R.B.479
2012-62, 2012-42 I.R.B.489
2012-63, 2012-42 I.R.B.496
Proposed Regulations:
REG-126770-06, 2012-38 I.R.B.347
REG-138367-06, 2012-40 I.R.B.426
REG-101812-07, 2012-34 I.R.B.311
REG-134042-07, 2012-27 I.R.B.5
REG-153627-08, 2012-29 I.R.B.60
REG-136491-09, 2012-35 I.R.B.321
REG-138489-09, 2012-38 I.R.B.355
REG-125570-11, 2012-30 I.R.B.93
REG-130266-11, 2012-32 I.R.B.126
REG-134935-11, 2012-29 I.R.B.64
REG-141832-11, 2012-28 I.R.B.54
REG-107889-12, 2012-28 I.R.B.53
REG-113738-12, 2012-29 I.R.B.66
Revenue Procedures:
2012-28, 2012-27 I.R.B.4
2012-29, 2012-28 I.R.B.49
Revenue Procedures— Continued:
2012-30, 2012-33 I.R.B.165
2012-31, 2012-33 I.R.B.256
2012-32, 2012-34 I.R.B.267
2012-33, 2012-34 I.R.B.272
2012-34, 2012-34 I.R.B.280
2012-35, 2012-37 I.R.B.341
2012-36, 2012-39 I.R.B.374
2012-37, 2012-41 I.R.B.449
2012-39, 2012-41 I.R.B.470
2012-40, 2012-40 I.R.B.424
Revenue Rulings:
2012-19, 2012-28 I.R.B.16
2012-20, 2012-27 I.R.B.1
2012-21, 2012-32 I.R.B.123
2012-23, 2012-39 I.R.B.359
2012-24, 2012-36 I.R.B.329
2012-25, 2012-37 I.R.B.337
2012-26, 2012-39 I.R.B.358
2012-27, 2012-41 I.R.B.435
2012-28, 2012-42 I.R.B.476
2012-29, 2012-42 I.R.B.475
Treasury Decisions:
9591, 2012-28 I.R.B.32
9592, 2012-28 I.R.B.41
9593, 2012-28 I.R.B.17
9594, 2012-29 I.R.B.57
9595, 2012-30 I.R.B.71
9596, 2012-30 I.R.B.84
9597, 2012-34 I.R.B.258
9598, 2012-38 I.R.B.343
9599, 2012-40 I.R.B.417
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2012–1 through 2012–26 is in Internal Revenue Bulletin
2012–26, dated June 25, 2012.
October 15, 2012ii2012–42 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2012–27 through 2012–42
Announcements:
83-196
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
85-141
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
2008-105
Modified and superseded by
Ann. 2012-34, 2012-36 I.R.B.334
Notices:
2009-24
Amplified by
Notice 2012-51, 2012-33 I.R.B.150
2011-81
Superseded by
Notice 2012-63, 2012-42 I.R.B.496
2012-51
Amplified by
Notice 2012-51, 2012-33 I.R.B.150
Proposed Regulations:
REG-100276-97
Withdrawn by
Ann. 2012-27, 2012-27 I.R.B.10
Revenue Procedures:
94-22
Modified and superseded by
Rev. Proc. 2012-35, 2012-37 I.R.B.341
95-15
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
97-27
Modified by
Rev. Proc. 2012-39, 2012-41 I.R.B.470
98-32
Modified and superseded by
Rev. Proc. 2012-33, 2012-34 I.R.B.272
2007-38
Modified and superseded by
Rev. Proc. 2012-32, 2012-34 I.R.B.267
2011-14
Clarified and modified by
Rev. Proc. 2012-39, 2012-41 I.R.B.470
2011-40
Superseded by
Rev. Proc. 2012-30, 2012-33 I.R.B.165
Revenue Procedures— Continued:
2011-50
Superseded by
Rev. Proc. 2012-36, 2012-39 I.R.B.374
Treasury Decisions:
9752
Corrected by
Ann. 2012-35, 2012-38 I.R.B.356
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2012–1 through 2012–26 is in Internal Revenue Bulletin 2012–26, dated June 25, 2012.
2012–42 I.R.B.iiiOctober 15, 2012

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