Internal Revenue Bulletin 2019-14 (PDF rendition): IRS Notices

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

# INTERNAL REVENUE BULLETIN

4
IRS

Bulletin No. 2019-14
April 1, 2019

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## ADMINISTRATIVE

### Notice 2019-20, page 927.

This Notice provides penalty relief under sections 6722 (failure
to furnish correct payee statements); 6698 (failure to file
partnership return); section 6038(b) and (c) (failure to furnish
information with respect to certain partnerships); and any other
section for filing or furnishing Schedules K-1 or other forms or
statements, where a penalty is imposed solely as a result of
failing to include information about partners' negative tax basis
capital accounts for the 2018 tax year.

### Notice 2019-22, page 931.

Section 30D provides a credit of up to $7,500 for new qualified
plug-in electric drive motor vehicles sold after December 31,
2009. This notice announces the credit phase-out schedule for
new qualified plug-in electric drive motor vehicles sold by
General Motors, LLC. Section 30D of the Internal Revenue
Code provides for a credit determined under § 30D(b) for
certain new qualified plug-in electric drive motor vehicles. The
new qualified plug-in electric drive motor vehicle credit begins
to phase out for a manufacturer's qualified plug-in electric drive
motor vehicles in the second calendar quarter after the calen-
dar quarter in which at least 200,000 of the manufacturer's
vehicles that qualify for the credit have been sold for use or
lease in the United States (determined on a cumulative basis
for sales after December 31, 2009). General Motors, LLC has
submitted quarterly reports that indicate that its cumulative
sales of qualified plug-in electric drive motor vehicles reached
the 200,000-vehicle limit during the calendar quarter ending
December 31, 2018. Accordingly, the credit for all new qual-
ified plug-in electric drive motor vehicles sold by General Mo-
tors, LLC will begin to phase out on April 1, 2019.

## EMPLOYEE PLANS

### Notice 2019-21, page 927.

This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for March
2019 used under § 417(e)(3)(D), the 24-month average seg-
ment rates applicable for March 2019, and the 30-year Trea-
sury rates, as reflected by the application of § 430(h)(2)(C)(iv).

### REV. RUL. 2019-06, page 919.

This revenue ruling provides tables of covered compensation
under § 401(l)(5)(E) of the Internal Revenue Code and the
Income Tax Regulations thereunder, effective January 1, 2019.

## INCOME TAX

### Notice 2019-24, page 932.

Notice 2019-24 provides for adjustment to the limitation on
housing expenses for purposed of section 911 of the Internal
Revenue Code. These adjustments are made on the basic
geographical differences in housing costs in the United States.
Further, if the limitation on housing expenses is higher for
taxable year 2019 than the adjusted limitations on housing
expenses provided in Notice 2018-44, qualified taxpayers
may apply the adjusted limitations for taxable year 2019 to
their 2018 taxable year.

### REV PROC 2019-15, page 939.

Attached is Revenue Procedure 2019-15, which provides a
waiver for the time requirements for individuals electing to
exclude their foreign earned income who must leave a foreign
country because of war, civil unrest, or similar adverse condi-
tions in that country. Rev. Proc. 2019-15 adds the Democratic
Republic of the Congo, Cuba, Iraq, and Nicaragua to the list of
waiver countries for tax year 2018 for which the minimum time
requirements are waived. Generally, U.S. citizens or resident

aliens living and working abroad are taxed on their worldwide
income. However, if their tax home is in a foreign country and
they meet either the bona fide residence test or the physical
presence test, they can choose to exclude from their income a
limited amount of their foreign earned income ($103,900 for
20018). Both the bona fide residence test and the physical
presence test contain minimum time requirements.

### REV. RUL. 2019-08, page 923.

Federal rates; adjusted federal rates; adjusted federal long-
term rate, the long-term exempt rate, and the blended annual
rate. For purposes of sections 382, 1274, 1288, 7872 and
other sections of the Code, tables set forth the rates for April
2019.

### REV. RUL. 2019-09, page 925.

This revenue ruling suspends Rev. Rul. 57-464, 1957-2 C.B.
244, and Rev. Rul. 57-492, 1957-2 C.B. 247, pending the
completion of a study by the Department of the Treasury and
the Internal Revenue Service regarding the active trade or
business requirement under sections 355(a)(1)(C) and (b) of
the Internal Revenue Code.

### T.D. 9851, page 917.

These final regulations provide guidance on the requirements
that are used to determine whether a corporation qualifies as
a regulated investment company (RIC) for federal income tax
purposes. The final regulations clarify that amounts included in
gross income under § 951(a)(1)(A) or 1293(a) are treated as
dividends only to the extent that there is an actual distribution
out of the earnings and profits of the taxable year that are
attributable to the amounts so included. The final regulations
also provide that inclusions under §§ 951(a)(1) and 1293(a)
derived with respect to a RIC's business of investing in stock,
securities, or currencies are other qualifying income for pur-
poses of the RIC income test under § 851(b)(2).

## The IRS Mission

Provide America's taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing 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.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal 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, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion 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 Sec-
retary (Enforcement).

### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

## Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

26 CFR 1.851-2

### T.D. 9851

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1

### Guidance Under Section 851 Relating to Investments in Stock and Securities

AGENCY: Internal Revenue Service (IRS),
Treasury.

ACTION: Final Regulations.

SUMMARY: This document provides fi-
nal regulations relating to the income test
used to determine whether a corporation
may qualify as a regulated investment
company (RIC) for Federal income tax
purposes. These final regulations provide
guidance to corporations that intend to
qualify as RICs.

DATES: Effective Date: These regula-
tions are effective on March 19, 2019.

Applicability Date: For the date of ap-
plicability, see § 1.851-2(d).

FOR FURTHER INFORMATION CON-
TACT: Matthew Howard at (202) 317-
7053 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

#### Background

This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) relating to RICs. Section 851 of the
Internal Revenue Code (Code) sets forth
requirements for qualifying as a RIC.

On September 28, 2016, a notice of
proposed rulemaking (REG-123600-16)
was published in the Federal Register
(81 FR 66576) under section 851. No pub-
lic hearing was requested or held. Written
or electronic comments responding to the
notice of proposed rulemaking were re-
ceived. After consideration of all the com-
ments, the proposed regulations are ad-
opted as revised by this Treasury decision
containing final regulations. The revisions

to the proposed regulations are discussed
in the Summary of Comments and Expla-
nation of Revisions.

### Summary of Comments and Explanation of Revisions

In response to the notice of proposed
rulemaking, the IRS received five written
comments that are available for public
inspection at www.regulations.gov or
upon request.

#### A. Revisions Due to Statutory Changes

The notice of proposed rulemaking
proposed revisions to § 1.851-2(b)(1),
which had been published in the Federal
Register (25 FR 11910) on November 26,
1960, as part of TD 6500 (1960 final reg-
ulations). The proposed revisions would
conform § 1.851-2(b)(1) to several
changes to the statutory text of section
851(b)(2) enacted after the 1960 final reg-
ulations were published. See Pub. L. 95-
345, § 2(a)(3), 92 Stat. 481, 481 (1978);
Tax Reform Act of 1986, Pub. L. 99-514,
§ 653(b), 100 Stat. 2085, 2298 (1986);
Taxpayer Relief Act of 1997, Pub. L.
105-34, § 1271(a), 111 Stat. 788, 1036
(1997). No comments were received on
these proposed revisions. Accordingly,
the final regulations adopt the revisions to
§ 1.851-2(b)(1) as proposed.

#### B. Defining Securities

In the notice of proposed rulemaking,
the Department of the Treasury (Treasury
Department) and the IRS determined that
the IRS should no longer issue private
letter rulings on questions relating to the
treatment of a corporation as a RIC that
require a determination of whether a fi-
nancial instrument or position is a security
under the Investment Company Act of
1940, Pub. L. No. 76-768, 54 Stat. 789
(codified as amended at 15 U.S.C.
§§ 80a-1 - 80a-64 (2016)) (1940 Act).
Contemporaneously with the publication
of the notice of proposed rulemaking, the
Treasury Department and the IRS issued
Rev. Proc. 2016-50 (2016-43 I.R.B.
522), which provides that the IRS ordinar-

ily will not issue rulings or determination
letters on any issue relating to the treat-
ment of a corporation as a RIC that re-
quires a determination of whether a finan-
cial instrument or position is a security
under the 1940 Act. One commenter rec-
ommended that the IRS not add this issue
to the no-rule list and that the IRS con-
tinue to consider ruling requests in situa-
tions in which the status of an investment
as a security under section 2(a)(36) of the
1940 Act is sufficiently clear under the
language of the 1940 Act or under rele-
vant guidance from the SEC. In issuing
the notice of proposed rulemaking and
Rev. Proc. 2016-50, the Treasury Depart-
ment and the IRS considered the issues,
the resource constraints of the IRS, and
the jurisdiction of the SEC under the 1940
Act and determined that the IRS ordinar-
ily should not issue rulings that require a
determination by the IRS of whether a
financial instrument or position is a secu-
rity under the 1940 Act. If the security
status of an instrument is sufficiently clear
under the 1940 Act, or if the SEC has
issued relevant guidance, any other re-
quested ruling may be considered by the
IRS subject to other limitations applicable
to all ruling requests. See, for example,
section 6 of Rev. Proc. 2019-1 (2019-1
I.R.B. 1, 18). The IRS therefore declines
to adopt the suggestion and has continued
to include the issue described in Rev.
Proc. 2016-50 in the list of areas in which
rulings or determinations letters will not
ordinarily be issued. See, for example,
section 4.01(44) of Rev. Proc. 2019-3
(2019-1 I.R.B. 130, 140).

In the notice of proposed rulemaking,
the Treasury Department and the IRS also
requested comments as to whether Rev.
Rul. 2006-1 (2006-1 C.B. 261), Rev.
Rul. 2006-31 (2006-1 C.B. 1133), and
other previously issued guidance involv-
ing determinations of whether a financial
instrument or position held by a RIC is a
security under the 1940 Act should be
withdrawn. Commenters recommended
that Rev. Rul. 2006-1 and Rev. Rul.
2006-31 not be withdrawn because RICs
rely on those rulings to invest with confi-
dence in certain derivatives on stocks and

securities. The commenters suggested
that withdrawal of those rulings would
create confusion and uncertainty with
respect to investments by a RIC. After
consideration of the comments, the
Treasury Department and the IRS have
decided not to withdraw the revenue
rulings at this time.

#### C. Inclusions Under Section 951(a)(1) or 1293(a)

In certain circumstances, a U.S. person
may be required under section 951(a)(1)
or 1293(a) to include in taxable income
certain earnings of a foreign corporation
in which the U.S. person holds an interest,
without regard to whether the foreign cor-
poration makes a distribution to the U.S.
person. The Tax Reduction Act of 1975,
Pub. L. No. 94-12, § 602, 89 Stat. 26, 58
(1975 Act), substantially increased the
overall amount of these inclusions. Be-
cause these inclusions are not dividends
(even if accompanied by a corresponding
distribution), they would have been non-
qualifying gross income for RICs. How-
ever, the same subsection of the 1975 Act
that increased the amount of inclusions
also amended section 851(b). This amend-
ment provided that an inclusion under sec-
tion 951 was treated as a dividend (and
therefore qualifying income for purposes
of section 851(b)(2)) if the inclusion was
accompanied by a distribution out of the
earnings and profits of the taxable year
that are attributable to the amounts so
included. The Tax Reform Act of 1986,
Pub. L. No. 99-514, § 1235, 100 Stat.
2085, 2575 (1986 Act), provided the same
dividend treatment for amounts included
in income under section 1293(a). The cur-
rent version of the language added by the
1975 and 1986 amendments provides:

For purposes of [section 851(b)(2)],
there shall be treated as dividends
amounts included in gross income
under section 951(a)(1)(A) or 1293(a)
for the taxable year to the extent that,
under section 959(a)(1) or 1293(c) (as
the case may be), there is a distribution
out of the earnings and profits of the
taxable year which are attributable to
the amounts so included.

The 1986 Act also added to the de-
scription of a RIC's qualifying income

"other income (including but not limited
to gains from options, futures or forward
contracts) derived with respect to its busi-
ness of investing in . . . stock, securities,
or currencies."

The amendments to section 851(b) by
the 1975 Act and the 1986 Act unambig-
uously condition dividend treatment of an
inclusion under section 951(a)(1)(A) or
1293(a) on a distribution from the foreign
corporation's earnings and profits attribut-
able to the amount included. Absent a
distribution, there is no support in the
Code for treating an inclusion under sec-
tion 951(a)(1)(A) or 1293(a) as a dividend
under section 851. The proposed regula-
tions would, therefore, clarify that an in-
clusion under section 951(a)(1)(A) or
1293(a) is treated as a dividend for pur-
poses of section 851(b)(2) only to the ex-
tent that the distribution requirement in
section 851(b) is met. All five commenters
acknowledged that the distribution re-
quirement for dividend treatment in the
proposed regulations is consistent with the
statutory language in section 851(b). Ac-
cordingly, the final regulations adopt the
clarification of the distribution require-
ment as proposed.

The proposed regulations, however, also
would provide that dividend treatment is the
only manner in which an inclusion under
section 951(a)(1) or 1293(a) may be quali-
fying income. That is, under the proposed
regulations, for purposes of section
851(b)(2) neither of these inclusions would
be other income derived with respect to a
RIC's business of investing in stock, secu-
rities, or currencies (Non-qualifying Income
Proposal). Commenters unanimously rec-
ommended that the Treasury Department
and the IRS exclude the Non-qualifying In-
come Proposal from the final regulations.
Commenters noted that some RICs have no
ability to control when, or whether, distri-
butions are made and may have income
inclusions in excess of available or allow-
able distributions.

Commenters also suggested that the
Non-qualifying Income Proposal would
produce inconsistent results. For example,
if a RIC has income inclusions with re-
spect to a passive foreign investment com-
pany (PFIC) as a result of making a mark-
to-market election under section 1296
with respect to the PFIC, the RIC would
have qualifying income under section

851(b). See section 1296(h), which spe-
cifically treats that income as a dividend
even though there has been no distribu-
tion. In contrast, if the RIC had made a
qualified electing fund election under sec-
tion 1293 with respect to a PFIC, then the
Non-qualifying Income Proposal would
prevent income inclusions with respect to
that PFIC from being qualifying income.

The Treasury Department and the IRS
have carefully considered the comments
and recognize that the Non-qualifying In-
come Proposal creates an unintended ef-
fect on the RIC income test of section
851(b)(2). For example, certain types of
income, such as interest and dividends,
would be considered qualifying income if
earned directly by a RIC. These types of
income, however, would not be qualifying
income when received by a controlled for-
eign corporation or PFIC and included in
a RIC's income under section 951(a)(1) or
1293(a), unless there is a corresponding
distribution. Accordingly, the Treasury
Department and the IRS have decided not
to include the Non-qualifying Income
Proposal in these final regulations.

One commenter further recommended
that the final regulations treat inclusions
under sections 951(a)(1)(A) and 1293(a)
derived with respect to a RIC's business
of investing in stock, securities, or curren-
cies as other qualifying income for pur-
poses of the RIC income test of section
851(b)(2) (Qualifying Income Proposal).
The Treasury Department and the IRS
recognize that inclusions under sections
951(a)(1) and 1293(a) with respect to
which there are no corresponding distri-
butions may be accelerations of income
derived from stock that otherwise would
be recognized as a dividend or as gain
from the sale or other disposition of stock.
The Qualifying Income Proposal recom-
mended by the commenter would treat
these inclusions as qualifying income for
purposes of section 851(b)(2). That is, it
would apply to inclusions with respect to
which there are no corresponding contem-
poraneous distributions and which other-
wise would not be treated as dividends
even though those inclusions are con-
nected to a RIC's business of investing in
stock, securities, or currencies. After fur-
ther consideration of the issues raised by
the commenter and the provisions in "An
Act to provide for reconciliation pursuant

to titles II and V of the concurrent reso-
lution on the budget for fiscal year 2018,"
P.L. 115-97, title 1, § 11000, 131 Stat.
2054 (Dec. 22, 2017), affecting the taxa-
tion of income earned outside of the
United States, the Treasury Department
and the IRS adopt the Qualifying Income
Proposal in the final regulations.

##### Special Analyses

This regulation is not subject to review
under section 6(b) of Executive Order
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) between the
Treasury Department and the Office of
Management and Budget regarding re-
view of tax regulations.

Because these regulations do not im-
pose a collection of information on small
entities, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Pursuant
to section 7805(f) of the Internal Revenue
Code, the notice of proposed rulemaking
preceding these regulations was submitted
to the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business, and
no comments were received.

##### Statement of Availability of IRS Documents

The IRS revenue procedures and revenue
rulings cited in this document are published
in the Internal Revenue Bulletin (or Cumu-
lative Bulletin) and are available from the
Superintendent of Documents, U.S. Gov-
ernment Publishing Office, Washington,
DC 20402, or by visiting the IRS website at
www.irs.gov.

###### Drafting Information

The principal author of these final regu-
lations is Matthew Howard, Office of Asso-
ciate Chief Counsel (Financial Institutions
and Products). However, other personnel
from the Treasury Department and the IRS
participated in their development.

* * * * *

###### Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended
as follows:

## PART 1-INCOME TAXES

Paragraph 1. The authority citation for
part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.851-2 is amended by
revising paragraphs (b)(1) and (b)(2)(i),
and adding paragraphs (b)(2)(iii) and (d)
to read as follows:

§ 1.851-2 Limitations.

* * * * *

(b) * * * (1) General rule. A corpora-
tion will not be a regulated investment
company for a taxable year unless 90 per-
cent of its gross income for that year is
income described in paragraph (b)(1)(i) or
(ii) of this section. Any loss from the sale
or other disposition of stock or securities
is not taken into account in the gross in-
come computation.

(i) Gross income amounts. Income is
described in this paragraph (b)(1)(i) if it is
gross income derived from:

(A) Dividends;

(B) Interest;

(D) Gains from the sale or other dispo-
sition of stocks or securities (as defined in
section 2(a)(36) of the Investment Com-
pany Act of 1940, as amended);

(E) Gains from the sale or other dispo-
sition of foreign currencies; or

(F) Other income (including but not lim-
ited to gains from options, futures, or forward
contracts) derived with respect to a regulated
investment company's business of investing in
such stock, securities, or currencies.

(ii) Income from a publicly traded
partnership. Income is described in this
paragraph (b)(1)(ii) if it is net income
derived from an interest in a qualified
publicly traded partnership (as defined in
section 851(h)).

(2) * * * (i) For purposes of section
851(b)(2)(A) and paragraph (b)(1)(i)(A)
of this section, amounts included in gross
income for the taxable year under section
951(a)(1)(A) or 1293(a) are treated as div-
idends only to the extent that, under sec-
tion 959(a)(1) or 1293(c) (as the case may
be), there is a distribution out of the earn-
ings and profits of the taxable year that are
attributable to the amounts included in
gross income for the taxable year under
section 951(a)(1)(A) or 1293(a). For alloca-

tion of distributions to earnings and profits
of foreign corporations, see § 1.959-3.
* * * * *

(iii) If an amount is included in gross
income under section 951(a)(1) or 1293(a)
and is derived with respect to a corpora-
tion's business of investing in stock, securi-
ties, or currencies then the amount is other
income described in section 851(b)(2)(A)
and paragraph (b)(1)(i)(F) of this section.
Notwithstanding paragraph (d) of this sec-
tion, a taxpayer may rely on the rule in this
paragraph (b)(2)(iii) for taxable years that
begin after September 28, 2016.
* * * * *

(d) Applicability date. The rules in
paragraphs (b)(1) and (b)(2)(i) and (iii)
apply to taxable years that begin after
June 17, 2019.

Kirsten Wielobob
Deputy Commissioner for Services and
Enforcement.
Approved: February 15, 2019

David J. Kautter
Assistant Secretary of the Treasury (Tax
Policy).

(Filed by the Office of the Federal Register on March 18,
2019, 8:45 a.m., and published in the issue of the Federal
Register for March 19, 2019, 84 F.R. 9959)

## Section 401 .- Qualified Pension, Profit-Sharing, and Stock Bonus Plans

26 CFR 1.401(1)-1: Permitted disparity in employer-
provided contributions or benefits

## Rev. Rul. 2019-06

This revenue ruling provides tables of cov-
ered compensation under § 401(l)(5)(E) of
the Internal Revenue Code and the Income
Tax Regulations thereunder, for the 2019
plan year.

Section 401(l)(5)(E)(i) defines covered
compensation with respect to an employee
as the average of the contribution and
benefit bases in effect under section 230
of the Social Security Act (the "Act") for
each year in the 35-year period ending
with the year in which the employee at-
tains social security retirement age.

Section 401(l)(5)(E)(ii) states that the
determination for any year preceding the

year in which the employee attains social
security retirement age shall be made by
assuming that there is no increase in cov-
ered compensation after the determination
year and before the employee attains so-
cial security retirement age.

Section 1.401(1)-1(c)(34) of the In-
come Tax Regulations defines the taxable
wage base as the contribution and benefit
base under section 230 of the Act.

Section 1.401(1)-1(c)(7)(i) defines cov-
ered compensation for an employee as the
average (without indexing) of the taxable
wage bases in effect for each calendar
year during the 35-year period ending
with the last day of the calendar year in
which the employee attains (or will attain)

social security retirement age. A 35-year
period is used for all individuals regard-
less of the year of birth of the individual.
In determining an employee's covered
compensation for a plan year, the taxable
wage base for all calendar years beginning
after the first day of the plan year is as-
sumed to be the same as the taxable wage
base in effect as of the beginning of the
plan year. An employee's covered com-
pensation for a plan year beginning after
the 35-year period applicable under
§ 1.401(1)-1(c)(7)(i) is the employee's
covered compensation for a plan year dur-
ing which the 35-year period ends. An
employee's covered compensation for a
plan year beginning before the 35-year

period applicable under § 1.401(1)-
1(c)(7)(i) is the taxable wage base in ef-
fect as of the beginning of the plan year.

Section 1.401(1)-1(c)(7)(ii) provides
that, for purposes of determining the
amount of an employee's covered com-
pensation under § 1.401(1)-1(c)(7)(i), a
plan may use tables, provided by the
Commissioner, that are developed by
rounding the actual amounts of covered
compensation for different years of birth.

For purposes of determining covered
compensation for the 2019 year, the tax-
able wage base is $132,900.

The following tables provide covered
compensation for 2019.

ATTACHMENT I 2019 COVERED COMPENSATION TABLE CALENDAR CALENDAR YEAR OF 2019 COVERED YEAR OF SOCIAL SECURITY COMPENSATION

BIRTH

RETIREMENT AGE

TABLE II

1907

1972

$ 4,488

1908

1973

4,704

1909

1974

5,004

1910

1975

5,316

1911

1976

5,664

1912

1977

6,060

1913

1978

6,480

1914

1979

7,044

1915

1980

7,692

1916

1981

8,460

1917

1982

9,300

1918

1983

10,236

1919

1984

11,232

1920

1985

12,276

1921

1986

13,368

1922

1987

14,520

1923

1988

15,708

1924

1989

16,968

1925

1990

18,312

1926

1991

19,728

1927

1992

21,192

1928

1993

22,716

1929

1994

24,312

1930

1995

25,920

1931

1996

27,576

1932

1997

29,304

1933

1998

31,128

CALENDAR YEAR OF

ATTACHMENT I 2019 COVERED COMPENSATION TABLE CALENDAR YEAR OF 2019 COVERED SOCIAL SECURITY COMPENSATION RETIREMENT AGE TABLE II

BIRTH

1934

1999

33,060

1935

2000

35,100

1936

2001

37,212

1937

2002

39,444

1938

2004

43,992

1939

2005

46,344

1940

2006

48,816

1941

2007

51,348

1942

2008

53,952

1943

2009

56,628

1944

2010

59,268

1945

2011

61,884

1946

2012

64,560

1947

2013

67,308

1948

2014

69,996

1949

2015

72,636

1950

2016

75,180

1951

2017

77,880

1952

2018

80,532

1953

2019

83,244

1954

2020

85,920

1955

2022

91,056

1956

2023

93,564

1957

2024

96,000

1958

2025

98,328

1959

2026

100,596

1960

2027

102,804

1961

2028

104,964

1962

2029

107,028

1963

2030

109,080

1964

2031

111,084

1965

2032

113,004

1966

2033

114,852

1967

2034

116,580

1968

2035

118,200

1969

2036

119,700

1970

2037

121,068

1971

2038

122,376

1972

2039

123,660

1973

2040

124,884

1974

2041

126,000

1975

2042

127,008

1976

2043

127,884

ATTACHMENT I 2019 COVERED COMPENSATION TABLE CALENDAR CALENDAR YEAR OF 2019 COVERED YEAR OF SOCIAL SECURITY COMPENSATION BIRTH RETIREMENT AGE TABLE II

1977

2044

128,640

1978

2045

129,384

1979

2046

130,128

1980

2047

130,776

1981

2048

131,328

1982

2049

131,784

1983

2050

132,192

1984

2051

132,600

1985

2052

132,768

1986 and

2053 and Later

132,900

Later

ATTACHMENT II 2019 ROUNDED COVERED COMPENSATION TABLE

CALENDAR YEAR OF

2019 COVERED COMPENSATION ROUNDED

BIRTH

1937

$ 39,000

1938 - 1939

45,000

1940

48,000

1941

51,000

1942

54,000

1943

57,000

1944

60,000

1945

63,000

1946 - 1947

66,000

1948

69,000

1949

72,000

1950

75,000

1951

78,000

1952

81,000

1953

84,000

1954

87,000

1955

90,000

1956

93,000

1957

96,000

1958

99,000

1959 - 1960

102,000

1961

105,000

1962 - 1963

108,000

1964

111,000

1965 - 1966

114,000

# ATTACHMENT II 2019 ROUNDED COVERED COMPENSATION TABLE

CALENDAR YEAR OF BIRTH

2019 COVERED COMPENSATION ROUNDED

1967 - 1968

117,000

1969 - 1970

120,000

1971 - 1972

123,000

1973 - 1975

126,000

1976 - 1979

129,000

1980 - 1983

132,000

1984 and Later

132,900

## DRAFTING INFORMATION

The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development of
this guidance. For further information re-
garding this notice, contact Mr. Morgan at
202-317-6700 or Gregory K. Davis at
443-853-5590 (not toll-free numbers).

# Section 1274 .- Determina- tion of Issue Price in the Case of Certain Debt Instruments Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)

## Rev. Rul. 2019-08

This revenue ruling provides various pre-
scribed rates for federal income tax pur-
poses for April 2019 (the current month).
Table 1 contains the short-term, mid-term,
and long-term applicable federal 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 fed-
eral rates (adjusted AFR) for the current
month for purposes of section 1288(b). Ta-
ble 3 sets forth the adjusted federal long-
term rate and the long-term tax-exempt rate
described in section 382(f). Table 4 contains
the appropriate percentages for determining
the low-income housing credit described in
section 42(b)(1) for buildings placed in ser-
vice during the current month. However,
under section 42(b)(2), the applicable per-
centage for non-federally subsidized new
buildings placed in service after July 30,
2008, shall not be less than 9%. Finally,
Table 5 contains the federal rate for deter-
mining the present value of an annuity, an
interest for life or for a term of years, or a
remainder or a reversionary interest for pur-
poses of section 7520.

REV. RUL. 2019-08 TABLE 1 Applicable Federal Rates (AFR) for April 2019

Annual

Period for Compounding Semiannual

Quarterly

Monthly

Short-term

AFR

2.52%

2.50%

2.49%

110% AFR

2.77%

2.75%

2.74%

2.73%

120% AFR

3.02%

3.00%

2.99%

2.98%

130% AFR

3.28%

3.25%

3.24%

3.23%

AFR

Mid-term

2.55%

2.53%

2.52%

110% AFR

2.80%

2.78%

2.77%

2.76%

120% AFR

3.06%

3.04%

3.03%

3.02%

130% AFR

3.32%

3.29%

3.28%

3.27%

150% AFR

3.84%

3.80%

3.78%

3.77%

175% AFR

4.48%

4.43%

4.41%

4.39%

# REV. RUL. 2019-08 TABLE 1 Applicable Federal Rates (AFR) for April 2019

Period for Compounding Annual Semiannual Quarterly Long-term

Monthly

AFR

2.89%

2.87%

2.86%

2.85%

110% AFR

3.18%

3.16%

3.15%

3.14%

120% AFR

3.47%

3.44%

3.43%

3.42%

130% AFR

3.76%

3.73%

3.71%

3.70%

REV. RUL. 2019-08 TABLE 3 Rates Under Section 382 for April 2019

REV. RUL. 2019-08 TABLE 2 Adjusted AFR for April 2019 Period for Compounding

Annual

Semiannual

Quarterly

Monthly

Short-term adjusted AFR

1.91%

1.90%

1.89%

Mid-term adjusted AFR

1.93%

1.92%

1.91%

Long-term adjusted AFR

2.19%

2.18%

2.17%

Adjusted federal long-term rate for the current month

2.19%

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.)

2.20%

REV. RUL. 2019-08 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for April 2019

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, shall not be less than 9%.

REV. RUL. 2019-08 TABLE 5 Rate Under Section 7520 for April 2019

Appropriate percentage for the 70% present value low-income housing credit

7.63%

Appropriate percentage for the 30% present value low-income housing credit

3.27%

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a 3.0%
remainder or reversionary interest

# Section 42 .- Low-Income Housing Credit

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

## Section 280G .- Golden Parachute Payments

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

## Section 382 .- Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change

The adjusted applicable federal long-term rate is
set forth for the month of April 2019. See Rev. Rul.
2019-08, page 923.

## Section 467 .- Certain Payments for the Use of Property or Services

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

## Section 468 .- Special Rules for Mining and Solid Waste Reclamation and Closing Costs

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

# Section 482 .- Allocation of Income and Deductions Among Taxpayers

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

# Section 483 .- Interest on Certain Deferred Payments

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

# 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 April 2019. See Rev. Rul. 2019-08, page 923.

# Section 7520 .- Valuation Tables

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

# Section 7872 .- Treatment of Loans With Below-Market Interest Rates

The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of April
2019. See Rev. Rul. 2019-08, page 923.

# Section 355 .- Distributions of Stock and Securities of a Controlled Corporation

26 CFR 1.355-3: Active conduct of a trade or busi-
ness.

# Rev. Rul. 2019-09

This revenue ruling suspends Rev. Rul.
57-464, 1957-2 C.B. 244, and Rev. Rul.
57-492, 1957-2 C.B. 247, pending the
completion of a study by the Department
of the Treasury (Treasury Department)
and the Internal Revenue Service (Ser-
vice) regarding the active trade or busi-
ness (ATB) requirement under sections
355(a)(1)(C) and (b) of the Internal Rev-
enue Code.

# REVENUE RULINGS

In Rev. Rul. 57-464, the Service con-
sidered the section 355 qualification of a
corporation's separation of a manufactur-
ing business from a group of real estate

assets consisting of an old factory build-
ing used for storage and four other build-
ings: a duplex apartment building rented
to employees of the corporation, a small
office building rented to a single tenant,
and two houses, one of which was occu-
pied by a sister-in-law of the president of
the corporation. The use of the old factory
building for storage "was not in itself the
active operation of a business as defined
in the regulations." The rental activities
"produced only a nominal rental" and
"negligible" net income, and the proper-
ties "were acquired either as an invest-
ment or as a convenience to employees of
the manufacturing business." The Service
held that the separation did not satisfy the
ATB requirement.

In Rev. Rul. 57-492, a corporation en-
gaged in refining, transporting, and mar-
keting petroleum products began a sepa-
rate operation to explore for and produce
oil. The exploration and production oper-
ation incurred substantial expenditures but
"did not include any income producing
activity or any source of income" until
less than five years preceding its separa-
tion from the primary refining, transporta-
tion, and marketing operation. The Ser-
vice held that the exploration and
production operation failed to qualify as
an ATB because, "[b]efore oil was discov-
ered in commercial quantities .. . , the
venture . . . did not include any income
producing activity or any source of in-
come."

# LAW

Section 355(a)(1) provides that, if certain
requirements are met, a corporation may
distribute stock and securities of a controlled
corporation to its shareholders and security
holders without recognition of gain or loss
or income to the recipient shareholders or
security holders. Among those require-
ments, both the distributing corporation and
the controlled corporation must be engaged
in an ATB immediately after the distribu-
tion. Sections 355(a)(1)(C) and (b), and
§ 1.355-3(a)(1)(i). Each trade or business
must have been actively conducted through-
out the five-year period ending on the date
of the distribution. Section 355(b)(2)(B) and
§ 1.355-3(b)(3).

Section 1.355-3(b)(2)(ii) describes a
"trade or business" as "a specific group of
activities [that] are being carried on by the

corporation for the purpose of earning in-
come or profit, and the activities included
in such group include every operation that
forms a part of, or a step in, the process of
earning income or profit." In particular,
"[s]uch group of activities ordinarily must
include the collection of income and the
payment of expenses." Section 1.355-
3(b)(2)(ii).

# ANALYSIS

The Treasury Department and the Ser-
vice are conducting a study to determine, for
purposes of section 355, "whether a busi-
ness can qualify as an ATB if entrepreneur-
ial activities, as opposed to investment or
other non-business activities, take place
with the purpose of earning income in the
future, but no income has yet been col-

lected." See IRS statement regarding the
active trade or business requirement for
section 355 distributions, dated Septem-
ber 25, 2018, available at http://
www.irs.gov/newsroom/statements-from-
office-of-the-chief-counsel. The ATB
analysis underlying the holdings in Rev.
Rul. 57-464 and Rev. Rul. 57-492 fo-
cuses, in significant part, on the lack of
income generated by the activities under
consideration. Consequently, these rulings
could be interpreted as requiring income
generation for a business to qualify as an
ATB.

Accordingly, Rev. Rul. 57-464 and
Rev. Rul. 57-492 are suspended pending
completion of the study. See IRM
32.2.2.8.1, para. 9 (Aug. 11, 2004) (pro-
viding that a revenue ruling can be sus-
pended "only in rare situations to show

that previously published guidance will
not be applied pending some future action,
such as . .. the outcome of a Service
study").

# EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 57-464 and Rev. Rul. 57-
492 are suspended.

# DRAFTING INFORMATION

The principal author of this revenue
ruling is Lola L. Johnson of the Office of
Chief Counsel (Corporate). For further in-
formation regarding this revenue ruling,
please contact Ms. Johnson at (202)
317-5024.

# Part III. Administrative, Procedural, and Miscellaneous

## Penalty Relief for Missing Negative Tax Basis Capital Account Information

### Notice 2019-20

This Notice provides penalty relief un-
der sections 6722 (failure to furnish cor-
rect payee statements), 6698 (failure to
file partnership return), section 6038(b)
and (c) (failure to furnish information
with respect to certain partnerships), and
any other section of the Internal Revenue
Code (Code) for filing or furnishing
Schedules K-1 or other forms or state-
ments, where a penalty is imposed solely
as a result of failing to include informa-
tion about partners' negative tax basis
capital accounts for taxable years that be-
gan after December 31, 2017, but before
January 1, 2019.

### BACKGROUND

Item L of Schedule K-1 to Form 1065
and Item F of Schedule K-1 to Form 8865
require reporting a partner's capital ac-
count. Generally, a partnership may report
partner capital to a partner using tax basis,
Generally Accepted Accounting Princi-
ples, section 704(b) book, or some other
method. Pursuant to updates, the 2018 In-
structions for Form 1065 and Partner's
Instructions for Schedule K-1 (Form
1065) to Item L now require a partnership
that does not report tax basis capital ac-
counts to its partners to report, on line 20
of Schedule K-1 (Form 1065) using code
AH, the amount of such partner's tax basis
capital both at the beginning of the year
and at the end of the year if either amount
is negative (negative tax basis capital ac-
count information). The Instructions for
Form 8865, Schedule K-1, incorporate
this requirement by reference to the In-
structions for Form 1065.

The Treasury Department and Internal
Revenue Service (IRS) have become
aware that certain persons and partner-
ships may be unable to comply timely
with this new requirement.

## PENALTY RELIEF

The IRS will waive penalties under
section 6722 for failure to furnish a part-
ner a Schedule K-1 (Form 1065) and un-
der section 6698 for failure to file a
Schedule K-1 (Form 1065) with a part-
nership return, under section 6038 for fail-
ure to furnish a Schedule K-1 (Form
8865), and under any other section of the
Code for failure to file or furnish a Sched-
ule K-1 or any other form or statement,
for any penalty that arises solely as a
result of failing to include negative tax
basis capital account information if both
the following conditions are met:

1\. The Schedule K-1 or other applicable
form or statement is timely filed, in-
cluding extensions, with the IRS; is
timely furnished to the appropriate
partner, if applicable; and contains all
other required information.

2\. The person or partnership required
to file the Schedule K-1 or other ap-
plicable form or statement files with
the IRS, no later than one year after
the original, unextended due date
of the form to which the Schedule
K-1 or other applicable form or state-
ment must be attached, a schedule
setting forth, for each partner for
which negative tax basis capital ac-
count information is required:

a. the partnership's name and Em-
ployee Identification Number, if
any, and Reference ID Number, if
any;

b. the partner's name, address, and
taxpayer identification number;
and

c. the amount of the partner's tax ba-
sis capital account at the beginning
and end of the tax year at issue.

The schedule should be captioned "Filed
Under Notice 2019-20" and accord with
instructions and additional guidance
posted by the IRS on IRS.gov.

The due date for this supplemental
schedule is determined without consider-
ation of any extensions, automatic or oth-
erwise, that may apply to the due date for
the form itself. The schedule should be
sent to the following address:

1973 North Rulon White Blvd.
Ogden, UT 84404-7843

MS 4700

Attn: Ogden PTE

This penalty relief applies only for a
taxable year beginning after December 31,
2017, but before January 1, 2019. To re-
ceive a penalty waiver, a person or part-
nership is not required to file or furnish
amended Schedules K-1 or other applica-
ble amended forms or statements to part-
ners or the IRS, or to file an administrative
adjustment request under section 6227, if
applicable. Partnerships or other persons
should not delay filing or furnishing
Schedules K-1 or other applicable forms
or statements on account of this Notice.
The timely filing and furnishing, includ-
ing extensions, of Schedules K-1 or other
applicable forms or statements is a re-
quirement to be eligible for relief under
this Notice. The IRS will post instructions
and additional information about the relief
provided by this Notice in the coming
weeks on IRS.gov, where forms, instruc-
tions, and other tax assistance are avail-
able.

The penalty relief under this Notice
will allow additional time for persons and
partnerships to provide the negative tax
basis capital account information with re-
spect to their taxable years beginning after
December 31, 2017, but before January 1,
2019.

## CONTACT INFORMATION

The principal author of this Notice is
Isaac Brooks Fishman of the Office of the
Associate Chief Counsel (Procedure and
Administration). For further information
regarding this Notice contact Isaac Brooks
Fishman at (202) 317-6844 (not a toll-free
number).

## Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Notice 2019-21

This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average

segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).

## YIELD CURVE AND SEGMENT RATES

Section 430 specifies the minimum
funding requirements that apply to single-
employer plans (except for CSEC plans
under § 414(y)) pursuant to § 412. Section
430(h)(2) specifies the interest rates that
must be used to determine a plan's target
normal cost and funding target. Under this
provision, present value is generally de-
termined using three 24-month average
interest rates ("segment rates"), each of
which applies to cash flows during speci-
fied periods. To the extent provided under

§ 430(h)(2)(C)(iv), these segment rates
are adjusted by the applicable percentage of
the 25-year average segment rates for the
period ending September 30 of the year
preceding the calendar year in which the
plan year begins.1 However, an election
may be made under § 430(h)(2)(D)(ii) to
use the monthly yield curve in place of the
segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond seg-
ment rates used to compute the target nor-
mal cost and the funding target. Consis-
tent with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from February
2019 data is in Table 2019-2 at the end of
this notice. The spot first, second, and
third segment rates for the month of Feb-
ruary 2019 are, respectively, 3.01, 4.11,
and 4.41.

The 24-month average segment rates
determined under § 430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the applica-
ble minimum and maximum percentages of
the corresponding 25-year average segment
rates. For plan years beginning before 2021,
the applicable minimum percentage is 90%
and the applicable maximum percentage is
110%. The 25-year average segment rates
for plan years beginning in 2018 and
2019 were published in Notice 2017-50,
2017-41 I.R.B. 280, and Notice 2018-73,
2018-40 I.R.B. 526, respectively.

## 24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate
bond segment rates applicable for March
2019 without adjustment for the 25-year
average segment rate limits are as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment

Applicable Month First Segment

Second Segment

Third Segment

March 2019

2.65

3.95

4.48

month averages applicable for March

Based on § 430(h)(2)(C)(iv), the 24-
2019, adjusted to be within the applicable
minimum and maximum percentages of

the corresponding 25-year average seg-
ment rates, are as follows:

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates

Applicable Month

First Segment

Second Segment

Third Segment

2018

March 2019

3.92

5.52

6.29

2019

March 2019

3.74

5.35

6.11

### 30-YEAR TREASURY SECURITIES INTEREST RATES

Section 431 specifies the minimum fund-
ing requirements that apply to multiem-
ployer plans pursuant to § 412. Section
431(c)(6)(B) specifies a minimum amount
for the full-funding limitation described in
§ 431(c)(6)(A), based on the plan's current
liability. Section 431(c)(6)(E)(ii)(I) provides
that the interest rate used to calculate current

liability for this purpose must be no more
than 5 percent above and no more than 10
percent below the weighted average of the
rates of interest on 30-year Treasury securi-
ties during the four-year period ending on
the last day before the beginning of the plan
year. Notice 88-73, 1988-2 C.B. 383, pro-
vides guidelines for determining the
weighted average interest rate. The rate of
interest on 30-year Treasury securities for
February 2019 is 3.02 percent. The Service

determined this rate as the average of the
daily determinations of yield on the 30-year
Treasury bond maturing in November 2048
determined each day through February 6,
2019 and the yield on the 30-year Treasury
bond maturing in February 2049 determined
each day for the balance of the month. For
plan years beginning in March 2019, the
weighted average of the rates of interest on
30-year Treasury securities and the permis-

1Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

sible range of rates used to calculate current
liability are as follows:

For Plan Years Beginning In

Treasury Weighted Average Rates 30-Year Treasury Weighted Average

Permissible Range 90% to 105%

March 2019

2.93

2.64 to 3.08

# MINIMUM PRESENT VALUE SEGMENT RATES

In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-

ment rates determined for February 2019
are as follows:

Month

Minimum Present Value Segment Rates

First Segment

Second Segment

Third Segment

February 2019

3.01

4.11

4.41

## DRAFTING INFORMATION

The principal author of this notice is
Tom Morgan of the Office of the Associ-

ate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development of

this guidance. For further information re-
garding this notice, contact Mr. Morgan at
202-317-6700 or Paul Stern at 202-317-
8702 (not toll-free numbers).

# Table 2019-2 Monthly Yield Curve for February 2019 Derived from February 2019 Data

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

0.5

2.72

20.5

4.43

40.5

4.41

60.5

4.41

80.5

4.41

1.0

2.84

21.0

4.43

41.0

4.41

61.0

4.41

81.0

4.41

1.5

2.94

21.5

4.42

41.5

4.41

61.5

4.41

81.5

4.41

2.0

3.00

22.0

4.42

42.0

4.41

62.0

4.41

82.0

4.41

2.5

3.04

22.5

4.42

42.5

4.41

62.5

4.41

82.5

4.41

3.0

3.06

23.0

4.42

43.0

4.41

63.0

4.41

83.0

4.41

3.5

3.07

23.5

4.41

43.5

4.41

63.5 64.0 64.5 65.0 65.5 66.0 66.5 67.0 67.5

4.41

83.5

4.41

4.0

3.09

24.0

4.41

44.0

4.41

84.0

4.41

4.5

3.13

24.5

4.41

44.5

4.41

84.5

4.41

5.0

3.18

25.0

4.41

45.0

4.41

85.0

4.41

5.5

3.24

25.5

4.41

45.5

4.41

85.5

4.41

6.0

3.32

26.0

4.41

46.0

4.41

86.0

4.41

6.5

3.40

26.5

4.41

46.5

4.41

86.5

4.41

7.0

3.49

27.0

4.40

47.0

4.41

87.0

4.41

7.5

3.59

27.5

4.40

47.5

4.41

87.5

4.41

8.0

3.68

28.0

4.40

48.0

4.41

68.0

4.41

88.0

4.41

8.5

3.77

28.5

4.40

48.5

4.41

68.5

4.41

88.5

4.41

9.0

3.85

29.0

4.40

49.0

4.41

69.0

4.41

89.0

4.41

9.5

3.93

29.5

4.40

49.5

4.41

69.5

4.41

89.5

4.41

10.0

4.01

30.0

4.40

50.0

4.41

70.0

4.41

90.0

4.41

10.5

4.07

30.5

4.40

50.5

4.41

70.5

4.41

90.5

4.41

11.0

4.13

31.0

4.40

51.0

4.41

71.0

4.41

91.0

4.41

11.5

4.19

31.5

4.40

51.5

4.41

71.5

4.41

91.5

4.41

12.0

4.24

32.0

4.40

52.0

4.41

72.0

4.41

92.0

4.41

12.5

4.28

32.5

4.40

52.5

4.41

72.5

4.41

92.5

4.41

13.0

4.31

33.0

4.40

53.0

4.41

73.0

4.41

93.0

4.41

13.5

4.34

33.5

4.40

53.5

4.41

73.5

4.41

93.5

4.41

14.0

4.36

34.0

4.40

54.0

4.41

74.0

4.41

94.0

4.41

14.5

4.38

34.5

4.40

54.5

4.41

74.5

4.41

94.5

4.41

15.0

4.40

35.0

4.40

55.0

4.41

75.0

4.41

95.0

4.41

15.5

4.41

35.5

4.40

55.5

4.41

75.5

4.41

95.5

4.41

16.0

4.42

36.0

4.40

56.0

4.41

76.0

4.41

96.0

4.41

16.5

4.42

36.5

4.40

56.5

4.41

76.5

4.41

96.5

4.41

17.0

4.43

37.0

4.40

57.0

4.41

77.0

4.41

97.0

4.41

17.5

4.43

37.5

4.40

57.5

4.41

77.5 78.0 78.5 79.0 79.5 80.0

4.41

97.5

4.41

18.0

4.43

38.0

4.41

58.0

4.41

98.0

4.41

18.5

4.43

38.5

4.41

58.5

4.41

98.5

4.41

19.0

4.43

39.0

4.41

59.0

4.41

99.0

4.41

19.5

4.43

39.5

4.41

59.5

4.41

99.5

4.41

20.0

4.43

40.0

4.41

60.0

4.41

100.0

4.41

# Phase-out of Credit for New Qualified Plug-in Electric Drive Motor Vehicles

Notice 2019-22

## SECTION 1. PURPOSE

This notice announces the credit phase-
out schedule for new qualified plug-in
electric drive motor vehicles sold by Gen-
eral Motors, LLC.

## SECTION 2. BACKGROUND

Section 30D(a) of the Internal Revenue
Code provides for a credit for certain new
qualified plug-in electric drive motor ve-
hicles. The new qualified plug-in electric
drive motor vehicle credit begins to phase
out for a manufacturer's vehicles in the
second calendar quarter after the calendar
quarter in which at least 200,000 of the
manufacturer's vehicles that qualify for
the credit have been sold for use or lease
in the United States (determined on a cu-
mulative basis for sales after December
31, 2009). Taxpayers purchasing the man-
ufacturer's vehicles during the first two
calendar quarters of the phase-out period
may claim 50 percent of the otherwise
allowable credit. Taxpayers purchasing
the manufacturer's vehicles during the
third and fourth calendar quarters of the

phase-out period may claim 25 percent of
the otherwise allowable credit. No credit
is available for vehicles purchased after
the last day of the fourth calendar quarter
of the phase-out period.

Notice 2009-89, 2009-48 I.R.B. 714,
provides procedures for a vehicle manu-
facturer (or in the case of a foreign vehicle
manufacturer, its domestic distributor) to
certify to the Internal Revenue Service
(Service) both (1) that a particular make,
model and model year of vehicle qualifies
as a plug-in electric drive motor vehicle
and (2) the amount of the credit allowable
with respect to that vehicle.

Section 5.05 of Notice 2009-89 re-
quires a manufacturer (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor) that has received from the Ser-
vice an acknowledgement of its certifica-
tion for a particular make, model, and
model year of vehicle to submit to the
Service a report of the number of qualified
vehicles sold by the manufacturer (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor) to consumers or
retail dealers during the calendar quarter.
A qualified vehicle is defined for this pur-
pose as any vehicle that is a new qualified
plug-in electric drive motor vehicle.

In accordance with section 5.05 of No-
tice 2009-89, General Motors, LLC has
submitted reports that indicate that its cu-
mulative sales of qualified vehicles
reached the 200,000-vehicle limit during

the calendar quarter ending December 31,
2018. Accordingly, the credit for all new
qualified plug-in electric drive motor ve-
hicles sold by General Motors, LLC will
begin to phase out April 1, 2019.

## SECTION 3. SCOPE OF NOTICE

This notice applies to any make, model,
or model year of new qualified plug-in elec-
tric drive motor vehicle that is -

(1) sold by General Motors, LLC; and

(2) purchased for use or lease in the
United States on or after April 1, 2019.

## SECTION 4. CREDIT AMOUNT

If a new qualified plug-in electric drive
motor vehicle sold by General Motors,
LLC is purchased for use or lease on or
after April 1, 2019, the allowable credit is
as follows:

(1) For vehicles purchased for use or
lease on or after April 1, 2019, and on or
before September 30, 2019, the credit is
50 percent of the otherwise allowable
amount determined under § 30D(b);

(2) For vehicles purchased for use or
lease on or after October 1, 2019, and on
or before March 31, 2020, the credit is 25
percent of the otherwise allowable amount
determined under § 30D(b);

(3) For vehicles purchased for use or
lease on or after April 1, 2020, no credit is
allowable.

Qualifying Vehicle

Full Credit When Purchased through 3/31/2019; (first quarter =100% credit allowed)

Reduced Credit When Purchased from 4/1/2019 through 9/30/2019 (2nd &amp; 3rd quarters = 50% credit allowed)

Reduced Credit When Purchased from 10/1/2019 through 3/31/2020 (4th &amp; 5th quarters = 25% credit allowed)

Credit available starting 4/1/2020

Chevrolet Volt 2011-2019

$7,500

$3,750

$1,875

Chevrolet Spark EV 2014-2016

$7,500

$3,750

$1,875

Chevrolet Bolt 2017-2019

$7,500

$3,750

$1,875

Cadillac ELR 2014, 2016

$7,500

$3,750

$1,875

Cadillac CT6 Plug-In 2017-2018

$7,500

$3,750

$1,875

## SECTION 5: DRAFTING INFORMATION

The principal author of this notice is
Maggie Stehn of the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). For further information re-
garding this notice contact Ms. Stehn at
(202) 317-4547 (not a toll-free number).

## Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2019

### Notice 2019-24 SECTION 1. PURPOSE

This notice provides adjustments to the
limitation on housing expenses for pur-
poses of section 911 of the Internal Rev-
enue Code for specific locations for 2019.
These adjustments are made on the basis
of geographic differences in housing costs
relative to housing costs in the United
States.

### SECTION 2. BACKGROUND

Section 911(a) allows a qualified indi-
vidual to elect to exclude from gross in-

come the foreign earned income and hous-
ing cost amount of such individual. The
term "housing cost amount" is generally
the total of the housing expenses for the
taxable year minus a base housing
amount. See section 911(c)(1). For this
purpose, the housing expenses taken into
account are limited to an amount that is
tied to the maximum foreign earned in-
come exclusion. Specifically, the limit on
such housing expenses equals 30 percent
(adjusted as may be provided under the
Secretary's authority under section
911(c)(2)(B)) of the maximum exclusion
amount (computed on a daily basis), mul-
tiplied by the number of days in the ap-
plicable period that fall within the taxable
year. See sections 911(c)(2)(A) and
911(d)(1). Thus, under this general limi-
tation, a qualified individual whose entire
taxable year is within the applicable pe-
riod is limited to maximum housing ex-
penses of $31,770 ($105,900 x .30) for
2019.

Similarly, the computation of the base
housing amount is also tied to the maxi-
mum foreign earned income exclusion.
Specifically, the base housing amount is
16% of the maximum exclusion amount
(computed on a daily basis), multiplied by
the number of days in the applicable pe-
riod that fall within the taxable year. See

sections 911(c)(1)(B) and 911(d)(1). As-
suming that the entire taxable year of a
qualified individual is within the applica-
ble period, the base housing amount for
2019 is $16,944 ($105,900 x .16). Section
911(c)(2)(B) authorizes the Secretary to
issue regulations or other guidance to ad-
just the percentage under section
911(c)(2)(A)(i) (which determines the
limit on housing expenses) based on geo-
graphic differences in housing costs rela-
tive to housing costs in the United States.
Pursuant to this authority, the Department
of the Treasury (Treasury Department)
and the Internal Revenue Service (IRS)
have published annual notices concerning
the limitation on the section 911 housing
cost amounts since the 2006 taxable year.

For more background on the foreign
housing exclusion, https://www.irs.gov/
individuals/international-taxpayers/foreign-
housing-exclusion-or-deduction.

### SECTION 3. TABLE OF ADJUSTED LIMITATIONS FOR 2019

The following table provides adjusted
limitations on housing expenses (in lieu of
the otherwise applicable limitation of
$31,770) for 2019.

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Angola

Luanda

84,000

230.14

Argentina

Buenos Aires

56,500

154.79

Australia

Perth

32,300

88.49

Australia

Sydney

61,000

167.12

Austria

Vienna

35,400

96.99

Bahamas, The

Nassau

49,700

136.16

Bahrain

48,300

132.33

Barbados

37,700

103.29

Barbados

Bridgetown

37,700

103.29

Belgium

Brussels

41,900

114.79

Belgium

Gosselies

37,300

102.19

Belgium

Mons

37,300

102.19

Belgium

SHAPE/Chievres

37,300

102.19

Bermuda

90,000

246.58

Brazil

Rio de Janeiro

35,100

96.16

Brazil

Sao Paulo

56,600

155.07

Canada

Calgary

38,500

105.48

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Canada

Montreal

52,500

143.84

Canada

Ottawa

43,600

119.45

Canada

Quebec

34,900

95.62

Canada

Toronto

50,200

137.53

Canada

Vancouver

43,700

119.73

Canada

Victoria

39,500

108.22

Cayman Islands

Grand Cayman

48,000

131.51

Chile

Santiago

39,100

107.12

China

Beijing

71,200

195.07

China

Hong Kong

114,300

313.15

China

Shanghai

57,001

156.17

Colombia

Bogota

58,700

160.82

Colombia

All cities other than Bogota

49,400

135.34

Costa Rica

San Jose

32,000

87.67

Democratic Republic of the Congo

Kinshasa

42,000

115.07

Denmark

Copenhagen

43,704

119.74

Dominican Republic

Santo Domingo

45,500

124.66

Ecuador

Quito

38,200

104.66

El Salvador

San Salvador

32,000

87.67

Estonia

Tallinn

46,600

127.67

France

Garches

71,800

196.71

France

Lyon

39,700

108.77

France

Marseille

38,700

106.03

France

Montpellier

32,000

87.67

France

Paris

71,800

196.71

France

Sevres

71,800

196.71

France

Suresnes

71,800

196.71

France

Versailles

71,800

196.71

France

All cities other than Garches, Le Havre, Lyon, Marseille, Montpellier, Paris, Sevres, Suresnes, and Versailles

31,900

87.40

Germany

Babenhausen

35,200

96.44

Germany

Baumholder

35,000

95.89

Germany

Berlin

43,000

117.81

Germany

Birkenfeld

35,000

95.89

Germany

Boeblingen

42,300

115.89

Germany

Bonn

42,000

115.07

Germany

Cologne

56,200

153.97

Germany

Darmstadt

35,200

96.44

Germany

Frankfurt am Main

36,800

100.82

Germany

Garmisch-Partenkirchen

33,100

90.68

Germany

Gelnhausen

44,400

121.64

Germany

Giessen

36,000

98.63

Germany

Grafenwoehr

35,600

97.53

Germany

Hanau

44,400

121.64

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Germany

Heidelberg

32,900

90.14

Germany

Idar-Oberstein

35,000

95.89

Germany

Ingolstadt

50,300

137.81

Germany

Kaiserslautern, Landkreis

43,200

118.36

Germany

Karlsruhe

34,000

93.15

Germany

Koblenz

34,600

94.79

Germany

Leimen

32,900

90.14

Germany

Ludwigsburg

42,300

115.89

Germany

Mainz

48,100

131.78

Germany

Mannheim

32,900

90.14

Germany

Munich

50,300

137.81

Germany

Nellingen

42,300

115.89

Germany

Neubruecke

35,000

95.89

Germany

Ober Ramstadt

35,200

96.44

Germany

Oberammergau

33,100

90.68

Germany

Pfullendorf

34,600

94.79

Germany

Pirmasens

43,200

118.36

Germany

Rheinau

32,900

90.14

Germany

Schwetzingen

32,900

90.14

Germany

Seckenheim

32,900

90.14

Germany

Sembach

43,200

118.36

Germany

Stuttgart

42,300

115.89

Germany

Vilseck

35,600

97.53

Germany

Wahn

42,000

115.07

Germany

Wiesbaden

48,100

131.78

Germany

Zweibrueken

43,200

118.36

Germany

All cities other than Augsburg, Babenhausen, Bad Aibling, Bad Kreuznach, Bad Nauheim, Baum- holder, Berchtesgaden, Berlin, Birkenfeld, Boeblin- gen, Bonn, Bremen, Bremerhaven, Butzbach, Co- logne, Darmstadt, Delmenhorst, Duesseldorf, Erlangen, Flensburg, Frankfurt am Main, Friedberg, Fuerth, Garlstedt, Garmisch-Partenkirchen, Geilen- kirchen, Gelnhausen, Germersheim, Giebelstadt, Grafenwoehr, Grefrath, Greven, Gruenstadt, Ham- burg, Hanau, Handorf, Hannover, Heidelberg, Hei- lbronn, Herongen, Idar-Oberstein, Ingolstadt, Kaiser- slautern, Landkreis, Kalkar, Karlsruhe, Kerpen, Kitzingen, Koblenz, Leimen, Leipzig, Ludwigsburg, Mainz, Mannheim, Mayen, Moenchen-Gladbach, Muenster, Munich, Nellingen, Neubruecke, Noer- venich, Nuernberg, Ober Ramstadt, Oberammergau, Osterholz-Scharmbeck, Pfullendorf, Pirmasens, Rheinau, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf and Zweibrueken

34,600

94.79

Ghana

Accra

36,000

98.63

Greece

Athens

35,200

96.44

Greece

Elefsis

35,200

96.44

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Greece

Ellinikon

35,200

96.44

Greece

Mt. Parnis

35,200

96.44

Greece

Mt. Pateras

35,200

96.44

Greece

Nea Makri

35,200

96.44

Greece

Piraeus

35,200

96.44

Greece

Tanagra

35,200

96.44

Guatemala

Guatemala City

42,000

115.07

Guinea

Conakry

51,300

140.55

Guyana

Georgetown

35,000

95.89

Holy See, The

47,900

131.23

Hungary

Budapest

32,500

89.04

India

Mumbai

67,920

186.08

India

New Delhi

56,124

153.76

Indonesia

Jakarta

37,776

103.50

Ireland

Dublin

41,600

113.97

Ireland

Shannon Area

32,900

90.14

Israel

Beer Sheva

54,100

148.22

Israel

Tel Aviv

50,800

139.18

Italy

Genoa

41,800

114.52

Italy

La Spezia

40,400

110.68

Italy

Milan

71,500

195.89

Italy

Naples

49,100

134.52

Italy

Parma

36,300

99.45

Italy

Pordenone-Aviano

38,100

104.38

Italy

Rome

47,900

131.23

Italy

Turin

35,800

98.08

Italy

Vicenza

39,900

109.32

Jamaica

Kingston

41,200

112.88

Japan

Atsugi

41,600

113.97

Japan

Camp Zama

41,600

113.97

Japan

Chiba-Ken

41,600

113.97

Japan

Fussa

41,600

113.97

Japan

Gifu

74,300

203.56

Japan

Haneda

41,600

113.97

Japan

Iwakuni

32,800

89.86

Japan

Kanagawa-Ken

41,600

113.97

Japan

Komaki

74,300

203.56

Japan

Machidi-Shi

41,600

113.97

Japan

Misawa

33,200

90.96

Japan

Nagoya

74,300

203.56

Japan

Okinawa Prefecture

58,600

160.55

Japan

Osaka-Kobe

90,664

248.39

Japan

Sagamihara

41,600

113.97

Japan

Saitama-Ken

41,600

113.97

Japan

Sasebo

34,700

95.07

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Japan

Tachikawa

41,600

113.97

Japan

Tokyo

93,200

255.34

Japan

Tokyo-to

41,600

113.97

Japan

Yokohama

49,600

135.89

Japan

Yokosuka

50,200

137.53

Japan

Yokota

39,200

107.40

Jerusalem

49,000

134.25

Jerusalem

West Bank

49,000

134.25

Kazakhstan

Almaty

48,000

131.51

Korea

Camp Colbern

54,200

148.49

Korea

Camp Market

57,600

157.81

Korea

Camp Mercer

54,200

148.49

Korea

K-16

57,600

157.81

Korea

Kimpo Airfield

57,600

157.81

Korea

Munsan

32,900

90.14

Korea

Osan AB

37,100

101.64

Korea

Pyongtaek

41,000

112.33

Korea

Seoul

57,600

157.81

Korea

Suwon

57,600

157.81

Korea

Taegu

34,900

95.62

Korea

Tongduchon

35,200

96.44

Korea

Uijongbu

31,800

87.12

Kuwait

Kuwait City

64,400

176.44

Kuwait

All cities other than Kuwait City

57,700

158.08

Luxembourg

39,200

107.40

Macedonia

Skopje

35,400

96.99

Malaysia

Kuala Lumpur

46,200

126.58

Malaysia

All cities other than Kuala Lumpur

33,700

92.33

Malta

55,100

150.96

Mexico

Merida

37,900

103.84

Mexico

Mexico City

47,900

131.23

Mexico

Monterrey

33,200

90.96

Mexico

All cities other than Ciudad Juarez, Cuernavaca, Gua- dalajara, Hermosillo, Matamoros, Mazatlan, Merida, Metapa, Mexico City, Monterrey, Nogales, Nuevo Laredo, Reynosa, Tapachula, Tijuana, Tuxtla Gutier- rez, and Veracruz

39,400

107.95

Mozambique

Maputo

39,500

108.22

Namibia

Windhoek

32,100

87.95

Netherlands

Amsterdam

52,900

144.93

Netherlands

Aruba

36,000

98.63

Netherlands

Brunssum

35,100

96.16

Netherlands

Eygelshoven

35,100

96.16

Netherlands

Hague, The

57,000

156.16

Netherlands

Heerlen

35,100

96.16

Netherlands

Hoensbroek

35,100

96.16

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Netherlands

Hulsberg

35,100

96.16

Netherlands

Kerkrade

35,100

96.16

Netherlands

Landgraaf

35,100

96.16

Netherlands

Maastricht

35,100

96.16

Netherlands

Papendrecht

34,400

94.25

Netherlands

Rotterdam

34,400

94.25

Netherlands

Schaesburg

35,100

96.16

Netherlands

Schinnen

35,100

96.16

Netherlands

Schiphol

52,900

144.93

Netherlands

Ypenburg

57,000

156.16

Netherlands

All cities other than Amsterdam, Aruba, Brunssum, Coevorden, Eygelshoven, The Hague, Heerlen, Hoensbroek, Hulsberg, Kerkrade, Landgraaf, Maas- tricht, Margraten, Papendrecht, Rotterdam, Schaes- burg, Schinnen, Schiphol, and Ypenburg.

33,900

92.88

Netherlands Antilles

Curacao

45,800

125.48

New Zealand

Auckland

35,700

97.81

New Zealand

Christchurch

32,100

87.95

New Zealand

Wellington

33,800

92.60

Nicaragua

Managua

31,800

87.12

Nigeria

Abuja

36,000

98.63

Norway

Oslo

35,200

96.44

Oman

Muscat

41,300

113.15

Panama

Panama City

39,500

108.22

Peru

Lima

39,100

107.12

Philippines

Cavite

32,400

88.77

Philippines

Manila

37,380

102.41

Portugal

Alverca

43,800

120.00

Portugal

Lisbon

43,800

120.00

Qatar

Doha

45,888

125.72

Qatar

All cities other than Doha

32,400

88.77

Romania

Bucharest

41,200

112.88

Russia

Moscow

108,000

295.89

Russia

Saint Petersburg

60,000

164.38

Russia

Sakhalin Island

77,500

212.33

Russia

Vladivostok

77,500

212.33

Russia

Yekaterinburg

47,400

129.86

Saudi Arabia

Riyadh

40,000

109.59

Singapore

82,900

227.12

Slovenia

Ljubljana

50,200

137.53

South Africa

Pretoria

39,300

107.67

Spain

Barcelona

40,600

111.23

Spain

Madrid

58,300

159.73

Spain

Rota

35,600

97.53

Spain

Valencia

33,500

91.78

Suriname

Paramaribo

33,000

90.41

Country

Location

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

Switzerland

Bern

66,200

181.37

Switzerland

Geneva

94,300

258.36

Switzerland

Zurich

39,219

107.45

Switzerland

All cities other than Bern, Geneva, and Zurich

32,900

90.14

Taiwan

Taipei

46,188

126.54

Tanzania

Dar Es Salaam

44,000

120.55

Thailand

Bangkok

59,000

161.64

Trinidad and Tobago

Port of Spain

54,500

149.32

Ukraine

Kiev

72,000

197.26

United Arab Emirates

Abu Dhabi

49,687

136.13

United Arab Emirates

Dubai

57,174

156.64

United Kingdom

Basingstoke

41,099

112.60

United Kingdom

Bath

41,000

112.33

United Kingdom

Bracknell

62,100

170.14

United Kingdom

Brookwood

35,500

97.26

United Kingdom

Cambridge

34,400

94.25

United Kingdom

Caversham

73,800

202.19

United Kingdom

Cheltenham

41,900

114.79

United Kingdom

Croughton

36,200

99.18

United Kingdom

Fairford

34,200

93.70

United Kingdom

Farnborough

54,700

149.86

United Kingdom

Felixstowe

33,200

90.96

United Kingdom

Gibraltar

44,616

122.24

United Kingdom

Harrogate

37,400

102.47

United Kingdom

High Wycombe

62,100

170.14

United Kingdom

Huntingdon

35,500

97.26

United Kingdom

Kemble

34,200

93.70

United Kingdom

Lakenheath

45,600

124.93

United Kingdom

London

69,200

189.59

United Kingdom

Loudwater

54,600

149.59

United Kingdom

Menwith Hill

37,400

102.47

United Kingdom

Mildenhall

45,600

124.93

United Kingdom

Oxfordshire

34,800

95.34

United Kingdom

Plymouth

34,800

95.34

United Kingdom

Portsmouth

34,800

95.34

United Kingdom

Reading

62,100

170.14

United Kingdom

Rochester

35,700

97.81

United Kingdom

Samlesbury

35,500

97.26

United Kingdom

Southampton

44,200

121.10

United Kingdom

Surrey

48,402

132.61

United Kingdom

Waterbeach

35,500

97.26

United Kingdom

Wiltshire

33,500

91.78

Country

Location All cities other than Basingstoke, Bath, Belfast, Bir- mingham, Bracknell, Bristol, Brookwood, Brough, Cambridge, Caversham, Chelmsford, Cheltenham, Chicksands, Croughton, Dunstable, Edinburgh, Ed- zell, Fairford, Farnborough, Felixstowe, Ft. Hal- stead, Gibraltar, Glenrothes, Greenham Common, Harrogate, High Wycombe, Huntingdon, Hythe, Kemble, Lakenheath, Liverpool, London, Loudwa- ter, Menwith Hill, Mildenhall, Nottingham, Oxford- shire, Plymouth, Portsmouth, Reading, Rochester, Samlesbury, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire.

Limitation on Housing Expenses (full year)

Limitation on Housing Expenses (daily)

United Kingdom

35,500

97.26

Venezuela

Caracas

57,000

156.16

Vietnam

Hanoi

46,800

128.22

Vietnam

Ho Chi Minh City

42,000

115.07

### SECTION 4. OPTION TO APPLY 2019 ADJUSTED LIMITATIONS TO 2018 TAXABLE YEAR

For some locations, the limitation on
housing expenses provided in Section 3 of
this notice may be higher than the limita-
tion on housing expenses provided in the
"Table of Adjusted Limitations for 2018"
in Notice 2018-44. A qualified individual
incurring housing expenses in such a lo-
cation during 2018 may apply the adjusted
limitation on housing expenses provided
in Section 3 of this notice for 2019 in lieu
of the amounts provided in the "Table of
Adjusted Limitations for 2018" in Notice
2018-44 (and as set forth in the Instruc-
tions to Form 2555, Foreign Earned In-
come, for 2018).

The Treasury Department and the IRS
anticipate that future annual notices pro-
viding adjustments to housing expense
limitations will make a similar option
available to qualified individuals that in-
cur housing expenses in the immediately
preceding year. For example, when ad-
justed housing expense limitations for
2020 are issued, it is expected that taxpay-
ers will be permitted to apply those ad-
justed limitations to the 2019 taxable year.

#### SECTION 5. Filing Prior Year or Amended Tax Returns

Notice 2011-8, 2011-8 I.R.B. 503;
Notice 2012-19, 2012-10 I.R.B. 440; No-
tice 2013-31, 2013-21 I.R.B. 1099; No-

tice 2014-29, 2014-18 I.R.B. 991; Notice
2015-33, 2015-18 I.R.B. 934; Notice 2016-
21, 2016-12 I.R.B. 465; Notice 2017-21,
2017-13 I.R.B. 1026; and Notice 2018-44,
2018-21 I.R.B. 611 are relisted to assist
those individuals who are filing prior year
or amended tax returns.

### SECTION 6. EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2006-
87, 2006-43 I.R.B. 766; Notice 2007-25,
2007-12 I.R.B. 760; Notice 2007-77,
2007-40 I.R.B. 735; Notice 2008-107,
2008-50 I.R.B. 1265; Notice 2010-27,
2010-15 I.R.B. 531; Notice 2011-8,
2011-8 I.R.B. 503; Notice 2012-19,
2012-10 I.R.B. 440; Notice 2013-31,
2013-21 I.R.B. 1099; Notice 2014-29,
2014-18 I.R.B. 991; Notice 2015-33,
2015-18 I.R.B. 934; Notice 2016-21,
2016-12 I.R.B. 465; Notice 2017-21,
2017-13 I.R.B. 1026, and Notice 2018-
44, 2018-21 I.R.B. 611.

### SECTION 7. EFFECTIVE DATE

This notice is effective for taxable
years beginning on or after January 1,
2019. However, as provided in Section 4,
a taxpayer may apply the 2019 adjusted
housing limitations contained in Section 3
of this notice to his or her taxable year
beginning in 2018.

### SECTION 8. DRAFTING INFORMATION

The principal author of this notice is
Kate Y. Hwa of the Office of Associate
Chief Counsel (International). For further
information regarding this notice contact
Kate Y. Hwa at (202) 317-5001 (not a
toll-free number).

26 CFR 1.911-2: Qualified Individuals
(Also: Part I, §§ 911; 1.911-2.)

### Rev. Proc. 2019-15

### SECTION 1. PURPOSE

.01 This revenue procedure provides
information to any individual who failed
to meet the eligibility requirements of sec-
tion 911(d)(1) of the Internal Revenue
Code because adverse conditions in a for-
eign country precluded the individual
from meeting those requirements.

.02 The Internal Revenue Service pre-
viously has listed countries for which
the eligibility requirements of section
911(d)(1) of the Code are waived under
section 911(d)(4) because of adverse con-
ditions in those countries. See Rev. Proc.
2018-23, 2018-17, I.R.B. 516.

### SECTION 2. BACKGROUND

.01 Section 911(a) of the Code allows a
"qualified individual," as defined in sec-
tion 911(d)(1), to exclude from gross in-

come the individual's foreign earned in-
come and the housing cost amount.

.02 Section 911(d)(1) of the Code de-
fines the term "qualified individual" as an
individual whose tax home is in a foreign
country and who is (A) a citizen of the
United States and establishes to the satis-
faction of the Secretary of the Treasury
that the individual has been a bona fide
resident of a foreign country or countries
for an uninterrupted period that includes
an entire taxable year, or (B) a citizen or
resident of the United States who, during
any period of 12 consecutive months, is

present in a foreign country or countries
during at least 330 full days.

.03 Section 911(d)(4) of the Code pro-
vides an exception to the eligibility re-
quirements of section 911(d)(1). An indi-
vidual will be treated as a qualified
individual with respect to a period in
which the individual was a bona fide res-
ident of, or was present in, a foreign coun-
try if the individual left the country during
a period for which the Secretary of the
Treasury, after consultation with the Sec-
retary of State, determines that individuals
were required to leave because of war,
civil unrest, or similar adverse conditions

that precluded the normal conduct of busi-
ness. An individual must establish that but
for those conditions the individual could
reasonably have been expected to meet
the eligibility requirements.

### SECTION 3. APPLICATION

.01 For 2018, the Secretary of the Trea-
sury, in consultation with the Secretary of
State, has determined that war, civil un-
rest, or similar adverse conditions pre-
cluded the normal conduct of business in
the following countries beginning on the
specified date:

Country

Congo, Democratic Republic of the

Cuba

Iraq

Nicaragua

Date of Departure On or After
December 14, 2018
January 4, 2018
September 28, 2018
July 6, 2018

For example, for purposes of section
911 of the Code, an individual who left
the Democratic Republic of Congo on or
after December 14, 2018, will be treated
as a qualified individual with respect to
the period during which that individual
was present in, or was a bona fide resident
of, the Democratic Republic of Congo if
the individual establishes a reasonable ex-
pectation that he or she would have met
the requirements of section 911(d) but for
those conditions.

.02 To qualify for relief under section
911(d)(4) of the Code, an individual must
have established residency, or have been
physically present, in the foreign country
on or before the date that the Secretary of
the Treasury determines that individuals
were required to leave the foreign country.
For example, individuals who were first

physically present or established resi-
dency in the Democratic Republic of
Congo after December 14, 2018, are not
eligible to qualify for the exception pro-
vided in section 911(d)(4) of the Code for
taxable year 2018.

### SECTION 4. EFFECT ON OTHER DOCUMENTS

Previously issued revenue procedures
under section 911(d)(4) remain in full
force and effect. However, Rev. Proc.
2018-23, 2018-17, I.R.B. 516, is supple-
mented.

### SECTION 5. INQUIRIES

A taxpayer who needs assistance on
how to claim this exclusion, or on how to
file an amended return, should consult the

section under the heading Foreign
Earned Income Exclusion at https://
www.irs.gov/individuals/international-
taxpayers/us-citizens-and-resident-
aliens-abroad; consult the section under
the heading How to Get Tax Help at the
same web address; or contact a local IRS
office.

### SECTION 6. DRAFTING INFORMATION

The principal author of this revenue
procedure is Kate Y. Hwa of the Office
of Associate Chief Counsel (Interna-
tional). For further information regard-
ing this revenue procedure contact Kate
Y. Hwa at (202) 317-5001 (not a toll
free number).

### Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.

Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future 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.

Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

### Abbreviations

The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

TFE-Transferee.

CFR-Code of Federal Regulations.

GP-General Partner.

TFR-Transferor.

CI-City.

GR-Grantor.

T.I.R .- Technical Information Release.

TP-Taxpayer.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

TR-Trust.

CY-County.

LE-Lessee.

TT-Trustee.

D-Decedent.

LP-Limited Partner.

U.S.C .- United States Code.

DC-Dummy Corporation.

X-Corporation.

DE-Donee.

Del. Order-Delegation Order.

Nonacq .- Nonacquiescence.

O Organization.

DR-Donor.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.

PR-Partner.

PRS-Partnership.

PTE-Prohibited Transaction Exemption.
Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S-Subsidiary.

S.P.R .- Statement of Procedural Rules.

Stat .- Statutes at Large.

BK-Bank.

B.T.A .- Board of Tax Appeals.

T.C .- Tax Court.

C-Individual.

T.D .- Treasury Decision.

C.B .- Cumulative Bulletin.

COOP-Cooperative.

IC-Insurance Company.

LR-Lessor.

M-Minor.

Y-Corporation.

Z-Corporation.

DISC-Domestic International Sales Corporation.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

ERISA-Employee Retirement Income Security Act.
EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

T-Target Corporation.

Numerical Finding List1

Revenue Rulings:

Bulletin 2019-14

2019-03, 2019-02 I.R.B. 272

2019-04, 2019-07 I.R.B. 567

Action on Decision:

2019-05, 2019-11 I.R.B. 766

2019-06, 2019-14 I.R.B. 919

2019-1, 2019-08 I.R.B. 569

2019-07, 2019-10 I.R.B. 761

2019-08, 2019-14 I.R.B. 923

Announcements:

2019-09, 2019-14 I.R.B. 925

2019-1, 2019-06 I.R.B. 566
2019-2, 2019-12 I.R.B. 910

### Notices:

2019-01, 2019-02 I.R.B. 275
2019-02, 2019-02 I.R.B. 281
2019-03, 2019-03 I.R.B. 350
2019-04, 2019-02 I.R.B. 282
2019-05, 2019-02 I.R.B. 283
2019-06, 2019-03 I.R.B. 353
2019-07, 2019-09 I.R.B. 740
2019-08, 2019-03 I.R.B. 354
2019-09, 2019-04 I.R.B. 403
2019-10, 2019-13 I.R.B. 913
2019-11, 2019-05 I.R.B. 430
2019-13, 2019-08 I.R.B. 580
2019-16, 2019-10 I.R.B. 763
2019-17, 2019-12 I.R.B. 907
2019-18, 2019-13 I.R.B. 915
2019-19, 2019-12 I.R.B. 907
2019-20, 2019-14 I.R.B. 927
2019-21, 2019-14 I.R.B. 927
2019-22, 2019-14 I.R.B. 931
2019-24, 2019-14 I.R.B. 932

### Proposed Regulations:

REG-104259-18, 2019-02 I.R.B. 300
REG-104352-18, 2019-03 I.R.B. 357
REG-106089-18, 2019-05 I.R.B. 431
REG-134652-18, 2019-09 I.R.B. 747
REG-141739-08, 2019-09 I.R.B. 757

### Revenue Procedures:

2019-1, 2019-01 I.R.B. 1
2019-2, 2019-01 I.R.B. 106

2019-3, 2019-01 I.R.B. 130
2019-4, 2019-01 I.R.B. 146
2019-5, 2019-01 I.R.B. 230
2019-6, 2019-02 I.R.B. 284
2019-7, 2019-01 I.R.B. 268
2019-8, 2019-03 I.R.B. 347
2019-9, 2019-02 I.R.B. 293
2019-10, 2019-02 I.R.B. 296
2019-11, 2019-09 I.R.B. 742
2019-12, 2019-04 I.R.B. 401
2019-13, 2019-09 I.R.B. 744
2019-15, 2019-14 I.R.B. 939

### Treasury Decisions:

9844, 2019-11 I.R.B. 781
9845, 2019-08 I.R.B. 570
9846, 2019-09 I.R.B. 583
9847, 2019-09 I.R.B. 670
9848, 2019-11 I.R.B. 897
9850, 2019-12 I.R.B. 904
9851, 2019-14 I.R.B. 917

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018-27 through 2018-52 is in Internal Revenue Bulletin
2018-52, dated December 27, 2018.

# Finding List of Current Actions on Previously Published Items1

Bulletin 2019-14

# Internal Revenue Service Washington, DC 20224

Official Business
Penalty for Private Use, $300

# INTERNAL REVENUE BULLETIN

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