rp-08-66.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 1, 23, 24, 25A, 32, 42, 59, 62, 63, 68, 132, 135, 137, 146, 147, 148, 151,
170, 179, 213, 220, 221, 512, 513, 877, 877A, 911, 2032A, 2503, 2523, 4161, 4261,
6033, 6039F, 6323, 6334, 6601, 7430, 7702B; 1.148-3, 1.148-5)

Rev. Proc. 2008-66

Table of Contents
SECTION 1. PURPOSE
SECTION 2. CHANGES
SECTION 3. 2009 ADJUSTED ITEMS
Code Section

.01 Tax Rate Tables 1(a)-(e)
.02 Unearned Income of Minor Children Taxed as if Parent’s 1(g)
Income ("Kiddie Tax")
.03 Adoption Credit 23
.04 Child Tax Credit 24
.05 Hope and Lifetime Learning Credits 25A
.06 Earned Income Credit 32
.07 Low-Income Housing Credit 42(h)

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.08 Alternative Minimum Tax Exemption for a Child Subject to the 59(j)
“Kiddie Tax”
.09 Transportation Mainline Pipeline Construction Industry Optional 62(c)
Expense Substantiation Rules for Payments to Employees under
Accountable Plans
.10 Standard Deduction 63
.11 Overall Limitation on Itemized Deductions 68
.12 Qualified Transportation Fringe 132(f)
.13 Income from United States Savings Bonds for Taxpayers Who 135
Pay Qualified Higher Education Expenses
.14 Adoption Assistance Programs 137
.15 Private Activity Bonds Volume Cap 146(d)
.16 Loan Limits on Agricultural Bonds 147(c)(2)
.17 General Arbitrage Rebate Rules 148(f)
.18 Safe Harbor Rules for Broker Commissions on Guaranteed 148
Investment Contracts or Investments Purchased for a Yield
Restricted Defeasance Escrow
.19 Personal Exemption 151
.20 Election to Expense Certain Depreciable Assets 179
.21 Eligible Long-Term Care Premiums 213(d)(10)
.22 Medical Savings Accounts 220
.23 Interest on Education Loans 221
.24 Treatment of Dues Paid to Agricultural or Horticultural 512(d)
Organizations
.25 Insubstantial Benefit Limitations for Contributions Associated 513(h)
with Charitable Fund-Raising Campaigns

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.26 Expatriation to Avoid Tax 877
.27 Tax Responsibilities of Expatriation 877A
.28 Foreign Earned Income Exclusion 911
.29 Valuation of Qualified Real Property in Decedent's Gross Estate 2032A
.30 Annual Exclusion for Gifts 2503 & 2523
.31 Tax on Arrow Shafts 4161
.32 Passenger Air Transportation Excise Tax 4261

.33 Reporting Exception for Certain Exempt Organizations with 6033(e)(3)
Nondeductible Lobbying Expenditures
.34 Notice of Large Gifts Received from Foreign Persons 6039F
.35 Persons Against Whom a Federal Tax Lien Is Not Valid 6323
.36 Property Exempt from Levy 6334
.37 Interest on a Certain Portion of the Estate Tax Payable 6601(j)
in Installments
.38 Attorney Fee Awards 7430
.39 Periodic Payments Received under Qualified Long-Term Care 7702B(d)
Insurance Contracts or under Certain Life Insurance Contracts
SECTION 4. EFFECTIVE DATE
SECTION 5. DRAFTING INFORMATION

SECTION 1. PURPOSE
This revenue procedure sets forth inflation adjusted items for 2009.
SECTION 2. CHANGES
.01 For taxable years beginning after 2008, the $3,000 increase to the phaseout

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amounts of the earned income tax credit for married taxpayers filing a joint return under
§ 32(b)(2)(B)(iii) are adjusted for inflation. The adjusted amounts are included in the
amounts shown in section 3.06(1) of this revenue procedure.
.02 Section 42(h)(3)(I) was added to the Code by section 3001, Division C, Title I, of
the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654
(2008), to provide for a temporary increase in the State housing credit ceiling under
§ 42(h)(3)(C)(ii)(I) and (II) after any adjustments for inflation under § 42(h)(3)(H).
Accordingly, for calendar years 2008 and 2009, the inflation adjusted amount under
§ 42(h)(3)(C)(ii)(I) is increased by $0.20, and the inflation adjusted amount under
§ 42(h)(3)(C)(ii)(II) is increased by ten (10) percent and rounded to the next lowest
multiple of $5,000. (See section 3.07 of this revenue procedure.)
.03 Section 147(c)(2) was amended by section 15341, Title XV, Subtitle C, Part III, of
the Food Conservation and Energy Act of 2008, Pub. L. No. 110-246, 122 Stat. 1651
(2008), to provide for an increase in the loan limits on agricultural bonds for first-time
farmers. For calendar year 2008, the limit is $450,000. For calendar years after 2008,
the $450,000 amount will be adjusted for inflation. (See section 3.16 of this revenue
procedure.)
.04 Section 877A was added to the Code by section 301(a) of Title III of the Heroes
Earnings Assistance and Relief Tax Act of 2008, Pub. L. No. 110-245, 122 Stat. 1624
(2008), to provide special rules for the treatment of property of certain individuals who
are “covered expatriates,” and who cease to be treated as long term residents or who
relinquish their U.S. citizenship (expatriate). Pursuant to § 877A(a)(1), covered

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expatriates, as defined in § 877A(g)(1), are subject to income tax on the net unrealized
gain in their property as if the property had been sold for its fair market value on the day
before the expatriation date, as defined in § 877A(g)(3). Section 877A(a)(3) provides
that the amount of gain includible in gross income under § 877A(a)(1) is reduced (but
not below zero) by $600,000. For taxable years beginning in a calendar year after
2008, the $600,000 amount is adjusted for inflation. (See sections 3.26 and 3.27 of this
revenue procedure.)
.05 The passenger air transportation excise taxes imposed under § 4261(b) and (c),
as extended by § 2(b)(1) of the Federal Aviation Administration Extension Act of 2008,
Part II, Pub. L. No. 110-330, 122 Stat. 3717 (2008), apply to transportation taken
through March 31, 2009, and to amounts paid on or before March 31, 2009, for
transportation beginning after that date. Accordingly, the amounts in § 4261(b) and (c)
are adjusted for inflation for 2009 and are included in this revenue procedure. (See
section 3.32 of this revenue procedure.)
.06 The dollar limit on contributions to funeral trusts under § 685(c) was repealed by
§ 9 of the Hubbard Act, Pub. L. No. 110-317, 122 Stat. 3526 (2008), for taxable years
beginning after August 29, 2008. Accordingly, the dollar limitation under § 685(c) is no
longer included in this revenue procedure.
SECTION 3. 2009 ADJUSTED ITEMS
.01 Tax Rate Tables
. For taxable years beginning in 2009, the tax rate tables under
§ 1 are as follows:
TABLE 1 - Section 1(a) - Married Individuals Filing Joint Returns and Surviving
Spouses

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If Taxable Income Is
: The Tax Is:
Not over $16,700 10% of the taxable income
Over $16,700 but $1,670 plus 15% of
not over $67,900 the excess over $16,700
Over $67,900 but $9,350 plus 25% of
not over $137,050 the excess over $67,900
Over $137,050 but $26,637.50 plus 28% of
not over $208,850 the excess over $137,050
Over $208,850 but $46,741.50 plus 33% of
not over $372,950 the excess over $208,850
Over $372,950 $100,894.50 plus 35% of
the excess over $372,950
TABLE 2 - Section 1(b) – Heads of Households
If Taxable Income Is
: The Tax Is:
Not over $11,950 10% of the taxable income
Over $11,950 but $1,195 plus 15% of
not over $45,500 the excess over $11,950
Over $45,500 but $6,227.50 plus 25% of
not over $117,450 the excess over $45,500
Over $117,450 but $24,215 plus 28% of
not over $190,200 the excess over $117,450
Over $190,200 but $44,585 plus 33% of
not over $372,950 the excess over $190,200
Over $372,950 $104,892.50 plus 35% of
the excess over $372,950
TABLE 3 - Section 1(c) – Unmarried Individuals (other than Surviving Spouses and
Heads of Households)
If Taxable Income Is
: The Tax Is:

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Not over $8,350 10% of the taxable income
Over $8,350 but $835 plus 15% of
not over $33,950 the excess over $8,350
Over $33,950 but $4,675 plus 25% of
not over $82,250 the excess over $33,950
Over $82,250 but $16,750 plus 28% of
not over $171,550 the excess over $82,250
Over $171,550 but $41,754 plus 33% of
not over $372,950 the excess over $171,550
Over $372,950 $108,216 plus 35% of
the excess over $372,950
TABLE 4 - Section 1(d) – Married Individuals Filing Separate Returns
If Taxable Income Is
: The Tax Is:
Not over $8,350 10% of the taxable income
Over $8,350 but $835 plus 15% of
not over $33,950 the excess over $8,350
Over $33,950 but $4,675 plus 25% of
not over $68,525 the excess over $33,950
Over $68,525 but $13,318.75 plus 28% of
not over $104,425 the excess over $68,525
Over $104,425 but $23,370.75 plus 33% of
not over $186,475 the excess over $104,425
Over $186,475 $50,447.25 plus 35% of
the excess over $186,475
TABLE 5 - Section 1(e) – Estates and Trusts
If Taxable Income Is
: The Tax Is:
Not over $2,300 15% of the taxable income

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Over $2,300 but $345 plus 25% of
not over $5,350 the excess over $2,300
Over $5,350 but $1,107.50 plus 28% of
not over $8,200 the excess over $5,350
Over $8,200 but $1,905.50 plus 33% of
not over $11,150 the excess over $8,200
Over $11,150 $2,879 plus 35% of
the excess over $11,150
.02 Unearned Income of Minor Children Taxed as if Parent's Income (the "Kiddie
Tax"). For taxable years beginning in 2009, the amount in § 1(g)(4)(A)(ii)(I), which is
used to reduce the net unearned income reported on the child's return that is subject to
the "kiddie tax," is $950. This amount is the same as the $950 standard deduction
amount provided in section 3.10(2) of this revenue procedure. The same $950 amount
is used for purposes of § 1(g)(7) (that is, to determine whether a parent may elect to
include a child's gross income in the parent's gross income and to calculate the "kiddie
tax"). For example, one of the requirements for the parental election is that a child's
gross income is more than the amount referenced in § 1(g)(4)(A)(ii)(I) but less than 10
times that amount; thus, a child's gross income for 2009 must be more than $950 but
less than $9,500.
.03 Adoption Credit
. For taxable years beginning in 2009, under § 23(a)(3) the credit
allowed for an adoption of a child with special needs is $12,150. For taxable years
beginning in 2009, under § 23(b)(1) the maximum credit allowed for other adoptions is
the amount of qualified adoption expenses up to $12,150. The available adoption credit
begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross

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income in excess of $182,180 and is completely phased out for taxpayers with modified
adjusted gross income of $222,180 or more. (See section 3.14 of this revenue
procedure for the adjusted items relating to adoption assistance programs.)
.04 Child Tax Credit. For taxable years beginning in 2009, the value used in
§ 24(d)(1)(B)(i) to determine the amount of credit under § 24 that may be refundable is
$12,550.
.05 Hope and Lifetime Learning Credits
.
(1) For taxable years beginning in 2009, the Hope Scholarship Credit under
§ 25A(b)(1) is an amount equal to 100 percent of qualified tuition and related expenses
not in excess of $1,200 plus 50 percent of those expenses in excess of $1,200, but not
in excess of $2,400. Accordingly, the maximum Hope Scholarship Credit allowable
under § 25A(b)(1) for taxable years beginning in 2009 is $1,800.
(2) For taxable years beginning in 2009, a taxpayer's modified adjusted gross
income in excess of $50,000 ($100,000 for a joint return) is used to determine the
reduction under § 25A(d)(2)(A)(ii) in the amount of the Hope Scholarship and Lifetime
Learning Credits otherwise allowable under § 25A(a).
.06 Earned Income Credit
.
(1) In general
. For taxable years beginning in 2009, the following amounts are used
to determine the earned income credit under § 32(b). The "earned income amount" is
the amount of earned income at or above which the maximum amount of the earned
income credit is allowed. The "threshold phaseout amount" is the amount of adjusted
gross income (or, if greater, earned income) above which the maximum amount of the

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credit begins to phase out. The "completed phaseout amount" is the amount of
adjusted gross income (or, if greater, earned income) at or above which no credit is
allowed. The threshold phaseout amounts and the completed phaseout amounts
shown in the table below for married taxpayers filing a joint return include the increase
provided in § 32(b)(2)(B)(iii), as adjusted for inflation for taxable years beginning in
2009.
Number of Qualifying Children

Item One Two or More None
Earned Income Amount $8,950 $12,570 $5,970
Maximum Amount of Credit $3,043 $5,028 $457
Threshold Phaseout Amount $16,420 $16,420 $7,470
(Single, Surviving Spouse, or
Head of Household)
Completed Phaseout Amount $35,463 $40,295 $13,440
(Single, Surviving Spouse, or
Head of Household)
Threshold Phaseout Amount $19,540 $19,540 $10, 590
(Married Filing Jointly)
Completed Phaseout Amount $38,583 $43,415 $16,560
(Married Filing Jointly)
The instructions for the Form 1040 series provide tables showing the amount of the
earned income credit for each type of taxpayer.
(2) Excessive investment income
. For taxable years beginning in 2009, the earned
income tax credit is not allowed under § 32(i) if the aggregate amount of certain
investment income exceeds $3,100.

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.07 Low-Income Housing Credit
. For calendar year 2009, the amount used under
§ 42(h)(3)(C)(ii) to calculate the State housing credit ceiling for the low-income housing
credit is the greater of (1) $2.30 multiplied by the State population, or (2) $2,665,000.
.08 Alternative Minimum Tax Exemption for a Child Subject to the "Kiddie Tax
." For
taxable years beginning in 2009, for a child to whom the § 1(g) "kiddie tax" applies, the
exemption amount under §§ 55 and 59(j) for purposes of the alternative minimum tax
under § 55 may not exceed the sum of (1) the child's earned income for the taxable
year, plus (2) $6,700.
.09 Transportation Mainline Pipeline Construction Industry Optional Expense
Substantiation Rules for Payments to Employees under Accountable Plans. For
calendar year 2009, an eligible employer may pay certain welders and heavy equipment
mechanics an amount of up to $16 per hour for rig-related expenses that is deemed
substantiated under an accountable plan if paid in accordance with Rev. Proc. 2002-41,
2002-1 C.B. 1098. If the employer provides fuel or otherwise reimburses fuel expenses,
up to $10 per hour is deemed substantiated if paid under Rev. Proc. 2002-41.
.10 Standard Deduction
.
(1) In general
. For taxable years beginning in 2009, the standard deduction
amounts under § 63(c)(2) are as follows:
Filing Status
Standard Deduction
Married Individuals Filing Joint Returns $11,400
and Surviving Spouses (§ 1(a))
Heads of Households (§ 1(b)) $8,350
Unmarried Individuals (other than Surviving Spouses $5,700

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and Heads of Households) (§ 1(c))
Married Individuals Filing Separate $5,700
Returns (§ 1(d))
(2) Dependent
. For taxable years beginning in 2009, the standard deduction
amount under § 63(c)(5) for an individual who may be claimed as a dependent by
another taxpayer cannot exceed the greater of (1) $950, or (2) the sum of $300 and the
individual's earned income.
(3) Aged or blind
. For taxable years beginning in 2009, the additional standard
deduction amount under § 63(f) for the aged or the blind is $1,100. These amounts are
increased to $1,400 if the individual is also unmarried and not a surviving spouse.
.11 Overall Limitation on Itemized Deductions
. For taxable years beginning in 2009,
the "applicable amount" of adjusted gross income under § 68(b), above which the
amount of otherwise allowable itemized deductions is reduced under § 68, is $166,800
(or $83,400 for a separate return filed by a married individual).
.12 Qualified Transportation Fringe
. For taxable years beginning in 2009, the monthly
limitation under § 132(f)(2)(A), regarding the aggregate fringe benefit exclusion amount
for transportation in a commuter highway vehicle and any transit pass, is $120. The
monthly limitation under § 132(f)(2)(B), regarding the fringe benefit exclusion amount for
qualified parking, is $230.
.13 Income from United States Savings Bonds for Taxpayers Who Pay Qualified
Higher Education Expenses. For taxable years beginning in 2009, the exclusion under
§ 135, regarding income from United States savings bonds for taxpayers who pay
qualified higher education expenses, begins to phase out for modified adjusted gross

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income above $104,900 for joint returns and $69,950 for other returns. The exclusion is
completely phased out for modified adjusted gross income of $134,900 or more for joint
returns and $84,950 or more for other returns.
.14 Adoption Assistance Programs. For taxable years beginning in 2009, under
§ 137(a)(2) the amount that can be excluded from an employee’s gross income for the
adoption of a child with special needs is $12,150. For taxable years beginning in 2009,
under § 137(b)(1) the maximum amount that can be excluded from an employee’s gross
income for the amounts paid or expenses incurred by an employer for qualified adoption
expenses furnished pursuant to an adoption assistance program for other adoptions by
the employee is $12,150. The amount excludable from an employee’s gross income
begins to phase out under § 137(b)(2)(A) for taxpayers with modified adjusted gross
income in excess of $182,180 and is completely phased out for taxpayers with modified
adjusted gross income of $222,180 or more. (See section 3.03 of this revenue
procedure for the adjusted items relating to the adoption credit.)
.15 Private Activity Bonds Volume Cap
. For calendar year 2009, the amounts used
under § 146(d)(1) to calculate the State ceiling for the volume cap for private activity
bonds is the greater of (1) $90 multiplied by the State population, or (2) $273,270,000.
.16 Loan Limits for Agricultural Bonds
. For calendar year 2009, the loan limit amount
on agricultural bonds under § 147(c)(2)(A) for first-time farmers is $469,200.
.17 General Arbitrage Rebate Rules
. For bond years ending in 2009, the amount of
the computation credit determined under § 1.148-3(d)(4) of the proposed Income Tax
Regulations is $1,490.

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.18 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts
or Investments Purchased for a Yield Restricted Defeasance Escrow. For calendar
year 2009, under § 1.148-5(e)(2)(iii)(B)(1), a broker’s commission or similar fee for the
acquisition of a guaranteed investment contract or investments purchased for a yield
restricted defeasance escrow is reasonable if (1) the amount of the fee that the issuer
treats as a qualified administrative cost does not exceed the lesser of (A) $35,000, and
(B) 0.2 percent of the computational base (as defined in § 1.148-5(e)(2)(iii)(B)(2)) or, if
more, $4,000; and (2) the issuer does not treat more than $99,000 in brokers’
commissions or similar fees as qualified administrative costs for all guaranteed
investment contracts and investments for yield restricted defeasance escrows
purchased with gross proceeds of the issue.
.19 Personal Exemption
.
(1) Exemption amount
. For taxable years beginning in 2009, the personal
exemption amount under § 151(d) is $3,650. The exemption amount for taxpayers with
adjusted gross income in excess of the maximum phaseout amount is $2,433 for
taxable years beginning in 2009.
(2) Phaseout
. For taxable years beginning in 2009, the personal exemption amount
begins to phase out at, and reaches the maximum phaseout amount after, the following
adjusted gross income amounts:
AGI – Beginning AGI – Maximum
Filing Status
of Phaseout Phaseout
Married Individuals Filing Joint Returns and $250,200 $372,700
Surviving Spouses (§ 1(a))

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Heads of Households (§ 1(b)) $208,500 $331,000
Unmarried Individuals (other than Surviving $166,800 $289,300
Spouses and Heads of Households) (§ 1(c))
Married Individuals Filing Separate $125,100 $186,350
Returns (§ 1(d))
.20 Election to Expense Certain Depreciable Assets. For taxable years beginning in
2009, under § 179(b)(1) the aggregate cost of any § 179 property a taxpayer may elect
to treat as an expense cannot exceed $133,000. Under § 179(b)(2) the $133,000
limitation is reduced (but not below zero) by the amount by which the cost of § 179
property placed in service during the 2009 taxable year exceeds $530,000.
.21 Eligible Long-Term Care Premiums
. For taxable years beginning in 2009, the
limitations under § 213(d)(10), regarding eligible long-term care premiums includible in
the term "medical care," are as follows:
Attained Age Before the Close of the Taxable Year
Limitation on Premiums
40 or less $320
More than 40 but not more than 50 $600
More than 50 but not more than 60 $1,190
More than 60 but not more than 70 $3,180
More than 70 $3,980
.22 Medical Savings Accounts
.
(1) Self-only coverage
. For taxable years beginning in 2009, the term "high
deductible health plan" as defined in § 220(c)(2)(A) means, for self-only coverage, a
health plan that has an annual deductible that is not less than $2,000 and not more than

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$3,000, and under which the annual out-of-pocket expenses required to be paid (other
than for premiums) for covered benefits do not exceed $4,000.
(2) Family coverage. For taxable years beginning in 2009, the term "high deductible
health plan" means, for family coverage, a health plan that has an annual deductible
that is not less than $4,000 and not more than $6,050, and under which the annual out-
of-pocket expenses required to be paid (other than for premiums) for covered benefits
do not exceed $7,350.
.23 Interest on Education Loans
. For taxable years beginning in 2009, the $2,500
maximum deduction for interest paid on qualified education loans under § 221 begins to
phase out under § 221(b)(2)(B) for taxpayers with modified adjusted gross income in
excess of $60,000 ($120,000 for joint returns), and is completely phased out for
taxpayers with modified adjusted gross income of $75,000 or more ($150,000 or more
for joint returns).
.24 Treatment of Dues Paid to Agricultural or Horticultural Organizations
. For taxable
years beginning in 2009, the limitation under § 512(d)(1), regarding the exemption of
annual dues required to be paid by a member to an agricultural or horticultural
organization, is $145.
.25 Insubstantial Benefit Limitations for Contributions Associated with Charitable
Fund-Raising Campaigns.
(1) Low cost article
. For taxable years beginning in 2009, the unrelated business
income of certain exempt organizations under § 513(h)(2) does not include a "low cost
article" of $9.50 or less.

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(2) Other insubstantial benefits
. For taxable years beginning in 2009, the $5, $25,
and $50 guidelines in section 3 of Rev. Proc. 90-12, 1990-1 C.B. 471 (as amplified by
Rev. Proc. 92-49, 1992-1 C.B. 987, and modified by Rev. Proc. 92-102, 1992-2 C.B.
579), for disregarding the value of insubstantial benefits received by a donor in return
for a fully deductible charitable contribution under § 170, are $9.50, $47.50, and $95,
respectively.
.26 Expatriation to Avoid Tax
. For calendar year 2009, an individual with “average
annual net income tax” of more than $145,000 for the five taxable years ending before
the date of the loss of United States citizenship under § 877(a)(2)(A) is a covered
expatriate for purposes of § 877A(g)(1).
.27 Tax Responsibilities of Expatriation
. For taxable years beginning in 2009, the
amount that would be includible in the gross income of a covered expatriate by reason
of § 877A(a)(1) is reduced (but not below zero) by $626,000.
.28 Foreign Earned Income Exclusion
. For taxable years beginning in 2009, the
foreign earned income exclusion amount under § 911(b)(2)(D)(i) is $91,400.
.29 Valuation of Qualified Real Property in Decedent's Gross Estate
. For an estate of
a decedent dying in calendar year 2009, if the executor elects to use the special use
valuation method under § 2032A for qualified real property, the aggregate decrease in
the value of qualified real property resulting from electing to use § 2032A for purposes
of the estate tax cannot exceed $1,000,000.
.30 Annual Exclusion for Gifts
.
(1) For calendar year 2009, the first $13,000 of gifts to any person (other than gifts

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of future interests in property) are not included in the total amount of taxable gifts under
§ 2503 made during that year.
(2) For calendar year 2009, the first $133,000 of gifts to a spouse who is not a
citizen of the United States (other than gifts of future interests in property) are not
included in the total amount of taxable gifts under §§ 2503 and 2523(i)(2) made during
that year.
.31 Tax on Arrow Shafts
. For calendar year 2009, the tax imposed under
§ 4161(b)(2)(A) on the first sale by the manufacturer, producer, or importer of any shaft
of a type used in the manufacture of certain arrows is $0.45 per shaft.
.32 Passenger Air Transportation Excise Tax. For calendar year 2009, the tax under
§ 4261(b) on the amount paid for each domestic segment of taxable air transportation is
$3.60. For calendar year 2009, the tax under § 4261(c) on any amount paid (whether
within or without the United States) for any air transportation, if the transportation begins
or ends in the United States, generally is $16.10. However, for a domestic segment
beginning or ending in Alaska or Hawaii as described in § 4261(c)(3), the tax applies
only to departures and the rate is $8.00.
.33 Reporting Exception for Certain Exempt Organizations with Nondeductible
Lobbying Expenditures. For taxable years beginning in 2009, the annual per person,
family, or entity dues limitation to qualify for the reporting exception under § 6033(e)(3)
(and section 5.05 of Rev. Proc. 98-19, 1998-1 C.B. 547), regarding certain exempt
organizations with nondeductible lobbying expenditures, is $101 or less.
.34 Notice of Large Gifts Received from Foreign Persons
. For taxable years

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beginning in 2009, recipients of gifts from certain foreign persons may be required to
report these gifts under § 6039F if the aggregate value of gifts received in a taxable
year exceeds $14,139.
.35 Persons Against Whom a Federal Tax Lien Is Not Valid. For calendar year 2009,
a federal tax lien is not valid against (1) certain purchasers under § 6323(b)(4) who
purchased personal property in a casual sale for less than $1,380, or (2) a mechanic's
lienor under § 6323(b)(7) that repaired or improved certain residential property if the
contract price with the owner is not more than $6,880.
.36 Property Exempt from Levy
. For calendar year 2009, the value of property
exempt from levy under § 6334(a)(2) (fuel, provisions, furniture, and other household
personal effects, as well as arms for personal use, livestock, and poultry) cannot exceed
$8,230. The value of property exempt from levy under § 6334(a)(3) (books and tools
necessary for the trade, business, or profession of the taxpayer) cannot exceed $4,120.
.37 Interest on a Certain Portion of the Estate Tax Payable in Installments
. For an
estate of a decedent dying in calendar year 2009, the dollar amount used to determine
the "2-percent portion" (for purposes of calculating interest under § 6601(j)) of the estate
tax extended as provided in § 6166 is $1,330,000.
.38 Attorney Fee Awards
. For fees incurred in calendar year 2009, the attorney fee
award limitation under § 7430(c)(1)(B)(iii) is $180 per hour.
.39 Periodic Payments Received under Qualified Long-Term Care Insurance
Contracts or under Certain Life Insurance Contracts. For calendar year 2009, the
stated dollar amount of the per diem limitation under § 7702B(d)(4), regarding periodic

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payments received under a qualified long-term care insurance contract or periodic
payments received under a life insurance contract that are treated as paid by reason of
the death of a chronically ill individual, is $280.
SECTION 4. EFFECTIVE DATE
.01 General Rule. Except as provided in section 4.02, this revenue procedure applies
to taxable years beginning in 2009.
.02 Calendar Year Rule
. This revenue procedure applies to transactions or events
occurring in calendar year 2009 for purposes of sections 3.07 (low-income housing
credit), 3.09 (transportation mainline pipeline construction industry optional expense
substantiation rules for payments to employees under accountable plans), 3.15 (private
activity bond volume cap), 3.16 (loan limits on agricultural bonds), 3.17 (general
arbitrage rebate rules), 3.18 (safe harbor rules for broker commissions on guaranteed
investment contracts or investments purchased for a yield restricted defeasance
escrow), 3.26 (expatriation to avoid tax), 3.29 (valuation of qualified real property in
decedent's gross estate), 3.30 (annual exclusion for gifts), 3.31 (tax on arrow shafts),
3.32 (passenger air transportation excise tax), 3.35 (persons against whom a federal tax
lien is not valid), 3.36 (property exempt from levy), 3.37 (interest on a certain portion of
the estate tax payable in installments), 3.38 (attorney fee awards), and 3.39 (periodic
payments received under qualified long-term care insurance contracts or under certain
life insurance contracts).
SECTION 5. DRAFTING INFORMATION
The principal author of this revenue procedure is Christina M. Glendening of the

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Office of Associate Chief Counsel (Income Tax & Accounting). For further information
regarding this revenue procedure, contact Ms. Glendening at (202) 622-4920 (not a toll-
free call).