us-irs-revenue-rulings-irb-2023-23-pdf•Internal Revenue Bulletin 2023-23 (PDF rendition): IRS Revenue Rulings
Internal Revenue Bulletin 2023-23 (PDF rendition): IRS Revenue Rulings
us-irs-revenue-rulings-irb-2023-23-pdfInternal Revenue Bulletin 2023-23 (PDF rendition): IRS Revenue RulingsGuidance
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Bulletin No. 2023–23 June 5, 2023 HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. ADMINISTRATIVE Rev. Rul. 2023-11, page 886. Interest rates: underpayments and overpayments. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning July 1, 2023, will be 7 per- cent for overpayments (6 percent in the case of a corpora- tion), 7 percent for underpayments, and 9 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 4.5 percent. INCOME TAX Notice 2023-41, page 905. The notice provides the applicable reference price for qual- ified natural gas production from qualified marginal wells during taxable years beginning in calendar year 2022 for the purpose of determining the marginal well production credit under § 45I. The applicable reference price for taxable years beginning in calendar year 2022 is $3.43 per 1,000 cubic feet. The notice also provides the credit amount used for the purpose of determining the marginal well production credit. The credit amount for taxable years beginning in calendar year 2022 is $0.00 per 1,000 cubic feet. REG-108054-21, page 907. This document contains proposed regulations providing guid- ance on the application of the transfer for valuable consid- eration rules under section 101 and associated information reporting requirements for reportable policy sales of inter- ests in life insurance contracts under section 6050Y. The proposed regulations would amend the rules for exchanges of life insurance contracts qualifying for nonrecognition of gain or loss, as well as for certain acquisitions of interests in life insurance contracts in transactions that qualify as corpo- rate reorganizations. The proposed regulations affect parties involved in these life insurance contract transactions, includ- ing with respect to payments of reportable death benefits. Rev. Rul. 2023-10, page 884. Federal rates; adjusted federal rates; adjusted federal long- term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for June 2023. Finding Lists begin on page ii. The IRS Mission Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce 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 offi- cial rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is published weekly. It is the policy of the Service to publish in the Bulletin all sub- stantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless other- wise indicated. Procedures relating solely to matters of inter- nal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rul- ings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. The Bulletin is divided into four parts as follows: Part I.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986. Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions and Other Related Items, and Subpart B, Legislation and Related Committee Reports. Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement). Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbar- ment and suspension lists, and announcements. The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period. The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. June 5, 2023 Bulletin No. 2023–23 Part I Section 1274.— Determination 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. 2023-10 This revenue ruling provides vari- ous prescribed rates for federal income tax purposes for June 2023 (the current month). Table 1 contains the short- term, mid-term, and long-term applica- ble 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 federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted fed- eral 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-in- come housing credit described in sec- tion 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in ser- vice after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an inter- est for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520. REV. RUL. 2023-10 TABLE 1 Applicable Federal Rates (AFR) for June 2023 Period for Compounding AnnualSemiannualQuarterlyMonthly Short-term AFR4.43%4.38%4.36%4.34% 110% AFR4.88%4.82%4.79%4.77% 120% AFR5.33%5.26%5.23%5.20% 130% AFR5.77%5.69%5.65%5.62% Mid-term AFR3.56%3.53%3.51%3.50% 110% AFR 3.92%3.88%3.86%3.85% 120% AFR4.28%4.24%4.22%4.20% 130% AFR4.64%4.59%4.56%4.55% 150% AFR5.37%5.30%5.27%5.24% 175% AFR6.28%6.18%6.13%6.10% Long-term AFR3.79%3.75%3.73%3.72% 110% AFR4.17%4.13%4.11%4.09% 120% AFR4.55%4.50%4.47%4.46% 130% AFR4.94%4.88%4.85%4.83% REV. RUL. 2023-10 TABLE 2 Adjusted AFR for June 2023 Period for Compounding AnnualSemiannualQuarterlyMonthly Short-term adjusted AFR3.36%3.33%3.32%3.31% Mid-term adjusted AFR2.70%2.68%2.67%2.67% Long-term adjusted AFR2.87%2.85%2.84%2.83% June 5, 2023 884 Bulletin No. 2023–23 REV. RUL. 2023-10 TABLE 3 Rates Under Section 382 for June 2023 Adjusted federal long-term rate for the current month2.87% Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 3.04% REV. RUL. 2023-10 TABLE 4 Appropriate Percentages Under Section 42(b)(1) for June 2023 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%. Appropriate percentage for the 70% present value low-income housing credit7.85% Appropriate percentage for the 30% present value low-income housing credit 3.36% REV. RUL. 2023-10 TABLE 5 Rate Under Section 7520 for June 2023 Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 4.20% Section 42.—Low-Income Housing Credit The applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2023. See Rev. Rul. 2023-10, page 884. Section 280G.—Golden Parachute Payments The applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2023. See Rev. Rul. 2023-10, page 884. Section 382.—Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change The applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. Section 7520.—Valuation Tables The applicable federal mid-term rates are set forth for the month of June 2023. See Rev. Rul. 2023-10, page 884. 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 June 2023. See Rev. Rul. 2023-10, page 884. Bulletin No. 2023–23 885 June 5, 2023 June 5, 2023 886 Bulletin No. 2023–23 Section 6621.— Determination of Rate of Interest 26 CFR 301.6621-1: Interest rate. Rev. Rul. 2023-11 Section 6621 of the Internal Revenue Code establishes the interest rates on overpayments and underpayments of tax. Under section 6621(a)(1), the over- payment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a cor- poration), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Under section 6621(a) (2), the underpayment rate is the sum of the federal short-term rate plus 3 percent- age points. Section 6621(c) provides that for purposes of interest payable under sec- tion 6601 on any large corporate under- payment, the underpayment rate under section 6621(a)(2) is determined by sub- stituting “5 percentage points” for “3 per- centage points.” See section 6621(c) and section 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpay- ment and for the rules for determining the applicable date. Section 6621(c) and sec- tion 301.6621-3 are generally effective for periods after December 31, 1990. Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter. Section 6621(b) (2)(A) provides that the federal short- term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after that month. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during that month by the Secretary in accordance with section 1274(d), rounded to the nearest full per- cent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent). Notice 88-59, 1988-1 C.B. 546, announced that in determining the quar- terly interest rates to be used for over- payments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding. The federal short-term rate deter- mined in accordance with section 1274(d) during April 2023 is the rate published in Revenue Ruling 2023-9, 2023-19 IRB 835, to take effect beginning May 1, 2023. The federal short-term rate, rounded to the nearest full percent, based on daily com- pounding determined during the month of April 2023 is 4 percent. Accordingly, an overpayment rate of 7 percent (6 per- cent in the case of a corporation) and an underpayment rate of 7 percent are estab- lished for the calendar quarter beginning July 1, 2023. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quar- ter beginning July 1, 2023, is 4.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning July 1, 2023, is 9 percent. These rates apply to amounts bearing interest during that calendar quarter. Sections 6654(a)(1) and 6655(a) (1) provide that the underpayment rate established under section 6621 applies in determining the addition to tax under sections 6654 and 6655 for failure to pay estimated tax for any taxable year. Thus, the 7 percent rate also applies to estimated tax underpayments for the third calendar quarter beginning July 1, 2023. In addi- tion, pursuant to section 6603(d)(4), the rate of interest on section 6603 deposits is 4 percent for the third calendar quarter in 2023. Interest factors for daily compound interest for annual rates of 4.5 percent, 6 percent, 7 percent and 9 percent are pub- lished in Tables 14, 17, 19 and 23 of Rev. Proc. 95-17, 1995-1 C.B. 568, 571, 573, and 577. Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling. DRAFTING INFORMATION The principal author of this revenue ruling is Casey R. Conrad of the Office of the Associate Chief Counsel (Procedure and Administration). For further informa- tion regarding this revenue ruling, contact Mr. Conrad at (202) 317-6844 (not a toll- free number). Bulletin No. 2023–23 887 June 5, 2023 APPENDIX A 365 Day Year 0.5% Compound Rate 184 Days DaysFactorDaysFactorDaysFactor 10.000013699630.0008633801250.001713784 20.000027397640.0008770911260.001727506 30.000041096650.0008908011270.001741228 40.000054796660.0009045121280.001754951 50.000068495670.0009182231290.001768673 60.000082195680.0009319341300.001782396 70.000095894690.0009456461310.001796119 80.000109594700.0009593571320.001809843 90.000123294710.0009730691330.001823566 100.000136995720.0009867811340.001837290 110.000150695730.0010004931350.001851013 120.000164396740.0010142061360.001864737 130.000178097750.0010279181370.001878462 140.000191798760.0010416311380.001892186 150.000205499770.0010553441390.001905910 160.000219201780.0010690571400.001919635 170.000232902790.0010827701410.001933360 180.000246604800.0010964841420.001947085 190.000260306810.0011101971430.001960811 200.000274008820.0011239111440.001974536 210.000287711830.0011376251450.001988262 220.000301413840.0011513391460.002001988 230.000315116850.0011650541470.002015714 240.000328819860.0011787681480.002029440 250.000342522870.0011924831490.002043166 260.000356225880.0012061981500.002056893 270.000369929890.0012199131510.002070620 280.000383633900.0012336291520.002084347 290.000397336910.0012473441530.002098074 300.000411041920.0012610601540.002111801 310.000424745930.0012747761550.002125529 320.000438449940.0012884921560.002139257 330.000452154950.0013022081570.002152985 340.000465859960.0013159251580.002166713 350.000479564970.0013296411590.002180441 360.000493269980.0013433581600.002194169 370.000506974990.0013570751610.002207898 380.0005206801000.0013707921620.002221627 390.0005343861010.0013845101630.002235356 400.0005480921020.0013982271640.002249085 410.0005617981030.0014119451650.002262815 June 5, 2023 888 Bulletin No. 2023–23 420.0005755041040.0014256631660.002276544 430.0005892111050.0014393811670.002290274 440.0006029171060.0014531001680.002304004 450.0006166241070.0014668181690.002317734 460.0006303311080.0014805371700.002331465 470.0006440391090.0014942561710.002345195 480.0006577461100.0015079751720.002358926 490.0006714541110.0015216941730.002372657 500.0006851611120.0015354141740.002386388 510.0006988691130.0015491331750.002400120 520.0007125781140.0015628531760.002413851 530.0007262861150.0015765731770.002427583 540.0007399951160.0015902931780.002441315 550.0007537031170.0016040141790.002455047 560.0007674121180.0016177341800.002468779 570.0007811211190.0016314551810.002482511 580.0007948311200.0016451761820.002496244 590.0008085401210.0016588971830.002509977 600.0008222501220.0016726191840.002523710 610.0008359601230.001686340 620.0008496701240.001700062 Bulletin No. 2023–23 889 June 5, 2023 366 Day Year 0.5% Compound Rate 184 Days DaysFactorDaysFactorDaysFactor 10.000013661630.0008610201250.001709097 20.000027323640.0008746931260.001722782 30.000040984650.0008883661270.001736467 40.000054646660.0009020401280.001750152 50.000068308670.0009157131290.001763837 60.000081970680.0009293871300.001777522 70.000095632690.0009430611310.001791208 80.000109295700.0009567351320.001804893 90.000122958710.0009704091330.001818579 100.000136620720.0009840841340.001832265 110.000150283730.0009977581350.001845951 120.000163947740.0010114331360.001859638 130.000177610750.0010251081370.001873324 140.000191274760.0010387831380.001887011 150.000204938770.0010524591390.001900698 160.000218602780.0010661341400.001914385 170.000232266790.0010798101410.001928073 180.000245930800.0010934861420.001941760 190.000259595810.0011071621430.001955448 200.000273260820.0011208391440.001969136 210.000286924830.0011345151450.001982824 220.000300590840.0011481921460.001996512 230.000314255850.0011618691470.002010201 240.000327920860.0011755461480.002023889 250.000341586870.0011892231490.002037578 260.000355252880.0012029001500.002051267 270.000368918890.0012165781510.002064957 280.000382584900.0012302561520.002078646 290.000396251910.0012439341530.002092336 300.000409917920.0012576121540.002106025 310.000423584930.0012712911550.002119715 320.000437251940.0012849691560.002133405 330.000450918950.0012986481570.002147096 340.000464586960.0013123271580.002160786 350.000478253970.0013260061590.002174477 360.000491921980.0013396851600.002188168 370.000505589990.0013533651610.002201859 380.0005192571000.0013670441620.002215550 390.0005329251010.0013807241630.002229242 400.0005465941020.0013944041640.002242933 410.0005602621030.0014080851650.002256625 420.0005739311040.0014217651660.002270317 June 5, 2023 890 Bulletin No. 2023–23 430.0005876001050.0014354461670.002284010 440.0006012691060.0014491271680.002297702 450.0006149391070.0014628081690.002311395 460.0006286081080.0014764891700.002325087 470.0006422781090.0014901701710.002338780 480.0006559481100.0015038521720.002352473 490.0006696181110.0015175331730.002366167 500.0006832891120.0015312151740.002379860 510.0006969591130.0015448971750.002393554 520.0007106301140.0015585801760.002407248 530.0007243011150.0015722621770.002420942 540.0007379721160.0015859451780.002434636 550.0007516431170.0015996281790.002448331 560.0007653151180.0016133111800.002462025 570.0007789861190.0016269941810.002475720 580.0007926581200.0016406781820.002489415 590.0008063301210.0016543611830.002503110 600.0008200031220.0016680451840.002516806 610.0008336751230.001681729 620.0008473481240.001695413 Bulletin No. 2023–23 891 June 5, 2023 TABLE OF INTEREST RATES PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986 OVERPAYMENTS AND UNDERPAYMENTS PERIODRATEIn 1995-1 C.B. DAILY RATE TABLE Before Jul. 1, 19756%Table2,pg.557 Jul. 1, 1975–Jan. 31, 19769%Table4,pg.559 Feb. 1, 1976–Jan. 31, 19787%Table3,pg.558 Feb. 1, 1978–Jan. 31, 19806%Table2,pg.557 Feb. 1, 1980–Jan. 31, 198212%Table5,pg.560 Feb. 1, 1982–Dec. 31, 198220%Table6,pg.560 Jan. 1, 1983–Jun. 30, 198316%Table37,pg.591 Jul. 1, 1983–Dec. 31, 198311%Table27,pg.581 Jan. 1, 1984–Jun. 30, 198411%Table75,pg.629 Jul. 1, 1984–Dec. 31, 198411%Table75,pg.629 Jan. 1, 1985–Dec. 31, 198513%Table31,pg.585 Jul. 1, 1985–Dec. 31, 198511%Table27,pg.581 Jan. 1, 1986–Jun. 30, 198610%Table25,pg.579 Jul. 1, 1986–Dec. 31, 19869%Table23,pg.577 TABLE OF INTEREST RATES FROM JAN. 1, 1987 – Dec. 31, 1998 OVERPAYMENTSUNDERPAYMENTS 1995-1 C.B.1995-1 C.B. RATE RATETABLEPGRATETABLEPG Jan. 1, 1987–Mar. 31, 19878%215759%23577 Apr. 1, 1987–Jun. 30, 19878%215759%23577 Jul. 1, 1987–Sep. 30, 19878%215759%23577 Oct. 1, 1987–Dec. 31, 19879%2357710%25579 Jan. 1, 1988–Mar. 31, 198810%7362711%75629 Apr. 1, 1988–Jun. 30, 19889%7162510%73627 Jul. 1, 1988–Sep. 30, 19889%7162510%73627 Oct. 1, 1988–Dec. 31, 198810%7362711%75629 Jan. 1, 1989–Mar. 31, 198910%2557911%27581 Apr. 1, 1989–Jun. 30, 198911%2758112%29583 Jul. 1, 1989–Sep. 30, 198911%2758112%29583 Oct. 1, 1989–Dec. 31, 198910%2557911%27581 Jan. 1, 1990–Mar. 31, 199010%2557911%27581 Apr. 1, 1990–Jun. 30, 199010%2557911%27581 Jul. 1, 1990–Sep. 30, 199010%2557911%27581 Oct. 1, 1990–Dec. 31, 199010%2557911%27581 Jan. 1, 1991–Mar. 31, 199110%2557911%27581 June 5, 2023 892 Bulletin No. 2023–23 Apr. 1, 1991–Jun. 30, 19919%2357710%25579 Jul. 1, 1991–Sep. 30, 19919%2357710%25579 Oct. 1, 1991–Dec. 31, 19919%2357710%25579 Jan. 1, 1992–Mar. 31, 19928%696239%71625 Apr. 1, 1992–Jun. 30, 19927%676218%69623 Jul. 1, 1992–Sep. 30, 19927%676218%69623 Oct. 1, 1992–Dec. 31, 19926%656197%67621 Jan. 1, 1993–Mar. 31, 19936%175717%19573 Apr. 1, 1993–Jun. 30, 19936%175717%19573 Jul. 1, 1993–Sep. 30, 19936%175717%19573 Oct. 1, 1993–Dec. 31, 19936%175717%19573 Jan. 1, 1994–Mar. 31, 19946%175717%19573 Apr. 1, 1994–Jun. 30, 19946%175717%19573 Jul. 1, 1994–Sep. 30, 19947%195738%21575 Oct. 1, 1994–Dec. 31, 19948%215759%23577 Jan. 1, 1995–Mar. 31, 19958%215759%23577 Apr. 1, 1995–Jun. 30, 19959%2357710%25579 Jul. 1, 1995–Sep. 30, 19958%215759%23577 Oct. 1, 1995–Dec. 31, 19958%215759%23577 Jan. 1, 1996–Mar. 31, 19968%696239%71625 Apr. 1, 1996–Jun. 30, 19967%676218%69623 Jul. 1, 1996–Sep. 30, 19968%696239%71625 Oct. 1, 1996–Dec. 31, 19968%696239%71625 Jan. 1, 1997–Mar. 31, 19978%215759%23577 Apr. 1, 1997–Jun. 30, 19978%215759%23577 Jul. 1, 1997–Sep. 30, 19978%215759%23577 Oct. 1, 1997–Dec. 31, 19978%215759%23577 Jan. 1, 1998–Mar. 31, 19988%215759%23577 Apr. 1, 1998–Jun. 30, 19987%195738%21575 Jul. 1, 1998–Sep. 30, 19987%195738%21575 Oct. 1, 1998–Dec. 31, 19987%195738%21575 Bulletin No. 2023–23 893 June 5, 2023 TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS 1995-1 C.B. RATETABLEPAGE Jan. 1, 1999–Mar. 31, 19997%19573 Apr. 1, 1999–Jun. 30, 19998%21575 Jul. 1, 1999–Sep. 30, 19998%21575 Oct. 1, 1999–Dec. 31, 19998%21575 Jan. 1, 2000–Mar. 31, 20008%69623 Apr. 1, 2000–Jun. 30, 20009%71625 Jul. 1, 2000–Sep. 30, 20009%71625 Oct. 1, 2000–Dec. 31, 20009%71625 Jan. 1, 2001–Mar. 31, 20019%23577 Apr. 1, 2001–Jun. 30, 20018%21575 Jul. 1, 2001–Sep. 30, 20017%19573 Oct. 1, 2001–Dec. 31, 20017%19573 Jan. 1, 2002–Mar. 31, 20026%17571 Apr. 1, 2002–Jun. 30, 20026%17571 Jul. 1, 2002–Sep. 30, 20026%17571 Oct. 1, 2002–Dec. 31, 20026%17571 Jan. 1, 2003–Mar. 31, 20035%15569 Apr. 1, 2003–Jun. 30, 20035%15569 Jul. 1, 2003–Sep. 30, 20035%15569 Oct. 1, 2003–Dec. 31, 20034%13567 Jan. 1, 2004–Mar. 31, 20044%61615 Apr. 1, 2004–Jun. 30, 20045%63617 Jul. 1, 2004–Sep. 30, 20044%61615 Oct. 1, 2004–Dec. 31, 20045%63617 Jan. 1, 2005–Mar. 31, 20055%15569 Apr. 1, 2005–Jun. 30, 20056%17571 Jul. 1, 2005–Sep. 30, 20056%17571 Oct. 1, 2005–Dec. 31, 20057%19573 Jan. 1, 2006–Mar. 31, 20067%19573 Apr. 1, 2006–Jun. 30, 20067%19573 Jul. 1, 2006–Sep. 30, 20068%21575 Oct. 1, 2006–Dec. 31, 20068%21575 Jan. 1, 2007–Mar. 31, 20078%21575 Apr. 1, 2007–Jun. 30, 20078%21575 Jul. 1, 2007–Sep. 30, 20078%21575 Oct. 1, 2007–Dec. 31, 20078%21575 Jan. 1, 2008–Mar. 31, 20087%67621 Apr. 1, 2008–Jun. 30, 20086%65619 Jul. 1, 2008–Sep. 30, 20085%63617 Oct. 1, 2008–Dec. 31, 20086%65619 June 5, 2023 894 Bulletin No. 2023–23 Jan. 1, 2009–Mar. 31, 20095%15569 Apr. 1, 2009–Jun. 30, 20094%13567 Jul. 1, 2009–Sep. 30, 20094%13567 Oct. 1, 2009–Dec. 31, 20094%13567 Jan. 1, 2010–Mar. 31, 20104%13567 Apr. 1, 2010–Jun. 30, 20104%13567 Jul. 1, 2010–Sep. 30, 20104%13567 Oct. 1, 2010–Dec. 31, 20104%13567 Jan. 1, 2011–Mar. 31, 20113%11565 Apr. 1, 2011–Jun. 30, 20114%13567 Jul. 1, 2011–Sep. 30, 20114%13567 Oct. 1, 2011–Dec. 31, 20113%11565 Jan. 1, 2012–Mar. 31, 20123%59613 Apr. 1, 2012–Jun. 30, 20123%59613 Jul. 1, 2012–Sep. 30, 20123%59613 Oct. 1, 2012–Dec. 31, 20123%59613 Jan. 1, 2013–Mar. 31, 20133%11565 Apr. 1, 2013–Jun. 30, 20133%11565 Jul. 1, 2013–Sep. 30, 20133%11565 Oct. 1, 2013–Dec. 31, 20133%11565 Jan. 1, 2014–Mar. 31, 20143%11565 Apr. 1, 2014–Jun. 30, 20143%11565 Jul. 1, 2014–Sep. 30, 20143%11565 Oct. 1, 2014–Dec. 31, 20143%11565 Jan. 1, 2015–Mar. 31, 20153%11565 Apr. 1, 2015–Jun. 30, 20153%11565 Jul. 1, 2015–Sep. 30, 20153%11565 Oct. 1, 2015–Dec. 31, 20153%11565 Jan. 1, 2016–Mar. 31, 20163%59613 Apr. 1, 2016–Jun. 30, 20164%61615 Jul. 1, 2016–Sep. 30, 20164%61615 Oct. 1, 2016–Dec. 31, 20164%61615 Jan. 1, 2017–Mar. 31, 20174%13567 Apr. 1, 2017–Jun. 30, 20174%13567 Jul. 1, 2017–Sep. 30, 20174%13567 Oct. 1, 2017–Dec. 31, 20174%13567 Jan. 1, 2018–Mar. 31, 20184%13567 Apr. 1, 2018–Jun. 30, 20185%15569 Jul. 1, 2018–Sep. 30, 20185%15569 Oct. 1, 2018–Dec. 31, 20185%15569 Jan. 1, 2019–Mar. 31, 20196%17571 Apr. 1, 2019–Jun. 30, 20196%17571 Jul. 1, 2019–Sep. 30, 20195%15569 Oct. 1, 2019–Dec. 31, 20195%15569 Jan. 1, 2020–Mar. 31, 20205%63617 Bulletin No. 2023–23 895 June 5, 2023 Apr. 1, 2020–Jun. 30, 20205%63617 Jul. 1, 2020–Sep. 30, 20203%59613 Oct. 1, 2020–Dec. 31, 20203%59613 Jan. 1, 2021–Mar. 31, 20213%11565 Apr. 1, 2021–Jun. 30, 20213%11565 Jul. 1, 2021–Sep. 30, 20213%11565 Oct. 1, 2021–Dec. 31, 20213%11565 Jan. 1, 2022–Mar. 31, 20223%11565 Apr. 1, 2022–Jun. 30, 20224%13567 Jul. 1, 2022–Sep. 30, 20225%15569 Oct. 1, 2022–Dec. 31, 20226%17571 Jan. 1, 2023–Mar. 31, 20237%19573 Apr. 1, 2023–Jun. 30, 20237%19573 Jul. 1, 2023–Sep. 30, 2023 7%19573 June 5, 2023 896 Bulletin No. 2023–23 TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS OVERPAYMENTSUNDERPAYMENTS 1995-1 C.B.1995-1 C.B. RATETABLEPGRATETABLEPG Jan. 1, 1999–Mar. 31, 19996%175717%19573 Apr. 1, 1999–Jun. 30, 19997%195738%21575 Jul. 1, 1999–Sep. 30, 19997%195738%21575 Oct. 1, 1999–Dec. 31, 19997%195738%21575 Jan. 1, 2000–Mar. 30, 20007%676218%69623 Apr. 1, 2000–Jun. 30, 20008%696239%71625 Jul. 1, 2000–Sep. 30, 20008%696239%71625 Oct. 1, 2000–Dec. 31, 20008%696239%71625 Jan. 1, 2001–Mar. 31, 20018%215759%23577 Apr. 1, 2001–Jun. 30, 20017%195738%21575 Jul. 1, 2001–Sep. 30, 20016%175717%19573 Oct. 1, 2001–Dec. 31, 20016%175717%19573 Jan. 1, 2002–Mar. 31, 20025%155696%17571 Apr. 1, 2002–Jun. 30, 20025%155696%17571 Jul. 1, 2002–Sep. 30, 20025%155696%17571 Oct. 1, 2002–Dec. 31, 20025%155696%17571 Jan. 1, 2003–Mar. 31, 20034%135675%15569 Apr. 1, 2003–Jun. 30, 20034%135675%15569 Jul. 1, 2003–Sep. 30, 20034%135675%15569 Oct. 1, 2003–Dec. 31, 20033%115654%13567 Jan. 1, 2004–Mar. 31, 20043%596134%61615 Apr. 1, 2004–Jun. 30, 20044%616155%63617 Jul. 1, 2004–Sep. 30, 20043%596134%61615 Oct. 1, 2004–Dec. 31, 20044%616155%63617 Jan. 1, 2005–Mar. 31, 20054%135675%15569 Apr. 1, 2005–Jun. 30, 20055%155696%17571 Jul. 1, 2005–Sep. 30, 20055%155696%17571 Oct. 1, 2005–Dec. 31, 20056%175717%19573 Jan. 1, 2006–Mar. 31, 20066%175717%19573 Apr. 1, 2006–Jun. 30, 20066%175717%19573 Jul. 1, 2006–Sep. 30, 20067%195738%21575 Oct. 1, 2006–Dec. 31, 20067%195738%21575 Jan. 1, 2007–Mar. 31, 20077%195738%21575 Apr. 1, 2007–Jun. 30, 20077%195738%21575 Jul. 1, 2007–Sep. 30, 20077%195738%21575 Oct. 1, 2007–Dec. 31, 20077%195738%21575 Jan. 1, 2008–Mar. 31, 20086%656197%67621 Apr. 1, 2008–Jun. 30, 20085%636176%65619 Jul. 1, 2008–Sep. 30, 20084%616155%63617 Oct. 1, 2008–Dec. 31, 20085%636176%65619 Bulletin No. 2023–23 897 June 5, 2023 Jan. 1, 2009–Mar. 31, 20094%135675%15569 Apr. 1, 2009–Jun. 30, 20093%115654%13567 Jul. 1, 2009–Sep. 30, 20093%115654%13567 Oct. 1, 2009–Dec. 31, 20093%115654%13567 Jan. 1, 2010–Mar. 31, 20103%115654%13567 Apr. 1, 2010–Jun. 30, 20103%115654%13567 Jul. 1, 2010–Sep. 30, 20103%115654%13567 Oct. 1, 2010–Dec. 31, 20103%115654%13567 Jan. 1, 2011–Mar. 31, 20112%95633%11565 Apr. 1, 2011–Jun. 30, 20113%115654%13567 Jul. 1, 2011–Sep. 30, 20113%115654%13567 Oct. 1, 2011–Dec. 31, 20112%95633%11565 Jan. 1, 2012–Mar. 31, 20122%576113%59613 Apr. 1, 2012–Jun. 30, 20122%576113%59613 Jul. 1, 2012–Sep. 30, 20122%576113%59613 Oct. 1, 2012–Dec. 31, 20122%576113%59613 Jan. 1, 2013–Mar. 31, 20132%95633%11565 Apr. 1, 2013–Jun. 30, 20132%95633%11565 Jul. 1, 2013–Sep. 30, 20132%95633%11565 Oct. 1, 2013–Dec. 31, 20132%95633%11565 Jan. 1, 2014–Mar. 31, 20142%95633%11565 Apr. 1, 2014–Jun. 30, 20142%95633%11565 Jul. 1, 2014–Sep. 30, 20142%95633%11565 Oct. 1, 2014–Dec. 31, 20142%95633%11565 Jan. 1, 2015–Mar. 31, 20152%95633%11565 Apr. 1, 2015–Jun. 30, 20152%95633%11565 Jul. 1, 2015–Sep. 30, 20152%95633%11565 Oct. 1, 2015–Dec. 31, 20152%95633%11565 Jan. 1, 2016–Mar. 31, 20162%576113%59613 Apr. 1, 2016–Jun. 30, 20163%596134%61615 Jul. 1, 2016–Sep. 30, 20163%596134%61615 Oct. 1, 2016–Dec. 31, 20163%596134%61615 Jan. 1, 2017–Mar. 31, 20173%115654%13567 Apr. 1, 2017–Jun. 30, 20173%115654%13567 Jul. 1, 2017–Sep. 30, 20173%115654%13567 Oct. 1, 2017–Dec. 31, 20173%115654%13567 Jan. 1, 2018–Mar. 31, 20183%115654%13567 Apr. 1, 2018–Jun. 30, 20184%135675%15569 Jul. 1, 2018–Sep. 30, 20184%135675%15569 Oct. 1, 2018–Dec. 31, 20184%135675%15569 Jan. 1, 2019–Mar. 31, 20195%155696%17571 Apr. 1, 2019–Jun. 30, 20195%155696%17571 Jul. 1, 2019–Sep. 30, 20194%135675%15569 Oct. 1, 2019–Dec. 31, 20194%135675%15569 Jan. 1, 2020–Mar. 31, 20204%616155%63617 June 5, 2023 898 Bulletin No. 2023–23 Apr. 1, 2020–Jun. 30, 20204%616155%63617 Jul. 1, 2020–Sep. 30, 20202%576113%59613 Oct. 1, 2020–Dec. 31, 20202%576113%59613 Jan. 1, 2021–Mar. 31, 20212%95633%11565 Apr. 1, 2021–Jun. 30, 20212%95633%11565 Jul. 1, 2021–Sep. 30, 20212%95633%11565 Oct. 1, 2021–Dec. 31, 20212%95633%11565 Jan. 1, 2022–Mar. 31, 20222%95633%11565 Apr. 1, 2022–Jun. 30, 20223%115654%13567 Jul. 1, 2022–Sep. 30, 20224%135675%15569 Oct. 1, 2022–Dec. 31, 20225%155696%17571 Jan. 1, 2023–Mar. 31, 20236%175717%19573 Apr. 1, 2023–Jun. 30, 20236%175717%19573 Jul. 1, 2023–Sep. 30, 20236%175717%19573 Bulletin No. 2023–23 899 June 5, 2023 TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT 1995-1 C.B. RATETABLEPG Jan. 1, 1991–Mar. 31, 199113%31585 Apr. 1, 1991–Jun. 30, 199112%29583 Jul. 1, 1991–Sep. 30, 199112%29583 Oct. 1, 1991–Dec. 31, 199112%29583 Jan. 1, 1992–Mar. 31, 199211%75629 Apr. 1, 1992–Jun. 30, 199210%73627 Jul. 1, 1992–Sep. 30, 199210%73627 Oct. 1, 1992–Dec. 31, 19929%71625 Jan. 1, 1993–Mar. 31, 19939%23577 Apr. 1, 1993–Jun. 30, 19939%23577 Jul. 1, 1993–Sep. 30, 19939%23577 Oct. 1, 1993–Dec. 31, 19939%23577 Jan. 1, 1994–Mar. 31, 19949%23577 Apr. 1, 1994–Jun. 30, 19949%23577 Jul. 1, 1994–Sep. 30, 199410%25579 Oct. 1, 1994–Dec. 31, 199411%27581 Jan. 1, 1995–Jun. 30, 199511%27581 Apr. 1, 1995–Jun. 30, 199512%29583 Jul. 1, 1995–Sep. 30, 199511%27581 Oct. 1, 1995–Dec. 31, 199511%27581 Jan. 1, 1996–Mar. 31, 199611%75629 Apr. 1, 1996–Jun. 30, 199610%73627 Jul. 1, 1996–Sep. 30, 199611%75629 Oct. 1, 1996–Dec. 31, 199611%75629 Jan. 1, 1997–Mar. 31, 199711%27581 Apr. 1, 1997–Jun. 30, 199711%27581 Jul. 1, 1997–Sep. 30, 199711%27581 Oct. 1, 1997–Dec. 31, 199711%27581 Jan. 1, 1998–Mar. 31, 199811%27581 Apr. 1, 1998–Jun. 30, 199810%25579 Jul. 1, 1998–Sep. 30, 199810%25579 Oct. 1, 1998–Dec. 31, 199810%25579 Jan. 1, 1999–Mar. 31, 19999%23577 Apr. 1, 1999–Jun. 30, 199910%25579 Jul. 1, 1999–Sep. 30, 199910%25579 Oct. 1, 1999–Dec. 31, 199910%25579 Jan. 1, 2000–Mar. 31, 200010%73627 Apr. 1, 2000–Jun. 30, 200011%75629 Jul. 1, 2000–Sep. 30, 200011%75629 Oct. 1, 2000–Dec. 31, 200011%75629 Jan. 1, 2001–Mar. 31, 200111%27581 June 5, 2023 900 Bulletin No. 2023–23 Apr. 1, 2001–Jun. 30, 200110%25579 Jul. 1, 2001–Sep. 30, 20019%23577 Oct. 1, 2001–Dec. 31, 20019%23577 Jan. 1, 2002–Mar. 31, 20028%21575 Apr. 1, 2002–Sep. 30, 20028%21575 Jul. 1, 2002–Sep. 30, 20028%21575 Oct. 1, 2002–Dec. 31, 20028%21575 Jan. 1, 2003–Mar. 31, 20037%19573 Apr. 1, 2003–Jun. 30, 20037%19573 Jul. 1, 2003–Sep. 30, 20037%19573 Oct. 1, 2003–Dec. 31, 20036%17571 Jan. 1, 2004–Mar. 31, 20046%65619 Apr. 1, 2004–Jun. 30, 20047%67621 Jul. 1, 2004–Sep. 30, 20046%65619 Oct. 1, 2004–Dec. 31, 20047%67621 Jan. 1, 2005–Mar. 31, 20057%19573 Apr. 1, 2005–Jun. 30, 20058%21575 Jul. 1, 2005–Sep. 30, 20058%21575 Oct. 1, 2005–Dec. 31, 20059%23577 Jan. 1, 2006–Mar. 31, 20069%23577 Apr. 1, 2006–Jun. 30, 20069%23577 Jul. 1, 2006–Sep. 30, 200610%25579 Oct. 1, 2006–Dec. 31, 200610%25579 Jan. 1, 2007–Mar. 31, 200710%25579 Apr. 1, 2007–Jun. 30, 200710%25579 Jul. 1, 2007–Sep. 30, 200710%25579 Oct. 1, 2007–Dec. 31, 200710%25579 Jan. 1, 2008–Mar. 31, 20089%71625 Apr. 1, 2008–Sep. 30, 20088%69623 Jul. 1, 2008–Sep. 30, 20087%67621 Oct. 1, 2008–Dec. 31, 20088%69623 Jan. 1, 2009–Mar. 31, 20097%19573 Apr. 1, 2009–Jun. 30, 20096%17571 Jul. 1, 2009–Sep. 30, 20096%17571 Oct. 1, 2009–Dec. 31, 20096%17571 Jan. 1, 2010–Mar. 31, 20106%17571 Apr. 1, 2010–Jun. 30, 20106%17571 Jul. 1, 2010–Sep. 30, 20106%17571 Oct. 1, 2010–Dec. 31, 20106%17571 Jan. 1, 2011–Mar. 31, 20115%15569 Apr. 1, 2011–Jun. 30, 20116%17571 Jul. 1, 2011–Sep. 30, 20116%17571 Oct. 1, 2011–Dec. 31, 20115%15569 Jan. 1, 2012–Mar. 31, 20125%63617 Apr. 1, 2012–Jun. 30, 20125%63617 Bulletin No. 2023–23 901 June 5, 2023 Jul. 1, 2012–Sep. 30, 20125%63617 Oct. 1, 2012–Dec. 31, 20125%63617 Jan. 1, 2013–Mar. 31, 20135%15569 Apr. 1, 2013–Jun. 30, 20135%15569 Jul. 1, 2013–Sep. 30, 20135%15569 Oct. 1, 2013–Dec. 31, 20135%15569 Jan. 1, 2014–Mar. 31, 20145%15569 Apr. 1, 2014–Jun. 30, 20145%15569 Jul. 1, 2014–Sep. 30, 20145%15569 Oct. 1, 2014–Dec. 31, 20145%15569 Jan. 1, 2015–Mar. 31, 20155%15569 Apr. 1, 2015–Jun. 30, 20155%15569 Jul. 1, 2015–Sep. 30, 20155%15569 Oct. 1, 2015–Dec. 31, 20155%15569 Jan. 1, 2016–Mar. 31, 20165%63617 Apr. 1, 2016–Jun. 30, 20166%65619 Jul. 1, 2016–Sep. 30, 20166%65619 Oct. 1, 2016–Dec. 31, 20166%65619 Jan. 1, 2017–Mar. 31, 20176%17571 Apr. 1, 2017–Jun. 30, 20176%17571 Jul. 1, 2017–Sep. 30, 20176%17571 Oct. 1, 2017–Dec. 31, 20176%17571 Jan. 1, 2018–Mar. 31, 20186%17571 Apr. 1, 2018–Jun. 30, 20187%19573 Jul. 1, 2018–Sep. 30, 20187%19573 Oct. 1, 2018–Dec. 31, 20187%19573 Jan. 1, 2019–Mar. 31, 20198%21575 Apr. 1, 2019–Jun. 30, 20198%21575 Jul. 1, 2019–Sep. 30, 20197%19573 Oct. 1, 2019–Dec. 31, 20197%19573 Jan. 1, 2020–Mar. 31, 20207%67621 Apr. 1, 2020–Jun. 30, 20207%67621 Jul. 1, 2020–Sep. 30, 20205%63617 Oct. 1, 2020–Dec. 31, 20205%63617 Jan. 1, 2021–Mar. 31, 20215%15569 Apr. 1, 2021–Jun. 30, 20215%15569 Jul. 1, 2021–Sep. 30, 20215%15569 Oct. 1, 2021–Dec. 31, 20215%15569 Jan. 1, 2022–Mar. 31, 20225%15569 Apr. 1, 2022–Jun. 30, 20226%17571 Jul. 1, 2022–Sep. 30, 20227%19573 Oct. 1, 2022–Dec. 31, 20228%21575 Jan. 1, 2023–Mar. 31, 20239%23577 Apr. 1, 2023–Jun. 30, 20239%23577 Jul. 1, 2023–Sep. 30, 20239%23577 June 5, 2023 902 Bulletin No. 2023–23 TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 – PRESENT 1995-1 C.B. RATETABLEPG Jan. 1, 1995–Mar. 31, 19956.5%18572 Apr. 1, 1995–Jun. 30, 19957.5%20574 Jul. 1, 1995–Sep. 30, 19956.5%18572 Oct. 1, 1995–Dec. 31, 19956.5%18572 Jan. 1, 1996–Mar. 31, 19966.5%66620 Apr. 1, 1996–Jun. 30, 19965.5%64618 Jul. 1, 1996–Sep. 30, 19966.5%66620 Oct. 1, 1996–Dec. 31, 19966.5%66620 Jan. 1, 1997–Mar. 31, 19976.5%18572 Apr. 1, 1997–Jun. 30, 19976.5%18572 Jul. 1, 1997–Sep. 30, 19976.5%18572 Oct. 1, 1997–Dec. 31, 19976.5%18572 Jan. 1, 1998–Mar. 31, 19986.5%18572 Apr. 1, 1998–Jun. 30, 19985.5%16570 Jul. 1, 1998–Sep. 30, 19985.5%16570 Oct. 1, 1998–Dec. 31, 19985.5%16570 Jan. 1, 1999–Mar. 31, 19994.5%14568 Apr. 1, 1999–Sep. 30, 19995.5%16570 Jul. 1, 1999–Sep. 30, 19995.5%16570 Oct. 1, 1999–Dec. 31, 19995.5%16570 Jan. 1, 2000–Mar. 31, 20005.5%64618 Apr. 1, 2000–Jun. 30, 20006.5%66620 Jul. 1, 2000–Sep. 30, 20006.5%66620 Oct. 1, 2000–Dec. 31, 20006.5%66620 Jan. 1, 2001–Mar. 31, 20016.5%18572 Apr. 1, 2001–Jun. 30, 20015.5%16570 Jul. 1, 2001–Sep. 30, 20014.5%14568 Oct. 1, 2001–Dec. 31, 20014.5%14568 Jan. 1, 2002–Mar. 31, 20023.5%12566 Apr. 1, 2002–Jun. 30, 20023.5%12566 Jul. 1, 2002–Sep. 30, 20023.5%12566 Oct. 1, 2002–Dec. 31, 20023.5%12566 Jan. 1, 2003–Mar. 31, 20032.5%10564 Apr. 1, 2003–Jun. 30, 20032.5%10564 Jul. 1, 2003–Sep. 30, 20032.5%10564 Oct. 1, 2003–Dec. 31, 20031.5%8562 Jan. 1, 2004–Mar. 31, 20041.5%56610 Apr. 1, 2004–Jun. 30, 20042.5%58612 Bulletin No. 2023–23 903 June 5, 2023 Jul. 1, 2004–Sep. 30, 20041.5%56610 Oct. 1, 2004–Dec. 31, 20042.5%58612 Jan. 1, 2005–Mar. 31, 20052.5%10564 Apr. 1, 2005–Jun. 30, 20053.5%12566 Jul. 1, 2005–Sep. 30, 20053.5%12566 Oct. 1, 2005–Dec. 31, 20054.5%14568 Jan. 1, 2006–Mar. 31, 20064.5%14568 Apr. 1, 2006–Jun. 30, 20064.5%14568 Jul. 1, 2006–Sep. 30, 20065.5%16570 Oct. 1, 2006–Dec. 31, 20065.5%16570 Jan. 1, 2007–Mar. 31, 20075.5%16570 Apr. 1, 2007–Jun. 30, 20075.5%16570 Jul. 1, 2007–Sep. 30, 20075.5%16570 Oct. 1, 2007–Dec. 31, 20075.5%16570 Jan. 1, 2008–Mar. 31, 20084.5%62616 Apr. 1, 2008–Jun. 30, 20083.5%60614 Jul. 1, 2008–Sep. 30, 20082.5%58612 Oct. 1, 2008–Dec. 31, 20083.5%60614 Jan. 1, 2009–Mar. 31, 20092.5%10564 Apr. 1, 2009–Jun. 30, 20091.5%8562 Jul. 1, 2009–Sep. 30, 20091.5%8562 Oct. 1, 2009–Dec. 31, 20091.5%8562 Jan. 1, 2010–Mar. 31, 20101.5%8562 Apr. 1, 2010–Jun. 30, 20101.5%8562 Jul. 1, 2010–Sep. 30, 20101.5%8562 Oct. 1, 2010–Dec. 31, 20101.5%8562 Jan. 1, 2011–Mar. 31, 20110.5%* Apr. 1, 2011–Jun. 30, 20111.5%8562 Jul. 1, 2011–Sep. 30, 20111.5%8562 Oct. 1, 2011–Dec. 31, 20110.5%* Jan. 1, 2012–Mar. 31, 20120.5%* Apr. 1, 2012–Jun. 30, 20120.5%* Jul. 1, 2012–Sep. 30, 20120.5%* Oct. 1, 2012–Dec. 31, 20120.5%* Jan. 1, 2013–Mar. 31, 20130.5%* Apr. 1, 2013–Jun. 30, 20130.5%* Jul. 1, 2013–Sep. 30, 20130.5%* Oct. 1, 2013–Dec. 31, 20130.5%* Jan. 1, 2014–Mar. 31, 20140.5%* Apr. 1, 2014–Jun. 30, 20140.5%* Jul. 1, 2014–Sep. 30, 20140.5%* Oct. 1, 2014–Dec. 31, 20140.5%* June 5, 2023 904 Bulletin No. 2023–23 Jan. 1, 2015–Mar. 31, 20150.5%* Apr. 1, 2015–Jun. 30, 20150.5%* Jul. 1, 2015–Sep. 30, 20150.5%* Oct. 1, 2015–Dec. 31, 20150.5%* Jan. 1, 2016–Mar. 31, 20160.5%* Apr. 1, 2016–Jun. 30, 20161.5%56610 Jul. 1, 2016–Sep. 30, 20161.5%56610 Oct. 1, 2016–Dec. 31, 20161.5%56610 Jan. 1, 2017–Mar. 31, 20171.5%8562 Apr. 1, 2017–Jun. 30, 20171.5%8562 Jul. 1, 2017–Sep. 30, 20171.5%8562 Oct. 1, 2017–Dec. 31, 20171.5%8562 Jan. 1, 2018–Mar. 31, 20181.5%8562 Apr. 1, 2018–Jun. 30, 20182.5%10564 Jul. 1, 2018–Sep. 30, 20182.5%10564 Oct. 1, 2018–Dec. 31, 20182.5%10564 Jan. 1, 2019–Mar. 31, 20193.5%12566 Apr. 1, 2019–Jun. 30, 20193.5%12566 Jul. 1, 2019–Sep. 30, 20192.5%10564 Oct. 1, 2019–Dec. 31, 20192.5%10564 Jan. 1, 2020–Mar. 31, 20202.5%58612 Apr. 1, 2020–Jun. 30, 20202.5%58612 Jul. 1, 2020–Sep. 30, 20200.5%* Oct. 1, 2020–Dec. 31, 20200.5%* Jan. 1, 2021–Mar. 31, 20210.5%* Apr. 1, 2021–Jun. 30, 20210.5%* Jul. 1, 2021–Sep. 30, 20210.5%* Oct. 1, 2021–Dec. 31, 20210.5%* Jan. 1, 2022–Mar. 31, 20220.5%* Apr. 1, 2022–Jun. 30, 20221.5%8562 Jul. 1, 2022–Sep. 30, 20222.5%10564 Oct. 1, 2022–Dec. 31, 20223.5%12566 Jan. 1, 2023–Mar. 31, 20234.5%14568 Apr. 1, 2023–Jun. 30, 20234.5%14568 Jul. 1, 2023–Sep. 30, 2023 4.5%14568 * The asterisk reflects the interest factors for daily compound interest for annual rates of 0.5 percent published in Appendix A of this Revenue Ruling. Bulletin No. 2023–23 905 June 5, 2023 Part III Reference Price for Section 45I Credit for Production of Natural Gas from Marginal Wells During Taxable Years Beginning in Calendar Year 2022 Notice 2023-41 SECTION 1. PURPOSE This notice provides the applicable reference price for qualified natural gas production from qualified marginal wells during taxable years beginning in calen- dar year 2022 for the purpose of deter- mining the marginal well production credit (MWC) under § 45I of the Internal Revenue Code. The applicable reference price for taxable years beginning in cal- endar year 2022 is $3.43 per 1,000 cubic feet (Mcf). This notice also provides the credit amount used for the purpose of determin- ing the MWC for taxable years begin- ning in calendar year 2022. The credit amount is determined using the 2022 inflation adjustment factor of 1.3950 and the applicable reference price of $3.43 per Mcf. The credit amount for taxable years beginning in calendar year 2022 is $0.00 per Mcf. SECTION 2. BACKGROUND Section 45I(a), as it relates to quali- fied natural gas production, provides that, for purposes of § 38, the MWC for any taxable year is an amount equal to the product of (1) the credit amount and (2) the qualified natural gas production that is attributable to the taxpayer. Section 45I(c)(1) provides that “qual- ified natural gas production” means domestic natural gas produced from a qualified marginal well. Section 45I(c)(3) (A) provides that a qualified marginal well is a domestic well (i) the production from which during the taxable year is treated as marginal production under § 613A(c)(6), or (ii) which, during the taxable year (I) has average production of not more than 25 barrel-of-oil equivalents per day, and (II) produces water at a rate not less than 95 percent of total well effluent. Section 613A(c)(6)(D) and (E) pro- vide that “marginal production” means domestic natural gas produced during any taxable year from a property which is a stripper well property for the calendar year in which the taxable year begins. A “stripper well property” is, with respect to any calendar year, any property producing not more than 15 barrel equivalents per day, determined by dividing the average daily production of domestic crude oil and domestic natural gas from producing wells on the property for such calendar year by the number of such wells. Section 45I(c)(2)(A) provides that generally only the first 1,095 barrels or barrel-of-oil equivalents (as defined in § 45K(d)(5)) produced during the taxable year qualify for the MWC. This limitation is proportionately reduced in the case of a short taxable year or in the case of a well that is not capable of production each day of a taxable year. See § 45I(c)(2)(B). The number of wells on which a taxpayer may claim the MWC is not limited. Section 45I(d)(2) provides that to claim the credit a taxpayer must hold an operat- ing interest in the qualified marginal well producing the natural gas to which the credit relates. Under § 45I(d)(1) if a well is owned by more than one owner and the natural gas production exceeds the lim- itation under § 45I(c)(2), the qualifying natural gas production attributable to the taxpayer is determined on the basis of the ratio which taxpayer’s revenue interest in the production bears to the aggregate of the revenue interests of all operating interest owners in the production. Finally, § 45I(d) (3) provides that the MWC is not allowable if the taxpayer is also eligible to claim the § 45K nonconventional sources credit for the taxable year, unless the taxpayer elects not to claim the credit under § 45K for the well. For purposes of § 45I(a)(1), the credit amount is 50 cents (adjusted for inflation) per Mcf of qualified natural gas produc- tion (tentative credit amount). See § 45I(b) (1)(B) and (b)(2)(B). Section 45I(b)(2)(A) and (B) provide that the tentative credit amount (adjusted for inflation) is reduced (but not below zero) to the extent that the applicable reference price exceeds $1.67 (adjusted for inflation). More specifically, § 45I(b) (2)(A) provides that the tentative credit amount (adjusted for inflation) is reduced by an amount which bears the same ratio to the tentative credit amount (adjusted for inflation) as the excess (if any) of the applicable reference price over $1.67 (adjusted for inflation), bears to $0.33 (adjusted for inflation). As a result, the MWC is not available if the applicable reference price for qualified natural gas production is $2.00 (adjusted for inflation) or more. Section 45I(b)(2)(A) also provides that the applicable reference price for a taxable year is the reference price for the calendar year preceding the calendar year in which the taxable year begins. Section 45I(b)(2) (C)(ii) provides that the term “reference price” means, with respect to any calendar year, in the case of qualified natural gas production, the Secretary’s estimate of the annual average wellhead price per Mcf for all domestic natural gas. Section 45I(b)(2)(B) provides that in the case of any taxable year beginning in a calendar year after 2005, each of the dollar amounts contained in § 45I(b)(2)(A) will be increased to an amount equal to such dollar amount multiplied by the inflation adjustment factor for such calendar year (determined under § 43(b)(3)(B) by sub- stituting “2004” for “1990”). SECTION 3. INFLATION ADJUSTMENT FACTOR AND REFERENCE PRICE .1 Inflation Adjustment. The inflation adjustment factor under § 45I(b)(2)(B) for calendar year 2022 is 1.3950. .2 Reference Price. The Secretary’s estimate of the calendar year 2021 annual average wellhead price per Mcf for all domestic natural gas under § 45I(b)(2) (C)(ii) was calculated by applying the Producer Price Index commodity index for “Natural Gas from the Wellhead” June 5, 2023 906 Bulletin No. 2023–23 (WPU053101051) 1 published by the Bureau of Labor Statistics (BLS) as part of its Producer Price Index program, to the 2020 annual average wellhead price ($1.52) published in Notice 2022-18, 2022-18 I.R.B. 1048. The annual Producer Price Index commodity index for natu- ral gas published by the BLS was 47.4 in 2020 and 106.8 in 2021, which implies a ratio of 2021 to 2020 average wellhead prices of 2.253 (106.8/47.4). Therefore, the Secretary’s estimate of the calendar year 2021 annual average wellhead price per Mcf for all domestic natural gas is $3.43 per Mcf (2.253 x $1.52 per Mcf). For years after 2021, the Secretary intends to continue calculating the refer- ence price by application of the Producer Price Index commodity index for “Natural Gas from the Wellhead” (WPU053101051) published by the BLS to the previous year’s reference price. SECTION 4. CALCULATION OF CREDIT AMOUNT Under § 45I(b)(1)(B) and (2)(B), the tentative credit amount used to calculate the MWC for taxable years beginning in calendar year 2022 is $0.70 per Mcf ($0.50 x 1.3950 inflation adjustment fac- tor). Pursuant to the reduction specified in § 45I(b)(2)(A), the tentative credit amount for taxable years beginning in calendar year 2022 is reduced to zero. Specifically, pursuant § 45I(b)(2)(A), the tentative credit amount is reduced (but not below zero) by an amount (the Reduction Amount) which bears the same ratio to such amount as (i) the excess (if any) of the appli- cable reference price over $2.33 ($1.67 x 1.3950 inflation adjustment factor), bears to (ii) $0.46 ($0.33 x 1.3950 inflation adjust- ment factor). The Reduction Amount (as adjusted for inflation) is computed as follows: ReductionAmount TentativeCreditAmount ApplicableReferen = ccePrice Reduction Amount $ $$ $ − − = $. $. . .. . 233 046 070 343233 046 The Reduction Amount is $1.67 ($1.10 ÷ $0.46 x $0.70) and it exceeds the tenta- tive credit amount ($0.70). Therefore, the credit amount used to calculate the MWC for taxable years beginning in calendar year 2022 is $0.00 per Mcf. SECTION 5. EFFECTIVE DATE This notice is effective for qualified natural gas production during taxable years beginning in calendar year 2022. SECTION 6. DRAFTING AND CONTACT INFORMATION The principal author of this notice is Boris Kukso of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice contact Mr. Kukso at (202) 317-6853 (not a toll-free number). 1 https://data.bls.gov/cgi-bin/srgate. The BLS publishes indexes and not actual or average prices. Bulletin No. 2023–23 907 June 5, 2023 Part IV Notice of Proposed Rulemaking Information Reporting and Transfer for Valuable Consideration Rules for Section 1035 Exchanges of Life Insurance and Certain Other Life Insurance Contract Transactions REG-108054-21 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed regulations providing guid- ance on the application of the transfer for valuable consideration rules and associ- ated information reporting requirements for reportable policy sales of interests in life insurance contracts to exchanges of life insurance contracts qualifying for nonrecognition of gain or loss, as well as to certain acquisitions of interests in life insurance contracts in transactions that qualify as corporate reorganizations. The proposed regulations affect parties involved in these life insurance contract transactions, including with respect to payments of reportable death benefits. This document also invites comments on these proposed regulations. DATES: Written or electronic comments and requests for a public hearing must be received by July 10, 2023. Requests for a public hearing must be submitted as pre- scribed in the “Comments and Requests for a Public Hearing” section. ADDRESSES: Commenters are strongly encouraged to submit public comments electronically. Submit electronic submis- sions via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG-108054-21) by following the online instructions for submitting com- ments. Once submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn. The Department of the Treasury (Treasury Department) and the IRS will publish for public availabil- ity any comments submitted to the IRS’s public docket. Send paper submissions to: CC:PA:LPD:PR (REG-108054-21), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Kathryn M. Sneade, (202) 317-6995 (not a toll-free number); con- cerning submissions of comments or requests for a public hearing, Vivian Hayes, (202) 317-6902 (not a toll-free number) or by email to publichearings@ irs.gov (preferred). SUPPLEMENTARY INFORMATION: Background This document contains pro- posed amendments to the Income Tax Regulations (26 CFR part 1) under sec- tions 101 and 6050Y of the Internal Revenue Code (Code). The proposed reg- ulations under sections 101 and 6050Y (proposed regulations) would provide guidance on the application of the rules for determining the amount of death ben- efits excluded from gross income follow- ing reportable policy sales of interests in life insurance contracts under section 101 and the associated information reporting requirements for reportable policy sales under section 6050Y to the exchange of a life insurance contract for another life insurance contract qualifying for non- recognition of gain or loss under section 1035 (section 1035 exchange), as well as to certain acquisitions of interests in life insurance contracts in transactions that qualify as reorganizations under section 368(a) (reorganizations). The proposed regulations would amend final regulations under sections 101 and 6050Y (T.D. 9879) published in the Federal Register (84 FR 58460) on October 31, 2019, as corrected (84 FR 68042) on December 13, 2019 (final regulations). Following the publica- tion of the final regulations in the Federal Register, the Treasury Department and the IRS received letters relating to the application of sections 101 and 6050Y to section 1035 exchanges and reorgani- zations. The proposed regulations would modify the final regulations to address the issues raised in these letters. Development of the Final Regulations The Treasury Department and the IRS published the final regulations to imple- ment legislative changes to the Code made by sections 13520 and 13522 of Public Law 115-97, 131 Stat. 2054, 2148, 2151 (2017), commonly known as the Tax Cuts and Jobs Act (TCJA). Section 13522 of the TCJA amended section 101 by adding new section 101(a) (3) to the Code, which defines the term “reportable policy sale” and provides rules for determining the amount of death benefits excluded from gross income fol- lowing a reportable policy sale. 1 The final regulations under section 101 provide definitions applicable under sections 101 and 6050Y and guidance for determining the amount of death benefits excluded from gross income. For example, §1.101- 1(c)(1) of the final regulations defines “reportable policy sale” to mean, subject 1 Generally, under section 101(a)(1), gross income does not include amounts received (whether in a single sum or otherwise) under a life insurance contract if such amounts are paid by reason of the death of the insured. However, the first sentence of section 101(a)(2) (the transfer for value rule) provides that, in the case of a transfer for a valuable consideration, by assignment or otherwise, of a life insurance contract or any interest therein, the amount excluded from gross income by section 101(a)(1) cannot exceed an amount equal to the sum of the actual value of such consideration and the premiums and other amounts subsequently paid by the transferee. The second sentence of section 101(a)(2) provides that the transfer for value rule does not apply in the case of transfers described in section 101(a)(2)(A) or (B). Section 101(a)(2)(A) (the carryover basis exception) applies if the contract or interest therein has a basis for determining gain or loss in the hands of a transferee determined in whole or in part by reference to such basis of such contract or interest therein in the hands of the transferor. Section 101(a)(2)(B) applies if the transfer is to the insured, to a partner of the insured, to a partnership in which the insured is a partner, or to a corporation in which the insured is a shareholder or officer. However, section 101(a)(3)(A) provides that the exceptions in the second sentence of section 101(a)(2) do not apply in the case of a transfer of a life insurance contract, or any interest therein, that is a reportable policy sale. June 5, 2023 908 Bulletin No. 2023–23 to certain exceptions, any direct or indi- rect acquisition of an interest in a life insurance contract if the acquirer has, at the time of the acquisition, no substantial family, business, or financial relationship with the insured apart from the acquirer’s interest in the life insurance contract. Section 13520 of the TCJA added sec- tion 6050Y to chapter 61 (Information and Returns) in subtitle F of the Code. Section 6050Y(a) requires a person who acquires a life insurance contract or any interest in a life insurance contract in a reportable policy sale to report certain information about payments made in the sale. Section 6050Y(b) requires issuers of life insur- ance contracts to report certain informa- tion upon notice of a reportable policy sale or a transfer of a life insurance contract to a foreign person. Section 6050Y(c) requires a payor of reportable death ben- efits (defined by section 6050Y(d)(4) as amounts paid by reason of the death of the insured under a life insurance contract that has been transferred in a reportable policy sale) to report certain information about such payments. Section 6050Y provides that each of the returns required by section 6050Y is to be made “at such time and in such manner as the Secretary shall pre- scribe.” 2 The final regulations under sec- tion 6050Y implement section 6050Y by specifying the manner in which and time at which the information reporting obliga- tions imposed by section 6050Y must be satisfied. The final regulations also pro- vide definitions and rules that govern the application of the information reporting obligations. The final regulations were adopted after consideration of public comments received on proposed regulations under sections 101 and 6050Y (REG-103083- 18) published in the Federal Register (84 FR 11009) on March 25, 2019 (2019 proposed regulations), and a public hear- ing held on June 5, 2019. Additionally, the Treasury Department and the IRS received comments in response to Notice 2018-41, 2018-20 I.R.B. 584, which described the regulations the Treasury Department and the IRS expected to propose under sec- tions 101 and 6050Y, and considered these comments in developing the rules in the 2019 proposed regulations. Development of the Section 1035 Exchange Provisions of the Final Regulations Prior to amendment in 2019, the regu- lations under section 101 did not explic- itly address section 1035 exchanges. Comments received on Notice 2018-41 suggested that the person to whom a life insurance contract is issued (that is, the original policyholder) should not be con- sidered an “acquirer” for purposes of sec- tion 6050Y(a), which imposes reporting obligations on any person who acquires a life insurance contract or any interest in a life insurance contract in a report- able policy sale. See 84 FR 11009, 11016. In response, §1.101-1(e)(2) of the 2019 proposed regulations clarified that the issuance of a life insurance contract to a policyholder, other than the issuance of a policy in an exchange pursuant to section 1035, is not a transfer of an interest in a life insurance contract. The preamble to the 2019 proposed regulations requested comments on whether the regulations should include additional provisions regarding the treat- ment of section 1035 exchanges of life insurance contracts. See 84 FR 11009, 11019. As described in the preamble to the final regulations, one commenter on the 2019 proposed regulations recommended that no additional provisions be added to the regulations for this circumstance, stating that the acquirer of a life insur- ance contract in a reportable policy sale would be unlikely to meet the state law requirements for an insurable interest in the insured and, consequently, would not be able to make a section 1035 exchange. See 84 FR 58460, 58465. Another com- menter recommended that the statement in §1.101-1(e)(2) of the 2019 proposed regu- lations regarding section 1035 exchanges be deleted or amended to eliminate any suggestion that such transactions, by themselves, can be reportable policy sales. The commenter acknowledged that in a section 1035 exchange, the new carrier acquires an interest in the old policy, but advocated against treating that acquisition as a reportable policy sale. As explained in the preamble to the final regulations, the reference in §1.101-1(e)(2) to section 1035 exchanges was not intended to imply that the transfer of a policy to an insurance company in a section 1035 exchange would be a report- able policy sale. See 84 FR 58460, 58465. Rather, the concern prompting the refer- ence to section 1035 exchanges related to the possibility that a policy transferred in a reportable policy sale subsequently could be exchanged for a new policy in an exchange pursuant to section 1035 and that, absent the reference in §1.101-1(e) (2), the death benefits paid under the new policy might not be reported under section 6050Y(c). Section 1.101-1(e)(2) of the 2019 pro- posed regulations was adopted as proposed in the final regulations, but in response to the comments received on section 1035 exchanges, §1.101-1(c)(2)(iv) of the final regulations provides that the acquisition of a life insurance contract by an insur- ance company in an exchange pursuant to section 1035 is not a reportable pol- icy sale. Additionally, §1.101-1(c)(2)(v) of the final regulations provides that the acquisition of a life insurance contract by a policyholder in an exchange pursuant to section 1035 is not a reportable policy sale if the policyholder has a substantial fam- ily, business, or financial relationship with the insured, apart from its interest in the life insurance contract, at the time of the exchange. Based on a comment received on the 2019 proposed regulations, a sit- uation in which the policyholder making a section 1035 exchange does not have a substantial family, business, or financial relationship with the insured should rarely arise due to state law insurable interest requirements. Should this situation arise, however, the final regulations provide cer- tain exceptions to the reporting require- ments that generally apply to reportable policy sales. See §1.6050Y-2(f)(3) of the final regulations (providing that, with respect to the issuance of a life insurance contract in a section 1035 exchange, the acquirer is not required to file the informa- tion return required by section 6050Y(a) (1) and §1.6050Y-2(a) of the final regula- tions); §1.6050Y-3(f)(3) of the final regu- lations (providing that the issuer of a new life insurance contract in a section 1035 exchange is not required to file a return or 2 Section 7701(a)(11)(B) provides that when used in the Code, the term “Secretary” means the Secretary of the Treasury or her delegate. Bulletin No. 2023–23 909 June 5, 2023 furnish a statement to the seller under sec- tion 6050Y(b) and §1.6050Y-3 of the final regulations). Additionally, the final reg- ulations provide certain rules applicable to section 1035 exchanges to clarify the reporting required with respect to section 1035 exchanges that are reportable policy sales. See §1.6050Y-1(a)(8)(ii) (providing that, in the case of the issuance of a life insurance contract to a policyholder in an exchange pursuant to section 1035, the issuer of the new contract is the 6050Y(a) issuer with respect to whom the acquirer has reporting obligations under section 6050Y(a) and §1.6050Y-2 of the final regulations). Letters Received on the Section 1035 Exchange Provisions of the Final Regulations Following the publication of the final regulations in the Federal Register, the Treasury Department and the IRS received letters relating to the application of sections 101 and 6050Y to section 1035 exchanges under the final regulations. One letter indicated that, in at least some cases, the final regulations under section 101 regarding reportable pol- icy sales appear to treat a section 1035 exchange as a transfer for value that can cause the death benefits to become taxable. The letter said that this treatment appears to arise even when neither the contract given in the exchange nor any predeces- sor contract has been involved in a report- able policy sale. The author of the letter requested guidance that the issuance of a life insurance contract in a section 1035 exchange is not a transfer of an interest in the contract to the owner for purposes of the transfer for value rule and provided support for the position that treating a sec- tion 1035 exchange as a transfer for value is inconsistent with the relevant statutes, congressional intent, sound tax policy, and long-standing interpretations of the law. The author of another letter took a con- trary position, stating that a section 1035 exchange has always (before the TCJA was enacted, as well as after) constituted a transfer of a life insurance contract for pur- poses of section 101(a)(2) that qualifies for the exception set forth in section 101(a)(2) (A) to the transfer for value rule for con- tracts held with a transferred basis, com- monly referred to as the “carryover basis” exception. This author advocated against guidance concluding that the issuance of a life insurance contract in a section 1035 exchange is not a transfer of an interest in the contract to the owner for purposes of the transfer for value rule, suggesting that to do so would be to adopt a policy choice that was specifically rejected by Congress with the enactment of section 101(j). 3 The author remarked that section 101(j) was enacted in response to concerns that despite state insurable interest rules, com- panies were acquiring insurance on per- sons whose relationship with the company was too attenuated and were doing so without the consent (or even knowledge) of such persons. Development of Exceptions Related to Ordinary Course Trade or Business Acquisitions in the Final Regulations Several commenters on Notice 2018- 41 suggested that acquisitions of life insurance contracts, or interests therein, in ordinary course business transactions in which one trade or business acquires another trade or business that owns life insurance on the lives of former employ- ees or directors should not be reportable policy sales. The 2019 proposed regu- lations included provisions that exclude certain of these transactions from the defi- nition of reportable policy sales. Public comments remarked favorably on these provisions, which were adopted by the final regulations. See §1.101-1(d)(2) of the final regulations (defining the term “sub- stantial business relationship” to include the relationship between an insured and an acquirer in certain circumstances involv- ing the acquirer’s acquisition of an active trade or business with respect to which the insured is an employee within the meaning of section 101(j)(5) 4 or was a director, highly compensated employee, or highly compensated individual); §1.101-1(d)(4) (i) of the final regulations (providing a special rule for indirect acquisitions that deems the acquirer of an interest in a life insurance contract to have a substantial business or financial relationship with the insured if the direct holder of the interest in the life insurance contract has such a relationship); and §1.101-1(e)(3)(ii) of the final regulations (defining the term “indirect acquisition of an interest in a life insurance contract” to exclude an acqui- sition through ownership of stock in a C corporation provided that no more than 50 percent of the gross value of the assets of the C corporation consists of life insur- ance contracts). As described in the preamble to the final regulations, one commenter on the 2019 proposed regulations remarked that §1.101-1(e)(3)(ii) results in the disparate treatment of policies transferred directly in asset reorganizations and indirectly in stock reorganizations. See 84 FR 58460, 58466-58468. That is, with respect to pol- icies held by a C corporation, not more than 50 percent of the gross value of the assets of which consists of life insurance contracts, an indirect acquisition of the policies, such as through a stock reorgani- zation under section 368(a)(1)(B), would not result in a reportable policy sale, but a direct acquisition of the policies, such as through an asset reorganization under section 368(a)(1)(A), could result in a reportable policy sale. The commenter asserted that this disparate treatment is inappropriate and not warranted as a mat- ter of good tax policy and requested that the 2019 proposed regulations be revised to provide that any transfer of an inter- est in a life insurance contract as part of a reorganization of a C corporation con- ducted in the ordinary course of business is eligible for an exception to being treated as a reportable policy sale under section 101(a)(3)(B), regardless of whether the target C corporation survives the reorga- nization transaction unless, immediately 3 Section 101(j) generally provides that in the case of an employer-owned life insurance contract, the amount of death benefits excluded from gross income under section 101(a) is limited, unless certain notice and consent requirements are met and either an exception based on the insured’s status applies (because the insured was an employee in the twelve months preceding death or the insured was, at the time the life insurance contract was issued, a director, highly compensated employee, or highly compensated individual) or an exception for amounts paid to the insured’s heirs applies. 4 Section 101(j)(5) defines the term “employee” to include an officer, director, and highly compensated employee (within the meaning of section 414(q)). June 5, 2023 910 Bulletin No. 2023–23 prior to the acquisition, more than 50 per- cent of the gross value of the assets of the C corporation consists of life insurance contracts. The commenter acknowledged that the 2019 proposed regulations provide certain exceptions that could apply to mergers qualifying as reorganizations in which the target goes out of existence and the surviving corporation continues to hold the life insurance contract, but asserted that having to determine in these types of mergers whether a particular exception applies on a contract-by-contract basis is unduly complex and a trap for the unwary. The commenter further asserted that this burdensome exercise does not serve the purpose of the change in the statute. The commenter’s recommendation was not adopted in the final regulations for reasons further described in the pre- amble to the final regulations. Briefly, the final regulations preserve the different results for stock and asset reorganizations because the Treasury Department and the IRS concluded that significant differences between the two types of reorganization justify different treatment for purposes of sections 101 and 6050Y. For instance, an acquirer of an interest in an entity may have limited ability to determine what types of assets an entity owns, or to obtain from the entity information necessary to report on the entity’s assets. Further, the Treasury Department and the IRS had not identified any clear policy reason why the complete exclusion of death benefits from policies held by a corporation should carry over when ownership of the insur- ance policy is transferred but a substantial business or financial relationship does not exist between the acquirer and insured. Regarding the commenter’s remark on the burden of a case-by-case review of policies in certain types of transactions, the pre- amble to the final regulations noted that, in asset reorganizations, it would in any case be necessary to review the life insur- ance contracts directly acquired on a con- tract-by-contract basis in order to update insurance contract ownership and benefi- ciary information with the relevant insur- ance company. Letter Received on Exceptions Related to Ordinary Course Trade or Business Acquisitions in the Final Regulations Following the publication of the final regulations in the Federal Register, the Treasury Department and the IRS received a letter relating to the disparate treatment of different types of ordinary course trade or business acquisitions under the final regulations. The author noted that, since the issuance of the final regulations, the life insurance industry has seen a number of circumstances in which transactions that are wholly unre- lated to the transfer of life insurance are nevertheless subject to negative outcomes under the reportable policy sale rules as a result of the transactions’ legal form, even though transactions with identical or nearly identical economic substance but a different legal form would be treated more favorably. The author noted that the ordinary course acquisitive transactions of concern do not in any way turn on tax outcomes pertaining to the meagre amounts of life insurance that are commonly at issue, and asserted that there are a number of legal, economic, and business practice reasons why it is highly unlikely that these same transactions can simply be restructured to meet the form- driven rules of the final regulations. The author suggested the addition of an excep- tion from the reportable policy sale rules for acquisitive transactions involving enti- ties that own a de minimis amount of life insurance (for example, as a proportion of the total value of the transaction). More specifically, the author proposed that the Treasury Department and the IRS consider a further exception for transactions in which the amount of life insurance acquired as a result of the acquisitive transaction (and any related acquisitions) is five percent or less of the value of the stock, assets, or both acquired. Explanation of Provisions Section 1035 Exchanges As stated in the preamble to the final regulations, the concern prompting the ref- erences to section 1035 exchanges in the 2019 proposed regulations and the final regulations related to the possibility that a policy transferred in a reportable pol- icy sale subsequently could be exchanged for a new policy in an exchange pursuant to section 1035 and that the death bene- fits paid under the new policy might not be reported under section 6050Y(c). See 84 FR 58460, 58465. The section 1035 exchange provisions were not intended to change the treatment under section 101 of the policyholder’s new contract if the pol- icyholder’s old contract was never trans- ferred in a reportable policy sale. However, the Treasury Department and the IRS have determined that such a change was inadvertently effected by the final regulations. Prior to the issuance of the final regulations, the transfer for value rule of section 101(a)(2) did not apply as the result of a section 1035 exchange of a life insurance contract by the original pol- icyholder of the contract. However, under §1.101-1(e)(2) of the final regulations, the issuance of a new policy in a section 1035 exchange is a transfer of an interest in a life insurance contract. Because the new policy is issued in exchange for an old policy, the exchange is a transfer for valu- able consideration under §1.101-1(f)(5) of the final regulations. Therefore, the new policy is subject to the transfer for value rule of section 101(a)(2), unless one of the exceptions in section 101(a)(2)(A) and (B) applies. For either exception to apply, there must be a substantial business, fam- ily, or financial relationship between the insured and the acquirer of the new pol- icy. The Treasury Department and the IRS have determined that the carryover basis exception of section 101(a)(2)(A) would not apply in this case. 5 Therefore, the application of the transfer for value 5 The Code recognizes two categories of substituted basis property: transferred basis property and exchanged basis property. See section 7701(a)(42). Property has a “transferred basis” for Federal tax purposes when the same property is transferred from one person to another but keeps the same basis. See section 7701(a)(43). Property has an “exchanged basis” for Federal tax purposes when a person’s basis in new property is determined by reference to other property held by that same person. See section 7701(a)(44). The section 101(a)(2) “carryover basis” exception applies to a transfer if the transferred life insurance contract or interest therein has a basis for determining gain or loss in the hands of a transferee determined in whole or in part by reference to such basis of such contract or interest therein in the hands of the transferor. That is, the exception applies if the contract is transferred basis property. However, the basis of a new policy issued in a section 1035 exchange to the same taxpayer is the same as the basis of the old policy held by that taxpayer, decreased in the amount of any money received by the taxpayer and increased in the amount of gain or decreased in the amount of loss to the taxpayer that was recognized on such exchange. See sections 1035(d)(2) and 1031(d). The new policy is thus exchanged basis property, not transferred basis property. It is therefore ineligible for the carryover basis exception of section 101(a)(2)(A). Bulletin No. 2023–23 911 June 5, 2023 rule would generally limit the amount of death benefits excludable under section 101(a)(1), even in the absence of a report- able policy sale, unless one of the section 101(a)(2)(B) exceptions applies (that is, the transfer is to the insured, to a partner of the insured, to a partnership in which the insured is a partner, or to a corpora- tion in which the insured is a shareholder or officer). The Treasury Department and the IRS have determined that this result is inconsistent with the prior treatment of new policies issued in section 1035 exchanges. Accordingly, the proposed regulations are intended to correct the unintended change effected by the final regulations to the treatment under section 101 of a life insurance contract issued to a pol- icyholder in a section 1035 exchange, while continuing to address the concern that the reporting of death benefits paid under section 6050Y(c) could be avoided by exchanging a policy transferred in a reportable policy sale for a new policy in a section 1035 exchange, as well as the concern that a policyholder could attempt to avoid the limitation on the excludabil- ity of death benefits resulting from the application of the transfer for value rule through a section 1035 exchange. The proposed regulations would accomplish these objectives by revising the final regu- lations in four ways. 1. Modify definition of a transfer of an interest in a life insurance contract First, proposed §1.101-1(e)(2) would revise the definition of a transfer of an interest in a life insurance contract in §1.101-1(e)(2) of the final regulations to exclude the issuance of a life insur- ance contract to a policyholder, without qualification. As such, any issuance of a life insurance contract to a policyholder, including in a section 1035 exchange, is not a transfer of an interest in a life insur- ance contract and therefore cannot be a reportable policy sale under §1.101-1(c) (1) of the final regulations. The Treasury Department and the IRS do not view this position as inconsistent with the purpose of section 101(j). See Public Law 109- 280, §863(d), 120 Stat. 780, 1024 (2006) (providing that section 101(j) generally applies to life insurance contracts issued after August 17, 2006, “except for a con- tract issued after such date pursuant to an exchange described in section 1035...for a contract issued on or prior to that date”); Notice 2009-48, 2009-1 C.B. 1085 (pro- viding that further notice and consent is not required by section 101(j) with regard to a contract received in a section 1035 exchange for an employer-owned life insurance contract issued after August 17, 2006, for which the notice and consent requirements were previously satisfied if either (1) the existing consent remains valid, or (2) the exchange does not result in a material change in the death benefit or other material change in the contract). The proposed regulations make con- forming changes to remove the exception in §1.101-1(c)(2)(v) of the final regula- tions (providing that the acquisition of a life insurance contract by a policyholder in a section 1035 exchange is not a report- able policy sale if the policyholder has a substantial family, business, or financial relationship with the insured, apart from its interest in the life insurance contract, at the time of the exchange); to remove §§1.6050Y-2(f)(3) and 1.6050Y-3(f)(3) of the final regulations (providing cer- tain reporting requirement exceptions related to section 1035 exchanges that are no longer necessary); and to remove §1.6050Y-1(a)(8)(ii) of the final regula- tions (providing a definitional rule related to section 1035 exchanges that is no lon- ger necessary). 2. New rule addressing section 1035 exchanges Second, proposed §1.101-1(b)(2)(iv) provides a new rule that would apply to the exchange of an interest in a life insurance contract (old interest) in a section 1035 exchange for an interest in a newly issued life insurance contract (new interest) and provides guidance on how to determine the amount of the proceeds attributable to the new interest that is excludable from gross income under section 101(a), provided the new interest is not subsequently trans- ferred or exchanged. If the new interest is subsequently transferred or exchanged, the amount excludable from gross income under section 101(a) would be determined under the rule in §1.101-1(b) applicable to the type of transfer or exchange involved. The limitation (or lack of any limitation) on the amount of the proceeds attribut- able to the old interest that is excludable from gross income applies under proposed §1.101-1(b)(2)(iv) to the new interest for which it is exchanged, just as the basis of the old interest applies to the new interest. See sections 1031(d) and 1035(d)(2) (pro- viding that a contract acquired in a section 1035 exchange has the same basis as the contract for which it was exchanged). The IRS has previously treated certain attributes of contracts exchanged in sec- tion 1035 exchanges as applying to the new contracts acquired. See, e.g., Rev. Rul. 92-95, 1992-2 C.B. 43 (for purposes of section 72(q)(2)(I) and 72(u)(4), the “date of purchase” of an annuity contract acquired in a section 1035 exchange for another annuity contract is the date of purchase of the annuity contract that was exchanged for the new contract). See also section 7702A(a)(2) (defining a modified endowment contract to include any con- tract exchanged for a contract that is a modified endowment contract under sec- tion 7702A(a)(1)). Proposed §1.101-1(b)(2)(iv) ensures that the acquirer of an interest in a life insurance contract in a reportable policy sale cannot avoid any limit imposed by section 101(a)(2) and (a)(3) on the amount of the proceeds attributable to the interest that is excludable from gross income under section 101(a)(1) by simply exchanging the interest for a new life insurance con- tract. Under proposed §1.101-1(b)(2)(iv) (A), if the entire amount of the proceeds attributable to the old interest would have been excludable from gross income under section 101(a) at the time of the section 1035 exchange, the entire amount of the proceeds attributable to the new interest is excludable from gross income. Under proposed §1.101-1(b)(2)(iv)(B), if less than the entire amount of the proceeds attributable to the old interest would have been excludable from gross income under section 101(a) at the time of the section 1035 exchange, the amount of the pro- ceeds attributable to the new interest that is excludable from gross income is limited to the sum of the amount of the proceeds attributable to the old interest that would have been excludable at the time of the section 1035 exchange, and the premiums and other amounts subsequently paid with June 5, 2023 912 Bulletin No. 2023–23 respect to the new interest by the policy- holder. Proposed §1.101-1(b)(2)(iv)(B) also provides that, when determining the premiums and other amounts subsequently paid by the policyholder with respect to the new interest, the amounts paid by the policyholder are reduced, but not below zero, by amounts received by the policy- holder under the new life insurance con- tract that are not received as an annuity, to the extent excludable from gross income under section 72(e). The proposed regu- lations also make conforming changes to §1.101-1(a)(1) of the final regulations and the headings of §1.101-1(b) and (b)(2) of the final regulations to reflect the addition of proposed §1.101-1(b)(2)(iv). The pro- posed regulations also add two examples to illustrate the application of the rules set forth in proposed §1.101-1(b)(2)(iv). See proposed §1.101-1(g)(17) and (18). 3. Modification to definition of reportable policy sale Third, the proposed regulations would modify the definition of “reportable policy sale” to address section 1035 exchanges. Specifically, proposed §1.101-1(c)(3) addresses situations in which an old interest is exchanged in a section 1035 exchange for a new interest, and the old interest was previously transferred for valuable consideration in a reportable policy sale or is treated, under proposed §1.101-1(c)(3), as an interest in a life insurance contract that was previously transferred for valuable consideration in a reportable policy sale. In such cases, the new interest is treated, for purposes of §1.101-1, as an interest in a life insurance contract that was previously transferred for valuable consideration in a reportable policy sale. Under the proposed rule, the old inter- est’s attribute of having been previously transferred for valuable consideration in a reportable policy sale applies to the new interest acquired in a section 1035 exchange. Whether or not an interest in a life insurance policy was previously trans- ferred in a reportable policy sale is rele- vant for the purpose of determining the applicability of certain provisions in the final regulations. See, e.g., §1.101-1(b)(1) (ii)(B)(1) of the final regulations (applies only if the interest was not previously transferred for valuable consideration in a reportable policy sale); §1.101-1(b) (1)(ii)(B)(2) and (3) of the final regula- tions (apply if the interest was previously transferred for valuable consideration in a reportable policy sale); §1.101-1(b)(2)(i) of the final regulations (includes a special rule for interests that have not previously been transferred for value in a reportable policy sale). The Treasury Department and the IRS have previously treated (and con- tinue to treat) other attributes of contracts exchanged in section 1035 exchanges as applying to the new contracts acquired, so the new contract is treated the same as the old contract. See, e.g., Rev. Rul. 92-95. Similarly, the proposed rule ensures that the new interest is treated the same as the old interest when applying rules that con- sider whether an interest in a life insur- ance contract was previously transferred in a reportable policy sale. See proposed §1.101-1(c)(3). Proposed §1.101-1(c)(3) also provides that, for purposes of §§1.6050Y-3 and 1.6050Y-4, the section 1035 exchange is treated as the transfer of an interest in the life insurance contract in a reportable pol- icy sale if the old interest previously was transferred for valuable consideration in a reportable policy sale (or is treated, under proposed §1.101-1(c)(3), as an interest in a life insurance contract that previously was transferred for valuable consideration in a reportable policy sale). Accordingly, the designation of death benefits as reportable death benefits is an attribute that transfers from the old interest to the new interest in a section 1035 exchange. See also pro- posed §1.6050Y-1(a)(12). The Treasury Department and the IRS previously have treated other attributes of contracts exchanged in section 1035 exchanges as transferring to the new contracts acquired. In this case, the proposed rule ensures that death benefits under the new interest are treated the same as under the old interest for purposes of reporting under section 6050Y(c) and §1.6050Y-4. These rules are necessary to ensure that the acquirer of an interest in a life insurance contract in a reportable policy sale cannot avoid the designation of the death benefits as report- able death benefits and the associated reporting of the payment of the reportable death benefits by simply exchanging the interest for a new life insurance contract. The proposed regulations also make con- forming changes to §1.101-1(c)(1) of the final regulations to reflect the addition of proposed §1.101-1(c)(3). 4. Conforming modifications to §§1.6050Y-1 through 1.6050Y-4 Finally, consistent with proposed §1.101-1(c)(3), the proposed regula- tions would modify several definitions in §1.6050Y-1 of the final regulations and modify the reporting rules under §§1.6050Y-3 and 1.6050Y-4 of the final regulations to ensure proper reporting of reportable death benefits paid under con- tracts issued in section 1035 exchanges. Notably, however, the section 1035 exchange rules of proposed §1.101-1(c)(3) do not apply for purposes of §1.6050Y-2 of the final regulations, and no report- ing is required under §1.6050Y-2 of the final regulations at the time of a section 1035 exchange, even if the new interest is exchanged for an old interest that was pre- viously transferred for valuable consider- ation in a reportable policy sale. Proposed §1.6050Y-1(a)(14) provides that the term “reportable policy sale” has the meaning given to it in §1.101- 1(c)(1), except as otherwise provided in §1.6050Y-1. Proposed §1.6050Y-1(a) (12) provides that the term “reportable death benefits” means amounts paid by reason of the death of the insured under a life insurance contract that are attrib- utable to an interest in the contract that was transferred in a reportable policy sale described in §1.101-1(c)(1) of the final regulations or proposed §1.101-1(c)(3). Accordingly, payors of such amounts are subject to the reporting requirements of section 6050Y(c) and §1.6050Y-4 of the final regulations. Proposed §1.6050Y- 1(a)(1) and (2) modify the definitions of “acquirer” and “buyer,” respectively, to treat as a buyer for purposes of reporting under section 6050Y(c) and §1.6050Y-4 a person to whom an interest in a life insurance contract is issued in a section 1035 exchange treated as the transfer of an interest in the life insurance contract in a reportable policy sale under proposed §1.101-1(c)(3). See §1.6050Y-4(a)(5) of the final regulations (requiring a payor of reportable death benefits to report the pay- or’s estimate of investment in the contract Bulletin No. 2023–23 913 June 5, 2023 with respect to the buyer, limited to the payor’s estimate of the buyer’s investment in the contract with respect to the interest for which the reportable death benefits payment recipient was paid). To ensure proper reporting of report- able death benefits paid under contracts issued in section 1035 exchanges, pro- posed §1.6050Y-3(a) requires report- ing by each “6050Y(b) issuer” that is a “section 1035 issuer” with respect to each “seller” at the time of the exchange. Proposed §1.6050Y-1(a)(8)(iii)(C) pro- vides that the term “6050Y(b) issuer” includes any person that is a section 1035 issuer or the designee of a section 1035 issuer. Proposed §1.6050Y-1(a)(8)(v) defines the term “section 1035 issuer” to include the issuer of the old interest (old issuer) and the issuer of the new interest (new issuer) in a section 1035 exchange that is treated as the transfer of an interest in the life insurance contract in a report- able policy sale under proposed §1.101- 1(c)(3). The old issuer is a section 1035 issuer described in proposed §1.6050Y- 1(a)(8)(v)(A), and the new issuer is a section 1035 issuer described in proposed §1.6050Y-1(a)(8)(v)(B). However, an issuer is not considered a section 1035 issuer if it never received information indicating that the interest in a life insur- ance contract with respect to which it is an issuer was transferred in a reportable policy sale under §1.101-1(c)(1) or (3). See proposed §1.6050Y-1(a)(8)(v)(A) and (B). Proposed §1.6050Y-1(a)(18) provides that, for purposes of reporting by both the old issuer and the new issuer, the term “seller” includes any person that holds an interest in a life insurance contract that has been transferred in a reportable policy sale under §1.101-1(c)(1) or (3) and exchanges that interest for an interest in a new life insurance contract in an exchange pursu- ant to section 1035. The information to be provided by a section 1035 issuer includes the name, address, and taxpayer identifi- cation number of the seller, the investment in the contract with respect to the seller, and any other information that is required by the form or its instructions. It is antici- pated that this reporting will be completed on Form 1099-SB, “Seller’s Investment in Life Insurance Contract”, and the infor- mation to be provided will also include the policy number (old or new, as applicable) and identification of the transaction as a section 1035 exchange. Under proposed §1.6050Y-3(a)(3), section 1035 issuers are not required to report the amount the seller would have received if the seller had sur- rendered the life insurance contract. The proposed regulations make con- forming changes to §1.6050Y-3(c) of the final regulations to provide the time and place for filing returns required to be made by section 1035 issuers. See pro- posed §1.6050Y-3(c) (section 1035 issu- ers file returns at the same time and place as other 6050Y(b) issuers). Proposed §1.6050Y-3(d)(1) provides that each sec- tion 1035 issuer must furnish a statement to each seller who makes a section 1035 exchange, just as other 6050Y(b) issu- ers are required to furnish a statement to sellers, and proposed §1.6050Y-3(d)(2) imposes the same deadline for doing so. Additionally, proposed §1.6050Y-3(d)(1) requires the old issuer to furnish a state- ment to the new issuer in a section 1035 exchange providing information about the interest being exchanged. This state- ment serves to provide notice to the new issuer that the old interest was transferred in a reportable policy sale and, therefore, that the new interest will be treated as an interest in a life insurance contract that has been transferred in a reportable policy sale and that death benefits paid under the new interest are reportable death benefits. Proposed §1.6050Y-3(d)(2) provides that this statement must be furnished within 30 days of the section 1035 exchange. The proposed regulations also mod- ify the exception to reporting set forth in §1.6050Y-4(e)(3) of the final regu- lations. Section 1.6050Y-4(e)(3) of the final regulations provides an exception from reporting under §1.6050Y-4 of the final regulations if the payor never received, and has no knowledge of any issuer having received, a reportable pol- icy sale statement (RPSS) with respect to the interest in a life insurance contract with respect to which the reportable death benefits are paid. However, death benefits paid with respect to the new interest may be reportable death benefits even though an RPSS was never furnished with respect to the new interest. Accordingly, the exist- ing exception would apply too broadly in the context of section 1035 exchanges. Proposed §1.6050Y-4(e)(3) therefore imposes an additional requirement if the reportable death benefits are paid with respect to an interest in a life insurance contract issued in a section 1035 exchange. In that case, the exception applies only if the payor also never received, and has no knowledge of any issuer having received, a statement described in §1.6050Y-3(d)(1) from a section 1035 issuer or other infor- mation indicating that the issuance of the contract is treated as a transfer of an inter- est in the contract in a reportable policy sale under §1.101-1(c)(3). Ordinary Course Trade or Business Acquisitions As noted in the preamble to the final regulations, C corporations are not fre- quently used as vehicles for investing in life insurance contracts covering insureds with respect to which the corporation does not have a substantial business, financial, or family relationship at the time the con- tract is issued because a corporate level income tax applies to corporate earn- ings in addition to income tax on distri- butions at the shareholder level. See 84 FR 58460, 58467. After consideration of the comments and letter received on the 2019 proposed regulations and the final regulations, respectively, regarding ordi- nary course trade or business acquisitions, the Treasury Department and the IRS are proposing an exception for certain direct acquisitions of interests in life insurance contracts from a C corporation. Proposed §1.101-1(c)(2)(v) provides that the direct acquisition of an inter- est in a life insurance contract from a C corporation by a C corporation is not a reportable policy sale if (1) the acquisition results from a transaction that qualifies as a reorganization under section 368(a); (2) immediately before the acquisition, (i) the interest is held by a C corporation that conducts an active trade or business within the meaning of §1.367(a)-2(d)(2) and (3), (ii) the C corporation does not engage in a trade or business of investing in interests in life insurance contracts, and (iii) no more than 5 percent of the gross value of the assets of the C corporation con- sists of life insurance contracts; and (3) immediately after the acquisition, (i) the acquiring C corporation does not June 5, 2023 914 Bulletin No. 2023–23 engage in a trade or business of invest- ing in interests in life insurance con- tracts, and (ii) not more than 5 percent of the gross value of the assets of the C corporation consists of life insurance contracts. This exception would pro- vide relief from the reportable policy sale rules for acquisitions of interests in life insurance contracts through certain ordinary course trade or business acqui- sitions while preserving different treat- ment for direct and indirect acquisitions of interests in life insurance contracts in other cases. The proposed regulations modify Example 11 in §1.101-1(g) (11) of the final regulations to reflect the addition of the exception in pro- posed §1.101-1(c)(2)(v). See proposed §1.101-1(g)(11). Applicability Dates Proposed §§1.101-1(b)(2)(iv) and (c) (3) are proposed to apply to section 1035 exchanges occurring on or after the date the Treasury decision adopting these reg- ulations as final regulations is published in the Federal Register, and proposed §1.101-1(c)(2)(v) is proposed to apply to any acquisition of an interest in a life insurance contract occurring on or after the date the Treasury decision adopting these regulations as final regulations is published in the Federal Register. See proposed §1.101-6(c). However, it is pro- posed that a taxpayer may choose to apply §1.101-1(b)(2)(iv), (c)(2)(v), and (c)(3) of the regulations set forth in the Treasury decision adopting these regulations as final regulations to all section 1035 exchanges and acquisitions occurring after December 31, 2017, and before the date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register. See section 7805(b) (7) of the Code. Alternatively, a taxpayer may rely on proposed §1.101-1(b)(2)(iv), (c)(2)(v), and (c)(3) for all section 1035 exchanges and acquisitions occurring after December 31, 2017, and before the date of publication of the Treasury deci- sion adopting these rules as final regula- tions in the Federal Register. The reporting obligations under pro- posed §1.6050Y-3 are proposed to apply to any section 1035 exchange treated as a reportable policy sale under proposed §1.101-1(c)(3) if the exchange occurs on or after the date the Treasury deci- sion adopting these regulations as final regulations is published in the Federal Register. See proposed §1.6050Y-1(b) (2). The reporting obligations under proposed §1.6050Y-4 are proposed to apply to reportable death benefits paid with respect to an interest in a life insur- ance contract issued in a section 1035 exchange treated as a reportable policy sale under proposed §1.101-1(c)(3) if the exchange occurs on or after the date the Treasury decision adopting these regu- lations as final regulations is published in the Federal Register. See proposed §1.6050Y-1(b)(2). Any person with a reporting obligation under proposed §1.6050Y-3 or proposed §1.6050Y-4 may, however, rely on the proposed regulations with respect to all section 1035 exchanges occurring after May 10, 2023, and before the date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register. Special Analyses I. Regulatory Planning and Review The proposed regulations are not subject to review under section 6(b) of Executive Order 12866, as amended pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations. II. Paperwork Reduction Act The additional collection of informa- tion relating to this notice of proposed rulemaking will be submitted to the Office of Management and Budget for review under OMB Control Number 1545-2281 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). In gen- eral, the additional collection of infor- mation is required under section 6050Y. When an interest in a life insurance con- tract that was previously transferred in or is treated as having been previously trans- ferred in a reportable policy sale (original contract) is exchanged by a policyholder under section 1035 for a new life insur- ance contract (new contract), proposed §1.6050Y-3(a) would require the issuer of the original contract (original issuer) to notify the issuer of the new contract (new issuer), the policyholder, and the IRS of the status of the original contract as a con- tract transferred in or treated as having been transferred in a reportable policy sale and to provide the investment in the con- tract for the original contract. Proposed §1.6050Y-3(a) would also require any new issuer receiving such notification with respect to a section 1035 exchange to provide the policyholder and the IRS with the policy number of the new contract and the investment in the contract. This infor- mation is necessary to carry out the pur- pose of section 6050Y(c), which requires a payor of reportable death benefits to report certain information about payments of reportable death benefits. The likely respondents to the collec- tion of information are life insurance companies. The burden for the additional collec- tion of information contained in proposed §1.6050Y-3 will be reflected in the burden on Form 1099-SB, “Seller’s Investment in Life Insurance Contract”, when the burden is revised to reflect the additional collection of information in proposed §1.6050Y-3. The OMB Control Number for this form is 1545-2281. Comments on the collection of infor- mation should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by July 10, 2023. Comments are specifically requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collection of information; How the quality, utility, and clarity of the information to be collected may be enhanced; Bulletin No. 2023–23 915 June 5, 2023 How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection tech- niques or other forms of information tech- nology; and Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it dis- plays a valid control number assigned by the Office of Management and Budget. III. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) requires agencies to “prepare and make available for public comment an initial regulatory flexibility analysis,” which will “describe the impact of the proposed rule on small entities.” 5 U.S.C. 603(a). Section 605(b) of the RFA allows an agency to certify a rule, in lieu of prepar- ing an analysis, if the proposed rulemak- ing is not expected to have a significant economic impact on a substantial number of small entities. Pursuant to the RFA, it is hereby cer- tified that the proposed regulations will not have a significant economic impact on a substantial number of small entities, because any effect on small entities by the rules proposed in this document flows directly from section 13520 of the TCJA. In addition, it is anticipated that require- ments in the proposed regulations, which implement the statutory requirements under section 13520 of the TCJA, will fall primarily on financial and insurance firms with annual receipts greater than $41.5 million and, therefore, on no small entities. Therefore, the Commissioner of the IRS hereby certifies that the proposed regula- tions will not have a significant economic impact on a substantial number of small entities. The Treasury Department and the IRS request comments on the impacts of this proposed rule on small entities. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small entities. IV. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggre- gate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This proposed rule does not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sec- tor in excess of that threshold. V. Executive Order 13132: Federalism Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on state and local gov- ernments, and is not required by statute, or preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. These proposed regulations do not have federalism implications and do not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order. Comments and Requests for a Public Hearing Before these proposed amendments to the final regulations are adopted as final regulations, consideration will be given to comments that are submitted timely to the IRS as prescribed in this preamble under the ADDRESSES heading. The Treasury Department and the IRS request comments on all aspects of the proposed regulations. Any electronic comments submitted, and to the extent practicable any paper com- ments submitted, will be made available at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written com- ments. Requests for a public hearing are also encouraged to be made electronically. If a public hearing is scheduled, notice of the date and time for the public hearing will be published in the Federal Register. Drafting Information The principal author of these reg- ulations is Kathryn M. Sneade, Office of Associate Chief Counsel (Financial Institutions and Products), IRS. However, other personnel from the Treasury Department and the IRS participated in their development. Availability of IRS Documents The revenue rulings, notices, and other guidance cited in this document are pub- lished in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at www.irs.gov. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and record- keeping requirements. Proposed Amendments to the Regulations Accordingly, the Treasury Department and the IRS propose to amend 26 CFR part 1 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 1.101-1 is amended by: 1. Adding a heading for paragraph (a) introductory text. 2. In paragraph (a)(1), adding a sentence after the fourth sentence. 3. In paragraphs (b) introductory text and (b)(2), revising the headings. 4. Adding paragraph (b)(2)(iv). 5. Adding a sentence at the end of para- graph (c)(1). 6. Revising paragraph (c)(2)(v). 7. Adding paragraph (c)(3). 8. In paragraph (e)(2), removing “, other than the issuance of a policy in an exchange pursuant to section 1035” in the last sentence. June 5, 2023 916 Bulletin No. 2023–23 9. In paragraph (g)(11), adding two sen- tences after the fourth sentence. 10. Adding paragraphs (g)(17) through (g)(19). The additions and revisions read as follows: §1.101-1 Exclusion from gross income of proceeds of life insurance contracts payable by reason of death. (a) Exclusion from gross income—(1) In general. * * * The extent to which this exclusion applies in cases where life insur- ance policies have been gratuitously trans- ferred or issued in an exchange pursuant to section 1035 (section 1035 exchange) is stated in paragraph (b)(2) of this section. * * * * * * * * (b) Transfers and exchanges of life insurance policies. * * * * * (2) Other transfers and exchanges—* * * * * * * * (iv) Section 1035 exchanges. When an interest in a life insurance contract (old interest) is exchanged in a section 1035 exchange for an interest in a newly issued life insurance contract (new interest), except as otherwise provided by this sec- tion with respect to any portion of the new interest that is transferred or exchanged subsequent to the section 1035 exchange, the amount of the proceeds attributable to the new interest that is excludable from gross income under section 101(a) is determined as follows: (A) If, at the time of the exchange, the entire amount of the proceeds attribut- able to the old interest would have been excludable from gross income under sec- tion 101(a), the entire amount of the pro- ceeds attributable to the new interest is excludable from gross income; and (B) If, at the time of the exchange, less than the entire amount of the proceeds attributable to the old interest would have been excludable from gross income under section 101(a), the amount of the proceeds attributable to the new interest that is excludable from gross income is limited to the sum of the amount of the proceeds attributable to the old interest that would have been excludable at the time of the exchange and the premiums and other amounts subsequently paid with respect to the new interest by the policyholder, reduced (but not below zero) by amounts received by the policyholder under the life insurance contract that are not received as an annuity, to the extent excludable from gross income under section 72(e). * * * * * (c) * * * (1) * * * See paragraph (c)(3) of this section for special rules applicable to sec- tion 1035 exchanges. (2) * * * (v) The direct acquisition of an interest in a life insurance contract by a C corpo- ration if: (A) Immediately before the acquisition, the interest is held by another C corpora- tion (target C corporation) that actively conducts a trade or business within the meaning of §1.367(a)-2(d)(2) and (3); (B) Immediately before the acquisition, the target C corporation does not engage in a trade or business of investing in inter- ests in life insurance contracts; (C) Immediately before the acquisi- tion, no more than 5 percent of the gross value of the assets (as determined under paragraph (f)(4) of this section) of the target C corporation consists of life insur- ance contracts; (D) The acquisition results from a transaction that qualifies as a reorganiza- tion under section 368(a) with respect to which the target C corporation and the acquiring C corporation each is a party to the reorganization (within the meaning of section 368(b)); (E) Immediately after the acquisition, the acquiring C corporation does not engage in a trade or business of investing in interests in life insurance contracts, and (F) Immediately after the acquisi- tion, no more than 5 percent of the gross value of the assets (as determined under paragraph (f)(4) of this section) of the acquiring C corporation consists of life insurance contracts. (3) Section 1035 exchanges. This paragraph (c)(3) applies if an interest in a life insurance contract (old interest) is exchanged in a section 1035 exchange for an interest in a newly issued life insurance contract (new interest), and the old inter- est previously was transferred for valuable consideration in a reportable policy sale under paragraph (c)(1) of this section or is treated as an interest in a life insurance contract that previously was transferred for valuable consideration in a report- able policy sale under this paragraph (c) (3). For purposes of this section, the new interest is treated as an interest in a life insurance contract that previously was transferred for valuable consideration in a reportable policy sale. For purposes of §§1.6050Y-3 and 1.6050Y-4, the section 1035 exchange is treated as the transfer of an interest in the life insurance contract in a reportable policy sale. * * * * * (g) * * * (11) * * * Also, the exception in para- graph (c)(2)(v) of this section applies, provided Corporation X satisfies the requirements of paragraph (c)(2)(v)(A) through (C) of this section immediately before the acquisition by Corporation Y, and Corporation Y satisfies the require- ments of paragraph (c)(2)(v)(E) and (F) of this section immediately after the acqui- sition. This would be the case even if A were no longer employed by Corporation X at the time of the transfer. * * * * * * * * (17) Example 17. The facts are the same as in Example 4 in paragraph (g)(4) of this section except that, before A’s death, C exchanges the policy on A’s life for a new policy on A’s life in a section 1035 exchange. The amount of the proceeds C may exclude from C’s gross income under this section is limited under paragraph (b)(2)(iv)(B) of this section to $6,000 plus any premiums and other amounts paid by C with respect to the original policy subsequent to the transfer and any premiums and other amounts paid by C with respect to the new policy subsequent to the exchange. (18) Example 18. The facts are the same as in Example 17 in paragraph (g)(17) of this section except that, before A’s death, C sells the new pol- icy to A for fair market value. A’s estate receives the proceeds of $100,000 on A’s death. Under paragraph (b)(1)(ii)(B)(3)(i) of this section, the amount of the proceeds A’s estate may exclude from gross income is not limited by paragraph (b) of this section. (19) Example 19. A is the initial policyholder of a $100,000 insurance policy on A’s life. A transfers the policy for $6,000, its fair market value, to an indi- vidual, C, who does not have a substantial family, business, or financial relationship with A at the time of the transfer. The transfer from A to C is a report- able policy sale. C also is the initial policyholder of a $200,000 insurance policy on A’s life. Before A’s death, C exchanges the two policies on A’s life for a single new policy on A’s life in a section 1035 exchange. C receives the proceeds from the new pol- icy on A’s death. The entire amount of the proceeds attributable to the interest in the new policy that was issued in exchange for the policy originally issued to C is excludable from gross income under paragraph Bulletin No. 2023–23 917 June 5, 2023 (b)(2)(iv)(A) of this section. The amount of the pro- ceeds attributable to the interest in the new policy that was issued in exchange for the policy originally issued to A that is excludable from gross income is limited under paragraph (b)(2)(iv)(B) of this section to $6,000 plus any premiums and other amounts paid by C with respect to the policy originally issued to A subsequent to the transfer and any premiums and other amounts paid by C with respect to the interest in the new policy that was issued in exchange for the policy originally issued to A. Par. 3. Section 1.101-6 is amended by adding paragraph (c) to read as follows: §1.101-6 Effective date. * * * * * (c) Notwithstanding paragraphs (a) and (b) of this section, §1.101-1(b)(2) (iv) and (c)(3) apply to any interest in a life insurance contract issued in a section 1035 exchange occurring on or after the date these regulations are published as final regulations in the Federal Register, and §1.101-1(c)(2)(v) applies to any acquisition of an interest in a life insur- ance contract occurring on or after the date these regulations are published as final regulations in the Federal Register. However, under section 7805(b)(7), a taxpayer may choose to apply the rules in §1.101-1(b)(2)(iv), (c)(2)(v), and (c) (3) to all exchanges and acquisitions occurring after December 31, 2017, and before the date these regulations are pub- lished as final regulations in the Federal Register. Par. 4. Section 1.6050Y-1 is amended by: 1. In paragraph (a)(1), adding a sentence at the end of the paragraph. 2. In paragraph (a)(2), adding “under §1.101-1(c)(1) or treated as such an interest under §1.101-1(c)(3)” before the second comma. 3. In paragraph (a)(8)(ii), removing the last sentence. 4. In paragraph (a)(8)(iii)(A), removing “or” at the end. 5. In paragraph (a)(8)(iii)(B)(2), remov- ing the period at the end of the para- graph and adding in its place “; or”. 6. Adding paragraph (a)(8)(iii)(C). 7. Adding paragraph (a)(8)(v). 8. In paragraph (a)(12), adding “under §1.101-1(c)(1) or (3)” before the period at the end of the paragraph. 9. In paragraph (a)(14), removing “§1.101-1(c)” before the period at the end of the paragraph, and adding in its place “§1.101-1(c), except as oth- erwise provided in this section”. 10. In paragraph (a)(18)(i), removing “or” at the end of the paragraph. 11. In paragraph (a)(18)(ii), removing the period at the end of the paragraph and adding in its place “; or”. 12. Adding paragraph (a)(18)(iii). 13. Redesignating paragraphs (b)(1) through (5) as paragraphs (b)(1)(i) through (v); redesignating paragraph (b) introductory text as paragraph (b) (1); adding a heading to paragraph (b) introductory text; revising the heading for the newly redesignated paragraph (b)(1); revising the first two sentences of newly redesignated paragraph (b) (1); and adding paragraph (b)(2). The additions and revisions read as follows: §1.6050Y-1 Information reporting for reportable policy sales, transfers of life insurance contracts to foreign persons, and reportable death benefits. (a) * * * (1) * * * For purposes of determin- ing the buyer under paragraph (a)(2) of this section, the term acquirer also includes any person to whom an interest in a life insurance contract is issued in an exchange pursuant to section 1035 (sec- tion 1035 exchange) that is treated as the transfer of an interest in the life insurance contract in a reportable policy sale under §1.101-1(c)(3). * * * * * (8) * * * (iii) * * * (C) Any person that is a section 1035 issuer or the designee of a section 1035 issuer. * * * * * (v) Section 1035 issuer. A section 1035 issuer is any person that, on the date of a section 1035 exchange of an interest in an existing life insurance contract for an interest in a newly issued life insurance contract that is treated as the transfer of an interest in a life insurance contract in a reportable policy sale under §1.101-1(c) (3), is: (A) An issuer with respect to the exist- ing life insurance contract, provided the issuer received an RPSS, a statement required by §1.6050Y-3(d)(1), or other information indicating that the existing life insurance contract or interest therein was transferred in a reportable policy sale under §1.101-1(c)(1) or (3); or (B) An issuer with respect to the newly issued life insurance contract, provided the issuer receives the statement required by §1.6050Y-3(d)(1) or other information indicating that existing life insurance con- tract or interest therein was transferred in a reportable policy sale under §1.101-1(c) (1) or (3). * * * * * (18) * * * (iii) For purposes of reporting under §1.6050Y-3 by both the section 1035 issuer described in paragraph (a)(8)(v)(A) of this section and the section 1035 issuer described in paragraph (a)(8)(v)(B) of this section, holds an interest in a life insur- ance contract that has been transferred in a reportable policy sale under §1.101-1(c) (1) or (3) and exchanges that interest for an interest in a new life insurance contract in a section 1035 exchange. (b) Applicability date—(1) In general. Except as otherwise provided in para- graph (b)(2) of this section, this section and §§1.6050Y-2 through 1.6050Y-3 apply to reportable policy sales made after December 31, 2018. Except as otherwise provided in paragraph (b)(2) of this sec- tion, this section and §1.6050Y-4 apply to reportable death benefits paid after December 31, 2018. * * * * * * * * (2) Section 1035 exchanges. Section 1.6050Y-3 applies to a section 1035 exchange treated as a reportable policy sale under §1.101-1(c)(3) if the exchange occurs on or after the date these regula- tions are published as final regulations in the Federal Register. Section 1.6050Y-4 applies to reportable death benefits paid with respect to an interest in a life insur- ance contract issued in a section 1035 exchange treated as a reportable policy sale under §1.101-1(c)(3) if the exchange occurs on or after the date these regula- tions are published as final regulations in the Federal Register. §1.6050Y-2 [Amended] Par. 5. Section 1.6050Y-2 is amended by removing paragraph (f)(3). June 5, 2023 918 Bulletin No. 2023–23 Par. 6. Section 1.6050Y-3 is amended by: 1. In paragraph (a) introductory text, removing “that receives an RPPS or any notice of a transfer to a foreign person” in the first sentence and adding in its place “that receives an RPSS, receives any notice of a trans- fer to a foreign person, or is a section 1035 issuer”. 2. In paragraph (a)(3), removing “The” at the beginning of the paragraph and adding in its place “For 6050Y(b) issuers other than section 1035 issu- ers, the”. 3. In paragraph (c), removing “report- able policy sale or the transfer to a foreign person occurred” before the period at the end of the first sentence and adding in its place “reportable policy sale, transfer to a foreign person, or section 1035 exchange occurred”. 4. In paragraph (d)(1), removing “is a reportable policy sale payment recip- ient or makes a transfer to a foreign person” in the first sentence and add- ing in its place “is a reportable pol- icy sale payment recipient, makes a transfer to a foreign person, or makes a section 1035 exchange”, and adding a sentence at the end of the paragraph. 5. In paragraph (d)(2), removing “reportable policy sale or transfer to a foreign person occurred” before the period at the end of the first sentence and adding in its place “reportable policy sale, transfer to a foreign person, or section 1035 exchange occurred”, and adding a sentence after the second sentence. 6. In paragraph (f), removing “para- graph (f)(1), (2), or (3) of this section applies” before the period at the end of the paragraph and adding in its place “paragraph (f)(1) or (2) of this section applies”. 7. Removing paragraph (f)(3). The additions read as follows: §1.6050Y-3 Information reporting by 6050Y(b) issuers for reportable policy sales and transfers of life insurance contracts to foreign persons. * * * * * (d) * * * (1) * * * In addition, every section 1035 issuer described in §1.6050Y-1(a) (8)(v)(A) filing a return required by para- graph (a) of this section with respect to a section 1035 exchange must furnish to each section 1035 issuer described in §1.6050Y-1(a)(8)(v)(B) with respect to that exchange a written statement showing the information required by paragraph (a) of this section with respect to the seller in the exchange and the name, address, and phone number of the information contact of the person filing the return. (2) Time for furnishing statement. * * * Each statement required by paragraph (d)(1) of this section to be furnished to any section 1035 issuer described in §1.6050Y-1(a)(8)(v)(B) must be furnished within 30 days of the date of the section 1035 exchange. * * * * * * * * Par. 7. Section 1.6050Y-4 is amended by adding a sentence at the end of para- graph (e)(3) to read as follows: §1.6050Y-4 Information reporting by payors for reportable death benefits. * * * * * (e) * * * (3) * * * Additionally, if the reportable death benefits are paid with respect to an interest in a life insurance contract issued in a section 1035 exchange, the payor never received, and has no knowledge of any issuer having received, a statement described in §1.6050Y-3(d)(1) from a sec- tion 1035 issuer or other information indi- cating that the issuance of the contract is treated as a transfer of an interest in the contract in a reportable policy sale under §1.101-1(c)(3). * * * * * Douglas W. O’Donnell, Deputy Commissioner for Services and Enforcement. (Filed by the Office of the Federal Register May 9, 2023, 8:45a.m., and published in the issue of the Federal Register for May 10, 2023, 88 FR 30058) Bulletin No. 2023–23 i June 5, 2023 Definition of Terms Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the effect: Amplified describes a situation where no change is being made in a prior pub- lished position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle ap- plied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below). Clarified is used in those instances where the language in a prior ruling is be- ing made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior rul- ing is being changed. Distinguished describes a situation where a ruling mentions a previously pub- lished ruling and points out an essential difference between them. Modified is used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior ruling is modified because it corrects a published position. (Compare with amplified and clarified, above). Obsoleted describes a previously pub- lished ruling that is not considered deter- minative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in laws or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted. Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in a new ruling. Superseded describes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the new ruling does more than restate the sub- stance of a prior ruling, a combination of terms is used. For example, modified and superseded describes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previous- ly published ruling in a new ruling that is self contained. In this case, the previously published ruling is first modified and then, as modified, is superseded. Supplemented is used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rul- ings in the series. Suspended is used in rare situations to show that the previous published rul- ings 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 material published in the Bulletin. A—Individual. Acq.—Acquiescence. B—Individual. BE—Beneficiary. BK—Bank. B.T.A.—Board of Tax Appeals. C—Individual. C.B.—Cumulative Bulletin. CFR—Code of Federal Regulations. CI—City. COOP—Cooperative. Ct.D.—Court Decision. CY—County. D—Decedent. DC—Dummy Corporation. DE—Donee. Del. Order—Delegation Order. DISC—Domestic International Sales Corporation. DR—Donor. E—Estate. EE—Employee. E.O.—Executive Order. ER—Employer. ERISA—Employee Retirement Income Security Act. EX—Executor. F—Fiduciary. FC—Foreign Country. FICA—Federal Insurance Contributions Act. FISC—Foreign International Sales Company. FPH—Foreign Personal Holding Company. F.R.—Federal Register. FUTA—Federal Unemployment Tax Act. FX—Foreign corporation. G.C.M.—Chief Counsel’s Memorandum. GE—Grantee. GP—General Partner. GR—Grantor. IC—Insurance Company. I.R.B.—Internal Revenue Bulletin. LE—Lessee. LP—Limited Partner. LR—Lessor. M—Minor. Nonacq.—Nonacquiescence. O—Organization. P—Parent Corporation. PHC—Personal Holding Company. PO—Possession of the U.S. PR—Partner. PRS—Partnership. PTE—Prohibited Transaction Exemption. Pub. L.—Public Law. REIT—Real Estate Investment Trust. Rev. Proc.—Revenue Procedure. Rev. Rul.—Revenue Ruling. S—Subsidiary. S.P.R.—Statement of Procedural Rules. Stat.—Statutes at Large. T—Target Corporation. T.C.—Tax Court. T.D.—Treasury Decision. TFE—Transferee. TFR—Transferor. T.I.R.—Technical Information Release. TP—Taxpayer. TR—Trust. TT—Trustee. U.S.C.—United States Code. X—Corporation. Y—Corporation. Z—Corporation. June 5, 2023 ii Bulletin No. 2023–23 Numerical Finding List 1 Bulletin 2023–23 Announcements: 2023-2, 2023-2 I.R.B. 344 2023-1, 2023-3 I.R.B. 422 2023-3, 2023-5 I.R.B. 447 2023-4, 2023-7 I.R.B. 470 2023-5, 2023-9 I.R.B. 499 2023-6, 2023-9 I.R.B. 501 2023-8, 2023-14 I.R.B. 632 2023-9, 2023-15 I.R.B. 639 2023-10, 2023-16 I.R.B. 663 2023-7, 2023-17 I.R.B. 797 2023-11, 2023-17 I.R.B. 798 2023-12, 2023-17 I.R.B. 799 2023-13, 2023-18 I.R.B. 833 2023-14, 2023-19 I.R.B. 853 2023-16, 2023-20 I.R.B. 854 2023-15, 2023-21 I.R.B. 856 AOD: 2023-1, 2023-10 I.R.B. 502 2023-2, 2023-11 I.R.B. 529 Notices: 2023-4, 2023-2 I.R.B. 321 2023-5, 2023-2 I.R.B. 324 2023-6, 2023-2 I.R.B. 328 2023-8, 2023-2 I.R.B. 341 2023-1, 2023-3 I.R.B. 373 2023-2, 2023-3 I.R.B. 374 2023-3, 2023-3 I.R.B. 388 2023-7, 2023-3 I.R.B. 390 2023-9, 2023-3 I.R.B. 402 2023-10, 2023-3 I.R.B. 403 2023-11, 2023-3 I.R.B. 404 2023-12, 2023-6 I.R.B. 450 2023-13, 2023-6 I.R.B. 454 2023-16, 2023-8 I.R.B. 479 2023-17, 2023-10 I.R.B. 505 2023-18, 2023-10 I.R.B. 508 2023-20, 2023-10 I.R.B. 523 2023-19, 2023-11 I.R.B. 560 2023-21, 2023-11 I.R.B. 563 2023-22, 2023-12 I.R.B. 569 2023-23, 2023-13 I.R.B. 571 2023-24, 2023-13 I.R.B. 571 2023-26, 2023-13 I.R.B. 577 2023-25, 2023-14 I.R.B. 629 2023-27, 2023-15 I.R.B. 634 2023-28, 2023-15 I.R.B. 635 2023-31, 2023-16 I.R.B. 661 2023-30, 2023-17 I.R.B. 766 2023-33, 2023-18 I.R.B. 803 Notices:—Continued 2023-34, 2023-19 I.R.B. 837 2023-38, 2023-22 I.R.B. 872 2023-39, 2023-22 I.R.B. 877 2023-40, 2023-22 I.R.B. 879 2023-41, 2023-23 I.R.B. 905 Proposed Regulations: REG-100442-22, 2023-3 I.R.B. 423 REG-146537-06, 2023-3 I.R.B. 436 REG-114666-22, 2023-4 I.R.B. 437 REG 122286-18, 2023-11 I.R.B. 565 REG-120653-22, 2023-15 I.R.B. 640 REG-105954-22, 2023-16 I.R.B. 713 REG-120080-22, 2023-16 I.R.B. 746 REG 109309-22, 2023-17 I.R.B. 770 REG 121709-19, 2023-17 I.R.B. 789 REG-124064-19, 2023-17 I.R.B. 789 REG-108054-21, 2023-23 I.R.B. 907 Revenue Procedures: 2023-1, 2023-1 I.R.B. 1 2023-2, 2023-1 I.R.B. 120 2023-3, 2023-1 I.R.B. 144 2023-4, 2023-1 I.R.B. 162 2023-5, 2023-1 I.R.B. 265 2023-7, 2023-1 I.R.B. 305 2023-8, 2023-3 I.R.B. 407 2023-10, 2023-3 I.R.B. 411 2023-11, 2023-3 I.R.B. 417 2023-14, 2023-6 I.R.B. 466 2023-9, 2023-7 I.R.B. 471 2023-13, 2023-13 I.R.B. 581 2023-17, 2023-13 I.R.B. 604 2023-18, 2023-13 I.R.B. 605 2023-19, 2023-13 I.R.B. 626 2023-20, 2023-15 I.R.B. 636 2023-12, 2023-17 I.R.B. 768 2023-15, 2023-18 I.R.B. 806 2023-21, 2023-19 I.R.B. 837 2023-22, 2023-19 I.R.B. 838 2023-23, 2023-22 I.R.B. 883 Revenue Rulings: 2023-1, 2023-2 I.R.B. 309 2023-3, 2023-6 I.R.B. 448 2023-4, 2023-9 I.R.B. 480 2023-5, 2023-10 I.R.B. 503 2023-6, 2023-14 I.R.B. 627 2023-7, 2023-15 I.R.B. 633 2023-2, 2023-16 I.R.B. 658 2023-8, 2023-18 I.R.B. 801 2023-9, 2023-19 I.R.B. 835 2023-10, 2023-23 I.R.B. 884 2023-11, 2023-23 I.R.B. 886 Treasury Decisions: 9970, 2023-2 I.R.B. 311 9771, 2023-3 I.R.B. 346 9772, 2023-11 I.R.B. 530 9773, 2023-11 I.R.B. 557 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin 2022–52, dated December 27, 2022. Bulletin No. 2023–23 iii June 5, 2023 Finding List of Current Actions on Previously Published Items 1 Bulletin 2023–23 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin 2022–52, dated December 27, 2022. Internal Revenue Service Washington, DC 20224 Official Business Penalty for Private Use, $300 INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletins are available at www.irs.gov/irb/. We Welcome Comments About the Internal Revenue Bulletin If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave. NW, IR-6230 Washington, DC 20224.
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