Internal Revenue Bulletin 2008-12 (PDF rendition): IRS Revenue Rulings

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

Bulletin No. 200
8-12
March 24, 2008
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2008–17, page 626.
International operation of ships or aircraft; foreign cor-
poration.This ruling assists a foreign corporation engaged
in the international operation of ships or aircraft, and its share-
holders, in determining whether the foreign corporation is orga-
nized in a country that grants an “equivalent exemption” from
tax for purposes of section 883(a) and (c) of the Code. The rul-
ing also assists a nonresident alien individual engaged in the in-
ternational operation of ships or aircraft in determining whether
a country grants an equivalent exemption for purposes of sec-
tion 872(b). The ruling does not, however, provide substantive
guidance under section 883. Rev. Ruls. 89–42, 97–31, and
2001–48 modified and superseded.
Notice 2008–33, page 642.
This notice provides procedures for manufacturers to follow
to certify both that a particular make, model, and model year
of fuel cell motor vehicle meets the requirements of section
30B(a)(1) and (b) of the Code, and the amount of the credit
allowable with respect to the vehicle.
Notice 2008–34, page 645.
This notice identifies a transaction in which a tax indifferent
party contributes one or more distressed assets with a high
basis and low fair market value to a trust or series of trusts
and sub-trusts, and a U.S. taxpayer acquires an interest in the
trust (and/or series of trusts and/or sub-trusts) for the purpose
of shifting a built-in loss from the tax indifferent party to the U.S.
taxpayer that has not incurred the economic loss.
Notice 2008–35, page 647.
This notice supersedes Notice 2006–27, 2006–1 C.B. 626, by
substantially republishing the guidance contained in that publi-
cation while clarifying the meaning of the terms equivalent rat-
ing network, equivalent calculation procedure, and eligible con-
tractor. The notice also clarifies the process for removing soft-
ware from the list of approved software and provides for the ex-
tension of the tax credit through December 31, 2008. Notice
2006–27 clarified and superseded. Announcement 2006–88
clarified and superseded.
Notice 2008–36, page 650.
This notice supersedes Notice 2006–28, 2006–1 C.B. 628, by
substantially republishing theguidance contained in that publi-
cation while clarifying the meaning of the terms equivalent rat-
ing network, equivalent calculation procedure, and eligible con-
tractor. The notice also clarifies the process for removing soft-
ware from the list of approved software and provides for the ex-
tension of the tax credit through December 31, 2008. Notice
2006–28 clarified and superseded. Announcement 2006–88
clarified and superseded.
Rev. Proc. 2008–21, page 657.
This procedure provides that the Service will not challenge
the accuracy of 2007 returns filed in compliance with Notice
2008–28, 2008–10 I.R.B. 546, by eligible individuals who en-
ter $1.00 in adjusted gross income on their 2007 return for the
sole purpose of effectuating the electronic filing of their 2007
tax return.
Rev. Proc. 2008–22, page 658.
Automobile owners and lessees.This procedure provides
owners and lessees of passenger automobiles (including trucks
and vans) with tables detailing the limitations on depreciation
deductions for passenger automobiles first placed in service
during calendar year 2008 and the amounts to be included in
income for passenger automobiles first leased during calendar
year 2008.
(Continued on the next page)
Finding Lists begin on page ii.

Rev. Proc. 2008–23, page 664.
This procedure provides an alternative dollar-value last-in, first-
out (LIFO) pooling method, the Vehicle-Pool Method, for certain
resellers of cars and light-duty trucks and provides procedures
for obtaining automatic consent to change to that method. The
procedure also provides the permissible method of pooling for
crossover vehicles under the Alternative LIFO Method and the
Used Vehicle Alternative LIFO Method for those resellers that
do not choose to use the Vehicle-Pool Method. Rev. Procs.
97–36 and 2001–23 modified.
EMPLOYEE PLANS
Notice 2008–29, page 637.
Alternative mortality tables; disabled individuals; de-
fined benefit plans.This notice provides which mortality
tables are permitted to be used to determine present values
with respect to individuals who are entitled to benefits under a
qualified defined benefit pension plan on account of disability.
Notice 2008–30, page 638.
Distributions; various issues; Pension Protection Act of
2006 (PPA ’06).This notice provides guidance in the form
of questions and answers with respect to certain provisions
contained in PPA ’06 that are effective in 2008 and are primarily
related to distributions described in sections 302, 824, and
1004 of PPA ’06.
Notice 2008–37, page 654.
Weighted average interest rate update; corporate bond
indices; 30-year Treasury securities; segment rates.
This notice contains updates for the corporate bond weighted
average interest rate for plan years beginning in March 2008;
the 24-month average segment rates; the funding transitional
segment rates applicable for March 2008; and the minimum
present value transitional rates for February 2008.
EXCISE TAX
Rev. Rul. 2008–15, page 633.
Insurance premiums; excise tax consequences.This rul-
ing describes the insurance excise tax consequences (under
section 4371 of the Code) of insurance premiums paid by one
foreign insurer (foreign insurer) to another (foreign reinsurer). In
particular, the ruling addresses the excise tax consequences
of such payments where the foreign insurer is eligible for a
waiver of the excise tax by income tax treaty but the foreign
reinsurer is not. There are two types of insurance excise tax
waivers provided by treaty. The ruling addresses both types of
waivers. Rev. Rul. 58–612 clarified and amplified.
Announcement 2008–18, page 667.
This announcement sets forth a voluntary compliance initiative
that encourages any foreign person who has failed to pay ex-
cise taxes due under section 4371 of the Code, or failed to
disclose that it has claimed a waiver from the taxes pursuant
to an income tax treaty, to become compliant with its obliga-
tions. In general, if a taxpayer participates in this initiative in
accordance with the terms laid out in this announcement, the
IRS will not conduct examinations covering insurance excise
tax liabilities arising under the four situations set forth in Rev.
Rul. 2008–15 (this Bulletin), or any similar fact pattern, to the
extent that premiums are paid or received by the participating
taxpayer during any quarterly tax period prior to October 1,
2008.
TAX CONVENTIONS
Rev. Rul. 2008–15, page 633.
Insurance premiums; excise tax consequences.This rul-
ing describes the insurance excise tax consequences (under
section 4371 of the Code) of insurance premiums paid by one
foreign insurer (foreign insurer) to another (foreign reinsurer). In
particular, the ruling addresses the excise tax consequences
of such payments where the foreign insurer is eligible for a
waiver of the excise tax by income tax treaty but the foreign
reinsurer is not. There are two types of insurance excise tax
waivers provided by treaty. The ruling addresses both types of
waivers. Rev. Rul. 58–612 clarified and amplified.
Rev. Rul. 2008–17, page 626.
International operation of ships or aircraft; foreign cor-
poration.This ruling assists a foreign corporation engaged
in the international operation of ships or aircraft, and its share-
holders, in determining whether the foreign corporation is orga-
nized in a country that grants an “equivalent exemption” from
tax for purposes of section 883(a) and (c) of the Code. The rul-
ing also assists a nonresident alien individual engaged in the in-
ternational operation of ships or aircraft in determining whether
a country grants an equivalent exemption for purposes of sec-
tion 872(b). The ruling does not, however, provide substantive
guidance under section 883. Rev. Ruls. 89–42, 97–31, and
2001–48 modified and superseded.
(Continued on the next page)
March 24, 20082008–12 I.R.B.

Announcement 2008–18, page 667.
This announcement sets forth a voluntary compliance initiative
that encourages any foreign person who has failed to pay ex-
cise taxes due under section 4371 of the Code, or failed to
disclose that it has claimed a waiver from the taxes pursuant
to an income tax treaty, to become compliant with its obliga-
tions. In general, if a taxpayer participates in this initiative in
accordance with the terms laid out in this announcement, the
IRS will not conduct examinations covering insurance excise
tax liabilities arising under the four situations set forth in Rev.
Rul. 2008–15 (this Bulletin), or any similar fact pattern, to the
extent that premiums are paid or received by the participating
taxpayer during any quarterly tax period prior to October 1,
2008.
ADMINISTRATIVE
Notice 2008–34, page 645.
This notice identifies a transaction in which a tax indifferent
party contributes one or more distressed assets with a high
basis and low fair market value to a trust or series of trusts
and sub-trusts, and a U.S. taxpayer acquires an interest in the
trust (and/or series of trusts and/or sub-trusts) for the purpose
of shifting a built-in loss from the tax indifferent party to the U.S.
taxpayer that has not incurred the economic loss.
2008–12 I.R.B.March 24, 2008

The IRS Mission
Provide Americ
a’s taxpayers top quality service by helping them
understand an
d meet their tax responsibilities and by applying
the tax law with
integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
March 24, 20082008–12 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 872.—
Gross
Income
A revenue ruli
ng is provided to assist a foreign
corporation e
ngaged in the international operation of
ships or aircr
aft, and its shareholders, in determin-
ing whether t
he foreign corporation is organized in
a country tha
t grants an “equivalent exemption” from
tax for purpo
ses of section 883(a) and (c) of the In-
ternal Reven
ue Code (Code). This revenue ruling
is also inte
nded to assist a nonresident alien individ-
ual engaged
in the international operation of ships or
aircraft in
determining whether a country grants an
equivalent
exemption from taxfor purposes of sec-
tion 872(b)
of the Code. See Rev. Rul. 2008-17,
page 626.
Section 883.—Exclusions
From Gross Income
26 CFR 1.883: Exclusion of income from the interna-
tional operation of ships or aircraft.
(Also Section 872, 894.)
International operation of ships or
aircraft; foreign corporation.This rul-
ing assists a foreign corporation engaged
in the international operation of ships or
aircraft, and its shareholders, in determin-
ing whether the foreign corporation is or-
ganized in a country that grants an “equiv-
alent exemption” from tax for purposes of
section 883(a) and (c) of the Code. The
ruling also assists a nonresident alien in-
dividual engaged in the international op-
eration of ships or aircraft in determining
whether a country grants an equivalent ex-
emption for purposes of section 872(b).
The ruling does not, however, provide sub-
stantive guidance under section 883. Rev.
Ruls. 89–42, 97–31, and 2001–48 modi-
fied and superseded.
Rev. Rul. 2008–17
Purpose
The purpose of this revenue ruling is
to assist a foreign corporation engaged in
the international operation of ships or air-
craft, and its shareholders, in determining
whether the foreign corporation is orga-
nized in a country that grants an “equiv-
alent exemption” from tax for purposes of
section 883(a) and (c) of the Internal Rev-
enue Code (Code). This revenue ruling is
also intended to assist a nonresident alien
individual en
gaged in the international op-
eration of shi
ps or aircraft in determining
whether a coun
trygrantsanequivalentex-
emption from
tax for purposes of section
872(b) of the
Code. This revenue ruling
provides lis
ts of countries that may pro-
vide various
forms of equivalent exemp-
tions. This
revenue ruling does not, how-
ever, provi
de substantive guidance under
section 883
of the Code. For detailed guid-
ance, see Tr
eas. Reg. § 1.883–0 through
§ 1.883–5 (T
.D. 9087, 2003–2 C.B. 781,
as amended
by T.D. 9218, 2005–2 C.B.
503), and T
reas. Reg. § 1.883–0T through
§ 1.883–5T
(T.D. 9332, 2007–32 I.R.B.
300).
Background
Section 883(a) of the Code generally
provides that gross income derived by
a foreign corporation from the interna-
tional operation of ships or aircraft shall
not be included in the gross income of
such foreign corporation, and shall be ex-
empt from U.S. taxation, if the country in
which the corporation is organized grants
an equivalent exemption to corporations
organized in the United States (U.S. cor-
porations). Section 883(c)(1) provides
that the exemption provided by section
883(a) is not available if 50 percent or
more of the value of the stock of the for-
eign corporation is owned by individuals
who are not residents of a country that
grants an equivalent exemption to U.S.
corporations. Thus, a foreign corporation
seeking to avail itself of the exemption
from tax under section 883 must determine
whether it is organized in a country that
provides an equivalent exemption to U.S.
corporations and whether its shareholders
are organized in, or residents of, a country
that provides an equivalent exemption to
U.S. corporations. Treasury regulation
§ 1.883–1(c)(3) also requires a foreign
corporation claiming an exemption from
tax to provide the applicable authority for
an equivalent exemption with its Form
1120–F (U.S. Income Tax Return of a For-
eign Corporation).
Treasury regulation § 1.883–1(h)(1)
provides that an equivalent exemption
may exist if a foreign country generally
imposes no tax
on income or specifically
provides an ex
emption under domestic
law for income
derived from the inter-
national ope
ration of ships or aircraft.
Alternative
ly, a foreign country may ex-
change a dipl
omatic note, or enter into
an agreement
, with the United States that
provides fo
r an equivalent exemption for
purposes of
section 883. Treas. Reg.
§ 1.883–1T(
h)(1) broadens the definition
of equivale
nt exemption to include an
exemption p
rovided by income tax con-
vention, p
rovided the foreign corporation
meets cert
ain additional conditions set
forthin§1
.883–1T(h)(3).
Table I
PartAofTableIofthisrevenueruling
provides a list of countries that grant an
equivalent exemption as evidenced by a
diplomatic note exchanged with the United
States.
Part B of Table I provides a list of coun-
tries that grant an equivalent exemption to
U.S. corporations by statute or decree, or
by not imposing tax on income from the
international operation of ships or aircraft.
The Internal Revenue Service (IRS) gen-
erally has made the determinations based
upon information submitted by the foreign
country regarding its domestic law in ef-
fect at the time of the submission. The date
of the IRS’s review of the foreign country’s
law is reflected in the first column of Part
B of Table I. The list of countries included
in Part B of Table I is not an exhaustive list
of the countries which provide an equiva-
lent exemption under domestic law. Other
countries that have not submitted the infor-
mation necessary for the IRS to make a de-
termination also may grant an equivalent
exemption.
Because Part B of Table I does not re-
flect any changes to a country’s domestic
law since the IRS’s review, a foreign cor-
poration and its shareholders should inde-
pendently verify the accuracy of the infor-
mation in Part B of Table I as it relates to
the relevant taxable year.
Consistent with past practice, the IRS
will entertain a request from a foreign gov-
ernment to determine whether the domes-
tic law of the foreign country provides an
2008–12 I.R.B.626March 24, 2008

equivalent exemption for one or more cate-
gories of income that may be exempt from
U.S. taxation under section 883. Accord-
ingly, taxpayers may ask the relevant for-
eign government to contact the IRS for this
purpose. The letter from the foreign gov-
ernment official should be addressed to the
Associate Chief Counsel (International),
Internal Revenue Service, 1111 Constitu-
tion Avenue, NW, Washington, DC 20224,
Attn: CC:INTL:Br1. The letter should
state the name, citation, and effective date
of the statute or decree, and generally de-
scribe the application of the country’s do-
mestic law to income derived by U.S. per-
sons from the international operation of
ships or aircraft andfrom calling on ports
or airports in that country. For example,
the letter should discuss whether the law
provides an exemption for each category
of income described in § 1.883–1(h)(2)(i)
through (viii). A copy of the relevant
statute or decree as published in an offi-
cial government publication and a certified
English translation of the document, if it
was not published in English, should be at-
tached to the letter.
Table II
Table II of this revenue ruling provides
a list of countries that have entered into
income tax conventions with the United
States that include a shipping and air trans-
port article or a gains article. Prior to
the issuance of § 1.883–1T(h)(3), a for-
eign corporation organized in a country
that only provided an exemption from tax
through an income tax convention with
the United States was not considered orga-
nized in a country that granted an equiv-
alent exemption for purposes of section
883. For taxable years of foreign cor-
porations beginning on or after June 25,
2007, § 1.883–1T(h)(3)(i) provides that if
a foreign corporation is organized in a for-
eign country that only provides an exemp-
tion from tax for profits from the oper-
ation of ships or aircraft in international
transport or international traffic under the
shipping and air transport or gains arti-
cle of an income tax convention with the
United States, then such foreign corpora-
tion may treat the exemption from tax pro-
vided by the income tax convention as an
equivalent exemption for purposes of sec-
tion 883, but only if: (1) the foreign cor-
poration meets all the conditions for claim-
ing benefits with respect to such profits un-
der the income tax convention, including
the limitation on benefits article; and (2)
the profits that are exempt from tax pur-
suant to the income tax convention also fall
within a category of income described in
§ 1.883–1(h)(2)(i) through (viii).
A foreign corporation that relies on
an income tax convention as providing
an equivalent exemption with respect to
a particular category of income under
§ 1.883–1T(h)(1)(ii) must demonstrate not
only that it qualifies for benefits under
the income tax convention but also that it
meets the requirements of section 883. For
example, a corporation that is considered a
resident of a foreign country that grants an
equivalent exemption because it is man-
aged and controlled inthat country will not
qualify for an exemption from tax under
section 883(a) unless the corporation is
also organized in that country. Similarly, a
foreign corporation that does not meet one
of the stock ownership tests described in
§ 1.883–1(c)(2) may not claim an exemp-
tion from tax under section 883, even if it
qualifies for benefits under the limitation
on benefits article of the relevant income
tax convention.
Table II summarizes the bases for
claiming an exemption under each in-
come tax convention, including whether
the exemption under the shipping and air
transport article is based solely on resi-
dence, or, as in the case of certain older
income tax conventions, the exemption
has an additional requirement of documen-
tation or registration. Table II now also
includes limitation on benefits articles as
a condition for claiming benefits. Table II
does not set forth other benefits relating to
a shipping or an air transport business that
may be provided under articles covering
business profits, rentals and royalties, or
other income because such benefits are
not relevant for purposes of section 883(a)
or (c).
Table I and Table II are intended only
as a summary, and the full text of any rel-
evant diplomatic note, foreign law, or in-
come tax convention (including any pro-
tocol thereto, any agreement, any diplo-
matic note accompanying the convention,
or the technical explanation of the income
tax convention) should be consulted. The
IRS and Treasury Department intend to up-
date the tables periodically.
CHANGES TO REV. RUL. 2001–48
In Part A of Table I, Angola, the Cape
Verde Islands, Ghana, and the Bailiwick
of Jersey have been added to the list of
countries that have exchanged diplomatic
notes with the United States.
In Part B of Table I, the British Vir-
gin Islands, Croatia, Gibraltar, Kuwait
(shipping only), Monaco, Qatar (shipping
only), and Uruguay have been added to the
list of countries whose domestic law has
been determined to provide an equivalent
exemption.
In Table II, the following countries have
been added to the list of countries that pro-
vide an exemption under an income tax
convention: Bangladesh and Sri Lanka.
The following countries have entered into
new income tax conventions or protocols
with the United States that contain new
shipping and air transport articles that su-
persede prior income tax conventions re-
ported in Rev. Rul. 2001–48: Australia,
Belgium, Japan, and the United Kingdom.
A subheading has been added under the
headingBasis for Exemptionto notify any
foreign person, whether it is the corpora-
tion seeking an exemption from tax un-
der section 883, or a shareholder of such
corporation, that it may not treat an in-
come tax convention as granting an equiv-
alent exemption unless that person qual-
ifies for benefits under the limitation on
benefits article, if any, in that income tax
convention. Footnote number 35 has also
been added to identify those countries that
provide an equivalent exemption from tax
only through an income tax convention
with the United States.
TO CLAIM AN EXEMPTION
Nonresident alien individuals claiming
an exemption from U.S. taxation under
section 872(b) of the Code must file a re-
turn on Form 1040NR (U.S. Nonresident
Alien Income Tax Return), follow the ac-
companying instructions, and claim the ex-
emption. Foreign corporations claiming
an exemption under section 883 must file
a return on Form 1120F (U.S. Income Tax
Return of a Foreign Corporation), follow
the accompanying instructions, and com-
ply with the relevant reporting provisions
of Treas. Reg. § 1.883–1(c)(3).
March 24, 20086272008–12 I.R.B.

EFFECT ON OTHER REVENUE
RULINGS
Rev. Rul. 89–42, Rev. Rul. 97–31,
and Rev. Rul. 2001–48 are modified and
superseded.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Patricia A. Bray of the Office of As-
sociate Chief Counsel (International). For
further information regarding this revenue
ruling, contact Patricia A. Bray at (202)
622–5871 (not a toll-free call).
TABLE I
Countries Granting Equivalent Exemptions For
Income From The International Operation of
Ships and Aircraft
PART A — EXCHANGE OF NOTES
1
TYPES OF SHIPPING AND AIRCRAFT INCOME EXEMPTED
2
Countries And
Territories
Cumulative Bulletin
Or Internal
Revenue Bulletin
Citation
Operating
Income
Full Rental
(Time or
Voyage
Charter)
Bareboat
Rental
Incidental
Container
Rental
Cap
3
Gains
Angola2007–42 I.R.B. 801
XXXXX
Argentina1988–1 C.B. 456
XXXXX
Bahamas
1988–1 C.B. 458
XXXX-
Bahrain2000–2 C.B. 475
XXXXX
Belgium1988–1 C.B. 459
XX- X-
Bolivia
4
1988–1 C.B. 460
XXXX-
Cape Verde2005–2 C.B. 855
XXXXX
Chile
5
1991–1 C.B. 304
XXX
3
X-
Colombia1988–1 C.B. 461
XXXX-
Cyprus1989–2 C.B. 332
XXXX-
Denmark
1988–1 C.B. 462
XXXX-
El Salvador
5
1988–1 C.B. 463
XXXXX
Ethiopia1999–1 C.B. 1134
XXXXX
Fiji1996–2 C.B. 202
XXXXX
Finland1989–2 C.B. 334
XXXX-
Ghana2002–1 C.B. 725
XXXXX
Greece1988–2 C.B. 366
XXXX-
Hong Kong
6/7
1995–1 C.B. 228
XXXXX
India1990–2 C.B. 316
XXX
3
XX
Isle of Man
6
1990–2 C.B. 317
XXXXX
Japan
1990–2 C.B. 318
XXXX-
Jersey
2007–10 I.R.B. 665
XXXXX
Jordan
1996–2 C.B. 202
XXXX-
Liberia1988–1 C.B. 463
XXXXX
Luxembourg
1996–2 C.B. 203
XXXX-
Malaysia1990–2 C.B. 319
XXX
3
XX
Malta
1997–1 C.B. 314
XXXXX
2008–12 I.R.B.628March 24, 2008

TABLE I—Continued
Countries Granting Equivalent Exemptions For
Income From The International Operation of
Ships and Aircraft
PART A — EXCHANGE OF NOTES
1
TYPES OF SHIPPING AND AIRCRAFT INCOME EXEMPTED
2
Countries And
Territories
Cumulative Bulletin
Or Internal
Revenue Bulletin
Citation
Operating
Income
Full Rental
(Time or
Voyage
Charter)
Bareboat
Rental
Incidental
Container
Rental
Cap
3
Gains
Marshall
Islands
1990–2 C.B. 321
XXXXX
Norway
1991–1 C.B. 30
4
XXXXX
Pakistan
6
1991–1 C.B. 305
X
8
-- --
Panama
1988–2 C.B. 366
XXXX-
Peru
6
1989–2 C.B. 33
5
XXX
3
X-
St. Vincent &
Grenadines
1989–2 C.B. 336
XXXX-
Saudi Arabia
9
2000–1 C.B. 1126
XXXXX
Singapore1990–2 C.B. 323
XXXXX
Sweden1988–1 C.B. 466
XXX
3
X-
Taiwan1989–2 C.B. 337
XXXX-
United Arab
Emirates
1998–2 C.B. 528
XXXXX
Venezuela
1988–1 C.B. 467
XXX
3
XX
PART B — DOMESTIC LAW
TYPES OF SHIPPING AND AIRCRAFT INCOME EXEMPTED
2
Countries
And
Territories
Date
Foreign Law
Reviewed
Operating
Income
Full Rental
(Time or
Voyage
Charter)
Bareboat
Rental
Incidental
Container
Rental
Cap
3
Gains
Antigua & Barbuda
6
NOV 1991
XXXXX
ArubaJUNE 1999
XXXX-
Barbados
OCT 1989
XXXXX
Bermuda
NOV 1988
XXXXX
Brazil
10
DEC 1988
XXX
3
X-
British Virgin IslandsMAR 2003
XX-- -
BulgariaFEB 1989
XXXXX
Cayman Islands
11
JAN 1987
XXXXX
Chile
6
OCT 1988
XXXXX
CroatiaFEB 2007
XXXXX
Ecuador
6/12
DEC 1989
XXX
3
XX
GibraltarJULY 2006
XXXXX
Israel
FEB 1991
XXXXX
March 24, 20086292008–12 I.R.B.

TABLE I—Continued
Countries Granting Equivalent Exemptions For
Income From The International Operation of
Ships and Aircraft
PART B — DOMESTIC LAW—Continued
TYPES OF SHIPPING AND AIRCRAFT INCOME EXEMPTED
2
Countries
And
Territories
Date
Foreign Law
Reviewed
Operating
Income
Full Rental
(Time or
Voyage
Charter)
Bareboat
Rental
Incidental
Container
Rental
Cap
3
Gains
Kuwait
6
APRIL 2007
XXXX-
Monaco
JAN 2005
XXXXX
Netherlands
OCT 1988
XXX
3
X-
Netherlands AntillesMAY 1988
XXXXX
Peru
5
SEPT 1995
XXXXX
ShipsJUNE 1989
XXX- -Portugal
10
AircraftFEB 1989
XXX- -
Ships
6
JAN 1993
X
8
X-- -
Qatar
Aircraft
5
AUG 1994
X
8
----
Spain
13
DEC 1988
XX-X-
SurinamNOV 1999
XXXXX
Turkey
14
JAN 1987
X- -X-
Turks & Caicos
11
FEB 1990
XXXXX
Uruguay
JAN 2007
X
8
----
U.S. Virgin IslandsOCT 1988
XXXXX
Vanuatu
MAY 1987
XXXXX
TABLE II
Countries Granting Exemptions from Tax by Income Tax Convention
15
BASIS FOR EXEMPTIONTYPES OF SHIPPING AND AIRCRAFT INCOME
EXEMPTED
2
Countries
And
Territories
Residence
Based No
Flag
Residence
&Flag
Reciprocal
LOB
29
Article
Operating
Income
Full
Rental
(Time or
Voyage
Charter)
Bare-Boat
Rental
Incidental
Container
Rental
Cap
Gains
Australia
19/35
X- XXX
16
X
3
XX
Austria
35
X- XXX
20
X
20
XX
Bangladesh
19/35
X- XXX
20
X
20
XX
BarbadosX-XXX
20
X
20
XX
Belgium
19
X- XXXX
20
XX
Canada
35
X- XXXXXX
China
22/35
(People’s
Republic)
X- XXX
20
X
20
XX
2008–12 I.R.B.630March 24, 2008

TABLE II—Continued
Countries Granting Exemptions from Tax by Income Tax Convention
15
BASIS FOR EXEMPTIONTYPES OF SHIPPING AND AIRCRAFT INCOME
EXEMPTED
2
Countries
And
Territories
Residence
Based No
Flag
Residence
&Flag
Reciprocal
LOB
29
Article
Operating
Income
Full
Rental
(Time or
Voyage
Charter)
Bare-Boat
Rental
Incidental
Container
Rental
Cap
Gains
Russian Federation
35
X- XXXX
20
XX
Slovak Republic
35
X- XXXX
3
XX
Slovenia
35
X- XXXX
20
XX
South Africa
35
X- XXXX
20
XX
Spain
X- XXXX
3
XX
Sri Lanka
5/19/31/35
X- XXX
20
X
20
--
Sweden
X- XXXX
3
XX
Switzerland
35
X- XXX
33
X
3
-X
Thailand
35
X
5
-XXXX
3
XX
X
6
-X----X
Trinidad & Tobago
35
-X
25
-X X
3
X
3
-X
Tunisia
35
X- XXX
20
X
20
XX
TurkeyX-XXXX
3
XX
Ukraine
35
X- XXXX
20
XX
USSR/NIS
34/35
-X-X
8
---X
U.K.
19/35
X- XXXX
3
XX
Venezuela
35
X- XXXX
20
XX
FOOTNOTES TO TABLES
1
Notes signed prior to the Technical and Miscellaneous Revenue Act of 1988 are interpreted in accordance with the technical corrections enacted by thatAct.
2
Under the heading “Types of Shipping and Aircraft Income Exempted” unless otherwise footnoted, an “X” indicates full exemption whether or not there isa
permanent establishment.
3
The tax exemption is available only if the income is incidental to operating income.
4
The note was ratified by the Bolivian Congress and signed by the Bolivian President. The note and exemption officially became effective upon publication in
the official Gazette on March 31, 1999, for income earned after that date.
5
This exemption applies to aircraft only.
6
This exemption applies to shipping only.
7
This diplomatic note applies to Hong Kong before July 1, 1997, and pursuant to Notice 97–40, 1997–2 C.B. 287, to the Hong Kong Special Administrative
Region of the People’s Republic of China on or after July 1, 1997. The note does not apply with respect to the People’s Republic of China, which will continue
to be treated as a separate country for purposes of the Internal Revenue Code.
8
Operating
income is not defined.
9
The note is effective for all taxable years beginning on or after January 1, 1999, and for all prior open taxable years.
10
Only corporations are exempt under the Brazilian and Portuguese statutes.
11
The count
ry generally imposes no income tax.
12
This exemption is generally effective for all open years beginning on or after January 1, 1987.
13
The Spanish statute exempts only corporations.
14
See gene
rally Rev. Rul. 87–18, 1987–1 C.B. 178 (explaining the application of Turkey’s domestic-law exemption).
15
Table II is relevant for determining whether a shareholder of a foreign corporation is a resident of a country that grants an equivalent exemption by means of an
income tax convention with the United States. Table II is also relevant for determining whether a foreign corporation itself is eligible to claim an exemption
under se
ction 883(a) when it is organized in a country that only provides an exemption by means of an income tax convention.
16
Lessor must either regularly lease ships or aircraft on a full basis or operate them in international traffic.
2008–12 I.R.B.632March 24, 2008

17
This exemption applies if the ships or aircraft are operated in international traffic by the lessee, and the rental income is incidental to the operation of ships or
aircraft in international traffic by the lessor.
18
Except to the extent depreciation has been allowed in the other country.
19
The following countries have entered into new income tax conventions or protocols with the United States that contain new Shipping and Air Transport articles
that supersede prior income tax conventions reported in Rev. Rul. 2001–48:
Australia............................. January1,2004
Bangladesh........................... January1,2007
Belgium.............................. January1,2008
Japan................................
January 1, 2005
SriLanka............................. January1,2004
UnitedKingdom....................... January1,2004
20
This exemption applies if the ships or aircraft are operated in international traffic by the lessee, or the rental income is incidental to the operation of ships or
aircraft in international traffic by the lessor.
21
In the case of aircraft only, the registration may be in the country of residence or in any country with a treaty providing an equivalent exemption between
such country and the country of residence.
22
Pursuant to Notice 97–40, 1997–2 C.B. 287, the treaty between the United States and the People’s Republic of China (China) will continue to apply only to
China and will not apply to the Hong Kong Special Administrative Region of the People’s Republic of China. The Shipping and Aircraft Agreement between
China and the United States was ratified on September 6, 1983. The Shipping and Aircraft Agreement is separate from the income tax treaty with China.
23
The exempt
ion applies except where the containers are used solely between places within the other Contracting State.
24
This treaty is effective for the eastern States of Germany (the former East Germany) from January 1, 1991.
25
Documentation or registration required for ships or aircraft of United States residents only.
26
This trea
ty exempts gains derived by an enterprise of a Contracting State if the ships or aircraft or containers are owned and operated by the enterprise
and the income from them is taxable only in that State.
27
Income from the bareboat rental of aircraft used in international traffic is exempt. Income from the bareboat rental of ships also is exempt if the shipis operated
in inter
national traffic and if the lessee is not a resident of, or does not have a permanent establishment in, the other Contracting State.
28
See also the diplomatic notes or protocol accompanying this treaty.
29
Each country identified in this column has entered into an income tax convention with the United States that contains a comprehensive limitation on
benefi
ts article. Accordingly, if a foreign corporation or shareholder of a foreign corporation intends to rely on an equivalent exemption provided through
such an income tax convention with the United States, that person must be a resident of that country for treaty purposes and satisfy the limitation on
benefits article in that convention.
30
This exemption applies if the ship or aircraft is operated in international traffic or if the rental income is incidental to income from such international operation.
31
In connection with the revised U.S. protocol with Sri Lanka, an exchange of notes signed September 20, 2002, provides, “[w]ith respect to Article 8 (Shipping
and Air Transport), it is understood that Sri Lanka shall exempt from tax the profits of an enterprise of the United States from sources within Sri Lankafrom the
operation in international traffic of ships for as long as there remains in force Article 8 of the Convention between the Government of the Democratic Socialist
Republic of Sri Lanka and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, signed at London on June 21, 1979; Article 8 of the Convention Between the
Government of the Polish People’s Republic and the Government of the Democratic Socialist Republic of Sri Lanka for the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, signed at Colombo on April 25, 1980; or any provision granting the same
treatment as accorded under aforesaid provisions to a resident of a third state.”
32
As a result of correspondence, it was clarified that income from the international operation of ships or aircraft includes this category of income.
33
This exemption applies if the ships or aircraft are used by the lessee in international traffic.
34
The U.S. - U.S.S.R. income tax treaty signed June 20, 1973, continues to applyto the New Independent States (NIS) ofArmenia, Azerbaijan, Belarus, Georgia,
Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. See Treasury News NB–1763.
35
This country only provides an exemption from tax through an income tax convention with the United States. A corporation organized in this country and
claiming an exemption under section 883(a) must satisfythe additional requirements set forth in §1.883–1T(h)(3).
Section 894.—Income
Affected by Treaty
A revenue ruling is provided to assist a foreign
corporation engaged in the international operation of
ships or aircraft, and its shareholders, in determin-
ing whether the foreign corporation is organized in
a country that grants an “equivalent exemption” from
tax for purposes of section 883(a) and (c) of the In-
ternal Revenue Code (Code). This revenue ruling
is also intended to assist a nonresident alien individ-
ual engaged in the international operation of ships or
aircraft in determining whether a country grants an
equivalent exemption from tax for purposes of sec-
tion 872(b) of the Code. See Rev. Rul. 2008-17,
page 626.
Section 4371.—Imposition
of Tax
An announcement describes a voluntary compli-
ance initiative by the Internal Revenue Service (IRS)
regarding the foreign insurance excise tax. See An-
nouncement 2008-18, page 667.
(Also: 4372, 4373, and 4374.)
Insurance premiums; excise tax con-
sequences.This ruling describes the insur-
ance excise tax consequences (under sec-
tion 4371 of the Code) of insurance premi-
ums paid by one foreign insurer (foreign
insurer) to another (foreign reinsurer). In
particular, the ruling addresses the excise
tax consequences of such payments where
the foreign insurer is eligible for a waiver
of the excise tax by income tax treaty but
the foreign reinsurer is not. There are two
types of insurance excise tax waivers pro-
vided by treaty. The ruling addresses both
types of waivers. Rev. Rul. 58–612 clari-
fied and amplified.
Rev. Rul. 2008–15
ISSUES
1) Whether the reinsurance excise tax
imposed by section 4371(3) of the Internal
Revenue Code (Code) on policies of rein-
surance covering contracts taxable under
March 24, 20086332008–12 I.R.B.

paragraph (1), (2) or (3) of section 4371 ap-
plies to reinsurance premiums paid by one
foreign insurer or reinsurer to another.
2) Whether the insurance excise taxes
imposedbysection4371applytotheex-
tent that a foreign insurer or reinsurer that
would otherwise be entitled under an in-
come tax treaty to an exemption from the
excise taxes imposed by paragraphs (1),
(2) or (3) of section 4371 reinsures the
risks covered by such contracts with a for-
eign reinsurer that is not entitled to an ex-
emption from such excise taxes under an
income tax treaty (a nonqualified foreign
reinsurer).
FACTS
Situation 1
Foreign Insurer, a foreign corporation
incorporated in Country X, issues policies
of casualty insurance to U.S. Corporation,
a domestic corporation, with respect to
hazards, risks, losses, or liabilities wholly
or partly within the United States. For-
eign Insurer is not engaged in a trade or
business in the United States. Country X
does not have an income tax treaty with the
United States.
Foreign Insurer enters into a reinsur-
ance agreement with Foreign Reinsurer, a
foreign corporation incorporated in Coun-
try Y, whereby Foreign Reinsurer agrees
to indemnify Foreign Insurer against all or
part of the loss that Foreign Insurer may
sustain under the policies it has issued to
U.S. Corporation. Foreign Reinsurer is not
engaged in a trade or business in the United
States. Country Y has an income tax treaty
with the United States that does not exempt
insurance premiums from the excise taxes
imposedbysection4371.
Situation 2
Foreign Reinsurer A, a foreign corpo-
ration incorporated in Country W, issues
policies of reinsurance to Domestic In-
surer, a U.S. corporation, that cover casu-
alty insurance contracts issued to or for, or
in the name of, an insured as defined in
section 4372(d). Foreign Reinsurer A en-
ters into a reinsurance agreement with For-
eign Reinsurer B, incorporated in Country
Y, whereby Foreign Reinsurer B agrees to
indemnify Foreign Reinsurer A against all
or part of the loss that Foreign Reinsurer
A may sustain under the policies it has is-
sued to Domestic Insurer. Country W and
Country Y have income tax treaties with
the United States that do not exempt insur-
ance premiums from the excise taxes im-
posedbysection4371.
Situation 3
The facts are the same as in Situation 1,
except that there is an income tax treaty in
force between the United States and Coun-
try X (the “U.S.-X Treaty”). Foreign In-
surer is a resident of Country X for pur-
poses of the U.S.-X Treaty and satisfies
the requirements of the limitation on ben-
efits article in that treaty. Article 2 of the
U.S.-X Treaty provides, in pertinent part:
The existing taxes to which this Con-
vention shall apply are:
In the case of the United States:
***
the Federal excise taxes imposed on
insurance premiums paid to foreign in-
surers...
The Convention shall, however, ap-
ply to the Federal excise taxes imposed
on insurance premiums paid to foreign
insurers only to the extent that the risks
covered by such premiums are not rein-
sured with a person not entitled to the
benefits of this or any other convention
which provides exemption from these
taxes....
***
Situation 4
The facts are the same as in Situation 1,
except that Foreign Insurer is a resident of
Country Z and there is an income tax treaty
in force between the United States and
Country Z (the “U.S.-Z Treaty”) that con-
tains a comprehensive limitation on ben-
efits article. Foreign Insurer satisfies the
requirements of the limitation on benefits
article in that treaty. Article 2 of the U.S.-Z
Treaty provides, in pertinent part:
The existing taxes to which this Con-
vention shall apply are:
In the case of the United States:
***
the Federal excise taxes imposed on
insurance policies issued by foreign in-
surers...
The Business Profits article of the
Country Z treaty provides in pertinent
part:
***
The United States excise tax on in-
surance policies issued by foreign in-
surers shall not be imposed on insur-
ance or reinsurance policies, the premi-
ums on which are the receipts of a busi-
ness of insurance carried on by an en-
terprise of Country Z. However, if such
policies are entered into as part of a
conduit arrangement, the United States
may impose excise tax on those poli-
cies, unless the premiums in respect of
those policies are, or are part of, the in-
come of a permanent establishment that
the enterprise of Country Z has in the
United States.
The term “conduit arrangement” is
defined to mean a transaction or series
of transactions:
whichisstructuredinsuchaway
that a resident of a Contracting State
entitled to the benefits of this Con-
vention receives an item of income
arising in the other Contracting State
but that resident pays, directly or in-
directly, all or substantially all of
that income (at any time or in any
form) to another person who is not a
resident of either Contracting State
and who, if it received that item of
income direct from the other Con-
tracting State, would not be entitled
under a convention for the avoid-
ance of double taxation between the
state in which that other person is
resident and the Contracting State in
which the income arises, or other-
wise, to benefits with respect to that
item of income which are equivalent
to, or more favourable than, those
available under this Convention to a
resident of a Contracting State; and
which has as its main purpose, or
one of its main purposes, obtaining
such increased benefits as are avail-
able under this Convention.
It is assumed for purposes of this rev-
enue ruling that Foreign Insurer has not en-
tered into such policies with U.S. Corpora-
tion as part of a conduit arrangement.
LAW AND ANALYSIS
Section 4371 of the Code imposes an
excise tax on each policy of insurance, in-
demnity bond, annuity contract, or policy
of reinsurance issued by any foreign in-
surerorreinsurer.
2008–12 I.R.B.634March 24, 2008

Section 4371(1) imposes such excise
tax at the rate of 4 cents on each dollar,
or fractional part thereof, of the premium
paid on the policy of casualty insurance or
the indemnity bond, if issued to or for, or in
the name of, an insured as defined in sec-
tion 4372(d).
Section 4371(2) imposes such excise
tax at the rate of 1 cent on each dollar, or
fractional part thereof, of the premium paid
on the policy of life, sickness, or accident
insurance, or annuity contract.
Section 4371(3) imposes such excise
tax at the rate of 1 cent on each dollar, or
fractional part thereof, of the premium paid
on the policy of reinsurance covering any
of the contracts taxable under paragraph
(1) or (2) of section 4371.
Section 4372(a) of the Code, for pur-
poses of Section 4371, defines the term
“foreign insurer or reinsurer” as an insurer
or reinsurer who is a nonresident alien in-
dividual, or a foreign partnership, or a for-
eign corporation.
Section 4372(d)(1) of the Code defines
the term “insured” to include a domestic
corporation or partnership, or an individ-
ual resident of the United States, that is
insured against, or with respect to, haz-
ards, risks, losses, or liabilities wholly or
partly within the United States. Section
4372(d)(2) defines the term “insured” to
include also a foreign corporation, foreign
partnership, or nonresident individual, en-
gaged in a trade or business within the
United States, that is insured against, or
with respect to, hazards, risks, losses, or
liabilities within the United States.
Section 4372(f) of the Code defines the
term “policy of reinsurance”, for the pur-
poses of section 4371(3), as any policy or
other instrument by whatever name called
whereby a contract of reinsurance is made,
continued, or renewed against, or with re-
spect to, any of the hazards, risks, losses,
or liabilities covered by contracts taxable
under paragraph (1) or (2) of section 4371.
Section 4373(1) of the Code provides
an exemption, whereby the tax imposed by
section 4371 shall not apply to any amount
which is effectively connected with the
conduct of a trade or business within
the United States unless such amount is
exempt from the application of section
882(a) of the Code pursuant to a treaty
obligation of the United States.
Section 4374 of the Code provides that
any tax imposed by section 4371 shall be
paid, on the basis of a return, by any person
who makes, signs, issues, or sells any of
the documents and instruments subject to
the tax, or for whose use or benefit the
same are made, signed, issued or sold.
Revenue Ruling 58–612, 1958–2 C.B.
850, concluded that a policy of reinsurance
issued by a foreign insurer covering any
of the hazards, risks, losses or liabilities
covered by contracts taxable under section
4371(1) and (2) of the Code is subject to
the tax imposed on reinsurance policies by
section 4371(3) of the Code, regardless of
whether the primary insurer was a domes-
tic or foreign insurer.
InUnited States v. Northumberland
Insurance Co., Ltd., 521 F. Supp. 70
(D.N.J.1981),thecourtheldthatthe
premiums ceded for a reinsurance policy
issued by a foreign reinsurer are taxable
if the underlying policy is issued to an
“insured” as defined in section 4372(d),
and there is no requirement that the
reinsured qualify as an “insured” to be
subject to the excise tax.
InAmerican Bankers Insurance Com-
pany of Florida v. United States,265
F.Supp 67 (S. D. Fla. 1967) (aff’d 388 F.2d
304, 5
th
Cir. 1968), the court held that, for
purposes of determining whether the tax
imposedbysection4371(3)oftheInternal
Revenue Code of 1954 applied to contracts
of reinsurance issued by foreign insurers
to reinsure policies of insurance issued by
plaintiffs who were domestic insurers, the
phrase “taxable under paragraph (1) or (2)”
in section 4371(3) does not require actual
taxation. The tax may be imposed if the
policies are of the type “covered” or “de-
scribed in” paragraphs (1) and (2), as such
contracts are of the type capable of being
taxed.
Treas. Reg. §46.4371–2(c), issued in
1970, incorporating the decision inAmer-
ican Bankers Insurance Company, states
that “[s]ection 4371(3) imposes a tax upon
each policy of reinsurance...if issued- (1)
[b]y a nonresident alien individual, a for-
eign partnership, or a foreign corporation,
as reinsurer ...; and (2) [t]o any person
against, or with respect to, any of the haz-
ards, risks, losses, or liabilitiescovered by
contracts describedin section 4371(1) or
(2).” (Emphasis added).
Situation 1
In Situation 1, the premiums paid by
U.S. Corporation on the policies of casu-
alty insurance issued by Foreign Insurer
are subject to the four-percent excise tax
imposed by section 4371(1), because the
policies were issued by Foreign Insurer,
a foreign corporation, to U.S. Corpora-
tion, an “insured” for purposes of section
4372(d). In addition, premiums paid by
Foreign Insurer on the policies of reinsur-
ance issued by Foreign Reinsurer with re-
spect to the foregoing insurance policies
are subject to the one-percent excise tax
imposed by section 4371(3) because sec-
tion 4371(3) imposes an excise tax on rein-
surancepoliciesissuedbyaforeignrein-
surer with respect to risks covered by con-
tracts described in section 4371(1).
Situation 2
In Situation 2, the reinsurance premi-
ums paid by Domestic Insurer to Foreign
Reinsurer A covering casualty insurance
contracts issued by Domestic Insurer are
subject to the one-percent excise tax im-
posed by section 4371(3), because the
policies of reinsurance cover contracts
described in section 4371(1). The pre-
miums paid by Foreign Reinsurer A to
Foreign Reinsurer B are also subject to the
one-percent excise tax imposed by section
4371(3) based on the same analysis.
Situation 3
In Situation 3, the premiums paid by
U.S. Corporation on the policies of casu-
alty insurance issued by Foreign Insurer
would generally be exempt from the sec-
tion 4371(1) excise tax under the U.S.-X
Treaty. However, the U.S.-X Treaty also
provides that such premiums are not ex-
empt to the extent that the risks covered
by such premiums are reinsured with a for-
eign reinsurer not entitled to the benefits of
a treaty that provides an exemption from
insurance excise taxes. Therefore, because
the risks are reinsured with Foreign Rein-
surer, who is not entitled to the benefits of a
treaty that provides an exemption from in-
suranceexcisetaxes,theinsurancepremi-
ums received by Foreign Insurer from U.S.
Corporation are subject to the four-percent
excise tax as of the date the reinsurance
premiums are paid by Foreign Insurer to
Foreign Reinsurer. In addition, premiums
March 24, 20086352008–12 I.R.B.

paid by Foreign Insurer to Foreign Rein-
surer on the policies of reinsurance cover-
ing contracts described in section 4371(1)
are subject to the one-percent excise tax
imposed by section 4371(3), because For-
eign Reinsurer is a resident of Country Y,
which has an income tax treaty with the
United States that does not exempt insur-
ance premiums from the excise taxes im-
posedbysection4371.
Situation 4
In Situation 4, the insurance premiums
paid by U.S. Corporation on the policies
of casualty insurance issued by Foreign In-
surer are exempt from the section 4371(1)
excise tax after application of the U.S.-Z
Treaty because Foreign Insurer satisfies
the requirements of the limitation on ben-
efits provision of the U.S.-Z Treaty and
the policies were not entered into as part
of a conduit arrangement. However, the
premiums paid by Foreign Insurer to For-
eign Reinsurer on the policies of reinsur-
ance issued by Foreign Reinsurer are sub-
ject to the one-percent excise tax imposed
by section 4371(3), because Foreign Rein-
surer is a resident of Country Y, which
has an income tax treaty with the United
States that does not exempt insurance pre-
miums from the excise taxes imposed by
section 4371. The fact that the original in-
surance premiums paid by U.S. Corpora-
tion to Foreign Insurer are exempt from tax
after application of the U.S.-Z Treaty does
not preclude imposition of the excise tax
under section 4371(3) on premiums paid
by Foreign Insurer to Foreign Reinsurer.
Such reinsurance premiums are paid on
policies of reinsurance covering contracts
described in and capable of being taxed un-
der section 4371(1).
HOLDINGS
(1) The rei
nsurance excise tax imposed
by section
4371(3) on policies of reinsur-
ance cover
ing contracts described in para-
graph (1),
(2) or (3) of section 4371 applies
to reinsu
rance premiums paid by one for-
eign insu
rer or reinsurer to another foreign
reinsure
r, unless the second foreign rein-
surer iss
uing the policies is itself entitled to
an exempt
ion from the excise tax under an
income t
ax treaty with the United States.
(2) Under the terms of the U.S.-X
Treaty in Situation 3, the exemption from
the excise taxes imposed by section 4371
provided by the U.S.-X Treaty does not
apply where a foreign insurer or rein-
surer entitled to the benefits of the U.S.-X
Treaty reinsures policies covering con-
tracts described in paragraph (1), (2) or (3)
ofsection4371withaforeignreinsurer
not entitled to an exemption from excise
tax under the U.S.-X Treaty or another
income tax treaty (the nonqualified for-
eign reinsurer). Thus, the premiums on
the underlying policies of insurance or
reinsurancepaidtotheforeigninsurerbe-
come subject to the relevant excise taxes
imposedbysection4371uponthepay-
ment of the subsequent premiums to the
nonqualified foreign reinsurer. In addi-
tion, the reinsurance premiums paid by the
foreign insurer or reinsurer to the nonqual-
ified foreign reinsurer are subject to the
one-percent excise tax imposed by section
4371(3) when paid.
(3) In contrast, under the terms of the
U.S.-Z Treaty in Situation 4, if a foreign
insurer or reinsurer entitled to the bene-
fits of the U.S.-Z Treaty reinsures policies
covering contracts described in paragraph
(1), (2) or (3) of section 4371 with another
foreign reinsurer not entitled to an exemp-
tion from excise tax under an income tax
treaty, the premiums paid on the underly-
ing policies will not become subject to the
excise taxes imposed by section 4371, un-
less such policies were entered into as part
of a conduit arrangement, as defined in the
U.S.-Z Treaty. Even if there is no conduit
arrangement, however, the one-percent ex-
cise tax under section 4371(3) still applies
when the foreign insurer or reinsurer pays
premiums to the nonqualified foreign rein-
surer.
EFFECT ON OTHER REVENUE
RULING(S)
Rev. Rul. 58–612 is clarified and am-
plified.
DRAFTING INFORMATION
Various p
ersonnel from the Office of
the Assoc
iate Chief Counsel (Interna-
tional) p
articipated in the development of
this reve
nue ruling. For further informa-
tion regarding this revenue ruling, contact
Mr. Willard Yates of the Office of the
Associate Chief Counsel (International) at
(202) 622–3880 (not a toll-free call).
Section 4372.—Definitions
A revenue ruling discusses whether the reinsur-
ance excise tax imposed by section 4371(3) of the
Internal Revenue Code (Code) on policies of reinsur-
ance covering contracts taxable under paragraph (1),
(2) or (3) of section 4371 applies to reinsurance pre-
miums paid by one foreign insurer or reinsurer to an-
other. See Rev. Rul. 2008-15, page 633.
An announcement describes a voluntary compli-
ance initiative by the Internal Revenue Service (IRS)
regarding the foreign insurance excise tax. See An-
nouncement 2008-18, page 667.
Section 4373.—Exemptions
A revenue ruling discusses whether the reinsur-
ance excise tax imposed by section 4371(3) of the
Internal Revenue Code (Code) on policies of reinsur-
ance covering contracts taxable under paragraph (1),
(2) or (3) of section 4371 applies to reinsurance pre-
miums paid by one foreign insurer or reinsurer to an-
other. See Rev. Rul. 2008-15, page 633.
An announcement describes a voluntary compli-
ance initiative by the Internal Revenue Service (IRS)
regarding the foreign insurance excise tax. See An-
nouncement 2008-18, page 667.
Section 4374.—Liability
for Tax
A revenue ruling discusses whether the reinsur-
ance excise tax imposed by section 4371(3) of the
Internal Revenue Code (Code) on policies of reinsur-
ance covering contracts taxable under paragraph (1),
(2) or (3) of section 4371 applies to reinsurance pre-
miums paid by one foreign insurer or reinsurer to an-
other. See Rev. Rul. 2008-15, page 633.
An announcement describes a voluntary compli-
ance initiative by the Internal Revenue Service (IRS)
regarding the foreign insurance excise tax. See An-
nouncement 2008-18, page 667.
Section 7
270.—Insurance
Policies
An announ
cement describes a voluntary compli-
ance init
iative by the Internal Revenue Service (IRS)
regardin
g the foreign insurance excise tax. See An-
nouncem
ent 2008-18, page 667.
2008–12 I.R.B.636March 24, 2008

Part III. Administrative, Procedural, and Miscellaneous
Alternative Disability Mortality
Tables — Continued Reliance
on Revenue Ruling 96–7
Notice 2008–29
This notice provides guidance regard-
ing the mortality tables that are permit-
ted to be used to determine present values
with respect to individuals who are enti-
tled to benefits under a qualified defined
benefit pension plan on account of disabil-
ity. This notice reflects changes to the min-
imum funding requirements made by the
Pension Protection Act of 2006, Pub. L.
109–280 (PPA ’06).
Background
Pursuant to changes made by PPA ’06,
§ 412 of the Internal Revenue Code pro-
vides minimum funding requirements for
qualified defined benefit pension plans
that generally apply for plan years begin-
ning on or after January 1, 2008. Section
430 specifies the minimum required con-
tribution that must be made for a single
employer defined benefit plan under § 412
as modified by PPA ’06. Section 431
specifies the amount that must be con-
tributed under § 412 to a multiemployer
defined benefit plan to avoid an accumu-
lated funding deficiency in order to satisfy
the requirements of § 412 as modified by
PPA ’06. Prior to these changes, the min-
imum funding requirements for qualified
pension plans were set forth in § 412.
PriortoamendmentbyPPA’06,
§ 412(l)(7)(C)(ii) required the use of cer-
tain mortality tables to determine a plan’s
current liability, effective for plan years
beginning after December 31, 1994. Sec-
tion 412(l)(7)(C)(iii)(I) provided that, for
purposes of determining current liability
for plan years beginning after December
31, 1995, the Secretary was required to
establish mortality tables that were per-
mitted to be used, in lieu of the tables
under § 412(l)(7)(C)(ii), to determine cur-
rent liability under § 412(l) for individuals
who were entitled to benefits under the
plan on account of disability. The Sec-
retary was required to establish separate
tables for individuals whose disabilities
occurred in plan years beginning before
January 1, 1995, and for individuals whose
disabilities occurredin plan years begin-
ning after December 31, 1994. Under
§ 412(l)(7)(C)(iii)(II), the mortality table
for individuals whose disabilities occurred
in plan years beginning after December
31, 1994, applied only with respect to
individuals who were disabled within the
meaning of title II of the Social Security
Act and the regulations thereunder.
Rev. Rul. 96–7, 1996–1 C.B. 59, which
was effective for plan years beginning after
December 31, 1995, set forth the mortality
tables that were permitted to be used pur-
suant to § 412(l)(7)(C)(iii)(I) for disabili-
ties occurring in plan years beginning be-
fore January 1, 1995, and for disabilities
occurring in plan years beginning after De-
cember 31, 1994.
Section 430(h)(3) provides rules re-
gardingthemortalitytablestobeusedin
determining present values and making
other computations under § 430. Section
430(h)(3)(D) provides that, for purposes
of determining any present value or mak-
ing any computation under § 430 for plan
years beginning after December 31, 2007,
the Secretary is to establish mortality ta-
bles that may be used, in lieu of the tables
under § 430(h)(3)(A), for individuals who
are entitled to benefits under the plan on
account of disability. The Secretary is to
establish separate tables for individuals
whose disabilities occurred in plan years
beginning before January 1, 1995, and
for individuals whose disabilities occur
in plan years beginning after December
31, 1994. Under § 430(h)(3)(D)(ii), the
mortality table for individuals whose dis-
abilities occur in plan years beginning
after December 31, 1994, applies only
with respect to individuals who are dis-
abled within the meaning of title II of
the Social Security Act and the regula-
tions thereunder. Thus, the standard for
the establishment of mortality tables that
are permitted to be used with respect to
individuals who are entitled to benefits
under the plan on account of disability
is the same under § 430(h)(3)(D) as the
standard that previously applied under
§ 412(l)(7)(C)(iii).
Section 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans. Under § 431(c)(6)(B),
a plan’s full funding limitation cannot be
less than the excess (if any) of 90 per-
cent of the current liability of the plan
(including the expected increase in current
liability due to benefits accruing during
the plan year) over the value of the plan’s
assets. Section 431(c)(6)(D)(iv), (v), and
(vi) provide rules regarding the mortal-
itytablestobeusedindetermininga
plan’s current liability for this purpose.
Section 431(c)(6)(D)(v)(I) provides that,
for purposes of determining a plan’s cur-
rent liability, the Secretary is to establish
mortality tables that may be used, in lieu
of the tables that apply generally under
§ 431(c)(6)(D)(iv), for individuals who
are entitled to benefits under the plan on
account of disability. The Secretary is to
establish separate tables for individuals
whose disabilities occurred in plan years
beginning before January 1, 1995, and
for individuals whose disabilities occur
in plan years beginning after December
31, 1994. Under § 431(c)(6)(D)(v)(II),
the mortality table for individuals whose
disabilities occur in plan years beginning
after December 31, 1994, applies only
with respect to individuals who are dis-
abledwithinthemeaningoftitleIIof
the Social Security Act and the regula-
tions thereunder. Thus, like the standard
for the establishment of mortality tables
with respect to disabled participants un-
der § 430(h)(3)(D), the standard for the
establishment of mortality tables that
are permitted to be used with respect to
individuals who are entitled to benefits
under a plan on account of disability un-
der § 431(c)(6)(D)(v) is the same as the
standard that previously applied under
§ 412(l)(7)(C)(iii).
Continued Use of Revenue Ruling 96–7
Disabled Mortality Tables
Until further guidance is issued, the
rules of Rev. Rul. 96–7 (including the
mortality tables set forth in Rev. Rul.
96–7 as well as the rules regarding the de-
termination of whether a benefit is payable
on account of disability) apply under
§§ 430(h)(3)(D) and 431(c)(6)(D)(v). As
provided in § 1.430(h)(3)–2(c)(1)(iv) of
the proposed Income Tax Regulations, the
alternative mortality tables in Rev. Rul.
96–7 are permitted to be applied where
March 24, 20086372008–12 I.R.B.

employer-specific substitute mortality ta-
bles are used for nondisabled participants,
but only if mortality experience with re-
spect to disabled individuals for which
those tables are used has been excluded in
developing mortality rates for the substi-
tute mortality tables.
Comments Requested
The Service is considering issu-
ing updated mortality tables under
§§ 430(h)(3)(D) and 431(c)(6)(D)(v) that
could be used with respect to individuals
who are entitled to pension plan benefits
on account of disability. Comments are
requested regardingthe construction of
these updated mortality tables, including
suggestions for sources of updated data re-
garding mortality experience with respect
to disabled pension plan participants. In
addition, comments are requested con-
cerning the use of select and ultimate mor-
tality tables under which mortality rates
vary depending on the individual’s age
and the number of years that the individ-
ual has been disabled. Written comments
should be submitted by June 23, 2008.
Send submissions to CC:PA:LPD:DRU
(Notice 2008–29), Room 5203, Internal
Revenue Service, POB 7604, Ben Franklin
Station, Washington, D.C. 20044. Com-
ments may be hand delivered between
the hours of 8 a.m. and 4 p.m., Mon-
day through Friday, to CC:PA:LPD:DRU
(Notice 2008–29), Courier’s Desk, Inter-
nal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC, or sent
electronically via the Federal eRulemak-
ing portal athttp://www.regulations.gov
(Notice 2008–29). All comments will be
available for public inspection.
Drafting Information
The principal author of this notice
is David Ziegler of the Tax Exempt
and Government Entities Division, Em-
ployee Plans. For further information
regarding this notice, please contact
the Employee Plans taxpayer assistance
telephone service at 1–877–829–5500
(a toll-free number) between the hours
of 8:00 a.m. and 4:30 p.m. East-
ern Time, Monday through Friday.
Mr. Ziegler can be contacted via e-mail at
RetirementPlanQuestions@irs.gov.
Miscellaneous Pension
Protection Act Changes
Notice 2008–30
I. PURPOSE AND BACKGROUND
This notice provides guidance in the
form of questions and answers with re-
spect to certain distribution-related pro-
visions of the Pension Protection Act of
2006, P.L. 109–280 (“PPA ’06”), that
are effective in 2008. This notice also
provides, in Part V, guidance on amending
plans to require that distribution of excess
deferrals includes earnings from the end of
the taxable year to the date of distribution
(“gap-period” earnings).
The sections of PPA ’06 addressed in
this notice are § 824 (relating to rollovers
from eligible retirement plans to Roth
IRAs), § 1004 (relating to additional sur-
vivor annuity options), and § 302 (relating
to interest rate assumptions for lump sum
distributions). Notice 2007–7, 2007–5
I.R.B. 395, provides guidance with respect
to certain provisions of PPA ’06 that are
primarily related to distributions and that
were effective beginning in 2007 or ear-
lier.
II. SECTION 824 OF PPA ’06
Prior to amendment by PPA ’06, § 408A
of the Code provided that a Roth IRA
could only accept a rollover contribu-
tion of amounts distributed from another
Roth IRA, from a nonRoth IRA (i.e.,
atraditionalorSIMPLEIRA)orfrom
a designated Roth account described in
§ 402A. These rollover contributions to
Roth IRAs are called “qualified rollover
contributions.” A qualified rollover con-
tribution from a nonRoth IRA to a Roth
IRA is called a “conversion.” An indi-
vidual who rolls over an amount from a
nonRoth IRA to a Roth IRA must include
in gross income any portion of the con-
version amount that would be includible
in gross income if the amount were dis-
tributed without being rolled over. For
distributions before 2010, a conversion
contribution is permitted only if the IRA
owner’s adjusted gross income does not
exceed certain limits.
Section 824 of PPA ’06 amended the
definition of qualified rollover contribu-
tion in § 408A of the Code to include
additional plans. Under this expansion,
in addition to the rollovers described in
the preceding paragraph, a Roth IRA can
accept rollovers from other eligible retire-
ment plans (as defined in § 402(c)(8)(B)).
The amendments made by § 824 of
PPA ’06 are effective for distributions
made after December 31, 2007.
Q–1. Can distributions from a qualified
plan described in § 401(a) be rolled over to
aRothIRA?
A–1. Yes. The rollover can be made
through a direct rollover from the plan
to the Roth IRA or an amount can be
distributed from the plan and contributed
(rolled over) to the Roth IRA within 60
days. In either case, the amount rolled over
must be an eligible rollover distribution
(as defined in § 402(c)(4)) and, pursuant
to § 408A(d)(3)(A), there is included in
gross income any amount that would be
includible if the distribution were not
rolled over. In addition, for taxable years
beginning before January 1, 2010, an in-
dividual can not make a qualified rollover
contribution from an eligible retirement
plan other than a Roth IRA if, for the year
the eligible rollover distribution is made,
he or she has modified adjusted gross in-
come (“MAGI”) exceeding $100,000 or is
married and files a separate return.
Q–2. Can distributions from other types
of retirement plans be rolled over to a Roth
IRA?
A–2. Subject to the limitations de-
scribed in the final sentence of A–1 of
this notice, the new definition of qualified
rollover contribution in § 408A(e) includes
distributions from annuity plans described
in § 403(a) and (b) and from eligible gov-
ernmental plans under § 457(b).
Q–3. Does the additional tax under
§ 72(t) apply to a qualified rollover con-
tribution from an eligible retirement plan
other than a Roth IRA?
A–3. No. Pursuant to § 408A(d)(3)
(A)(ii), the additional tax under § 72(t)
does not apply to rollovers from an eligible
retirement plan other than a Roth IRA.
However, as with conversions, if a taxable
amount rolled into a Roth IRA from
an eligible retirement plan other than a
Roth IRA is distributed within 5 years,
§72(t)appliestosuchdistributionasif
it were includible in gross income. See
§ 408A(d)(3)(F).
Q–4. Under § 401(a)(31)(A), must
a plan permit a distributee of an eligi-
2008–12 I.R.B.638March 24, 2008

ble rollover distribution to elect a direct
rollover to a Roth IRA?
A–4. Yes. Section 401(a)(31) requires
that a plan follow a distributee’s election to
have an eligible rollover distribution paid
in a direct rollover to an eligible retirement
plan specified by the distributee. Section
1.401(a)(31)–1 of the Income Tax Regula-
tions provides rules for direct rollovers, in-
cluding exceptions for small amounts and
multiple distributions.
Q–5. Is the plan administrator respon-
sible for assuring the distributee is eligible
to make a rollover to a Roth IRA?
A–5. No, the plan administrator is not
responsible for assuring the distributee is
eligible to make a rollover to a Roth IRA.
However, a distributee that is ineligible
to make a rollover to a Roth IRA may
recharacterize the contribution pursuant to
§ 408A(d)(6).
Q–6. What are the withholding require-
ments for an eligible rollover distribution
that is rolled over to a Roth IRA?
A–6. An eligible rollover distribution
paid to an employee or the employee’s
spouse is subject to 20% mandatory with-
holding under § 3405(c). Pursuant to
§ 3405(c)(2), an eligible rollover dis-
tribution that a distributee elects, under
§ 401(a)(31)(A), to have paid directly to
an eligible retirement plan (including a
Roth IRA) is not subject to mandatory
withholding, even if the distribution is
includible in gross income. Also, a distri-
bution that is directly rolled over to a Roth
IRA by a nonspouse beneficiary pursuant
to § 402(c)(11) (see Q&A–7 of this notice)
is not subject to mandatory withholding.
However, a distributee and a plan admin-
istrator or payor are permitted to enter into
a voluntary withholding agreement with
respect to an eligible rollover distribution
that is directly rolled over from an eligible
retirement plan to a Roth IRA. See section
3402(p) and the regulations thereunder for
rules relating to voluntary withholding.
Q–7. Can beneficiaries make qualified
rollover contributions to Roth IRAs?
A–7. Yes. In the case of a distribution
from an eligible retirement plan other than
a Roth IRA, the MAGI and filing status
of the beneficiary are used to determine
eligibility to make a qualified rollover
contribution to a Roth IRA. Pursuant to
§ 402(c)(11), a plan may but is not required
to permit rollovers by nonspouse bene-
ficiaries and a rollover by a nonspouse
beneficiary must be made by a direct
trustee-to-trustee transfer. A nonspouse
beneficiary that is ineligible to make a
qualified rollover contribution to a Roth
IRA may recharacterize the contribution
pursuant to § 408A(d)(6). A surviving
spouse who makes a rollover to a Roth
IRA may elect either to treat the Roth IRA
as his or her own or to establish the Roth
IRA in the name of the decedent with the
surviving spouse as the beneficiary. (See
Notice 2007–7, Q&A–13, for a rule on
how to title a beneficiary IRA.) A non-
spouse beneficiary cannot elect to treat the
Roth IRA as his or her own. (See Notice
2007–7, Part V.)
In the case of a rollover where the bene-
ficiary does not treat the Roth IRA as his or
her own, required minimum distributions
from the Roth IRA are determined in ac-
cordance with Notice 2007–7, Q&As –17,
–18 and –19.
III. SECTION 1004 OF PPA ’06
Section 401(a)(11) of the Code applies
to defined benefit plans and to certain de-
fined contribution plans that are subject to
the funding standards of § 412 or that do
not satisfy certain other requirements to be
exempt from § 401(a)(11). Plans that are
subject to § 401(a)(11) must provide that
accrued benefits are payable, in the case of
a vested participant who does not die be-
fore the annuity starting date, in the form
of a qualified joint and survivor annuity
(“QJSA”). Section 417(b) defines a QJSA,
for a married participant, as an annuity for
the life of a participant with a survivor an-
nuity for the life of the participant’s spouse
which is not less than 50% and not more
than 100% of the amount of the annuity
payable during the joint lives of the partic-
ipant and the spouse. Section 417(a) gen-
erally provides that a plan that is subject
to§401(a)(11)mustpermitaparticipant
to waive the QJSA, with spousal consent,
during an applicableelection period, and
must provide a written explanation to the
participant of the terms and conditions of
the QJSA.
Section1004ofPPA’06amends
§ 417 to require a plan that is subject
to § 401(a)(11) to offer to participants a
specified optional form of benefit as an
alternative to the QJSA. In particular, a
plan that is subject to § 401(a)(11) must
provide to a participant who waives the
QJSA an opportunity to elect a qualified
optional survivor annuity (“QOSA”) dur-
ing the applicable election period, and
must provide a written explanation to par-
ticipants of the terms and conditions of the
QOSA. Section 1004 of PPA ’06 defines
a QOSA as an annuity for the life of a
participant with a survivor annuity for the
life of the participant’s spouse that is equal
to a specified applicable percentage of
the amount of the annuity that is payable
during the joint lives of the participant and
the spouse, and that is the actuarial equiv-
alent of a single life annuity for the life
of the participant. A QOSA also includes
a distribution option in a form having the
effect of such an annuity.
Section1107ofPPA’06permitsaplan
sponsor to delay adopting a plan amend-
ment pursuant to statutory provisions un-
der PPA ’06 (or pursuant to any regulation
issued under PPA ’06) until the last day
of the first plan year beginning on or after
January 1, 2009 (January 1, 2011, in the
case of governmental plans). This amend-
ment deadline applies to both interim and
discretionary amendments that are made
pursuant to PPA ’06 statutory provisions
or any regulation issued under PPA ’06.
If§1107ofPPA’06appliestoaplan
amendment, the plan does not fail to sat-
isfy the requirements of § 411(d)(6) by rea-
son of the amendment except as provided
by the Secretary of the Treasury. How-
ever, see Q&A–14 of this notice, which
provides that § 411(d)(6) relief does not
apply to a plan amendment adopted pur-
suant to § 1004 of PPA ’06.
Q–8. What level of spouse survivor
annuity must be provided under a QOSA?
A–8. The level of spouse survivor an-
nuity that must be provided under a QOSA
depends upon the level of spouse survivor
annuity provided under a plan’s QJSA
(that is, the QJSA form of benefit that is
provided to a married participant in the
absence of a waiver of such form of bene-
fit). If the QJSA for a married participant
provides a survivor annuity for the life of
the participant’s spouse that is less than
75 percent of the amount of the annuity
that is payable during the joint lives of the
participant and the participant’s spouse,
the QOSA must provide a spouse survivor
annuity percentage of 75 percent. If the
QJSA for a married participant provides a
survivor annuity for the life of the partici-
pant’s spouse that is greater than or equal
March 24, 20086392008–12 I.R.B.

to 75 percent of the amount of the annuity
that is payable during the joint lives of the
participant and the participant’s spouse,
the QOSA must provide a spouse survivor
annuity percentage of 50 percent.
Q–9. If, both before and after the effec-
tive date of § 1004 of PPA ’06, a plan that
is subject to § 401(a)(11) offers, in addition
to the QJSA, an optional joint and spouse
survivor annuity that isat least actuarially
equivalent to the plan’s single life annuity
form of benefit payable at the same time as
the optional joint and spouse survivor an-
nuity and that provides a spouse survivor
annuity percentage equal to the spouse sur-
vivor annuity percentage required to be
provided under a QOSA, must the plan be
amended or the plan’s administration be
changed in order to implement § 1004 of
PPA ’06?
A–9. No. A plan that is subject to
§ 401(a)(11) must provide an optional joint
and spouse survivor annuity that (i) is at
least actuarially equivalent to the plan’s
single life annuity form of benefit payable
at the same time as the optional joint and
spouse survivor annuity, and (ii) provides a
spouse survivor annuity percentage that is
equal to the spouse survivor annuity per-
centage required to be provided under a
QOSA. The plan need not be amended
so that the optional joint and spouse sur-
vivor annuity is designated as a QOSA,
and its administrativeprocedures need not
be revised to designate the optional form
of benefit as a QOSA. For example, a
plan that, both before and after the effec-
tive date of § 1004 of PPA ’06, provides
a QJSA for a married participant that in-
cludes a spouse survivor annuity percent-
age of 50 percent, and also provides an
optional joint and spouse survivor annu-
ity that includes a spouse survivor annu-
ity percentage of 75 percent and is at least
actuarially equivalent to the plan’s single
life annuity form of benefit payable at the
same time as the optional joint and spouse
survivor annuity, complies with § 1004 of
PPA ’06 without the need for any amend-
ment or other administrative change.
Q–10. If a plan that is subject to
§ 401(a)(11) provides a QJSA that is more
valuable than the plan’s single life annuity
form of benefit, must the plan’s QOSA be
at least actuarially equivalent to the QJSA
or need the plan’s QOSA only be at least
actuarially equivalent to the plan’s single
life annuity form of benefit payable at the
same time as the QOSA?
A–10. A plan subject to § 401(a)(11)
must provide a QOSA that is at least ac-
tuarially equivalent to the plan’s form of
benefit that is a single life annuity for the
life of the participant payable at the same
time as the QOSA. The QOSA need not be
actuarially equivalent to the plan’s QJSA.
Q–11. If a participant elects to receive
a distribution in the form of a QOSA, must
the participant’s spouse consent to the par-
ticipant’s election?
A–11. In general, spousal consent is re-
quired for a participant to waive a plan’s
QJSA form of distribution and elect an
alternative distribution form. However,
§ 1.401(a)–20, Q&A–16, provides that a
participant may elect out of the QJSA, in
favor of an actuarially equivalent alterna-
tive joint and survivor annuity that satis-
fies the conditions to be a QJSA, with-
out spousal consent. Because a QOSA, by
definition, satisfies the conditions to be a
QJSA, no spousal consent is required if a
plan participant elects a QOSA that is ac-
tuarially equivalent to the plan’s QJSA. If
the QOSA is not actuarially equivalent to
the QJSA, spousal consent is required for
the participant to waive the QJSA and elect
the QOSA.
Q–12. How does a plan that is sub-
ject to § 401(a)(11) satisfy the requirement
in § 417(a)(3)(i), as amended by §1004 of
PPA ’06, that the plan provide to a partici-
pant a written explanation of the terms and
conditions of the QOSA available to the
participant?
A–12. A plan that is subject to
§ 401(a)(11) can satisfy the requirement
that it provide to a participant a written
explanation of the terms and conditions of
the QOSA available to the participant by
satisfying the written explanation require-
ments of § 1.417(a)(3)–1. In satisfying
these written explanation requirements,
the plan must treat the QOSA as an op-
tional form of benefit presently available
to participants under the plan. The written
explanation need not designate the op-
tional form of benefit as the plan’s QOSA.
Q–13. Must a plan that is subject to
§ 401(a)(11) offer to participants, as an al-
ternative to a qualified preretirement sur-
vivor annuity described in § 417(c), a pre-
retirement survivor annuity that is based
on a QOSA?
A–13. No. A plan that is subject to
§ 401(a)(11) must offer participants a
QOSA that is an alternative form of distri-
bution to the QJSA. There is no require-
ment that the plan offer to participants, as
an alternative to a qualified preretirement
survivor annuity described in § 417(c),
a preretirement survivor annuity that is
based on a QOSA.
Q–14. How does § 1107 of PPA ’06,
which provides certain rules regarding
amendments made pursuant to PPA ’06,
apply to plan amendments adopted pur-
suant to § 1004 of PPA?
A–14. If a plan that is subject to
§ 401(a)(11) is amended to implement a
QOSA within the period established in
§ 1107(b)(2)(A) of PPA ’06, and the plan
is operated as if the amendment were in
effect during the period from the effec-
tive date of the changes made to § 417 by
§1004ofPPA’06untilthedateofthe
amendment, the plan is treated, pursuant
to§1107ofPPA’06,asbeingoperated
in accordance with its terms during such
period, and the amendment is treated as
being adopted on the effective date of
such changes made to § 417. However,
an amendment that implements a QOSA
is not eligible for any relief, pursuant to
§ 1107 of PPA ’06, from the requirements
of § 411(d)(6). Thus, for example, a plan
amendment that implements a QOSA may
eliminate a distribution form or reduce
or eliminate a subsidy with respect to a
distribution form only to the extent such
reduction or elimination is permitted un-
der § 1.411(d)–3.
Q–15. What is the effective date of
the changes made to § 417 by § 1004 of
PPA ’06?
A–15. In general, the changes to § 417
made by § 1004 of PPA ’06 apply to dis-
tributions from a plan that is subject to
§ 401(a)(11) with annuity starting dates in
plan years beginning after December 31,
2007. However, in the case of a plan that
is subject to § 401(a)(11) and that is main-
tained pursuant to one or more collective
bargaining agreements between employee
representatives and one or more employers
ratified on or before August 17, 2006 (the
date of enactment of PPA ’06), the changes
to§417madeby§1004ofPPA’06ap-
ply to distributions with annuity starting
dates during plan years beginning on or
after the earlier of (i) January 1, 2008 or,
if later, the date on which the last collec-
2008–12 I.R.B.640March 24, 2008

tive bargaining agreement related to the
plan terminates (determined without re-
gard to any extensions to a collective bar-
gaining agreement made after August 17,
2006), or (ii) January 1, 2009. In the event
a participant elects a distribution with a
retroactive annuity starting date (pursuant
to § 1.417(e)–1(b)(3)(iv)) that is before the
effective date of § 1004 of PPA ’06, the
date of the first actual payment of bene-
fits based on the retroactive annuity start-
ing date is substituted for the annuity start-
ing date for purposes of applying the rules
of this paragraph.
IV. SECTION 302 OF PPA ’06
Section 417(e)(3) of the Code provides
rules for the determination of the present
value of plan benefits for purposes of
§ 417(e). Section 417(e)(3)(A) generally
provides that, for purposes of § 417(e)(1)
and (e)(2), the present value is not per-
mitted to be less than the present value
calculated by using the applicable mortal-
ity table and the applicable interest rate as
definedin§417(e)(3)(B)and(C).
For plan years beginning prior to Jan-
uary 1, 2008, § 417(e)(3)(A)(ii)(II) defines
the term “applicable interest rate” as the
annual rate of interest on 30-year Treasury
securities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe
(the “pre-PPA ’06 applicable interest
rate”). In addition, for the same plan
years, § 417(e)(3)(A)(ii)(I) defines the
term “applicable mortality table” as the
mortality table prescribed by the Secretary
and provides for such table to be based on
the prevailing commissioners’ standard
table (described in § 807(d)(5)(A)) used
to determine group reserves for group an-
nuity contracts issued on the date as of
which the present value is determined (the
“pre-PPA ’06 applicable mortality table”).
For plan years beginning on or after
January 1, 2008, § 302 of PPA ’06 changes
the present value determination under
§ 417(e)(3). For such years, § 417(e)(3)(C)
defines the term “applicable interest rate”
as the adjusted first, second, and third
segment rates applied under rules simi-
lar to the rules of § 430(h)(2)(C) for the
month before the date of the distribution
or such other time as the Secretary may by
regulations prescribe (the “post-PPA ’06
applicable interest rate”). For this purpose,
the adjusted first, second, and third seg-
ment rates are determined without regard
to the 24-month averaging provided under
§ 430(h)(2)(D)(i), and § 417(e)(3)(D)(ii)
provides a transition rule that phases in
the use of the segment rates over 5 years.
Also, for such years, § 417(e)(3)(B) de-
fines the term “applicable mortality table”
as a mortality table, modified as appropri-
ate by the Secretary, based on the mortality
table specified for the plan year under
subparagraph (A) of § 430(h)(3) (without
regard to subparagraph (C) or (D) of such
section) (the “post-PPA ’06 applicable
mortality table”).
Section 1.401(a)–20, Q&A–16, pro-
vides that, in the case of a married partici-
pant, the QJSA provided under a plan that
is subject to § 401(a)(11) must be at least
as valuable as any other optional form of
benefit payable under the plan at the same
time, and further provides that a plan does
not fail to satisfy this requirement merely
because the amount payable under an op-
tional form of benefit that is subject to the
minimum present value requirement of
§ 417(e)(3) is calculated using the appli-
cable interest rate and applicable mortality
table under § 417(e)(3).
As noted in Part III above, § 1107 of
PPA ’06 provides certain rules with respect
to plan amendments adopted pursuant to
statutory provisions under PPA ’06.
Rev. Rul. 2007–67, 2007–48 I.R.B.
1047, provides guidance regarding the im-
plementation of § 302 of PPA ’06, includ-
ing guidance regarding the application of
§ 1107 of PPA ’06 to amendments adopted
pursuant to § 302 of PPA ’06.
Q–16. If, after § 302 of PPA ’06 is
effective, a plan is amended, during the
period established in § 1107(b)(2)(A)
of PPA ’06, to provide that the amount
payable under an optional form of benefit
that is subject to the minimum present
value requirement of § 417(e)(3) is
calculated as the more favorable to
participants of (i) the amount calculated by
using the pre-PPA ’06 applicable mortality
table and pre-PPA ’06 applicable interest
rate, or (ii) the amount calculated by using
the post-PPA ’06 applicable mortality table
and post-PPA ’06 applicable interest rate,
will the plan fail to satisfy the requirement
that the QJSA for a married participant be
at least as valuable as any other form of
benefit payable under the plan at the same
time?
A–16. A plan does not fail to sat-
isfy the requirement that the QJSA for
a married participant be at least as valu-
able as any other form of benefit payable
under the plan at the same time merely
because the amount payable under an op-
tional form of benefit that is subject to
the minimum present value requirement
of § 417(e)(3) is calculated as the more
favorable to participants of (i) the amount
calculated by using the pre-PPA ’06 ap-
plicable mortality table and pre-PPA ’06
applicable interest rate, or (ii) the amount
calculated by using the post-PPA ’06 ap-
plicable mortality table and post-PPA ’06
applicable interest rate. This special treat-
ment for amounts calculated by using the
pre-PPA ’06 applicable mortality table
and pre-PPA ’06 applicable interest rate
applies only through the end of the period
described in § 1107(b)(2)(A) of PPA ’06.
It is anticipated that § 1.401(a)–20,
Q&A–16, will be amended to reflect this
special treatment.
Q–17. If a plan is amended as described
in Q&A–16 of this notice, but provides
that benefits cease to be calculated by us-
ing the pre-PPA ’06 applicable mortality
table and pre-PPA ’06 applicable interest
rate after a specifiedperiod, does relief un-
der § 1107 of PPA ’06, as described in Rev.
Rul. 2007–67, apply to the amendment?
A–17. In general, relief under § 1107
of PPA ’06 applies to an amendment that
provides the more favorable to partici-
pantsofanamountcalculatedbyusing
the pre-PPA ’06 applicable mortality ta-
ble and pre-PPA ’06 applicable interest
rate or an amount calculated by using the
post-PPA ’06 applicable mortality table
and post-PPA ’06 applicable interest rate,
even if the pre-PPA ’06 applicable in-
terest rate and/or pre-PPA ’06 applicable
mortality table apply only for a specified
period of time (as long as the amendment
is adopted during the period established in
§ 1107(b)(2)(A) of PPA ’06). For example,
if a plan is amended to provide that the
amount payable under an optional form
of benefit that is subject to the minimum
present value requirements of § 417(e)(3)
is calculated in the manner described in
Q&A–16 of this notice (i.e.,pursuant to
a better-of calculation) for a specified
period of time, and thereafter is calculated
without reference to the pre-PPA ’06
applicable mortality table and pre-PPA ’06
applicable interest rate, the plan will
March 24, 20086412008–12 I.R.B.

not fail to satisfy the requirements of
§ 411(d)(6) by reason of the amendment.
However, with respect to a particu-
lar plan provision, relief under § 1107
of PPA ’06 applies only to the first
plan amendment that implements the
post-PPA ’06 applicable interest rate
and/or post-PPA ’06 applicable mortality
table with respect to the provision, and any
subsequent amendment with respect to the
provision will not be treated as adopted
“pursuant to” statutory provisions under
PPA ’06, as required for relief under § 1107
of PPA ’06. For purposes of determining
whether an amendment that implements
the post-PPA ’06 applicable interest rate
and/or post-PPA ’06 applicable mortality
table with respect to a particular plan
provision is the first such amendment,
amendments adopted on or before June
30, 2008, are disregarded. Thus, if a plan
amendment is adopted that provides that
the amount payable under an optional form
of benefit that is subject to the minimum
present value requirements of § 417(e)(3)
is calculated in the manner described in
Q&A–16 of this notice, and the plan is
subsequently amended (during the period
established in § 1107 of PPA ’06) so that
the amount payable is calculated without
reference to the pre-PPA ’06 applicable
mortality table and pre-PPA ’06 applicable
interest rate, the relief under § 1107 of
PPA ’06 will apply with respect to the
subsequent amendment only if the initial
amendment was adopted on or before June
30, 2008.
Q–18. Does the relief under § 1107
of PPA ’06, as described in Rev. Rul.
2007–67 and this notice, apply to a plan
amendment that replaces a plan reference
to the pre-PPA ’06 applicable mortal-
ity table and/or pre-PPA ’06 applica-
ble interest rate with a reference to the
post-PPA ’06 applicable mortality table
and/or post-PPA ’06 applicable interest
rate, without regard to whether § 302 of
PPA ’06 requires such amendment?
A–18. The relief under § 1107 of
PPA ’06, as described in Rev. Rul.
2007–67 and this notice, applies to an
amendment to a plan that is subject to
§ 401(a)(11) and that replaces a plan
reference to the pre-PPA ’06 applicable
mortality table and/or pre-PPA ’06
applicable interest rate with a reference to
the post-PPA ’06 applicable mortality table
and/or post-PPA ’06 applicable interest
rate, without regard to whether § 302 of
PPA ’06 requires such amendment. For
example, if a plan calculates the amount
of an optional form of benefit that is not
subject to the minimum present value
requirements of § 417(e)(3) by reference to
the pre-PPA ’06 applicable mortality table
and/or pre-PPA ’06 applicable interest
rate and the plan is amended, pursuant to
an amendment adopted during the period
established in § 1107(b)(2)(A) of PPA ’06,
so that it calculates the amount of the
optional form of benefit by reference to the
post-PPA ’06 applicable mortality table
and/or post-PPA ’06 applicable interest
rate, the plan will not fail to satisfy the
requirements of § 411(d)(6) by reason of
the amendment.
V. GAP-PERIOD EARNINGS
The final regulations (T.D. 9324,
2007–22 I.R.B. 1302) under § 402(g),
published in the Federal Register (72 FR
21103) on April 30, 2007, provide that
the gap-period earnings must be included
with the distribution of excess deferrals
to the extent the employee is or would be
credited with an allocable gain or loss on
those excess deferrals for the gap period,
if the total amount were to be distributed.
This gap-period earnings rule applies to
both pre-tax excess deferrals and excess
deferrals that are designated Roth contri-
butions. The effective date for the rule
on gap-period earnings is taxable years
beginning on or after January 1, 2007.
Section 5.04 of Rev. Proc. 2007–44,
2007–28 I.R.B. 54, generally requires an
interim plan amendment to be adopted by
the time described in section 5.05 of the
revenue procedure when there is a statu-
tory or regulatory change with respect to
plan qualification requirements that will
impact provisions of the written plan doc-
ument.
Q–19. Is a plan restatement submit-
ted to the Service in Cycle B (February 1,
2007, through January 31, 2008) or Cycle
C (February 1, 2008, through January 31,
2009) required to provide for the inclusion
of gap-period earnings in the distribution
of excess deferrals?
A–19. Yes. As described in section
12.03 of Rev. Proc. 2007–44, a restated
plan submitted to the Service in Cycle B or
Cycle C is required to provide for the dis-
tribution of gap-period earnings. A plan
sponsor of a plan submitted before March
24, 2008 that does not provide for the dis-
tribution of gap-period earnings will be
askedtoamendtheplantoincludethedis-
tribution of gap-period earnings in order to
receive a determination letter.
Q–20. Is an interim plan amendment
to provide for the inclusion of gap-period
earnings in the distribution of excess de-
ferrals required to be adopted by the time
describedinsection5.05ofRev. Proc.
2007–44?
A–20. No. An interim plan amendment
to provide for the inclusion of gap-period
earnings in the distribution of excess defer-
rals will not be required to be adopted until
the last day of the first plan year beginning
on or after January 1, 2009.
Q–21. Are plans required to include
gap-period earnings in the distribution of
excess deferrals in accordance with the fi-
nal regulations under § 402(g)?
A–21. Yes. Although the interim plan
amendment requirement has been delayed
until 2009, plans must include gap-period
earnings in the distribution of excess defer-
rals, effective for excess deferrals attribut-
able to taxable years beginning on or after
January 1, 2007.
DRAFTING INFORMATION
The principal author of this notice is
Angelique Carrington of the Employee
Plans, Tax Exempt and Government En-
tities Division. For further information
regarding this notice, please contact the
Employee Plans taxpayer assistance an-
swering service at 1–877–829–5500 (a toll
free number) or e-mail Ms. Carrington at
RetirementPlanQuestions@irs.gov.
Credit for New Qualified
Alternative Motor Vehicles
(Qualified Fuel Cell Motor
Vehicles)
Notice 2008–33
SECTION 1. PURPOSE
This notice sets forth interim guidance,
pending the issuance of regulations, relat-
ing to the new fuel cell motor vehicle credit
under§30B(a)(1)and(b)oftheInternal
Revenue Code. Specifically, this notice
2008–12 I.R.B.642March 24, 2008

provides procedures for a vehicle manu-
facturer (or, in the case of a foreign vehi-
cle manufacturer, its domestic distributor)
to certify to the Internal Revenue Service
(Service) both:
(1) that a vehicle of a particular make,
model, and model year meets certain re-
quirements that must be satisfied to claim
the new qualified fuelcell motor vehicle
credit under § 30B(a)(1) and (b); and
(2) the amount of the credit allowable
with respect to that vehicle.
This notice also provides guidance to
taxpayers who purchase vehicles regard-
ing the conditions under which they may
rely on the vehicle manufacturer’s (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor’s) certification in
determining whether a credit is allowable
with respect to the vehicle and the amount
of the credit. The Service and the Trea-
sury Department expect that the regula-
tions will incorporate the rules set forth in
this notice.
SECTION 2. BACKGROUND
Section 30B(a)(1) provides for a credit
determined under § 30B(b) for certain new
qualified fuel cell motor vehicles. The
base amount of the new qualified fuel cell
motor vehicle credit varies with the gross
vehicle weight rating of the vehicle. The
base amount of the credit applicable to ve-
hicles having a gross vehicle weight of not
more than 8,500 pounds is $8,000 for ve-
hicles placed in service on or before De-
cember 31, 2009, and $4,000 for vehicles
placed in service after that date. The base
amount of the credit applicable to heavier
vehicles varies from $10,000 to $40,000
and is not reduced for vehicles placed in
service after December 31, 2009. Passen-
ger automobiles and light trucks, as de-
fined in section 4 of this notice are eligi-
ble for an additional fuel economy amount
that varies with the rated fuel economy of
a qualifying vehicle compared to the 2002
model year city fuel economy for a vehicle
in its weight class.
SECTION 3. SCOPE OF NOTICE
.01Vehicles Covered. This notice ap-
plies only to fuel cell motor vehicles. This
notice applies with respect to a fuel cell
motor vehicle whether such vehicle is a
passenger automobile, a light truck, or a
motor vehicle other than a passenger au-
tomobile or light truck.
.02Rules Common to All Qualifying
Vehicles. This notice does not address a
number of rules that are common to all
motor vehicles that qualify for credits un-
der § 30B. These rules include: (1) rules
under which lessors may claim the cred-
its allowable under § 30B; (2) the rule
preventing the credits from being used to
reduce alternative minimum tax liability;
and (3) rules relating to recapture of the
credit. Certain rules applicable to all mo-
tor vehicles that qualify for credits under
§ 30B are describedin Fact Sheet 2007–9
(http://www.irs.ustreas.gov/newsroom/
article/0,,id=165649,00.html).
SECTION 4. MEANING OF TERMS
The following definitions apply for pur-
poses of this notice:
(1)Passenger Automobile and Light
Truck. Section 30B provides that the
terms “passenger automobile” and “light
truck” have the meaning given in regula-
tions prescribed by the Administrator of
the Environmental Protection Agency for
purposes of the administration of Title II
of the Clean Air Act (42 U.S.C. 7521et
seq.). Those regulations currently do not
include a definition of these terms, but
§ 30B(b)(2)(B) provides the 2002 model
year city fuel economy tables that must
be used to determine the amount of the
credit for passenger automobiles and light
trucks. Those tables do not prescribe the
fuel economy for vehicles having a gross
vehicle weight of more than 8,500 pounds.
Accordingly, until either the Environmen-
tal Protection Agency issues regulations or
future guidance issued by the Service pro-
vides otherwise (whichever occurs first),
any vehicle having a gross vehicle weight
of more than 8,500 pounds will not be
treated as a passenger automobile or light
truck for purposes of this notice.
(2)City Fuel Economy. The term “city
fuel economy” has the meaning prescribed
in 40 CFR § 600.002–85(11). If fuel is
stored on board a fuel cell motor vehicle
as hydrogen and not in a form that requires
reformation prior to use, city fuel economy
is determined by reference to the consump-
tion of hydrogen. If fuel is stored on board
a fuel cell motor vehicle in a form that re-
quires reformation prior to use, city fuel
economy is determined by reference to the
consumption of such fuel.
(3)Gasoline Gallon Equivalent.Inthe
case of a motor vehicle that does not use
gasoline, the 2002 model year city fuel
economy is determined on a gasoline-gal-
lon-equivalent basis. If fuel is stored on
board a fuel cell motor vehicle as hydrogen
and not in a form that requires reformation
prior to use, the gasoline gallon equivalent
for the 2002 model year city fuel economy
is determined by converting miles per gal-
lon of gasoline into miles per kilogram of
hydrogen at a conversion ratio of 0.98 mile
per kilogram of hydrogen for each mile per
gallon of gasoline. Thus, for example, the
2002 model year city fuel economy for a
hydrogen-fueled passenger automobile in
the 7,000 to 8,500 pounds vehicle iner-
tia weight class is 11.1 miles per kilogram
of hydrogen (0.98 x 11.3 (the 2002 model
year city fuel economy in miles per gallon
of gasoline)). If fuel (other than gasoline)
is stored on board a fuel cell motor vehicle
in a form that requires reformation prior to
use, the gasoline gallon equivalent for the
2002 model year cityfuel economy may be
obtained from the Environmental Protec-
tion Agency, Office of Transportation and
Air Quality at the following address:
Mailing Address
USEPA Headquarters
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Mail Code: 6401A
Washington, DC 20460
Courier Address
USEPA Headquarters
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Room 6502A
Washington, DC 20004
March 24, 20086432008–12 I.R.B.

(4)Vehicle Inertia Weight Class.The
term “vehicle inertia weight class” means,
with respect to a motor vehicle, its inertia
weight class determined under 40 CFR
§ 86.129–94. Under 40 CFR § 86.082–2,
the inertia weight class is the class (a
group of test weights) into which a vehicle
is grouped based on its loaded vehicle
weight in accordance with the provisions
of 40 CFR part 86.
SECTION 5. MANUFACTURER’S
CERTIFICATION
.01When Certification Permitted.A
vehicle manufacturer (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor) may certify to purchasers that
a vehicle of a particular make, model, and
model year meets all requirements (other
thanthoselistedinsection5.02ofthisno-
tice) that must be satisfied to claim the new
qualified fuel cell motor vehicle credit, and
the amount of the credit allowable under
§ 30B(a)(1) and (b) with respect to the
vehicle, if the following requirements are
met:
(1) The manufacturer (or, in the case of
a foreign vehicle manufacturer, its domes-
tic distributor) has submitted to the Ser-
vice, in accordance with section 6 of this
notice, a certification with respect to the
vehicle and the certification satisfies the
requirements of section 5.03 of this notice;
and
(2) The manufacturer (or, in the case of
a foreign vehicle manufacturer, its domes-
tic distributor) hasreceived an acknowl-
edgment of the certification from the Ser-
vice.
.02Purchaser’s Reliance. Except as
provided in section 5.05 of this notice, a
purchaser of a vehicle may rely on the
manufacturer’s (or, inthe case of a foreign
vehicle manufacturer, its domestic distrib-
utor’s) certification concerning the vehicle
and the amount of the credit allowable with
respect to the vehicle (including cases in
which the certification is received after the
purchase of the vehicle). The purchaser
may claim a credit in the certified amount
with respect to the vehicle if the following
requirements are satisfied:
(1) The vehicle is placed in service by
the taxpayer after December 31, 2005, and
is purchased on or before December 31,
2014;
(2) The original use of the vehicle com-
mences with the taxpayer;
(3) The vehicle is acquired for use or
lease by the taxpayer, and not for resale;
and
(4) The vehicle is used predominantly
in the United States.
.03Content of Certification.
(1)All Vehicles.For all vehicles, the
certification must contain the following in-
formation:
(a) The name, address, and taxpayer
identification number of the certifying en-
tity;
(b) The make, model, model year, and
any other appropriate identifiers of the mo-
tor vehicle;
(c) A statement that the vehicle is made
by a manufacturer;
(d) The amount of the credit for the ve-
hicle (showing computations);
(e) The gross vehicle weight rating of
the vehicle;
(f) A statement that the vehicle is pro-
pelled by power derived from one or more
cells that convert chemical energy directly
into electricity by combining oxygen with
hydrogen fuel which is stored on board the
vehicle in any form and may or may not
require reformation prior to use;
(g) A statement that the vehicle com-
plies with the applicable provisions of the
Clean Air Act;
(h) A statement that the vehicle com-
plies with the applicable air quality pro-
visions of state law of each state that has
adopted the provisions under a waiver un-
der§209(b)oftheCleanAirActoralist
identifying each state that has adopted ap-
plicable air quality provisions with which
the vehicle does not comply;
(i) A statement that the vehicle com-
plies with the motor vehicle safety pro-
visions of 49 U.S.C. §§ 30101 through
30169; and
(j) A declaration,applicable to the
certification and any accompanying doc-
uments, signed by a person currently
authorized to bind the manufacturer (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor) in these matters,
in the following form:
“Under penalties of perjury, I declare
that I have examined this certification, in-
cluding accompanying documents, and to
the best of my knowledge and belief, the
facts presented in support of this certifica-
tion are true, correct, and complete.”
(2)Passenger Automobiles and Light
Trucks. If the vehicle is a passenger auto-
mobile or light truck, the certification must
include a copy of the certificate (received
on or after August 8, 2005) that the vehicle
meets or exceeds the applicable Bin 5 Tier
II emission standard established in regu-
lations prescribed by the Administrator of
the Environmental Protection Agency un-
der § 202(i) of the Clean Air Act for that
make and model year vehicle.
(3)Additional Fuel Economy Credit.If
the manufacturer (or, in the case of a for-
eign manufacturer, its domestic distribu-
tor) is certifying that a passenger automo-
bile or light truck is eligible for the addi-
tional fuel economy credit allowable un-
der § 30B(b)(2), the certification must also
contain the following information:
(a) The vehicle inertia weight class of
the vehicle; and
(b) The city fuel economy of the vehi-
cle.
.04Acknowledgment of Certification.
The Service will review the original signed
certification and issue an acknowledgment
letter to the vehicle manufacturer (or, in the
case of a foreign vehicle manufacturer, its
domestic distributor) within 30 days of re-
ceipt of the request for certification. This
acknowledgment letter will state whether
purchasers may rely on the certification.
.05Effect of Erroneous Certification.
The acknowledgment that the Service pro-
vides for a certification is not a determina-
tion that a vehicle qualifies for the credit,
or that the amount of the credit is correct.
The Service may, upon examination (and
after any appropriate consultation with the
Department of Transportation or the Envi-
ronmental Protection Agency), determine
that the vehicle is not a new qualified fuel
cell motor vehicle or that the amount of the
credit determined by the manufacturer (or,
in the case of a foreign vehicle manufac-
turer, its domestic distributor) to be allow-
able with respect to the vehicle is incorrect.
In either event, the manufacturer’s (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor’s) right to provide
a certification to future purchasers of new
fuel cell motor vehicles will be withdrawn,
and purchasers who acquire a vehicle after
the date on which the Service publishes an
announcement of the withdrawal may not
rely on the certification. Purchasers may
continue to rely on the certification for ve-
hicles they acquired on or before the date
2008–12 I.R.B.644March 24, 2008

on which the announcement of the with-
drawal is published (including in cases in
which the vehicle is not placed in service
and the credit is not claimed until after that
date), and the Service will not attempt to
collect any understatement of tax liability
attributable to such reliance. Manufactur-
ers (or, in the case of foreign vehicle man-
ufacturers, their domestic distributors) are
reminded that an erroneous certification or
an erroneous quarterly report may result in
the imposition of penalties—
(1) under § 7206 for fraud and making
false statements; and
(2) under § 6701 for aiding and abetting
an understatement of tax liability in the
amount of $1,000 ($10,000 in the case of
understatements by corporations) per re-
turn on which a credit is claimed in re-
liance on the certification).
SECTION 6. TIME AND ADDRESS
FOR FILING CERTIFICATION
.01Time for Filing Certification.Inor-
der for a certification under section 5 of
this notice to be effective for new quali-
fied fuel cell motor vehicles placed in ser-
vice during a calendar year beginning af-
ter December 31, 2007, the certification
must be received by the Service not later
than December 31
st
of that calendar year.
In order for a certification under section 5
of this notice to be effective for new fuel
cell motor vehicles placed in service dur-
ing 2006 and 2007, the certification must
be received by the Service not later than
December 31, 2008.
.02Address for Filing. Certifications
under section 5 of this notice must be sent
to:
Internal Revenue Service
Industry Director, Large and
Mid-Size Business,
Heavy Manufacturing and
Transportation
MetroParkOfficeComplex—
LMSB
111 Wood Avenue, South
Iselin, New Jersey 08830
SECTION 7. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and ap-
proved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under
control number 1545–2028.
An agency may not conduct or sponsor,
and a person is not required to respond
to a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in section 5. This information
is required to be collected and retained in
order to ensure that vehicles meet the re-
quirements for the new qualified fuel cell
motor vehicle credit under § 30B(a)(1) and
(b). This information will be used to de-
termine whether the vehicle for which the
credit is claimed by a taxpayer is property
that qualifies for the credit. The collection
of information is required to obtain a ben-
efit. The likely respondents are corpora-
tions and partnerships.
The estimated total annual reporting
burden is 200 hours.
The estimated annual burden per re-
spondent varies from 35 hours to 45 hours,
depending on individual circumstances,
with an estimated average burden of 40
hours to complete the certification re-
quired under this notice. The estimated
number of respondents is 5.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 8. DRAFTING
INFORMATION
The principal author of this notice is
Jaime C. Park of the Office of Associate
Chief Counsel (Passthroughs & Special In-
dustries). For furtherinformation regard-
ing this notice, contact Jaime C. Park at
(202) 622–3110 (not a toll-free call).
Distressed Asset Trust (DAT)
Transaction
Notice 2008–34
The Internal Revenue Service (Service)
and the Treasury Department are aware of
a type of transaction, described below, in
which a tax indifferent party, directly or in-
directly, contributes oneormoredistressed
assets (for example, a creditor’s interest in
debt) with a high basis and low fair mar-
ket value to a trust or series of trusts and
sub-trusts, and a U.S. taxpayer acquires
an interest in the trust (and/or series of
trusts and/or sub-trusts) for the purpose of
shifting a built-in loss from the tax indif-
ferent party to the U.S. taxpayer that has
not incurred the economic loss. This no-
tice alerts taxpayers and their representa-
tives that this transaction (referred to as a
distressed asset trust or DAT transaction)
is a tax avoidance transaction and identi-
fies this transaction,and substantially sim-
ilar transactions, as listed transactions for
purposes of § 1.6011–4(b)(2) of the In-
come Tax Regulations and §§ 6111 and
6112 of the Internal Revenue Code. This
notice also alerts persons involved with
these transactions to certain responsibili-
ties that may arise from their involvement
with these transactions.
BACKGROUND
The Service and Treasury Department
are aware that, prior to October 23, 2004,
taxpayers used partnerships improperly
to engage in variations of the distressed
asset transaction described in this notice.
The Coordinated Issue Paper, “Distressed
Asset/Debt Coordinated Issue Paper,”
LMSB–04–0407–031 (Apr. 18, 2007)
describes the variation of the distressed
asset transaction involving partnerships
(DAD). The American Jobs Creation Act
of 2004, Public Law 108–357 (118 Stat.
1418) (AJCA), amended §§ 704, 734 and
743 effective after October 22, 2004, for
contributions of built-in loss property to a
partnership, for basis adjustment rules in
the case of a distribution for which there is
a substantial basis reduction, and for basis
adjustment rules in the case of a transfer
of a partnership interest for which there is
a substantial built-in loss. The revisions
to §§ 704, 734 and 743 generally (1) re-
quire that a built-in loss may be taken into
account only by the contributing partner
and not other partners, and (2) make the
basis adjustment rules mandatory in cases
with a substantial basis reduction or sub-
stantial built-in loss. Thus, the statutory
changes to §§ 704, 734 and 743 under
AJCA prevent taxpayers from shifting a
built-in loss from a tax indifferent party
March 24, 20086452008–12 I.R.B.

to a U.S. taxpayer through the use of a
partnership. The Service and Treasury
Department have learned that a variation
of the distressed asset transaction using
a trust is being promoted in an attempt
to avoid these revisions made by AJCA.
Consequently, this notices identifies the
DAT variation of the transaction as a listed
transaction under § 1.6011–4(b)(2) for
transactions that are entered into after Oc-
tober 22, 2004.
FACTS
In a DAT transaction, a tax indiffer-
ent party creates a trust (Main-Trust) with
X as trustee. The taxindifferent party
contributes distressed assets directly or in-
directly (through a partnership or other-
wise) to Main-Trust, and is described as
the grantor and beneficiary of Main-Trust.
A U.S. taxpayer (Taxpayer) transfers
cash or a note to Main-Trust in exchange
for certificates evidencing units of bene-
ficial interest in Main-Trust. The cash or
note approximately equals the fair market
value of the distressed assets. Under the
terms of the Main-Trust agreement, Tax-
payer thereby becomes a beneficiary of
Main-Trust.
The parties contend that Main-Trust is
a trust for tax purposes with the stated
purpose of preserving and protecting as-
sets. Thus, the parties contend that Main-
Trust is to be taxed as a trust under the In-
ternal Revenue Code, and not as a busi-
ness entity described in § 301.7701–2 of
the Procedure and Administration Regu-
lations. As a result, the parties contend
that under § 1015(b), Main-Trust’s basis
in the distressed assets is the same as the
grantor’s basis in the distressed assets (in
this case, the tax indifferent party’s basis).
Under the Main-Trust agreement, X,
the trustee, is permitted to establish one
or more sub-trusts of Main-Trust, each for
a separate beneficiary of Main-Trust who
will then be the sole beneficiary of that
sub-trust. The Main-Trust agreement fur-
ther provides that each sub-trust for a ben-
eficiary constitutes a separate and distinct
sub-trust of Main-Trust with beneficial
interest certificates issued and separate
records maintained for each sub-trust.
As permitted under the Main-Trust
agreement, the trustee creates a separate
sub-trust (Sub-Trust), transfers certificates
evidencing units of beneficial interest in
Sub-Trust (Sub-Trust Certificates) to Tax-
payer, and allocates the distressed assets to
Sub-Trust for the sole benefit of the bene-
ficiary of the Sub-Trust. The Main-Trust
agreement entitles the holder of Sub-Trust
Certificates to various rights including
the right to direct the trustee to vest the
holder’s ratable share of the corpus or the
income of Sub-Trust in the holder. The
Taxpayer contends that the existence of
these rights causes the Taxpayer to be
considered the owner of Sub-Trust under
§ 678, and that Sub-Trust is a grantor trust.
As a result of being treated as the owner of
Sub-Trust, the Taxpayer takes into account
those items of income, deductions, and
credits against tax, which are attributable
to Sub-Trust, to the extent that such items
would be taken into account in comput-
ing taxable income or credits against the
tax of an individual. Section 671. The
Taxpayer contends that Sub-Trust’s ba-
sis in the distressed assets is the same as
the grantor’s basis in the distressed assets
(in this case Main-Trust’s basis). Section
1015(b). Within a short period of time,
the distressed assets held by the Sub-Trust
are written off as wholly worthless under
§ 166. Alternatively, the distressed assets
are sold, and Taxpayer claims a deduction
under § 165.
DISCUSSION
The transaction described in this notice
attempts to shift built-in losses from a tax
indifferent party to a U.S. taxpayer who
has not incurred an economic loss so that
the U.S. taxpayer may claim a deduction of
the built-in losses from the distressed as-
sets. The built-in loss purportedly trans-
ferred to Main-Trust and Sub-Trust and
improperly shifted to the Taxpayer is not
an allowable loss for the Taxpayer. The
Service may assert one or more arguments
that may include, but are not limited to, as-
serting that the Taxpayer’s transfer of cash
or a note to Main-Trust in exchange for
certificates of beneficial interest is a trans-
fer of the distressed assets under § 1001;
asserting that Main-Trust does not meet
the trust requirements of § 301.7701–4;
asserting that Main-Trust is not a taxable
trust; asserting that one or more of the
entities is properly classified for Federal
tax purposes as a partnership subject to
§§ 704(c)(1)(C), 734(b) and 743; asserting
that the claimed loss deduction under § 165
was not incurred in a transaction under-
taken for profit; asserting the judicial doc-
trines, including substance over form, lack
of economic substance, and step transac-
tion; and asserting that, in the case of dis-
tressed debt, the distressed debt was worth-
less under § 166 at the time of contribution
to Main-Trust and Sub-Trust.
Transactions that are the same as, or
substantially similar to, the transaction
described in this notice that are entered
into after October 22, 2004, are identi-
fied as “listed transactions” for purposes
of § 1.6011–4(b)(2) and §§ 6111 and
6112 effective February 27, 2008, the
date this notice was released to the pub-
lic. Independent of their classification
as listed transactions, transactions that
are the same as, or substantially simi-
lar to, the transaction described in this
notice may already be subject to the re-
quirements of § 6011, § 6111, § 6112, or
the regulations thereunder. However, the
variations of this transaction described in
the Coordinated Issue Paper, “Distressed
Asset/Debt Coordinated Issue Paper,”
LMSB–04–0407–031 (Apr. 18, 2007),
that are subject to the AJCA changes to
§§ 704, 734 and 743 are not being identi-
fied as “listed transactions” for purposes
of this notice, § 1.6011–4(b)(2), § 6111
and § 6112.
Persons required to disclose these trans-
actions under § 1.6011–4 who fail to do
so may be subject to the penalty under
§ 6707A, which applies to returns and
statements due after October 22, 2004.
Persons required to disclose these transac-
tions under § 1.6011–4 who fail to do so
may be subject to an extended period of
limitations under § 6501(c)(10). Persons
required to disclose these transactions un-
der § 6111 who fail to do so may be subject
to the penalty under § 6707(a). Persons
required to maintain lists of investors un-
der§6112whofailtodoso(orwhofail
to provide such lists when requested by
the Service) may be subject to the penalty
under § 6708(a). In addition, the Service
may impose other penalties on persons
involved in these transactions or substan-
tially similar transactions, including the
accuracy-related penalty under § 6662 or
§ 6662A.
A person that is a tax-exempt en-
tity within the meaning of § 4965(c), or
an entity manager within the meaning
of § 4965(d), may be subject to excise
2008–12 I.R.B.646March 24, 2008

tax, disclosure, filing or payment obliga-
tions under § 4965, § 6033(a)(2), § 6011,
and § 6071. Some taxable entities may
be subject to disclosure obligations un-
der § 6011(g), that apply to “prohibited
tax shelter transactions” as defined by
§ 4965(e) (including listed transactions).
The Service and Treasury recognize
that some taxpayers may have filed tax
returns taking the position that they were
entitled to the purported tax benefits of
the type of transaction described in this
notice. These taxpayers should take ap-
propriate correctiveaction and ensure that
their transactions are disclosed properly.
DRAFTING INFORMATION
The principal author of this notice is
Eric Ingala of the Office of Associate Chief
Counsel (Passthroughs and Special Indus-
tries). For further information regarding
this notice, contact Mr. Ingala at (202)
622–3070 (not a toll-free call).
Amplification of Notice
2006–27 Certification of
Energy Efficient Home Credit
Notice 2008–35
SECTION 1. PURPOSE
This notice clarifiesand supersedes No-
tice 2006–27, 2006–1 C.B. 626, as updated
by Announcement 2006–88, 2006–2 C.B.
910. Notice 2006–27, as updated, pro-
vided guidance regarding the calculation
ofheatingandcoolingenergyconsump-
tion for purposes of determining the eligi-
bility of a dwelling unit (other than a man-
ufactured home) for the New Energy Effi-
cient Home Credit under Internal Revenue
Code § 45L. Notice 2006–27 also provided
guidance relating to the public list of soft-
ware programs that may be used to calcu-
late energy consumption. Guidance relat-
ing to manufactured homes is provided in
Notice 2008–36.
This notice supersedes Notice 2006–27
by substantially republishing the guidance
contained in that publication. This notice
clarifies the meaning of the terms equiva-
lent rating network and eligible contractor,
and permits calculation procedures other
than those identified in Notice 2006–27 to
be used to calculate energy consumption.
Finally, this notice clarifies the process
for removing software from the list of ap-
proved software and reflects the extension
of the tax credit through December 31,
2008.
SECTION 2. BACKGROUND
.01In General. Section 45L provides
a credit to an eligible contractor who con-
structs a qualified energy efficient home.
For qualified energy efficient homes (other
than manufactured homes), the amount of
the credit is $2,000. A dwelling unit qual-
ifies for the credit if—
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;
(3) It meets the energy saving require-
ments of § 45L(c)(1); and
(4) It is acquired from the eligible con-
tractor after December 31, 2005, and be-
fore January 1, 2009, for use as a resi-
dence.
.02Energy Saving Requirements.To
meet the energy saving requirements of
§ 45L(c)(1), a dwelling unit must be certi-
fied to provide a level of heating and cool-
ing energy consumption that is at least 50
percent below that of a reference dwelling
unit constructed in accordance with the
standards of § 404 of the 2004 Supplement
to the 2003 International Energy Conser-
vation Code (2004 IECC Supplement),
and to have building envelope component
improvements that provide for a level of
heating and cooling energy consumption
that is at least 10 percent below that of a
reference dwelling unit.
.03Calculation Procedures. For pur-
poses of section 2.02 of this notice, heat-
ing and cooling energy consumption must
be calculated in accordance with the pro-
cedures prescribed in Residential Energy
Services Network (RESNET) Publication
No. 05–001 (Nov. 17, 2005) or No.
06–001 (June 1, 2006) or in accordance
with an equivalent calculation procedure.
.04Acquired from Eligible Contractor.
A qualified energy efficient home is ac-
quired from an eligible contractor for use
as a residence if the person that constructed
the home sells or leases the home to an-
other person for use as a residence. A qual-
ified energy efficient home is not acquired
from an eligible contractor if the person
that constructed the home retains the home
for use as a residence. For example, a
qualified energy efficient home is acquired
from an eligible contractor in the following
situations:
(1) A person constructs a qualified en-
ergy efficient home and then sells the home
to the homeowner.
(2) A person constructs a qualified en-
ergy efficient home and then leases the
home to the lessee or tenant.
(3) A person hires a third party contrac-
tor to construct a qualified energy efficient
home and then sells the home to the home-
owner. (See section 4.01(5) of this notice
for guidance regarding the person treated
as the eligible contractor in this case.)
SECTION 3. CERTIFICATION
An eligible contractor must obtain the
certification required under § 45L(c)(1)
with respect to a dwelling unit (other than
a manufactured home) from an eligible
certifier before claiming the energy ef-
ficient home credit with respect to the
dwelling unit. An eligible contractor is
not required to file the certification with
the return on which the credit is claimed.
However, § 1.6001–1(a) of the Income
Tax Regulations requires that taxpayers
maintain such books and records as are
sufficient to establish the entitlement to,
and amount of, any credit claimed by the
taxpayer. Accordingly, an eligible con-
tractor claiming a $2,000 credit under
§ 45L should retain the certification as
part of the eligible contractor’s records to
satisfy this requirement. The certification
will be treated as satisfying the require-
ments of § 45L(c)(1) if all construction
has been performed in a manner consistent
with the design specifications provided to
the eligible certifierand the certification
contains all of the following:
.01 The name, address, and telephone
number of the eligible certifier.
.02 The address of the dwelling unit.
.03 A statement by the eligible certifier
that—
(1) The dwelling unit has a projected
level of annual heating and cooling en-
ergy consumption that is at least 50 per-
cent below the annual level of heating and
coolingenergyconsumption of a reference
dwelling unit in the same climate zone;
(2) Building envelope component im-
provements alone account for a level of an-
nual heating and cooling energy consump-
tion that is at least 10 percent below the
March 24, 20086472008–12 I.R.B.

annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(3) Heating and cooling energy con-
sumption have been calculated in the man-
nerprescribedinsection2.03ofthisno-
tice.
.04 A statement by the eligible certi-
fier that field inspections of the dwelling
unit (or of other dwelling units under the
sampling protocol described below) per-
formed by the eligible certifier during
and after the completion of construction
have confirmed that all features of the
home affecting such heating and cool-
ing energy consumption comply with the
design specifications provided to the el-
igible certifier. With respect to builders
who build at least 85 homes during a
twelve-month period or build subdivi-
sions with the same floor plan using the
same subcontractors, the eligible certifier
may use the sampling protocol found in
the current ENERGY STAR
®
for Homes
Sampling Protocol Guidelines instead of
inspecting all of the homes. The sampling
protocols can be found at the following
web address:http://www.energystar.gov/
index.cfm?c=bldrs_lenders_raters.nh_
sampling.
.05 A list identifying—
(1) The dwelling unit’s energy efficient
building envelope components and their
respective energy performance ratings as
required by § 401.3 of the 2004 IECC Sup-
plement; and
(2) The energy efficient heating
and cooling equipment installed in the
dwelling unit and the energy efficiency
performance of such equipment as rated
under applicable Department of Energy
Appliance Standards test procedures.
.06 Identification of the listed software
program used to calculate energy con-
sumption (see section 5 of this notice).
.07 A declaration, applicable to the
certification and any accompanying doc-
uments, signed by a person currently
authorized to bind the eligible certifier in
these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification,
including accompanying documents,
and to the best of my knowledge and
belief, the facts presented in support of
this certification are true, correct, and
complete.”
SECTION 4. DEFINITIONS
.01 The following definitions apply for
purposes of this notice:
(1) Building envelope components are
basement walls, exterior walls, floor, roof,
and any other building element that en-
closes conditioned space, including any
boundary between conditioned space and
unconditioned space.
(2) A climate zone is a geographical
area within which all locations have simi-
lar long-term climate conditions as defined
in Chapter 3 of the 2004 IECC Supple-
ment.
(3) A dwelling unit is a single unit pro-
viding complete independent living facil-
ities for one or more persons, including
permanent provisions for living, sleeping,
eating, cooking, and sanitation, within a
building that is not more than three stories
above grade in height.
(4) An eligible certifier is a person
that is not related (within the meaning of
§ 45(e)(4)) to the eligible contractor and
has been accredited or otherwise autho-
rized by RESNET (or an equivalent rating
network) to use energy performance mea-
surement methods approved by RESNET
(or the equivalent rating network). An em-
ployee or other representative of a utility
or local building regulatory authority qual-
ifies as an eligible certifier if the employee
or representative has been accredited or
otherwise authorized by RESNET (or an
equivalent rating network) to use the ap-
proved energy performance measurement
methods.
(5) An eligible contractor is the person
that constructed a qualified energy effi-
cient home. A person must own and have a
basis in the qualified energy efficient home
during its construction to qualify as an el-
igible contractor with respect to the home.
For example, in the situation described in
section 2.04(3) of this notice, if the person
that hires the third party contractor to con-
struct the home owns and has the basis in
the home during its construction, the per-
son that hires the third party contractor is
the eligible contractorandthethirdparty
contractor is not an eligible contractor.
(6) An equivalent calculation procedure
is a procedure that produces results com-
parable to the results obtained under the
procedures prescribed in Residential En-
ergy Services Network (RESNET) Publi-
cation No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006).
(7) An equivalent rating network in-
cludes, in a state that has established en-
ergy efficiency standards under which a
dwelling unit is required to achieve a spec-
ified aggregate level of heating and cool-
ingenergyconsumptionforanypurpose
(including compliance with building codes
or eligibility for a state grant or tax credit),
the state agency administering those stan-
dards. Thus, if the agency has accredited
or otherwise authorized a person to use
energy performance measurement meth-
ods approved by the agency for use in de-
termining whether the state’s energy effi-
ciency standards are satisfied, the person
so accredited or authorized qualifies as an
eligible certifier.
(8) A manufactured home is a dwelling
unit constructed in accordance with the
Federal Manufactured Home Construction
and Safety Standards (24 C.F.R. 3280).
(9) A qualified energy efficient home is
a dwelling unit that qualifies for the credit
under § 45L. See section 2.01 of this notice
for the requirements that a dwelling unit
must satisfy to qualify for the credit.
(10) A reference dwelling unit is a
dwelling unit that is similar in technical
specifications and design to the dwelling
unit constructed by the eligible contractor
except that—
(a) The reference dwelling unit is con-
structed in accordance with the minimum
standards of Chapter 4 of the 2004 IECC
Supplement;
(b) The reference dwelling unit’s air
conditioners have a Seasonal Energy Ef-
ficiency Ratio (SEER) of 13, measured in
accordance with 10 C.F.R. 430.23(m); and
(c) The reference dwelling unit’s heat
pumps have a SEER of 13 and a Heat-
ing Seasonal Performance Factor (HSPF)
of 7.7, measured in accordance with
10 C.F.R. 430.23(m).
SECTION 5. SOFTWARE
PROGRAMS
.01In General. The Internal Revenue
Service will create and maintain a pub-
lic list of software programs that may
be used to calculate energy consumption
for purposes of providing a certifica-
tion under section 3 of this notice. This
list of approved software may be found
2008–12 I.R.B.648March 24, 2008

at:http://www.irs.gov/businesses/small/
industries/article/0,,id=155445,00.html.
.02Requirements for Software Pro-
grams To Be Included on the Internal
Revenue Service List. A software program
will be included on the list created by the
Internal Revenue Service if the software
developer submits the following informa-
tion to the Service and RESNET:
(1) The name, address, and telephone
number of the software developer,
(2) The name or other identifier of the
program as it will appear on the list,
(3) The test results, test runs, and the
software program with which the test was
conducted, and
(4) A declaration by the developer of
the software program, made under penal-
ties of perjury, that the software program—
(i) Has satisfied all tests required to
conform to the software accreditation
process prescribed in Residential Energy
Services Network (RESNET) Publica-
tion No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006); or
(ii) Has satisfied all tests necessary to
permit a determination that the software
program is sufficiently accurate to justify
its use in calculating energy consumption
for purposes of providing a certification
under section 3 of this notice.
.03Addresses. Submissions under this
section must be addressed as follows:
Submissions to the Service submitted
by U.S. mail:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions to the Service submitted
by a private delivery service:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
1111 Constitution Ave., N.W.
Washington, DC 20224
Submissions to RESNET:
Residential Energy Services Network
P.O. Box 4561
Oceanside, CA 92052–4561
.04Original and Updated Lists.Asoft-
ware program was included on the origi-
nal list if the software developer’s submis-
sion was received before March 1, 2006.
The list will be updated as necessary to re-
flect additions resulting from submissions
received after February 28, 2006, and dele-
tions resulting from removal of software
from the list under section 5.05 of this no-
tice.
.05Removal from Published List.The
Service may, upon examination (and after
appropriate consultation with the Depart-
ment of Energy), determine that a software
program is not sufficiently accurate to jus-
tify its use in calculating energy consump-
tion for purposes of providing a certifica-
tion under section 3 of this notice and re-
move the software program from the pub-
lished list. The Service may undertake an
examination on its own initiative or in re-
sponse to a public request supported by
appropriate analysis of the software pro-
gram’s deficiencies.
.06Effect of Removal from Published
List. A software program may not be used
to calculate energy consumption for pur-
poses of providing a certification that sat-
isfies the requirements of § 45L after the
effective date of removal of the software
from the published list. The removal will
not affect the validity of any certification
provided with respect to a dwelling unit
on or before the effective date of removal
from the published list. Generally, notice
that software is being removed from the
published list will be provided at the site
specified in section 5.01 of this notice at
least sixty (60) days before the effective
date of the removal.
.07Public Availability of Information.
RESNET may make available for public
review any information provided to it un-
der section 5.02 of this notice.
SECTION 6. PAPERWORK
REDUCTION ACT
The collections of information con-
tained in this notice have been reviewed
and approved by the Office of Manage-
ment and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C.
3507) under control number 1545–1995.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in sections 3 and 5. This in-
formation is required to be collected and
retained in order to ensure that a dwelling
unit (other than a manufactured home)
meets the requirements for the energy
efficient home credit under § 45L. This
information will be used to determine
whether property for which certifications
are provided is property that qualifies for
the credit. The collection of information is
required to obtain a benefit. The likely re-
spondents are corporations, partnerships,
and individuals.
The estimated total annual reporting
burden is 180 hours.
The estimated annual burden per re-
spondent varies from 2.5 hours to 4 hours,
depending on individual circumstances,
with an estimated average burden of 3
hours to complete the certification re-
quired under this notice. The estimated
number of respondents is 45.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any Internal Revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Notice 2006–27, as updated by An-
nouncement 2006–88, is clarified and
superseded. Announcement 2006–88 is
also clarified and superseded.
SECTION 8. EFFECTIVE DATE
This notice applies with respect to certi-
fications provided after February 29, 2008.
Taxpayers may apply the provisions of this
notice with respect to certifications pro-
vided on or before February 29, 2008.
SECTION 9. DRAFTING
INFORMATION
The principal author of this notice
is Jennifer Bernardini of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further in-
formation regarding this notice, contact
March 24, 20086492008–12 I.R.B.

Jennifer Bernardini at (202) 622–3110
(not a toll-free call).
Amplification of Notice
2006–28 Energy Efficient
Home Credit; Manufactured
Homes
Notice 2008–36
SECTION 1. PURPOSE
This notice clarifiesand supersedes No-
tice 2006–28, 2006–1 C.B. 628, as updated
by Announcement 2006–88, 2006–2 C.B.
910. Notice 2006–28, as updated, pro-
vided guidance regarding the calculation
ofheatingandcoolingenergyconsump-
tion for purposes of determining the eli-
gibility of a manufactured home for the
New Energy Efficient Home Credit un-
der Internal Revenue Code § 45L. No-
tice 2006–28 also provided guidance relat-
ing to the public list of software programs
that may be used to calculate energy con-
sumption. Guidance relating to dwelling
units other than manufactured homes is
provided in Notice 2008–35.
This notice supersedes Notice 2006–28
by substantially republishing the guidance
contained in that publication. This notice
clarifies the meaning of the terms equiva-
lent rating network and eligible contractor,
and permits calculation procedures other
than those identified in Notice 2006–28 to
be used to calculate energy consumption.
Finally, this notice clarifies the process
for removing software from the list of ap-
proved software and reflects the extension
of the tax credit through December 31,
2008.
SECTION 2. BACKGROUND
.01In General. Section 45L provides
a credit to an eligible contractor who con-
structs a qualified energy efficient home.
For qualified energy efficient homes that
are manufactured homes, the amount of the
credit is $1,000 or $2,000, depending on
the energy savings that are achieved. A
manufactured home qualifies for the credit
if:
(1) It is located in the United States;
(2) Its construction is substantially
completed after August 8, 2005;
(3) It meets the energy saving require-
mentsof§45L(c)(2)or(3);and
(4) It is acquired, directly or indirectly,
from the eligible contractor after Decem-
ber 31, 2005, and before January 1, 2009,
for use as a residence.
.02Energy Saving Requirements.To
meet the energy saving requirements of
§ 45L(c)(2) or (3), a manufactured home
must meet one of the following standards:
(1) To meet the energy saving require-
ments of § 45L(c)(2) and qualify for the
$2,000 credit, a manufactured home must
be certified to provide a level of heating
and cooling energy consumption that is at
least 50 percent below that of a reference
dwelling unit constructed in accordance
with the standards of § 404 of the 2004
Supplement to the 2003 International En-
ergy Conservation Code (2004 IECC Sup-
plement), and to have building envelope
component improvements that provide for
a level of heating and cooling energy con-
sumption that is at least 10 percent below
that of a reference dwelling unit (see sec-
tion 3 of this notice).
(2) To meet the energy saving require-
ments of § 45L(c)(3) and qualify for the
$1,000 credit, a manufactured home must
either—
(a) be certified to provide a level of
heating and cooling energy consumption
that is at least 30 percent below that of
a reference dwelling unit constructed in
accordance with the standards of § 404 of
the 2004 IECC Supplement, and to have
building envelope component improve-
ments that provide for a level of heating
and cooling energy consumption that is at
least 10 percent below that of a reference
dwelling unit; or
(b) meet the current requirements estab-
lished by the Administrator of the Environ-
mental Protection Agency under the EN-
ERGY STAR
®
Labeled Homes Program
in effect on the date construction is sub-
stantially completed (see section 4 of this
notice).
.03Calculation Procedures. For pur-
poses of section 2.02 of this notice, heat-
ing and cooling energy consumption must
be calculated in accordance with the pro-
cedures prescribed in Residential Energy
Services Network (RESNET) Publication
No. 05–001 (Nov. 17, 2005) or No.
06–001 (June 1, 2006) or in accordance
with an equivalent calculation procedure.
.04Acquired from Eligible Contractor.
A qualified energy efficient manufactured
home is acquired directly from an eligible
contractor for use as a residence if the per-
son that produced the manufactured home
sells or leases the manufactured home to
another person for use as a residence. A
qualified energy efficient manufactured
home is acquired indirectly from an eli-
gible contractor for use as a residence if
the person that produced the manufactured
home sells the manufactured home to an
intermediary and the intermediary (or the
last of multiple intermediaries) sells or
leases the manufactured home to another
person for use as a residence. A qualified
energy efficient manufactured home is not
acquired from an eligible contractor if the
person that produced the manufactured
home retains the manufactured home for
use as a residence. For example, a quali-
fied energy efficient manufactured home
is acquired from an eligible contractor in
the following situations:
(1) A person produces a qualified en-
ergy efficient manufactured home and then
sells the manufactured home to the home-
owner.
(2) A person produces a qualified en-
ergy efficient manufactured home and then
leases the manufactured home to the lessee
or tenant.
(3) A person hires a third party con-
tractor to produce a qualified energy ef-
ficient manufactured home and then sells
the manufactured hometo the homeowner.
(See section 5.01(5) of this notice for guid-
ance regarding the person treated as the el-
igible contractor in this case.)
(4) A person that produces a manufac-
turedhomesellsthehometoadealerof
manufactured homes and the dealer sells
the manufactured home to another person
for use as a residence. (See section 7.01 of
this notice for a rule permitting an eligible
contractor to rely on a dealer’s statement
concerning a sale by the dealer.)
SECTION 3. REQUIREMENTS TO
CLAIM THE $2,000 CREDIT
An eligible contractor must obtain the
certification required under § 45L(c)(2)
with respect to a manufactured home from
an eligible certifier before claiming the
$2,000 energy efficient home credit with
respect to the manufactured home. An el-
igible contractor is not required to file the
2008–12 I.R.B.650March 24, 2008

certification with the return on which the
credit is claimed. However, § 1.6001–1(a)
of the Income Tax Regulations requires
that taxpayers maintain such books and
records as are sufficient to establish the
entitlement to, and amount of, any credit
claimed by the taxpayer. Accordingly,
an eligible contractor claiming a $2,000
credit under § 45L should retain the certi-
fication as part of the eligible contractor’s
records to satisfy this requirement. The
certification will be treated as satisfying
the requirements of § 45L(c)(2) if all con-
struction has been performed in a manner
consistent with the design specifications
provided to the eligible certifier and the
certification contains all of the following:
.01 The name, address, and telephone
number of the eligible certifier.
.02 The manufactured home’s serial or
other identification number.
.03 A statement by the eligible certifier
that—
(1) The manufactured home has a pro-
jected level of annual heating and cooling
energy consumption that is at least 50 per-
cent below the annuallevel of heating and
cooling energy consumption of a reference
dwelling unit in the same climate zone;
(2) Building envelope component im-
provements alone account for a level of an-
nual heating and cooling energy consump-
tion that is at least 10 percent below the
annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(3) Heating and cooling energy con-
sumption have been calculated in the man-
nerprescribedinsection2.03ofthisno-
tice.
.04 A statement by the eligible certifier
that inspections of the manufactured home
(or of other manufactured homes under
the sampling protocol described below)
performed by the eligible certifier after
installation on the permanent site have
confirmed that such heating and cooling
energy consumption complies with the de-
sign specifications provided to the eligible
certifier. With respect to manufacturers
that produce at least 85 homes during a
twelve-month period, the eligible certifier
may use the sampling protocol found in
the current standards of the ENERGY
STAR
®
Qualified Manufactured Homes
— Design, Manufacturing, Installation,
and Certification Procedures, located at
the following web address:http://www.
energystar.gov/index.cfm?c=bldrs_
lenders_raters.pt_builder_manufactured.
.05 A list identifying—
(1) The manufactured home’s energy
efficient building envelope components
and their respective energy performance
rating as required by § 401.3 of the 2004
IECC Supplement; and
(2) The energy efficient heating and
cooling equipment installed in the manu-
factured home and the energy efficiency
performance of such equipment as rated
under applicable Department of Energy
Appliance Standards test procedures.
.06 Identification of the listed software
program used to calculate energy con-
sumption (see section 6 of this notice).
.07 A declaration, applicable to the
certification and any accompanying doc-
uments, signed by a person currently
authorized to bind the eligible certifier in
these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification,
including accompanying documents,
and to the best of my knowledge and
belief, the facts presented in support of
this certification are true, correct, and
complete.”
SECTION 4. REQUIREMENTS TO
CLAIM THE $1,000 CREDIT
.01Certified Homes. Except as pro-
vided in section 4.02 of this notice, an el-
igible contractor must obtain the certifica-
tion required under § 45L(c)(3)(A) with re-
spect to a manufactured home from an el-
igible certifier beforeclaiming the $1,000
energy efficient home credit with respect
to the manufactured home. An eligible
contractor is not required to attach the cer-
tification to the return on which the credit
is claimed. However, § 1.6001–1(a) re-
quires that taxpayers maintain such books
and records as are sufficient to establish the
entitlement to, and amount of, any credit
claimed by the taxpayer. Accordingly, an
eligible contractor claiming a $1,000 credit
under § 45L should retain the certification
as part of the eligible contractor’s records
to satisfy this requirement. The certifica-
tion will be treated as satisfying the re-
quirements of § 45L(c)(3)(A) if all con-
struction has been performed in a manner
consistent with the design specifications
provided to the eligible certifier and the
certification contains all of the following:
(1) The name, address, and telephone
number of the eligible certifier.
(2) The manufactured home’s serial or
other identification number.
(3) A statement by the eligible certifier
that—
(a) The manufactured home has a pro-
jected level of annual heating and cooling
energy consumption that is at least 30 per-
cent below the annual level of heating and
coolingenergyconsumption of a reference
dwelling unit in the same climate zone;
(b) Building envelope component im-
provements alone account for a level of an-
nual heating and cooling energy consump-
tion that is at least 10 percent below the
annual level of heating and cooling energy
consumption of a reference dwelling unit
in the same climate zone; and
(c) Heating and cooling energy con-
sumption have been calculated in the man-
ner prescribed in section 2.03 of this no-
tice.
(4) A statement by the eligible certifier
that field inspections of the manufactured
home (or of other manufactured homes
under the sampling protocol described
below) performed by the eligible certi-
fier after installation on the permanent
site have confirmed that such heating and
cooling energy consumption complies
with the design specifications provided to
the eligible certifier. With respect to man-
ufacturers that produce at least 85 homes
during a twelve-month period, the certifier
may use the sampling protocol found in
the current standards of the current EN-
ERGY STAR
®
Qualified Manufactured
Homes: Guide for Retailers, located at
the following web address:http://www.
energystar.gov/index.cfm?c=bldrs_
lenders_raters.pt_builder_manufactured.
(5) A list identifying—
(a) The manufactured home’s energy
efficient building envelope components
and their respective energy performance
rating as required by § 401.3 of the 2004
IECC Supplement; and
(b) The energy efficient heating and
cooling equipment installed in the manu-
factured home and the energy efficiency
performance of such equipment as rated
under applicable Department of Energy
Appliance Standards test procedures.
(6) Identification of the listed software
program used to calculate energy con-
sumption (see section 6 of this notice).
March 24, 20086512008–12 I.R.B.

(7) A declaration, applicable to the
certification and any accompanying doc-
uments, signed by a person currently
authorized to bind the eligible certifier in
these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification,
including accompanying documents,
and to the best of my knowledge and
belief, the facts presented in support of
this certification are true, correct, and
complete.”
.02Energy Star Homes. An eligible
contractor may claim the $1,000 energy ef-
ficient home credit with respect to a man-
ufactured home by meeting the applica-
ble certification requirements established
by the Administrator of the Environmen-
tal Protection Agency under the ENERGY
STAR
®
Labeled Homes Program in effect
on the date construction is substantially
completed.
SECTION 5. DEFINITIONS
.01 The following definitions apply for
purposes of this notice:
(1) Building envelope components are
basement walls, exterior walls, floor, roof,
and any other building element that en-
closes conditioned space, including any
boundary between conditioned space and
unconditioned space.
(2) A climate zone is a geographical
area within which all locations have simi-
lar long-term climate conditions as defined
in Chapter 3 of the 2004 IECC Supple-
ment.
(3) A dwelling unit is a single unit pro-
viding complete independent living facil-
ities for one or more persons, including
permanent provisions for living, sleeping,
eating, cooking, and sanitation, within a
building that is not more than three stories
above grade in height.
(4) An eligible certifier is a person
that is not related (within the meaning of
§ 45(e)(4)) to the eligible contractor and
has been accredited or otherwise autho-
rized by RESNET (or an equivalent rating
network) to use energy performance mea-
surement methods approved by RESNET
(or the equivalent rating network). An em-
ployee or other representative of a utility
or local building regulatory authority qual-
ifies as an eligible certifier if the employee
or representative has been accredited or
otherwise authorized by RESNET (or an
equivalent rating network) to use the ap-
proved energy performance measurement
methods.
(5) An eligible contractor, in the case
of a qualified energy efficient home that
is a manufactured home, is the person that
produced the manufactured home. A per-
son must own and have a basis in the qual-
ified energy efficient manufactured home
during its production to qualify as an eligi-
ble contractor with respect to the manufac-
tured home. For example, in the situation
described in section 2.04(3) of this notice,
if the person that hires the third party con-
tractor to produce the manufactured home
owns and has the basis in the home during
its construction, the person that hires the
third party contractor is the eligible con-
tractor and the third party contractor is not
an eligible contractor.
(6) An equivalent calculation procedure
is a procedure that produces results com-
parable to the results obtained under the
procedures prescribed in Residential En-
ergy Services Network (RESNET) Publi-
cation No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006).
(7) An equivalent rating network in-
cludes, in a state that has established en-
ergy efficiency standards under which a
dwelling unit is required to achieve a spec-
ified aggregate level of heating and cool-
ing energy consumption for any purpose
(including compliance with building codes
or eligibility for a state grant or tax credit),
the state agency administering those stan-
dards. Thus, if the agency has accredited
or otherwise authorized a person to use
energy performance measurement meth-
ods approved by the agency for use in de-
termining whether the state’s energy effi-
ciency standards are satisfied, the person
so accredited or authorized qualifies as an
eligible certifier.
(8) A manufactured home is a dwelling
unit constructed in accordance with the
Federal Manufactured Home Construction
and Safety Standards (24 C.F.R. 3280).
(9) A qualified energy efficient manu-
factured home is a dwelling unit that qual-
ifies for the credit under section 45L. See
section 2.01 of this notice for the require-
ments that a dwelling unit must satisfy to
qualify for the credit.
(10) A reference dwelling unit is a
dwelling unit that is similar in technical
specifications and design to the manu-
factured home produced by the eligible
contractor except that—
(a) The reference dwelling unit is con-
structed in accordance with the minimum
standards of Chapter 4 of the 2004 IECC
Supplement;
(b) The reference dwelling unit’s air
conditioners have a Seasonal Energy Ef-
ficiency Ratio (SEER) of 13, measured in
accordance with 10 C.F.R. 430.23(m); and
(c) The reference dwelling unit’s heat
pumps have a SEER of 13 and a Heat-
ing Seasonal Performance Factor (HSPF)
of 7.7, measured in accordance with
10 C.F.R. 430.23(m).
SECTION 6. SOFTWARE
PROGRAMS
.01In General. The Internal Revenue
Service will create and maintain a pub-
lic list of software programs that may be
used to calculate energy consumption for
purposes of providing certifications un-
der sections 3 and 4 of this notice. This
list of approved software may be found
at:http://www.irs.gov/businesses/small/
industries/article/0,,id=155445,00.html.
.02Requirements for Software Pro-
grams To Be Included on the Internal
Revenue Service List. A software program
will be included on the list created by the
Internal Revenue Service if the software
developer submits the following informa-
tion to the Service and RESNET:
(1) The name, address, and telephone
number of the software developer;
(2) The name or other identifier of the
program as it will appear on the list;
(3) The test results, test runs, and the
software program with which the test was
conducted; and
(4) A declaration by the developer of
the software program, made under penal-
ties of perjury, that the software program—
(i) Has satisfied all tests required to
conform to the software accreditation
process prescribed in Residential Energy
Services Network (RESNET) Publica-
tion No. 05–001 (Nov. 17, 2005) or
No. 06–001 (June 1, 2006); or
(ii) Has satisfied all tests necessary to
permit a determination that the software
program is sufficiently accurate to justify
its use in calculating energy consumption
for purposes of providing certifications un-
der sections 3 and 4 of this notice.
2008–12 I.R.B.652March 24, 2008

.03Addresses. Submissions under this
section must be addressed as follows:
Submissions to the Service submitted
by U.S. mail:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions to the Service submitted
by a private delivery service:
Internal Revenue Service
Attn: Program Administrator
CC:PSI:6, Room 5114
1111 Constitution Ave., N.W.
Washington, DC 20224
Submissions to RESNET:
Residential Energy Services Network
P.O. Box 4561
Oceanside, CA 92052–4561
.04Original and Updated Lists.Asoft-
ware program was included on the origi-
nal list if the software developer’s submis-
sion was received before March 1, 2006.
The list will be updated as necessary to re-
flect additions resulting from submissions
received after February 28, 2006, and dele-
tions resulting from removal of software
from the list under section 6.05 of this no-
tice.
.05Removal from Published List.The
Servicemay,uponexamination(andafter
appropriate consultation with the Depart-
ment of Energy), determine that a software
program is not sufficiently accurate to jus-
tify its use in calculating energy consump-
tion for purposes of providing a certifica-
tion under sections 3 and 4 of this notice
and remove the software program from the
published list. The Service may undertake
an examination on its own initiative or in
response to a public request supported by
appropriate analysis of the software pro-
gram’s deficiencies.
.06Effect of Removal from Published
List. A software program may not be used
to calculate energy consumption for pur-
poses of providing a certification that sat-
isfies the requirements of § 45L after the
effective date of removal of the software
from the published list. The removal will
not affect the validity of any certification
provided with respect to a manufactured
home on or before the effective date of re-
moval from the published list. Generally,
notice that software is being removed from
the published list will be provided at the
site specified in section 6.01 of this notice
at least sixty (60) days before the effective
date of the removal.
.07Public Availability of Information.
RESNET may make available for public
review any information provided to it un-
der section 6.02 of this notice.
SECTION 7. SALES TO DEALERS
.01In General. In the case of a manu-
factured home sold by an eligible contrac-
tor to a dealer of manufactured homes, the
eligible contractor may rely on a statement
by the dealer to establish the date on which
a manufactured home is acquired, that it is
located in the United States, and that it is
acquired for use as a residence. An eligible
contractor is not required to file the state-
ment with the return on which the credit
is claimed. However, § 1.6001–1(a) of the
Income Tax Regulations requires that tax-
payers maintain such books and records
as are sufficient to establish the entitle-
ment to, and amount of, any credit claimed
by the taxpayer. Accordingly, an eligible
contractor claiming a credit under § 45L
should retain the statement as part of its
records to satisfy thisrequirement, and is
not entitled to rely on the statement unless
the statement is so retained.
.02ContentofStatement. The eligible
contractor may not rely on the statement
by the dealer unless the statement specifies
the date of the retail sale of the manufac-
tured home, that the dealer delivered the
manufactured home to the purchaser at an
address in the United States, and that the
dealer has no knowledge of any informa-
tion suggesting that the purchaser will use
the manufactured home other than as a res-
idence. The statement must also contain
the following information:
(1) The name, address, and telephone
number of the dealer.
(2) A declaration, applicable to the
statement made by the dealer and any
accompanying documents, signed by a
person currently authorized to bind the
dealer in such matters, in the following
form:
“Under penalties of perjury, I declare
that, to the best of my knowledge and
belief, the facts presented with respect
to this sale transaction are true, correct,
and complete.”
SECTION 8. PAPERWORK
REDUCTION ACT
The collections of information con-
tained in this notice have been reviewed
and approved by the Office of Manage-
ment and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C.
3507) under control number 1545–1994.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in sections 3, 4, 6, and 7. This
information is required to be collected and
retained in order to ensure that a manufac-
tured home meets the requirements for the
energy efficient home credit under § 45L.
This information will be used to determine
whether property for which certifications
are provided is property that qualifies for
the credit. The collection of information is
required to obtain a benefit. The likely re-
spondents are corporations, partnerships,
and individuals.
The estimated total annual reporting
burden is 75 hours.
The estimated annual burden per re-
spondent varies from 3.5 hours to 5 hours,
depending on individual circumstances,
with an estimated average burden of
4 hours to complete the certification
required under this notice. The estimated
number of respondents is 15.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any Internal Revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 9. EFFECT ON OTHER
DOCUMENTS
Notice 2006–28, as updated by An-
nouncement 2006–88, is clarified and
March 24, 20086532008–12 I.R.B.

superseded. Announcement 2006–88 is
also clarified and superseded.
SECTION 10. EFFECTIVE DATE
This notice applies with respect to certi-
fications provided after February 29, 2008.
Taxpayers may apply the provisions of this
notice with respect to certifications pro-
vided on or before February 29, 2008.
SECTION 11. DRAFTING
INFORMATION
The principal author of this notice
is Jennifer Bernardini of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further in-
formation regarding this notice, contact
Jennifer Bernardini at (202) 622–3110
(not a toll-free call).
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2008–37
This notice provides guidance as to the
corporate bond weighted average interest
rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code as in ef-
fect for plan years beginning before 2008.
It also provides guidance on the corpo-
rate bond monthly yield curve (and the
corresponding spot segment rates), the
24-month average segment rates, and
the funding transitional segment rates
under § 430(h)(2). In addition, this no-
tice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008, and the min-
imum present value segment rates under
§ 417(e)(3)(D) as in effect for plan years
beginning after 2007.
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections 412(b)(5)(B)(ii) and 412(l)(7)
(C)(i), as amended by the Pension Funding
Equity Act of 2004 and by the Pension
Protection Act of 2006 (PPA), provide
that the interest rates used to calculate
current liability andtodeterminethe
required contribution under § 412(l) for
plan years beginning 2007 must be within
a permissible range based on the weighted
average of the rates of interest on amounts
invested conservatively in long term
investment grade corporate bonds during
the 4-year period ending on the last day
before the beginning of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–2 C.B. 366.
The composite corporate bond rate for
February 2008 is 6.36 percent. Pursuant
to Notice 2004–34, the Service has de-
termined this rate as the average of the
monthly yields for the included corporate
bond indices for that month.
The following corporate bond weighted
average interest rate was determined for
plan years beginning in the month shown
below.
For Plan Years
Beginning inPermissible Range
MonthYear
Corporate
Bond Weighted
Average90%to100%
March2008
5.965.365.96
YIELD CURVE AND SEGMENT
RATES
Generally for plan years beginning
after 2007 (except for delayed effective
dates for certain plans under sections 104,
105, and 106 of PPA), § 430 of the Code
specifies the minimum funding require-
ments that apply to single employer plans
pursuant to § 412. Section 430(h)(2) spec-
ifies the interest rates that must be used
to determine a plan’s target normal cost
and funding target. Under this provision,
present value is generally determined us-
ing three 24-month average interest rates
(“segment rates”), each of which applies
to cash flows during specified periods.
However, an election may be made under
§ 430(h)(2)(D)(ii) to use the monthly yield
curve in place of the segment rates. For
plan years beginning in 2008 and 2009, a
transitional rule under § 430(h)(2)(G) pro-
vides that the segment rates are blended
with the corporate bond weighted average
as specified above. An election may be
made under § 430(h)(2)(G)(iv) to use the
segment rates without applying the transi-
tional rule.
Notice 2007–81, 2007–44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, the
24-month average corporate bond seg-
ment rates, and the funding transitional
segment rates used to compute the tar-
get normal cost and the funding target.
Pursuant to Notice 2007–81, the monthly
corporate bond yield curve derived from
February 2008 data is in Table I at the end
of this notice. The spot first, second, and
third segment rates for the month of Feb-
ruary 2008 are, respectively, 4.11, 6.18,
and 7.05. The three 24-month average
corporate bond segment rates applica-
ble for March 2008 under the election of
§ 430(h)(2)(G)(iv) are as follows:
First
Segment
Second
Segment
Third
Segment
5.245.97
6.49
2008–12 I.R.B.654March 24, 2008

The transitional segment rates under
§ 430(h)(2)(G) applicable for March 2008,
taking into account the corporate bond
weighted average of 5.96 stated above, are
as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
2008
5.725.96
6.14
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 417(e)(3)(A)(ii)(II) (prior to
amendment by PPA) defines the appli-
cable interest rate, which must be used
for purposes of determining the minimum
present value of a participant’s benefit
under § 417(e)(1) and (2), as the annual
rate of interest on 30-year Treasury se-
curities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe.
Section 1.417(e)–1(d)(3) of the Income
Tax Regulations provides that the applica-
ble interest rate for a month is the annual
rate of interest on 30-year Treasury secu-
rities as specified by the Commissioner
for that month in revenue rulings, notices
or other guidance published in the Internal
Revenue Bulletin.
The rate of interest on 30-year Trea-
sury securities for February 2008 is 4.52
percent. The Service has determined this
rate as the average of the yield on the
30-year Treasury bond maturing in May
2037 determined each day through Febru-
ary 6, 2007, and the yield on the 30-year
Treasury bond maturing in February 2038
determined each day for the balance of the
month.
Generally for plan years beginning after
2007, § 431 specifies the minimum fund-
ing requirements that apply to multiem-
ployer plans pursuant to § 412. Section
431(c)(6)(B) specifies a minimum amount
for the full-funding limitation described in
§ 431(c)(6)(A), based on the plan’s current
liability. Section 431(c)(6)(E)(ii)(I) pro-
vides that the interest rate used to calculate
current liability for this purpose must be
no more than 5 percent above and no more
than 10 percent below the weighted aver-
age of the rates of interest on 30-year Trea-
sury securities during the four-year period
ending on the last day before the beginning
of the plan year. Notice 88–73, 1988–2
C.B. 383, provides guidelines for deter-
mining the weighted average interest rate.
The following rates were determined for
plan years beginning in the months shown
below.
For Plan Years
Beginning inPermissible Range
MonthYear
30-Year
Treasury
Weighted
Average90%to105%
January20084.814.33
5.06
February20084.804.32
5.04
March20084.794.31
5.03
MINIMUM PRESENT VALUE
SEGMENT RATES
Generally for plan years beginning af-
ter December 31, 2007, the applicable in-
terest rates under § 417(e)(3)(D) are seg-
ment rates computed without regard to a
24-month average. For plan years begin-
ning in 2008 through 2011, the applica-
ble interest rate is the monthly spot seg-
ment rate blended with the applicable rate
under § 417(e)(3)(A)(ii)(II) as in effect
for plan years beginning in 2007. Notice
2007–81 provides guidelines for determin-
ing the minimum present value segment
rates. Pursuant to that notice, the min-
imum present value transitional segment
rates determined for February 2008, tak-
ing into account the February 2008 30-year
Treasury rate of 4.52 stated above, are as
follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20084.44
4.855.03
DRAFTING INFORMATION
The principal author of this notice is
Tony Montanaro of the Employee Plans,
Tax Exempt and Government Entities Di-
vision. Mr. Montanaro may be e-mailed at
RetirementPlanQuestions@irs.gov.
March 24, 20086552008–12 I.R.B.

Table I
Monthly Yield Curve for February 2008
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.5
3.37
20.5
6.76
40.5
7.09
60.5
7.20
80.5
7.26
1.0
3.51
21.06.7841.0
7.09
61.07.2081.07.26
1.5
3.66
21.5
6.79
41.5
7.10
61.5
7.20
81.5
7.26
2.03.8222.06.8142.07.1062.07.2182.07.26
2.5
4.00
22.5
6.82
42.5
7.11
62.5
7.21
82.5
7.26
3.04.1823.06.8343.07.1163.07.2183.07.26
3.5
4.37
23.56.8543.5
7.11
63.5
7.21
83.5
7.26
4.0
4.55
24.06.8644.07.1264.07.2184.07.26
4.5
4.73
24.5
6.87
44.5
7.12
64.5
7.22
84.5
7.27
5.0
4.89
25.06.8845.07.1265.07.2285.07.27
5.55.0425.5
6.89
45.5
7.13
65.5
7.22
85.5
7.27
6.05.1926.0
6.90
46.07.1366.07.2286.07.27
6.55.3226.5
6.91
46.5
7.13
66.5
7.22
86.5
7.27
7.0
5.44
27.0
6.92
47.07.1467.07.2287.07.27
7.55.5527.5
6.93
47.5
7.14
67.5
7.22
87.5
7.27
8.05.6628.0
6.94
48.07.1468.07.2388.07.27
8.55.7628.5
6.95
48.57.1568.5
7.23
88.5
7.27
9.0
5.85
29.06.9649.0
7.15
69.0
7.23
89.0
7.27
9.55.9329.5
6.96
49.5
7.15
69.57.2389.57.27
10.06.0130.0
6.97
50.07.15
70.07.23
90.0
7.28
10.5
6.08
30.5
6.98
50.5
7.16
70.5
7.2390.57.28
11.06.1531.0
6.99
51.07.16 71.07.23
91.0
7.28
11.5
6.21
31.5
6.99
51.5
7.16
71.5
7.2491.57.28
12.06.2632.07.00
52.0
7.1672.07.24
92.0
7.28
12.5
6.31
32.5
7.01
52.5
7.17
72.5
7.2492.57.28
13.06.3633.07.01
53.0
7.1773.07.24
93.0
7.28
13.5
6.40
33.5
7.02
53.5
7.17
73.5
7.2493.57.28
14.06.4434.07.0254.07.1774.07.24
94.0
7.28
14.5
6.48
34.5
7.03
54.5
7.18
74.5
7.2494.57.28
15.06.5235.0
7.04
55.0
7.18
75.07.25
95.07.28
15.56.5535.5
7.04
55.5
7.18
75.57.25
95.57.28
16.0
6.58
36.0
7.0556.0
7.1876.0
7.25
96.07.29
16.5
6.60
36.57.0556.5
7.19
76.57.25
96.5
7.29
17.06.6337.07.0657.0
7.19
77.07.25
97.07.29
17.56.6537.5
7.06
57.5
7.19
77.57.25
97.57.29
18.06.6738.07.07
58.0
7.19
78.0
7.25
98.07.29
18.5
6.69
38.5
7.07
58.5
7.19
78.57.25
98.5
7.29
19.0
6.71
39.0
7.0859.07.20
79.0
7.25
99.07.29
19.56.7339.57.0859.57.2079.57.2699.5
7.29
20.06.7540.0
7.09
60.07.2080.07.26100.0
7.29
2008–12 I.R.B.656March 24, 2008

26 CFR 1.6012–1: Individuals required to make re-
turns of income.
(Also: Part 1, § 1.6017–1.)
Rev. Proc. 2008–21
SECTION 1. PURPOSE
This revenue procedure provides that
the Internal Revenue Service will not chal-
lenge the accuracy of income tax returns
filed in compliance with Notice 2008–28,
2008–10 I.R.B. 546, by eligible individu-
als who enter $1.00 in adjusted gross in-
come solely for purposes of effectuating
the electronic filing of the return.
SECTION 2. BACKGROUND
.01 The Economic Stimulus Act of
2008 amended section 6428 of the Internal
Revenue Code to provide economic stim-
ulus payments to eligible individuals. For
this purpose, an eligible individual is any
individual other than a nonresident alien,
an estate or trust, or an individual who
can be claimed as dependent under sec-
tion 151 for the taxable year.Seesection
6428(e)(3). In general, the amount of the
economic stimulus payment is the lesser
of (1) the individual’s net income tax lia-
bility, or (2) $600 ($1,200 in the case of a
joint return).Seesection 6428(a).
.02 As provided in section 6428(b),
individuals with at least $3,000 of “qual-
ifying income” may receive a minimum
payment of $300 ($600 in the case of a
joint return), even though the individual
has no net income tax liability. Qualifying
income as defined in section 6428(e)(1)
means: earned income as defined in sec-
tion 32(c)(2) that is includible in gross
income for federal income tax purposes
(including, if elected, certain combat zone
compensation of members of the Armed
Forces); social security benefits (including
monthly retirement, survivor and disabil-
ity benefits, but not including supple-
mental security income (SSI) payments)
and Tier I railroad retirement benefits de-
scribed in section 86(d); and disability
compensation, disability pension and sur-
vivors’ benefits from the Department of
Veterans’ Affairs (VA) pursuant to Chap-
ters 11, 13, or 15 of Title 38 of the United
States Code.
.03 Section 6012(a) requires every in-
dividual who (1) has gross income for the
taxable year which equals or exceeds the
sum of the exemption amount plus the ap-
plicable standard deduction, or (2) has re-
ceived advance payment of earned income
credit under section 3507 to file an income
tax return for that taxable year. In addi-
tion, section 6017 requires an individual
to file an income tax return with respect to
self-employment tax on net earnings from
self-employment of $400 or more.
In order to receive an economic stim-
ulus payment to be advanced in 2008, a
taxpayer must file an income tax return for
2007.Seesection 6428(g)(2). No advance
payments of economic stimulus amounts
shall be made or allowed after December
31, 2008.Seesection 6428(g)(3). Most
taxpayers who are eligible for the eco-
nomic stimulus payment are already re-
quired by sections 6012 or 6017 to file a
return. Additionally, some taxpayers who
are not required to file a return neverthe-
less file to obtain refunds of withholding
or estimated tax payments.
.04 In the case of a taxpayer required by
sections 6012 or 6017 to file an income tax
return, eligibility for a stimulus payment in
2008, and the amount of that payment, is
based on information reported on the tax-
payer’s filed income tax return for 2007.
Seesection 6428(g)(2). These taxpayers
will not need to file any extra forms or
call the IRS to request the payment. How-
ever, eligible individuals with qualifying
income not already reported on the 2007
income tax return (e.g., certain disability or
survivor benefits from the VA) may need to
file an amended return in some situations
to receive a larger stimulus payment.
.05 Similarly, for a taxpayer who does
not have a filing requirement under sec-
tions 6012 or 6017, but who files an in-
come tax return to receive a refund of with-
held tax (for example, tax withheld on
wages under section 31), the IRS will de-
termine eligibility and the amount of the
2008 stimulus payment based on the infor-
mation reported on the taxpayer’s filed in-
come tax return for 2007.
.06Manyindividualswhohavelow
earned income, or only social security ben-
efits, railroad retirement benefits, or cer-
tain disability or survivors’ benefits from
the VA would not be required by sections
6012 or 6017 to file an income tax return
and would be due no refund of tax other
than the economic stimulus amount. No-
tice 2008–28 informs these individuals of
the minimum filing necessary to obtain the
stimulus payment. Notice 2008–28 ad-
vises these individuals to complete only
certain lines on the income tax return that
are necessary to identify the individual and
report the amount of qualifying income.
Thus, in many cases, such as where an in-
dividual’s qualifying income consists only
of social security benefits, the income tax
return will show no adjusted gross income,
even though the individual has minimal
amounts of nonqualifying income, such as
interest or dividend income.
.07 To effectuate electronic filing, a re-
turn must include at least $1.00 of adjusted
gross income.
SECTION 3. SCOPE
This revenue procedure applies to eli-
gible individuals who are not required by
sections 6012 or 6017 to file an income tax
return, but who file a return as provided in
Notice 2008–28 solely for the purpose of
obtaining a stimulus payment.
SECTION 4. PROCEDURE
.01 An individual, within the scope of
this revenue procedure, who wishes to
electronically file anincome tax return
may enter $1.00 of income in the Income
section of the return and at least $1.00 of
adjusted gross income even though the
return prepared as instructed in Notice
2008–28 would otherwise show no ad-
justed gross income.
.02 The IRS will not challenge the accu-
racy of the entry of $1.00 of adjusted gross
income on the return for any eligible indi-
vidual who follows the procedures in No-
tice 2008–28 and in this revenue procedure
and who has no filing requirement under
sections 6012 or 6017.
.03 However, the IRS may challenge
and assert any applicable penalties if the
return contains inaccuracies not related to
this procedure for electronically filing a re-
turn solely to claim an economic stimulus
payment. For example, failure to report
actual adjusted gross income (in excess of
the $1.00) as required would continue to be
subject to applicable penalties.
SECTION 5. EXAMPLE
A, an unmarried individual, receives $200 of in-
terest income, $100 of dividend income and $7,000
of social security retirement benefits during the year
March 24, 20086572008–12 I.R.B.

2007. Under section 86, no portion ofA’s social se-
curity benefits is includible inA’s gross income for
2007. BecauseA’s gross income does not exceed the
sum of the exemption amount plus the basic standard
deduction applicable to an unmarried individual,A
is not required by sections 6012 or 6017 to file an
income tax return for 2007. In accordance with the
procedures provided in Notice 2008–28,Aenters the
amount of his social security benefits on line 14a of
Form 1040A, but does not enter the amount of his in-
terest income or dividend income on Form 1040A.A
seeks to file his return electronically. In order to ef-
fectuate the electronic filing ofA’s return,Amay in-
clude $1.00 in the adjusted gross income reported on
his electronically filed return.
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also: Part I, §§ 280F; 1.280F–7.)
Rev. Proc. 2008–22
SECTION 1. PURPOSE
.01 This revenue procedure provides:
(1) limitations on depreciation deductions
for owners of passenger automobiles first
placed in service by the taxpayer during
calendar year 2008, including a sepa-
rate table of limitations on depreciation
deductions for trucks and vans; and (2)
the amounts to be included in income
by lessees of passenger automobiles first
leased by the taxpayer during calendar
year 2008, including a separate table of
inclusion amounts for lessees of trucks
and vans.
.02 The tables detailing these depre-
ciation limitations and lessee inclusion
amounts reflect the automobile price infla-
tion adjustments required by § 280F(d)(7)
of the Internal Revenue Code.
SECTION 2. BACKGROUND
.01 For owners of passenger automo-
biles, § 280F(a) imposes dollar limitations
on the depreciation deduction for the year
that the passenger automobile is placed in
service by the taxpayer and each succeed-
ing year. Section 280F(d)(7) requires the
amounts allowable as depreciation deduc-
tions to be increased by a price inflation
adjustment amount for passenger automo-
biles placed in service after 1988. The
method of calculating this price inflation
amount for trucks and vans placed in ser-
vice in or after calendar year 2003 uses
a different CPI “automobile component”
(the “new trucks” component) than that
used in the price inflation amount calcu-
lation for other passenger automobiles (the
“new cars” component), resulting in some-
what higher depreciation deductions for
trucks and vans. This change reflects the
higher rate of price inflation that trucks and
vans have been subject to since 1988.
.02 Section 103 of the Economic Stim-
ulus Act of 2008, Pub. L. No. 110–185,
122 Stat. 613 (Feb. 13, 2008), amended
§ 168(k). As amended, § 168(k)(1)(A)
provides a 50-percent additional first year
depreciation deduction for certain new
property acquired by the taxpayer after
December 31, 2007, and before January
1, 2009, so long as no written binding
contract for the acquisition of the property
existed prior to January 1, 2008. The Act
also amended § 168(k)(2)(F)(i) to increase
the first year depreciation allowed under
§ 280F(a)(1)(A) by $8,000 for passenger
automobiles to which the 50-percent ad-
ditional first year depreciation deduction
applies.
.03 Section 168(k)(2)(D)(i) provides
that the 50-percent additional first year de-
preciation deduction does not apply to any
property required tobe depreciated under
the alternative depreciation system of sec-
tion 168(g), including property described
in section 280F(b)(1). Further, section
168(k)(2)(D)(iii) permits a taxpayer to
elect not to claim the 50-percent additional
first year depreciation deduction for any
class of property. Accordingly, this rev-
enue procedure provides tables for passen-
ger automobiles for which the 50-percent
additional depreciation deduction applies
and tables for passenger automobiles for
which the 50-percent additional first year
depreciation deduction does not apply,
including passenger automobiles in a class
of property for whichthe taxpayer “elects
out” of the 50-percent additional first year
depreciation deduction.
.04 For leased passenger automobiles,
§ 280F(c) requires a reduction in the de-
duction allowed to the lessee of the pas-
senger automobile. The reduction must be
substantially equivalent to the limitations
on the depreciation deductions imposed on
owners of passenger automobiles. Under
§ 1.280F–7(a) of the Income Tax Regu-
lations, this reduction requires the lessees
to include in gross income an inclusion
amount determined by applying a formula
to the amount obtained from a table. There
is a table for lessees of trucks and vans and
a table for all other passenger automobiles.
Each table shows inclusion amounts for a
range of fair market values for each taxable
year after the passenger automobile is first
leased.
SECTION 3. SCOPE
.01 The limitations on depreciation de-
ductions in section 4.02(2) of this revenue
procedure apply to passenger automobiles
(other than leased passenger automobiles)
that are placed in service by the taxpayer
in calendar year 2008, and continue to ap-
ply for each taxable year that the passenger
automobile remains in service.
.02 The tables in section 4.03 of this
revenue procedure apply to leased passen-
ger automobiles for which the lease term
begins during calendar year 2008. Lessees
of such passenger automobiles must use
these tables to determine the inclusion
amount for each taxable year during which
the passenger automobile is leased. See
Rev. Proc. 2002–14, 2002–1 C.B. 450, for
passenger automobiles first leased before
January 1, 2003, Rev. Proc. 2003–75,
2003–2 C.B. 1018, for passenger auto-
mobiles first leased during calendar year
2003, Rev. Proc. 2004–20, 2004–1 C.B.
642, for passenger automobiles first leased
during calendar year 2004, Rev. Proc.
2005–13, 2005–1 C.B. 759, for passenger
automobiles first leased during calendar
year 2005, Rev. Proc. 2006–18, 2006–1
C.B. 645, for passenger automobiles first
leased during calendar year 2006, and Rev.
Proc. 2007–30, 2007–18 I.R.B. 1104, for
passenger automobiles first leased during
calendar year 2007.
SECTION 4. APPLICATION
.01In General.
(1)Limitations on Depreciation Deduc-
tions for Certain Automobiles. The limita-
tions on depreciation deductions for pas-
senger automobiles placed in service by
the taxpayer for the first time during calen-
dar year 2008 are found in Tables 1 through
4 in section 4.02(2) of this revenue proce-
dure. Table 1 of this revenue procedure
provides limitations on depreciation de-
ductions for a passenger automobile (other
than a truck or van) for which the 50-per-
cent additional first year depreciation de-
duction does not apply, including a pas-
2008–12 I.R.B.658March 24, 2008

senger automobile (other than a truck or
van) in a class of property for which the
taxpayer elects out of the 50-percent ad-
ditional first year depreciation deduction.
Table 2 of this revenue procedure provides
limitations on depreciation deductions for
a passenger automobile (other than a truck
or van) for which the 50-percent additional
first year depreciation deduction applies.
Table 3 of this revenue procedure provides
limitations on depreciation deductions for
a truck or van for which the 50-percent
additional first year depreciation deduc-
tion does not apply, including a truck or
van in a class of property for which the
taxpayer elects out of the 50-percent ad-
ditional first year depreciation deduction.
Table 4 of this revenue procedure provides
limitations on depreciation deductions for
a truck or van for which the 50-percent ad-
ditional first year depreciation deduction
applies.
(2)Inclusions in Income of Lessees of
Passenger Automobiles. A taxpayer first
leasing a passenger automobile during cal-
endar year 2008 must determine the in-
clusion amount that is added to gross in-
come using the tables in section 4.03 of this
revenue procedure. The inclusion amount
is determined using Table 5 in the case
of a passenger automobile (other than a
truck or van), and Table 6 in the case of
a truck or van. In addition, the procedures
of § 1.280F–7(a) must be followed.
.02Limitations on Depreciation Deduc-
tions for Certain Automobiles.
(1)Amount of the Inflation Adjustment.
Under § 280F(d)(7)(B)(i), the automobile
price inflation adjustment for any calendar
year is the percentage (if any) by which the
CPI automobile component for October of
the preceding calendar year exceeds the
CPI automobile component for October
1987. The term “CPI automobile com-
ponent” is defined in § 280F(d)(7)(B)(ii)
as the “automobile component” of the
Consumer Price Index for all Urban Con-
sumers published by the Department of
Labor (the CPI). The new car component
of the CPI was 115.2 for October 1987 and
135.169 for October 2007. The October
2007 index exceeded the October 1987
index by 19.969. The Internal Revenue
Service has, therefore, determined that
the automobile price inflation adjustment
for 2008 for passenger automobiles (other
than trucks and vans) is 17.33 percent
(19.969/115.2 x 100%). This adjustment
is applicable to all passenger automobiles
(other than trucks and vans) that are first
placed in service in calendar year 2008.
The dollar limitations in § 280F(a) must
therefore be multiplied by a factor of
0.1733, and the resulting increases, after
rounding to the nearest $100, are added to
the 1988 limitations to give the depreci-
ation limitations applicable to passenger
automobiles (other than trucks and vans)
for calendar year 2008. To determine the
dollar limitations applicable to trucks and
vans first placed in service during calen-
dar year 2008, the new truck component
of the CPI is used instead of the new car
component. The new truck component of
the CPI was 112.4 for October 1987 and
139.513 for October 2007. The October
2007 index exceeded the October 1987
index by 27.113. The Service has, there-
fore, determined that the automobile price
inflation adjustment for 2008 for trucks
and vans is 24.12 percent (27.113/112.4 x
100%). This adjustment is applicable to
all trucks and vans that are first placed in
service in calendar year 2008. The dollar
limitations in § 280F(a) must therefore be
multiplied by a factor of 0.2412, and the
resulting increases, after rounding to the
nearest $100, are added to the 1988 limi-
tations to give the depreciation limitations
applicable to trucks and vans.
(2)Amount of the Limitation.Forpas-
senger automobiles placed in service by
the taxpayer in calendar year 2008, Tables
1 through 4 contain the dollar amount of
the depreciation limitation for each taxable
year. Use Table 1 for a passenger auto-
mobile (other than a truck or van) placed
in service by the taxpayer in calendar year
2008, for which the 50-percent additional
first year depreciation deduction does not
apply, including a passenger automobile
(other than a truck or van) in a class of
property for which the taxpayer elects out
of the 50-percent additional first year de-
preciation deduction. Use Table 2 for a
passenger automobile (other than a truck
or van) placed in service by the taxpayer in
calendar year 2008, for which the 50-per-
cent additional first year depreciation de-
duction applies. Use Table 3 for a truck
or van placed in service by the taxpayer in
calendar year 2008, for which the 50-per-
cent additional first year depreciation de-
duction does not apply, including a truck
or van in a class of property for which the
taxpayer elects out of the 50-percent ad-
ditional first year depreciation deduction.
Use Table 4 for a truck or van placed in
service by the taxpayer in calendar year
2008, for which the 50-percent additional
first year depreciation deduction applies.
REV. PROC. 2008–22 TABLE 1
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES
(THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN
CALENDAR YEAR 2008, FOR WHICH THE 50-PERCENT ADDITIONAL FIRST YEAR
DEPRECIATION DEDUCTION DOES NOT APPLY
Tax YearAmount
1st Tax Year
$2,960
2nd Tax Year
$4,800
3rd Tax Year
$2,850
Each Succeeding Year
$1,775
March 24, 20086592008–12 I.R.B.

REV. PROC. 2008–22 TABLE 2
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES
(THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN
CALENDAR YEAR 2008, FOR WHICH THE 50-PERCENT ADDITIONAL FIRST YEAR
DEPRECIATION DEDUCTION APPLIES
Tax YearAmount
1st Tax Year
$10,960
2nd Tax Year
$4,800
3rd Tax Year
$2,850
Each Succeeding Year
$1,775
REV. PROC. 2008–22 TABLE 3
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY
THE TAXPAYER IN CALENDAR YEAR 2008, FOR WHICH THE 50-PERCENT
ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY
Tax YearAmount
1st Tax Year
$3,160
2nd Tax Year
$5,100
3rd Tax Year
$3,050
Each Succeeding Year
$1,875
REV. PROC. 2008–22 TABLE 4
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY
THE TAXPAYER IN CALENDAR YEAR 2008, FOR WHICH THE 50-PERCENT
ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES
Tax YearAmount
1st Tax Year
$11,160
2nd Tax Year
$5,100
3rd Tax Year
$3,050
Each Succeeding Year
$1,875
.03Inclusions in Income of Lessees of
Passenger Automobiles.
The inclusion amounts for passenger
automobiles first leased in calendar year
2008 are calculated under the procedures
described in § 1.280F–7(a). Lessees of
passenger automobiles other than trucks
and vans should use Table 5 of this revenue
procedure in applying these procedures,
while lessees of trucks and vans should use
Table 6 of this revenue procedure.
REV. PROC. 2008–22 TABLE 5
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES
(THATARENOTTRUCKSORVANS)
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2008
Fair Market Value of Passenger
Automobile
Tax Year During Lease
OverNot Over1st2nd3rd4th
5th & Later
$18,500$19,000
2042627384
19,000
19,500
2247718394
19,500
20,000
2553
7893106
20,000
20,500
27
58
87102117
20,500
21,0003063
95
112128
21,000
21,500
3269103122139
2008–12 I.R.B.660March 24, 2008

REV. PROC. 2008–22 TABLE 5—Continued
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES
(THATARENOTTRUCKSORVANS)
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2008
Fair Market Value of Passenger
Automobile
Tax Year During Lease
OverNot Over1st2nd3rd4th
5th & Later
21,500
22,00034
75
111131
151
22,00023,0003883123146167
23,00024,0004394139
165
190
24,000
25,000
48
105155185
212
25,000
26,000
53115
172204
235
26,00027,000
58
126188223
257
27,00028,00063137204243279
28,00029,00068148220262302
29,00030,00073
159
236282324
30,00031,00078170
252
301347
31,00032,00083181268321368
32,00033,00088192284340391
33,00034,00093202301
359
414
34,000
35,000
98213317379436
35,000
36,000103224333398
459
36,00037,000108
235
349418481
37,00038,000113246
365
437
503
38,00039,000118
257
381
457525
39,00040,000123268397476
548
40,00041,000128279413
495571
41,00042,000133289430
515593
42,00043,000137301446
534615
43,00044,000142312462
553
638
44,000
45,000
147323478
573659
45,000
46,000
152
333
495592
682
46,00047,000
157
344
511
611
705
47,00048,000162
355527
631727
48,00049,000167366
543650750
49,000
50,000
172377
559
670772
50,00051,000
177388
575
689794
51,00052,000
182399
591
709816
52,00053,000
187410607728839
53,00054,000
192420624747862
54,00055,000
197431640767884
55,00056,000
202442
657785
906
56,00057,000
207
453
673
805
928
57,00058,000
212464689824
951
58,00059,000
217
475705
844973
59,000
60,000222486721863996
60,00062,000229
502
7468921,029
62,00064,000239
524
7789311,074
64,00066,000249
546
8109701,118
66,00068,000
259567
8431,0081,164
68,00070,000269
589875
1,0471,209
70,00072,0002796119071,086
1,253
72,00074,000289633939
1,125
1,298
74,00076,000299
654
9721,1641,342
76,00078,0003096761,0041,2031,387
78,00080,0003196981,0361,2421,432
80,000
85,000
3367361,0931,309
1,511
85,000
90,0003617911,1731,4061,623
90,000
95,000
386
8451,2551,503
1,734
95,000
100,000410900
1,335
1,6001,846
100,000110,000448981
1,4571,745
2,014
March 24, 20086612008–12 I.R.B.

REV. PROC. 2008–22 TABLE 5—Continued
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES
(THATARENOTTRUCKSORVANS)
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2008
Fair Market Value of Passenger
Automobile
Tax Year During Lease
OverNot Over1st2nd3rd4th
5th & Later
110,000120,0004971,0901,6191,9392,238
120,000130,000
547
1,1991,7802,1332,462
130,000140,000
597
1,3081,9422,327
2,685
140,000
150,000
6461,4172,103
2,521
2,910
150,000
160,000696
1,5262,2652,715
3,133
160,000170,000
7451,635
2,4272,908
3,357
170,000180,000
795
1,744
2,588
3,103
3,581
180,000190,000
8451,8532,750
3,296
3,805
190,000200,0008941,9622,9123,4904,028
200,000210,0009442,0713,0733,684
4,252
210,000220,0009942,179
3,235
3,8784,476
220,000230,0001,0432,2893,3964,0724,700
230,000240,0001,0932,397
3,5594,265
4,924
240,000and up1,142
2,507
3,720
4,4595,148
REV. PROC. 2008–22 TABLE 6
DOLLAR AMOUNTS FOR TRUCKS AND VANS
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2008
Fair Market Value of Truck or VanTax Year During Lease
OverNot Over1st2nd3rd4th
5th & later
$19,000$19,500
1737
5465
73
19,500
20,00020426373
85
20,000
20,500
2248708496
20,500
21,000
2553
7993107
21,000
21,500
27
59
86103118
21,500
22,0003064
95
112130
22,00023,0003372107128146
23,00024,0003883123147168
24,000
25,000
4394139166191
25,000
26,00048
105155
186213
26,00027,000
53
116171
205
236
27,00028,000
58
127187
225258
28,00029,00063138204243280
29,00030,00068148221263302
30,00031,00073
159
237282
325
31,00032,00078170
253
301348
32,00033,00083181269321370
33,00034,00088192
285
340393
34,000
35,000
93203301360414
35,000
36,00098214317379437
36,00037,000103
225
333399
459
37,00038,000108
235350
418482
38,00039,000113246366437
505
39,00040,000118
257
382
457526
40,00041,000123268398476
549
41,00042,000128279414496
571
42,00043,000133290430
515594
43,00044,000137301447
534
616
44,000
45,000
142312463
553
639
45,000
46,000147323479
573
661
2008–12 I.R.B.662March 24, 2008

REV. PROC. 2008–22 TABLE 6—Continued
DOLLAR AMOUNTS FOR TRUCKS AND VANS
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2008
Fair Market Value of Truck or VanTax Year During Lease
OverNot Over1st2nd3rd4th
5th & later
46,00047,000
152
334
495592
684
47,00048,000
157345511
612
705
48,00049,000162
356527
631728
49,000
50,000
167366
544651750
50,00051,000
172377
560
670773
51,00052,000
177388
576
689796
52,00053,000
182399
592
709817
53,00054,000
187410608728840
54,00055,000
192421624748862
55,00056,000
197432640767
885
56,00057,000
202443
656
787907
57,00058,000
207
453
673806929
58,00059,000
212464689
825952
59,000
60,000217
475705845
974
60,00062,0002244927298741,008
62,00064,000234
513
762913
1,052
64,00066,000244
535
794
951
1,098
66,00068,000
254557
8269901,142
68,00070,000264
579858
1,0291,187
70,00072,0002746008921,0671,232
72,00074,0002846229241,1061,276
74,00076,000294644
9561,145
1,321
76,00078,0003046669881,1841,366
78,00080,0003146871,0211,2221,411
80,000
85,000
3317261,0771,2901,489
85,000
90,000
356
780
1,158
1,3871,601
90,000
95,000
381
835
1,2381,4841,713
95,000
100,000
405
8891,320
1,5811,825
100,000110,0004439711,4401,7271,993
110,000120,0004921,0801,6021,9212,216
120,000130,000
542
1,1891,7642,1142,440
130,000140,000
592
1,2971,9262,308
2,665
140,000
150,000
6411,4072,087
2,502
2,888
150,000
160,000691
1,515
2,2492,6963,112
160,000170,000740
1,625
2,4102,8903,336
170,000180,0007901,733
2,573
3,083
3,560
180,000190,0008401,8422,7343,2783,783
190,000200,000889
1,951
2,8963,4724,007
200,000210,0009392,060
3,0583,665
4,231
210,000220,0009892,1693,219
3,8594,455
220,000230,0001,0382,2783,381
4,053
4,678
230,000240,0001,0882,387
3,542
4,2474,903
240,000and up1,1372,4963,7044,441
5,126
SECTION 5. EFFECTIVE DATE
This revenue procedure applies to pas-
senger automobiles (other than leased pas-
senger automobiles) that are first placed
in service by the taxpayer during calendar
year 2008, and to leased passenger auto-
mobiles that are first leased by the taxpayer
during calendar year 2008.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Bernard P. Harvey of the Of-
fice of Associate Chief Counsel (Income
Tax & Accounting). For further informa-
tion regarding the depreciation limitations
and lessee inclusion amounts in this rev-
enue procedure, contact Bernard P. Harvey
at (202) 622–4930 (not a toll-free call).
March 24, 20086632008–12 I.R.B.

26 CFR 601.204: Changes in accounting periods
and in methods of accounting.
(Also Part I, §§ 446; 472; 1.446–1; 1.472–1;
1.472–8.)
Rev. Proc. 2008–23
SECTION 1. PURPOSE
This revenue procedure provides an
alternative dollar-value last-in, first-out
(LIFO) pooling method, the Vehicle-Pool
Method, for retail dealers and wholesale
distributors (collectively, “resellers”) of
cars and light-duty trucks. This revenue
procedure also provides the exclusive pro-
cedures for obtaining automatic consent
to change to the Vehicle-Pool Method. In
addition, this revenue procedure modifies
Rev. Proc. 97–36, 1997–2 C.B. 450, and
Rev. Proc. 2001–23, 2001–1 C.B. 784,
as modified by Announcement 2004–16,
2004–1 C.B. 668, to provide the permis-
sible method of pooling for crossover
vehicles for resellers of cars and light-duty
trucks that do not use the Vehicle-Pool
Method.
SECTION 2. BACKGROUND
.01 Section 472(a) of the Internal
Revenue Code provides generally that a
taxpayer may use the LIFO method of
inventorying goods if, among other re-
quirements, the change to, and use of, the
method is in accordance with such reg-
ulations as the Secretary may prescribe
as necessary in order that the use of the
method may clearly reflect income.
.02 Section 1.472–8(a) of the Income
Tax Regulations provides that any tax-
payer may elect to determine the cost of its
LIFO inventories under the dollar-value
LIFO method of accounting, provided
such method is used consistently and
clearly reflects income in accordance with
the rules of § 1.472–8.
.03 Section 1.472–8(b)(1) requires
manufacturers and processors to estab-
lish one pool for each natural business
unit unless the taxpayer elects under
§ 1.472–8(b)(3) to establish multiple
pools. In addition, § 1.472–8(b)(1) re-
quires that where the manufacturer or
processor is also engaged in the whole-
saling or retailing of goods purchased
from others, any pooling of the LIFO in-
ventory of such purchased goods for the
wholesaling or retailing operations shall
be determined in accordance with the rules
of § 1.472–8(c) (concerning pools of re-
sellers).
.04 Section 1.472–8(c)(1) requires, in
relevant part, a reseller to establish dollar-
value pools based on major lines, types, or
classes of goods.
.05 Section 1.472–8(g)(1) provides that
any change in method of pooling autho-
rized by § 1.472–8 and used in computing
the taxpayer’s LIFO inventories under the
dollar-value LIFO method shall be treated
as a change in method of accounting. Any
method of pooling that is authorized by
§ 1.472–8 shall be used for the year of
adoption and for all subsequent taxable
years unless a change is required by the
Commissioner in order to clearly reflect
income, or unless permission to change is
granted by the Commissioner as provided
in § 1.446–1(e). If the taxpayer changes
from one method of pooling to another
method of pooling, the ending LIFO inven-
tory for the taxable year preceding the year
of change shall be restated under the new
method of pooling.
.06 Section 1.472–8(g)(2)(i) provides,
in relevant part, that a taxpayer who has
been using the dollar-value LIFO method
and who is permitted or required to change
its method of pooling shall combine or
separate the LIFO value of its inventory
for the base year and each yearly layer
of increment in order to conform to the
new pool or pools. The combination or
separation of the LIFO value of the tax-
payer’s inventory for the base year and
each yearly layer of increment shall be
made in accordance with the appropriate
method in § 1.472–8(g)(2), unless the use
of a different method is approved by the
Commissioner. Section 1.472–8(g)(2)(ii)
provides rules that a taxpayer must ap-
ply when separating a pool. Sections
1.472–8(g)(2)(iii) and (iv) provide alter-
native rules that a taxpayer must apply
when combining pools. These sections
also contain examples showing the appli-
cation of the rules for taxpayers that use
double-extension LIFO.
.07 A taxpayer generally may obtain
automatic consent under § 446(e) and
§ 1.446–1(e)(2)(i) to change to a method
of accounting listed in the APPENDIX of
Rev. Proc. 2002–9, 2002–1 C.B. 327, as
modified and clarified by Announcement
2002–17, 2002–1 C.B. 561, as modified
and amplified by Rev. Proc. 2002–19,
2002–1 C.B. 696, and asamplified, clari-
fied and modified by Rev. Proc. 2002–54,
2002–2 C.B. 432.
.08 Under the “Alternative LIFO
Method” provided in Rev. Proc. 97–36
and listed in section 10.03 of the APPEN-
DIX of Rev. Proc. 2002–9, a retail dealer
of new cars or new trucks (“automobile
dealer”) must establish one pool for all
new cars and a separate pool for all new
light-duty trucks (two-pools rule). For this
purpose, “light-duty truck” means a truck
with a gross vehicle weight that does not
exceed 14,000 pounds. These light-duty
trucks sometimes are referred to as “class
1,” “class 2,” and “class 3” trucks.
.09 Under the “Used Vehicle Alterna-
tive LIFO Method” provided in Rev. Proc.
2001–23, 2001–1 C.B. 784, as modified
by Announcement 2004–16, 2004–1 C.B.
668, and listed in section 10.04 of the
APPENDIX of Rev. Proc. 2002–9, a
reseller of used cars or used light-duty
trucks (“used vehicle dealer”) must estab-
lish one pool for all used cars and a sep-
arate pool for all used light-duty trucks
(two-pools rule). Again, “light-duty truck”
means a truck with a gross vehicle weight
that does not exceed 14,000 pounds (i.e.,
class 1, class 2, or class 3 truck). Fur-
thermore, “used car” and “used light-duty
truck” mean previously titled vehicles, ex-
cluding demonstrator vehicles. A taxpayer
may choose to assign a used sport-utility
vehicle (“SUV”) or a used “hybrid” vehi-
cle (e.g., van and minivan) to either its used
car pool or its used light-duty truck pool.
Once the taxpayer has assigned one used
SUV or one used hybrid vehicle to a pool,
the taxpayer must assign all used SUVs
and all used hybrid vehicles to that same
pool in subsequent years.
.10 The two-pools rule found in both
Rev. Proc. 97–36 and Rev. Proc. 2001–23
is based on the opinions inFox Chevrolet,
Inc. Maryland v. Commissioner,76 T.C.
708 (1981),acq., 1984–2 C.B. 1, in which
tax years from 1972 through 1974 were
at issue, andRichardson Investments, Inc.,
and Subsidiaries v. Commissioner,76 T.C.
736 (1981), in which tax years 1971, 1972,
and 1974 were at issue. After acknowledg-
ing the similaritiesof cars and trucks, the
court inFox Chevroletfocusedontheirdif-
ferences in deciding that cars and trucks do
not constitute a single class of goods under
§ 1.472–8(c)(1). First, the court noted that
2008–12 I.R.B.664March 24, 2008

cars and trucks appeal to different types
of purchasers. “The market for [cars] is
comprised in the main of persons among
the general public who desire to acquire
a means of transporting themselves be-
tween locations, usually within their com-
munity and occasionally on extended out-
ings to more distant locales. Trucks, on
the other hand, are more often bought for
business use. They are used principally
for transporting property.” 76 T.C. at 725.
Second, the court observed that the na-
ture of the operation of trucks is quite dif-
ferent from that of cars. “Due to their
size, weight, and in some instances me-
chanical complexity, greater experience or
training is occasionally required to oper-
ate trucks designed to haul property. Fur-
thermore, the evidence in this case reveals
that trucks are a more expensive invest-
ment than is the average [car]. The regis-
tration and other legal requirements for the
operationoftrucksalsotendtobemuch
more stringent than those for [cars].” 76
T.C. at 725. Finally, the court rejected
the argument that light-duty trucks are ac-
quired by the same class of consumers and
are used interchangeably for the same pur-
poses as cars. “While economy and light-
duty trucks are certainly closer to automo-
biles than are heavy-duty trucks, and it is
always difficult to draw a fine line, we be-
lieve that smaller trucks have more in com-
mon with other types of trucks than they
do with [cars]. In any event, if light-duty
trucks are a hybrid, they are far from fully
interchangeable with [cars]. The line is
difficult to draw, but is more appropriately
drawn between trucks and cars than be-
tween different classes of trucks.” 76 T.C.
at 726. InRichardson Investments,the
Tax Court, citingFox Chevroletas control-
ling authority, rejected a Ford dealer’s ar-
gument that it may assign cars and trucks
to a single “transportation” pool. Noting
that this taxpayer did not include used ve-
hicles and recreational vehicles in the same
pool, the court also noted that Ford Mo-
tor Company’s advertising campaign dis-
tinguished between the commercial nature
of Ford trucks (“built tough”) and the per-
sonal nature of Ford Granadas (“look and
ride like a Mercedes”).
.11 The Treasury Department and
the Internal Revenue Service recognize
that the distinctions between cars and
light-duty trucks have diminished signifi-
cantly sinceFox ChevroletandRichardson
Investmentswere decided. For example,
during the 1970s, most cars were pur-
chased to transport people for personal
purposes, and most trucks were purchased
to transport property for business pur-
poses. Today, however, manufacturers
advertise that their light-duty trucks of-
fer the ride, handling, and amenities of
cars plus the additional seating and cargo
capacity that larger families need to trans-
port themselves and their personal-use
property. Furthermore, people do not
need a special operator’s license to drive
light-duty trucks on highways. More-
over, the distinctions between cars and
light-duty trucks that existed during the
1970s have been reduced significantly
by the creation of “crossover” vehicles,
which share some characteristics of both
cars and light-duty trucks (e.g.,SUVs,
minivans, and similar vehicles, formerly
denoted as “hybrid”). Because of these
changes, sales of light-duty trucks have
greatly increased relative to sales of cars.
Also, today federal regulators treat cars
and light-duty trucks with greater similar-
ity in regulations promulgated under both
the Energy Policy and Conservation Act
of 1975 (49 U.S.C. 32902), which sets fuel
economy standards, and the Clean Air Act
(42 U.S.C. 7521), which sets emissions
standards.
SECTION 3. SCOPE
Any reseller of cars or light-duty trucks
that is subject to the dollar-value LIFO
pooling rules of § 1.472–8(c)(1), Rev.
Proc. 97–36, or Rev. Proc. 2001–23 may
use the Vehicle-Pool Method, as described
section 4.01(1) of this revenue procedure.
Also, any reseller of cars or light duty
trucks that has crossover vehicles and that
uses the Alternative LIFO Method under
Rev. Proc. 97–36 or the Used Vehicle Al-
ternative LIFO Method under Rev. Proc.
2001–23 must use the method of pooling
for crossover vehicles under Rev. Proc.
97–36 or Rev. Proc. 2001–23, as de-
scribed in section 4.02(1) of this revenue
procedure if the reseller does not choose to
use the Vehicle-Pool Method described in
section 4.01(1) of this revenue procedure.
SECTION 4. APPLICATION
.01Vehicle-Pool Method.
(1)Description. Under the Vehicle-
Pool Method, a reseller with new vehicles
(i.e., new cars, new light-duty trucks, and
new crossover vehicles, including SUVs,
vans, minivans, and other similar vehi-
cles) may establish a New Vehicle pool for
all new vehicles. In addition, under this
method, a reseller with used vehicles (i.e.,
used cars, used light-duty trucks, and used
crossover vehicles, including SUVs, vans,
minivans, and other similar vehicles) may
establish a Used Vehicle pool for all used
vehicles. No pool established under this
revenue procedure may include a vehicle
with a gross vehicle weight that exceeds
14,000 pounds.
(2)Change to the Vehicle-Pool Method.
(a) Pursuant to section 6.01 of Rev.
Proc. 2002–9 (or successor), a reseller
within the scope of this revenue proce-
dure and Rev. Proc. 2002–9, as modified
by this revenue procedure, is granted the
Commissioner’s consent to change to the
Vehicle-Pool Method described in section
4.01(1) of this revenue procedure, pro-
vided the reseller follows the provisions
of Rev. Proc. 2002–9, with the following
modifications:
(i) The scope limitation in section
4.02(6) of Rev. Proc. 2002–9 does not
apply for the reseller’s first taxable year
ending on or after December 31, 2007; and
(ii) The designated automatic account-
ing method change number for a change in
method of accounting to the Vehicle-Pool
Method made pursuant to this revenue
procedure is “112.” A reseller also concur-
rently changing to the Alternative LIFO
Method under Rev. Proc. 97–36 or the
Used Vehicle Alternative LIFO Method
under Rev. Proc. 2001–23 should file a
single Form 3115,Application for Change
in Accounting Method, for both changes
and enter both designated numbers on
its Form 3115. For example, a reseller
concurrently changing to the Alterna-
tive LIFO Method and the Vehicle-Pool
Method should enter both “58 and 112” on
its Form 3115.
(b) A reseller that changes its pooling
method under this revenue procedure must
make the change on a cut-off basis (see
section 2.06 of Rev. Proc. 2002–9) and
must comply with § 1.472–8(g). Instead
of using the earliest taxable year for which
the reseller adopted the LIFO method for
any items in a pool, the reseller must use
the year of change as the base year when
March 24, 20086652008–12 I.R.B.

determining the LIFO value of that pool
for the year of change and subsequent tax-
able years (i.e., the cumulative index at
the beginning of the year of change will
be 1.00). The reseller must restate the
base-year cost of all layers of increment
in a pool at the beginning of the year of
change in terms of new base-year cost.
For an example of establishing a new base
year, see § 1.472–8(e)(3)(iv)(B)(1)(ii).
.02Method of Pooling for Crossover
Vehicles under Rev. Proc. 97–36 and Rev.
Proc. 2001–23.
(1)Description. A reseller of cars and
light duty trucks that uses the Alternative
LIFO Method under Rev. Proc. 97–36
or the Used Vehicle Alternative LIFO
Method under Rev. Proc. 2001–23 and
that maintains separate new car and new
truck pools or separate used car and used
truck pools, or both, (in lieu of the Ve-
hicle Pool Method described in section
4.01(1) of this revenue procedure) must
assign new crossover vehicles to either
the new car pool or the new truck pool,
whichever is more reasonable under all the
facts and circumstances, and must assign
used crossover vehicles to either the used
car pool or the used truck pool, whichever
is more reasonable under all the facts and
circumstances.
(2)Change to the method of pooling for
crossover vehicles under Rev. Proc. 97–36
and Rev. Proc. 2001–23. A reseller within
the scope of this revenue procedure that
wants to change to the method of pooling
for crossover vehicles under Rev. Proc.
97–36 and Rev. Proc. 2001–23, as pro-
vided in section 4.02(1) of this revenue
procedure, must use the provisions of Rev.
Proc. 97–27, 1997–1 C.B. 680, as modi-
fiedandamplifiedbyRev. Proc. 2002–19,
2002–1 C.B. 696, as amplified and clar-
ified by Rev. Proc. 2002–54, 2002–2
C.B.432,andasmodifiedbyRev. Proc.
2007–67, 2007–48 I.R.B 1072.
SECTION 5. AUDIT PROTECTION
A reseller’s use of the Vehicle-Pool
Method in accordance with section 4.01(1)
of this revenue procedure on a federal
income tax return filed before March 7,
2008, will not be raised as an issue by the
Service. In addition, if a reseller’s use of
the Vehicle-Pool Method in accordance
with section 4.01(1) of this revenue pro-
cedure on a federal income tax return filed
before March 7, 2008, is an issue under
consideration in an examination, in an
appeals office, or before the Tax Court,
the issue will not be further pursued by
the Service. However, the audit protection
granted by this section 5 extends only to
the question of whether the reseller has es-
tablished the appropriate number of pools
under § 1.472–8(c)(1). Thus, this section 5
does not prohibit the Service from raising
or pursuing other inventory-related issues
in an examination, in an appeals office,
and before the Tax Court.
SECTION 6. EFFECT ON OTHER
DOCUMENTS
.01.Changes to Rev. Proc. 97–36.
(1) Rev. Proc. 97–36 is modified to
permit an automobile dealer to establish a
New Vehicle pool for inventories of new
cars, new crossover vehicles, and new
light-duty trucks.
(2) Rev. Proc. 97–36 is modified to re-
quire an automobile dealer that maintains
separate new car and new truck pools un-
der section 4.02(1) of Rev. Proc. 97–36
to assign new crossover vehicles to either
the new car pool or the new truck pool,
whichever is more reasonable under all the
facts and circumstances.
.02.Changes to Rev. Proc. 2001–23.
(1) Rev. Proc. 2001–23 is modified
to permit a used vehicle dealer to estab-
lish a Used Vehicle pool for inventories
of used cars, used crossover vehicles, and
used light-duty trucks.
(2) Section 4.02(3) of Rev. Proc.
2001–23 is modified to require a used ve-
hicle dealer that maintains separate used
car and used truck pools to assign used
crossover vehicles to either the used car
pool or the used truck pool, whichever is
more reasonable under all the facts and
circumstances.
SECTION 7. EFFECTIVE DATE
In general, this revenue procedure is ef-
fective for taxable years ending on or af-
ter December 31, 2007. However, sections
4.02, 6.01(2) and 6.02(2) of this revenue
procedure are effective for taxable years
ending on or after March 7, 2008.
SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Leo F. Nolan II of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, contact
Leo F. Nolan II at (202) 622–4970 (not a
toll-free call).
2008–12 I.R.B.666March 24, 2008

Part IV. Items o
fGeneralInterest
Voluntary Com
pliance
Initiative Co
vering Policies of
Insurance and
Reinsurance
Issued by For
eign Insurers
and Foreign R
einsurers
Announceme
nt 2008–18
Section 1. O
verview and Purpose of the
Voluntary C
ompliance Initiative.
This announ
cement describes a volun-
tary compli
ance initiative by the Internal
Revenue Ser
vice (IRS) regarding the for-
eign insur
ance excise tax. The purpose
of this vol
untary compliance initiative is
to encoura
ge foreign insurers, reinsurers,
and other a
gents, solicitors and brokers to
comply wit
h their obligations under sec-
tion 4371
through 4374 of the Internal
Revenue C
ode (the Code), and in partic-
ular, wit
h their obligations described in
Revenue R
uling 2008–15, 2008–12 I.R.B.
633.
Revenue R
uling 2008–15 generally
clarifi
es the foreign insurance excise tax
consequ
ences under section 4371et seq.
of the Co
de with respect to premiums paid
by one fo
reign insurer or reinsurer to an-
other, i
ncluding the consequences where
the fir
st-mentioned foreign insurer or rein-
surer q
ualifies for an exemption from the
foreig
n insurance excise tax under an in-
come ta
x treaty with the United States
and the
second foreign insurer or reinsurer
does n
ot qualify for such an exemption.
In orde
r to ensure that all participants
in the
industry are aware of these tax con-
seque
nces and their associated reporting
and re
cord-keeping obligations, and have
a reas
onable period of time to come into
compl
iance with them, the IRS is announc-
ing h
erein that, unless otherwise noted, it
will
not examine issues arising under the
situ
ations set forth in Rev. Rul. 2008–15
in re
spect of reinsurance premiums paid
by on
e foreign insurer or reinsurer to an-
oth
er prior to October 1, 2008, the first day
of t
he quarterly excise tax period begin-
nin
g six months after this announcement
is p
ublished in the Internal Revenue Bul-
let
in. The specific terms of this voluntary
com
pliance initiative are as follows.
Section 2. Eli
gibility for the Voluntary
Compliance In
itiative.
.01 Eligible F
oreign Person. Any for-
eign insurer o
r reinsurer, as defined in sec-
tion 4372(a),
or any other foreign person
liable for the
tax imposed by section 4371
of the Code (“
eligible foreign person”), is
eligible to p
articipate if such person has
failed to fil
e timely one or more Form 720
returns (Qua
rterly Federal Excise Tax Re-
turn) and pa
y or remit any foreign insur-
ance excise
taxes due with respect to pre-
miums paid o
r received during any quar-
terly tax pe
riod ending prior to October 1,
2008. An el
igible foreign person also in-
cludes any
foreign insurer or reinsurer that
has failed
to satisfy the treaty-based return
disclosur
e requirements of Treas. Reg.
§301.6114
–1(c)(viii), if applicable, with
respect t
oclaiminganexemptionfromfor-
eign insu
rance excise tax under a U.S. in-
come tax t
reaty during any such period.
.02 Ineli
gible Failures to File. Notwith-
standing
that a foreign insurer or reinsurer
is an elig
ible foreign person, certain fail-
ures by t
hatpersontofileaForm720re-
turn and
pay excise tax will not fall within
the scop
e of the initiative. Accordingly,
such fai
lures to file and pay occurring dur-
ing any q
uarterly tax period ending prior
to Octo
ber 1, 2008, will not be protected
from ex
amination as described in Section
5below
, regardless of whether the foreign
insure
r or reinsurer is a participating tax-
payer,
as described in Section 3 below, in
this v
oluntary compliance initiative. The
failu
res to file that are not covered by this
initi
ative include:
a. In t
he case of a foreign insurer or
reins
urer that has entered into a closing
agree
ment with the IRS based on Appen-
dix A o
f Rev. Proc. 2003–78, 2003–2 C.B.
1029
, or any predecessor revenue proce-
dure
, any failure to pay foreign insurance
exci
se tax with respect to premiums re-
ceiv
ed on policies issued by that foreign
insu
rer or reinsurer that do not qualify for
an e
xemption from tax under the income
tax
treaty with the country in which it
is r
esident because that foreign insurer or
rei
nsurer has reinsured, in whole or in part,
apo
licy of reinsurance with a foreign rein-
sur
er not entitled to an exemption from tax
un
der that treaty or any other treaty; and
b. In the case o
f a foreign insurer or
reinsurer tha
t has entered into a closing
agreement wit
h the IRS based on Appen-
dix B of Rev. Pr
oc. 2003–78, 2003–2
C.B. 1029, any
failure to pay foreign in-
surance exci
se tax with respect to premi-
ums received
on policies issued by that for-
eign insurer
or reinsurer where, as part of
a conduit arr
angement, the foreign insurer
or reinsure
r reinsures, in whole or in part, a
policy of in
surance or reinsurance with any
person not e
ntitled to an exemption from
tax under th
at treaty or any other treaty.
Section 3. P
articipation Requirements.
.01 Partici
pating Taxpayers. A par-
ticipatin
g taxpayer under this voluntary
complianc
e initiative is any eligible for-
eign perso
n that timely files the applicable
Form 720 re
turn or returns and pays any
foreign i
nsurance excise taxes due with
respect t
o premiums paid or received on
or after O
ctober 1, 2008, or, if applicable,
who timel
y discloses in accordance with
section 6
114 of the Code its treaty-based
return po
sition that it is entitled to an ex-
emption
under an income tax treaty with
the Unit
ed States with respect to such
premium
s. If a participating taxpayer
does not
make any premium payment for
polici
es of reinsurance covering contracts
descri
bed in section 4371 of the Code dur-
ing the
quarterly tax period beginning on
Octobe
r 1, 2008, and is not otherwise obli-
gated t
ofileaForm720returntodisclose
atrea
ty-based return position, it may still
parti
cipate in this compliance initiative
if it t
imely files a blank Form 720 return
with t
he notation described in Section 4
below
.
.02 Re
cordkeeping Requirements. A
taxpa
yer will not be considered a partic-
ipat
ing taxpayer, however, if it does not
also
comply with the record-keeping re-
quir
ements in Treas. Reg. § 46.4371–4
with
respect to premiums paid or received
on or
after October 1, 2008, which includes
main
taining the appropriate records “for at
lea
st 3 years from the date any part of the
tax
became due or the date any part of the
tax
is paid, whichever is later, in such man-
ner
as to be readily accessible to authorized
int
ernal revenue officers or employees”.
.03
Determination of Date of Receipt.
For
purposes of determining whether for-
March 24, 20086672008–12 I.R.B.

eign insurance excise taxes are due with
respect to premiums received by a for-
eign insurer or reinsurer, a premium will
be treated as received on or after October
1, 2008, if the date on which the liabil-
ity for the foreign insurance excise tax at-
taches, within the meaning of Treas. Reg.
§46.4374–1(b), occurs on or after October
1, 2008. For example, if an insured pays to
a participating taxpayer, prior to October 1,
2008, a premium on a covered policy that
is exempt from foreign insurance excise
taxundersection4371oftheCodebyrea-
son of an income tax treaty, and the partici-
pating taxpayer makes a premium payment
reinsuring the risk covered by such policy
with a person not entitled to the benefits of
an income tax treaty on or after October 1,
2008, liability for the foreign insurance ex-
cise tax with respect to the premium paid
to the participating taxpayer will generally
attach as of the date that the second pre-
mium is paid by the participating taxpayer,
and will, therefore, be treated as received
by the participating taxpayer on or after
October 1, 2008.
Section 4. Notification Procedures for
Participating Taxpayers.
A participating taxpayer under this vol-
untary compliance initiative must file its
Form 720 return described in Section 3
above with the Cincinnati Service Center
at the following address:
Department of Treasury
Internal Revenue Service Center
Cincinnati, OH 45999–0009
In addition to filing its Form 720 re-
turn with the Cincinnati Service Center, a
participating taxpayer must also notify the
IRS of its election to participate by includ-
ing a notation, as described below, on the
Form 720 return.
A participating taxpayer must notate in
red print at the top of the Form 720 return
the following statement:
Election to participate in FET Volun-
tary Compliance Initiative pursuant to An-
nouncement 2008–18.
Section 5. Terms for Participating
Taxpayers.
Except as provided in Section 2.02, the
IRS agrees not to examine any participat-
ing taxpayer (whether a foreign insurer,
reinsurer, agent, solicitor or broker) with
respect to tax liabilities arising under
the four situations set forth in Rev. Rul.
2008–15, or any similar fact pattern, to the
extent that premiums are paid or received
by the participating taxpayer during any
quarterly tax period prior to October 1,
2008.
Section 6. Non-participating Taxpayers.
A non-participating taxpayer under this
voluntary compliance initiative is defined
as an eligible foreign person who is not a
participating taxpayer.
The IRS may: (a) conduct examina-
tions of a non-participating taxpayer cov-
eringany and allexcise taxes due under
section 4371 of the Code for any open tax
periods, including tax periods beginning
prior to October 1, 2008; and, (b) deter-
mine and assess the correct excise taxes
due under section 4371 of the Code, in-
cluding interest, additions to tax, and, if
applicable, penalties under section 6712 of
the Code for failure to disclose a treaty-
based return position under section 6114
of the Code and the regulations thereun-
der, and penalties under section 7270 of
the Code for failure to comply with section
4374 of the Code.
Section 7. ContactInformation.
Various personnel from the Office
of Large and Mid-Sized Business Unit,
the Office of Small Business/Self Em-
ployed Business Unit, and the Office
of the Associate Chief Counsel (Inter-
national), participated in drafting this
announcement. For further information
regarding this announcement, contact
Charles E. Jenkins with the Office of Large
and Mid-Sized Business Unit (Pre-Filing
and Technical Guidance) via e-mail at
charles.e.jenkins@irs.gov, or Jody Angelo
with the Office of Small Business/Self
Employed Business Unit (Excise Policy)
via e-mail atjody.j.angelo@irs.gov.
2008–12 I.R.B.668March 24, 2008

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
March 24, 2008i2008–12 I.R.B.

Numerical Finding List
1
Bulletins 2008–1 through 2008–12
Announcements:
2008-1, 2008-1 I.R.B.246
2008-2, 2008-3 I.R.B.307
2008-3, 2008-2 I.R.B.269
2008-4, 2008-2 I.R.B.269
2008-5, 2008-4 I.R.B.333
2008-6, 2008-5 I.R.B.378
2008-7, 2008-5 I.R.B.379
2008-8, 2008-6 I.R.B.403
2008-9, 2008-7 I.R.B.444
2008-10, 2008-7 I.R.B.445
2008-11, 2008-7 I.R.B.445
2008-12, 2008-7 I.R.B.446
2008-13, 2008-8 I.R.B.480
2008-14, 2008-8 I.R.B.481
2008-15, 2008-9 I.R.B.511
2008-16, 2008-9 I.R.B.511
2008-17, 2008-9 I.R.B.512
2008-18, 2008-12 I.R.B.667
2008-19, 2008-11 I.R.B.624
2008-20, 2008-11 I.R.B.625
Notices:
2008-1, 2008-2 I.R.B.251
2008-2, 2008-2 I.R.B.252
2008-3, 2008-2 I.R.B.253
2008-4, 2008-2 I.R.B.253
2008-5, 2008-2 I.R.B.256
2008-6, 2008-3 I.R.B.275
2008-7, 2008-3 I.R.B.276
2008-8, 2008-3 I.R.B.276
2008-9, 2008-3 I.R.B.277
2008-10, 2008-3 I.R.B.277
2008-11, 2008-3 I.R.B.279
2008-12, 2008-3 I.R.B.280
2008-13, 2008-3 I.R.B.282
2008-14, 2008-4 I.R.B.310
2008-15, 2008-4 I.R.B.313
2008-16, 2008-4 I.R.B.315
2008-17, 2008-4 I.R.B.316
2008-18, 2008-5 I.R.B.363
2008-19, 2008-5 I.R.B.366
2008-20, 2008-6 I.R.B.406
2008-21, 2008-7 I.R.B.431
2008-22, 2008-8 I.R.B.465
2008-23, 2008-7 I.R.B.433
2008-24, 2008-8 I.R.B.466
2008-25, 2008-9 I.R.B.484
2008-26, 2008-9 I.R.B.487
2008-27, 2008-10 I.R.B.543
2008-28, 2008-10 I.R.B.546
2008-29, 2008-12 I.R.B.637
Notices— Continued:
2008-30, 2008-12 I.R.B.638
2008-31, 2008-11 I.R.B.592
2008-32, 2008-11 I.R.B.593
2008-33, 2008-12 I.R.B.642
2008-34, 2008-12 I.R.B.645
2008-35, 2008-12 I.R.B.647
2008-36, 2008-12 I.R.B.650
2008-37, 2008-12 I.R.B.654
Proposed Regulations:
REG-147290-05, 2008-10 I.R.B.576
REG-104713-07, 2008-6 I.R.B.409
REG-104946-07, 2008-11 I.R.B.596
REG-111583-07, 2008-4 I.R.B.319
REG-114126-07, 2008-6 I.R.B.410
REG-136701-07, 2008-11 I.R.B.616
REG-139236-07, 2008-9 I.R.B.491
REG-141399-07, 2008-8 I.R.B.470
REG-147832-07, 2008-8 I.R.B.472
REG-149475-07, 2008-9 I.R.B.510
Revenue Procedures:
2008-1, 2008-1 I.R.B.1
2008-2, 2008-1 I.R.B.90
2008-3, 2008-1 I.R.B.110
2008-4, 2008-1 I.R.B.121
2008-5, 2008-1 I.R.B.164
2008-6, 2008-1 I.R.B.192
2008-7, 2008-1 I.R.B.229
2008-8, 2008-1 I.R.B.233
2008-9, 2008-2 I.R.B.258
2008-10, 2008-3 I.R.B.290
2008-11, 2008-3 I.R.B.301
2008-12, 2008-5 I.R.B.368
2008-13, 2008-6 I.R.B.407
2008-14, 2008-7 I.R.B.435
2008-15, 2008-9 I.R.B.489
2008-16, 2008-10 I.R.B.547
2008-17, 2008-10 I.R.B.549
2008-18, 2008-10 I.R.B.573
2008-19, 2008-11 I.R.B.594
2008-21, 2008-12 I.R.B.657
2008-22, 2008-12 I.R.B.658
2008-23, 2008-12 I.R.B.664
Revenue Rulings:
2008-1, 2008-2 I.R.B.248
2008-2, 2008-2 I.R.B.247
2008-3, 2008-2 I.R.B.249
2008-4, 2008-3 I.R.B.272
2008-5, 2008-3 I.R.B.271
2008-6, 2008-3 I.R.B.271
2008-7, 2008-7 I.R.B.419
2008-8, 2008-5 I.R.B.340
2008-9, 2008-5 I.R.B.342
Revenue Rulings— Continued:
2008-11, 2008-10 I.R.B.541
2008-12, 2008-10 I.R.B.520
2008-13, 2008-10 I.R.B.518
2008-14, 2008-11 I.R.B.578
2008-15, 2008-12 I.R.B.633
2008-16, 2008-11 I.R.B.585
2008-17, 2008-12 I.R.B.626
Tax Conventions:
2008-8, 2008-6 I.R.B.403
Treasury Decisions:
9368, 2008-6 I.R.B.382
9369, 2008-6 I.R.B.394
9370, 2008-7 I.R.B.428
9371, 2008-8 I.R.B.447
9372, 2008-8 I.R.B.462
9373, 2008-8 I.R.B.463
9374, 2008-10 I.R.B.521
9375, 2008-5 I.R.B.344
9376, 2008-11 I.R.B.587
9377, 2008-11 I.R.B.578
9382, 2008-9 I.R.B.482
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin
2007–52, dated December 26, 2007.
2008–12 I.R.B.iiMarch 24, 2008

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2008–1 through 2008–12
Announcements:
2006-88
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
Notice 2008-36, 2008-12 I.R.B.650
2008-6
Superseded by
Ann. 2008-19, 2008-11 I.R.B.624
Notices:
2001-16
Modified by
Notice 2008-20, 2008-6 I.R.B.406
2001-60
Modified and superseded by
Notice 2008-31, 2008-11 I.R.B.592
2006-27
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
2006-28
Clarified and superseded by
Notice 2008-36, 2008-12 I.R.B.650
2006-77
Clarified and amplified by
Notice 2008-25, 2008-9 I.R.B.484
2006-107
Modified by
Notice 2008-7, 2008-3 I.R.B.276
2007-30
Modified and superseded by
Notice 2008-14, 2008-4 I.R.B.310
2007-54
Clarified by
Notice 2008-11, 2008-3 I.R.B.279
Proposed Regulations:
REG-209020-86
Corrected by
Ann. 2008-11, 2008-7 I.R.B.445
REG-113891-07
Hearing scheduled by
Ann. 2008-4, 2008-2 I.R.B.269
Revenue Procedures:
97-36
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
Revenue Procedures— Continued:
2001-23
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
2002-9
Modified by
Rev. Proc. 2008-18, 2008-10 I.R.B.573
2007-1
Superseded by
Rev. Proc. 2008-1, 2008-1 I.R.B.1
2007-2
Superseded by
Rev. Proc. 2008-2, 2008-1 I.R.B.90
2007-3
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-4
Superseded by
Rev. Proc. 2008-4, 2008-1 I.R.B.121
2007-5
Superseded by
Rev. Proc. 2008-5, 2008-1 I.R.B.164
2007-6
Superseded by
Rev. Proc. 2008-6, 2008-1 I.R.B.192
2007-7
Superseded by
Rev. Proc. 2008-7, 2008-1 I.R.B.229
2007-8
Superseded by
Rev. Proc. 2008-8, 2008-1 I.R.B.233
2007-26
Obsoleted in part by
Rev. Proc. 2008-17, 2008-10 I.R.B.549
2007-31
Obsoleted in part by
Rev. Proc. 2008-19, 2008-11 I.R.B.594
2007-39
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-52
Superseded by
Rev. Proc. 2008-9, 2008-2 I.R.B.258
2008-13
Corrected by
Ann. 2008-15, 2008-9 I.R.B.511
Revenue Rulings:
58-612
Clarified and amplified by
Rev. Rul. 2008-15, 2008-12 I.R.B.633
Revenue Rulings— Continued:
89-42
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
97-31
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2001-48
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2007-4
Supplemented and superseded by
Rev. Rul. 2008-3, 2008-2 I.R.B.249
Treasury Decisions:
9362
Corrected by
Ann. 2008-9, 2008-7 I.R.B.444
Ann. 2008-12, 2008-7 I.R.B.446
9363
Corrected by
Ann. 2008-10, 2008-7 I.R.B.445
9375
Corrected by
Ann. 2008-16, 2008-9 I.R.B.511
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin 2007–52, dated December 26,
2007.
March 24, 2008iii2008–12 I.R.B.

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