Internal Revenue Bulletin 2014-34 (PDF rendition): IRS Revenue Rulings

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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
REG–105067–14, page 391.
This proposed regulation, which cross-references a temporary
regulation under Section 382 of the Code, modifies the effective
date of earlier regulations under section 382 (TD 9638, published
October 22, 2013) to prevent an adverse effect on certain cor-
porations whose stock was or is owned by the Department of the
Treasury and then is sold by Treasury to a public group.
Announcement 2014–28, page 391.
Guidance is provided to individuals who fail to meet the eligi-
bility requirements of section 911(d)(1) of the Internal Revenue
Code because adverse conditions in a foreign country preclude
the individual from meeting those requirements. Rev. Proc.
2014–25 provides a current list of countries for tax year 2013
and the dates those countries are subject to the section
911(d)(4) waiver is provided. That list is incomplete. South
Sudan and its departure date have been added.
Notice 2014–45, page 388.
This Notice supplements Notice 2014–44 providing guidance
concerning section 901(m), particularly with regard to entity
classification elections.
Rev. Proc. 2014–45, page 388.
This revenue procedure describes the circumstances in which
the IRS will not treat a redemption of a money market fund
share as part of a wash sale under section 1091 of the Internal
Revenue Code.
T.D. 9685, page 379.
This temporary regulation under Section 382 modifies the
effective date of earlier regulations under section 382 (TD
9638,published October 22, 2013) to prevent an adverse effect on
certain corporations whose stock was or is owned by the Depart-
ment of the Treasury and then is sold by Treasury to a public group.
ESTATE TAX
Rev. Rul. 2014–21, page 381.
Special Use Value; Farms; Interest Rates. The 2014 interest
rates to be used in computing the special use value of farm real
property for which an election is made under section 2032A of
the Code are listed for estates of decedents.
EXCISE TAX
Notice 2014–42, page 387.
This notice provides guidance on the branded prescription
drug fee related to (1) the submission of Form 8947, Report of
Branded Prescription Drug Information; (2) the time and man-
ner for notifying covered entities of their preliminary fee calcu-
lation; (3) the time and manner for submitting error reports for
the dispute resolution process; and (4) the time for notifying
covered entities of their final fee calculation. Notice 2013–51,
2013–34 I.R.B. 153, which provides guidance for the 2014 fee
year, is obsoleted as of October 1, 2014.
ADMINISTRATIVE
T.D. 9686, page 382.
These final regulations implement the amendments to section
6707 of the Internal Revenue Code by the American Jobs
Creation Act of 2004. The regulations provide the rules relating
to the assessment of penalties against material advisors who
fail to timely file a true and complete return as required under
section 6111(a).
Finding Lists begin on page ii.
Index for July through August begins on page iv.
Bulletin No. 2014–34
August 18, 2014

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
August 18, 2014Bulletin No. 2014–34

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 382.—Limitation
on net operating loss
carryforwards and certain
built-in losses following
ownership change
26 CFR 1.382–3T Definitions and rules relating to a
5-percent shareholder
TD 9685
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Segregation Rule Effective
Date
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION:Final and temporary regulations.
SUMMARY: This document contains
temporary regulations under section 382
of the Internal Revenue Code (Code) that
modify the effective date provision of re-
cently published regulations. These regu-
lations affect corporations whose stock is
or was acquired by the Department of the
Treasury (Treasury) pursuant to certain
programs under the Emergency Economic
Stabilization Act of 2008 (EESA). The
text of these temporary regulations also
serves as the text of the proposed regula-
tions set forth in the notice of proposed
rulemaking on this subject in the Proposed
Rules section in this issue of theBulletin.
This document also modifies the existing
regulations to provide a cross-reference to
this temporary regulation.
DATES:Effective Date: These regula-
tions are effective on July 31, 2014.
Applicability Date: For dates of appli-
cability, see section 1.382–3T(j)(17).
FOR FURTHER INFORMATION
CONTACT: Stephen R. Cleary, (202)
317-5353 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 382
Section 382 of the Code provides that
the taxable income of a loss corporation
for a year following an ownership change
may be offset by pre-change losses only to
the extent of the section 382 limitation for
such year. An ownership change occurs
with respect to a corporation if it is a loss
corporation on a testing date and, imme-
diately after the close of the testing date,
the percentage of stock of the corporation
owned by one or more 5-percent share-
holders has increased by more than 50
percentage points over the lowest percent-
age of stock of such corporation owned by
such shareholders at any time during the
testing period.
Pursuant to section 382(g)(4)(A),
shareholders who own less than five per-
cent of a loss corporation are aggregated
and treated as a single 5-percent share-
holder (a public group). In addition, new
public groups may be created as a result of
certain transactions under the segregation
rules in the section 382 regulations. Any
new public group is tracked separately
from, and in addition to, the public group
or groups that existed previously and is
treated as a new 5-percent shareholder
that increases its ownership interest in the
loss corporation.
One particular segregation rule, which
was imposed by § 1.382–2T(j)(3)(i) of the
Temporary Income Tax Regulations until
it was superseded, required segregation
when an individual or entity that owned
five percent or more of the loss corpora-
tion transferred an interest in the loss cor-
poration to public shareholders. After the
sale, stock owned by a public group that
existed immediately before the sale was
treated separately from the stock owned
by the public group that acquired stock
from the seller. This separate public group
was treated as a new 5-percent share-
holder. However, this rule was rendered
inoperative by § 1.382–3(j)(13), part of a
set of regulations published in TD 9638
[78 FR 62418] on October 22, 2013. Un-
der the new regulation, no new public
group is created on the transfer of stock to
the public shareholders; instead, the trans-
ferred stock is treated as acquired propor-
tionately by the public groups existing at
the time of the transfer.
Notice 2010–2 (2010–2 IRB 251 (Decem-
ber 16, 2009)) (see § 1.601.601(d)(2)(ii)(B) of
this chapter), provides guidance regarding
the application of section 382 of the Code
and other provisions of law to corpora-
tions whose instruments are acquired and
disposed of by the Treasury pursuant to
EESA. Notice 2010–2 relates to instru-
ments acquired by Treasury pursuant to
the following EESA programs: (i) the
Capital Purchase Program for publicly-
traded issuers; (ii) the Capital Purchase
Program for private issuers; (iii) the Cap-
ital Purchase Program for S corporations;
(iv) the Targeted Investment Program; (v)
the Asset Guarantee Program; (vi) the
Systemically Significant Failing Institu-
tions Program; (vii) the Automotive In-
dustry Financing Program; and (viii) the
Capital Assistance Program for publicly-
traded issuers. (These programs are col-
lectively referred to as “Programs” in that
Notice and in this preamble.)
Under Section III(G) of Notice
2010–2, a “Covered Instrument” is an in-
strument that is acquired by Treasury in
exchange for an instrument that was is-
sued to Treasury under the Programs, or is
acquired by Treasury in exchange for an-
other Covered Instrument. For most pur-
poses of that Notice, a Covered Instru-
ment is treated as though it had been
issued directly to Treasury under the Pro-
grams.
Section III(E) of Notice 2010–2 pro-
vides the following rule to govern the sale
by Treasury of stock of a corporation to
public shareholders:
Section 382 treatment of stock sold
by Treasury to public shareholders.
If Treasury sells stock that was is-
sued to it pursuant to the Programs
(either directly or upon the exercise
of a warrant) and the sale creates a
public group (“New Public
Group”), the New Public Group’s
ownership in the issuing corporation
shall not be considered to have in-
Bulletin No. 2014–34August 18, 2014
379

creased solely as a result of such a
sale. A NewPublic Group’s owner-
ship shall be treated as having in-
creased to the extent the New Public
Group increases its ownership pursu-
ant to any transaction other than a sale
of stock by Treasury, including pur-
suant to a stock issuance described in
section 1.382–3(j)(2) or a redemption
(see § 1.382–2T(j)(2)(iii)(C)).Such
stock is considered outstanding for
purposes of determining the per-
centage of stock owned by other
5-percent shareholders on any test-
ing date, and section 382 (and the
regulations thereunder) shall other-
wise apply to the New Public Group
in the same manner as with respect
to other public groups.
This rule was created to prevent a loss
corporation from experiencing an owner
shift when Treasury sells stock to public
shareholders. By its terms, the rule relies
on the assumption that the stock sale “cre-
ates a public group.” As explained earlier
in this preamble, § 1.382–2T(j)(3)(i), be-
fore it was superseded, required creation
of a new public group when a 5-percent
shareholder sold stock in a loss corpora-
tion to public shareholders. However, un-
der § 1.382–3(j)(13) as now in effect, such
a transfer does not create a new public
group.
Explanation of Provision
The IRS and Treasury are concerned
that the elimination of the segregation rule
described earlier in this preamble may
have unintentionally rendered inoperative
the rule in Notice 2010–2 that protects a
loss corporation from an owner shift when
Treasury sells stock that it held pursuant
to the Programs to public shareholders. To
prevent this result, the temporary regula-
tion modifies the effective date rule of TD
9638 to except from the changes to the
segregation rules in that regulation the
sale by the Treasury Department to public
shareholders of any “Program Instrument”
(an instrument issued pursuant to a Pro-
gram or a Covered Instrument). As a re-
sult, a sale of stock by Treasury to the
public will create a public group, and the
rule of Section III(E) of Notice 2010–2
will continue to apply as intended. This
provision will only affect the sale of a
Program Instrument by the Treasury De-
partment and will not affect the applica-
tion of the segregation rule changes in TD
9638 to any other transactions involving
stock of the corporations that participated
in the Programs.
Special Analyses
These regulations are necessary to pro-
vide corporations with immediate guid-
ance regarding the continuing effect of
Notice 2010–2 in light of the change to
the segregation rules provided by TD
9638. Because of the need for immediate
guidance, the IRS and the Treasury De-
partment are issuing temporary regula-
tions which are effective immediately.
It has also been determined that this
temporary regulation is not a significant
regulatory action as defined in Executive
Order 12866, as supplemented by Execu-
tive Order 13563. Therefore, a regulatory
assessment is not required. For the appli-
cation of the Regulatory Flexibility Act (5
U.S.C. chapter 6),refer to the Special
Analysis section of the preamble of the
cross-referenced notice of proposed
rulemaking published in this issue of the
Bulletin. Pursuant to section 7805(f) of
the Code, these regulations have been
submitted to the Chief Counsel for Ad-
vocacy of the Small Business Adminis-
tration for comment on their impact on
small business.
Drafting Information
The principal author of these regula-
tions is Stephen R. Cleary of the Office of
Associate Chief Counsel (Corporate).
However, other personnel from the IRS
and the Treasury Department participated
in their development.
*****
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805***
Section 1.382–3T also issued under 26
U.S.C. 382(g)(4)(C) and 26 U.S.C.
382(m).***
Par. 2. Section 1.382–3 is amended by
revising paragraph (j)(17) to read as fol-
lows:
§ 1.382–3 Definitions and rules relating
to a 5-percent shareholder.
*****
(j)***
(17)Effective/applicability date. [Re-
served]. For further guidance, see
§ 1.382–3T(j)(17).
*****
Par. 3. Section 1.382–3T is added to
read as follows:
§ 1.382–3T Definitions and rules
relating to a 5-percent shareholder
(temporary).
(a) through (j)(16) [Reserved]. For fur-
ther guidance see § 1.382–3(a) through
(j)(16).
(17)Effective/applicability date. This
paragraph (j) generally applies to issu-
ances or deemed issuances of stock in
taxable years beginning on or after No-
vember 4, 1992. However, paragraphs
(j)(11)(ii) and (j)(13) through (j)(15) of
this section andExamples 5through13of
paragraph (j)(16) of this section apply to
testing dates occurring on or after October
22, 2013, other than with respect to the
sale of a Program Instrument by the Trea-
sury Department. Forpurposes of this para-
graph (j)(17), a Program Instrument is an
instrument issued pursuant to a Program, as
defined in Internal Revenue Service Notice
2010–2 (2010–2 IRB 251 (December 16,
2009)) (see § 601.601(a)(2)(ii)(B) ofthis
chapter), or a Covered Instrument, as de-
fined in that Notice. Taxpayers may apply
paragraphs (j)(11)(ii) and (j)(13) through
(j)(15) of this section andExamples 5
through13of paragraph (j)(16) of this
section in their entirety (other than with
respect to a sale of a Program Instrument
by the Treasury Department) to all testing
dates that are included in a testing period
beginning before and ending on or after
October 22, 2013. However, the provi-
sions described in the preceding sentence
may not be applied to any date on or
before the date of any ownership change
that occurred before October 22, 2013,
under the regulations in effect before Oc-
tober 22, 2013, and they may not be ap-
August 18, 2014Bulletin No. 2014–34
380

plied as described in the preceding sen-
tence if such application would result in
an ownership change occurring on a date
before October 22, 2013, that did not oc-
cur under the regulations in effect before
October 22, 2013. See § 1.382–3(j)(14)(ii)
and (iii), as contained in 26 CFR part 1
revised as of April 1, 1994 for the appli-
cation of paragraph (j)(10) to stock issued
on the exercise of certain options exer-
cised on or after November 4, 1992, and
for an election to apply paragraphs (j)(1)
through (12) retroactively to certain issu-
ances and deemed issuances of stock oc-
curring in taxable years prior to Novem-
ber 4, 1992.
(18)Expiration date. This section
1.382–3T expires on or before July 28, 2017.
John Dalrymple
Deputy Commissioner for
Services and Enforcement.
Approved July 18, 2014,
Mark J. Mazur
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register on July 30, 2014,
8:45 a.m., and published in the issue of the Federal Register
for July 31, 2014, 79 F.R. 44280)
Section 2032A.—Valuation
of Certain Farm, Etc., Real
Property
26 CFR 20.2032A–4: Method of valuing farm real
property.
Rev. Rul. 2014–21
ISSUE
This revenue ruling contains a list of
the average annual effective interest rates
on new loans under the Farm Credit Sys-
tem. This revenue ruling also contains a
list of the states within each Farm Credit
System Bank Territory.
Under § 2032A(e)(7)(A)(ii) of the In-
ternal Revenue Code, rates on new Farm
Credit System Bank loans are used in
computing the special use value of real
property used as a farm for which an
election is made under § 2032A. The rates
in Table 1 of this revenue ruling may be
used by estates that value farmland under
§ 2032A as of a date in 2014.
Average annual effective interest rates, cal-
culated in accordance with § 2032A(e)(7)(A)
and § 20.2032A–4(e) of the Estate Tax
Regulations, to be used under
§ 2032A(e)(7)(A)(ii),are set forth in the
accompanying Table of Interest Rates
(Table 1). The states within each Farm
Credit System Bank Territory are set forth
in the accompanying Table of Farm Credit
System Bank Territories (Table 2).
Rev. Rul. 81–170, 1981–1 C.B. 454,
contains an illustrative computation of an
average annual effective interest rate. The
rates applicable for valuation in 2013 are
in Rev. Rul. 2013–19, 2013–39 I.R.B.
240. For rate information for years prior to
2013, see Rev. Rul. 2012–26, 2012–39
I.R.B. 358, and other revenue rulings that
are referenced therein.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Lane Damazo of the Office of the
Associate Chief Counsel (Passthroughs
and Special Industries). For further infor-
mation regarding this revenue ruling, con-
tact Lane Damazo at (202) 317-6859 (not
a toll-free number).
REV. RUL. 2014–21 TABLE 1
TABLE OF INTEREST RATES
(Year of Valuation 2014)
Farm Credit System Bank Servicing State in Which Property is LocatedRate
AgFirst, FCB.............................................................................................................................................................................5.29
AgriBank, FCB.........................................................................................................................................................................4.71
CoBank, ACB...........................................................................................................................................................................4.31
Texas, FCB ...............................................................................................................................................................................4.82
REV. RUL. 2014–21 TABLE 2
TABLE OF FARM CREDIT SYSTEM BANK TERRITORIES
Farm Credit System BankLocation of Property
AgFirst, FCB ..........................Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, Pennsylvania,
South Carolina, Virginia, West Virginia.
AgriBank, FCB.......................Arkansas, Illinois, Indiana, Lowa, Kentucky, Michigan, Minnesota, Missouri, Nebraska,
North Dakota, Ohio, South Dakota, Tennessee, Wisconsin, Wyoming.
CoBank, ACB.........................Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Idaho, Kansas, Maine,
Massachusetts, Montana, New Hampshire, New Jersey, New Mexico, New York, Nevada,
Oklahoma, Oregon, Rhode Island, Utah, Vermont, Washington.
Texas, FCB.............................Alabama, Louisiana, Mississippi, Texas.
Bulletin No. 2014–34August 18, 2014
381

Section 6707.—Failure to
Furnish Information
Regarding Reportable
Transactions
26 CFR 1.6707–1: material advisor penalty for fail-
ure to furnish information regarding reportable
transactions
TD 9686
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Material Advisor Penalty
for Failure to Furnish
Information Regarding
Reportable Transactions
AGENCY:Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains fi-
nal regulations relating to the assessment
of penalties against material advisors who
fail to timely file a true and complete
return. The regulations implement amend-
ments made by the American Jobs Cre-
ation Act of 2004. These regulations af-
fect material advisors responsible for
disclosing reportable transactions.
DATES:Effective Date: These regula-
tions are effective on July 31, 2014.
Applicability Date: For dates of appli-
cability, see § 301.6707–1(f).
FOR FURTHER INFORMATION
CONTACT: James G. Hartford at (202)
317-6844 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Procedure and Administration Reg-
ulations (26 CFR Part 301) under section
6707. On December 22, 2008, a notice of
proposed rulemaking (REG–160872–04)
was published in theFederal Register
(73 FR 78254) relating to the penalty un-
der section 6707 of the Internal Revenue
Code imposed on material advisors for
failure to furnish information regarding
reportable transactions (the proposed reg-
ulations). No comments were received
from the public in response to the notice
of proposed rulemaking. No public hear-
ing was requested or held. The proposed
regulations are adopted by this Treasury
decision with revisions as discussed in
this preamble.
Section 6707 was originally added to
the Code by section 141(b) of the Tax
Reform Act of 1984, Public Law 98–369,
98 Stat. 494 (July 18, 1984). At that time,
section 6707 imposed a penalty for failing
to timely register a tax shelter or for filing
false or incomplete information with re-
spect to the tax shelter registration. Sec-
tion 301.6707–1T of the temporary regu-
lations implementing the penalty was
published shortly after section 6707 be-
came law.
The American Jobs Creation Act of
2004, Public Law 108–357, 118 Stat.
1418 (AJCA), was enacted on October 22,
2004. As amended by AJCA, section 6707
imposes a penalty on a material advisor
required to file a return under section
6111(a) with respect to a reportable trans-
action who fails to timely file such a re-
turn or who files the return with false or
incomplete information. Section 6707, as
amended, is effective for returns due after
October 22, 2004.
In 2007, the Treasury Department and
the IRS issued Rev. Proc. 2007–21,
2007–1 CB 613 (February 26, 2007), (see
§ 601.601(d)(2)(ii)(b)), of this chapter, to
provide procedures for requesting rescis-
sion of a penalty assessed under section
6707 for failure by a material advisor to
disclose a reportable transaction and un-
der section 6707A for failure by a tax-
payer to disclose a reportable transaction.
For each penalty, the revenue procedure
provides the deadline by which a person
must request rescission; the information
the person must provide in the rescission
request; where the person must submit the
rescission request; and the rules governing
requests for additional information from
the person requesting rescission. In addi-
tion, the revenue procedure sets forth the
factors that weigh in favor of and against
granting rescission. For example, one fac-
tor described in the revenue procedure as
weighing in favor of rescission of the sec-
tion 6707 penalty is filing a Form 8918,
“Material Advisor Disclosure Statement,”
after the due date but before the taxpayer
files a Form 8886, “Reportable Transac-
tion Disclosure Statement,” identifying
the material advisor as an advisor with
respect to the transaction or before the
IRS contacts the material advisor concern-
ing the reportable transaction.
On December 22, 2008, proposed reg-
ulations implementing the penalty under
section 6707 were published. The pro-
posed regulations set forth the rules for
application of the penalty under section
6707, including examples and relevant
definitions such as the definition of in-
complete information, false information,
and when a failure is intentional so that
the higher penalty with respect to listed
transactions will apply. The proposed reg-
ulations also adopted the factors described
in Rev. Proc. 2007–21 that will be con-
sidered when determining whether a re-
quest for rescission of a section 6707 pen-
alty with respect to a non-listed reportable
transaction will be granted. In addition,
the proposed regulations generally re-
stated the existing authority of the Secre-
tary to prescribe procedures for requesting
rescission by revenue procedure or other
guidance published in the Internal Reve-
nue Bulletin. The proposed regulations
did not address the procedures for request-
ing rescission in Rev. Proc. 2007–21, such
as the deadline, the information provided,
where to submit the request, and requests
for additional information.
Explanation of Revisions
These regulations remove temporary
regulations § 301.6707–1T (TD 7964), 49
FR 32712, which implement section 6707
as enacted in 1984. Amendments to sec-
tion 6707 made by section 816 of AJCA
render temporary regulations § 301.6707–1T
obsolete.
The final regulations make several sub-
stantive changes to the proposed regula-
tions. First, a new paragraph (iii) has been
added under § 301.6707–1(a)(1)(B) re-
garding the penalty in the case of listed
transactions.This new paragraph clarifies
that only one section 6707 penalty will ap-
ply in the case of a transaction that is both a
listed transaction and a reportable transac-
tion other than a listed transaction, and that
the penalty that applies in these cases is the
higher penalty for listedtransactions
August 18, 2014Bulletin No. 2014–34
382

under § 301.6707–1(a)(1)(B). Section
301.6707–1(a)(1) of the final regulations
has also been clarified to provide that if
there is a failure with respect to more than
one reportable or listed transaction, a ma-
terial advisor will be subject to a separate
penalty for each transaction.
In addition, § 301.6707–1(a)(2), which
describes gross income derived from a
transaction for purposes of determining
the penalty in the case of a listed transac-
tion, has been clarified to provide that
only fees from a listed transaction for
which the advisor is a material advisor are
taken into account for purposes of com-
puting the penalty. A new example 4 has
been added to illustrate this clarification.
Finally, § 301.6707–1(e) of the pro-
posed regulations is modified to provide
additional guidance on rescission of the
penalty under section 6707. Under Rev.
Proc. 2007–21 and § 301.6707–1(e)(3)(i)
of the proposed regulations, filing a Form
8918, “Material Advisor Disclosure State-
ment,” after the due date will be a factor
weighing strongly in favor of rescission
unless the form is filed after the taxpayer
files a Form 8886, “Reportable Transac-
tion Disclosure Statement,” identifying
the material advisor as an advisor with
respect to the transaction or after the IRS
contacts the material advisor concerning
the reportable transaction. The final regu-
lations modify this rule to also consider
whether circumstances indicate that the
material advisor delayed filing the Form
8918, recognizing that the mere filing of a
Form 8886 before filing the Form 8918,
alone, is not indicative of whether rescis-
sion is appropriate. Accordingly, the final
regulations provide that if a material ad-
visor unintentionally failed to file a Form
8918, but then files a properly completed
form with the IRS, that filing will be a
factor that weighs in favor of rescission of
the section 6707 penalty if the facts sug-
gest that the material advisor did not delay
filing the form until after the IRS had
taken steps to identify that person as a
material advisor with respect to that par-
ticular transaction. The final regulations
further provide that the late filing will not
weigh in favor of rescission if the facts
and circumstances suggest that the mate-
rial advisor delayed filing the Form 8918
until after the material advisor’s client
filed its Form 8886 (or successor form)
disclosing the client’s participation in the
particular reportable transaction.
In addition, the final regulations clar-
ify the language of the proposed regu-
lations in a few other ways not intended
to be substantive, including clarification
of examples.
Effect on Other Documents
Sections 4.04, 4.05, and 4.06 of Reve-
nue Procedure 2007–21, relating to the
factors for rescission of the section 6707
penalty, are superseded as of July 31,
2014.
Special Analyses
It has been determined that this Trea-
sury Decision is not a significant regula-
tory action as defined in Executive Order
12866, as supplemented by Executive Or-
der 13563. Therefore, a regulatory assess-
ment is not required. The IRS has deter-
mined that sections 553(b) and (d) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) do not apply to these regula-
tions and because the regulations do not
impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, the notice of proposed
rulemaking preceding these regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business Admin-
istration for comment on its impact on
small business. No comments were re-
ceived on the proposed regulations.
Drafting Information
The principal author of these regula-
tions is James G. Hartford of the Office of
the Associate Chief Counsel (Procedure
and Administration).
*****
Penalties, Reporting and recordkeeping
requirements.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR Part 301 is
amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805.***
Par. 2. Section 301.6707–1 is added to
read as follows:
§ 301.6707–1 Failure to furnish
information regarding reportable
transactions.
(a)(1)In general. A material advisor
who is required to file a return under sec-
tion 6111(a) of the Internal Revenue Code
(Code) with respect to any reportable
transaction who fails to file a timely return
in accordance with § 301.6111–3(e) or
who files a return with false or incomplete
information with respect to the reportable
transaction will be subject to a penalty. A
material advisor who fails to file a timely
return or who files a false or incomplete
return with respect to more than one re-
portable transaction will be subject to a
separate section 6707 penalty for each
transaction.
(i)Reportabletransactions. The
amount of the penalty for failing to timely
file a return under section 6111(a), or fil-
ing the return with false or incomplete
information with respect to any reportable
transaction other than a listed transaction
is $50,000.
(ii)Listed transactions. (A)In general.
The amount of the penalty for failing to
timely file a return under section 6111(a),
or filing the return with false or incom-
plete information with respect to a listed
transaction is the greater of $200,000 or
50 percent of the gross income derived by
the material advisor with respect to aid,
assistance, or advice that is provided with
respect to the listed transaction before the
date the return is filed under section 6111.
(B)Intentional action or failure.Ifthe
failure or action subject to the penalty is
with respect to a listed transaction and is
intentional, the penalty is the greater of
$200,000 or 75 percent of the gross in-
come derived by the material advisor with
respect to aid, assistance, or advice that is
provided with respect to the listed trans-
action before the date the return is filed
under section 6111.
Bulletin No. 2014–34August 18, 2014
383

(C)Transaction that is both a listed
transaction and reportable transaction
other than a listed transaction. In the case
of a penalty imposed under section 6707
with respect to a transaction that is both a
listed transaction and a reportable transac-
tion other than a listed transaction, the
penalty under this paragraph (a)(1)(ii),
and not the penalty under paragraph
(a)(1)(i) of this section, will apply.
(2)Gross income derived by the mate-
rial advisor. For purposes of calculating
the amount of the penalty with respect to
a listed transaction, the gross income de-
rived by the material advisor will be de-
termined in accordance with § 301.6111–
3(b)(3)(ii) of this chapter. If a person is a
material advisor with regard to more than
one type of listed transaction, the gross
income derived from each type of listed
transaction will be considered separately
and will not be aggregated to determine
the amount of any section 6707 penalty
for failing to make a proper return under
section 6111(a). Further, only gross in-
come derived from listed transactions for
which the advisor is a material advisor
under section 6111 is taken into account
for purposes of computing the penalty.
(b)Definitions—(1)Derive. The term
“derive” is defined in § 301.6111–3(c)(3).
(2)False information. For purposes of
this section, the term “false information:
means information provided on a Form
8918, “Material Advisor Disclosure State-
ment” (or successor form), filed with the
Internal Revenue Service (IRS) that is un-
true or incorrect when the Form 8918 (or
successor form) was filed. False informa-
tion does not include information pro-
vided on a Form 8918 (or successor form)
filed with the IRS that is immaterial or
that is untrue or incorrect due to a mistake
or accident after the exercise of reason-
able care.
(3)Incomplete information. For pur-
poses of this section, the term “incomplete
information” means a Form 8918 (or suc-
cessor form) filed with the IRS that does
not provide the information required un-
der § 301.6111–3(d). A Form 8918 (or
successor form) filed with the IRS will not
be considered incomplete when the infor-
mation not provided on the form is imma-
terial or was not provided due to mistake
or accident after the exercise of reason-
able care. Whether information is imma-
terial will be determined based upon the
facts and circumstances surrounding each
failure to file or filing of an incomplete
return. A material advisor who completes
the form to the best of the material advi-
sor’s ability and knowledge after the ex-
ercise of reasonable effort to obtain the
information will not be considered to have
filed incomplete information within the
meaning of this section. A Form 8918 (or
successor form) will be considered to pro-
vide incomplete information when it
omits information required to be provided
under § 301.6111–3(d) or contains a state-
ment that the omitted information will be
provided upon request.
(4)Intentional. For purposes of this
section, the failure to timely file a return
or the submission of a return with false or
incomplete information is intentional if—
(i) The material advisor knew of the
obligation to file a return and knowingly
did not timely file a return with the IRS; or
(ii) The material advisor filed a return
knowing that it was false or incomplete.
(5) Listed transaction. The term “listed
transaction” is defined in section
6707A(c)(2) of the Code and § 1.6011–
4(b)(2) of this chapter.
(6)Material Advisor. The term “mate-
rial advisor” is defined in section
6111(b)(1) of the Code and § 301.6111–
3(b).
(7)Reportable transaction. The term
“reportable transaction” is defined in sec-
tion 6707A(c)(1) of the Code and
§ 1.6011–4(b)(1) of this chapter.
(c)Assessment of penalty—(1)Inten-
tional failure determined based on all the
facts and circumstances. Whether a mate-
rial advisor intentionally failed to timely
file a return or intentionally filed a false or
incomplete return will be determined
based upon all the facts and circumstances
surrounding the non-filing or filing of a
false and/or incomplete return. The higher
penalty under the flush language of sec-
tion 6707(b)(2) will not apply to any ma-
terial advisor whose failure to timely file
or whose furnishing of false or incomplete
information was unintentional. The failure
to timely file a return, or filing a return
with false or incomplete information, will
be considered unintentional if the material
advisor subsequently files a true and com-
plete return prior to the earlier of the date
that any taxpayer files a Form 8886, “Re-
portable Transaction Disclosure State-
ment” (or successor form) identifying the
material advisor with respect to the report-
able transaction in question, or the date
the IRS contacts the material advisor con-
cerning the reportable transaction.
(2)Individual liability in the case of
more than one material advisor. If there is
more than one material advisor who is
responsible for filing a return under sec-
tion 6111 with respect to the same report-
able transaction, a separate penalty under
section 6707 may be assessed against each
material advisor who fails to timely file or
files a return with false or incomplete in-
formation. The determination of whether
the failure or action subject to the penalty
is intentional will be made individually
for each material advisor.
(3)Designation agreements. A mate-
rial advisor who is required to file a return
under section 6111 and who is a party to a
designation agreement within the meaning
of § 301.6111–3(f) is subject to a penalty
under section 6707 if the designated ma-
terial advisor fails to file a return timely or
files a return with false or incomplete in-
formation. In the case of a listed transac-
tion, if the designated material advisor
fails to file a return timely, or files a return
with false or incomplete information, the
nondesignated material advisor who is a
party to the designation agreement will
not be treated as intentionally failing to
file the return, or intentionally filing a
return with false or incomplete informa-
tion, unless the nondesignated material
advisor knew or should have known that
the designated material advisor would fail
to file a true and complete return timely.
(d)Examples. The rules of paragraphs
(a) through (c) of this section are illus-
trated by the following examples:
Example 1. Advisor A becomes a material advi-
sor as defined under section 6111(b)(1) and
§ 301.6111–3(b) in the fourth quarter of 2014 with
respect to a reportable transaction other than a listed
transaction, and Advisor B also becomes a material
advisor in the same quarter with respect to the same
reportable transaction. Advisors A and B fail to
timely file the Form 8918 with respect to the report-
able transaction. Under paragraph (a)(1)(ii) of this
section, the penalty for failure by a material advisor
to timely disclose a reportable transaction other than
a listed transaction is $50,000. Because the section
6707 penalty applies to each material advisor inde-
pendently under paragraph (c)(2) of this section,
Advisors A and B each are subject to a section 6707
penalty of $50,000.
August 18, 2014Bulletin No. 2014–34
384

Example 2. Same asExample 1, except that Ad-
visor B timely files the Form 8918. Advisors A and
B did not enter into a designation agreement. Ac-
cordingly, paragraph (c)(3) of this section does not
apply and only Advisor A is subject to a $50,000
section 6707 penalty.
Example 3. Advisor C becomes a material advi-
sor to Client X on January 5, 2015, with respect to a
listed transaction. Advisor C derives $400,000 in
gross income from his advice to Client X because he
expects to receive that amount from Client X, even
though he has not yet received that amount. On
January 5, 2016, Advisor C becomes a material
advisor to Client Y with respect to the same type of
listed transaction. Advisor C derives $100,000 in
gross income from his advice to Client Y because he
expects to receive that amount from Client Y, even
though he has not yet received that amount. At no
time did Advisor C file a Form 8918 to disclose the
listed transaction. For purposes of this example, as-
sume that Advisor C’s failure to file a Form 8918
was unintentional. Therefore, under paragraph (c)(2)
of this section, Advisor C is subject to a section 6707
penalty based on the gross income derived from
Client X and Client Y. Accordingly, Advisor C is
subject to a penalty of $250,000 (50 percent of
$500,000, the gross income derived from Clients X
and Y).
Example 4. Same asExample 3, except that the
gross income Advisor C expects to receive from his
advice to Client Y (a C corporation) is $20,000.
Because the material advisor fee threshold is not
satisfied with respect to Client Y, Advisor C is not a
material advisor to Client Y with respect to the listed
transaction. Advisor C is, however, a material advi-
sor with respect to Client X with respect to the same
listed transaction. Therefore, Advisor C is subject to
a section 6707 penalty with respect to the failure to
timely file a Form 8918 disclosing the listed trans-
action. Although Advisor C provided advice with
respect to two transactions that are the same type of
listed transaction, Advisor C was only a material
advisor with respect to advice provided to Client X.
Therefore, under paragraph (c)(2) of this section
Advisor C is subject to a section 6707 penalty based
only on the gross income derived from Client X.
Accordingly, Advisor C is subject to a penalty of
$200,000 (50 percent of $400,000, the gross income
derived from Client X).
Example 5. Same asExample 3, except that Ad-
visor C files a Form 8918 disclosing the listed trans-
action on November 16, 2015. Because Advisor C
becomes a material advisor to Client X on January 5,
2015, the Form 8918 is required to be filed on or
before April 30, 2015 (the last day of the month that
follows the end of the calendar quarter in which the
advisor became a material advisor with regard to the
reportable transaction). See § 301.6111–3(e). There-
fore, Advisor C did not timely file the Form 8918.
Advisor C is subject to a $200,000 penalty under
section 6707 for his unintentional failure because, as
of the date he filed the Form 8918, the gross income
Advisor C had received or expected to receive with
respect to advice relating to a listed transaction that
was not disclosed only included $400,000 of gross
income for advice to Client X. By the time that
Advisor C provides advice to Client Y on January 5,
2016, Advisor C has disclosed the listed transaction.
Example 6. Same asExample 3, except that Ad-
visor C files the Form 8918 on February 16, 2016,
disclosing the listed transaction. Because Advisor C
first becomes a material advisor with respect to the
listed transaction on January 5, 2015, the Form 8918
is required to be filed on or before April 30, 2015
regardless of the fact that Advisor C is also a mate-
rial advisor to a second client, Client Y, with respect
to the same listed transaction. This is because under
the facts ofExample 3, Advisor C “becomes” a
material advisor on January 5, 2015. The date on
which a material advisor “becomes” a material ad-
visor is determinative of the due date for the Form
8918 under § 301.6111–3(e). Therefore, when Ad-
visor C files the Form 8918 on February 16, 2016,
the form is not timely filed under section 6111.
Under paragraph (c)(2) of this section, Advisor C is
subject to a penalty under section 6707 of $250,000
(50 percent of $500,000) because, as of the date that
the Form 8918 was filed, the gross income that
Advisor C received or expected to receive as a ma-
terial advisor with respect to a listed transaction that
was not disclosed included gross income for advice
to both Client X ($400,000) and Client Y
($100,000).
Example 7. Advisor D becomes a material advi-
sor as defined under section 6111(b)(1) and
§ 301.6111–3(b) in the first quarter of 2016 with
respect to a reportable transaction other than a listed
transaction. Advisor D does not file a Form 8918 by
April 30, 2016. The transaction is then identified as
a listed transaction in published guidance on July 7,
2016. Advisor D knew that he had a new obligation
to file a Form 8918 by October 31, 2016, and inten-
tionally fails to file the Form 8918. Advisor D is
subject to only one penalty, in the amount of the
greater of $200,000, or 75 percent of the gross in-
come he derived from the transaction, for intention-
ally failing to disclose the listed transaction in ac-
cordance with § 301.6111–3(d)(1) and (e).
Example 8. Same asExample 7, except that Ad-
visor D filed a Form 8918 disclosing the listed trans-
action on October 15, 2016. As a result of that
disclosure, Advisor D is not subject to the section
6707 penalty amount described in § 301.6707–
1(a)(1)(ii). However, because Advisor D did not
timely file a Form 8918 by April 30, 2016, the due
date for the Form 8918 with respect to the reportable
transaction for which Advisor D became a material
advisor in the first quarter of 2016, Advisor D is
subject to a section 6707 penalty of $50,000 as
described in § 301.6707–1(a)(1)(i). The disclosure of
the listed transaction does not correct Advisor D’s
initial failure to disclose the reportable transaction
by April 30, 2016.
(e)Rescission authority—(1)In gen-
eral.The Commissioner (or the Commis-
sioner’s delegate) may rescind the section
6707 penalty if—
(i) The violation relates to a reportable
transaction that is not a listed transaction;
and
(ii) Rescinding the penalty would pro-
mote compliance with the requirements of
the Code and effective tax administration.
(2)Requesting rescission. The Secre-
tary may prescribe the procedures for a
material advisor to request rescission of a
section 6707 penalty by guidance pub-
lished in the Internal Revenue Bulletin.
(3)Factors that weigh in favor of
grantingrescission.In determining
whether rescission would promote com-
pliance with the requirements of the Code
and effective tax administration, the Com-
missioner (or the Commissioner’s dele-
gate) will take into account the following
list of factors that weigh in favor of grant-
ing rescission. This is not an exclusive
list, and no single factor will be determi-
native of whether to grant rescission in
any particular case. Rather, the Commis-
sioner (or the Commissioner’s delegate)
will consider and weigh all relevant fac-
tors, regardless of whether the factor is
included in this list.
(i) The material advisor, upon becom-
ing aware of the failure to disclose a re-
portable transaction in accordance with
section 6111 and the regulations thereun-
der, filed a complete and proper, albeit
untimely, Form 8918 (or successor form).
This factor weighs in favor of rescission if
circumstances suggest that the material
advisor did not delay in filing an untimely
but properly completed Form 8918 (or
successor form) until after the IRS had
taken steps to identify the person as a
material advisor with respect to the report-
able transaction. For instance, this factor
will weigh strongly in favor of rescission
if the material advisor files the Form 8918
(or successor form) prior to the date the
IRS contacts the material advisor concern-
ing the reportable transaction. However,
this factor will not weigh in favor of re-
scission if the facts and circumstances in-
dicate that the material advisor delayed
filing the Form 8918 (or successor form)
until after a taxpayer files a Form 8886 (or
successor form) identifying the material
advisor with respect to the reportable
transaction in question.
(ii) The material advisor’s failure to
disclose the reportable transaction prop-
erly was due to an unintentional mistake
of fact that existed despite the material
advisor’s reasonable attempts to ascertain
the correct facts with respect to the trans-
action.
(iii) The material advisor has an estab-
lished history of properly disclosing other
Bulletin No. 2014–34August 18, 2014
385

reportable transactions and complying
with other tax laws, including compliance
with any requests made by the IRS under
section 6112, if applicable.
(iv) The material advisor demonstrates
that the failure to include on any return or
statement any information required to be
disclosed under section 6111 arose from
events beyond the material advisor’s control.
(v) The material advisor cooperates
with the IRS by providing timely informa-
tion with respect to the transaction at issue
that the Commissioner (or the Commis-
sioner’s delegate) may request in consid-
eration of the rescission request. In con-
sidering whether a material advisor
cooperates with the IRS, the Commis-
sioner (or the Commissioner’s delegate)
will take into account whether the mate-
rial advisor meets the deadlines described
in guidance published in the Internal Rev-
enue Bulletin for complying with requests
for additional information.
(vi) Assessment of the penalty weighs
against equity and good conscience, in-
cluding whether the material advisor dem-
onstrates that there was reasonable cause
for, and the material advisor acted in good
faith with respect to, the failure to timely
file or to include on any return any infor-
mation required to be disclosed under sec-
tion 6111. Animportant factor in determin-
ing reasonable cause and good faith is the
extent of the material advisor’s efforts to
determine whether there was a requirement
to file the return required under section
6111. The presence of reasonable cause,
however, will not necessarily be determina-
tive of whether to grant rescission.
(4)Absence of favorable factors
weighs against rescission. The absence of
facts establishing the factors described in
paragraph (e)(3) of this section weighs
against granting rescission. The presence
or absence of any one of these factors,
however, will not necessarily be determi-
native of whether to grant rescission;
rather the determination will be made in
consideration of all of the factors and any
other facts and circumstances.
(5)Factors not considered. In deter-
mining whether to grant rescission, the
Commissioner (or the Commissioner’s
delegate) will not consider doubt as to
collectability of, or liability for, the pen-
alties (except that the Commissioner (or
the Commissioner’s delegate) may con-
sider doubt as to liability to the extent it is
a factor in the determination of reasonable
cause and good faith).
(f)Effective/applicability date. The
rules of this section apply to returns the
due date for which is after July 31, 2014.
§ 301.6707–1T [Removed]
Par. 3. Section 301.6707–1T is removed.
John Dalrymple,
Deputy Commissioner for
Services and Enforcement.
Approved June 26, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register on July 30, 2014,
8:45 a.m., and published in the issue of the Federal Register
for July 31, 2014, 79 F.R. 44282)
August 18, 2014Bulletin No. 2014–34
386

Part III. Administrative, Procedural, and Miscellaneous
Branded Prescription Drug
Fee; Procedural and
Administrative Guidance
Notice 2014–42
This notice provides guidance on the
branded prescription drug fee for each fee
year related to (1) the submission of Form
8947, “Report of Branded Prescription
Drug Information,” (2) the time and man-
ner for notifying covered entities of their
preliminary fee calculation, (3) the time
and manner for submitting error reports
for the dispute resolution process, and (4)
the time for notifying covered entities of
their final fee calculation.
Background
An annual fee on covered entities en-
gaged in the business of manufacturing or
importing branded prescription drugs is
imposed by § 9008 of the Patient Protec-
tion and Affordable Care Act, Public Law
111–148 (124 Stat. 119 (2010)), as
amended by § 1404 of the Health Care
and Education Reconciliation Act of
2010, Public Law 111–152 (124 Stat.
1029 (2010)) (collectively the ACA).
The Branded Prescription Drug Fee
Regulations in 26 C.F.R. Part 51, which
were published on July 28, 2014, (TD 9684,
79 FR 43631) provide the method by which
each covered entity’s annual fee is calcu-
lated. These regulations also define terms
for the administration of the fee. As relevant
for this notice, § 51.2(g) definesfee yearas
the calendar year in which the fee for a
particular sales year must be paid and
§ 51.2(m) definessales yearas the second
calendar year preceding the fee year.
Section 51.3 provides that annually,
each covered entity may submit a com-
pleted Form 8947, “Report of Branded
Prescription Drug Information,” in accor-
dance with the instructions for the form.
Generally, the form solicits information
from covered entities on National Drug
Codes, orphan drugs, designated entities,
rebates, and other information specified
by the form or its instructions. The form is
to be filed by the date prescribed in guid-
ance published in the Internal Revenue
Bulletin.
Section 51.6 provides that for each
sales year the Internal Revenue Service
(IRS) will make a preliminary fee calcu-
lation for each covered entity and will
notify each covered entity of this calcula-
tion by the date prescribed in guidance
published in the Internal Revenue Bulle-
tin. This notification will also include ad-
ditional prescribed information. As used
in this notice, “notice of preliminary fee
calculation” includes the additional pre-
scribed information.
Section 51.7 provides that upon receipt
of its preliminary fee calculation, each
covered entity will have an opportunity to
dispute this calculation by submitting to
the IRS an error report with prescribed
information. Section 51.7(b) sets out the
information that a covered entity must
submit to support each asserted error.
Section51.7(c) provides that each cov-
ered entity must submit its error report(s)
in the form and manner that is prescribed
in guidance published in the Internal Rev-
enue Bulletin. This guidance will also pre-
scribe the date by which each covered
entity must submit its report(s).
Section 51.8 provides that the IRS will
send each covered entity its final fee cal-
culation no later than August 31 of each
fee year and also provides that covered
entities must pay their fee by September
30 of the fee year.
Section 7503 of the Internal Revenue
Code provides that if the last day for per-
forming an act required under the author-
ity of the internal revenue laws falls on a
Saturday, Sunday, or legal holiday, the
performance of the act is timely if the act
is performed on the next succeeding day
that is not a Saturday, Sunday, or legal
holiday. Section 9008(f)(1) of the ACA
and § 51.9(a) treat this annual fee as an
excise tax for purposes of subtitle F of the
Code. Therefore, § 7503 applies to acts
required to be performed under § 9008.
Accordingly, if a date prescribed in this
notice falls on a Saturday, Sunday, or le-
gal holiday, a covered entity’s perfor-
mance of an act by this date is timely if
the covered entity performs the act on the
next succeeding day that is not a Saturday,
Sunday, or legal holiday.
Submission of Form 8947
For each fee year, a covered entity that
chooses to submit Form 8947 reporting
information for the sales year must file the
form by November 1 of the preceding
year. For example, for the 2015 fee year,
a covered entity must submit its Form
8947 reporting information for the 2013
sales year by Monday, November 3, 2014
(after applying § 7503).
A covered entity may submit its Form
8947 by mail or using e-file. Before using
e-file, a covered entity must first: (1) suc-
cessfully register with IRS e-services; (2)
successfully complete the e-file applica-
tion; and (3) receive an e-file acceptance
letter (5120C letter) that contains an Elec-
tronic Filing Identification Number
(EFIN) and an Electronic Transmitter
Identification Number (ETIN). A covered
entity must also file Form 8453–R, Dec-
laration and Signature for Electronic Fil-
ing of Forms 8947 and 8963. The IRS
provides instructions regarding e-file on
the dedicated ACA e-file webpage at
http://www.irs.gov/uac/e-file-Affordable-
Care-Act-Information-Reports. A covered
entity may also contact the IRS e-Help
Desk at 1-866-937-4130 (Monday
through Friday from 6:30 am to 6:00 pm
(CST)).
Time and manner for notifying covered
entities of their preliminary fee
calculation
The IRS will mail each covered entity
a paper notice of its preliminary fee cal-
culation by March 1 of each fee year. This
mailing will include a National Drug
Code attachment (NDC attachment) that
lists the covered entity’s National Drug
Codes and the sales data reported to the
IRS by each government program pursu-
ant to § 51.4.
A covered entity may request that the
IRS send an electronic copy of the NDC
attachment on a separate CD-ROM in Mi-
crosoft Excel format or other electronic
format the IRS may designate in the fu-
ture. The covered entity must submit a
request by February 15 of each fee year by
telephone, email, or fax as indicated in the
Contact Informationsection of this notice.
If a covered entity makes this request
Bulletin No. 2014–34August 18, 2014
387

timely, the IRS will mail the covered en-
tity its notice of preliminary fee calcula-
tion and the NDC attachment on paper as
well as send the electronic version of the
NDC attachment by March 1 of each fee
year.
Time and manner for submitting error
reports for the dispute resolution
process
A covered entity that chooses to submit
an error report regarding its preliminary
fee calculation must mail the error report
by May 15 of each fee year.
When the IRS mails each covered en-
tity a notice of its preliminary fee calcu-
lation by March 1 of each fee year, the
IRS will also send each covered entity a
template that the covered entity must use
to prepare its error report. The IRS will
send this template on a separate CD-ROM
in Microsoft Excel format or other elec-
tronic format the IRS may designate in the
future. All completed templates and the
supporting documentation must be sub-
mitted on a CD-ROM in Microsoft Excel
format or other electronic format desig-
nated by the IRS and sent to:
Department of the Treasury
Internal Revenue Service – Branded
Prescription Drug Fee
1973 N. Rulon White Boulevard, Mail
Stop 4916
Ogden, UT 84404
Notice of Final Fee Calculation
In accordance with § 51.8(a), the IRS
will notify each covered entity of its final
fee calculation by August 31 of each fee
year. The IRS will mail a notice of final
fee calculation and a final NDC attach-
ment on paper. If, for purposes of the
preliminary fee notification, a covered en-
tity timely requested that the IRS send an
electronic copy of the NDC attachment on
a separate CD-ROM or other electronic
format, the IRS will also send an elec-
tronic copy of the final NDC attachment
on a separate CD-ROM or other electronic
format. In accordance with § 51.8(c), each
covered entity must pay this fee by Sep-
tember 30 of each fee year.
Contact Information
A covered entity may contact the IRS
regarding the branded prescription drug
fee by: (1) leaving a voice mail message
in the BPD Mailbox at (908) 301-2118
(not a toll free call); (2) sending an email
toit.bpd.fee@irs.gov; or (3) sending a fax
toll free to (877) 797-0234.
Effective/Applicability Date
This Notice is effective on August 11,
2014, and applies on October 1, 2014 and
thereafter.
Effect on Other Documents
Notice 2013–51, 2013–34 I.R.B. 153,
which provides guidance for the 2014 fee
year, is obsoleted as of October 1, 2014.
Drafting Information
The principal author of this notice is
Celia Gabrysh of the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). For further information re-
garding this notice, please contact Celia
Gabrysh at (202) 317-6855 (not a toll-free
number).
Foreign tax credit guidance
under section 901(m)
Notice 2014–45
On July 21, 2014, the Internal Revenue
Service (IRS) and the Department of the
Treasury (Treasury Department) released
Notice 2014–44, to be published in IRB
2014–32 on August 11, 2014, which de-
scribes regulations that the IRS and the
Treasury Department will issue to address
the application of section 901(m) to dis-
positions of assets following covered asset
acquisitions. Notice 2014–44 states that
those regulations will generally apply to
dispositions that occur on or after, and any
Unallocated Basis Difference (as that term
is defined in Notice 2014–44) with re-
spect to a relevant foreign asset as of, July
21, 2014.
In order to prevent abuse, the regula-
tions described in Notice 2014–44 will
also apply to determine the tax conse-
quences under section 901(m) of an entity
classification election made under
§ 301.7701–3 that is filed on or after July
29, 2014, and that is effective on or before
July 21, 2014, including whether a dispo-
sition results from the election for pur-
poses of section 901(m) and the treatment
of any Unallocated Basis Difference that
results from such an election.
DRAFTING INFORMATION
The principal author of this notice is
Jeffrey L. Parry, of the Office of Associate
Chief Counsel (International). However,
other personnel from the IRS and the
Treasury Department participated in its
development. For further information re-
garding this notice, contact Mr. Parry at
(202) 317-6936 (not a toll-free number).
26 CFR § 601.105: Examination of returns and
claims for refund, credit or abatement; determina-
tion of correct tax liability.
(Also: Part 1, § 1091)
Rev. Proc. 2014–45
SECTION 1. PURPOSE
This revenue procedure describes the
circumstances in which the Internal Rev-
enue Service (Service) will not treat a
redemption of shares in a money market
fund (MMF) as part of a wash sale for
purposes of section 1091 of the Internal
Revenue Code. This revenue procedure
responds to Securities and Exchange
Commission (SEC) rules that change how
certain MMF shares are priced.See
Money Market Fund Reform; Amend-
ments to Form PF, Securities Act Release
No. 33–9616, Investment Advisers Act
Release No. IA–3879, Investment Com-
pany Act Release No. IC–31166, Finan-
cial Reporting Codification No. FR–84
(SEC MMF Reform Rules). As described
in section 2.03 of this revenue procedure,
the Service previously published Notice
2013–48, 2013–31 I.R.B. 120, proposing
a revenue procedure that would have ex-
cepted from the wash sale rules certainde
minimislosses realized in redemptions of
MMF shares. This revenue procedure in-
cludes revisions responding to comments
received regarding that proposal.
August 18, 2014Bulletin No. 2014–34
388

SECTION 2. BACKGROUND
.01 Money Market Funds
(1) An MMF is a type of investment
company registered under the Investment
Company Act of 1940 (1940 Act) and
regulated as an MMF under Rule 2a–7
under the 1940 Act (17 CFR § 270.2a–7).
Unlike other types of mutual funds,
MMFs have historically sought to keep
stable (typically at $1.00) the prices at
which their shares are distributed, re-
deemed, and repurchased.
(2) To hold itself out to investors as an
MMF, an investment company must meet
the requirements specified in Rule 2a–7,
which, among other things, establishes
limitations as to the maturity, quality, di-
versification, and liquidity of an MMF’s
investments. Generally, an MMF must
hold a diversified portfolio of short-term,
low-risk, liquid securities. The securities
that an MMF holds generally result in no
more than minimal fluctuations in the
MMF’s net asset value per share (NAV).
(3) Until the SEC MMF Reform Rules
change how certain MMFs price their
shares, Rule 2a–7 permits any MMF
meeting the other requirements of Rule
2a–7 to compute its price per share for
purposes of distribution, redemption, and
repurchase by using either or both of (a)
the amortized cost method of valuation,
and (b) the penny-rounding method of
pricing. Under the amortized cost method,
an MMF’s NAV is determined by valuing
the fund’s portfolio securities at their ac-
quisition cost, adjusted for amortization of
premium or accretion of discount. Under
the penny-rounding method, an MMF’s
NAV is rounded to the nearest one percent
in computing the price per share for pur-
poses of distribution, redemption, and re-
purchase.These methods have enabled
MMFs to maintain constant share prices ex-
cept in situations in which the “deviation [of
the current net asset value per share calcu-
lated using available market quotations]
from the money market fund’s amortized
cost price per share exceeds 1/2 of 1 per-
cent” (commonly called “breaking the
buck”). 17 CFR § 270.2a–7(c)(8)(ii)(B).
(4) The perceived safety and simplicity
of MMFs have led to their widespread use
for cash management purposes. It is there-
fore common for investors to purchase
and redeem MMF shares frequently. An
MMF is often used as an account into
which, or from which, cash is automati-
cally deposited, or withdrawn, on a daily
basis (commonly referred to as a sweep
arrangement). MMFs generally declare
dividends daily and distribute them
monthly. MMF shareholders typically re-
invest these distributions automatically in
the MMF.
(5) In June 2013, the SEC proposed
rules that would change how certain MMF
shares are priced.SeeMoney Market
Fund Reform; Amendments to Form PF,
Securities Act Release No. 33–9408, In-
vestment Advisors Act Release No. IA–
3616, Investment Company Act Release
No. IC–30551, 78 FR 36834 (June 19,
2013) (SEC MMF Reform Proposal). The
SEC MMF Reform Rules adopt the gen-
eral approach of the SEC MMF Reform
Proposal, but include various modifica-
tions in response to comments and com-
bine the two principal reform alterna-
tives.
1
The SEC MMF Reform Rules
generally bar the use of the amortized cost
method of valuation and the use of the
penny-rounding method of pricing, except
by government MMFs and retail MMFs.
2
In the case of an MMF that is neither a
government MMF nor a retail MMF, the
SEC MMF Reform Rules require the
MMF to value its portfolio securities us-
ing market-based factors and to “compute
its price per share for purposes of distri-
bution, redemption and repurchase by
rounding the fund’s current net asset value
per share to a minimum of the fourth
decimal place in the case of a fund with a
$1.0000 share price or an equivalent or
more precise level of accuracy for money
market funds with a different share price
(e.g.$10.000 per share, or $100.00 per
share).”Id. § 270.2a–7(c)(1)(ii). (This
method of computing the price per share
is referred to hereafter as “basis point
rounding.”)
3
(6) An MMF that uses market factors
to value its securities and uses basis point
rounding to price its shares for purposes
of distribution, redemption, and repur-
chase (floating-NAV MMF) has a share
price that is expected to change regularly,
or “float.” Floating-NAV MMFs therefore
resemble in some respects other mutual
funds that are not MMFs, but they remain
subject to the risk-limiting conditions in
Rule 2a–7 and are expected to continue to
fulfill MMFs’ unique role.
(7) Stable share prices simplify the tax-
ation of transactions in MMF shares be-
cause a shareholder does not realize gain
or loss when a share is redeemed for an
amount equal to its basis. Shareholders
typically will realize gain or loss, how-
ever, on redemptions of floating-NAV
MMF shares. In certain circumstances, a
loss realized on the redemption of an
MMF share may implicate the wash sale
rules of section 1091, as discussed in sec-
tion 2.02 of this revenue procedure.
(8) The Treasury Department and the
Service have proposed regulations to sim-
plify the recognition of gain or loss on
floating-NAV MMF shares. Shareholders
of floating-NAV MMFs may rely on the
proposed regulations before final regula-
tions are issued.See§ 1.446–7 of the
proposed Income Tax Regulations. Under
the permissible method of accounting de-
scribed in those proposed regulations, ag-
gregate gain or loss is determined for each
computation period, and no gain or loss is
determined for any particular redemption
of a taxpayer’s shares in a floating-NAV
MMF. Without a determination of loss, a
particular redemption does not implicate
the wash sale rules. If a shareholder of a
floating-NAV MMF, however, does not
use this method of accounting, then that
shareholder will typically experience fre-
quent wash sales. This revenue procedure
provides relief for such a shareholder.
1
These alternatives were Floating Net Asset Value and Standby Liquidity Fees and Gates.SeeSEC MMF Reform Proposal at 36849 and 36878. The proposal included a number of other
possibilities, including a combination of these two.
2
A government MMF is an MMF that “invests 99.5 percent or more of its total assets in cash, government securities, and/or repurchase agreements that arecollateralized fully.” SEC MMF
Reform Rules, § 270.2a–7(a)(16). A retail MMF is an MMF that “has policies and procedures reasonably designed to limit all beneficial owners of the fundto natural persons.”Id.
§ 270.2a–7(a)(25).
3
The SEC has also amended Rule 2a–7 to require every MMF to disclose daily the fund’s current NAV rounded to the nearest basis point, but government and retail MMFs are not required
to use basis point rounding to distribute, redeem, and repurchase shares.
Bulletin No. 2014–34August 18, 2014
389

(9) Sections 6045, 6045A, and 6045B
establish certain reporting requirements
relating to securities. Each of those sec-
tions has an exception for an MMF (or
shares in an MMF) that “computes its
current price per share for purposes of
distributions, redemptions, and purchases
so as to stabilize the price per share at a
constant amount that approximates its is-
sue price or the price at which it was
originally sold to the public.” §§ 1.6045–
1(c)(3)(vi), 1.6045A–1(a)(1)(v), and
1.6045B–1(a)(5) of the Income Tax Reg-
ulations. The Treasury Department and
the Service have proposed regulations to
clarify that these exceptions apply to all
MMFs, including floating-NAV MMFs.
See§ 1.6045–1(c)(3)(vi) of the proposed
Income Tax Regulations.
.02 Wash Sale Rules
(1) Section 1091(a) disallows a loss
realized by a taxpayer on a sale or other
disposition of shares of stock or securities
if, within a period beginning 30 days be-
fore and ending 30 days after the date of
such sale or disposition, the taxpayer ac-
quires (by purchase or by an exchange on
which the entire amount of gain or loss is
recognized by law), or enters into a con-
tract or option to so acquire, substantially
identical stock or securities (unless the
taxpayer is a dealer in stock or securities
and the loss is sustained in a transaction
made in the ordinary course of such busi-
ness).
(2) If a taxpayer acquired property and
that acquisition resulted in the nondeduct-
ibility of a loss under section 1091(a),
then under section 1091(d), the taxpayer’s
basis in the property so acquired equals
the basis of the stock or securities dis-
posed of at a loss, increased or decreased
to take into account any difference be-
tween the price at which the replacement
property was acquired and the price at
which the original stock or securities were
disposed of.
(3) A shareholder that redeems shares
in a floating-NAV MMF may realize a
loss on the redemption. Moreover, be-
cause many MMF shareholders engage in
frequent purchases of MMF shares (in-
cluding purchases made as a result of
sweep arrangements and reinvestments of
monthly distributions), a shareholder that
realizes a loss on a redemption of MMF
shares will often acquire shares in that
MMF within 30 days before or after the
redemption.
(4) Redemptions of shares of MMFs,
which are expected to have relatively sta-
ble values even when share prices float, do
not give rise to the concern that section
1091 is meant to address. Moreover, given
the expected volume of transactions in
floating-NAV MMF shares, tracking wash
sales of MMF shares will present share-
holders of floating-NAV MMFs with sig-
nificant practical challenges.
.03 Notice 2013–48
(1) The Service published Notice
2013–48 on July 29, 2013, in response to
the SEC MMF Reform Proposal. The no-
tice proposed a revenue procedure provid-
ing that the Service would not treat a loss
realized upon a redemption of a floating-
NAV MMF share as subject to the wash
sale rules if the amount of the loss was not
more than one half of one percent of the
taxpayer’s basis in that share.
(2) The Service received comments in-
dicating that the proposed revenue proce-
dure would not significantly reduce the
tax compliance burdens associated with
applying the wash sale rules to floating-
NAV MMFs, because shareholders would
still have to track wash sales to determine
whether the amount of the wash sale ex-
ceeds the 0.5%de minimistest. The com-
menters suggested that MMFs are not the
type of investment with which the wash
sale rules are concerned because investors
do not have any expectation of capital
appreciation. As a result, the commenters
requested that floating-NAV MMFs be
exempted entirely from the wash sale
rules in section 1091.
(3) Because of the expectation that val-
ues of floating-NAV MMFs will be rela-
tively stable and because of the adminis-
trative burdens associated with applying
section 1091 to shares in floating-NAV
MMFs, it is in the interest of sound tax
administration for the Service not to treat
a redemption of a floating-NAV MMF
share as part of a wash sale under section
1091.
SECTION 3. SCOPE
This revenue procedure applies to a
redemption of one or more shares in an
investment company registered under the
1940 Act if—
.01 The investment company is regu-
lated as an MMF under Rule 2a–7 and
holds itself out to investors as an MMF;
and
.02 At the time of the redemption, the
investment company is a floating-NAV
MMF.
SECTION 4. APPLICATION
If a redemption is within the scope of
section 3 of this revenue procedure and
results in a loss, the Service will not treat
the redemption as part of a wash sale.
Therefore, section 1091(a) will not disal-
low the deduction for the resulting loss in
the year realized and section 1091(d) will
not cause the basis of any property to be
determined by reference to the basis of the
redeemed shares.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective
for redemptions on or after the effective
date of the SEC MMF Reform Rules
(which is 60 days after August 14, 2014,
the date that they were published in the
Federal Register).
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Jason Kurth of the Office of
Associate Chief Counsel (Financial Insti-
tutions & Products). For further informa-
tion regarding this revenue procedure con-
tact Mr. Kurth at (202) 317-6842 (not a
toll free number).
August 18, 2014Bulletin No. 2014–34
390

Part IV. Items of General Interest
This announcement
updates the list of waiver
countries for tax year 2013
provided in Rev. Proc.
2014–25.
Announcement 2014–28
This announcement updates the list of
foreign countries for which the eligibility
requirements of section 911(d)(1) are
waived in Rev. Proc. 2014–25.
Rev. Proc. 2014–25, 2014–15 I.R.B.
927, provides guidance to any individual
who fails to meet the eligibility require-
ments of section 911(d)(1) of the Internal
Revenue Code because adverse conditions
in a foreign country preclude the individ-
ual from meeting those requirements. Sec-
tion 3.04 of Rev. Proc. 2014–25 provides
a current list of foreign countries and the
departure dates for those countries for
which the eligibility requirements of sec-
tion 911(d)(1) are waived. The list of for-
eign countries is incomplete. The follow-
ing country and departure date is added:
Date of Departure
CountryOn or after
South SudanDecember 17, 2013
The principal author of this announce-
ment is Kate Y. Hwa of the Office of
Associate Chief Counsel (International).
For further information regarding this an-
nouncement contact Kate Y. Hwa at (202)
317-6934 (not a toll-free number).
Notice of Proposed
Rulemaking by Cross-
Reference to Temporary
Regulations
Segregation Rule Effective
Date
REG–105067–14
AGENCY:Internal Revenue Service (IRS),
Treasury.
ACTION:Notice of proposed rulemaking
by cross-reference to temporary regulations.
SUMMARY: In the Rules and Regula-
tions section of this issue of the Federal
Register, the IRS is issuing temporary reg-
ulations that modify the effective date
provision of recently published final reg-
ulations under Section 382 of the Internal
Revenue Code. The temporary regulations
affect corporations whose stock is or was
acquired by the Department of the Trea-
sury (Treasury) pursuant to certain pro-
grams under the Emergency Economic
Stabilization Act of 2008 (EESA). The
text of those temporary regulations pub-
lished in this issue of theBulletinalso
serves as the text of these proposed
regulations.
DATES: Written or electronic comments
and requests for a public hearing must be
submitted by September 2, 2014.
ADDRESSES: Send submissions to CC:
PA:LPD:PR (REG–105067–14), room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-
delivered Monday through Friday be-
tween the hours of 8 a.m. and 4 p.m. to
CC:PA:LPD:PR(REG–105067–14),
Courier’s Desk, Internal Revenue Service,
1111 Constitution Avenue N.W., Wash-
ington, DC 20224, or sent electronically
via the Federal eRulemaking Portal atwww.
regulations.gov(IRS REG–105067–14).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Stephen R. Cleary, (202) 317-
5353; concerning submission of com-
ments and requests for a public hearing,
Oluwafumnilayo Taylor, (202) 317-6901
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Temporary regulations in the Rules
and Regulations section of this issue of
theBulletinamend 26 CFR Part 1. The
temporary regulations modify the effec-
tive date provision for TD 9638 [78 FR
62418], published on October 22, 2013,
which provided final regulations that al-
tered the operation of certain of the public
group segregation rules under section 382.
The temporary regulations apply to stock
acquired by Treasury pursuant to certain
programs under EESA (Programs). In par-
ticular, the temporary regulations apply to
the subsequent sale by Treasury of that
stock. The text of those regulations also
serves as the text of these proposed regu-
lations. The preamble to the temporary
regulations explains the amendments.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Exec-
utive Order 12866, as supplemented by
Executive Order 13563. Therefore, a reg-
ulatory assessment is not required. It is
hereby certified that these regulations will
not have a significant economic impact on
a substantial number of small entities.
This certification is based on the fact that,
if the regulations apply to any small enti-
ties, the effect will not be to increase their
tax liability, but to prevent a potential
increase in tax liability that might other-
wise occur. Therefore, a Regulatory Flex-
ibility Analysis under the Regulatory
Flexibility Act (5 U.S.C. chapter 6) is not
required. Pursuant to section 7805(f) of
the Code, these regulations have been sub-
mitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on their impact on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed
original and eight (8) copies) or electronic
copies that are submitted timely to the
IRS. The IRS and the Treasury Depart-
ment request comments on the clarity of
the proposed rules and how they can be
made easier to understand. All comments
will be made available for public inspec-
tion and copying atwww.regulations.gov
or upon request. A public hearing will be
scheduled if requested in writing by any
person that timely submits written com-
ments. If a public hearing is scheduled,
Bulletin No. 2014–34August 18, 2014
391

notice of the date, time, and place for the
public hearing will be published in the
Federal Register.
Drafting information
The principal author of these regula-
tions is Stephen R. Cleary, Office of As-
sociate Chief Counsel (Corporate). How-
ever, other personnel from the IRS and the
Treasury Department participated in their
development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is pro-
posed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805***
Section 1.382–3 also issued under 26
U.S.C. 382(g)(4)(C) and 26 U.S.C.
382(m).***
Par. 2. Section 1.382–3 is amended by
revising paragraph (j)(17) to read as fol-
lows:
§ 1.382–3 Definitions and Rules
Relating to a 5-percent Shareholder.
*****
(j)***
(17)Effective/applicability date. [The
text of the proposed amendment to
§ 1.382–3(j)(17) is the same as the text of
§ 1.382–3T(j)(17) published elsewhere in
this issue of theBulletin].
John Dalrymple
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on July 30, 2014,
8:45 a.m., and published in the issue of the Federal Register
for July 31, 2014, 79 F.R. 44324)
August 18, 2014Bulletin No. 2014–34
392

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
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
with amplified andclarified, 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
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
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
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
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 following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2014–34August 18, 2014
i

Numerical Finding List
1
Bulletins 2014–27 through 2014–34
Announcements:
2014-2, 2014-28 I.R.B.120
2014-28, 2014-34 I.R.B.391
Notices:
2014-40, 2014-27 I.R.B.100
2014-41, 2014-27 I.R.B.97
2014-42, 2014-34 I.R.B.387
2014-43, 2014-31 I.R.B.249
2014-44, 2014-32 I.R.B.270
2014-45, 2014-34 I.R.B.388
Proposed Regulations:
REG-104579-13, 2014-33 I.R.B.370
REG-120756-13, 2014-31 I.R.B.252
REG-105067-14, 2014-34 I.R.B.391
REG-110948-14, 2014-30 I.R.B.239
REG-121542-14, 2014-28 I.R.B.119
REG-107012-14, 2014-33 I.R.B.371
REG-123286-14, 2014-33 I.R.B.377
REG-209459-78, 2014-31 I.R.B.253
Revenue Procedures:
2014-26, 2014-27 I.R.B.26
2014-27, 2014-27 I.R.B.41
2014-29, 2014-28 I.R.B.105
2014-37, 2014-33 I.R.B.363
2014-38, 2014-29 I.R.B.132
2014-39, 2014-29 I.R.B.151
2014-40, 2014-30 I.R.B.229
2014-41, 2014-33 I.R.B.364
2014-42, 2014-29 I.R.B.193
2014-43, 2014-32 I.R.B.273
2014-44, 2014-32 I.R.B.274
2014-45, 2014-34 I.R.B.388
2014-46, 2014-33 I.R.B.367
Revenue Rulings:
2014-14, 2014-27 I.R.B.12
2014-19, 2014-32 I.R.B.266
2014-20, 2014-28 I.R.B.101
2014-21, 2014-34 I.R.B.381
Treasury Decisions:
9664, 2014-32 I.R.B.254
9668, 2014-27 I.R.B.1
9669, 2014-28 I.R.B.103
9670, 2014-29 I.R.B.121
9671, 2014-29 I.R.B.124
9672, 2014-30 I.R.B.196
9673, 2014-30 I.R.B.212
9674, 2014-30 I.R.B.225
Treasury Decisions—Continued:
9675, 2014-31 I.R.B.242
9676, 2014-32 I.R.B.260
9677, 2014-31 I.R.B.241
9678, 2014-32 I.R.B.262
9679, 2014-32 I.R.B.267
9680, 2014-32 I.R.B.254
9681, 2014-33 I.R.B.340
9682, 2014-33 I.R.B.342
9683, 2014-33 I.R.B.330
9684, 2014-33 I.R.B.345
9685, 2014-34 I.R.B.379
9686, 2014-34 I.R.B.382
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014–01 through 2014–26 is in Internal Revenue Bulletin
2014–26, dated June 30, 2014.
August 18, 2014Bulletin No. 2014–34
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2014–27 through 2014–34
Announcements:
2012-11
Supplemented by
Ann. 2014-2, 2014-28 I.R.B.120
2013-11
Supplemented by
Ann. 2014-2, 2014-28 I.R.B.120
2010-41
Obsoleted by
Rev. Proc. 2014-43, 2014-32 I.R.B.273
Revenue Procedures:
1981-38
Superseded by
Rev. Proc. 2014-42, 2014-29 I.R.B.193
93-37
Modified and Superseded by
Rev. Proc. 2014-43, 2014-32 I.R.B.273
1981-38
Modified by
Rev. Proc. 2014-42, 2014-29 I.R.B.193
2000-12
Superseded by
Rev. Proc. 2014-39, 2014-29 I.R.B.151
2002-55
Revoked by
Rev. Proc. 2014-39, 2014-29 I.R.B.151
2012-38
Superseded by
Rev. Proc. 2014-27, 2014-27 I.R.B.26
2012-46
Superseded by
Rev. Proc. 2014-26, 2014-27 I.R.B.41
2014-4
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B.229
2014-5
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B.229
2014-8
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B.229
Revenue Procedures—Continued:
2014-9
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B.229
2014-10
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B.229
2014-13
Modified by
Rev. Proc. 2014-38, 2014-29 I.R.B.132
2014-13
Superseded by
Rev. Proc. 2014-38, 2014-29 I.R.B.132
Notices:
2013-51
Obsoleted by
Notice 2014-42, 2014-34 I.R.B.387
2014-44
Supplemented by
Notice 2014-45, 2014-34 I.R.B.388
Treasury Decision:
2005-47
Obsoleted by
T.D. 9668 2014-27 I.R.B.1
2010-51
Obsoleted by
T.D. 9684 2014-33 I.R.B.345
2010-71
Obsoleted by
T.D. 9684 2014-33 I.R.B.345
2011-6
Obsoleted by
T.D. 9684 2014-33 I.R.B.345
2011-9
Obsoleted by
T.D. 9684 2014-33 I.R.B.345
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014–01 through 2014–26 is in Internal Revenue Bulletin 2014–26, dated June 30, 2014.
Bulletin No. 2014–34August 18, 2014
iii

INDEX
Internal Revenue Bulletins 2014–27 through
2014–34
The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parentheses refer to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
ADMINISTRATIVE
AJCA – Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34,382
Announcement to Discontinue the Internal Revenue Bulletin
Index (Ann 27) 28,120
Annual Filing Season Program (RP 42) 29,193
Disclosure to Census Bureau (REG–120756–13) 31,252
Disclosure to Census Bureau (TD 9677) 31,241
Information reporting by passport applicants (TD 9679) 32,267
Procedures to void backup withholding (RP 43) 32,273
Proposed Regulations:
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (REG–120756–13)
31,252
Regulations Governing Practice Before the Internal Revenue
Service (REG–138367–06) (TD 9668) 27,1
Regulations:
31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31, revised;
10.35, revised; 10.36, revised; 10.37, revised; 10.52, revised;
10.81, revised; 10.82, revised; 10.91, revised. (TD 9668) 27,1
26 CFR 301.6109–4, added; 1.6042–4, amended; 1.6043–4,
amended; 1.6044–5, amended; 1.6045–2, amended; 1.6045–3,
amended; 1.6045–4, amended; 1.6045–5, amended; 1.6049–6,
amended; 1.6050A–1, amended; 1.6050E–1, amended;
1.6050N–1, amended; 1.6050P–1, amended; 1.6050S–1, amend-
ed; 1.6050S–3, amended (TD 9675) 31,242
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (TD 9677) 31,241
26 CFR part 301, amended; 26 CFR 301.6039E–1 added (TD
9679) 32,267
26 CFR 301.6707–1, added; 301.6707–1T, removed; Rev.
Proc. 2007–21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34,382
ADMINISTRATIVE—Cont.
Substitute Forms Preparation for Certain Information Returns
(RP 27) 27,41
Substitute Forms Preparation for Certain Information Returns
(RP 44) 32,274
Truncated Taxpayer Identification Numbers (TD 9675) 31,242
EMPLOYEE PLANS
Individual Retirement Account Rollover Limitations (REG–
209459–78) 31,253
Longevity Annuity Contracts (TD 9673) 30,212
Proposed Regulations:
26 CFR 408, Individual Retirement Accounts (REG–209459–78)
31,253
Regulations:
26 CFR 54.9815–2708, as amended (TD 9671) 29,174
26 CFR 1.401(a)(9)–5, amended; 1.401(a)(9)–6, amended;
1.403(b)–6, amended; 1.408–8, amended; 1.408A–6,
amended; 1.6047–2, added (TD 9673) 30,212
Rules relating to 90 day waiting period limitation (TD 9671) 29,124
Weighted average interest rates
Segment rates for June 2014 (Notice 41) 27,97
Segment rates for July 2014 (Notice 43) 31,249
EMPLOYMENT TAX
Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29,121
Method of accounting for gains and losses on shares in certain
money market funds; broker returns with respect to sales of
shares in money market funds (REG–107012–14) 33,371
Publications:
1223, General Rules and Specifications for Substitute Forms
W–2c and W–3c (RP29) 28,105
4436, General Rules and Specifications for Substitute Form
941 and Schedule B (Form 941), and Schedule R (RP 26)
27,26
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28,103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28,103
26 CFR 1.1361–4, amended; 1.1361–4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1, added; 31.3127–1T, removed; 31.3306(c)(5)–1,
amended; 31.3306(c)(5)–1T, removed; 301.7701–2, amend-
ed; 301.7701–2T, removed; extending religious and family
member FICA and FUTA exceptions to disregarded entities;
regulations regarding the indoor tanning services excise tax
and disregarded entities (TD 9670) 29,121
26 CFR 1.446–7 added; 1.6045–1 amended; method of ac-
counting for gains and losses on shares in certain money
market funds; broker returns with respect to sales of shares
in money market funds (REG–107012–14) 33,371
August 18, 2014Bulletin No. 2014–34
iv

ESTATE TAX
Section 2032A.— Valuation of Certain Farm, Etc., Real Property
(RR 21) 34,381
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28,103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28,103
EXCISE TAX
Branded Prescription Drug Fee (REG–123286–14) 33,377
Branded Prescription Drug Fee (TD 9684) 33,345
Branded Prescription Drug Fee (Notice 42) 34,387
Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29,121
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28,103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28,103
26 CFR 1.1361–4, amended; 1.1361–4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1,added;31.3127–1T,removed;
31.3306(c)(5)–1, amended; 31.3306(c)(5)–1T, removed;
301.7701–2, amended; 301.7701–2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29,121
26 CFR 54.9815–2708, as amended (TD 9671) 29,121
26 CFR 51.2(e)(3), amended; (REG–123286–14) 33,377
Rules relating to 90 day waiting period limitation (TD 9671) 29,
124
EXEMPT ORGANIZATIONS
Streamlined Application for Recognition of Exemption Under
Section 501(c)(3) (RP 2014–40) 30,229
Streamlined process for 501(c)(3) recognition (REG–110948–
14) 30,239
Streamlined process for 501(c)(3) recognition (TD 9674) 30,225
Regulations:
26 CFR 1.501(c)–1 amended 1. 501(a)–1T added;
1.501(c)(3)–1 amended, 1.501(c)(3)–1T added; and
1.508–1 amended, 1.508–1T added (REG–110948–14)
(TD 9674) 30,225
GIFT TAX
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28,103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG–121542–14) (TD
9669) 28,103
INCOME TAX
AJCA – Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34,382
Allocation and Apportionment of Interest Expense (TD 9676)
32,260
Basis of indebtedness of S corporations to their shareholders (TD
9682) 33,342
Credit for carbon dioxide Sequestration (Notice 40) 27,100
Disclosure to Census Bureau (REG–120756–13) 31,252
Disclosure to Census Bureau (TD 9677) 31,241
FFI Agreement for Participating FFI and Reporting Model 2 FFI
(RP 38) 29,132
Foreign Earned Income Exclusion (Ann 28) 34,391
Foreign tax credit guidance under section 901 (m) (Notice 44)
32,270
Foreign tax credit guidance under section 901 (m) (Notice 45)
34,388
Information reporting by passport applicants (TD 9679) 32,267
Interest:
Investment:
Federal short-term, mid-term, and long-term rates for: July
2014 (RR 2014–20) 28,101
Federal short-term, mid-term, and long-term rates for: Au-
gust 2014 (RR 19) 32,266
Money market funds and the wash sale rules (RP 45) 34,388
Segregation rules for public groups of shareholders, (REG–
105067) 34,391
Segregation rules for public groups of shareholders, (TD 9685)
34,379
Summons Interview Regulations Under Section 7602 (REG–
121542) (TD 9669) 28,103
Premium Tax Credit (REG–104579–13) 33,370
Premium Tax Credit (RP 37) 33,363
Premium Tax Credit (RP 41) 33,364
Premium Tax Credit (TD 9683) 33,330
Proposed Regulations:
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (REG–
120756–13) 31,252
26 C.F.R. 1.382–3(j)(17), modified; 1.382–3T(j)(17), added,
segregation rules for public groups of shareholders (REG–
105067) 34,391
Publications:
1223, General Rules and Specifications for Substitute Forms
W–2c and W–3c (RP 29) 28,105
4436, General Rules and Specifications for Substitute Form
941 and Schedule B (Form 941), and Schedule R (RP 26)
27,26
Qualified Intermediary (QI) Agreement (RP 39) 29,151
Regulations:
31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31,
revised; 10.35, revised; 10.36, revised; 10.37, revised;
10.52, revised; 10.81, revised; 10.82, revised; 10.91, re-
vised (TD 9668) 27,1
Bulletin No. 2014–34August 18, 2014
v

INCOME TAX—Cont.
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG–121542–14) (TD
9669) 28,103
26 CFR 1.45R–0, added; 1.45R–1, added; 1.45R–2, added;
1.45R–3, added; 1.45R–4, added; 1.45R–5, added; tax
credit for employee health insurance expenses of small
employers (TD 9672) 30,196
26 CFR 301.6109–4, added; 1.6042–4, amended; 1.6043–4,
amended; 1.6044–5, amended; 1.6045–2, amended;
1.6045–3, amended; 1.6045–4, amended; 1.6045–5,
amended; 1.6049–6, amended; 1.6050A–1, amended;
1.6050E–1, amended; 1.6050N–1, amended; 1.6050P–1,
amended; 1.6050S–1, amended; 1.6050S–3, amended (TD
9675) 31,242
26 CFR 1.67–4, amended (TD 9667) 32,260
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (TD 9677) 31,
241
26 CFR 1.861–9 amended, 1.861–11 amended; (TD 9676) 32,
260
26 CFR 1.1092(b)–6, added; 1.1092(b)–6T, removed;
1.1092(b)–3T, amended; (TD 9678) 32,262
26 CFR part 301, amended; 26 CFR 301.6039E–1 added (TD
9679) 32,267
26 CFR 1.174–2 amended; (TD 9680) 32,254
26 CFR 1.36B–2T, 26 CFR 1.36B–3T, 1.36B–4T, added; 26
CFR 1.36B–2, 26 CFR 1.36B–3\, 1.36B–4, amended; 26
CFR 1.162(l)–1 and 26 CFR 1.162(l)–1T, added. (REG–
104579–13) 33,370
26 CFR 1.195–2, added; 26 CFR 1.708–1, amended; 26 CFR
1.709–1, amended. (TD 9681) 33,340
26 CFR 1.1366–2(a), added new paragraph (a)(2) and moved
current (a)(2) through (a)(6) to (a)(3) through (a)(7), re-
spectively; basis of indebtedness of S corporations to their
shareholders (TD 9682) 33,342
26 CFR 1.36B–2T, 26 CFR 1.36B–3T, 1.36B–4T added, 26
CFR 1.36B–2, 26 CFR 1.36B–3\, 1.36B–4, amended, 26
CFR 1.162(l)–1 and 26 CFR 1.162(l)–1T added, (TD
9683) 33,330
26 C.F.R. 1.382–3(j)(17), modified; 1.382–3T(j)(17), added,
segregation rules for public groups of shareholders (TD
9685) 34,379
26 CFR 301.6707–1, added; 301.6707–1T, removed; Rev.
Proc. 2007–21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34,382
Regulations Governing Practice Before the Internal Revenue
Service (REG–138367–06) (TD 9668) 27,1
Research and experimental expenditures (TD 9680) 32,254
Tax Credit for Employee Health Insurance Expenses of Small
Employers (TD 9672) 30,196
Truncated Taxpayer Identification Numbers (TD 9675) 31,242
Section 67 Limitations on Estates or Trusts; Change of Effective
Date (TD 9664) 32,260
Section 5000A national average premium for a bronze level of
coverage (RP 46) 33,367
INCOME TAX—Cont.
Substitute Forms Preparation for Certain Information Returns
(RP 27) 27,41
Substitute Forms Preparation for Certain Information Returns
(RP 44) 32,274
Unamortized organization and syndication expenses following a
partnership technical termination (TD 9681) 33,340
Underpayment and overpayments, quarter beginning: July 1,
2014 (RR 14) 27,12
Unrealized gain or loss treatment upon establishment of an
identified mixed straddle (TD 9678) 32,262
SELF-EMPLOYMENT TAX
Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29,121
Regulations:
26 CFR 1.1361–4, amended; 1.1361–4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1,added;31.3127–1T,removed;
31.3306(c)(5)–1, amended; 31.3306(c)(5)–1T, removed;
301.7701–2, amended; 301.7701–2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29,121
SPECIAL ANNOUNCEMENT
Annual Filing Season Program (RP 42) 29,193
Procedures to Avoid Backup Withholding (RP 43) 32,273
August 18, 2014Bulletin No. 2014–34
vi

INTERNAL REVENUE BULLETIN
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