Internal Revenue Bulletin 2015-46 (PDF rendition): IRS Announcements

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# INTERNAL REVENUE BULLETIN

IRS

## 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

Notice 2015-73, page 660.

The Treasury and IRS released Notice 2015-47, 2015-30
I.R.B. 76, a Listing Notice that applies to a type of structured
financial transaction in which a taxpayer attempts to defer and
treat ordinary income and short-term capital gain (earned un-
der a contract denominated as an option contract that refer-
ences a basket of securities) as long-term capital gain. Notice
2015-73 was initiated in response to commenters' concerns
that difficulty in identifying transactions that are the same as or
substantially similar to the transactions described in Notice
2015-47 may cause taxpayers to file disclosures for transac-
tions that are not intended to be treated as listed transactions
at this time. Notice 2015-73 revokes Notice 2015-47 and
provides additional details on the types of transactions that are
listed transactions. Notice 2015-73 also provides procedures
for taxpayers to change their method of accounting for trans-
actions within the scope of the notice. The transaction de-
scribed in Notice 2015-73 is similar to a transaction of inter-
est described in Notice 2015-74.

### Notice 2015-74, page 663.

The Treasury and IRS released Notice 2015-48, 2015-30
I.R.B. 77, a Transaction of Interest Notice that applies to a type
of structured financial transaction in which a taxpayer attempts
to defer and treat ordinary income and short-term capital gain
(earned under a contract denominated as a derivative contract
that references a basket of securities) as long-term capital
gain. Notice 2015-74 was initiated in response to comment-
ers' concerns that difficulty in identifying transactions that are
the same as or substantially similar to the transactions de-
scribed in Notice 2015-48 may cause taxpayers to file disclo-
sures for transactions that are not intended to be treated as
transactions of interest at this time. Notice 2015-74 revokes
Notice 2015-48 and provides additional details on the types
of transactions that are transactions of interest. Notice
2015-74 also provides procedures for taxpayers to change

Bulletin No. 2015-46
November 16, 2015

their method of accounting for transactions within the scope of
the notice. The transaction described in Notice 2015-74 is
similar to a listed transaction described in Notice 2015-73.

## EMPLOYEE PLANS

Notice 2015-75, page 668.

Section 415 of the Internal Revenue Code (the Code) provides
for dollar limitations on benefits and contributions under qual-
ified retirement plans. Section 415(d) requires that the Secre-
tary of the Treasury annually adjust these limits for cost of
living increases. Other limitations applicable to deferred com-
pensation plans are also affected by these adjustments under
§ 415. Under § 415(d), the adjustments are to be made under
adjustment procedures similar to those used to adjust benefit
amounts under § 215(i)(2)(A) of the Social Security Act.

## EXEMPT ORGANIZATIONS

Announcement 2015-28, page 673.

Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).

### Announcement 2015-29, page 673.

Serves notice to potential donors of a stipulated decision by
the United States Tax Court in declaratory judgment proceed-
ings under Section 7428.

Announcement 2015-30, page 673.

Serves notice to potential donors of a stipulated decision by
the United States Tax Court in declaratory judgment proceed-
ings under Section 7428.

(Continued on the next page)

Finding Lists begin on page ii.

## EXCISE TAX

### Notice 2015-76, page 669.

This notice requests comments about issues that should be
addressed in guidance relating to the excise tax imposed on
amounts paid for the right to award free or reduced rate air
transportation. Section 4261(e)(3) authorizes the IRS and Trea-
sury Department to prescribe rules to exclude from the air
transportation excise tax imposed by § 4261 amounts attrib-
utable to mileage awards (sometimes referred to as frequent
flyer miles) that are redeemed other than for taxable transpor-
tation.

## ADMINISTRATIVE

### REG-121496-15, page 674.

This document contains proposed regulations that will reduce
the user fee to obtain or renew a Preparer Tax Identification
Number (PTIN) from $50 to $33 for each original and renewal
application.

### Notice 2015-76, page 669.

### T.D. 9742, page 657.

This document contains temporary regulations that will reduce
the user fee to obtain or renew a Preparer Tax Identification
Number (PTIN) from $50 to $33 for each original and renewal
application.

## The IRS Mission

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

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

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

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

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

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

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

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury's Office of the Assistant Sec-
retary (Enforcement).

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

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

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

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

#### Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 T.D. 9742

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 300

### Preparer Tax Identification Number (PTIN) User Fee Update

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains tem-
porary regulations relating to the imposition
of certain user fees on tax return preparers.
The temporary regulations reduce the user
fee to apply for or renew a preparer tax
identification number (PTIN) and affect in-
dividuals who apply for or renew a PTIN.
The Independent Offices Appropriations
Act of 1952 authorizes the charging of user
fees. The text of the temporary regulations
also serves as the text of the proposed reg-
ulations (REG-121496-15) set forth in the
notice of proposed rulemaking on this sub-
ject in the Proposed Rules section of this
issue of the Bulletin.

DATES: Effective Date: These regula-
tions are effective on October 30, 2015.

Applicability Date: For date of appli-
cability, see paragraph (d) of these tem-
porary regulations.

#### FOR FURTHER INFORMATION

CONTACT: Concerning the temporary
regulations, Hollie M. Marx at (202) 317-
6844; concerning cost methodology, Eva
J. Williams at (202) 803-9728 (not toll-
free numbers).

SUPPLEMENTARY INFORMATION:

##### Background

The Independent Offices Appropria-
tions Act of 1952 (IOAA), which is cod-
ified at 31 U.S.C. 9701, authorizes agen-
cies to prescribe regulations that establish
user fees for services provided by the
agency. The charges must be fair and must

be based on the costs to the government,
the value of the service to the recipient,
the public policy or interest served, and
other relevant facts. The IOAA provides
that regulations implementing user fees
are subject to policies prescribed by the
President; these policies are set forth in
the Office of Management and Budget
Circular A-25, 58 FR 38142 (July 15,
1993) (OMB Circular A-25).

Under OMB Circular A-25, federal
agencies that provide services that confer
benefits on identifiable recipients are to
establish user fees that recover the full
cost of providing the special benefit. An
agency that seeks to impose a user fee for
government-provided services must cal-
culate the full cost of providing those ser-
vices. In general, a user fee should be set
at an amount that allows the agency to
recover the direct and indirect costs of
providing the service, unless the Office of
Management and Budget grants an excep-
tion. OMB Circular A-25 provides that
agencies are to review user fees biennially
and update them as necessary.

###### PTIN Requirement

Section 6109(a)(4) of the Internal Rev-
enue Code authorizes the Secretary to pre-
scribe regulations for the inclusion of a
tax return preparer's identifying number
on a return, statement, or other document
required to be filed with the IRS. On Sep-
tember 30, 2010, the Treasury Department
and IRS published final regulations under
section 6109 (REG-134235-08) in the
Federal Register (TD 9501) (75 FR
60315) (PTIN regulations) to provide that,
for returns or claims for refund filed after
December 31, 2010, the identifying num-
ber of a tax return preparer is the individ-
ual's PTIN or such other number pre-
scribed by the IRS in forms, instructions,
or other appropriate guidance. The PTIN
regulations require a tax return preparer
who prepares or who assists in preparing
all or substantially all of a tax return or
claim for refund after December 31, 2010
to have a PTIN. The PTIN regulations
also state that the IRS will set forth in
forms, instructions or other appropriate

guidance PTIN application and renewal
procedures, including the payment of a
user fee. The PTIN regulations further
state that the IRS may conduct a Federal
tax compliance check on an individual
who applies for or renews a PTIN.

In accordance with section 1.6109-
2(d) of the PTIN regulations, the IRS has
set forth application and renewal proce-
dures in Form W-12, IRS Paid Preparer
Tax Identification Number (PTIN) Appli-
cation and Renewal, and the Form W-12
Instructions. Individuals may also apply
for or renew a PTIN and pay the user fee
online at irs.gov/ptin. The annual PTIN
application and renewal period generally
begins in the fall (on October 15 in pre-
vious years) of the year preceding the
filing season to which the PTIN relates. A
third-party vendor processes applications
to obtain or renew a PTIN and charges a
reasonable fee that is separate from the
user fee charged by the government.

Requiring the use of PTINs improves
tax administration and tax compliance and
benefits tax return preparers by allowing
them to provide an identifying number on
the return that is not an SSN. Requiring
the use of PTINs enables the IRS to better
collect and track data on tax return pre-
parers, including the number of persons
who prepare returns, the qualifications of
those who prepare returns, and the number
of returns each person prepares. PTIN use
allows the IRS to more easily identify and
communicate with tax return preparers
who make errors on returns, which bene-
fits tax return preparers by improving
compliance and therefore reducing the
number of client returns that are exam-
ined. The PTIN also enables the IRS to
more easily locate and review returns pre-
pared by a tax return preparer when in-
stances of misconduct or potential mis-
conduct are detected, which aids tax
administration and compliance. These
aids to tax administration and compliance
in turn benefit taxpayers and tax return
preparers by working to reduce preparer
error and misconduct.

Section 1.6109-2(d) states that only
individuals authorized to practice before
the IRS under 31 U.S.C. 330 are eligible

to obtain a PTIN. Under section 1.6109-
2(h), the IRS may prescribe in forms, in-
structions, or other appropriate guidance
exceptions to the requirements of the
PTIN regulations, including the require-
ment that an individual must be autho-
rized to practice before the IRS to be
eligible to receive a PTIN. On December
30, 2010, the IRS released Notice 2011-6
(2011-3 IRB 315 (Jan. 17, 2011)), which
stated that, until December 31, 2013, a
provisional PTIN could be renewed upon
proper application and payment of the ap-
plicable user fee, even if the individual
holding the provisional PTIN was not au-
thorized to practice before the IRS.

On June 3, 2011, the Treasury Depart-
ment and the IRS published in the Fed-
eral Register (76 FR 32286) amendments
to Treasury Department Circular No. 230
(31 CFR part 10), to regulate all tax return
preparers under 31 U.S.C. 330. In Loving
v. IRS, 917 F.Supp.2d 67 (D.D.C. 2013),
the district court concluded that the IRS
and Treasury Department lacked statutory
authority to regulate tax return preparation
as practice before the IRS under 31 U.S.C.
330 and enjoined the IRS and Treasury
from enforcing the regulation of regis-
tered tax return preparers. The district
court subsequently modified its order to
clarify that the IRS's authority to require
that tax return preparers obtain a PTIN is
unaffected by the injunction. Loving v.
IRS, 920 F.Supp.2d 108, 109 (D.D.C.
2013) (stating "Congress has specifically
authorized the PTIN scheme by statute . . .
[and that] scheme, therefore, does not fall
within the scope of the injunction and may
proceed as promulgated."). The United
States Court of Appeals for the District of
Columbia Circuit affirmed the district
court's decision and order for injunction.
Loving v. IRS, 742 F.3d 1013 (D.C. Cir.
2014).

###### PTIN User Fee

Final regulations (REG-139343-08)
published in the Federal Register (TD
9503) (75 FR 60316) (PTIN user fee reg-
ulations) on September 30, 2010, estab-
lished a $50 user fee to apply for or renew
a PTIN. The $50 user fee was based on an
annual PTIN renewal period and an esti-
mate that 1.2 million individuals would be

applying for or renewing a PTIN each
year.

The IRS and Treasury Department de-
termined that a $50 user fee to apply for or
renew a PTIN would recover the full di-
rect and indirect costs that the government
incurs to administer the PTIN application
and renewal process. The initial determi-
nation of a $50 annual fee took into ac-
count certain costs that the IRS ascer-
tained it would incur to provide the
special benefit associated with the provi-
sion of PTINs. As explained in the PTIN
user fee regulations, the initial projected
costs included the development and main-
tenance of the IRS information technol-
ogy system that would interface with a
third-party vendor, the development and
maintenance of internal applications that
would have the capacity to process and
administer the anticipated increase in
PTIN applications, customer service sup-
port activities, which included website de-
velopment and maintenance and call cen-
ter staffing to respond to questions
regarding PTIN usage and renewal. The
$50 user fee was also determined to re-
cover costs for personnel, administrative,
and management support needed to eval-
uate and address tax compliance issues of
individuals applying for and renewing a
PTIN, to investigate and address conduct
and suitability issues, and otherwise sup-
port and enforce the programs that re-
quired an individual to apply for and re-
new a PTIN.

The vendor's fee, currently set at
$14.25 for new applications and $13 for
renewal applications, is paid directly to
the vendor and covers the costs incurred
by the vendor to process applications and
renewals. The agency user fee and the
vendor fee pay for different aspects of the
PTIN program, each of which is essential
to the program.

### Explanation of Provisions

Pursuant to the guidelines in OMB Cir-
cular A-25, the IRS has re-calculated its
cost of providing services under the PTIN
application and renewal process. The IRS
has determined that the full cost of admin-
istering the PTIN program going forward
has been reduced from $50 to $33 per
application or renewal. Individuals who
prepare or assist in preparing all or sub-
stantially all of a tax return or claim for

refund for compensation are required to
have a PTIN. The ability to prepare tax
returns and claims for refund for compen-
sation is a special benefit, for which the
IRS may charge a user fee to recover the
full costs of providing the special benefit.

The amount of the user fee is $33 for
both initial PTIN applications and renew-
als because the activities the IRS is re-
quired to perform to issue a new PTIN or
renew an existing PTIN are the same.
Pursuant to the authority granted in sec-
tion 6109(c), the IRS has determined that
it requires certain information to assign
(or, in the case of a renewal, re-assign) a
PTIN to an individual. The required infor-
mation is set forth in the Form W-12 and
Form W-12 Instructions.

The PTIN user fee is based on direct
costs of the PTIN program, which include
staffing and contract-related costs for activ-
ities, processes, and procedures related to
the electronic and paper registration and re-
newal submissions; tax compliance and
background checks; professional designa-
tion checks; foreign preparer processing;
compliance and IRS complaint activities;
information technology and contract-related
expenses; and communications. The PTIN
user fee also takes into account various in-
direct program costs, including manage-
ment and support costs.

The reduction in the fee amount is at-
tributable to several factors, which include
the reduced number of PTIN holders (ap-
proximately 700,000) from the number
originally projected (1.2 million) in 2010,
which reduced associated costs; the ab-
sorption of certain development costs in
the early years of the program; and the
fact that certain activities that would have
been required to regulate registered tax
return preparers will not be performed. In
particular, the determination of the user
fee no longer includes expenses for per-
sonnel who perform functions primarily
related to continuing education and testing
for registered tax return preparers. Addi-
tionally, expenses related to personnel
who perform continuing education and
testing for enrolled agents and enrolled
retirement plan agents were also removed
from the user fee.

Individuals who apply for or renew a
PTIN will continue to pay a fee directly to
a third-party vendor, which is separate
from the user fee described in this Trea-

sury decision. The vendor fee is increas-
ing from $14.25 for original applications
and $13 for renewal applications to $17
for original applications and $17 for re-
newal applications.

### 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.

Historically, the annual PTIN applica-
tion and renewal period has begun on Oc-
tober 15. For 2015, the date has been
postponed to November 1. There is insuf-
ficient time before November 1 to provide
an opportunity for notice and public com-
ment and issue a final regulation prior to
that date. To enable the reduced fee
amount to be in effect for PTINs issued or
renewed by tax return preparers preparing
returns in 2016, the IRS and Treasury find
that there is good cause to dispense with
(1) notice and public comment pursuant to
5 U.S.C. 553(b) and (c) and (2) a delayed
effective date pursuant to 5 U.S.C. 553(d).
It would be impracticable, unnecessary,
and contrary to the public interest to con-
tinue to charge the current fee when the
IRS has determined pursuant to the bien-
nial review conducted under OMB Circu-
lar A-25 that the fee should be reduced
going forward. The IRS and Treasury De-
partment will consider public comments
submitted in response to the cross-
referenced notice of proposed rulemaking

published elsewhere in this issue of the
Bulletin and will promulgate a final rule
after considering those comments.

For applicability of the Regulatory
Flexibility Act, please refer to the cross-
referenced notice of proposed rulemaking
published elsewhere in this issue of the
Bulletin. Pursuant to section 7805(f), this
Treasury decision has been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business.

### Drafting Information

The principal author of these regula-
tions is Hollie M. Marx, Office of the
Associate Chief Counsel (Procedure and
Administration).

* * * * *

### Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 300 is
amended as follows:

Paragraph 1. The authority citation for
part 300 continues to read as follows:
Authority: 31 U.S.C. 9701.

Par. 2. Section 300.13 is amended by
removing and reserving paragraph (b) to
read as follows:

§ 300.13 Fee for obtaining a preparer
tax identification number.

* * * * *

(b) Fee. [Reserved]

Par. 3. Section 300.13T is added to
read as follows:

§ 300.13T Fee for obtaining a preparer
tax identification number.

(a) [Reserved]

(b) Fee. The fee to apply for or renew
a preparer tax identification number is $33
per year, which is the cost to the govern-
ment for processing the application for a
preparer tax identification number and
does not include any fees charged by the
vendor.

(d) Effective/applicability date. This
section will be applicable for all PTIN
applications filed on or after November 1,
2015.

Karen M. Schiller
Acting Deputy Commissioner
for Services and Enforcement.

Approved: October 16, 2015.

Mark J. Mazur
Assistant Secretary of
the Treasury (Tax Policy).

(Filed by the Office of the Federal Register on October 29,
2015, 8:45 a.m., and published in the issue of the Federal
Register for October 30, 2015, 80 F.R. 27789)

## Part III. Administrative, Procedural, and Miscellaneous

### Listing Notice-Basket Option Contracts Notice 2015-73

The Treasury Department and the In-
ternal Revenue Service (the "IRS") are
aware of a type of structured financial
transaction, described below, in which a
taxpayer attempts to defer income recog-
nition and convert short-term capital gain
and ordinary income to long-term capital
gain using a contract denominated as an
option contract. The Treasury Department
and the IRS believe this transaction (the
"basket option contract") is a tax avoidance
transaction. Notice 2015-47, 2015-30
I.R.B. 76, identified the basket option con-
tract and substantially similar transactions
as listed transactions for purposes of
§ 1.6011-4(b)(2) of the Income Tax Reg-
ulations and §§ 6111 and 6112 of the
Internal Revenue Code ("the Code"). No-
tice 2015-47 also alerted persons in-
volved in these transactions about certain
responsibilities that may arise from their
involvement with these transactions.

Commenters expressed concern that dif-
ficulty in identifying transactions that are the
same as, or substantially similar to, the
transaction described in Notice 2015-47
may cause taxpayers to file disclosures for
transactions that are not intended to be
treated as listed transactions at this time.
This notice revokes Notice 2015-47. Sec-
tion 2 of this notice provides additional de-
tails on the types of transactions that are the
same as, or substantially similar to, the
transaction described in this notice, and thus
listed transactions for purposes of § 1.6011-
4(b)(2) and §§ 6111 and 6112 of the Code.
Section 3.06 of this notice provides proce-
dures for taxpayers to change their method
of accounting for transactions within the
scope of this notice.

Section 2.04 of this notice more spe-
cifically describes the tax benefits that
identify the transaction described in this
notice as a listed transaction. No inference
is intended regarding the appropriate
treatment of transactions not described in

this notice. The IRS may challenge, in-
cluding by asserting judicial doctrines,
claimed tax benefits under §§ 871, 881
and 882 or other provisions of the Code,
and assert failures to comply with report-
ing obligations associated with invest-
ments in passive foreign investment com-
panies and withholding and reporting
obligations under Chapters 3 and 4 of the
Code.

### SECTION 1. BACKGROUND

In a basket option contract, a taxpayer
("T"), typically a hedge fund or a high
net-worth individual, enters into a contract
that is denominated as an option with a
counterparty ("C"), typically a bank, to
receive a return based on the performance
of a notional basket of referenced actively
traded personal property (the "reference
basket"). T, or a designee named by T,
will either determine the assets that com-
prise the reference basket or design or
select a trading algorithm that determines
the assets. While the basket option con-
tract remains open, T1 has the right to
change the assets in the reference basket,
request that C change the assets in the
reference basket, change the trading algo-
rithm, or request that C change the trading
algorithm (collectively, discretion).2 The
terms of the basket option contract may
permit C to reject certain changes re-
quested by T to the assets in the reference
basket or the trading algorithm. C, how-
ever, generally accepts all or nearly all of
the changes requested by T.

When the basket option contract is en-
tered into, T typically makes an upfront
cash payment to C of between 10 and 40
percent of the value of the assets in the
reference basket. To manage its risk under
the basket option contract, C typically ac-
quires substantially all of the assets in the
reference basket at the inception of the
contract and acquires and disposes of as-
sets during the term of the contract either
when T changes the assets in the reference
basket or the trading algorithm provides
for such changes. C generally supplies the

additional cash required to purchase the
assets in the reference basket. The assets
in the reference basket would typically
generate ordinary income if held directly
by T, and short-term gains and losses if
purchases and sales of the assets were
carried out directly by T.

The basket option contract has a stated
term of more than one year but contains
provisions that in effect allow either party to
terminate the contract at any time during the
stated contract term with proper notice. The
amount that T receives upon settlement of
the basket option contract is based on the
performance of the assets in the reference
basket. A common payout formula on the
basket option contract entitles T to a return
equal to the upfront payment, plus net bas-
ket gain or minus net basket loss. The net
basket gain or net basket loss includes net
changes in the values of the assets in the
reference basket, together with interest, div-
idend, and other periodic income on the
assets, reduced by C's fee for its role in the
transaction. The basket option contract typ-
ically includes a provision automatically ter-
minating the contract if the amount of the
net basket loss reaches the amount of the
upfront payment, giving T a cash settlement
amount of zero. The basket option contract
also may permit or require T to provide
additional collateral or otherwise reduce risk
in the reference basket if a specified level of
risk is reached.

The basket option contract typically
contains other safeguards to minimize the
economic risk to C. For example, C may
terminate the basket option contract if T
violates investment guidelines that are
part of the contract. C typically holds the
rights associated with legal title to the
assets and positions in the reference bas-
ket, including voting rights and the right
to commingle, lend, pledge, transfer, or
otherwise use the assets in the basket
without notice to T.

1When used in this sentence and subsequently with respect to changing or requesting changes to the assets in the reference basket or the trading algorithm, references to "T" include T's
designee as defined in section 2.02 of this notice.

2See also section 2.03 of this notice.

terminates and, if the basket option con-
tract is held for more than one year, that
the entire gain is treated as long-term cap-
ital gain.

The Treasury Department and the IRS
are concerned that taxpayers are using a
basket option contract to inappropriately
defer income recognition or convert ordi-
nary income or short-term capital gain
into long-term capital gain. In some cases,
taxpayers are also mischaracterizing a
transaction as an option to avoid applica-
tion of § 1260. Therefore, the Treasury
Department and the IRS are identifying
transactions described in section 2 of this
notice as listed transactions.

The IRS may assert one or more argu-
ments to challenge the parties' tax char-
acterization of a basket option contract,
including: (1) that C, in substance, holds
the assets in the reference basket as an
agent of T and that T is the beneficial
owner of the assets for tax purposes; (2)
that the basket option contract is not an
option for tax purposes; (3) that changes
to the assets in the reference basket during
the year materially modify the basket op-
tion contract and result in taxable dispo-
sitions of the contract under § 1001
throughout the term of the contract; and
(4) that T actually owns separate contrac-
tual rights with respect to each asset in the
reference basket such that each change to
the assets in the basket results in a taxable
disposition of a contractual right under
§ 1001 with respect to the asset affected
by the change. The IRS may assert other
arguments supporting the conclusion that
T is the beneficial owner of the assets in
the reference basket for tax purposes.

### SECTION 2. LISTED TRANSACTIONS

#### .01 Transactions Identified as Listed Transactions

A transaction is the same as, or sub-
stantially similar to, the transaction iden-
tified in this notice only if: (1) T enters
into a transaction with C that is denomi-
nated as an option contract; (2) T receives
a return based on the performance of the
reference basket; (3) substantially all of
the assets in the reference basket primarily
consist of actively traded personal prop-

erty as defined under § 1.1092(d)-1(a); (4)
the contract is not fully settled at intervals
of one year or less; (5) T or T's designee
(as defined in section 2.02 of this notice)
has exercised discretion (as defined in sec-
tion 2.03 of this notice) to change (either
directly or through a request to C) the
assets in the reference basket or the trad-
ing algorithm; and (6) T's tax return for a
taxable year ending on or after January 1,
2011,3 reflects a tax benefit described in
section 2.04 of this notice. Notwithstand-
ing any other provision in this notice, a
transaction is not the same as, or substan-
tially similar to, the listed transaction
identified in this notice if the transaction is
described in section 2.05 of this notice.

#### .02 Designee

For purposes of this notice, any refer-
ence to T having the right to change or
request changes to the assets in the refer-
ence basket or the trading algorithm in-
cludes T's designee as defined in this sec-
tion 2.02. T's designee is any person who
is: (1) T's agent under principles of
agency law; (2) compensated by T for
suggesting, requesting, or determining
changes in the assets in the reference bas-
ket or the trading algorithm; or (3) se-
lected by T to suggest, request, or deter-
mine changes in the assets in the reference
basket or the trading algorithm. A person
will not, however, be treated as compen-
sated or selected by T as a result of: (1)
the person's position as an investment ad-
visor, officer, or employee of an entity,
such as a mutual fund, when the entity's
publicly offered securities are included in
the reference basket; or (2) the person's
use of, the person's payment of a licensing
fee for the right to use, or the person's
authority to suggest, request, or determine
changes in the assets included in (y) a
widely used and publicly quoted index
that is based on objective financial infor-
mation or (z) an index that tracks a broad
market or a market segment.

#### .03 Discretion

For purposes of this notice, T will not
be treated as having discretion to change
(either directly or through a request to C)
the assets in the reference basket or the

trading algorithm if changes in the assets
in the reference basket or the trading al-
gorithm are made according to objective
instructions, operations, or calculations
that are disclosed at the inception of the
transaction (the rules) and T does not have
the right to alter or amend the rules during
the term of the transaction or to deviate
from the assets in the reference basket or
the trading algorithm selected in accor-
dance with the rules. For these purposes,
T will not be treated as having authority to
alter or amend the rules solely because T
has the authority to: (1) exercise routine
judgment in the administration of the rules
provided, however, that such routine judg-
ment does not include deviations or alter-
ation to the rules that are designed to
improve the financial performance of the
reference basket; (2) correct errors in the
implementation of the rules or calcula-
tions made pursuant to the rules; or (3)
make an adjustment to respond to an un-
anticipated event outside of T's control,
such as a stock split, merger, listing or
delisting, nationalization, or insolvency of
a component of a basket, a disruption in
the financial markets for specific assets or
in a particular jurisdiction, regulatory
compliance requirement, force majeure,
or any other unanticipated event of similar
magnitude and significance.

#### .04 Tax Benefit

For purposes of this notice, a tax ben-
efit is a deferral of income into a later
taxable year or a conversion of ordinary
income or short-term capital gain or loss
into long-term capital gain or loss.

#### .05 Excluded Contracts

3See section 3.01 for disclosure requirements.

tingent payment debt instrument) or a
variable rate debt instrument under
§ 1.1275-5. With respect to T, a transac-
tion is not the same as, or substantially
similar to, the transaction described in this
notice unless T's tax return for a taxable
year ending on or after January 1, 2011,4
reflects a tax benefit of the transaction that
is described in section 2.04 of this notice.
With respect to C, a transaction is not the
same as, or substantially similar to, the
transaction described in this notice if: (1)
T represents to C in writing under penal-
ties of perjury that T's tax return has not
and will not reflect a tax benefit described
in section 2.04 of this notice in any tax-
able year ending on or after January 1,
2011,5 or (2) C has established that T is a
nonresident alien that is not engaged in a
U.S. trade or business or a foreign corpo-
ration that is not engaged in a U.S. trade
or business by obtaining a valid withhold-
ing certificate from the beneficial owner
of the payments made or to be made under
the basket option contract (W-8BEN,
W-8BEN-E, or W-8EXP), or in the case
of payments made outside of the U.S.
on offshore obligations, by obtaining
documentary evidence as described in
§ 1.1441-1(c)(17).

## SECTION 3. RULES OF APPLICATION

### .01 Effective Date

Transactions in effect on or after January
1, 2011, that are the same as, or substantially
similar to, the transaction described in this
notice are identified as "listed transactions"
for purposes of § 1.6011-4(b)(2) and
§§ 6111 and 6112 as of October 21, 2015.
Persons engaged in transactions in effect on
or after January 1, 2011, must disclose the
transactions as described in § 1.6011-4 for
each taxable year in which the taxpayer par-
ticipated in the transactions, provided that
the period of limitations for assessment of
tax had not ended on or before October 21,
2015. Material advisors who make a tax
statement on or after January 1, 2011, with
respect to transactions in effect on or after
January 1, 2011, have disclosure and list
maintenance obligations under §§ 6111 and
6112. See §§ 301.6111-3, 301.6112-1.

Independent of their classification as
listed transactions, transactions that are
the same as, or substantially similar to, the
transaction described in this notice may
already be subject to the requirements of
§§ 6011, 6111, or 6112, or the regulations
thereunder. If a transaction is identified as
a listed transaction under section 2.01 of
this notice and as a transaction of interest
in Notice 2015-74, the transaction is iden-
tified as a listed transaction. Persons sat-
isfying the disclosure requirements for a
listed transaction under this notice are
deemed to have satisfied the disclosure
requirements under Notice 2015-74.

### .02 Participation

Under § 1.6011-4(c)(3)(i)(A), for each
year in which a transaction described in
this notice (basket option contract) is
open, only the following parties are
treated as participating in the listed trans-
action identified in this notice: (1) the
purchaser of the basket option contract,
(2) if the purchaser of the basket option
contract is a partnership, any general part-
ner of the purchaser, (3) if the purchaser
of the basket option contract is a limited
liability company, any managing member
of the purchaser, and (4) the counterparty
to the basket option contract.

#### .03 Time for Disclosure

For rules regarding the time for provid-
ing disclosure of a transaction described
in this notice, see § 1.6011-4(e) and
§ 301.6111-3(e). However, if, under
§ 1.6011-4(e), a taxpayer is required to
file a disclosure statement with respect to
the listed transaction described in this no-
tice after October 21, 2015, and prior to
January 19, 2016, that disclosure state-
ment will be considered to be timely filed
if the taxpayer alternatively files the dis-
closure with the Office of Tax Shelter
Analysis by January 19, 2016.

#### .04 Material Advisor Threshold Amount

For the threshold amounts necessary to
become a material advisor to a listed
transaction, see § 301.6111-3(b)(3)(i)(B).

### .05 Penalties and Period of Limitations

Persons required to disclose these
transactions under § 1.6011-4 who fail to
do so may be subject to the penalty under
§ 6707A. Persons required to disclose
these transactions under § 6111 who fail
to do so may be subject to the penalty
under § 6707(a). Persons required to
maintain lists of advisees under § 6112
who fail to do so (or who fail to provide
such lists when requested by the IRS) may
be subject to the penalty under § 6708(a).
In addition, the IRS may impose other
penalties on parties involved in these
transactions or substantially similar trans-
actions, including the accuracy-related
penalty under §§ 6662 or 6662A. Persons
required to disclose these transactions un-
der § 1.6011-4 who fail to do so may be
subject to an extended period of limita-
tions on assessment under § 6501(c)(10).

The Treasury Department and the IRS
recognize that some taxpayers may have
filed tax returns taking the position that
they were entitled to the purported tax
benefits of the type of transaction de-
scribed in this notice. These taxpayers
should take appropriate corrective action
and ensure that their transactions are dis-
closed properly.

### .06 Requests for a Change in Method of Accounting

(1) Background. Section 446(e) and
§ 1.446-1(e) provide that, except as oth-
erwise provided, a taxpayer must secure
the consent of the Commissioner before
changing a method of accounting for fed-
eral income tax purposes. Section 1.446-
1(e)(3)(i) provides that, to obtain the
Commissioner's consent to an accounting
method change, a taxpayer must file a
Form 3115, Application for Change in
Accounting Method, during the taxable
year in which the taxpayer desires to make
the proposed change. Section 1.446-
1(e)(3)(ii) authorizes the Commissioner to
prescribe administrative procedures set-
ting forth the limitations, terms, and con-
ditions deemed necessary to permit a tax-
payer to obtain consent to change a

4See section 3.01 for disclosure requirements.

5See section 3.01 for disclosure requirements.

method of accounting in accordance with
§ 446(e).

Rev. Proc. 2015-13, 2015-5 I.R.B.
419, as clarified and modified by Rev.
Proc. 2015-33, 2015-24 I.R.B. 1067, pro-
vides the procedures for obtaining the
consent of the Commissioner to change a
method of accounting for Federal income
tax purposes. Under the non-automatic
change procedures of Rev. Proc. 2015-13,
a taxpayer generally must file a Form
3115 during the year of change. When a
taxpayer computes its taxable income us-
ing a method of accounting that differs
from the method of accounting used dur-
ing the preceding taxable year, a § 481(a)
adjustment is required to prevent the du-
plication or omission of taxable income.
See § 1.446-1(e)(3)(ii).

Section 11.02 of Rev. Proc. 2015-13
states that the national office will deny
any Form 3115 requesting consent to
make a change in method of accounting in
any situation in which the national office
determines that permitting the requested
change in method of accounting would
not clearly reflect income or would other-
wise not be in the interest of sound tax
administration. As part of this determina-
tion, the national office will consider
whether the change in method of account-
ing would clearly and directly frustrate
compliance efforts of the IRS in adminis-
tering the income tax laws. The national
office will consider all the facts and cir-
cumstances and exercise discretion under
§§ 446(e) and 481(c) in a manner that
generally minimizes distortions of income
across taxable years, as well as on an
annual basis.

Rev. Rul. 90-38, 1990-1 C.B. 57, pro-
vides that, if a taxpayer uses an erroneous
method of accounting for two or more
consecutive taxable years, the taxpayer
has adopted a method of accounting. The
ruling further provides that a taxpayer
may not, without the Commissioner's
consent, retroactively change from an er-
roneous to a permissible method of ac-
counting by filing an amended return. See
also Rev. Proc. 2015-13, section 2.03(1).

(2) In general. The IRS has deter-
mined that it is not in the interest of
sound tax administration to permit a
prospective change in method of ac-

counting6 for a transaction within the
scope of this notice. Accordingly, the
IRS will not process applications for
any changes in method of accounting
filed under the non-automatic change
procedures of Rev. Proc. 2015-13 for a
transaction within the scope of this no-
tice. A taxpayer may, however, change
its method of accounting for a transac-
tion within the scope of this notice by
filing an amended return in accordance
with section 3.06(3) of this notice.

(3) Change in method of accounting by
filing amended returns.

(a) In general. In accordance with
§ 1.446-1(e)(3)(ii) and Rev. Rul. 90-38,
consent is hereby granted for any taxpayer
that has engaged in a transaction within
the scope this notice to file amended re-
turns to retroactively change from an im-
permissible method of accounting to a
permissible method of accounting for the
transaction. This consent is granted only if
the taxpayer files such amended returns
using a permissible method of accounting
for such transactions for the first taxable
year in which the taxpayer used the im-
permissible method of accounting for any
such transaction (or if the period of limi-
tations has expired for such taxable year,
for the first taxable year for which the
period of limitations has not expired) and
for each subsequent taxable year in which
the taxpayer's use of the impermissible
method of accounting for these transac-
tions affected the taxpayer's taxable in-
come. If the period of limitations has ex-
pired for the first taxable year in which a
taxpayer used the impermissible method
of accounting for these transactions and
the taxpayer files amended returns pursu-
ant to this notice, the amended return for
the first taxable year for which the period
of limitations has not expired must in-
clude the entire amount of the § 481(a)
adjustment, whether positive or negative,
attributable to the change in accounting
method as ordinary in character. The
terms, conditions, and administrative pro-
cedures of Rev. Proc. 2015-13, as clari-
fied and modified by Rev. Proc. 2015-33,
do not apply to a taxpayer changing its
method of accounting by amending its
Federal income tax returns under section
3.06(3) of this notice.

(b) Manner of making change.

A taxpayer filing amended returns under
this notice must comply with the require-
ments of § 1.6011-4 including, but not lim-
ited to, attaching to the amended return any
disclosure statements that may be required
in accordance with § 1.6011-4(a) and (e).
In addition, a taxpayer filing an amended
return under this section 3.06(3)(b) must
write "FILED UNDER NOTICE 2015-73"
at the top of any amended paper return or,
with respect to any amended return submit-
ted electronically, must indicate "FILED
UNDER NOTICE 2015-73."

## SECTION 4. EFFECT ON OTHER DOCUMENTS

Notice 2015-47 is revoked.

## SECTION 5. DRAFTING INFORMATION

The principal authors of this notice are
Orla J. O'Connor and Robert A. Martin of
the Office of the Associate Chief Counsel
(Financial Institutions and Products). For
further information regarding this notice,
contact Ms. O'Connor at (202) 317-6367
or Mr. Martin at (202) 317-4455 (not toll-
free numbers).

## Transaction of Interest- Basket Contracts Notice 2015-74

The Treasury Department and the In-
ternal Revenue Service (the "IRS") are
aware of a type of structured financial
transaction, described below, in which a
taxpayer attempts to defer income recog-
nition and may attempt to convert short-
term capital gain and ordinary income to
long-term capital gain through a contract
denominated as an option, notional prin-
cipal contract, forward contract, or other
derivative contract. The Treasury Depart-
ment and the IRS believe this transaction
(the "basket contract") has a potential for
tax avoidance or evasion but lack enough
information to determine whether the
transaction should be identified specifically
as a tax avoidance transaction. Notice 2015-
48, 2015-30 I.R.B. 77, identified the basket

"Nothing in this notice may be construed as identifying whether the taxpayer's treatment of any particular aspect of a transaction described in this notice is a method of accounting.

contract and substantially similar transac-
tions as transactions of interest for purposes
of § 1.6011-4(b)(6) of the Income Tax Reg-
ulations and §§ 6111 and 6112 of the Inter-
nal Revenue Code ("the Code"). Notice
2015-48 also alerted persons involved in
these transactions about certain responsibil-
ities that may arise from their involvement
with these transactions.

Commenters expressed concern that
difficulty in identifying transactions that
are the same as, or substantially similar to,
the transaction described in Notice
2015-48 may cause taxpayers to file dis-
closures for transactions that are not in-
tended to be treated as transactions of
interest at this time. This notice revokes
Notice 2015-48. Section 2 of this notice
provides additional details on the types of
transactions that are the same as or sub-
stantially similar to the transaction de-
scribed in this notice, and thus transac-
tions of interest for purposes of § 1.6011-
4(b)(6) and §§ 6111 and 6112 of the Code.
Section 3.06 of this notice provides pro-
cedures for taxpayers to change their
method of accounting for transactions
within the scope of this notice.

Section 2.04 of this notice more spe-
cifically describes the tax benefits that
identify the transaction described in this
notice as a transaction of interest. No in-
ference is intended regarding the appro-
priate treatment of transactions not de-
scribed in this notice. The IRS may
challenge, including by asserting judicial
doctrines, claimed tax benefits under
§§ 871, 881 and 882 or other provisions of
the Code, and assert failures to comply
with reporting obligations associated with
investments in passive foreign investment
companies and withholding and reporting
obligations under Chapters 3 and 4 of the
Code.

## SECTION 1. BACKGROUND

In a basket contract, a taxpayer ("T")
enters into a contract with a counterparty
("C") to receive a return based on the
performance of a notional basket of refer-
enced assets (the "reference basket"). The
assets that comprise the reference basket
may include (1) interests in entities that

trade securities, commodities, foreign cur-
rency, or similar property ("hedge fund
interests"), (2) securities, (3) commodi-
ties, (4) foreign currency, or (5) similar
property (or positions in such property).
T, or a designee named by T, will either
determine the assets that comprise the ref-
erence basket or design or select a trading
algorithm that determines the assets.
While the basket contract remains open,
T1 has the right to change the assets in the
reference basket, request that C change
the assets in the reference basket, change
the trading algorithm, or request that C
change the trading algorithm (collec-
tively, discretion).2 The terms of the bas-
ket contract may permit C to reject certain
changes requested by T to the assets in the
reference basket or the trading algorithm.
C, however, generally accepts all or
nearly all of the changes requested by T.

When the basket contract is entered
into, T typically makes an upfront cash
payment to C of between 10 and 40 per-
cent of the value of the assets in the ref-
erence basket. To manage its risk under
the basket contract, C typically acquires
all or substantially all of the assets in the
reference basket at the inception of the
contract and acquires and disposes of as-
sets during the term of the contract either
when T changes the assets in the reference
basket or the trading algorithm provides
for such changes. C generally supplies the
additional cash required to purchase the
assets in the reference basket. The assets
in the reference basket would typically
generate ordinary income if held directly
by T, and short-term gains and losses if
purchases and sales of the assets were
carried out directly by T.

The basket contract has a stated term of
more than one year or overlaps two of T's
taxable years but contains provisions that
in effect allow either party to terminate
the contract at any time during the stated
contract term with proper notice. The
amount that T receives upon settlement of
the basket contract is based on the perfor-
mance of the assets in the reference bas-
ket. A common payout formula on the
basket contract entitles T to a return equal
to the upfront payment, plus net basket

gain or minus net basket loss. The net
basket gain or net basket loss includes net
changes in the values of the assets in the
reference basket, together with interest,
dividend, and other periodic income on
the assets, reduced by C's fee for its role
in the transaction. The basket contract typ-
ically includes a provision automatically
terminating the contract if the amount of
the net basket loss reaches the amount of
the upfront payment, giving T a cash set-
tlement amount of zero. The basket con-
tract also may permit or require T to pro-
vide additional collateral or otherwise
reduce risk in the reference basket if a
specified level of risk is reached.

The basket contract typically contains
other safeguards to minimize the eco-
nomic risk to C. For example, C may
terminate the basket contract if T violates
investment guidelines that are part of the
contract. C typically holds the rights as-
sociated with legal title to the assets and
positions in the reference basket, includ-
ing voting rights and the right to commin-
gle, lend, pledge, transfer, or otherwise
use the assets in the basket without notice
to T.

T takes the position that T's short-term
trading gains and interest, dividend, and
other ordinary periodic income from the
performance of the reference basket are
deferred until the basket contract termi-
nates and, if the basket contract is held for
more than one year, that the entire gain is
treated as long-term capital gain.

The Treasury Department and the IRS
are concerned that taxpayers may be using
a basket contract to inappropriately defer
income recognition or convert ordinary
income or short-term capital gain into
long-term capital gain. In some cases, tax-
payers also may be mischaracterizing the
form of the transaction to avoid applica-
tion of § 1260. Therefore, the Treasury
Department and the IRS are identifying
transactions described in section 2 of this
notice as transactions of interest. The
Treasury Department and the IRS believe
that the use of a basket contract to claim
the tax treatment specified herein may be
improper.

2See also section 2.03 of this notice.

## SECTION 2. TRANSACTIONS OF INTEREST

### .01 Transactions Identified as Transactions of Interest

A transaction is the same as, or sub-
stantially similar to, the transaction of in-
terest identified in this notice only if: (1) T
enters into a contract with C to receive a
return based on the performance of the
reference basket; (2) the basket contract
has a stated term of more than one year or
overlaps two of T's taxable years; (3) T or
T's designee (as defined in section 2.02 of
this notice) has exercised discretion (as
defined in section 2.03 of this notice) to
change (either directly or through a re-
quest to C) the assets in the reference
basket or the trading algorithm; and (4)
T's tax return for a taxable year ending on
or after January 1, 2011,3 reflects a tax
benefit described in section 2.04 of this
notice. Notwithstanding any other provi-
sion in this notice, a transaction is not the
same as, or substantially similar to, the
transaction of interest identified in this
notice if the transaction is described in
section 2.05 of this notice.

### .02 Designee

fee for the right to use, or the person's
authority to suggest, request, or determine
changes in the assets included in (y) a
widely used and publicly quoted index
that is based on objective financial infor-
mation or (z) an index that tracks a broad
market or a market segment.

### .03 Discretion

For purposes of this notice, T will not
be treated as having discretion to change
(either directly or through a request to C)
the assets in the reference basket or the
trading algorithm if changes in the assets
in the reference basket or the trading al-
gorithm are made according to objective
instructions, operations, or calculations
that are disclosed at the inception of the
transaction (the rules) and T does not have
the right to alter or amend the rules during
the term of the transaction or to deviate
from the assets in the reference basket or
the trading algorithm selected in accor-
dance with the rules. For these purposes,
T will not be treated as having authority to
alter or amend the rules solely because T
has the authority to: (1) exercise routine
judgment in the administration of the rules
provided, however, that such routine judg-
ment does not include deviations or alter-
ation to the rules that are designed to
improve the financial performance of the
reference basket; (2) correct errors in the
implementation of the rules or calcula-
tions made pursuant to the rules; or (3)
make an adjustment to respond to an un-
anticipated event outside of T's control,
such as a stock split, merger, listing or
delisting, nationalization, or insolvency of
a component of a basket, a disruption in
the financial markets for specific assets or
in a particular jurisdiction, regulatory
compliance requirement, force majeure,
or any other unanticipated event of similar
magnitude and significance.

### .04 Tax Benefit

.05 Excluded Contracts

A transaction is not the same as, or
substantially similar to, the transaction de-
scribed in this notice if: (1) the contract is
traded on (a) a national securities ex-
change that is regulated by the Securities
and Exchange Commission or a domestic
board of trade regulated by the Commod-
ity Futures Trading Commission, or (b) a
foreign exchange or board of trade that is
subject to regulation by a comparable reg-
ulator; or (2) the contract is treated as a
contingent payment debt instrument under
§ 1.1275-4 (including a short-term con-
tingent payment debt instrument) or a
variable rate debt instrument under
§ 1.1275-5. With respect to T, a transac-
tion is not the same as, or substantially
similar to, the transaction described in this
notice unless T's tax return for a taxable
year ending on or after January 1, 2011,4
reflects a tax benefit of the transaction that
is described in section 2.04 of this notice.
With respect to C, a transaction is not
the same as, or substantially similar to,
the transaction described in this notice
if: (1) T represents to C in writing under
penalties of perjury that T's tax return
has not and will not reflect a tax benefit
described in section 2.04 of this notice
in any taxable year ending on or after
January 1, 2011,5 or (2) C has estab-
lished that T is a nonresident alien that
is not engaged in a U.S. trade or busi-
ness or a foreign corporation that is not
engaged in a U.S. trade or business by
obtaining a valid withholding certificate
from the beneficial owner of the pay-
ments made or to be made under the
basket contract (W-8BEN, W-8BEN-E, or
W-8EXP), or in the case of payments
made outside of the U.S. on offshore ob-
ligations, by obtaining documentary evi-
dence as described in § 1.1441-1(c)(17).

## SECTION 3. RULES OF APPLICATION

### .01 Effective Date

Transactions entered into on or after
November 2, 2006, that are the same as,
or substantially similar to, the transac-

3See section 3.01 for disclosure requirements.

4See section 3.01 for disclosure requirements.

5See section 3.01 for disclosure requirements.

tions described in this notice, and in
effect on or after January 1, 2011, are
identified as transactions of interest for
purposes of § 1.6011-4(b)(6) and
§§ 6111 and 6112 as of October 21,
2015. Persons engaged in transactions
entered into on or after November 2,
2006, and in effect on or after January 1,
2011, must disclose the transactions as
described in § 1.6011-4 for each tax-
able year in which the taxpayer partici-
pated in the transactions, provided that
the period of limitations for assessment
of tax had not ended on or before Octo-
ber 21, 2015. Material advisors who
make a tax statement on or after January
1, 2011, with respect to transactions in
effect on or after January 1, 2011, have
disclosure and list maintenance obliga-
tions under §§ 6111 and 6112. See
§§ 301.6111-3, 301.6112-1.

Independent of their classification as
transactions of interest, transactions that
are the same as, or substantially similar to,
the transaction described in this notice
may already be subject to the require-
ments of §§ 6011, 6111, or 6112, or the
regulations thereunder. If a transaction is
identified as a listed transaction under sec-
tion 2.01 of Notice 2015-73, and as a
transaction of interest under this notice,
the transaction is identified as a listed
transaction. Persons satisfying the disclo-
sure requirements for a listed transaction
under Notice 2015-73 are deemed to have
satisfied the disclosure requirements un-
der this notice.

When the Treasury Department and the
IRS have gathered enough information to
make an informed decision as to whether
these transactions are a tax avoidance type
of transaction, the Treasury Department
and the IRS may take one or more admin-
istrative actions, including removing the
transactions from the transactions of inter-
est category in published guidance, desig-
nating the transactions as a listed transac-
tion, or providing a new category of
reportable transactions. In the interim, in
appropriate situations, the IRS may chal-
lenge the taxpayer's position taken as part
of these transactions under §§ 1260, 1001,
or other provisions of the Code or under
judicial doctrines, such as substance over
form.

### .02 Participation

Under § 1.6011-4(c)(3)(i)(E), for each
year in which a transaction described in
this notice (basket contract) is open, only
the following parties are treated as partic-
ipating in the transaction of interest iden-
tified in this notice: (1) the purchaser of
the basket contract, (2) if the purchaser of
the basket contract is a partnership, any
general partner of the purchaser, (3) if the
purchaser of the basket contract is a lim-
ited liability company, any managing
member of the purchaser, and (4) the
counterparty to the basket contract.

### .03 Time for Disclosure

For rules regarding the time for provid-
ing disclosure of a transaction described
in this notice, see § 1.6011-4(e) and
§ 301.6111-3(e). However, if, under
§ 1.6011-4(e), a taxpayer is required to
file a disclosure statement with respect to
the transaction of interest described in this
notice after October 21, 2015, and prior to
January 19, 2016, that disclosure state-
ment will be considered to be timely filed
if the taxpayer alternatively files the dis-
closure with the Office of Tax Shelter
Analysis by January 19, 2016.

### .04 Material Advisor Threshold Amount

The threshold amounts are the same
as those for listed transactions. See
§ 301.6111-3(b)(3)(i)(B).

### .05 Penalties

The Treasury Department and the IRS
recognize that some taxpayers may have
filed tax returns taking the position that

they were entitled to the purported tax
benefits of the type of transaction de-
scribed in this notice. These taxpayers
should take appropriate corrective action
and ensure that their transactions are dis-
closed properly.

### .06 Requests for a Change in Method of Accounting

When a taxpayer computes its taxable
income using a method of accounting that
differs from the method of accounting
used during the preceding taxable year, a
§ 481(a) adjustment is required to prevent
the duplication or omission of taxable in-
come. Except as otherwise provided in
Rev. Proc. 2015-13, a letter ruling to the
taxpayer, or in other guidance published
in the Internal Revenue Bulletin, section
7.03 of Rev. Proc. 2015-13 provides that
a positive § 481(a) adjustment is taken
into account ratably over four taxable
years, and a negative § 481(a) adjustment
is taken into account in one taxable year.
A taxpayer that timely files a Form 3115
under Rev. Proc. 2015-13 generally re-
ceives audit protection for taxable years

prior to the year of change, as provided in
section 8 of Rev. Proc. 2015-13.

(2) In general.6

(a) Deferral transaction. A taxpayer
that wants to change a method of account-
ing for a transaction described in this no-
tice, for a transaction from which the tax-
payer's only tax benefit is a deferral of
income into a later taxable year (a "defer-
ral transaction"), may change its method
of accounting for the deferral transaction
by either: (1) filing amended returns in
accordance with section 3.06(3) of this
notice, or (2) if eligible, requesting a
change in method of accounting under the
non-automatic change procedures of Rev.
Proc. 2015-13 subject to the rules pro-
vided in section 3.06(4) of this notice.

(b) Conversion transaction. The IRS
has determined that it is not in the interest
of sound tax administration to permit a
prospective change in method of account-

ing for a transaction within the scope of
this notice that involves the conversion of
ordinary income or short-term capital gain
or loss into long-term capital gain or loss
(a "conversion transaction"). Accord-
ingly, the IRS will not process applica-
tions for any changes in method of ac-
counting filed under the non-automatic
change procedures of Rev. Proc. 2015-13
for a conversion transaction within the
scope of this notice. A taxpayer may,
however, change its method of accounting
for a conversion transaction within the
scope of this notice by filing an amended
return in accordance with section 3.06(3)
of this notice.

(3) Change in method of accounting by
filing amended returns.

(a) In general. In accordance with
§ 1.446-1(e)(3)(ii) and Rev. Rul. 90-38,
consent is hereby granted for any taxpayer
that has engaged in a transaction within
the scope of this notice, to file amended
returns to retroactively change from an
impermissible method of accounting to a
permissible method of accounting for the
transaction. This consent is granted only if
the taxpayer files such amended returns
using a permissible method of accounting
for such transactions for the first taxable
year in which the taxpayer used the im-
permissible method of accounting for any
such transaction (or if the period of limi-
tations has expired for such taxable year,
for the first taxable year for which the
period of limitations has not expired) and
for each subsequent taxable year in which
the taxpayer's use of the impermissible
method of accounting for these transac-
tions affected the taxpayer's taxable in-
come. If the period of limitations has ex-
pired for the first taxable year in which a
taxpayer used the impermissible method
of accounting for these transactions and
the taxpayer files amended returns pursu-
ant to this notice, the amended return for
the first taxable year for which the period
of limitations has not expired must in-
clude the entire amount of the § 481(a)
adjustment, whether positive or negative,
attributable to the change in accounting
method as ordinary in character. The
terms, conditions, and administrative pro-
cedures of Rev. Proc. 2015-13, as clari-

fied and modified by Rev. Proc. 2015-33,
do not apply to a taxpayer changing its
method of accounting by amending its
Federal income tax returns under section
3.06(3) of this notice.

(b) Manner of making change.

A taxpayer filing amended returns un-
der this notice must comply with the re-
quirements of § 1.6011-4 including, but
not limited to, attaching to the amended
return any disclosure statements that may
be required in accordance with § 1.6011-
4(a) and (e). In addition, a taxpayer filing
an amended return under this section
3.06(3)(b) must write "FILED UNDER
NOTICE 2015-74" at the top of any
amended paper return or, with respect to
any amended return submitted electroni-
cally, must indicate "FILED UNDER NO-
TICE 2015-74."

(4) Filing Form 3115 under Rev. Proc.
2015-13 for a deferral transaction. A tax-
payer that wants to change its method of
accounting under Rev. Proc. 2015-13 for a
deferral transaction described in this notice,
must use the non-automatic change proce-
dures in Rev. Proc. 2015-13. Consistent
with the discretion granted to the National
Office under sections 7.01 and 7.03 of Rev.
Proc. 2015-13, a taxpayer making a change
in method of accounting under Rev. Proc.
2015-13 to the method described in this
notice must take into account the entire
amount of a positive § 481(a) adjustment in
the taxable year of change.

## SECTION 4. EFFECT ON OTHER DOCUMENTS

Notice 2015-48 is revoked.

## SECTION 5. DRAFTING INFORMATION

"Nothing in this notice may be construed as identifying whether the taxpayer's treatment of any particular aspect of a transaction described in this notice is a method of accounting.

## 2016 Limitations Adjusted As Provided in Section 415(d), etc.

### Notice 2015-75

Section 415 of the Internal Revenue
Code (the Code) provides for dollar limi-
tations on benefits and contributions under
qualified retirement plans. Section 415(d)
requires that the Secretary of the Treasury
annually adjust these limits for cost-of-
living increases. Other limitations appli-
cable to deferred compensation plans are
also affected by these adjustments under
§ 415. Under § 415(d), the adjustments
are to be made under adjustment proce-
dures similar to those used to adjust ben-
efit amounts under § 215(i)(2)(A) of the
Social Security Act.

#### Cost-of-Living Adjusted Limits for 2016

Effective January 1, 2016, the limita-
tion on the annual benefit under a defined
benefit plan under § 415(b)(1)(A) remains
unchanged at $210,000.

For a participant who separated from
service before January 1, 2016, the partic-
ipant's limitation under a defined benefit
plan under § 415(b)(1)(B) is computed by
multiplying the participant's compensa-
tion limitation, as adjusted through 2015,
by 1.0011.

The limitation for defined contribution
plans under § 415(c)(1)(A) remains un-
changed in 2016 at $53,000.

The Code provides that various other
dollar amounts are to be adjusted at the
same time and in the same manner as the
dollar limitation of § 415(b)(1)(A). After
taking into account the applicable round-
ing rules, the amounts for 2016 are as
follows:

The limitation under § 402(g)(1) on the
exclusion for elective deferrals described
in § 402(g)(3) remains unchanged at
$18,000.

The annual compensation limit under
§§ 401(a)(17), 404(l), 408(k)(3)(C),
and 408(k)(6)(D)(ii) remains un-
changed at $265,000.

The dollar limitation under § 416(i)(1)
(A)(i) concerning the definition of "key

employee" in a top-heavy plan remains
unchanged at $170,000.

The dollar amount under § 409(o)(1)(C)(ii)
for determining the maximum account
balance in an employee stock owner-
ship plan subject to a 5-year distribu-
tion period remains unchanged at
$1,070,000, while the dollar amount
used to determine the lengthening of
the 5-year distribution period remains
unchanged at $210,000.

The limitation used in the definition of
"highly compensated employee" under
§ 414(q)(1)(B) remains unchanged at
$120,000.

The dollar limitation under § 414(v)(2)
(B)(i) for catch-up contributions to an
applicable employer plan other than a
plan described in § 401(k)(11) or
§ 408(p) for individuals aged 50 or
over remains unchanged at $6,000.
The dollar limitation under
§ 414(v)(2)(B)(ii) for catch-up contri-
butions to an applicable employer plan
described in § 401(k)(11) or 408(p) for
individuals aged 50 or over remains
unchanged at $3,000.

The annual compensation limitation
under § 401(a)(17) for eligible partici-
pants in certain governmental plans
that, under the plan as in effect on July
1, 1993, allowed cost-of-living adjust-
ments to the compensation limitation
under the plan under § 401(a)(17) to be
taken into account, remains unchanged
at $395,000.

The compensation amount under
§ 408(k)(2)(C) regarding simplified
employee pensions (SEPs) remains un-
changed at $600.

The limitation under § 408(p)(2)(E) re-
garding SIMPLE retirement accounts
remains unchanged at $12,500.

The limitation on deferrals under
§ 457(e)(15) concerning deferred com-
pensation plans of state and local gov-
ernments and tax-exempt organizations
remains unchanged at $18,000.

The compensation amounts under
§ 1.61-21(f)(5)(i) of the Income Tax
Regulations concerning the definition of
"control employee" for fringe benefit
valuation purposes remains unchanged at

$105,000. The compensation amount un-
der § 1.61-21(f)(5)(iii) remains unchanged
at $215,000.

The Code provides that the $1,000,000,000
threshold used to determine whether a
multiemployer plan is a systematically im-
portant plan under § 432(e)(9)(H)(v)(III)(aa) is
adjusted using the cost-of-living adjustment
provided under § 432(e)(9)(H)(v)(III)(bb).
After taking the applicable rounding
rule into account, the threshold used to
determine whether a multiemployer plan
is a systematically important plan under
§ 432(e)(9)(H)(v)(III)(aa) is increased in
2016 from $1,000,000,000 to $1,012,000,000.

The Code also provides that several
retirement-related amounts are to be ad-
justed using the cost-of-living adjustment
under § 1(f)(3). After taking the applica-
ble rounding rules into account, the
amounts for 2016 are as follows:

The adjusted gross income limitation un-
der § 25B(b)(1)(A) for determining the
retirement savings contribution credit for
married taxpayers filing a joint return is
increased from $36,500 to $37,000; the
limitation under § 25B(b)(1)(B) is in-
creased from $39,500 to $40,000; and
the limitation under §§ 25B(b)(1)(C) and
25B(b)(1)(D) is increased from $61,000
to $61,500.

The adjusted gross income limitation un-
der § 25B(b)(1)(A) for determining the
retirement savings contribution credit for
taxpayers filing as head of household is
increased from $27,375 to $27,750; the
limitation under § 25B(b)(1)(B) is in-
creased from $29,625 to $30,000; and
the limitation under §§ 25B(b)(1)(C) and
25B(b)(1)(D) is increased from $45,750
to $46,125.

The adjusted gross income limitation
under § 25B(b)(1)(A) for determining
the retirement savings contribution
credit for all other taxpayers is in-
creased from $18,250 to $18,500; the
limitation under § 25B(b)(1)(B) is in-
creased from $19,750 to $20,000; and
the limitation under §§ 25B(b)(1)(C)
and 25B(b)(1)(D) is increased from
$30,500 to $30,750.

The deductible amount under § 219(b)
(5)(A) for an individual making quali-
fied retirement contributions remains
unchanged at $5,500.

The applicable dollar amount under
§ 219(g)(3)(B)(i) for determining the
deductible amount of an IRA contribu-
tion for taxpayers who are active par-
ticipants in a qualified plan (or another
retirement plan specified in § 219(g)
(5)) filing a joint return or as a quali-
fying widow(er) remains unchanged at
$98,000. The applicable dollar amount
under § 219(g)(3)(B)(ii) for all other tax-
payers (other than married taxpayers fil-
ing separate returns) remains unchanged
at $61,000. The applicable dollar amount
under § 219(g)(3)(B)(iii) for a married
individual filing a separate return is not
subject to an annual cost-of-living adjust-
ment and remains $0. The applicable
dollar amount under § 219(g)(7)(A) for a
taxpayer who is not an active participant
but whose spouse is an active participant
is increased from $183,000 to $184,000.

Accordingly, under § 219(g)(2)(A), the
deduction for taxpayers making contri-
butions to a traditional IRA is phased
out for single individuals and heads of
household who are active participants
in a qualified plan (or another retire-
ment plan specified in § 219(g)(5)) and
have adjusted gross incomes (as de-
fined in § 219(g)(3)(A)) between
$61,000 and $71,000. This income
phase-out range remains unchanged.
For married couples filing jointly, if the
spouse who makes the IRA contribu-
tion is an active participant, the income
phase-out range remains unchanged at
$98,000 to $118,000. For an IRA con-
tributor who is not an active participant
and is married to someone who is an
active participant, the deduction is
phased out if the couple's income is
between $184,000 and $194,000, in-
creased from between $183,000 and
$193,000. For a married individual fil-
ing a separate return who is an active
participant, the phase-out range is not
subject to an annual cost-of-living ad-
justment and remains $0 to $10,000.

The adjusted gross income limitation
under § 408A(c)(3)(B)(ii)(I) for deter-
mining the maximum Roth IRA contri-
bution for married taxpayers filing a
joint return or for taxpayers filing as a
qualifying widow(er) is increased from
$183,000 to $184,000. The adjusted
gross income limitation under

§ 408A(c)(3)(B)(ii)(II) for all other
taxpayers (other than married taxpay-
ers filing separate returns) is in-
creased from $116,000 to $117,000.
The applicable dollar amount under
§ 408A(c)(3)(B)(ii)(III) for a married
individual filing a separate return is
not subject to an annual cost-of-
living adjustment and remains $0.

Accordingly, under § 408A(c)(3)(A),
the adjusted gross income phase-out
range for taxpayers making contribu-
tions to a Roth IRA is $184,000 to
$194,000 for married couples filing
jointly, increased from $183,000 to
$193,000. For singles and heads of
household, the income phase-out range
is $117,000 to $132,000, increased
from $116,000 to $131,000. For a mar-
ried individual filing a separate return,
the phase-out range is not subject to an
annual cost-of-living adjustment and
remains $0 to $10,000.

The dollar amount under § 430(c)(7)(D)
(i)(II) used to determine excess employee
compensation with respect to a single-
employer defined benefit pension plan
for which the special election under
§ 430(c)(2)(D) has been made is in-
creased from $1,101,000 to $1,106,000.

#### Drafting Information

The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further
information regarding this notice, contact
Mr. Morgan at 202-317-6700 or John Heil
at 443-853-5519 (not toll-free numbers).

##### REQUEST FOR COMMENTS REGARDING THE EXCISE TAX ON AMOUNTS PAID FOR THE RIGHT TO PROVIDE MILEAGE AWARDS

###### Notice 2015-76

SECTION 1. PURPOSE

The Treasury Department and the In-
ternal Revenue Service (IRS) are consid-

ering exercising their authority under
§ 4261(e)(3)(C) of the Internal Revenue
Code (Code) to prescribe rules to exclude
from the tax imposed by § 4261(a) certain
amounts attributable to mileage awards
(sometimes referred to as “frequent flyer
miles") that are redeemed other than for
the taxable transportation of persons by
air (referred to in this notice as "other than
for taxable air transportation"), such as,
but not limited to, redemptions for inter-
national air transportation, restaurant gift
cards, magazine and newspaper subscrip-
tions, free hotel nights, and items from the
airline's shopping catalog. This notice in-
vites public comments on issues that
should be addressed in guidance relating
to § 4261(e)(3).

## SECTION 2. BACKGROUND

Section 4261(a) of the Code imposes a
tax on the amount paid for the taxable
transportation of any person.

Section 4262(a) defines "taxable trans-
portation" to generally include transporta-
tion by air that begins and ends in the
United States.

Section 4261(d) provides that the tax is
paid by the person making the payment
subject to tax, and § 4291 provides that
the tax is collected by the person receiving
the payment.

Section 4261(e)(3)(A) provides that for
purposes of § 4261(a) any amount paid
(and the value of any other benefit pro-
vided) to an air carrier (or any related
person) for the right to provide mileage
awards for (or other reductions in the cost
of) any transportation of persons by air is
treated as an amount paid for taxable
transportation.

Section 4261(e)(3)(C) provides that the
Secretary may prescribe rules that exclude
amounts attributable to mileage awards
that are used other than for the transpor-
tation of persons by air from the tax im-
posed by § 4261(a).

Congress enacted § 4261(e) as part of
the Taxpayer Relief Act of 1997 (Public
Law 105-34, 111 Stat. 788). The General
Explanation of Tax Legislation Enacted in
1997 (General Explanation), prepared by
the Joint Committee on Taxation, JCS-23-97
at 230-231, explains that § 4261(e)(3)(C)
authorizes the Treasury Department to de-
velop regulations excluding from the
§ 4261(a) tax base a portion of otherwise

taxable payments, if any, with respect to
awarded frequent flyer miles "if the Trea-
sury determines that a portion properly
can be allocated (traced) to frequent flyer
miles that are used by consumers for pur-
poses other than air transportation." Gen-
eral Explanation at 231. The General Ex-
planation further states that as part of any
rulemaking process it undertakes, the
Treasury Department is authorized to re-
view airline mileage awards programs and
other information from all available
sources, including industry and third-
party data, in determining whether fre-
quent flyer miles can be adequately traced
to support allocations based on the ulti-
mate use of the frequent flyer miles. The
General Explanation also states that Con-
gress intended that any adjustment to the
tax base will be prescribed only if the
Treasury Department finds a consistent
pattern of non-air transportation usage of
frequent flyer miles by consumers at lev-
els indicating that significant mileage
awarded pursuant to payments taxable un-
der § 4261(e)(3) are being used for pur-
poses other than for taxable air transpor-
tation.

The Treasury Department and the IRS
have not prescribed an allocation method
that taxpayers (for example, credit card
companies) and collectors (typically air-
lines' mileage awards programs) can use
to exclude from the taxes imposed by
§ 4261(a) amounts attributable to mileage
awards that are used other than for taxable
air transportation. As a result, taxpayers
currently must pay tax on all frequent
flyer miles purchased from an airline
mileage awards program and then file a
claim for credit or refund for tax paid on

those frequent flyer miles that were ulti-
mately redeemed other than for taxable air
transportation.

The Treasury Department and the IRS
are considering a possible methodology,
described in Section 3 of this Notice, that
would allow a reduction in a taxpayer's
§ 4261(a) tax base for amounts paid for
mileage awards based on historical re-
demption data.

## SECTION 3. POSSIBLE METHODOLOGY FOR DETERMINING REDUCTION IN SECTION 4261(a) TAX BASE

The Treasury Department and the
IRS are considering an elective safe har-
bor methodology that a collector could
use to reduce a taxpayer's § 4261(a) tax
base on purchased frequent flyer miles.
Under the methodology, for each 12
month period beginning on April 1 and
ending on March 31 (the "Election
Year"), the tax base for frequent flyer
miles purchased from a particular airline
mileage awards program would be re-
duced based on redemption data from
that airline mileage awards program for
the calendar year immediately preceding
the calendar year in which the Election
Year begins (the "Base Period").

The methodology would be based on
the following data from the Base Period:

· Total number of frequent flyer miles
redeemed under that program.

· Number of frequent flyer miles under
that program redeemed for taxable air
transportation.

· Number of frequent flyer miles re-
deemed under that program other than
for taxable air transportation.

More specifically, for each specific air-
line mileage awards program (that is, on a
per airline mileage awards program basis),
a collector may reduce the tax base upon
which the tax imposed by § 4261(a) is
calculated by applying the following ratio:

i) The number of frequent flyer miles
under that program that the airline data
shows were redeemed during the Base
Period other than for taxable air trans-
portation; over

ii) The total number of frequent flyer
miles under that program that the air-
line data shows were redeemed during
the Base Period.

The collector will multiply the amount
paid for the right to provide frequent flyer
miles under the program by the ratio de-
termined above (the "Exclusion Ratio")
and will reduce the § 4261(a) tax base on
the purchased frequent flyer miles by this
amount. The Exclusion Ratio would apply
for the entire Election Year.

Example. The following example illus-
trates this methodology:

On April 1, 2015, Company buys
5,000,000 frequent flyer miles from Air-
line X's only mileage award program for
$.01 per frequent flyer mile (for a total
cost of $50,000). Under current law, if the
§ 4261(a) tax is calculated on the gross
purchase of the frequent flyer miles, the
tax due on the purchase will be $3,750
($50,000 x 7.5%).

For the applicable Base Period (that is,
January 1, 2014, through December 31,
2014), Airline X data indicates that fre-
quent flyer miles were redeemed as noted
in the table below:

Base Period

Total Frequent Flyer Miles Redeemed

Frequent Flyer Miles Redeemed for Taxable Air Transportation

Frequent Flyer Miles Redeemed for Non-Taxable Purposes

1/1/2014 - 12/31/2014

100,000,000

70,000,000

30,000,000

Following the methodology described
above, Airline X may reduce Company's
tax base on the purchased frequent flyer
miles as follows:

· Frequent flyer miles redeemed other
than for taxable air transportation in
the Base Period divided by total frequent

flyer miles redeemed in that period:
30,000,000 = 100,000,000 = 30%.

· Exclusion Ratio calculated in the
previous step applied to the frequent
flyer miles purchased on April 1,
2015: 30% x $50,000 amount paid
for frequent flyer miles = § 4261(a)
tax base reduction of $15,000. This

results in a § 4261(a) tax base of
$35,000 ($50,000 less $15,000).

Therefore, under this methodology, the
tax due on the April 1, 2015, purchase is
$2,625 ($35,000 § 4261(a) tax base x
7.5%).

## SECTION 4. POSSIBLE PROCEDURES FOR A COLLECTOR ADOPTING AN EXCLUSION RATIO FOR A PROGRAM FOR A YEAR

4.01 The collector would file a new
form (to be designated by the IRS at a
future date) reporting the Exclusion Ratio
to the IRS by February 1 following the
close of the Base Period. The collector's
filing of the form by February 1 consti-
tutes an election to use the safe harbor
methodology. The election would be irre-
vocable for all frequent flyer miles pur-
chased from the collector during the Elec-
tion Year beginning on April 1 following
the close of the Base Period.

4.02 The collector would provide noti-
fication of the adoption of the use of an
Exclusion Ratio and specify the ratio itself
in program literature available to taxpay-
ers by February 1.

4.03 The collector would be required to
use the Exclusion Ratio reported by the
collector in its February 1 filing for the
entire Election Year.

4.04 A taxpayer that purchased fre-
quent flyer miles offered by the collector
would be deemed to have elected applica-
tion of the safe harbor methodology. The
collector would be required to reference
this deemed election in program literature
available to taxpayers.

4.05 A taxpayer would not subse-
quently be able to obtain a credit or refund
for a portion of the tax paid if the percent-
age of frequent flyer miles ultimately re-
deemed other than for taxable air trans-
portation ends up being higher than the
percentage calculated under the safe har-
bor methodology, nor would the taxpayer
be assessed additional § 4261(a) tax if the
percentage ends up being lower.

## SECTION 5. POSSIBLE PROCEDURES FOR FILING FORM 720 APPLYING AN EXCLUSION RATIO

A box would be added to Part I, Com-
munications and Air Transportation
Taxes, line IRS no. 26, of Form 720,
Quarterly Federal Excise Tax Return, in
which the collector would report the Ex-
clusion Ratio.

## SECTION 6. REQUEST FOR COMMENTS

The Treasury Department and the IRS
request comments on issues that should be
addressed in guidance relating to § 4261(e)(3).
Specifically, the Treasury Department and
the IRS request comments addressing the
following:

· Whether the methodology in Section 3
of this notice, if adopted, is workable
for taxpayers, airlines, and other po-
tential stakeholders.

· Whether the methodology in Section
3 of this notice, if adopted, should be
adopted as a rule of general applicability
instead of as a safe harbor provision.

· Whether the methodology in Section 3
of this notice should be modified to
take into account a longer or shorter
period of historical data.

· Whether airlines (or airline mileage
awards programs) are willing to share
historical data with taxpayers so that
taxpayers can verify the tax base upon
which the § 4261(a) tax is applied
when a taxpayer purchases frequent
flyer miles.

· Whether in lieu of the methodology in
Section 3 of this notice, the Treasury
Department and the IRS should pro-
vide an allocation percentage that can
be applied on an airline industry-wide
basis, which the Treasury Department
and the IRS would calculate using
industry-provided data.

· How often an industry-wide alloca-
tion percentage, if adopted, should
be updated to reflect current industry
data and what is the best method for
the Treasury Department and the
IRS to collect the necessary data.

· Whether the Treasury Department and
the IRS should adopt a methodology
that is not described in this notice and
recommendations for alternative
methodologies.

· Whether the Treasury Department and
the IRS should provide a mechanism
for collectors to make adjustments to
the Exclusion Ratio to correct compu-
tational and typographical errors after
the collector reports the Exclusion Ra-
tio to the IRS, and how such a mech-
anism should work.

. Whether the procedures in Sections 4
and 5 of this notice would be workable
from the collector and the taxpayer's
perspectives.

· How to address overpayments and
underpayments of tax resulting
from errors in the Exclusion Ratio,
including whether the collector
should be responsible for such un-
derpayments.

DATE: Comments must be submitted
by March 15, 2016.

ADDRESSES: Comments, identified
by Notice 2015-76, may be sent by one of
the following methods:

· Mail:

Internal Revenue Service
CC:PA:LPD:PR (Notice 2015-76)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

· Hand or courier delivery:
Submissions may be hand delivered
Monday through Friday between the
hours of 8 a.m. and 4 p.m. to:

Courier's Desk
Internal Revenue Service
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR
(Notice 2015-76)

· Electronic:
Taxpayers may submit comments
electronically to Notice.Comments@
irscounsel.treas.gov. Please include
"Notice 2015-76" in the subject line
of any electronic communications.

All submissions will be available for
public inspection and copying in room
1621, 1111 Constitution Avenue, NW,
Washington, DC, from 9 a.m. to 4 p.m.

## SECTION 7. NO EFFECT ON OTHER DOCUMENTS

This notice does not affect any other
documents.

## SECTION 8. NO RELIANCE BY COLLECTORS OR TAXPAYERS

Unless and until the Treasury Depart-
ment and the IRS issue regulatory or other

administrative guidance under § 4261(e)(3)(C)
that adopts the methodology in Section 3
of this notice, the methodology in Section
3 of this notice does not apply for pur-
poses of calculating the tax due under
§ 4261(a), and neither excise tax collec-
tors nor taxpayers may rely on that
method or this notice.

## SECTION 9. DRAFTING INFORMATION

The principal author of this notice is
Michael H. Beker of the Office of Asso-
ciate Chief Counsel (Passthroughs & Spe-
cial Industries). For further information

regarding this notice, please contact Mr.
Beker at (202) 317-6855 (not a toll-free
number).

## Part IV. Items of General Interest

Deletions From Cumulative
List of Organizations,
Contributions to Which are
Deductible Under Section
170 of the Code

Announcement 2015-28

Table of Contents

The Internal Revenue Service has revoked
its determination that the organizations listed
below qualify as organizations described in
sections 501(c)(3) and 170(c)(2) of the Inter-
nal Revenue Code of 1986.

Generally, the IRS will not disallow deduc-
tions for contributions made to a listed orga-

nization on or before the date of announce-
ment in the Internal Revenue Bulletin that an
organization no longer qualifies. However, the
IRS is not precluded from disallowing a de-
duction for any contributions made after an
organization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling or
determination letter, (2) was aware that such
revocation was imminent, or (3) was in part
responsible for or was aware of the activities
or omissions of the organization that brought
about this revocation.

If on the other hand a suit for declara-
tory judgment has been timely filed, con-

tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on November 16,
2015 and would end on the date the court
first determines the organization is not
described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.

NAME OF ORGANIZATION

Effective Date of Revocation

LOCATION

Center for Academic Research and Enrichment

January 1, 2013

San Luis Obispo, CA

Columbians of Nampa, Inc.

January 1, 2010

Nampa, ID

Community Distribution Center

January 1, 2011

Sherman Oaks, CA

Inspired Life Center, Inc.

January 1, 2011

Las Vegas, NV

Johnny's Kids, Inc.

January 1, 2011

Westerville, OH

Legacy Charter Schools, Inc.

July 1, 2011

Los Angeles, CA

Lewis Carroll Academy of the Arts a/k/a Lewis

November 1, 2012

Porter Ranch, CA

Carroll Academy of the Arts, Inc.

New Life Generation, Inc.

January 1, 2013

Terre Haute, IN

Omega First Incorporated

July 1, 2010

Charlotte, NC

Partners for a Safer America, Inc.

January 1, 2012

Palm Desert, CA

People Against Drugs Affordable Housing Agency

January 1, 2011

Dallas, TX

Return: The United Fund For The Education Of

January 1, 2000

Brooklyn, NY

Russian Immigrant Children In Israel, Inc

The Ted Foundation, Inc.

July 1, 2009

Aliquippa, PA

Works of Life International Ministries, Inc.

January 1, 2011

Clovis, CA

Notice of Disposition of
Declaratory Judgment
Proceedings under Section
7428
Announcement 2015-29

This announcement serves notice to
donors that on May 21, 2015, the United
States Tax Court entered a stipulated de-
cision that effective April 1, 2010, the
organization listed below is not qualified
as an organization described in I.R.C.
§ 501(c)(3), is not exempt from taxation

under I.R.C. § 501(a), and is not an orga-
nization described in I.R.C. § 170(c)(2).

Bixun Wang and Lin Cheng Foundation
Fremont, CA

Notice of Disposition of
Declaratory Judgment
Proceedings under Section
7428
Announcement 2015-30

This announcement serves notice to
donors that on June 22, 2015, the United

States Tax Court entered a stipulated de-
cision that effective January 1, 2008, the
organization listed below is not qualified
as an organization described in I.R.C.
§ 501(c)(3), is not exempt from taxation
under section 501(a), and is not an orga-
nization described in section 170(c)(2).

Golden State Debt Management
Los Angeles, CA

## Preparer Tax Identification Number (PTIN) User Fee Update

### REG-121496-15

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 Bulletin,
the IRS is issuing temporary regulations
that will amend regulations (TD 9503)
relating to the imposition of certain user
fees on tax return preparers. The tempo-
rary regulations reduce the amount of the
user fee to apply for or renew a preparer
tax identification number (PTIN). The text
of the temporary regulations also serves as
the text of these proposed regulations.

DATES: Written or electronic comments
and requests for a public hearing must be
received by January 28, 2016.

ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG-121496-15), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
D.C. 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-121496-15), Cou-
rier's Desk, Internal Revenue Service,
1111 Constitution Avenue, NW, Wash-
ington, D.C. 20224 or sent electronically
via the Federal eRulemaking Portal at
http://www.regulations.gov (IRS REG-
121496-15). The public hearing will be
held in the Auditorium of the Internal
Revenue Building, 1111 Constitution Av-
enue, NW, Washington, D.C.

### FOR FURTHER INFORMATION

CONTACT: Concerning the proposed
regulations, Hollie M. Marx at (202) 317-
6844; concerning cost methodology, Eva
J. Williams at (202) 803-9728; concerning
submission of comments and/or requests
for a public hearing, Oluwafunmilayo
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
the Bulletin amend regulations under 26
CFR part 300 setting a user fee for indi-
viduals who apply for or renew a PTIN.
The text of the temporary regulations also
serves as the text of these proposed regu-
lations. The preamble to the temporary
regulations explains the temporary regu-
lations and these proposed regulations.

##### 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.

It has been determined that an initial
regulatory flexibility analysis is required
for this notice of proposed rulemaking
under 5 U.S.C. 603. This analysis is set
forth under the heading "Initial Regula-
tory Flexibility Analysis."

Pursuant to section 7805(f), this notice
of proposed rulemaking has been submit-
ted to the Chief Counsel for Advocacy of
the Small Business Administration for
comment on its impact on small business.

Initial Regulatory Flexibility Analysis

When an agency issues a rulemaking
proposal, the Regulatory Flexibility Act
(5 U.S.C. chapter 6) (RFA) requires the
agency "to prepare and make available for
public comment an initial regulatory flex-
ibility analysis" that will "describe the
impact of the proposed rule on small en-
tities." See 5 U.S.C. 603(a). Section 605
of the RFA provides an exception to this
requirement if the agency certifies that the
proposed rulemaking will not have a sig-
nificant economic impact on a substantial
number of small entities. A small entity is
defined as a small business, small non-
profit organization, or small governmental
jurisdiction. See 5 U.S.C. 601(3) through
(6). The IRS and the Treasury Department
conclude that the proposed rule, if pro-
mulgated, may have a significant eco-
nomic impact on a substantial number of
small entities. As a result, an initial regu-
latory flexibility analysis is required.

Description of the reasons why action
by the agency is being considered

The IRS and the Treasury Department
implemented regulatory changes in 2010
that required any individual who prepares
or who assists in preparing all or substan-
tially all of a tax return or claim for refund
for compensation to obtain a PTIN. Pur-
suant to the PTIN regulations, only those
individuals who apply for and maintain a
current PTIN may prepare tax returns and
claims for refund for compensation. Be-
cause the ability to prepare tax returns and
claims for refund for compensation is lim-
ited to individuals who have a PTIN, the
provision of a PTIN confers a special ben-
efit. The IRS incurs costs associated with
processing a PTIN application and provid-
ing the special benefit associated with the
PTIN. The IRS and Treasury Department
initially determined that the full cost of
providing the special benefit conferred by
a PTIN was $50 for each original appli-
cation and each annual renewal. In accor-
dance with OMB Circular A-25, the IRS
and Treasury conducted a biennial review
of the PTIN user fee amount in 2015 and
determined that the full cost of providing
the special benefit conferred by a PTIN
had been reduced to $33 for each original
application and each annual renewal.

A succinct statement of the objectives of,
and legal basis for, the proposed rule

The objective of the proposed regula-
tions is to recover the costs to the govern-
ment associated with providing the special
benefit that an individual receives upon
applying for or renewing a PTIN. These
costs include activities, processes, and
procedures related to the electronic and
paper registration and renewal submis-
sions; tax compliance and background
checks; professional designation checks;
foreign preparer processing; compliance
and complaint activities; information
technology and contract-related expenses;
and communications. The PTIN user fee
also takes into account various indirect
program costs, including management and
support costs. OMB Circular A-25 en-
courages user fees when special benefits
are conferred on identifiable recipients.
Individuals who obtain a PTIN receive the
ability to prepare or assist in preparing all
or substantially all of a tax return or claim

for refund for compensation. The ability to
prepare or assist in preparing all or substan-
tially all of a tax return or claim for refund
for compensation is a special benefit.

The legal basis for the PTIN user fee is
contained in section 9701 of title 31.

A description of and, where feasible, an
estimate of the number of small entities
to which the proposed rule will apply

The proposed regulations affect all in-
dividuals who prepare or assist in prepar-
ing all or substantially all of a tax return or
claim for refund for compensation. Only
individuals, not businesses, can apply for
or renew a PTIN. Thus, the economic
impact of these regulations on any small
entity generally will be a result of an
individual tax return preparer who is re-
quired to apply for or renew a PTIN own-
ing a small business or a small business
otherwise employing an individual tax re-
turn preparer who is required to apply for
or renew a PTIN.

The appropriate NAICS codes for PTINs
are those that relate to tax preparation ser-
vices (NAICS code 541213), offices of cer-
tified public accountants (NAICS code
541211), other accounting services (NAICS
code 541219), and offices of lawyers (NA-
ICS code 541110). Entities identified as tax
preparation services, offices of certified pub-
lic accountants, and other accounting ser-
vices are considered small under the Small
Business Administration size standards (13
CFR 121.201) if their annual revenue is less
than $20.5 million. Entities identified as of-
fices of lawyers are considered small under
the Small Business Administration size
standards if their annual revenue is less than
$11 million. The IRS estimates that approx-
imately 70 to 80 percent of the individuals
subject to these proposed regulations are tax
return preparers operating as or employed
by small entities.

A description of the projected reporting,
recordkeeping and other compliance
requirements of the proposed rule,
including an estimate of the classes of
small entities which will be subject to
the requirement and the type of
professional skills necessary for
preparation of the report or record

No reporting or recordkeeping require-
ments are projected to be associated with
this proposed regulation.

An identification, to the extent
practicable, of all relevant Federal rules
which may duplicate, overlap, or conflict
with the proposed rule

The IRS is not aware of any Federal
rules that duplicate, overlap, or conflict
with the proposed rule.

A description of any significant
alternatives to the proposed rule which
accomplish the stated objectives of
applicable statutes and which minimize
any significant economic impact of the
proposed rule on small entities

The IOAA authorizes the charging of
user fees for agency services, subject to
policies designated by the President.
OMB Circular A-25 implements presi-
dential policies regarding user fees and
encourages user fees when a government
agency provides a special benefit to a
member of the public. In the IOAA, Con-
gress has stated a preference that special
benefits be self-sustaining.

A PTIN is required for an individual to
prepare or assist in preparing all or sub-
stantially all of a tax return or claim for
refund for compensation. PTINs are used
by the IRS to collect and track data on tax
return preparers. This data allows the IRS
to track the number of persons who pre-
pare or assist in preparing returns and
claims for refund, the qualifications of
those persons who prepare or assist in
preparing returns and claims for refund,
the number of returns each person pre-
pares, and, when instances of misconduct
or potential misconduct are detected, lo-
cate and review returns and claims for
refund prepared by a specific tax return
preparer. PTINs must be renewed annu-
ally to ensure that the identifying informa-
tion associated with a PTIN is current.

Due to the costs to the government to
process the application for a PTIN, the
requirement to include a PTIN on tax re-
turns and claims for refund, and the ex-
pressed preference in the IOAA that spe-
cial benefits be self-sustaining, there is no
viable alternative to imposing a user fee.

#### Comments and 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

comments that are submitted timely to the
IRS. The IRS and Treasury Department
request comments on all aspects of these
proposed regulations. All comments that
are submitted by the public will be made
available for public inspection and copy-
ing. A public hearing will be scheduled if
requested in writing by any person who
timely submits written comments. If a
public hearing is scheduled, 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 Hollie M. Marx, Office of the
Associate Chief Counsel (Procedure and
Administration).

* * * * *

#### Proposed Amendments to the Regulations

Accordingly, 26 CFR part 300 is pro-
posed to be amended as follows:

Paragraph 1. The authority citation for
part 300 continues to read as follows:
Authority: 31 U.S.C. 9701.
Par. 2. Section 300.13 is amended by
revising paragraphs (b) and (d) to read as
follows:

§ 300.13 Fee for obtaining a preparer
tax identification number.

* * * * *

(b) [The text of proposed § 300.13(b) is
the same as the text of § 300.13T(b) published
elsewhere in this issue of the Bulletin].

* * * * *

(d) [The text of proposed § 300.13(d) is
the same as the text of § 300.13T(d) published
elsewhere in this issue of the Bulletin].

Karen M. Schiller,
Acting Deputy Commissioner
for Services and Enforcement.

(Filed by the Office of the Federal Register on October 29,
2015, 8:45 a.m., and published in the issue of the Federal
Register for October 30, 2015, 80 F.R. 27791)

# Definition of Terms

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

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

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

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

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

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

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.

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

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

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

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

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

# Abbreviations

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

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

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

GE-Grantee.

GP-General Partner.

GR-Grantor.

IC-Insurance Company.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

CY-County.

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.

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.

BK-Bank.

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

C-Individual.

C.B .- Cumulative Bulletin.

CFR-Code of Federal Regulations.

CI-City.

COOP-Cooperative.

D-Decedent.

DC-Dummy Corporation.

X-Corporation.

Y-Corporation.

Z-Corporation.

Numerical Finding List1

Proposed Regulations :- Continued

Treasury Decisions :- Continued

Bulletins 2015-27 through 2015-46

REG-103033-11, 2015-37 I.R.B. 325

9734, 2015-41 I.R.B. 500

REG-109813-11, 2015-37 I.R.B. 330

9735, 2015-37 I.R.B. 316

Announcements:

REG-138344-13, 2015-41 I.R.B. 557

9736, 2015-39 I.R.B. 402

REG-139483-13, 2015-40 I.R.B. 475

9737, 2015-40 I.R.B. 449

2015-17, 2015-28 I.R.B. 67

REG-148998-13, 2015-45 I.R.B. 653

9738, 2015-40 I.R.B. 453

2015-18, 2015-33 I.R.B. 198

REG-115452-14, 2015-32 I.R.B. 158

9739, 2015-41 I.R.B. 528

2015-19, 2015-32 I.R.B. 157

REG-127895-14, 2015-41 I.R.B. 556

9740, 2015-42 I.R.B. 573

2015-20, 2015-38 I.R.B. 355

REG-132075-14, 2015-35 I.R.B. 288

9741, 2015-45 I.R.B. 628

2015-21, 2015-34 I.R.B. 220

REG-138526-14, 2015-28 I.R.B. 67

9742, 2015-46 I.R.B. 657

2015-22, 2015-35 I.R.B. 288

REG-143800-14, 2015-37 I.R.B. 347

2015-23, 2015-36 I.R.B. 311

REG-102648-15, 2015-31 I.R.B. 134

2015-24, 2015-36 I.R.B. 313

REG-102837-15, 2015-27 I.R.B. 43

2015-25, 2015-39 I.R.B. 422

REG-121496-15, 2015-46 I.R.B. 674

2015-28, 2015-46 I.R.B. 673

REG-123640-15, 2015-37 I.R.B. 350

2015-29, 2015-46 I.R.B. 673

2015-30, 2015-46 I.R.B. 673

Revenue Procedures:

Notices:

2015-34, 2015-27 I.R.B. 4

2015-36, 2015-27 I.R.B. 20

2015-43, 2015-29 I.R.B. 73

2015-38, 2015-36 I.R.B. 295

2015-46, 2015-28 I.R.B. 64

2015-39, 2015-33 I.R.B. 195

2015-47, 2015-30 I.R.B. 76

2015-40, 2015-35 I.R.B. 236

2015-48, 2015-30 I.R.B. 77

2015-41, 2015-35 I.R.B. 263

2015-49, 2015-30 I.R.B. 79

2015-42, 2015-36 I.R.B. 310

2015-50, 2015-30 I.R.B. 81

2015-43, 2015-40 I.R.B. 467

2015-51, 2015-31 I.R.B. 133

2015-44, 2015-38 I.R.B. 354

2015-52, 2015-35 I.R.B. 227

2015-45, 2015-39 I.R.B. 412

2015-53, 2015-33 I.R.B. 190

2015-46, 2015-39 I.R.B. 414

2015-54, 2015-34 I.R.B. 210

2015-47, 2015-39 I.R.B. 419

2015-55, 2015-34 I.R.B. 217

2015-48, 2015-40 I.R.B. 469

2015-56, 2015-35 I.R.B. 235

2015-49, 2015-41 I.R.B. 555

2015-57, 2015-36 I.R.B. 294

2015-50, 2015-42 I.R.B. 583

2015-58, 2015-37 I.R.B. 322

2015-51, 2015-42 I.R.B. 583

2015-59, 2015-40 I.R.B. 459

2015-52, 2015-45 I.R.B. 638

2015-60, 2015-43 I.R.B. 604

2015-53, 2015-44 I.R.B. 615

2015-61, 2015-39 I.R.B. 408

2015-54, 2015-45 I.R.B. 648

2015-62, 2015-39 I.R.B. 411

2015-63, 2015-40 I.R.B. 461

Revenue Rulings:

2015-64, 2015-40 I.R.B. 464

2015-65, 2015-40 I.R.B. 466

2015-15, 2015-27 I.R.B. 1

2015-66, 2015-41 I.R.B. 541

2015-16, 2015-31 I.R.B. 130

2015-67, 2015-41 I.R.B. 546

2015-17, 2015-39 I.R.B. 358

2015-68, 2015-41 I.R.B. 547

2015-18, 2015-34 I.R.B. 209

2015-69, 2015-41 I.R.B. 550

2015-19, 2015-36 I.R.B. 291

2015-70, 2015-43 I.R.B. 604

2015-20, 2015-38 I.R.B. 353

2015-71, 2015-43 I.R.B. 606

2015-21, 2015-40 I.R.B. 447

2015-72, 2015-44 I.R.B. 613

2015-22, 2015-44 I.R.B. 610

2015-73, 2015-46 I.R.B. 660

2015-74, 2015-46 I.R.B. 663

Treasury Decisions:

2015-75, 2015-46 I.R.B. 668

2015-76, 2015-46 I.R.B. 669

9723, 2015-31 I.R.B. 84 9726, 2015-31 I.R.B. 98

Proposed Regulations:

9727, 2015-32 I.R.B. 154

9728, 2015-33 I.R.B. 169

REG-140379-02, 2015-45 I.R.B. 653

9729, 2015-35 I.R.B. 221

REG-136459-09, 2015-37 I.R.B. 332

9730, 2015-35 I.R.B. 223

REG-155164-09, 2015-41 I.R.B. 560

9731, 2015-37 I.R.B. 314

REG-109370-10, 2015-33 I.R.B. 198

9732, 2015-39 I.R.B. 371

REG-112997-10, 2015-39 I.R.B. 422

9733, 2015-41 I.R.B. 494

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-01 through 2015-26 is in Internal Revenue Bulletin
2015-26, dated June 29, 2015.

## Finding List of Current Actions on Previously Published Items1

Bulletins 2015-27 through 2015-46

Notices:

2014-4
Modified by
Notice 2015-51, 2015-31 I.R.B. 133

2014-17
Superseded by
Notice 2015-67, 2015-41 I.R.B. 546

Proposed Regulations:

2009-57
Obsoleted by
REG-112997-10 2015-39 I.R.B. 422

2013-17
Obsoleted by
REG-148998-13 2015-45 I.R.B. 653

### Revenue Procedures:

1992-75
Clarified by
Rev. Proc. 2015-40, 2015-35 I.R.B. 236

2003-40
Modified by
Rev. Proc. 2015-40, 2015-35 I.R.B. 236

2003-78
Modified by
Rev. Proc. 2015-46, 2015-39 I.R.B. 414

2006-9
Modified by
Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2006-9
Superseded by
Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2006-54
Modified by
Rev. Proc. 2015-40, 2015-35 I.R.B. 236

2006-54
Superseded by
Rev. Proc. 2015-40, 2015-35 I.R.B. 236

2008-31
Modified by
Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2008-31
Superseded by
Rev. Proc. 2015-41, 2015-35 I.R.B. 263

Revenue Procedures :- Continued

2011-49
Modified by
Rev. Proc. 2015-36, 2015-27 I.R.B. 20

2011-49
Superseded by
Rev. Proc. 2015-36, 2015-27 I.R.B. 20

2015-14
Modified by
Rev. Proc. 2015-39, 2015-33 I.R.B. 195

2015-40
Amplified by
Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2015-41
Amplified by
Rev. Proc. 2015-40, 2015-35 I.R.B. 236

Treasury Decisions:

58-422
Obsoleted by
T.D. 9739 2015-41 I.R.B. 528

66-284
Obsoleted by
T.D. 9739 2015-41 I.R.B. 528

79-250
Obsoleted by
T.D. 9739 2015-41 I.R.B. 528

79-289
Obsoleted by
T.D. 9739 2015-41 I.R.B. 528

96-29
Obsoleted by
T.D. 9739 2015-41 I.R.B. 528

"A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-01 through 2015-26 is in Internal Revenue Bulletin
2015-26, dated June 29, 2015.

# Internal Revenue Service Washington, DC 20224

Official Business
Penalty for Private Use, $300

# INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.

# We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.

Internal Revenue Bulletin 2015-46 (PDF rendition): IRS Announcements

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