Internal Revenue Bulletin 2018-15 (PDF rendition): IRS Notices

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HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
Notice 2018–21, page 472.
This notice provides rules claimants must follow to make a
one-time claim for payment of the credits and payments allow-
able under §§ 6426(c), 6426(d), and 6427(e) of the Internal
Revenue Code for biodiesel (including renewable diesel) mix-
tures and alternative fuels sold or used during calendar year
2017. This notice also provides instructions for how a claimant
may offset its § 4081 liability with the § 6426(e) alternative fuel
mixture credit for 2017, as well as instructions for how a
claimant may make certain income tax claims relating to
biodiesel, second generation biofuel, and alternative fuel. In
addition, this notice provides a temporary modified safe harbor
for semimonthly deposits of the oil spill liability tax imposed by
§ 4611, which was reinstated effective March 1, 2018.
EXCISE TAX
Notice 2018–21, page 472.
This notice provides rules claimants must follow to make a
one-time claim for payment of the credits and payments allow-
able under §§ 6426(c), 6426(d), and 6427(e) of the Internal
Revenue Code for biodiesel (including renewable diesel) mix-
tures and alternative fuels sold or used during calendar year
2017. This notice also provides instructions for how a claimant
may offset its § 4081 liability with the § 6426(e) alternative fuel
mixture credit for 2017, as well as instructions for how a
claimant may make certain income tax claims relating to
biodiesel, second generation biofuel, and alternative fuel. In
addition, this notice provides a temporary modified safe harbor
for semimonthly deposits of the oil spill liability tax imposed by
§ 4611, which was reinstated effective March 1, 2018.
INCOME TAX
Notice 2018–23, page 474.
Notice 2018 –23 provides transitional guidance regarding the
requirements of Sec. 162(f), as amended on December 22,
2017, and sec. 6050X, added on December 22, 2017.
Finding Lists begin on page ii.
Bulletin No. 2018–15
April 9, 2018

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.
April 9, 2018Bulletin No. 2018–15

Part III. Administrative, Procedural, and Miscellaneous
Biodiesel and Alternative
Fuels; Claims for 2017; Oil
Spill Liability Tax; Excise
Tax and Deposits
Notice 2018–21
SECTION 1. PURPOSE
This notice provides rules claimants
must follow to make a one-time claim for
payment of the credits and payments al-
lowable under §§ 6426(c), 6426(d), and
6427(e) of the Internal Revenue Code
(Code) for biodiesel (including renewable
diesel) mixtures and alternative fuels sold
or used during calendar year 2017 (collec-
tively, 2017 biodiesel and alternative fuel
incentives). These rules are prescribed un-
der §§ 40406, 40407, and 40415, of the
Bipartisan Budget Act of 2018, Pub. L.
115–123, 132 Stat. 64 (2018) (the Act).
This notice also provides instructions for
how a claimant may offset its § 4081 liabil-
ity with the § 6426(e) alternative fuel mix-
ture credit for 2017, as well as instructions
for how a claimant may make certain in-
come tax claims relating to biodiesel, sec-
ond generation biofuel, and alternative fuel.
In addition, this notice provides a temporary
modified safe harbor for semimonthly de-
posits of the oil spill liability tax imposed by
§ 4611, which was reinstated effective
March 1, 2018, by § 40416 of the Act.
SECTION 2. BACKGROUND
.01Fuel Incentives.
Section 6426(a) and (c) allow a blender
of a biodiesel (including renewable diesel)
mixture to claim a $1.00 per gallon credit
against its tax liability under § 4081 (relat-
ing to the tax imposed on taxable fuel).
Similarly, § 6426(a) and (e) allow a blender
of an alternative fuel mixture to claim a
credit against its tax liability under § 4081,
except that the credit amount is $0.50 per
gallon. Section 6426(a) and (d) allow a per-
son that sells or uses alternative fuel as a
fuel in a motor vehicle or motorboat or in
aviation to claim a $0.50 per gallon credit
against the claimant’s tax liability under
§ 4041 (relating to the tax imposed on diesel
fuel and alternative fuel).
Blenders of biodiesel (including re-
newable diesel) mixtures and persons
that sell or use alternative fuel as a fuel
in a motor vehicle or motorboat or in
aviation may claim any excess credit
under § 6426(c) or (d) as a payment
under § 6427(e) or as a refundable in-
come tax credit under § 34. As an alter-
native to the payments and credits al-
lowed under §§ 6426, 6427, and 34, a
blender of a biodiesel (including renew-
able diesel) mixture may claim a nonre-
fundable income tax credit under § 40A
(see Section 8 of this notice for addi-
tional information). For federal income
tax purposes, a claimant reduces its
§ 4081 excise tax liability by the amount
of excise tax credit allowable under
§ 6426(c) and its § 4041 excise tax
liability by the amount of excise tax
credit allowable under § 6426(d) in de-
termining its deduction for those excise
taxes or its cost of goods sold deduction
attributable to those excise taxes.See
Notice 2015–56, 2015–35 I.R.B. 235,
and Notice 2016 – 05, 2016 – 6 I.R.B.
302.
The Code provisions that authorize these
credits and payments expired for sales and
uses after December 31, 2016, but were
reinstated by the Act for sales and uses
through 2017. Sections 40407(b)(4) and
40414(b) of the Act direct the Secretary of
the Treasury (Secretary) to issue guidance
providing for a one-time submission of
claims under §§ 6426(c), 6426(d), and
6427(e) for 2017. The Act requires the guid-
ance to provide for a 180-day period for the
submission of claims (in such manner as
prescribed by the Secretary) to begin no
later than 30 days after the guidance is is-
sued.
Sections 40406(a) and 40407(a) of the
Act also reinstated Code provisions autho-
rizing credits for second generation bio-
fuel producers (§ 40(b)(6)) and biodiesel
and renewable diesel used as fuel (§ 40A),
respectively. The second generation bio-
fuel producer credit expired for produc-
tion after December 31, 2016, and was
reinstated by the Act for production
through 2017. The credit for biodiesel and
renewable diesel used as fuel expired for
sales and uses after December 31, 2016,
and was reinstated by the Act for sales and
uses through 2017.
.02Oil Spill Liability Tax.
Section 4611 imposes a tax of $0.09
per barrel on crude oil received at a
United States refinery, and on petroleum
products entered into the United States for
consumption, use, or warehousing (oil
spill liability tax). The oil spill liability tax
expired on December 31, 2017.
Section 40416 of the Act reinstates the
oil spill liability tax for the period begin-
ning on March 1, 2018, and ending on
December 31, 2018.
SECTION 3. SCOPE
This notice provides the procedures for
claiming 2017 biodiesel and alternative
fuel incentives. Claimants that filed “pro-
tective” or anticipatory claims for biodie-
sel and alternative fuel incentives covered
by this notice should refile their claims
pursuant to the procedures provided in
this notice. The IRS will not treat as per-
fected any such protective or anticipatory
claims previously filed with the IRS that
are not timely supplemented in accor-
dance with these procedures.
Except as provided by this notice, the
rules in Notice 2005– 4, 2005–1 C.B.
289 (providing guidance on alcohol and
biodiesel fuel tax credits and payments),
as modified by Notice 2005– 62, 2005–2
C.B. 443 (providing guidance for certain
biodiesel issues not addressed in Notice
2005– 4), and Notice 2006 –92, 2006 –2
C.B. 774 (providing guidance on alter-
native fuel and alternative fuel mixture
taxes, credits, and payments), apply to
claims for 2017 biodiesel and alterna-
tive fuel incentives.
This notice also prescribes a method
for submitting claims for the alternative
fuel mixture credit relating to alternative
fuel mixtures sold or used during 2017.
This notice does not affect the income
tax claims described in Section 8 of this
notice.
Finally, this notice provides a special
rule for tax deposits related to the rein-
statement of the oil spill liability tax.
April 9, 2018Bulletin No. 2018–15
472

SECTION 4. HOW TO MAKE A
ONE-TIME CLAIM FOR CREDITS
AND PAYMENTS ALLOWABLE
UNDER §§ 6426(c), 6426(d), AND
6427(e)
Claimants must follow the procedures
listed below to make a one-time claim
under this notice for credits and payments
allowable under §§ 6426(c), 6426(d), and
6427(e), relating to 2017 biodiesel and
alternative fuel incentives.
•Claimants must submit claims for
2017 biodiesel and alternative fuel in-
centives on Form 8849,Claim for Re-
fund of Excise Taxes.
•Claimants must include Schedule 3
(Form 8849),Certain Fuel Mixtures and
the Alternative Fuel Credit, with their
submission and enter amounts for 2017
biodiesel and alternative fuel incentives
on Line 2 and Line 3 of Schedule 3
(Form 8849), as appropriate.
•Claimants must follow the instructions
to Form 8849 and Schedule 3 (Form
8849) when preparing their submis-
sion to the extent that those instruc-
tions do not conflict with this notice.
•Each claimant must claim all 2017
biodiesel and alternative fuel incen-
tives for which the claimant is eligible
on a single Form 8849.
•Each claimant must mail its submission
to the address listed for Schedule 3
(Form 8849) in the instructions to Form
8849 underWhere to File. Alternatively,
claimants may electronically file Form
8849 and Schedule 3 (Form 8849)
through any electronic return originator,
transmitter, or intermediate service pro-
vider participating in the IRS e-file pro-
gram for excise taxes.
•Claimants are reminded that they must
be registered by the IRS in order to
make alternative fuel claims under
§§ 6426(d) and 6427(e). Claimants
that are not already registered by the
IRS may apply to the IRS for registra-
tion by filing Form 637,Application
for Registration (For Certain Excise
Tax Activities), in accordance with the
instructions to Form 637.
•Claimants are also reminded that they
must have and maintain adequate re-
cords to substantiate eligibility for the
2017 biodiesel and alternative fuel in-
centives.
SECTION 5. CLAIM PERIOD AND
DUE DATE FOR BIODIESEL AND
ALTERNATIVE FUEL INCENTIVES
The 180-day claim period for 2017
biodiesel and alternative fuel incentives
begins on April 2, 2018. Consequently, all
claims for 2017 biodiesel and alternative
fuel incentives must be filed on or before
September 29, 2018. The IRS will not
process claims filed after that date. The
IRS will deem any claim that is submitted
by the method prescribed in this notice
before April 2, 2018, as filed on April 2,
2018.
If the IRS does not pay a 2017 biodie-
sel and alternative fuel incentives claim
that conforms to this notice within 60 days
after the claim is received, the IRS will
pay the claim with interest from the claim
filing date (April 2, 2018, in the case of
claims submitted before that date) using
the overpayment rate and method pro-
vided by § 6621 of the Code.
SECTION 6. HOW TO MAKE AN
ALTERNATIVE FUEL MIXTURE
CLAIM UNDER § 6426(e)
Claimants must follow the procedures
listed below to claim the alternative fuel
mixture credit allowable under § 6426(e)
for 2017.
•For 2017, all alternative fuel mixture
credit claims allowed by § 6426(e) must
be made on Form 720X,Amended
Quarterly Federal Excise Tax Return.
•Claimants must enter amounts for
2017 alternative mixture credit claims
on Line 2 of Form 720X. In addition,
on Line 6 of Form 720X, claimants
must identify the type of alternative
fuel(s) in the mixture(s) for which a
credit is being claimed and the number
of gallons of alternative fuel(s) used by
the claimant in producing the mix-
ture(s). This information is the same
information claimants are required to
report on Line 13 of Schedule C to
Form 720,Quarterly Federal Excise
Tax Return.
•Claimants must follow the instructions
to Form 720X when preparing their sub-
mission to the extent that those instruc-
tions do not conflict with this notice.
•Each claimant must mail its submis-
sion to the address listed for Form
720X in the instructions underWhere
to File.
•Claimants are reminded that they must
be registered by the IRS in order to
make alternative mixture claims under
§ 6426(e). Claimants that are not al-
ready registered by the IRS may apply
to the IRS for registration by filing
Form 637,Application for Registra-
tion (For Certain Excise Tax Activi-
ties), in accordance with the instruc-
tions to Form 637.
•Claimants are also reminded that the
claim for a § 6426(e) credit for any quar-
ter may not exceed the § 4081 liability
incurred in the quarter for which the
credit is being claimed. Form 720X al-
lows claimants to adjust multiple quar-
ters on a single Form 720X.
•Claimants are further reminded that
they must have and maintain adequate
records to substantiate eligibility for
the 2017 § 6426(e) credit.
•Failure to file a Form 720,Quar-
terly Federal Excise Tax Return,
and remit the § 4081 tax due for
any quarter in 2017 before submit-
ting a claim allowed by § 6426(e)
on Form 720X will result in de-
layed processing of the claim and
delayed payment of refunds result-
ing from the credit, or denial of
claim.
•Failure to follow the claim procedure
in this section will result in delayed
processing or denial of claim(s).
SECTION 7. CLAIM PERIOD AND
DUE DATE FOR ALTERNATIVE
FUEL MIXTURE CREDITS
The claim period for the 2017 alterna-
tive fuel mixture credit begins on April 2,
2018. The IRS will deem any claim that is
submitted by the method prescribed in
Section 6 of this notice before April 2,
2018, as filed on April 2, 2018. Generally,
claims for the § 6426(e) alternative fuel
mixture credit must be made within three
years from the time the return was filed or
two years from the time the tax was paid,
whichever is later.
SECTION 8. CLAIMS NOT
AFFECTED BY THIS NOTICE
This notice does not affect 2017 claims
for the nonrefundable income tax credit un-
Bulletin No. 2018–15April 9, 2018
473

der § 40(b)(6) for second generation biofuel
producers. Taxpayers should continue to
submit these claims separately on, and in
accordance with, Form 6478,Biofuel Pro-
ducer Credit. A taxpayer must submit Form
6478 with its income tax return in accor-
dance with the instructions to its income tax
return form. This notice also does not affect
2017 claims for the nonrefundable income
tax credits under § 40A(b)(1) for biodiesel
mixtures, under § 40A(b)(2) for biodiesel
(including renewable diesel), or under
§ 40A(b)(4) for the small agri-biodiesel pro-
ducer credit. Taxpayers should continue to
submit these claims separately on, and in
accordance with, Form 8864,Biodiesel and
Renewable Diesel Fuels Credit. A taxpayer
must submit Form 8864 with its income tax
return in accordance with the instructions to
its income tax return form. Taxpayers are
reminded that under § 40A(c), credits allow-
able under § 40A must be reduced to the
extent that any benefit is claimed under
§§ 6426 and 6427 with respect to the same
biodiesel (including renewable diesel).
Similarly, this notice does not affect
2017 claims for the refundable income tax
credit under § 34 for biodiesel mixtures or
alternative fuel. Taxpayers should continue
to submit these claims separately on, and in
accordance with, Form 4136,Credit for
Federal Tax Paid on Fuels. A taxpayer
must submit Form 4136 with its income tax
return in accordance with the instructions to
its income tax return form. Taxpayers are
reminded that under § 34(b), credits are not
allowed under § 34 for any amount properly
payable under § 6427 and claimed in a
timely filed claim. For this purpose, the IRS
will treat as timely filed any claim submitted
for amounts payable under § 6427 that con-
forms to the rules provided in this notice.
SECTION 9. MODIFIED SAFE
HARBOR RULE FOR
SEMIMONTHLY DEPOSITS OF THE
OIL SPILL LIABILITY TAX DURING
THE THIRD QUARTER OF 2018
.01Overview.
Section 6302 authorizes the IRS to es-
tablish the mode and time for collecting
certain taxes, including the taxes imposed
by § 4611. Section 40.6302(c)–1(a)(1) of
the Excise Tax Procedural Regulations re-
quires each person that is required to file
Form 720 to make deposits of tax for each
semimonthly period in which the tax lia-
bility is incurred. A semimonthly period is
the first 15 days of a calendar month or the
portion of a calendar month following the
15th day of the month.See§ 40.0 –1(c).
Under § 40.6302(c)–1(b)(1), the de-
posit for the oil spill liability tax for each
semimonthly period must not be less than
95% of the amount of net tax liability
incurred during the semimonthly period,
unless the safe harbor in § 40.6302(c)–
1(b)(2)(ii) or (iii) applies. Under the safe
harbor, any person that filed a Form 720
reporting the oil spill liability tax for the
second preceding calendar quarter (the
look-back quarter) is considered to have
met the semimonthly deposit requirement
for the current quarter if: (1) the deposit
for each semimonthly period in the cur-
rent calendar quarter is not less than 1/6 of
the net tax liability reported for the look-
back quarter; (2) each deposit is made on
time; (3) the amount of any underpayment
is paid by the due date of the return; and
(4) the person’s liability does not include
any tax that was not imposed at all times
during the look-back quarter.
For deposits that will be made during
the third calendar quarter of 2018, the
look-back quarter will be the first calendar
quarter of 2018. During that look-back
quarter, the oil spill liability tax will be
imposed for only one month (March).
Therefore, the oil spill liability tax will not
be imposed at all times during the look-
back quarter as required by § 40.6302(c)–
1(b)(2)(ii)(D). Consequently, the safe har-
bor deposit rule will not be available to
persons liable for the oil spill liability tax
during the third calendar quarter of 2018,
and each semimonthly deposit during the
third calendar quarter of 2018 must not be
less than 95% of the amount of net tax
liability incurred during the semimonthly
period.
In order to assist taxpayers in meeting
their deposit obligations and in the interest
of sound tax administration, the Treasury
Department and the IRS have decided to
allow persons liable for the oil spill liabil-
ity tax to use a modified form of the safe
harbor for the third calendar quarter of
2018. Use of the modified safe harbor
described in section 9.02 below is volun-
tary.
.02Modified Safe Harbor. For pur-
poses of deposits of the oil spill liability
tax during the third calendar quarter of
2018, persons will be considered to have
met the semimonthly deposit requirement
for that quarter if: (1) the deposit for each
semimonthly period in the quarter is not
less than 1/2 of the net tax liability re-
ported for the look-back quarter; (2) each
deposit is made on time; and (3) the
amount of any underpayment is paid by
the due date of the return. No affirmative
election or other special filing is required
in order for a person to avail themselves
of the modified safe harbor provided in
this notice. This modified safe harbor ap-
plies only with regard to deposits of the
oil spill liability tax during the third cal-
endar quarter of 2018.
SECTION 10. 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 contact Mr. Beker on
(202) 317-6855 (not a toll-free number).
For further information regarding the in-
come tax treatment of the 2017 biodiesel
and alternative fuel incentives, please con-
tact Angella Warren at (202) 317-4718
(not a toll-free number).
Transitional Guidance
Under §§ 162(f) and
6050X with Respect to
Certain Fines, Penalties,
and Other Amounts
Notice 2018–23
SECTION 1. PURPOSE
Section 13306 of “An Act to provide
for reconciliation pursuant to titles II and
V of the concurrent resolution on the bud-
get for fiscal year 2018,” Pub. L. 115–97
(the “Act”), which was signed into law on
December 22, 2017, amended § 162(f) of
the Internal Revenue Code (“Code”) and
added new § 6050X to the Code. The
Department of the Treasury (“Treasury
Department”) and the Internal Revenue
Service (“IRS”) intend to publish pro-
posed regulations under §§ 162(f) and
6050X. This notice provides transitional
guidance under §§ 162(f) and 6050X.
April 9, 2018Bulletin No. 2018–15
474

Specifically, as provided in section 3.01 of
this notice, to ensure efficient administra-
tion of this new provision, reporting will
not be required under § 6050X until the
date specified in the proposed regulations.
The specified date will not be earlier than
January 1, 2019, and will not be earlier
than the date of publication of the pro-
posed regulations. Reporting will not be
required with respect to amounts required
to be paid or incurred under a binding
court order or agreement entered into be-
fore the specified date. Further, section
3.02 of this notice provides transitional
guidance for purposes of satisfying the
identification requirement in § 162(f)(2)
(A)(ii). Finally, section 4 of this notice
requests comments regarding issues to be
addressed in the proposed regulations.
SECTION 2. LAW
Section 162(f)(1), as amended by the
Act, disallows a deduction for amounts
paid or incurred (whether by suit, agree-
ment, or otherwise) to, or at the direction
of, a government or governmental entity
in relation to the violation of any law or
the investigation or inquiry by such gov-
ernment or entity into the potential viola-
tion of any law. Section 162(f)(2) pro-
vides an exception to the general rule
under § 162(f)(1). Under the exception, an
amount described in § 162(f)(1) that is
otherwise deductible under the Code is
not disallowed if the taxpayer satisfies all
of the requirements in § 162(f)(2)(A)(i),
(ii), and (iii).
Section 162(f)(2)(A)(i) requires that the
taxpayer establish that the amount paid or
incurred (1) constitutes restitution (includ-
ing remediation of property) for damage or
harm that was or may be caused by violation
of any law or the potential violation of any
law, or (2) is paid to come into compliance
with any law that was violated or otherwise
involved in the investigation or inquiry into
the potential violation of any law (the “es-
tablishment requirement”). Section 162(f)
(2)(A)(ii) further requires that the amount
paid or incurred be identified as restitution
or as an amount paid to come into compli-
ance with such law in the court order or
settlement agreement (the “identification re-
quirement”). Finally, § 162(f)(2)(A)(iii)
provides that in the case of any amount of
restitution for failure to pay any tax imposed
under the Code, the amount is treated as if
such amount were such tax if it would have
been allowed as a deduction had it been
timely paid. Section 162(f)(2)(A) further
provides that meeting the identification re-
quirement alone is not sufficient to meet the
establishment requirement under § 162(f)
(2)(A)(i).
Section 6050X(a)(1) requires the
appropriate official of any government
or nongovernmental entity described in
§ 162(f)(5)that is involved in suits or
agreements described in § 6050X(a)(2) to
make a return in such form as determined
by the Secretary setting forth (1) the
amount required to be paid as a result of
the suit or agreement to which § 162(f)(1)
applies; (2) any amount required to be
paid as a result of the suit or agreement
that constitutes restitution or remediation
of property; and (3) any amount required
to be paid as a result of the suit or agree-
ment for the purpose of coming into com-
pliance with any law that was violated or
involved in the investigation or inquiry.
Under § 6050X(a)(2), amounts re-
quired to be paid as a result of a suit or
agreement are required to be reported un-
der § 6050X(a)(1) if the suit or agreement
is a type described in § 6050X(a)(2)(A)(i)
and the dollar threshold in § 6050X(a)
(2)(A)(ii) is met. A suit or agreement is
described in § 6050X(a)(2)(A)(i) if it is
(1) a suit with respect to a violation of any
law over which the government or entity
has authority and with respect to which
there has been a court order, or (2) an
agreement that is entered into with respect
to a violation of any law over which the
government or entity has authority or with
respect to an investigation or inquiry by
the government or entity into the potential
violation of any law over which the gov-
ernment or entity has authority.
Under § 6050X(a)(2)(A)(ii), the dollar
threshold for reporting is met if the aggre-
gate amount involved in all court orders
and agreements with respect to the viola-
tion, investigation, or inquiry is $600 or
more. However, § 6050X(a)(2)(B) re-
quires the Secretary to adjust the $600
amount as necessary to ensure the effi-
cient administration of the internal reve-
nue laws.
Section 6050X(a)(3) requires the re-
turn to be filed at the time the agreement is
entered into, as determined by the Secre-
tary.
Section 6050X(b) requires every per-
son required to make a return under
§ 6050X(a) to furnish to each person who
is a party to the suit or agreement a written
statement showing (1) the name of the
government or entity, and (2) the informa-
tion supplied to the Secretary under
§ 6050X(a)(1). This information must be
furnished at the same time it is provided to
the Secretary.
Section 6050X(c) defines “appropriate
official” as the officer or employee having
control of the suit, investigation, or in-
quiry or the person appropriately desig-
nated for purposes of § 6050X.
Under § 13306(a)(2) and (b)(3) of the
Act, § 162(f) as amended and new § 6050X
generally apply to amounts paid or incurred
on or after December 22, 2017, except that
they do not apply to amounts paid or in-
curred under any binding order or agree-
ment entered into before that date. If the
order or agreement required court approval
and the approval was not obtained before
that date, § 162(f) as amended and new
§ 6050X will apply.
SECTION 3. TRANSITIONAL
GUIDANCE
Section 162(f) as amended and new
§ 6050X were effective on December 22,
2017, the date of the enactment of the Act.
Parties to suits and agreements covered by
these sections have an immediate need for
guidance and have contacted the Treasury
Department and the IRS with questions
regarding the reporting requirement of
§ 6050X and the identification require-
ment of § 162(f)(2)(A)(ii). This section
provides transitional guidance regarding
those requirements.
.01 SECTION 6050X REPORTING
Following the enactment of the Act,
officials of a number of governments and
governmental entities contacted the Trea-
sury Department and the IRS requesting
additional time to make the necessary
changes to their systems to comply with
their new reporting responsibilities under
§ 6050X. In addition, the IRS needs addi-
tional time to make necessary program-
ming and form changes to implement
§ 6050X. Accordingly, the Treasury De-
partment and the IRS are providing tran-
sitional guidance with respect to reporting
Bulletin No. 2018–15April 9, 2018
475

obligations under § 6050X. Under this
transitional guidance, to ensure efficient
administration of this new provision,
reporting will not be required under
§ 6050X until the date specified in the
proposed regulations. The specified date
will not be earlier than January 1, 2019,
and will not be earlier than the date of
publication of the proposed regulations.
Reporting will not be required with re-
spect to any amounts required to be paid
or incurred under a binding court order or
settlement agreement entered into before
the specified date. For purposes of this
notice, an agreement that requires court
approval is binding when court approval
is obtained.This transitional guidance will
provide additional time for dialogue with
stakeholders in an effort to clarify the re-
porting requirements consistent with effec-
tive implementation of the law. Transitional
guidance will also provide governmental
and nongovernmental regulatory entities ad-
ditional time to develop their systems for
collecting and reporting the required infor-
mation.
.02 SECTION 162(f)(2)(A)(ii)
IDENTIFICATION
The transitional guidance provided in
section 3.01 of this notice does not affect
or delay the applicability of § 162(f). Ac-
cordingly, the identification requirement
in § 162(f)(2)(A)(ii) applies to amounts
paid or incurred on or after December 22,
2017, unless the amounts were paid or
incurred under any binding order or agree-
ment entered into before that date. Tax-
payers and officials of governments and
governmental entities have asked for im-
mediate guidance regarding the identifica-
tion requirement.
Until proposed regulations under
§ 162(f) are issued, the identification re-
quirement in § 162(f)(2)(A)(ii) is treated
as satisfied for an amount if the settlement
agreement or court order specifically
states on its face that the amount is resti-
tution, remediation, or for coming into
compliance with the law. Even if the iden-
tification requirement under this section
3.02 is treated as satisfied, taxpayers must
also meet the establishment requirement
in order to qualify for the § 162(f)(2)
exception.
SECTION 4. COMMENTS
The Treasury Department and the IRS
intend to issue proposed regulations
amending and adding sections to the In-
come Tax Regulations with respect to
§§ 162(f) and 6050X. To assist in the
development of the proposed regulations,
this notice requests comments from the
public and affected governments and non-
governmental entities, on any and all is-
sues related to the application and imple-
mentation of §§ 162(f) and 6050X that the
proposed regulations should address. In
particular, the Treasury Department and
the IRS request comments on:
1. The timing of the reporting required
under § 6050X;
2. The threshold amount for reporting
under § 6050X(a)(2);
3. Any anticipated administrative difficul-
ties in securing information needed to
report under § 6050X, including situa-
tions involving multiple payors or
payees;
4. How to define key terms in § 162(f);
and
5. What entities are nongovernmental
entities under § 162(f)(5).
WHERE TO SEND COMMENTS
Comments may be submitted by May
18, 2018, using one of the following
methods:
•By Mail:
Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2018 –
23)
Room 5203
P.O. Box 7602
Ben Franklin Station
Washington, D.C. 20444
•By Hand or Courier Delivery: Sub-
missions 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
Attn: CC:PA:LPD:PR (Notice 2018 –
23)
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
•Electronic: Alternatively, persons
may submit comments electronically to
Notice.Comments@irscounsel.treas.gov.
Please include “Notice 2018 –23” in the
subject line of any electronic communica-
tions. All submissions will be available for
public inspection and copying in room
1621, 1111 Constitution Avenue, N.W.,
Washington, D.C., from 9 a.m. to 4 p.m.
SECTION 5. CONTACT
INFORMATION
The principal author of this notice is
Christopher Wrobel of the Office of the
Associate Chief Counsel (Income Tax and
Accounting). For further information re-
garding this notice, contact Mr. Wrobel at
(202) 317-7011 (not a toll-free number).
April 9, 2018Bulletin No. 2018–15
476

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2018–15April 9, 2018
i

Numerical Finding List
1
Bulletin 2018 –1 through 2018 –14
Announcements:
2018-01, 2018-9 I.R.B.387
2018-02, 2018-9 I.R.B.387
2018-03, 2018-9 I.R.B.387
2018-04, 2018-10 I.R.B.401
2018-05, 2018-13 I.R.B.461
Notices:
2018-01, 2018-3 I.R.B.285
2018-02, 2018-2 I.R.B.281
2018-03, 2018-2 I.R.B.285
2018-05, 2018-6 I.R.B.341
2018-06, 2018-3 I.R.B.300
2018-07, 2018-4 I.R.B.317
2018-08, 2018-7 I.R.B.352
2018-10, 2018-8 I.R.B.359
2018-11, 2018-11 I.R.B.425
2018-12, 2018-12 I.R.B.441
2018-13, 2018-6 I.R.B.341
2018-14, 2018-7 I.R.B.353
2018-15, 2018-9 I.R.B.376
2018-16, 2018-10 I.R.B.390
2018-17, 2018-9 I.R.B.376
2018-18, 2018-12 I.R.B.443
2018-19, 2018-12 I.R.B.443
2018-20, 2018-12 I.R.B.444
2018-21, 2018-15 I.R.B.472
2018-22, 2018-14 I.R.B.464
2018-23, 2018-15 I.R.B.474
Proposed Regulations:
REG-119514-15, 2018-04 I.R.B.325
REG-129260-16, 2018-14 I.R.B.470
REG-118067-17, 2018-08 I.R.B.360
REG-132197-17, 2018-10 I.R.B.404
REG-133491-17, 2018-11 I.R.B.430
Revenue Procedures:
2018-1, 2018-1 I.R.B.1
2018-2, 2018-1 I.R.B.106
2018-3, 2018-1 I.R.B.130
2018-4, 2018-1 I.R.B.146
2018-5, 2018-1 I.R.B.244
2018-7, 2018-1 I.R.B.282
2018-8, 2018-2 I.R.B.286
2018-9, 2018-2 I.R.B.290
2018-10, 2018-7 I.R.B.355
2018-11, 2018-5 I.R.B.334
2018-12, 2018-6 I.R.B.349
2018-13, 2018-7 I.R.B.356
2018-14, 2018-9 I.R.B.378
2018-15, 2018-9 I.R.B.379
Revenue Procedures:—Continued
2018-16, 2018-9 I.R.B.383
2018-17, 2018-9 I.R.B.384
2018-18, 2018-10 I.R.B.392
2018-19, 2018-14 I.R.B.466
2018-20, 2018-11 I.R.B.427
2018-21, 2018-14 I.R.B.467
Revenue Rulings:
2018-01, 2018-2 I.R.B.275
2018-02, 2018-2 I.R.B.277
2018-03, 2018-2 I.R.B.278
2018-04, 2018-4 I.R.B.304
2018-05, 2018-6 I.R.B.339
2018-06, 2018-10 I.R.B.388
2018-07, 2018-13 I.R.B.445
2018-09, 2018-14 I.R.B.462
Treasury Decisions:
9829, 2018-04 I.R.B.308
9830, 2018-11 I.R.B.423
9831, 2018-13 I.R.B.459
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
April 9, 2018Bulletin No. 2018–15
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2018 –1 through 2018 –15
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
Bulletin No. 2018–15April 9, 2018
iii

INTERNAL REVENUE BULLETIN
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