n-10-03.pdf

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Part III – Administrative, Procedural, and Miscellaneous

Auction Rate Preferred Stock— Extension of Date for Addition of a Liquidity Facility

Notice 2010-3

This Notice modifies Notice 2008-55, 2008-27 I.R.B. 11 (July 7, 2008), to extend
the date by which an initial liquidity facility may be added to support certain auction rate
preferred stock from December 31, 2009 to December 31, 2010.

SECTION 1. Background

In Notice 2008-55, the Internal Revenue Service (IRS) provided guidance
regarding the effect of adding certain liquidity facilities to support certain auction rate
preferred stock on the equity character of the stock for Federal income tax purposes. In
Notice 2008-55, the IRS confirmed that the IRS will not challenge the equity
characterization of the auction rate preferred stock as a result of adding a liquidity
facility agreement if certain requirements are satisfied. Among other requirements
under Notice 2008-55, the auction rate preferred stock must have been outstanding on
February 12, 2008, or issued after that date to refinance, directly or indirectly, auction
rate preferred stock that was outstanding on that date. In addition, the liquidity facility
must be an initial liquidity facility with respect to the auction rate preferred stock that is
entered into on or before December 31, 2009, or a liquidity facility that renews, replaces,
or extends such an initial liquidity facility, either directly or in a series of liquidity facilities.

SECTION 2. Scope and Application. This Notice extends the time period during
which an initial liquidity facility can be entered into under § 3.2 of Notice 2008-55 from
December 31, 2009 until December 31, 2010.

SECTION 3. Effect on Other Guidance

This Notice modifies Notice 2008-55.

SECTION 4. Drafting Information

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The principal author of this Notice is Alfred C. Bishop of the Office of Associate
Chief Counsel (Corporate). For further information regarding this notice, please contact
Mr. Bishop at (202) 622-7930.