Internal Revenue Bulletin 2008-17 (PDF rendition): IRS Announcements

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Bulletin No. 200
8-17
April 28, 2008
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Ct. D. 2085, page 828.
Itemized deductions, certain federal taxable income.
The Supreme Court holds that investment advisory fees gen-
erally are subject to the 2% floor when incurred by a trust.
Knight, Trustee of William L. Rudkin Testamentary Trust
v. Commissioner of Internal Revenue.
T.D. 9388, page 832.
REG–143468–07, page 848.
Final, temporary, and proposed regulations under section 7701
of the Code add an entity to the list of foreign business entities
that are always classified as corporations. This entity is not
eligible to check the box to change its classification.
REG–119518–07, page 844.
Proposed regulations under section 162 of the Code provide
guidance regarding the deduction for deemed living expenses
while away from home for a state legislator who makes an
election under section 162(h).
EMPLOYEE PLANS
REG–110136–07, page 838.
Proposed regulations under section 4980F of the Code provide
guidance relating to a plan amendment that is permitted to be
effective before the plan amendment’s applicable amendment
date. The regulations would also reflect certain amendments
made to section 4980F by the Pension Protection Act of 2006,
Public Law 109–280 (120 Stat. 780). A public hearing is
scheduled for July 10, 2008.
Notice 2008–45, page 835.
Weighted average interest rate update; corporate bond
indices; 30-year Treasury securities; segment rates.
This notice contains updates for the corporate bond weighted
average interest rate for plan years beginning in April 2008;
the 24-month average segment rates; the funding transitional
segment rates applicable for April 2008; and the minimum
present value transitional rates for March 2008.
EXEMPT ORGANIZATIONS
Announcement 2008–37, page 850.
A list is provided of organizations now classified as private foun-
dations.
ADMINISTRATIVE
T.D. 9388, page 832.
REG–143468–07, page 848.
Final, temporary, and proposed regulations under section 7701
of the Code add an entity to the list of foreign business entities
that are always classified as corporations. This entity is not
eligible to check the box to change its classification.
(Continued on the next page)
Fi
nding Lists begin on page ii.
Index for January through April begins on page vi.

Announcement 2008–34, page 849.
This document provides notice of a public hearing on proposed
regulations (REG–133300–07, 2007–49 I.R.B. 1140) under
sections 401(k), 401(m), 402(c), 411(a), 414(w), and 4979(f)
of the Code relating to automatic contribution arrangements.
The regulations will affect administrators of, employers main-
taining, participants in, and beneficiaries of eligible plans that
include an automatic contribution arrangement under sections
401(k)(13), 401(m)(12), or 414(w). A public hearing is sched-
uled for May 19, 2008.
Announcement 2008–35, page 849.
This document contains a correction to final regulations (T.D.
9386, 2008–16 I.R.B. 788) concerning the availability and
character of a loss deduction under section 165 of the Code
for losses sustained from abandoned stock or other securities.
Announcement 2008–38, page 851.
This document contains a correction to final regulations (T.D.
8697, 1997–1 C.B. 215) that classify certain business organi-
zations under an elective regime.
April 28, 20082008–17 I.R.B.

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a’s taxpayers top quality service by helping them
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Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2008–17 I.R.B.April 28, 2008

April 28, 20082008–17 I.R.B.
Place missing child here.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 63.—T
axable
Income Define
d
Ct. D. 2085
SUPREME COURT OF THE
UNITED STATES
No. 06–1286
KNIGHT, TRUSTEE OF WILLIAM
L. RUDKIN TESTAMENTARY
TRUST v. COMMISSIONER OF
INTERNAL REVENUE
CERTIORARI TO THE
UNITED STATES COURT
OF APPEALS FOR
THE SECOND CIRCUIT
January 16, 2008
Syllabus
Individ
uals may subtract from their fed-
eral tax
able income certain itemized de-
duction
s, 26 U. S. C. §63(d), but only to
the exte
nt the deductions exceed 2% of ad-
justed
gross income, §67(a). A trust may
also ta
ke such deductions subject to the 2%
floor,
§67(e), except that when the rele-
vant co
st is “paid or incurred in connec-
tion wi
th the administration of the . . .
trust
” and “would not have been incurred
if the
property were not held in such trust,”
the co
st may be deducted without regard
to the
floor, §67(e)(1). After petitioner
Knigh
t (Trustee), the trustee of a testamen-
tary
trust (Trust), hired the Warfield firm
to ad
vise as to Trust investments, the Trust
dedu
cted in full on its fiduciary income tax
retu
rn the investment advisory fees paid
to Wa
rfield. Respondent Commissioner
fou
nd the fees subject to the 2% floor and
the
refore allowed the deduction only to the
ext
ent the fees exceeded 2% of the Trust’s
adj
usted gross income. The Tax Court de-
cid
ed for the Commissioner, and the Sec-
ond
Circuit affirmed, holding that because
su
ch fees were costs of a type thatcouldbe
in
curred if the property were held individ-
ua
lly rather than in trust, their deduction by
th
e Trust was subject to the 2% floor.
Held:Investm
ent advisory fees gener-
ally are subje
ct to the 2% floor when in-
curred by a tru
st. Pp. 5–13.
(a)Inaskingw
hether a particular type
of cost incurr
ed by a trust “wouldnot
have been inc
urred” if the property were
held by an ind
ividual, §67(e)(1) excepts
from the 2% fl
oor only those costs that it
would be unco
mmon (or unusual, or un-
likely) for
such a hypothetical individual
to incur. Th
equestionwhetheratrust-re-
lated expen
se is fully deductible turns on
apredictio
n about what would happen if
a fact were
changed—specifically, if the
property w
ereheldbyanindividualrather
than by a tr
ust. Predictions are based on
what would
customarily or commonly
occur. Thu
s, in the context of making
such a pre
diction, when there is uncer-
tainty ab
out the answer, the word “would”
is best re
ad to express concepts such as
custom, h
abit, natural disposition, or prob-
ability.
Although the statutory text does
not expr
essly ask whether expenses are
“custom
arily” incurred outside of trusts,
that is t
he direct import of the language in
context
. The Second Circuit’s approach,
which a
sks whether the cost at issuecould
have be
en incurred by an individual, flies
in the f
ace of the statutory language. Had
Congre
ss intended the Court of Appeals’
readin
g, it easily could have replaced
“woul
d” with “could” in §67(e)(1), and
presu
mably would have. The Trustee’s ar-
gumen
t that the proper inquiry is whether
apart
icular expense of a particular trust
was ca
used by the fact that the property
was h
eld in trust fails because the statute
by it
s terms does not establish a straight-
forw
ard causation test, but instead looks
to th
e counterfactual question whether an
indi
vidualwould have incurred such costs
in th
eabsenceof a trust. Further, under
the
Trustee’s approach,everytrust-related
exp
ense would be fully deductible, thus
all
owing the exception to the 2% floor
in §
67(e)(1) to swallow the general rule.
Pp.
5–10.
(b)
The Trust’s investment advisory
fee
s are subject to the 2% floor. The
Tr
ustee—who has the burden of estab-
li
shing entitlement to the deduction, see,
e.
g., INDOPCO, Inc.v.Commissioner,
50
3 U. S. 79, 84—has not demonstrated
that it is unco
mmon or unusual for
individuals t
o hire an investment adviser.
His argument i
s that individuals cannot
incur trust i
nvestment advisory fees,
not that indi
viduals do not commonly
incur invest
ment advisory fees. Indeed,
his essentia
l point is that he engaged
an investme
nt adviser because of his
fiduciary d
uties under Connecticut law,
which requi
res a trustee to invest and
manage trus
t assets “as a prudent investor
would.” Thi
s prudent investor standard
plainly do
es not refer to a prudent
trustee,b
ut looks instead to what a
prudent in
vestor with the same investment
objective
s handling his own affairs would
do—i.e.,
a prudent individual investor.
Because a
hypothetical prudent investor
in petiti
oner’s position would reasonably
have soli
cited investment advice, it is quite
difficul
t to say that the investment advisory
fees “wo
uld not have been incurred”—i.e.,
that it w
ould be unusual or uncommon
for such
fees to have been incurred—if
the prop
erty were held by an individual
invest
or with the same objectives as the
Trust i
n handling his own affairs. While
Congre
ss’s decision to phrase the pertinent
inquir
y in terms of a prediction about a
hypoth
etical situation inevitably entails
some un
certainty, that is no excuse for
judic
ial amendment of the statute. The
Code e
lsewhere poses similar questions,
see,e
.g.,§§162(a), 212, and the inquiry
is in a
ny event what §67(e)(1) requires.
Altho
ugh some trust-related investment
advi
sory fees may be fully deductible if
an in
vestment adviser were to impose a
spec
ial, additional charge applicable only
to it
s fiduciary accounts, there is nothing
in th
e record to suggest that Warfield did
so,
or treated the Trust any differently than
it w
ould have treated an individual with
sim
ilar objectives, because of the Trustee’s
fid
uciary obligations. Nor does the Trust
ass
ert that its investment objectives or
bal
ancing of competing interests were
so
distinctive that any comparison with
th
ose of an individual investor would be
im
proper. Pp. 10–13.
46
7F.3d149,affirmed.
RO
BERTS, C. J., delivered the opinion
fo
r a unanimous Court.
2008–17 I.R.B.828April 28, 2008

SUPREME COURT OF THE
UNITED STATES
No. 06–1286
MICHAEL J. KNIGHT, TRUSTEE
OF THE WILLIAM L. RUDKIN
TESTAMENTARY TRUST,
PETITIONER v. COMMISSIONER
OF INTERNAL REVENUE
ON WRIT OF CERTIORARI TO THE
UNITED STATES COURT
OF APPEALS FOR
THE SECOND CIRCUIT
January 16, 2008
CHIEF JUSTICE ROBERTS delivered
the opinion of the Court.
Under the Internal Revenue Code, indi-
viduals may subtract from their taxable in-
come certain itemized deductions, but only
to the extent the deductions exceed 2% of
adjusted gross income. A trust may also
claim those deductions, also subject to the
2% floor, except that costs incurred in the
administration of the trust, which would
not have been incurred if the trust property
were not held by a trust, may be deducted
without regard to the floor. In the case of
individuals, investment advisory fees are
subject to the 2% floor; the question pre-
sented is whether such fees are also subject
to the floor when incurred by a trust. We
hold that they are and therefore affirm the
judgment below, albeit for different rea-
sons than those given by the Court of Ap-
peals.
I
The Internal Revenue Code imposes a
tax on the “taxable income” of both indi-
viduals and trusts. 26 U. S. C. §1(a). The
Code instructs that the calculation of tax-
able income begins with a determination
of “gross income,” capaciously defined
as “all income from whatever source de-
rived.” §61(a). “Adjusted gross income” is
then calculated by subtracting from gross
income certain “above-the line” deduc-
tions, such as trade and business expenses
and losses from the sale or exchange of
property. §62(a). Finally, taxable in-
come is calculated by subtracting from
adjusted gross income “itemized deduc-
tions”—also known as “below-the-line”
deductions—defined as all allowable de-
ductions other than the “above-the-line”
deductions identified in §62(a) and the de-
duction for personal exemptions allowed
under §151 (2000 ed. and Supp. V).
§63(d) (2000 ed.).
Before the passage of the Tax Reform
Act of 1986, 100 Stat. 2085, below-the-
line deductions were deductible in full.
This system resulted in significant com-
plexity and potential for abuse, requiring
“extensive [taxpayer] recordkeeping with
regard to what commonly are small expen-
ditures,” as well as “significant administra-
tive and enforcement problems for the In-
ternal Revenue Service.” H. R. Rep. No.
99–426, p. 109 (1985).
In response, Congress enacted what is
known as the “2% floor” by adding §67
to the Code. Section 67(a) provides that
“the miscellaneous itemized deductions
for any taxable year shall be allowed only
to the extent that the aggregate of such
deductions exceeds 2 percent of adjusted
gross income.” The term “miscellaneous
itemized deductions” is defined to include
all itemized deductions other than cer-
tain ones specified in§67(b). Investment
advisory fees are deductible pursuant to
26 U. S. C. §212. Because §212 is not
listed in §67(b) as one of the categories
of expenses that may be deducted in full,
such fees are “miscellaneous itemized de-
ductions” subject to the 2% floor. 26 CFR
§1.67–1T(a)(1)(ii) (2007).
Section 67(e) makes the 2% floor gen-
erally applicable not only to individuals
but also to estates and trusts,
1
with one
exception relevant here. Under this ex-
ception, “the adjusted gross income of an
estate or trust shall be computed in the
same manner as in the case of an individ-
ual, except that . . . the deductions for
costs which are paid or incurred in connec-
tion with the administration of the estate
or trust and which would not have been in-
curred if the property were not held in such
trustorestate...shallbetreatedasal-
lowable” and not subject to the 2% floor.
§67(e)(1).
Petitioner Michael J. Knight is the
trustee of the William L. Rudkin Testa-
mentaryTrust,establishedintheStateof
Connecticut in 1967. In 2000, the Trustee
hired Warfield Associates, Inc., to pro-
vide advice with respect to investing the
Trust’s assets. At the beginning of the tax
year, the Trust held approximately $2.9
million in marketable securities, and it
paid Warfield $22,241 in investment ad-
visory fees for the year. On its fiduciary
income tax return for 2000, the Trust re-
ported total income of $624,816, and it
deducted in full the investment advisory
fees paid to Warfield. After conducting an
audit, respondent Commissioner of Inter-
nal Revenue found that these investment
advisory fees were miscellaneous itemized
deductions subject to the 2% floor. The
Commissioner therefore allowed the Trust
to deduct the investment advisory fees,
which were the only claimed deductions
subject to the floor, only to the extent that
they exceeded 2% of the Trust’s adjusted
gross income. The discrepancy resulted in
a tax deficiency of $4,448.
The Trust filed a petition in the United
States Tax Court seeking review of the
assessed deficiency. It argued that the
Trustee’s fiduciary duty to act as a “pru-
dent investor” under the Connecticut Uni-
form Prudent Investor Act, Conn. Gen.
Stat. §§45a–541a to 45a–541l(2007),
2
required the Trustee to obtain investment
advisory services, and therefore to pay
investment advisory fees. The Trust ar-
gued that such fees are accordingly unique
to trusts and therefore fully deductible
under 26 U. S. C. §67(e)(1). The Tax
Court rejected this argument, holding that
§67(e)(1) allows full deductibility only
for expenses that are not commonly in-
curred outside the trust setting. Because
investment advisory fees are commonly
incurred by individuals, the Tax Court held
that they are subject to the 2% floor when
incurred by a trust.Rudkin Testamentary
Trustv.Commissioner, 124 T. C. 304,
309–311 (2005).
The Trust appealed to the United States
Court of Appeals for the Second Circuit.
1
Because this case is only about trusts, we generally refer to trusts throughout, but the analysis applies equally to estates.
2
Forty-four States and the District of Columbia have adopted versions of the Uniform Prudent Investor Act. See 7B U. L. A. 1–2 (2006) (listing States that have enacted the Uniform Prudent
Investor Act). Five of the remaining six States have adopted their own versions of the prudent investor standard. See Del. Code Ann., Tit. 12, §3302 (1995 ed. and 2006 Supp.); Ga. Code
Ann. §53–12–287 (1997); La. Stat. Ann. §9:2127 (West 2005); Md. Est. & Trusts Code Ann. §15–114 (Lexis 2001); S. D. Codified Laws §55–5–6 (2004). Kentucky, the only remaining
State, applies the prudent investor standard only in certain circumstances. See Ky. Rev. Stat. Ann. §286.3–277 (Lexis 2007 Cum. Supp.); §§386.454(1), 386.502 (Supp. 2007).
April 28, 20088292008–17 I.R.B.

The Court of Appeals concluded that, in
determining whether costs such as invest-
ment advisory fees are fully deductible or
subject to the 2% floor, §67(e) “directs the
inquiry toward the counterfactual condi-
tion of assets held individually instead of
in trust,” and requires “an objective deter-
mination of whether the particular cost is
one that is peculiar to trusts and one that in-
dividuals are incapable of incurring.” 467
F. 3d 149, 155, 156 (2006). The court
held that because investment advisory fees
were “costs of a type thatcouldbe in-
curred if the property were held individu-
ally rather than in trust,” deduction of such
fees by the Trust was subject to the 2%
floor.Id., at 155–156.
The Courts of Appeals are divided on
the question presented. The Sixth Cir-
cuit has held that investment advisory fees
are fully deductible.O’Neillv.Commis-
sioner, 994 F. 2d 302, 304 (1993). In
contrast, both the Fourth and Federal Cir-
cuits have held that such fees are subject
to the 2% floor, because they are “com-
monly” or “customarily” incurred outside
of trusts. SeeScottv.United States,328
F. 3d 132, 140 (CA4 2003);Mellon Bank,
N. A. United States, 265 F. 3d 1275, 1281
(CA Fed. 2001). The Court of Appeals
below came to the same conclusion, but as
noted announced a more exacting test, al-
lowing” full deduction only for those costs
thatcould nothave been incurred by an
individual property owner.” 467 F. 3d, at
156 (emphasis added). We granted the
Trustee’s petition for certiorari to resolve
the conflict, 551 U. S. __ (2007), and now
affirm.
II
We start, as always, with the language
of the statute.”Williamsv.Taylor,529
U. S. 420, 431 (2000). Section 67(e) sets
forth a general rule: “[T]he adjusted gross
income of [a] . . . trust shall be com-
puted in the same manner as in the case
of an individual.” That is, trusts can or-
dinarily deduct costs subject to the same
2% floor that applies to individuals’ de-
ductions. Section 67(e) provides for an
exception to the 2% floor when two con-
ditions are met. First, the relevant cost
must be “paid or incurred in connection
with the administration of the . . . trust.”
§67(e)(1). Second, the cost must be one
“which would not have been incurred if the
property were not held in such trust.”Ibid.
In applying the statute, the Court of Ap-
peals below asked whether the cost at issue
couldhave been individuals’ deductions.
Section 67(e) provides for an exception to
the 2% floor when two conditions are met.
First, the relevant cost must be “paid or in-
curred in connection with the administra-
tion of the . . . trust.” §67(e)(1). Sec-
ond, the cost must be one “which would
not have been incurred if the property were
notheldinsuchtrust.”Ibid.
In applying the statute, the Court of Ap-
peals below asked whether the cost at is-
suecouldhave been incurred by an indi-
vidual.
3
This approach flies in the face of
the statutory language. The provision at
issue asks whether the costs “would not
have been incurred if the property were not
held” in trust,ibid.,not,astheCourtof
Appeals would have it, whether the costs
“could not have been incurred” in such a
case, 467 F. 3d, at 156. The fact that an
individual could not do something is one
reason he would not, but not the only pos-
sible reason. If Congress had intended the
Court of Appeals’ reading, it easily could
have replaced “would” in the statute with
“could,” and presumably would have. The
fact that it did not adopt this readily avail-
able and apparent alternative strongly sup-
ports rejecting the Court of Appeals’ read-
ing.
4
Moreover, if the Court of Appeals’
reading were correct, it is not clear why
Congress would have included in the
statute the first clause of §67(e)(1). If the
only costs that are fully deductible are
those thatcouldnot be incurred outside
the trust context—that is, that couldonly
be incurred by trusts—then there would
be no reason to place the further condi-
tion on full deductibility that the costs be
“paid or incurred in connection with the
administrationofthe...trust,Ӥ67(e)(1).
We can think of no expense that could be
incurred exclusively by a trust but would
neverthelessnotbe “paid or incurred in
connection with” its administration.
The Trustee argues that the exception
in §67(e)(1) “establishes a straightforward
causation test.” Brief for Petitioner 22.
The proper inquiry, the Trustee contends,
is “whether a particular expense of a par-
ticular trust or estate was caused by the fact
that the property was held in the trust or
estate.”Ibid. Investment advisory fees in-
curred by a trust, the argument goes, meet
this test because these costs are caused by
the trustee’s obligation “to obtain advice
on investing trust assets in compliance
with the Trustees’ particular fiduciary du-
ties.”Ibid. We reject this reading as well.
On the Trustee’s view, the statute oper-
ates only to distinguish costs that are in-
curred by virtue of a trustee’s fiduciary du-
ties from those that are not. But all (or
nearly all) of a trust’s expenses are in-
curred because the trustee has a duty to
incur them; otherwise, there would be no
reason for the trust to incur the expense
in the first place. See G. Bogert & G.
Bogert, Law of Trusts and Trustees §801,
p. 134 (2d rev. ed. 1981) (“[T]he payment
for expenses must be reasonably necessary
to facilitate administration of the trust”).
As an example of a type of trust-related
expense that would be subject to the 2%
floor, the Trustee offers “expenses for rou-
tine maintenance of real property” held by
a trust. Brief for Petitioner 23. But such
costs would appear to be fully deductible
under the Trustee’s own reading, because
a trustee is obligatedto incur maintenance
expenses in light of the fiduciary duty to
maintain trust property. See 1 Restatement
(Second) of Trusts §176, p. 381 (1957)
(“The trustee is under a duty to the ben-
3
The Solicitor General embraces this position in this Court, arguing that the Court of Appeals’ approach represents the best reading of the statute andestablishes an easily administrable
r
ule. See Brief for Respondent 17–20, 22. Indeed, after the Court of Appeals’ decision, the Commissioner adopted that court’s reading of the statute ina proposed regulation. See Section 67
L
imitations on Estates or Trusts, 72 Fed. Reg. 41243, 41245 (2007) (notice of proposed rulemaking) (a trust-related cost is exempted from the 2% floor only if “an individualcould nothave
incurred that cost in connection with property not held in an estate or trust” (emphasis added)). The Government did not advance this argument before the Court of Appeals. See Brief for
Appellee in No. 05–5151–AG (CA2), pp. 3–4, 22–24. In fact, the notice of proposed rulemaking appears to be the first time the Government has ever taken this position, and we are the first
Court to which the argument has been made in a brief. See Brief for United States inMellon Bankv.United States, No. 01–5015 (CA Fed.), p. 27 (“[I]f a trust-related administrative expense
is also customarily or habitually incurred outside of trusts, then it is subject to the two-percent floor”); Brief for United States inScottv.United States, No. 02–1464 (CA4), p. 27 (same).
4
In pressing the Court of Appeals’ approach, the Solicitor General argues that “to say that a team would not have won the game if it were not for the quarterback’s outstanding play is to say
that the team could not have won without the quarterback.” Brief for Respondent 19. But the Solicitor General simply posits the truth of a proposition—that the team would not have won
the game if it were not for the quarterback’s outstanding play—and then states its equivalent. The statute, in contrast, does not posit any proposition. Rather, it asks a question: whether a
particular costwouldhave been incurred if the property were held by an individual instead of a trust.
2008–17 I.R.B.830April 28, 2008

eficiary to use reasonable care and skill to
preserve the trust property”).
Indeed, the Trustee’s formulation of its
argument is circular: “Trust investment
advice fees are caused by the fact the prop-
erty is held in trust.” Brief for Petitioner
19. But “trust investment advice fees”
are only aptly described as such because
the property is held in trust; the statute
asks whether such costs would be incurred
by an individual if the property were not.
Even when there is a clearly analogous cat-
egory of costs that would be incurred by in-
dividuals, the Trustee’s reading would ex-
empt most or all trust costs as fully de-
ductible merely because they derive from a
trustee’s fiduciary duty. Adding the mod-
ifier “trust” to costs that otherwise would
be incurred by an individual surely cannot
be enough to escape the 2% floor.
What is more, if the Trustee’s position
were correct, then only the first clause of
§67(e)(1)—providing that the cost be “in-
curred in connection with the administra-
tion of the . . . trust”—would be neces-
sary. The statute’s second, limiting con-
dition—that the cost also be one “which
would not have been incurred if the prop-
erty were not held in such trust”—would
do no work; we see no difference in say-
ing, on the one hand, that costs are “caused
by” the fact that the property is held in
trust and, on the other, that costs are in-
curred “in connection with the adminis-
tration” of the trust. Thus, accepting the
Trustee’s approach “would render part of
the statute entirely superfluous, something
we are loath to do.”Cooper Industries, Inc.
v.Aviall Services, Inc., 543 U. S. 157, 166
(2004).
The Trustee’s reading is further under-
mined by our inclination, “[i]n constru-
ing provisions . . . in which a general
statement of policy is qualified by an ex-
ception, [to] read the exception narrowly
in order to preserve the primary opera-
tion of the provision.”Commissionerv.
Clark, 489 U. S. 726, 739 (1989). As
we have said, §67(e) sets forth a gen-
eral rule for purposes of the 2% floor
established in §67(a): “For purposes of
this section, the adjusted gross income
of an estate or trust shall be computed
in the same manner as in the case of an
individual.” Under the Trustee’s reading,
§67(e)(1)’s exception would swallow the
general rule; most (if not all) expenses in-
curred by a trust would be fully deductible.
“Given that Congress has enacted a gen-
eral rule . . . , we should not eviscerate that
legislative judgment through an expansive
reading of a somewhat ambiguous
exception.”Ibid.
More to the point, the statute by its
terms does not “establis[h] a straightfor-
ward causation test,” Brief for Petitioner
22, but rather invites a hypothetical inquiry
into the treatment of the property were
it held outside a trust. The statute does
not ask whether a cost was incurredbe-
causethepropertyisheldbyatrust;itasks
whether a particular cost “would not have
been incurred if the property were not held
in such trust,” §67(e)(1). “Far from exam-
ining the nature of the cost at issue from the
perspective of whether it was caused by the
trustee’s duties, the statute instead looks to
the counterfactual question of whetherin-
dividualswould have incurred such costs
in theabsenceof a trust.” Brief for Respon-
dent 9.
This brings us to the test adopted by
the Fourth and Federal Circuits: Costs
incurred by trusts that escape the 2% floor
are those that would not “commonly” or
“customarily” be incurred by individu-
als. SeeScott, 328 F. 3d, at 140 (“Put
simply, trust-related administrative ex-
penses are subject to the 2% floor if they
constitute expenses commonly incurred
by individual taxpayers”);Mellon Bank,
265 F. 3d, at 1281 (§67(e) “treats as
fully deductible only those trust-related
administrative expenses that are unique
to the administration of a trust and not
customarily incurred outside of trusts”).
The Solicitor General also accepts this
view as an alternative reading of the
statute. See Brief for Respondent 20–21.
We agree with this approach.
The question whether a trust-related
expense is fully deductible turns on a pre-
diction about what would happen if a fact
were changed—specifically, if the prop-
erty were held by an individual rather than
by a trust. In the context of making such a
prediction, when there is uncertainty about
the answer, the word “would” is best read
as “express[ing] concepts such as custom,
habit, natural disposition, or probability.”
Scott,supra, at 139. See Webster’s Third
New International Dictionary 2637–2638
(1993); American Heritage Dictionary
2042, 2059 (3d ed. 1996). The Trustee
objects that the statutory text “does not
ask whether expenses are ‘customarily’
incurred outside of trusts,” Reply Brief for
Petitioner 15, but that is the direct import
of the language in context. The text re-
quires determining what would happen if a
fact were changed; such an exercise neces-
sarily entails a prediction; and predictions
are based on what would customarily or
commonly occur. Thus, in asking whether
a particular type of cost “wouldnothave
been incurred” if the property were held
by an individual, §67(e)(1) excepts from
the 2% floor only those costs that it would
beuncommon (or unusual, or unlikely) for
such a hypothetical individual to incur.
III
Having decided on the proper reading
of §67(e)(1), we come to the application of
the statute to the particular question in this
case: whether investment advisory fees in-
curred by a trust escape the 2% floor.
It is not uncommon or unusual for in-
dividuals to hire an investment adviser.
Certainly the Trustee, who has the bur-
den of establishing its entitlement to the
deduction, has not demonstrated that it
is. SeeINDOPCO, Inc.v.Commis-
sioner, 503 U. S. 79, 84 (1992) (noting
the “‘familiar rule’ that ‘an income tax
deduction is a matter of legislative grace
and that the burden of clearly showing
the right to the claimed deduction is
on the taxpayer’” (quotingInterstate
Transit Linesv.Commissioner,319
U. S. 590, 593 (1943))); Tax Court Rule
142(a)(1) (stating that the “burden of
proof shall be upon the petitioner,” with
certain exceptions not relevant here). The
Trustee’s argument is that individuals
cannot incur trust investment advisory
fees, not that individuals do not commonly
incur investment advisory fees.
Indeed, the essential point of the
Trustee’s argument is that he engaged an
investment adviser because of his fidu-
ciary duties under Connecticut’s Uniform
Prudent Investor Act, Conn. Gen. Stat.
§45a–541a(a) (2007). The Act epony-
mously requires trustees to follow the
“prudent investor rule.” See n. 2,supra.
To satisfy this standard, a trustee must
“invest and manage trust assetsas a pru-
dent investor would, by considering the
purposes, terms, distribution require-
ments and other circumstances of the trust.
“§45a–541b(a) (emphasis added). The
prudent investor standard plainly does not
April 28, 20088312008–17 I.R.B.

refer to a prudenttrustee;itwouldnot
be very helpful to explain that a trustee
should act as a prudent trustee would.
Rather, the standard looks to what a pru-
dent investor with the same investment
objectives handling his own affairs would
do—i.e., a prudent individual investor.
See Restatement (Third) of Trusts (Pru-
dent Investor Rule) Reporter’s Notes on
§227, p. 58 (1990) (“The prudent investor
rule of this Section has its origins in the
dictum of Harvard College v. Amory, 9
Pick. (26 Mass.) 446, 461 (1830), stat-
ing that trustees must ‘observe how men
of prudence, discretion, and intelligence
manage their own affairs, not in regard to
speculation, but in regard to the permanent
disposition of their funds, considering the
probable income, as well as the probable
safety of the capital to be invested’”).
See also,e.g.,In re Musser’s Estate,341
Pa. 1, 9–10, 17 A. 2d 411, 415 (1941)
(noting the “generalrule”that“atrustee
must exercise such prudence and diligence
in conducting the affairs of the trust as
men of average diligence and discretion
would employ in their own affairs”). And
we have no reason to doubt the Trustee’s
claim that a hypothetical prudent investor
in his position would have solicited in-
vestment advice, just as he did. Having
accepted all this, it is quite difficult to say
that investment advisory fees” would not
have been incurred”—that is, that it would
be unusual or uncommon for such fees to
have been incurred—if the property were
held by an individual investor with the
same objectives as the Trust in handling
his own affairs.
We appreciate that the inquiry into what
is common may not be as easy in other
cases, particularly given the absence of
regulatory guidance. But once you de-
part in the name of ease of administration
from the language chosen by Congress,
there is more than one way to skin the
cat: The Trustee raises administrabil-
ity concerns in support of his causation
test, Reply Brief for Petitioner 6, but so
does the Government in explaining why
it prefers the Court of Appeals’ approach
to the one it has successfully advanced
before the Tax Court and two Federal Cir-
cuits. Congress’s decision to phrase the
pertinent inquiry in terms of a prediction
about a hypothetical situation inevitably
entails some uncertainty, but that is no
excuse for judicial amendment of the
statute. The Code elsewhere poses simi-
lar questions—such as whether expenses
are “ordinary,” see §§162(a), 212; see
alsoDeputy, Administratrixv.Du Pont,
308 U. S. 488, 495 (1940) (noting that
“[o]rdinary has the connotation of normal,
usual, or customary”)—and the inquiry is
in any event what §67(e)(1) requires.
As the Solicitor General concedes,
some trust-related investment advisory
fees may be fully deductible “if an invest-
ment advisor were to impose a special,
additional charge applicable only to its
fiduciary accounts.” Brief for Respon-
dent 25. There is nothing in the record,
however, to suggest that Warfield charged
the Trustee anything extra, or treated the
Trust any differently than it would have
treated an individual with similar objec-
tives, because of the Trustee’s fiduciary
obligations. See App. 24–27. It is con-
ceivable, moreover, that a trust may have
an unusual investment objective, or may
require a specialized balancing of the
interests of various parties, such that a
reasonable comparison with individual in-
vestors would be improper. In such a case,
the incremental cost of expert advice be-
yond what would normally be required for
the ordinary taxpayer would not be subject
to the 2% floor. Here, however, the Trust
has not asserted that its investment objec-
tive or its requisite balancing of competing
interests was distinctive. Accordingly, we
conclude that the investment advisory fees
incurred by the Trust are subject to the 2%
floor.
The judgment of the Court of Appeals
is affirmed.
It is so ordered.
Section 7701.—Definitions
26 CFR 301.7701–2: Business entities; definitions.
T.D. 9388
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Classification of Certain
Foreign Entities
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and temporary regula-
tions.
SUMMARY: This document contains tem-
porary and final regulations relating to cer-
tain business entities included on the list
of foreign business entities that are always
classified as corporations for Federal tax
purposes. The regulations are needed to
make the Federal tax classification of Bul-
garian public limited liability companies
consistent with the Federal tax classifica-
tion of public limited liability companies
organized in other countries of the Euro-
pean Economic Area. The regulations will
affect persons owning an interest in a Bul-
garian aktsionerno druzhestvo on or after
January 1, 2007. The text of the temporary
regulations serves as the text of the pro-
posed regulations (REG–143468–07) set
forth in the notice of proposed rulemaking
on this subject in this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on March 21, 2008.
Applicability Date:For the dates of
applicability of these regulations, see
§301.7701–2T(e)(7).
FOR FURTHER INFORMATION
CONTACT: S. James Hawes, (202)
622–3860 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The IRS and the Treasury Department
issued final regulations concerning the
Federal tax classification of entities under
section 7701 of the Internal Revenue Code
on December 18, 1996. See T.D. 8697,
2008–17 I.R.B.832April 28, 2008

1997–1 C.B. 215 [61 FR 66584] and
§§301.7701–1 through 301.7701–3.
Under those regulations, a business entity
that is not specifically classified as a
corporation can elect its classification
for Federal tax purposes under certain
circumstances. Section 301.7701–2(b)(8)
provides a list of certain foreign business
entities that are nevertheless always
classified as corporations for Federal tax
purposes. This list is known as theper
secorporation list. The foreign business
entities on this list are referred to asper se
corporations. Recent changes in European
law require the IRS and the Treasury
Department to amend theper selist. See
§601.601(d)(2)(ii)(b).
On October 8, 2001, the Council of the
European Union adopted Council Regu-
lation 2157/2001 (2001 Official Journal
of the European Communities, L 294/1)
(the EU Regulation) to provide for a new
business entity called the European public
limited liability company, which is also
known as a Societas Europaea or SE. The
EU Regulation entered into force October
8, 2004. The EU Regulation provides
general rules that govern the formation
and operation of an SE. With respect to
many issues, however, the EU Regulation
defers to the laws of the country in which
the SE has its registered office. An SE
musthavearegisteredofficeinoneofthe
Member States of the European Economic
Area, which includes Norway, Iceland,
Liechtenstein, and every country in the
European Union. For further background,
see T.D. 9197, 2005–1 C.B. 985 [70 FR
19697] and Notice 2004–68, 2004–2 C.B.
706. See §601.601(d)(2)(ii)(b).
The IRS and the Treasury Department
stated in Notice 2004–68 that the SE is
properly classified as aper secorpora-
tion for Federal tax purposes. Conse-
quently, the IRS and the Treasury De-
partment issued regulations modifying
§301.7701–2(b)(8) to include the SE on
theper secorporation list. Those reg-
ulations included certain public limited
liability companies organized in Member
States that did not already appear on the
per selist. See T.D. 9197 and T.D. 9235,
2006–1 C.B. 338 [70 FR 74658]. With the
entry of Bulgaria into the European Union
on January 1, 2007, an SE can now have
its registered office in Bulgaria.
Explanation of Provisions
Bulgaria’s SE is called an aktsion-
erno druzhestvo. The IRS and the
Treasury Department stated in No-
tice 2007–10, 2007–4 I.R.B. 354, that
§301.7701–2(b)(8) would be modified to
include the aktsionerno druzhestvo on the
per secorporation list. The temporary
regulations in this document make that
modification. In accordance with No-
tice 2007–10, these regulations will be
effective for any Bulgarian aktsionerno
druzhestvo formed on or after January 1,
2007.
Notice 2007–10 also stated that the
regulations would be effective for any
Bulgarian aktsionerno druzhestvo formed
before January 1, 2007, upon a 50 percent
or greater change of ownership in such
entity subsequent to that date. See section
7805(b)(1)(C) and §601.601(d)(2)(ii)(b).
The temporary regulations therefore
provide that a Bulgarian aktsionerno
druzhestvo formed before January 1, 2007,
will become aper secorporationonthe
date that, in the aggregate, a 50 percent
or more interest in the entity is owned by
a person or persons who were not owners
of the entity as of January 1, 2007. In the
case of a partnership, an interest means a
capital or profits interest. In the case of a
corporation, an interest means an equity
interest in the entity measured by vote or
value.
The standard provided by these tem-
porary regulations for determining the ap-
plication of the regulations to a Bulgar-
ian aktsionerno druzhestvo formed before
January 1, 2007, clarifies the standard de-
scribed in Notice 2007–10 and the stan-
dard to be applied with respect to enti-
ties listed in §301.7701–2(b)(8), includ-
ing those entities listed in T.D. 8697, T.D.
9197, and T.D. 9235. Comments are re-
quested with respect to this clarification.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. Chapter 5) does
not apply to this regulation. For the appli-
cability of the Regulatory Flexibility Act
(5 U.S.C. chapter 6), refer to the Special
Analyses section of the preamble to the no-
tice of proposed rulemaking published in
this issue of the Bulletin. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
these regulations have been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact.
Drafting Information
The principal author of these regula-
tions is S. James Hawes of the Office of
Associate Chief Counsel (International);
however, other personnel from the IRS and
the Treasury Department participated in
their development.
*****
Amendments to the Regulations
Accordingly, 26 CFR part 301 is
amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.7701–2(b)(8)(vi)
and (e)(7) are added and the paragraph
heading for paragraph (e) is revised to read
as follows:
§301.7701–2 Business entities;
definitions.
*****
(b) * * *
(8) * * *
(vi) [Reserved]. For further guidance,
see §301.7701–2T(b)(8)(vi).
*****
(e)Effective/applicability date.***
(7) [Reserved]. For further guidance,
see §301.7701–2T(e)(7).
Par. 3. Section 301.7701–2T is added
to read as follows:
§301.7701–2T Business entities;
definitions (temporary).
(a) through (b)(8)(v) [Reserved]. For
further guidance, see §301.7701–2(a)
through (b)(8)(v).
April 28, 20088332008–17 I.R.B.

(b)(8)(vi)Certain European entities.
The following business entity formed in
the following jurisdiction:
Bulgaria, Aktsionerno Druzhestvo.
(c) through (e)(6) [Reserved]. For fur-
ther guidance, see §301.7701–2(c) through
(e)(6).
(7) The reference to the Bulgarian en-
tity in paragraph (b)(8)(vi) of this section
appliestosuchentitiesformedonoraf-
ter January 1, 2007, and to any such en-
tity formed before such date from the date
that, in the aggregate, a 50 percent or more
interest in such entity is owned by any per-
son or persons who were not owners of the
entity as of January 1, 2007. For purposes
of the preceding sentence, the terminterest
means—
(i) In the case of a partnership, a capital
or profits interest; and
(ii) In the case of a corporation, an eq-
uity interest measured by vote or value.
(8)Expiration date.The applicability
of this section expires on or before March
18, 2011.
LindaE.Stiff,
Deputy Commissioner for
Services and Enforcement.
Approved March 12, 2008.
Eric Solomon,
Assistant Secretary of
theTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on March 20,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 21, 2008, 73 F.R. 15064)
2008–17 I.R.B.834April 28, 2008

Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2008–45
This notice provides guidance as to the
corporate bond weighted average interest
rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code as in ef-
fect for plan years beginning before 2008.
It also provides guidance on the corpo-
rate bond monthly yield curve (and the
corresponding spot segment rates), the
24-month average segment rates, and
the funding transitional segment rates
under § 430(h)(2). In addition, this no-
tice provides guidance as to the interest
rate on 30-year Treasury securities un-
der § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008, the
30-year Treasury weighted average rate
under § 431(c)(6)(E)(ii)(I), and the min-
imum present value segment rates under
§ 417(e)(3)(D) as in effect for plan years
beginning after 2007.
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections412(b)(5)(B)(ii)and
412(l)(7)(C)(i), as amended by the Pen-
sion Funding Equity Act of 2004 and by
the Pension Protection Act of 2006 (PPA),
provide that the interest rates used to cal-
culate current liability and to determine
the required contribution under § 412(l)
for plan years beginning in 2004 through
2007 must be within a permissible range
based on the weighted average of the rates
of interest on amounts invested conser-
vatively in long term investment grade
corporate bonds during the 4-year period
ending on the last day before the beginning
of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–2 C.B. 366.
The composite corporate bond rate for
March 2008 is 6.46 percent. Pursuant
to Notice 2004–34, the Service has de-
termined this rate as the average of the
monthly yields for the included corporate
bond indices for that month.
The following corporate bond weighted
average interest rate was determined for
plan years beginning in the month shown
below.
For Plan Years
Beginning inPermissible Range
MonthYear
Corporate
Bond Weighted
Average90%to100%
April2008
5.995.395.99
YIELD CURVE AND SEGMENT
RATES
Generally for plan years beginning
after 2007 (except for delayed effective
dates for certain plans under sections 104,
105, and 106 of PPA), § 430 of the Code
specifies the minimum funding require-
ments that apply to single employer plans
pursuant to § 412. Section 430(h)(2) spec-
ifies the interest rates that must be used
to determine a plan’s target normal cost
and funding target. Under this provision,
present value is generally determined us-
ing three 24-month average interest rates
(“segment rates”), each of which applies
to cash flows during specified periods.
However, an election may be made under
§ 430(h)(2)(D)(ii) to use the monthly yield
curve in place of the segment rates. For
plan years beginning in 2008 and 2009, a
transitional rule under § 430(h)(2)(G) pro-
vides that the segment rates are blended
with the corporate bond weighted average
as specified above. An election may be
made under § 430(h)(2)(G)(iv) to use the
segment rates without applying the transi-
tional rule.
Notice 2007–81, 2007–44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, the
24-month average corporate bond segment
rates, and the funding transitional segment
rates used to compute the target normal
cost and the funding target. Pursuant to
Notice 2007–81, the monthly corporate
bond yield curve derived from March 2008
data is in Table I at the end of this notice.
The spot first, second, and third segment
rates for the month of March 2008 are,
respectively, 4.28, 6.38, and 6.99. The
three 24-month average corporate bond
segment rates applicable for April 2008
under the election of § 430(h)(2)(G)(iv)
are as follows:
First
Segment
Second
Segment
Third
Segment
5.205.996.52
April 28, 20088352008–17 I.R.B.

The transitional segment rates under
§ 430(h)(2)(G) applicable for April 2008,
taking into account the corporate bond
weighted average of 5.99 stated above, are
as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
2008
5.735.99
6.17
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 417(e)(3)(A)(ii)(II) (prior to
amendment by PPA) defines the appli-
cable interest rate, which must be used
for purposes of determining the minimum
present value of a participant’s benefit
under § 417(e)(1) and (2), as the annual
rate of interest on 30-year Treasury se-
curities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe.
Section 1.417(e)–1(d)(3) of the Income
Tax Regulations provides that the applica-
ble interest rate for a month is the annual
rate of interest on 30-year Treasury secu-
rities as specified by the Commissioner
for that month in revenue rulings, notices
or other guidance published in the Internal
Revenue Bulletin.
The rate of interest on 30-year Treasury
securities for March 2008 is 4.39 percent.
The Service has determined this rate as the
monthly average of the daily determina-
tion of yield on the 30-year Treasury bond
maturing in February 2038.
Generally for plan years beginning
after 2007, § 431 specifies the mini-
mum funding requirements that apply to
multiemployer plans pursuant to § 412.
Section 431(c)(6)(B)specifies a minimum
amount for the full-funding limitation
described in section 431(c)(6)(A), based
on the plan’s current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 percent
below the weighted average of the rates of
interest on 30-year Treasury securities dur-
ing the four-year period ending on the last
day before the beginning of the plan year.
Notice 88–73, 1988–2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The following rates
were determined for plan years beginning
in the month shown below.
For Plan Years
Beginning inPermissible Range
MonthYear
30-Year
Treasury
Weighted
Average
90%to
105%
April20084.784.30
5.02
MINIMUM PRESENT VALUE
SEGMENT RATES
Generally for plan years beginning af-
ter December 31, 2007, the applicable in-
terest rates under § 417(e)(3)(D) are seg-
ment rates computed without regard to a
24-month average. For plan years begin-
ning in 2008 through 2011, the applica-
ble interest rate is the monthly spot seg-
ment rate blended with the applicable rate
under § 417(e)(3)(A)(ii)(II) as in effect
for plan years beginning in 2007. Notice
2007–81 provides guidelines for determin-
ing the minimum present value segment
rates. Pursuant to that notice, the min-
imum present value transitional segment
rates determined for March 2008, taking
into account the March 2008 30-year Trea-
sury rate of 4.39 stated above, are as fol-
lows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20084.374.794.91
DRAFTING INFORMATION
The principal author of this notice is
Tony Montanaro of the Employee Plans,
Tax Exempt and Government Entities Di-
vision. Mr. Montanaro may be e-mailed at
RetirementPlanQuestions@irs.gov.
2008–17 I.R.B.836April 28, 2008

Table I
Monthly Yield Curve for March 2008
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.5
3.36
20.56.8540.5
7.01
60.5
7.06
80.5
7.09
1.03.5921.06.8641.07.0161.07.0681.0
7.09
1.5
3.81
21.5
6.86
41.5
7.01
61.5
7.07
81.5
7.09
2.04.0322.06.8742.07.0162.07.0782.0
7.09
2.5
4.23
22.5
6.87
42.5
7.01
62.5
7.07
82.5
7.09
3.04.4223.06.8843.07.0263.07.0783.07.10
3.5
4.60
23.5
6.89
43.5
7.02
63.5
7.07
83.5
7.10
4.04.7724.0
6.89
44.07.0264.07.0784.07.10
4.5
4.93
24.5
6.90
44.5
7.02
64.5
7.07
84.5
7.10
5.05.0925.0
6.90
45.07.0265.07.0785.07.10
5.55.2425.5
6.90
45.5
7.02
65.5
7.07
85.5
7.10
6.0
5.38
26.0
6.91
46.07.0366.07.0786.07.10
6.55.5226.5
6.91
46.5
7.03
66.5
7.07
86.5
7.10
7.0
5.65
27.0
6.92
47.07.0367.07.0787.07.10
7.55.7727.5
6.92
47.5
7.03
67.5
7.08
87.5
7.10
8.05.8828.0
6.93
48.07.0368.07.0888.07.10
8.5
5.98
28.5
6.93
48.5
7.03
68.5
7.08
88.5
7.10
9.0
6.08
29.06.9449.0
7.04
69.0
7.08
89.0
7.10
9.56.1629.5
6.94
49.57.0469.57.0889.57.10
10.06.2430.0
6.94
50.0
7.0470.07.08
90.0
7.10
10.5
6.32
30.5
6.95
50.5
7.04
70.5
7.0890.57.10
11.06.3831.06.9551.07.0471.07.08
91.0
7.10
11.5
6.44
31.5
6.96
51.5
7.04
71.5
7.0891.57.10
12.0
6.49
32.0
6.96
52.0
7.0472.07.08
92.0
7.10
12.56.5432.5
6.96
52.57.0572.5
7.0892.57.10
13.0
6.58
33.0
6.97
53.07.05
73.07.08
93.0
7.10
13.5
6.62
33.5
6.97
53.57.0573.5
7.0893.57.10
14.06.6534.0
6.97
54.07.05 74.07.08
94.0
7.11
14.5
6.68
34.5
6.97
54.57.0574.5
7.0994.57.11
15.0
6.71
35.0
6.98
55.07.0575.0
7.09
95.07.11
15.5
6.73
35.5
6.98
55.57.0575.5
7.09
95.57.11
16.0
6.75
36.0
6.98
56.07.05
76.0
7.0996.0
7.11
16.5
6.77
36.5
6.99
56.5
7.06
76.5
7.09
96.57.11
17.06.7837.0
6.99
57.07.0677.0
7.0997.0
7.11
17.5
6.79
37.5
6.99
57.5
7.06
77.5
7.0997.57.11
18.06.8138.0
6.99
58.0
7.0678.0
7.0998.0
7.11
18.5
6.82
38.5
7.00
58.5
7.06
78.5
7.09
98.57.11
19.0
6.83
39.0
7.0059.07.06
79.07.0999.0
7.11
19.56.8339.57.0059.57.0679.5
7.09
99.57.11
20.06.8440.07.0060.07.0680.0
7.09
100.07.11
April 28, 20088372008–17 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking an
dNoticeof
Public Hearin
g
Notice Requir
ements for
Certain Pens
ion Plan
Amendments S
ignificantly
Reducing th
eRateofFuture
Benefit Acc
rual
REG–110136
–07
AGENCY: In
ternal Revenue Service
(IRS), Dep
artment of the Treasury.
ACTION: No
tice of proposed rulemaking
and notice
of public hearing.
SUMMARY: T
his document contains
proposed r
egulations that would provide
guidance r
elating to the application of sec-
tion 4980
F of the Internal Revenue Code
to a plan a
mendment that is permitted to
reduce be
nefits accrued before the plan
amendmen
t’s applicable amendment date.
These reg
ulations would also reflect cer-
tain ame
ndments made to section 4980F
by the Pe
nsion Protection Act of 2006,
Public L
aw 109–280 (120 Stat. 780).
These pr
oposed regulations would affect
sponsor
s, administrators, participants, and
benefi
ciaries of pension plans. This doc-
ument a
lso provides a notice of a public
hearin
g on these proposed regulations.
DATES:
Written or electronic comments
must be
received by June 19, 2008. Out-
lines o
f topics to be discussed at the pub-
lic he
aring scheduled for July 10, 2008, at
10 a.m
. must be received by June 20, 2008.
ADDRE
SSES: Send submissions to:
CC:PA
:LPD:PR(REG–110136–07),
room 5
203, Internal Revenue Ser-
vice,
PO Box 7604, Ben Franklin Sta-
tion
, Washington, DC 20044. Submis-
sion
s may be hand delivered Monday
thro
ugh Friday, between the hours of
8 a.m
.and4p.m.toCC:PA:LPD:PR
(REG
–110136–07), Courier’s Desk, Inter-
nal R
evenue Service, 1111 Constitution
Ave
nue, NW, Washington, DC 20224, or
sen
t via the Federal eRulemaking Por-
tal
athttp://www.regulations.gov(IRS
REG
–110136–07). The public hearing
will be held in
the IRS Auditorium,
Internal Reve
nue Building, 1111
Constitution
Avenue, N.W., Washington,
DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Pamela R. Kinard, at (202)
622–6060; concerning submission of
comments, the hearing, and/or to be
placed on the building access list to
attend the hearing, Richard A. Hurst,
Richard.A.Hurst@irscounsel.treas.gov,or
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information refer-
enced in this notice of proposed rule-
making were previously reviewed and
approved by the Office of Management
and Budget in accordance with the Pa-
perwork Reduction Act of 1995 (44
U.S.C. 3507(d)) under control number
1545–1780, in conjunction with the Trea-
sury Decision (T.D. 9052, 2003–1 C.B.
879), relating to Notice of Significant
Reduction in the Rate of Future Benefit
Accrual, published on April 9, 2003 in the
Federal Register(68 FR 17277). There
are no proposals for substantive changes
to this collection of information.
An agency may not conduct or sponsor,
and a person is not required to respond to, a
collection of information unless it displays
a valid control number assigned by the Of-
fice of Management and Budget.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
Background
Overview
This
document contains proposed
amen
dments to 26 CFR parts 1 and 54 un-
der s
ection 4980F of the Internal Revenue
Code
(Code). Section 4980F sets forth
the r
equirements for providing notice to
certain affec
ted persons when a plan sig-
nificantly re
duces future benefit accruals.
A notice requi
red under section 4980F of
the Code or the
parallel rules in section
204(h) of the E
mployee Retirement In-
come Securit
y Act of 1974 (ERISA) is
referred to a
s a “section 204(h) notice.”
These propos
ed regulations would set
forth timing
rules for providing a section
204(h) noti
ce for a plan amendment that
is permitte
d to be effective before the
applicable
amendment date. In addition,
the regulat
ions provide guidance relating
to changes
made in section 4980F by the
Pension Pr
otection Act of 2006, Public
Law 109–28
0 (120 Stat. 780) (PPA ’06).
Section 41
1(d)(6) Protected Benefits
Section 41
1(d)(6)(A) provides that a
plan is tre
ated as not satisfying the re-
quirement
s of section 411 if the accrued
benefit o
f a participant is decreased by an
amendmen
t of the plan. There are certain
exceptio
ns to this general rule. For ex-
ample, am
endments described in section
412(d)(2
) (section 412(c)(8) for plan years
beginni
ng before January 1, 2008) of the
Code or s
ection 4281 of ERISA. Section
204(g) o
f ERISA contains parallel rules to
section
411(d)(6) of the Code.
Notice R
equirements for Significant
Reducti
onintheRateofFutureBenefit
Accrua
ls
Section
4980F imposes an excise tax
when a p
lan administrator fails to provide
timely
notice of a plan amendment that
provid
es for a significant reduction in the
rate of
future benefit accrual. For this pur-
pose, t
he elimination or reduction of an
early
retirement benefit or retirement-type
subsi
dy is treated as having the effect of
reduc
ing the rate of future benefit accrual.
Secti
on 4980F(e)(3) provides that, except
as pro
vided in regulations, the notice must
be pr
ovided within a “reasonable time” be-
fore
the effective date of the plan amend-
ment
. Section 204(h) of ERISA contains
para
llel rules to section 4980F of the Code.
For b
oth section 204(g) and section
204(
h) of ERISA, the Secretary of the
Trea
sury has interpretive authority over
the
subject matter addressed in these reg-
ula
tions for purposes of ERISA, as well
2008–17 I.R.B.838April 28, 2008

as the Code. Pursuant to section 101(a)
of Reorganization Plan No. 4 of 1978, 29
U.S.C. 1001nt, the Secretary of the Trea-
sury generally has the authority to issue
regulations under parts 2 and 3 of subtitle
B of title I of ERISA, including section
204(g) and (h) of ERISA. Thus, these pro-
posed Treasury regulations under section
4980F of the Code would apply as well for
purposes of section 204(h) of ERISA.
Notice Requirements Relating to Plan
Amendments Affecting Benefits for Prior
Service
Section 412(d)(2) of the Code (section
412(c)(8) for plan years beginning before
January 1, 2008) provides special rules
relating to retroactive plan amendments.
Rev. Proc. 94–42, 1994–1 C.B. 717,
see §601.601(d)(2)(ii)(b), sets forth proce-
dures under which a plan sponsor may file
notice with and obtain approval from the
Secretary of the Treasury for a retroactive
amendment described in section 412(d)(2)
that reduces accrued benefits. Section 4 of
Rev. Proc. 94–42 provides guidance relat-
ingtothewrittennoticethatmustbepro-
vided to affected parties regarding the ap-
plication for approval of a retroactive plan
amendment to reduce accrued benefits un-
der section 412(d)(2) (a “section 412(d)(2)
written notice”). The content requirements
of a section 412(d)(2) written notice in-
clude a description of the plan amendment
and its effect, including the range in re-
duction of accrued benefits of participants,
beneficiaries, and alternate payees.
Section 212(a) of PPA ’06 added sec-
tion 432 of the Code, which provides rules
relating to multiemployer plans that are in
endangered or critical status. Under cer-
tain circumstances, a plan may adopt a
plan amendment that reduces previously
accrued benefits. Section 432(e)(8)(C) re-
quires a plan to provide notice of the plan
amendment to affected parties at least 30
days before the general effective date of
the reduction. The notice must include in-
formation that is sufficient for participants
and beneficiaries to understand the effect
of any reduction on their benefits and a de-
scription of the possible rights and reme-
dies of plan participants and beneficiaries.
Section 113(a)(1)(B) of PPA ’06 added
Code section 436, providing rules limit-
ing benefits and benefit accruals for sin-
gle-employer plans with certain funding
shortfalls. Section 101(j) of ERISA gener-
ally requires the plan administrator to pro-
vide a written notice to plan participants
and beneficiaries within 30 days after the
plan becomes subject to this benefit limi-
tation.
Section 4244A of ERISA provides that
a multiemployer plan in reorganization is
permitted to adopt an amendment reducing
or eliminating certainaccrued benefits (in-
creases adopted within the prior 5 years)
attributable to employer contributions un-
der the plan. Under section 4244A(b)(2)
of ERISA, an amendment is not permitted
to reduce or eliminate benefits unless no-
tice is given to plan participants, beneficia-
ries, and other affected persons at least 6
months before the first day of the plan year
in which the amendment reducing bene-
fits is adopted. The notice must include
certain information, including explaining
the rights and remedies of participants and
beneficiaries under the plan and informing
the recipients that if contributions under
the plan are not increased, accrued bene-
fits under the plan for certain participants
and beneficiaries will be reduced or an ex-
cise tax will be imposed on employers.
Section 4245 of ERISA provides rules
relating to suspension of benefits under in-
solvent multiemployer plans. If benefit
payments under the plan exceed the re-
source benefit level for the plan year, the
payment of benefits must be suspended to
the extent necessary to reduce such pay-
ments to the greater of the resource ben-
efit level or the level of basic benefits.
Section 4245(e) of ERISA provides that
certain plans in reorganization must pro-
vide notice to plan participants and benefi-
ciaries that certain non-basic benefit pay-
ments will be suspended.
Section 4281 of ERISA provides rules
relating to benefits under certain multiem-
ployer terminated plans. Section 4281(c)
of ERISA provides that if the value of non-
forfeitable benefits exceeds the value of
the plan assets, the plan must be amended
to reduce benefits in excess of nonfor-
feitable benefits arising from increases
adopted within the prior 5 years, or the
level that can be provided by plan assets,
if greater. The regulations at 29 CFR
4281.32 provide that a plan sponsor must
notify the Pension Benefit Guaranty Cor-
poration (PBGC) and plan participants and
beneficiaries of a plan amendment reduc-
ing benefits pursuant to section 4281(c) of
ERISA.Thenoticemustbeprovidedno
later than the earlier of 45 days after the
amendment reducing benefits is adopted
or the date of the first reduced benefit pay-
ment. Paragraph (e) of 29 CFR 4281.32
sets forth the content requirements appli-
cable to a notice of benefit reduction.
Additional Provisions of Pension
Protection Act of 2006
Section 402 of PPA ’06 provides special
funding rules for plans maintained by an
employer that is a commercial passenger
airline or the principal business of which
is providing catering services to a commer-
cial passenger airline. Section 402(h)(4) of
PPA ’06 provides that in the case of a plan
amendment adopted in order to comply
with the rules in section 402 of PPA ’06,
any notice required under section 4980F(e)
of the Code (or section 204(h) of ERISA)
must be provided within 15 days of the ef-
fective date of the plan amendment. Sec-
tion 402 of PPA ’06 generally applies to
amendments made pursuant to section 402
of PPA ’06 for plan years ending after the
date of enactment of PPA ’06 (August 17,
2006).
Section 502(c) of PPA ’06 amended
section 4980F(e)(1) of the Code (and sec-
tion 204(h) of ERISA) to add as a recipi-
ent of a section 204(h) notice any employer
that has an obligation to contribute to the
plan. This new disclosure requirement is
effective for plan years beginning after De-
cember 31, 2007.
Section1107ofPPA’06providesthat
any plan amendment made pursuant to any
PPA ’06 change may be retroactively ef-
fective, and, except as provided by the Sec-
retary of the Treasury, does not violate the
anti-cutback rules of section 411(d)(6) of
the Code (or section 204(g) of ERISA)
if, in addition to satisfying the conditions
specified in section 1107(b)(2) of PPA ’06,
the amendment is made on or before the
last day of the first plan year beginning on
or after January 1, 2009 (January 1, 2011,
with respect to governmental plans).
Explanation of Provisions
PPA ’06 Rules
These proposed regulations would add
contributing employers to the list of per-
sons to whom a section 204(h) notice must
be provided. A contributing employer is
April 28, 20088392008–17 I.R.B.

defined in the proposed regulations as an
employer that has an obligation to con-
tribute to a plan (within the meaning of
section 4212(a) of ERISA). This require-
ment to give section 204(h) notice to con-
tributing employers was added to reflect
section 502(c)(2) of PPA ’06. This require-
ment would only apply to amendments
adopted in plan years beginning after De-
cember 31, 2007.
The regulations would also add a spe-
cial timing rule to reflect section 402 of
PPA ’06. For certain plans maintained
by an employer that is a commercial pas-
senger airline or the principal business of
which is providing catering services to
a commercial passenger airline, section
204(h) notice must be provided at least
15daysbeforetheeffectivedateofthe
amendment.
1
Plan Amendments Reflecting a Change in
Statutorily Mandated Minimum Present
Value Rules
Section 417(e)(3) provides that, in dis-
tributing the present value of an accrued
benefit to a plan participant, the present
value of the benefit is not permitted to
be less than the present value using the
applicable mortality table and the appli-
cable interest rate, as defined in section
417(e)(3)(B) and (C), respectively. Sec-
tion 302(b) of PPA ’06 amended section
417(e)(3) to provide new actuarial as-
sumptions for calculating the minimum
present value of a participant’s accrued
benefit. Plan sponsors have asked whether
a plan amendment to reflect the change in
these section 417(e)(3)statutory actuarial
assumptions would trigger the require-
ment to provide a section 204(h) notice.
Revenue Ruling 2007–67, 2007–48 I.R.B.
1047, see §601.601(d)(2)(ii)(b), which
includes guidance on plan amendments
regarding the new interest rate and mor-
tality table under section 417(e)(3), states
that certain amendments to reflect the new
interest rate or mortality table for an an-
nuity starting date in 2008 or later would
not violate the anti-cutback rules of sec-
tion 411(d)(6). The proposed regulations
would provide that a reduced single-sum
distribution resulting from an amendment
to a traditional defined benefit plan to
substitute the prescribed actuarial assump-
tions under section 417(e)(3), as amended
by PPA ’06, for the pre-PPA ’06 actuarial
assumptions under section 417(e)(3) does
not require a section 204(h) notice.
Interaction of the Section 204(h) Notice
Timing Rules with Plan Amendments that
Have a Retroactive Effective Date
Section 1.411(d)–3(a)(1) generally pro-
vides that a plan is not a qualified plan if
a plan amendment decreases the accrued
benefit of any plan participant. These
rules are generally based on the appli-
cable amendment date, which is defined
in §1.411(d)–3(g)(4) as the later of the
effective date of the amendment or the
date the amendment is adopted. While the
general rule under §1.411(d)–3(a)(1) pro-
hibits plan amendments that reduce a plan
participant’s accrued benefit, certain ex-
ceptions exist. These exceptions include
amendments permitted under sections
412(d)(2), 418D, and 418E of the Code,
section 4281 of ERISA, and section 1107
of PPA ’06. The proposed regulations
would provide a conforming amendment
to §1.411(d)–3(a)(1) to reference the rules
at section 1107 of PPA ’06.
The proposed regulations generally
state that the effective date of an amend-
ment that is permitted to be adopted
retroactively is the date the amendment is
put into effect on an operational basis, so
that a section 204(h) notice must neverthe-
less generally be provided at least 45 days
before the date the amendment is effective
(15 days for multiemployer plans). The
proposed regulations would add special
timing rules for when a section 204(h)
notice must be provided to recipients with
respect to a section 204(h) amendment
2
that is permitted to reduce benefits accrued
before the plan amendment’s applicable
amendment date. Specifically, for pur-
poses of section 1107(b)(2)(A) of PPA ’06,
the proposed regulations would clarify that
the date on which such a plan amendment
is effective is the first day that the plan
is operated as if the amendment were in
effect. Thus, a section 204(h) notice must
generally be provided at least 45 days (15
days for a multiemployer plan) before the
amendment is effective (even though the
amendment is not adopted until a later
date). Except to the extent a special tim-
ingruleissetforthintheseregulations,a
determination of whether a section 204(h)
notice is required in connection with an
amendment made pursuant to section 1107
of PPA ’06 should be made in accordance
with the general standards set forth in
§54.4980F–1, Q&As–5, 6, 7, and 8.
The proposed regulations provide a spe-
cial timing rule for section 204(h) amend-
ments to an applicable defined benefit plan
as defined in section 411(a)(13)(C)(i). The
regulations provide that for any section
204(h) notice that is required to be pro-
videdinconnectionwithanamendmentto
an applicable defined benefit plan within
the meaning of section 411(a)(13)(C)(i)
that is first effective before January 1,
2009, and that limits the amount of the dis-
tribution to the account balance as permit-
ted under section 411(a)(13)(A), the notice
will not fail to be timely if provided at least
30 days before the date the amendment
is first effective. This special timing rule
reflects the 30-day timing rule described
in Notice 2007–6, 2007–3 I.R.B. 272,
see §601.601(d)(2)(ii)(b), which provides
transitional guidanceon the requirements
of sections 411(a)(13) and 411(b)(5) of the
Code.
3
The proposed regulations would
permit a plan amendment to an applicable
defined benefit plan within the meaning
of section 411(a)(13)(C)(i) to use this spe-
cial timing rule through the end of 2008.
Thereafter, the general 45-day timing rule
would apply to such amendments.
Interaction of Section 204(h) Notice
Requirements with Other Notice
Requirements Relating to Plan
Amendments
As explained earlier in this preamble,
under the heading “Notice Requirements
Relating to Plan Amendments Affecting
1
This timing rule is consistent with the Joint Committee on Taxation’s Technical Explanation to section 402 of PPA ’06, which states that the section 204(h) notice must be provided at least
15 days before the effective date of the plan amendment.SeeJoint Committee on Taxation, Technical Explanation of H.R. 4, the “Pension Protection Act of 2006” (JCX–38–06), August 3,
2006, 109
th
Cong., 2
nd
Sess. 87 (2006).
2
A section 204(h) amendment is defined in Q&A–4(b) of §54.4980F–1 of the Treasury Regulations as an amendment for which section 204(h) notice is required.
3
Section B.4 of Notice 2007–6 provides that, in the case of a plan amendment that is permitted to reduce benefit accruals, a section 204(h) notice must beprovided at least 30 days before the
amendment is effective. This rule wouldrequirethenoticetobeprovidedatleast30daysbeforetheearliestdateonwhichtheplanisoperatedinaccordance with the amendment.
2008–17 I.R.B.840April 28, 2008

Benefits for Prior Service,” both the Code
and ERISA include a number of notice re-
quirements for plan amendments that are
permitted to reduce or eliminate accrued
benefits. These notice requirements are
in addition to the notice requirements un-
der section 4980F of the Code and sec-
tion 204(h) of ERISA. To eliminate the
need for a plan to provide multiple notices
with substantially the same function and
information to affected persons, these pro-
posed regulations would provide that if a
plan provides one of these notices in ac-
cordance with the applicable standards for
such notices, the plan will be treated as
having complied with the requirement to
provide a section 204(h) notice with re-
spect to a section 204(h) amendment. Un-
der the proposed regulations, this treat-
ment would apply to the following notices:
•A notice required under Rev. Proc.
94–42 relating to retroactive plan
amendments that reduce accrued ben-
efits described in section 412(d)(2);
•A notice required under section 101(j)
of ERISA if an amendment is adopted
to comply with the benefit limitation
requirements of section 436 of the
Code (section 206(g) of ERISA);
•A notice required under 4244A(b) of
ERISA for an amendment that reduces
or eliminates accrued benefits attribut-
able to employer contributions with re-
spect to a multiemployer plan in reor-
ganization;
•A notice required under section
4245(e) of ERISA, relating to the ef-
fects of the insolvency status for a
multiemployer plan; and
•A notice required under section 4281
of ERISA and 29 CFR 4281.32 for an
amendment of a multiemployer plan
reducing benefits pursuant to section
4281(c) of ERISA.
Timing and Content Rules for
Multiemployer Plans in Endangered
or Critical Status
Section 432, relating to multiemployer
plans that are in endangered or critical sta-
tus (as defined in section 432(b)), permits
a plan amendment to be adopted that re-
duces prior accruals under certain circum-
stances. With respect to any such amend-
ment for a plan that is in critical status,
section 432(e)(8)(C) requires notice of the
plan amendment. Notice under section
432(e)(8)(C) must be provided at least 30
days before the general effective date of
the reduction. Section 432(e)(8)(C) re-
quires the notice to include information
that is sufficient for participants and bene-
ficiaries to understand the effect of any re-
duction on their benefits and a description
of the possible rights and remedies of par-
ticipants and beneficiaries, including con-
tact information for the Department of La-
bor for further assistance and information
where appropriate.
As discussed in this preamble under
the heading “Interaction of the Section
204(h) Timing Rules with Plan Amend-
ments that Have a Retroactive Effective
Date,” PPA ’06 requires that notice be
given 30 days before the general effec-
tive date for an amendment to a plan in
critical status under section 432(e)(8)(C).
Q&A–9(c) of §54.4980F–1 of the Trea-
sury Regulations provides that a section
204(h) amendment made in the case of
a multiemployer plan must be provided
at least 15 days before the effective date
of the amendment. Compliance with the
30-day timing rule of section 432(e)(8)(C)
notice would thus also satisfy this 15-day
timing rule. These proposed regulations
also include a rule under which the con-
tent of a notice under 432(e)(8)(C) would
also satisfy the content requirements for a
section 204(h) notice. As a result, under
these proposed regulations, any notice for
a multiemployer plan incritical status that
satisfies the timing and content require-
ments under section 432(e)(8)(C) would
be treated as satisfying the timing and
content requirements of a section 204(h)
notice.
However, in the case of an amendment
to which section 432 applies for a multiem-
ployer plan in endangered status, the nor-
mal timing and content rules for a section
204(h) notice under section 4980F would
apply (so that any required section 204(h)
notice must be provided at least 15 days
before the effective date).
Delegation of Authority to the
Commissioner
The proposed regulations would also
delegate to the Commissioner of the Inter-
nal Revenue Service the authority to pub-
lish revenue rulings, notices, or other guid-
ance published in the Internal Revenue
Bulletin (see §601.601(d)(2)(ii)(b)ofthis
chapter) under section 4980F of the Code
(which would also apply to section 204(h)
of ERISA) that the Commissioner deter-
mines to be necessary or appropriate with
respect to a section 204(h) amendment that
applies with respect to benefits accrued be-
fore the applicable amendment date but
that does not violate section 411(d)(6) of
the Code. This delegation of authority pro-
vides the Commissioner with greater flex-
ibility to develop special rules to address
the limited circumstances in which Con-
gresspermitsaplantobeamendedtore-
duce benefits accrued before the adoption
date of the plan amendment. This delega-
tion of authority also extends to circum-
stances in which a section 204(h) amend-
ment may require another notice in ad-
dition to a section 204(h) notice, regard-
less of whether that amendment reduces
benefits accrued before the adoption date
of the amendment. Often these notices
must provide content requirements simi-
lar to a section 204(h) notice. This dele-
gation would permit the Commissioner to
treat plans providing these other notices as
having complied with the requirement to
provide a section 204(h) notice, thus elim-
inating unnecessary overlap in the admin-
istration of plans.
Proposed Effective Dates
These regulationsare generally pro-
posed to be applicable to section 204(h)
amendments that are effective on or after
January 1, 2008. However, for any section
204(h) amendment that is adopted after
the effective date of the amendment, the
clarification of the effective date of the
amendment in these proposed regulations
is applicable to those amendments that
are effective on or after July 1, 2008. In
addition, for any amendment to which
the proposed regulations would otherwise
apply, no inference is intended as to when
a section 204(h) notice must be provided
if the amendment is effective before July
1, 2008.
April 28, 20088412008–17 I.R.B.

As described in this preamble under the
heading “Interaction of the Section 204(h)
Notice Timing Rules with Plan Amend-
ments that Have a Retroactive Effective
Date,” with respect to any section 204(h)
amendment to a lump sum-based benefit
formula (or any other amendment adopted
pursuant to section 701 of PPA ’06), the
special rules under the proposed regula-
tions relating to an amendment that ap-
plies with respect to benefits accrued be-
fore the applicable amendment date ap-
ply to amendments adopted after Decem-
ber 21, 2006 (the date on which Notice
2007–6 was published). However, the spe-
cial 30-day timing rule for providing a sec-
tion 204(h) notice applies to such amend-
ments effective on or after December 21,
2006, and not later than December 31,
2008. With respect totherulerelatingto
adding contributing employers to the list
of section 204(h) recipients, the effective
date is proposed to apply to section 204(h)
amendments adopted in plan years begin-
ning after December 31, 2007.
Special An
alyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866. Therefore, a regulatory as-
sessment is not required. It also has been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to this regulation. It
is hereby certified that the collection of
information in this regulation would not
have a significant impact on a substantial
number of small entities. This certifica-
tion is based on the fact that this regulation
only provides guidance on how to satisfy
existing collection of information require-
ments. Accordingly, a Regulatory Flexi-
bility Analysis is not required. Pursuant
to section 7805(f) of the Internal Revenue
Code, this regulation has been submitted
to the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies) or electronic com-
ments that are submitted timely to the IRS.
The Treasury Department and IRS request
comments on the clarity of the proposed
rules and how they can be made easier to
understand. All comments will be avail-
able for public inspection and copying.
A public hearing has been scheduled for
July 10, 2008, beginning at 10 a.m. in
the Auditorium, Internal Revenue Service,
1111 Constitution Avenue, N.W., Wash-
ington, DC. Due to building security pro-
cedures, visitors must enter at the Consti-
tution Avenue entrance. In addition, all
visitors must presentphoto identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER IN-
FORMATION CONTACT” section of this
preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish
to present oral comments at the hearing
must submit written or electronic com-
ments by June 19, 2008 and an outline of
the topics to be discussed and the amount
of time to be devoted to each topic (a
signed original and eight (8) copies) by
June 20, 2008. A period of 10 minutes will
be allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receiving outlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of these regula-
tions is Pamela R. Kinard, Office of Di-
vision Counsel/Associate Chief Counsel
(Tax Exempt and Government Entities).
However, other personnel from the IRS
and the Treasury Department participated
in their development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 54 are
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.411(d)–3 is amended
by revising the first sentence of paragraph
(a)(1) to read as follows:
§1.411(d)–3 Section 411(d)(6) protected
benefits.
(a)Protection of accrued benefits—(1)
General rule. Under section 411(d)(6)(A),
a plan is not a qualified plan (and a trust
forming a part of such plan is not a qual-
ified trust) if a plan amendment decreases
the accrued benefit of any plan participant,
except as provided in section 412(d)(2)
(section 412(c)(8) for plan years beginning
before January 1, 2008), section 4281 of
the Employee Retirement Income Security
Act of 1974 as amended (ERISA), or other
applicable law (see, for example, sections
418D and 418E of the Internal Revenue
Code, and section 1107 of the Pension Pro-
tection Act of 2006, Public Law 109–280
(120 Stat. 780, 1063)). * * *
*****
PART 54—PENSION EXCISE TAXES
Par. 3. The authority citation for part
54 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section54.4980F–1alsoissuedunder
26 U.S.C. 4980F and section 1107 of the
Pension Protection Act of 2006, Public
Law 109–780 (120 Stat. 780). * * *
Par. 4. Section 54.4980F–1 is amended
by:
1. Revising the second sentence of
A–1(a).
2. Redesignating A–8(d) as A–8(e) and
adding new A–8(d).
3. Revising the first sentence of
A–9(a), A–9(b), and A–9(c), and revising
A–9(d)(1).
4. Adding A–9(f) and A–9(g).
5. Revising the first sentence of
A–10(a).
6. Revising A–11(a)(1) and adding
A–11(a)(7).
7. Adding A–18(a)(4) and A–18(a)(5).
8. Revising A–18(b)(1) and adding
(b)(3)(i), (b)(3)(ii), and (b)(3)(iii).
These additions and revisions read as
follows:
2008–17 I.R.B.842April 28, 2008

§54.4980F–1 Notice requirements
for certain pension plan amendments
significantly reducing the rate of future
benefit accrual.
*****
A–1. (a)Requirements of Internal Rev-
enue Code section 4980F(e) and ERISA
section 204(h). * * * The notice is re-
quired to be provided to plan participants
and alternate payeeswho are applicable
individuals (as defined in Q&A–10 of this
section), to certain employee organiza-
tions, and to contributing employers (as
described in Q&A–10 of this section).
*****
A–8. * * *
(d)Plan amendments reflecting a
change in statutorily mandated minimum
present value rules. If a defined benefit
plan offers a distribution to which the
minimum present value rules of section
417(e)(3) apply (other than a payment to
which section 411(a)(13)(A) applies), and
the plan is amended to reflect the changes
to the applicable interest and mortality
assumptions in section 417(e)(3) made by
PPA ’06 (and no change is made in the
dates on which the payment will be made),
no section 204(h) notice is required to be
provided.
*****
A–9. (a)45-day general rule. Except as
otherwise provided in this Q&A–9, section
204(h) notice must be provided at least 45
days before the effective date of any sec-
tion 204(h) amendment. * * *
(b)15-day rule for small plans.Ex-
cept for amendments described in para-
graphs (d)(2) and (g) of this Q&A–9, sec-
tion 204(h) notice must be provided at least
15daysbeforetheeffectivedateofany
section 204(h) amendment in the case of
asmallplan. ***
(c)15-day rule for multiemployer
plans. Except for amendments described
in paragraphs (d)(2) and (g) of this
Q&A–9, section 204(h) notice must be
provided at least 15 days before the effec-
tive date of any section 204(h) amendment
in the case of a multiemployer plan. * * *
(d)Special timing rule for business
transactions—(1)15-day rule for section
204(h) amendment in connection with
an acquisition or disposition. Except
for amendments described in paragraphs
(d)(2) and (g) of this Q&A–9, if a section
204(h) amendment is adopted in connec-
tion with an acquisition or disposition,
section 204(h) notice must be provided at
least 15 days before the effective date of
the section 204(h) amendment.
*****
(f)Special timing rule for certain plans
maintained by commercial airlines.See
section 402 of the Pension Protection Act
of 2006, Public Law 109–780 (120 Stat.
780) (PPA ’06) for a special rule that ap-
plies to certain plans maintained by an em-
ployer that is a commercial passenger air-
line or the principal business of which is
providing catering services to a commer-
cial passenger airline. Under this special
rule, section 204(h) notice must be pro-
vided at least 15 days before the effective
date of the amendment.
(g)Special timing rules relating to cer-
tain section 411(d)(6) plan amendments—
(1)Plan amendments permitted to reduce
prior accruals. This paragraph (g) gener-
ally provides special rules with respect to
a plan amendment that would not violate
section 411(d)(6) even if the amendment
applies with respect to benefits accrued be-
fore the applicable amendment date. Thus,
for example, this paragraph (g) applies to
amendments that are permitted to be effec-
tive retroactively under section 412(d)(2)
(section 412(c)(8) forplan years beginning
before January 1, 2008), 418D, or 418E
of the Code, section 4281 of ERISA, or
section 1107 of PPA ’06. See, generally,
§1.411(d)–3(a)(1).
(2)General timing rule for amendments
to which this paragraph (g) applies.For
an amendment to which this paragraph (g)
applies, the amendment is effective on the
first date on which the plan is operated as
if the amendment were in effect. Thus,
except as otherwise provided in this para-
graph (g), a section 204(h) notice for an
amendment to which paragraph (a) of this
section applies that is adopted after the ef-
fective date of the amendment must be pro-
vided, with respect to any applicable in-
dividual, at least 45 days before (or such
other date as may apply under paragraphs
(b), (c), (d), or (f) of this Q&A–9) the date
the amendment is effective.
(3)Special rules for section 204(h)
notices provided in connection with other
disclosure requirements—(i)In general.
Notwithstanding the requirements in this
Q&A–9 and Q&A–11 of this section,
if a plan provides one of the notices in
paragraph (g)(3)(ii) of this Q&A–9 in ac-
cordance with the applicable timing and
content rules for such notice, the plan
is treated as providing a section 204(h)
notice with respect to a section 204(h)
amendment and is treated as satisfying
the timing rules of this Q&A–9 and the
content rules of paragraphs (a)(3), (4), and
(6)ofQ&A–11ofthissection.
(ii)Notice requirements. The notices in
this paragraph (g)(3)(ii) are —
(A) A notice required under any rev-
enue ruling, notice, or other guidance
published under the authority of the Com-
missioner in the Internal Revenue Bulletin
to affected parties in connection with a
retroactive plan amendment described in
section 412(d)(2) (section 412(c)(8) for
plan years beginning before January 1,
2008);
(B) A notice required under section
101(j) of ERISA if an amendment is
adopted to comply with the benefit limi-
tation requirements of section 206(g) of
ERISA (section 436 of the Code);
(C) A notice required under 4244A(b)
of ERISA for an amendment that reduces
or eliminates accrued benefits attributable
to employer contributions with respect to a
multiemployer plan in reorganization;
(D) A notice required under section
4245(e) of ERISA, relating to the effects
of the insolvency status for a multiem-
ployer plan; and
(E) A notice required under section
4281 of ERISA for an amendment of a
multiemployer plan reducing benefits pur-
suant to section 4281(c) of ERISA.
(4)Delegation of authority to Commis-
sioner. The Commissioner may provide
special rules under section 4980F, in rev-
enue rulings, notices, or other guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(b)ofthischapter),
that the Commissioner determines to be
necessary or appropriate with respect to a
section 204(h) amendment—
(i) that applies to benefits accrued be-
fore the applicable amendment date but
that does not violate section 411(d)(6) or
(ii) for which there is a required notice
with timing and content requirements sim-
ilar to a section 204(h) notice.
*****
A–10. (a)In general. Section 204(h)
notice must be provided to each applicable
April 28, 20088432008–17 I.R.B.

individual, to each employee organization
representing participants who are applica-
ble individuals, and, for plan years begin-
ning after December 31, 2007, to each em-
ployer that has an obligation to contribute
(within the meaning of section 4212(a) of
ERISA) to the plan.* * *
*****
A–11. (a)Explanation of notice re-
quirement—(1)In general. Section 204(h)
notice must include sufficient information
to allow applicable individuals to under-
stand the effect of the plan amendment. In
order to satisfy this rule, a plan administra-
tor providing section 204(h) notice must
generally satisfy paragraphs (a)(2), (3),
(4), (5), and (6) of this Q&A–11. See para-
graph (a)(7) of this Q&A–11 for a special
rule relating to section 204(h) notices pro-
vided in connection with a notice required
under section 432(e)(8)(C). See paragraph
(g)(3) of Q&A–9 of this section for special
rules relating to section 204(h) notices
provided in connection with certain other
written notices. See also paragraph (g)(4)
of Q&A–9 of this section for a delegation
of authority to the Commissioner to pro-
vide special rules.
*****
(7)Informationinsection204(h)no-
tice provided in connection with a notice
required under section 432(e)(8)(C).The
information required in a notice under sec-
tion 432(e)(8)(C) is treated as satisfying
the content requirements of paragraphs
(a)(3), (4), and (6) of this Q&A–11 for a
section 204(h) notice.
*****
A–18. (a) * * *
(4)Special effective date for certain
section 204(h) amendments made by plans
of commercial airlines. Section 402 of
PPA ’06 applies to section 204(h) amend-
ments adopted in plan years ending after
August 17, 2006.
(5)Special effective date for rule re-
lating to contributing employers. Section
502 of PPA ’06, which amended section
4980F(e)(1) of the Code, applies to section
204(h) amendments adopted in plan years
beginning after December 31, 2007.
(b)Regulatory effective date—(1)Gen-
eral effective date. Except as otherwise
provided in this paragraph (b), section
4980F and section 204(h) of ERISA, as
amendedbyEGTRRA,applytoplan
amendments taking effect on or after June
7, 2001 (statutory effective date), which is
the date of enactment of EGTRRA.
*****
(3)Effective dates for Q&A–9(g)(1),
(g)(3), and (g)(4) and Q&A–11(a)(7)—(i)
General effective date. Except as pro-
vided in Q&A–18(b)(3)(ii) or (b)(3)(iii)
of this section, the rules in Q&A–9(g)(1),
(g)(3), and (g)(4) and Q&A–11(a)(7) of
this section apply to amendments that are
effective on or after January 1, 2008.
(ii)Effective date for Q&A–9(g)(2).
Except as provided in Q&A–18(b)(3)(iii)
of this section, the rules in Q&A–9(g)(2)
of this section apply to amendments that
are effective on or after July 1, 2008.
(iii)Special rules for section 204(h)
amendments to applicable defined ben-
efit plan. Notwithstanding paragraph
(b)(3)(i) or (b)(3)(ii) of this Q&A–18, with
respect to any section 204(h) notice pro-
vided in connection with a section 204(h)
amendment to an applicable defined ben-
efit plan within the meaning of section
411(a)(13)(C)(i) to limit distributions as
permitted under section 411(a)(13)(A) for
distributions made after August 17, 2006,
that is made pursuant to section 701 of
PPA ’06, the special rules in paragraphs
(g)(1) and (2) of Q&A–9 of this section
apply to amendments made effective
after December 21, 2006. For such an
amendment that is effective not later than
December 31, 2008, section 204(h) notice
does not fail to be timely if the notice is
provided at least 30 days, rather than 45
days, before the date that the amendment
is first effective.
*****
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on March 20,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 21, 2008, 73 F.R. 15101)
Notice of Proposed
Rulemaking
Travel Expenses of State
Legislators
REG–119518–07
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed regulations relating to travel
expenses of state legislators while away
from home. The regulations affect eligible
state legislators who make the election
under section 162(h) of the Internal Rev-
enue Code (Code). The regulations are
necessary to clarify the amount of travel
expenses that may be deducted by a state
legislator who makes the election under
section 162(h).
DATES: Written (paper or electronic)
comments or a request for a public hearing
must be received by June 30, 2008.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–119518–07), room
5203, Internal Revenue Service, POB
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–119518–07),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC. Alternatively, tax-
payers may submit comments elec-
tronically via the Federal eRulemak-
ing Portal atwww.regulations.gov(IRS
REG–119518–07).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, R. Matthew Kelley, (202)
622–7900; concerning submission of
comments or a request for a hearing,
Kelly Banks, (202) 622–7180 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained
in this notice of proposed rulemaking has
2008–17 I.R.B.844April 28, 2008

been submitted to the Office of Manage-
ment and Budget for review in accordance
with the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)). Comments on the
collection of information should be sent to
theOffice of Management and Budget,
Attn: Desk Officer for the Department
of the Treasury, Office of Information
and Regulatory Affairs, Washington, DC
20503, with copies to theInternal Rev-
enue Service, Attn: IRS Reports Clear-
ance Officer, SE:W:CAR:MP:T:T:SP,
Washington, DC 20224. Comments on
the collection of information should be
received by May 30, 2008. Comments are
specifically requested concerning:
Whether the proposed collection of in-
formation is necessary for the proper per-
formance of the functions of the IRS, in-
cluding whether the information will have
practical utility;
The accuracy of the estimated burden
associated with the proposed collection of
information;
How the quality, utility, and clarity of
the information to be collected may be en-
hanced;
How the burden of complying with the
proposed collection of information may be
minimized, including through the appli-
cation of automated collection techniques
or other forms of information technology;
and
Estimates of capital or start-up costs
and costs of operation, maintenance, and
purchase of services to provide informa-
tion.
The collection of information in these
proposed regulations is in §1.162–24(e).
This collection of information will help the
IRS determine if a taxpayer may make an
election under section 162(h). The collec-
tionofinformationisrequiredtoobtaina
benefit.
The estimated burden is 30 minutes.
An agency may not conduct or sponsor,
and a person is not required to respond to, a
collection of information unless it displays
a valid control number assigned by the Of-
fice of Management and Budget.
Books or records relating to a collection
of information must be retained as long as
their contents may become material in the
administration of any internal revenue law.
Generally, tax returns and return informa-
tion are confidential, as required by section
6103.
Background
This document contains proposed
amendments to 26 CFR part 1 and 26 CFR
part 301, relating to travel expenses of
state legislators while away from home.
Section 162(a)(2) provides that a tax-
payer generally is allowed a deduction for
ordinary and necessary expenses paid or
incurred during the taxable year in carry-
ing on a trade or business, including trav-
eling expenses while away from home.
Section 162(h) provides that an eligible
individual who is a state legislator at any
time during the taxable year may make an
election under section 162(h) (an electing
legislator). Under section 162(h)(4), the
election is not available to any legislator
whose place of residence within the leg-
islative district represented by the legisla-
tor is 50 or fewer miles from the state capi-
tol building.
As a result of making the election for
a taxable year, under section 162(h)(1)(A)
an electing legislator’s place of residence
within the district represented by the leg-
islator is treated as the legislator’s home.
In addition, under section 162(h)(1)(B) an
electing legislator is deemed to have ex-
pended for living expenses (in connection
with the trade or business of being a legis-
lator), on each legislative day of the elect-
ing legislator, the greater of the amount
generally allowable for the day (i) to em-
ployees of the legislator’s state forper
diemwhile away from home, to the ex-
tent the amount does not exceed 110 per-
cent of the amount described in (ii); or (ii)
to employees of the executive branch of
the Federal government forper diemwhile
travelingawayfromhomeintheUnited
States. Finally, under section 162(h)(1)(C)
an electing legislator is deemed to be away
from home in the pursuit of a trade or busi-
ness on each legislative day.
Section 162(h)(2) defines a legislative
day for an electing legislator as any day on
which (A) the legislature is in session (in-
cluding any day in which the legislature is
not in session for a period of 4 consecutive
days or less), or (B) the legislature is not
in session but the physical presence of the
electing legislator is formally recorded at a
meeting of a committee of the legislature.
Section 301.9100–4T(a) of the Proce-
dure and Administration Regulations pro-
vides that a legislator makes the election
under section 162(h) by attaching a state-
ment to the legislator’s income tax return
(or amended return) for the taxable year for
which the election is effective. The state-
ment must include the following informa-
tion: (1) the taxpayer’s name, address, and
taxpayer identification number; (2) a state-
ment that the taxpayer is making an elec-
tion under section 162(h); and (3) informa-
tion establishing that the taxpayer is enti-
tled to make the election. A legislator must
make the election by the due date for filing
the return (including extensions). Under
§301.9100–4T(g), a legislator may revoke
an election only with the consent of the
Commissioner. Consent is requested by
filing an application with the service cen-
ter where the election was filed. The ap-
plication must include the following infor-
mation: (1) the taxpayer’s name, address,
and taxpayer identification number; (2) a
statement that the taxpayer is revoking an
election under section 162(h) for a speci-
fied year; and (3) a statement explaining
why the taxpayer seeks to revoke the elec-
tion.
Rev. Rul. 82–33, 1982–1 C.B. 28,
(see §601.601(d)(2)(ii)(b)) holds that (1)
an electing legislator’s tax home for all
legislative travel, including travel be-
tween sessions, is the legislator’s place
of residence within the legislative dis-
trict represented by the legislator; (2) the
term “living expenses” for purposes of
section 162(h) includes expenses for lodg-
ing, meals, laundry,and other incidental
expenses but does not include expenses
for travel fares, local transportation, or
telephone calls; (3) a legislative day in-
cludes the days of any period for which the
legislature is not in session for 4 consec-
utive days or less, without extension for
Saturdays, Sundays, or holidays; (4) for
purposes of section 162(h)(1)(B)(ii), the
amount generally allowable to employees
of the executive branch of the Federal
government forper diemwhile traveling
away from home in the United States is
theper diemamount for the particular city
in which the state capitol is located; and
(5) any amount deductible by an electing
legislator for deemed living expenses un-
der section 162(h) is in addition to any
other amount deductible under section
162(a) for other expenses incurred while
traveling away from home.
An electing legislator’s deduction un-
der section 162(h) for deemed living ex-
penses is reduced by the amount of any
April 28, 20088452008–17 I.R.B.

reimbursement received for the expenses
that is not included in the legislator’s gross
income.
Section 1.62–1T(e)(4) provides rules
regarding the allocation between meals
and lodging of unreimbursed expenses
of state legislators. Section 274(n) pro-
vides rules regarding the limitations on
the amount allowable as a deduction for
expenses for or allocable to meals.
Explanation of Provisions
The proposed regulations incorporate
the holdings of Rev. Rul. 82–33, which
will be obsoleted when the proposed regu-
lations are issued as final regulations. The
proposed regulations further provide that
a taxpayer becomes a state legislator on
the day the taxpayer is sworn into office
and ceases to be a state legislator on the
day following the day on which the tax-
payer’s term in office ends. The proposed
regulations provide that the legislature of
which an electing legislator is a member is
in session when the members of the leg-
islature are expected to attend and partic-
ipate as an assembled body of the legisla-
ture, whether or not the electing legislator
actually attends. The proposed regulations
also provide that a legislator’s legislative
days include a day on which the legisla-
tor’s attendance at a meeting of a commit-
tee of the legislature is formally recorded.
A committee of the legislature is defined
as a group that consists solely of members
of the legislature charged with conducting
business of the legislature. The proposed
regulations further provide that a legisla-
tor’s legislative days include any day that
is not otherwise a legislative day if the leg-
islator’s attendance at a session of the leg-
islature on that day is formally recorded.
An example in the proposed regulations il-
lustrates that if the members of the legisla-
ture are not expected to attend and partic-
ipate as an assembled body on a day, then
the legislature is not in session on that day;
however, that day is a legislative day for
those members whose actual attendance on
that day is formally recorded.
The proposed regulations incorporate
the current rules in §301.9100–4T for mak-
ing and revoking the election under sec-
tion 162(h). The regulations propose to
amend §301.9100–4T by removing these
rules from that section.
Effective/Applicability Date
The regulations are proposed to apply to
expenses deemed expended under section
162(h) after the date the regulations are
published as final regulations in theFed-
eral Register.
Effect on Other Documents
When the proposed regulations are
published as final regulations, Rev. Rul.
82–33 will be obsoleted.
Special Analyses
This notice of proposed rulemaking is
not a significant regulatory action as de-
fined in Executive Order 12866. There-
fore, a regulatory assessment is not re-
quired. It also has been determined that
section553(b)oftheAdministrativePro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations and, because
the regulations do not impose a collec-
tion of information on small entities, the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) does not apply. Pursuant to section
7805(f) of the Code, this notice of pro-
posed rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (either a signed
paper original with eight (8) copies or elec-
tronic) comments that are submitted timely
to the IRS. Comments are requested on
the clarity of the proposed regulations and
how they can be made easier to understand.
All comments will be available for public
inspection and copying. A public hearing
may be scheduled if requested in writing
by any person who timely submits written
(including electronic) comments. If a pub-
lic hearing is scheduled, notice of the date,
time, and place for the public hearing will
be published in theFederal Register.
Drafting Information
The principal author of these regula-
tions is R. Matthew Kelley of the Office
of Associate Chief Counsel (Income Tax
and Accounting). However, other person-
nel from the IRS and the Treasury Depart-
ment participated in their development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 301
are proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry to
read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§1.162–24 also issued under 26 U.S.C.
162(h). * * *
Par. 2. Section 1.162–24 is added to
read as follows:
§1.162–24 Travel expenses of state
legislators.
(a)In general. For purposes of section
162(a), in the case of any taxpayer who
is a state legislator at any time during the
taxable year and who makes an election
under section 162(h) for the taxable year—
(1) The taxpayer’s place of residence
within the legislative district represented
by the taxpayer is the taxpayer’s home for
that taxable year;
(2) The taxpayer is deemed to have ex-
pended for living expenses (in connection
with the taxpayer’s trade or business as
a legislator) an amount equal to the sum
of the amounts determined by multiplying
each legislative day of the taxpayer during
the taxable year by the greater of—
(i) The amount generally allowable
with respect to that day to employees of
the state of which the taxpayer is a legis-
lator forper diemwhile away from home,
to the extent the amount does not exceed
110 percent of the amount described in
paragraph (a)(2)(ii) of this section; or
(ii) The Federalper diemwith respect
to that day for the taxpayer’s state capital;
and
(3) The taxpayer is deemed to be away
from home in the pursuit of a trade or busi-
ness on each legislative day.
(b)Legislative day. For purposes of
section 162(h)(1) and this section, for any
taxpayer who makes an election under sec-
tion 162(h), a legislative day is any day
2008–17 I.R.B.846April 28, 2008

on which the taxpayer is a state legislator
and—
(1) The legislature is in session;
(2) The legislature is not in session for
a period that is not longer than 4 consecu-
tive days, without extension for Saturdays,
Sundays, or holidays;
(3) The taxpayer’s attendance at a meet-
ing of a committee of the legislature is for-
mally recorded; or
(4) The taxpayer’s attendance at any
session of the legislature that only a limited
number of members are expected to attend
(such as a“pro forma”session), on any
day not described in paragraph (b)(1) or
(b)(2) of this section, is formally recorded.
(c)Fifty mile rule. Section 162(h) and
thissectiondonotapplytoanytaxpayer
who is a state legislator and whose place
of residence within the legislative district
represented by the taxpayer is 50 or fewer
miles from the capitol building of the state.
For purposes of this paragraph (c), the dis-
tance between the taxpayer’s place of res-
idence within the legislative district rep-
resented by the taxpayer and the capitol
building of the state is the shortest of the
more commonly traveled routes between
the two points.
(d)Definitions and special rules.The
following definitions apply for purposes of
section 162(h) and this section.
(1)State legislator. A taxpayer be-
comes a state legislator on the day the tax-
payer is sworn into office and ceases to be
a state legislator on the day following the
day on which the taxpayer’s term in office
ends.
(2)Living expenses. Living expenses
include lodging, meals, and incidental ex-
penses.Incidental expenseshas the same
meaning as in 41 CFR 300–3.1.
(3)In session—(i)In general. For pur-
poses of this section, the legislature of
which a taxpayer is a member is in ses-
sion on any day if, at any time during that
day, the members of the legislature are ex-
pected to attend and participate as an as-
sembled body of the legislature.
(ii)Examples. The following examples
illustrate the rules of this paragraph (d)(3):
Example 1. B is a member of the legislature of
State X. On Day 1, the State X legislature is convened
and the members of the legislature generally are ex-
pected to attend and participate. On Day 1, the State
X legislature is in session within the meaning of para-
graph (d)(3)(i) of this section. B does not attend the
session of the State X legislature on Day 1. However,
Day 1 is a legislative day for B for purposes of section
162(h)(2)(A) and paragraph (b)(1) of this section.
Example 2. C, D, and E are members of the leg-
islature of State X. On Day 2, the State X legisla-
ture is convened for a limited session in which not
all members of the legislature are expected to attend
and participate. C and D are the only members who
are called to, and do, attend the limited session on
Day 2, and their attendance at the session is formally
recorded. E is not called and does not attend. Day
2 is not a day described in paragraph (b)(2) of this
section. On Day 2, the State X legislature is not in
session within the meaning of paragraph (d)(3)(i) of
this section. Day 2 is a legislative day as to C and
D under section 162(h)(2)(B) and paragraph (b)(4) of
this section. Day 2 is not a legislative day as to C and
D under section 162(h)(2)(A) and paragraph (b)(1) of
this section. Day 2 is not a legislative day as to E
under sections 162(h)(2)(A) and (h)(2)(B) and para-
graphs (b)(1) and (b)(4) of this section.
(4)Committee of the legislature.A
committee of the legislature is any group
consisting solely of legislators charged
with conducting business of the legis-
lature. Committees of the legislature
include, but are not limited to, committees
to which the legislature refers bills for con-
sideration, committees that the legislature
has authorized to conduct inquiries into
matters of public concern, and committees
charged with the internal administration
of the legislature. For purposes of this
section, groups that are not considered
committees of the legislature include, but
are not limited to, groups that promote
particular issues, raise campaign funds,
or are caucuses of members of a political
party.
(5)Federal per diem.TheFederalper
diemfor any city and day is the maximum
amount allowable to employees of the ex-
ecutive branch of the Federal government
for living expenses while away from home
in pursuit of a trade or business in that city
on that day. See 5 U.S.C. 5702 and the reg-
ulations under that section.
(e)Election—(1)Time for making elec-
tion. A taxpayer’s election under section
162(h) must be made for each taxable year
for which the election is to be in effect and
must be made no later than the due date (in-
cluding extensions) of the taxpayer’s Fed-
eral income tax return for the taxable year.
(2)Manner of making election.Atax-
payer makes an election under section
162(h) by attaching a statement to the tax-
payer’s income tax return for the taxable
year for which the election is made. The
statement must include—
(i) The taxpayer’s name, address, and
taxpayer identification number;
(ii) A statement that the taxpayer is
making an election under section 162(h);
and
(iii) Information establishing that the
taxpayer is a state legislator entitled to
make the election, for example, a state-
ment identifying the taxpayer’s state and
legislative district and representing that the
taxpayer’s place of residence in the legisla-
tive district is not 50 or fewer miles from
the state capitol building.
(3)Revocation of election. An election
under section 162(h) may be revoked only
with the consent of the Commissioner. An
application for consent to revoke an elec-
tion must be signed by the taxpayer and
filed with the submission processing cen-
ter with which the election was filed, and
must include—
(i) The taxpayer’s name, address, and
taxpayer identification number;
(ii) A statement that the taxpayer is re-
voking an election under section 162(h) for
a specified year; and
(iii) A statement explaining why the
taxpayer seeks to revoke the election.
(f)Effect of election on otherwise de-
ductible expenses for travel away from
home—(1)Legislative days—(i)Living
expenses. For any legislative day for
which an election under section 162(h)
and this section is in effect, the amount
of an electing taxpayer’s living expenses
while away from home is the greater of
the amount of the living expenses—
(A) Specified in paragraph (a)(2) of this
sectioninconnectionwiththetradeor
business of being a legislator; or
(B) Otherwise allowable under section
162(a)(2) in the pursuit of any other trade
or business of the taxpayer.
(ii)Other expenses. For any legislative
day for which an election under section
162(h) and this section is in effect, the
amount of an electing taxpayer’s expenses
(other than living expenses) for travel
away from home is the sum of the substan-
tiated expenses, such as expenses for travel
fares, telephone calls, and local transporta-
tion, that are otherwise deductible under
section 162(a)(2) in the pursuit of any
trade or business of the taxpayer.
(2)Non-legislative days. For any day
that is not a legislative day, the amount
of an electing taxpayer’s expenses (includ-
ing amounts for living expenses) for travel
away from home is the sum of the sub-
stantiated expenses that are otherwise de-
April 28, 20088472008–17 I.R.B.

ductible under section 162(a)(2) in the pur-
suit of any trade or business of the tax-
payer.
(g)Cross references.See
§1.62–1T(e)(4) for rules regarding al-
location of unreimbursed expenses of
state legislators and section 274(n) for
limitations on the amount allowable as a
deduction for expenses for or allocable to
meals.
(h)Effective/applicability date.This
section applies to expenses deemed ex-
pended under section 162(h) after the date
these regulations are published as final
regulations in theFederal Register.
Part 301—PROCEDURE AND
ADMINISTRATION
Par. 3. The authority citation for part
301 continues to read as follows:
Authority: 26 U.S.C. 7805 * * *
§301.9100–4T [Amended]
Par. 4. Section 301.9100–4T is
amended by removing from the table in
paragraph (a)(1) the language relating to
section 127(a) of the Economic Recovery
Tax Act of 1981 and removing paragraph
(a)(2)(iv).
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on March 28,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 31, 2008, 73 F.R. 16797)
Notice of Proposed
Rulemaking by
Cross-Reference to
Temporary Regulations
Classification of Certain
Foreign Entities
REG–143468–07
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary regula-
tions.
SUMMARY: In this issue of the Bulletin,
the IRS and the Treasury Department are
issuing temporary and final regulations
(T.D. 9388) relating to certain business
entities included on the list of foreign busi-
ness entities that are always classified as
corporations for Federal tax purposes. The
regulations are needed to make the Fed-
eral tax classification of Bulgarian public
limited liability companies consistent with
the Federal tax classification of public lim-
ited liability companies organized in other
countries of the European Economic Area.
They will affect persons owning an interest
in a Bulgarian aktsionerno druzhestvo on
or after January 1, 2007. 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 June 19, 2008.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–143468–07), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
betweenthehoursof8a.m. and4p.m.
to CC:PA:LPD:PR (REG–143468–07),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC 20224, or sent elec-
tronically via the Federal eRulemak-
ing Portal atwww.regulations.gov(IRS
REG–143468–07).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, S. James Hawes, (202)
622–3860; concerning submissions of
comments, Kelly Banks, (202) 622–7180
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Temporary regulations in this issue of
the Bulletin amend and revise 26 CFR part
301 relating to section 7701 of the Inter-
nal Revenue Code. The temporary regu-
lations add certain business entities to the
list of foreign business entities that are al-
ways classified as corporations for Federal
tax purposes. The preamble to the tempo-
rary regulations explains both the tempo-
rary regulations and these proposed regu-
lations.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866. Therefore, a regulatory as-
sessment is not required. It has been deter-
mined that section 553(b) of the Adminis-
trative Procedure Act (5 U.S.C. Chapter 5)
does not apply to this regulation. Because
the regulation does not impose a collection
of information on small entities, the Reg-
ulatory Flexibility Act (5 U.S.C. Chapter
6) does not apply, either. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
this regulation has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact.
Comments and Request for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies)orelectroniccom-
ments that are submitted timely to the In-
ternal Revenue Service (IRS). The IRS
and the Treasury Department request com-
ments on the clarity of the proposed rules
and how they can be made easier to un-
derstand. All comments will be available
for public inspection and copying. A pub-
lic hearing will be scheduled if requested
in writing by any person that timely sub-
mits written comments. If a public hearing
is scheduled, notice of the date, time, and
place for the public hearing will be pub-
lished in theFederal Register.
Proposed Effective Date
The regulations proposed in this docu-
ment would be applicable for entities ex-
isting on or after March 21, 2008.
Drafting Information
The principal author of these proposed
regulations is S. James Hawes of the Of-
fice of Associate Chief Counsel (Interna-
tional); however, other personnel from the
IRS and the Treasury Department partici-
pated in their development.
*****
2008–17 I.R.B.848April 28, 2008

Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 301 is pro-
posedtobeamendedasfollows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.7701–2 is amended
by revising paragraphs (b)(8)(vi) and
(e)(7) to read as follows:
§301.7701–2 Business entities;
definitions.
*****
(b) * * *
(8) * * *
(vi) [The text of the proposed amend-
ment to §301.7701–2(b)(8)(vi) is the same
as the text of §301.7701–2T(b)(8)(vi) pub-
lished elsewhere in this issue of the Bul-
letin.]
*****
(e) * * *
(7) [The text of the proposed amend-
ment to §301.7701–2(e)(7) is the same as
the text of §301.7701–2T(e)(7) published
elsewhere in this issue of the Bulletin.]
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on March 20,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 21, 2008, 73 F.R. 15107)
Automatic Contribution
Arrangements; Hearing
Announcement 2008–34
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of public hearing on pro-
posed rulemaking.
SUMMARY: This document provides
notice of public hearing on a notice of
proposed rulemaking (REG–133300–07,
2007–49 I.R.B. 1140) under sections
401(k), 401(m), 402(c), 411(a), 414(w),
and 4979(f) of the Internal Revenue Code
relating to automatic contribution arrange-
ments. These proposed regulations will
affect administrators of, employers main-
taining, participants in, and beneficiaries
of eligible plans that include an automatic
contribution arrangement under section
401(k)(13), 401(m)(12), or 414(w).
DATES: The public hearing is being held
on Monday, May 19, 2008, at 10 a.m. The
IRS must receive outlines of the topics to
be discussed at the hearing by Monday,
April 28, 2008.
ADDRESSES: The public hearing is being
held in the auditorium, Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC. Send submissions to:
CC:PA:LPD:PR (REG–133300–07), room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
betweenthehoursof8a.m. and4p.m.
to CC:PA:LPD:PR (REG–133300–07),
Courier’s Desk, Internal Revenue Service,
1111 Constitution Avenue, NW, Wash-
ington, DC. Alternatively, taxpayers may
submit electronic outlines of oral com-
ments via the Federal eRulemaking Portal
athttp://www.regulations.gov.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, R. Lisa Mojiri-Azad,
Dana Barry or William D. Gibbs at (202)
622–6060; concerning submissions of
comments, the hearing, and/or to be
placed on the building access list to
attend the hearing, Richard A. Hurst at
Richard.A.Hurst@irscounsel.treas.govor
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
The subject of the public hearing is
the notice of proposed rulemaking
(REG–133300–07) that was published
in theFederal Registeron Thursday,
November 8, 2007 (72 FR 63144).
Persons,whowishtopresentoralcom-
ments at the hearing that submitted writ-
ten comments, must submit an outline of
the topics to be discussed and the amount
of time to be devoted to each topic (signed
original and eight (8) copies) by April 28,
2008.
A period of 10 minutes is allotted to
each person for presenting oral comments.
After the deadline for receiving out-
lines has passed, the IRS will prepare an
agenda containing the schedule of speak-
ers. Copies of the agenda will be made
available, free of charge, at the hearing or
in the Freedom of Information Reading
Room (FOIA RR) (Room 1621) which
is located at the 11
th
and Pennsylvania
Avenue, NW entrance, 1111 Constitution
Avenue, NW, Washington, DC.
Because of access restrictions, the IRS
will not admit visitors beyond the imme-
diateentranceareamorethan30minutes
before the hearing starts. For informa-
tion about having your name placed on the
building access list to attend the hearing,
see the FOR FURTHER INFORMATION
CONTACT section of this document.
LaNita Van Dyke,
Chief, Publications and
Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).
(Filed by the Office of the Federal Register on March 27,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 28, 2008, 73 F.R. 16610)
Abandonment of Stock or
Other Securities; Correction
Announcement 2008–35
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations; Correction.
SUMMARY: This document contains a
correction to final regulations (T.D. 9386,
2008–16 I.R.B. 788) that were published
in theFederal Registeron Wednesday,
March 12, 2008 (73 FR 13124) concern-
ing the availability and character of a loss
deduction under section 165 of the In-
ternal Revenue Code for losses sustained
from abandoned stock or other securities.
These regulations clarify the tax treatment
of losses from abandoned securities, and
affect any taxpayer claiming a deduction
for a loss from abandoned securities.
DATES: The correction is effec
tive March
25, 2008.
FOR FURTHER INFORMATION
CONTACT: Sean M. Dwyer at (202)
April 28, 20088492008–17 I.R.B.

622–5020 or Peter C. Meisel at (202)
622–7750 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (T.D. 9386) that
are the subject of the correction are under
section 165 of the Internal Revenue Code.
Need for Correction
As published, final regulations (T.D.
9386) contain an error that may prove to
be misleading and are in need of clarifica-
tion.
Correction of Publication
Accordingly, the publication of the final
regulations (T.D. 9386), which were the
subject of FR Doc. E8–4862, is corrected
as follows:
On page 13124, column 2, in the
preamble, under the paragraph heading
“Background”, the language “A statement
in the preamble to the proposed regula-
tions requires clarification. The preamble
described section 165(g)(3) as providing
an exception from capital loss treatment
for certain worthless securities in a domes-
tic corporation affiliated with the taxpayer.
Section 165(g)(3) provides an exception
from capital loss treatment for a taxpayer
that is a domestic corporation that owns
certain worthless securities of a domestic
or foreign corporation affiliated with the
taxpayer. See §1.165–5(d)(1) of the In-
come Tax Regulations.” is inserted as a
second paragraph.
LaNita Van Dyke,
Chief, Publications and
Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).
(Filed by the Office of the Federal Register on March 24,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 25, 2008, 73 F.R. 15668)
Foundations Status of Certain
Organizations
Announcement 2008–37
The following organizations have failed
to establish or have been unable to main-
tain their status as public charities or as op-
erating foundations. Accordingly, grantors
and contributors may not, after this date,
rely on previous rulings or designations
in the Cumulative List of Organizations
(Publication 78), or on the presumption
arising from the filing of notices under sec-
tion 508(b) of the Code. This listing does
notindicate that the organizations have lost
their status as organizations described in
section 501(c)(3), eligible to receive de-
ductible contributions.
Former Public Charities.The follow-
ing organizations (which have been treated
as organizations thatare not private foun-
dations described in section 509(a) of the
Code) are now classified as private foun-
dations:
Aboutsmilesworld, Ltd.,
East Setauket, NY
Applied Inventions, Miami, FL
Art of Music Project, Inc.,
Sturgeon Bay, WI
Baltimore Family Resources, Inc.,
Timonium, MD
Bethel Foundation & Subsidiaries, Inc.,
Vidalia, LA
Betty Harris Homes, Inc., Philadelphia, PA
Camp Fund-to-Brush, Inc.,
Pembroke Pines, FL
Center of Tomorrows Future, Inc.,
Heuvelton, NY
Charitable Association for Relief and
Education International, Matthews, NC
Cherokee County YMCA,
Jacksonville, FL
Chinatown Learning Center,
Philadelphia, PA
Connecticut Maritime Foundation, Inc.,
Stonington, CT
Empowerment Through Exposure,
Annandale, VA
EsperanzaParalaFamilia,Inc.,
Stafford, TX
Family Enrichment Resource Center, Inc.,
Eureka, MO
FHC Gosnold Grove Corporation,
Falmouth, MA
Freedom House One, Peoria, IL
Freeman Housing Human Services, Inc.,
Brooklyn, NY
Fremont Economic Adjustment
Corporation, St. Anthony, ID
Friends of Paraguay Foundation, Inc.,
Stratford, CT
Full Circle Empowerment Center,
Chattanooga, TN
Gifts Help to Heal, Birmingham, AL
Great Urban Commission, Inc.,
Corona, NY
Home Sweets Home, Inc.,
Los Angeles, CA
Hunterbrook Ridge at Fieldhome, Inc.,
Yorktown Heights, NY
Johnnies Care, Inc., Warren, AR
Lamb Down Ministries,
Greenwell Springs, LA
Lasallian Association of Miguel Schools,
Washington, DC
Light for the Nations, Inc.,
Gardnerville, NV
Mack East Community Center, Detroit, MI
Manjula Arts and Theatre, Inc.,
San Jose, CA
Metro Family Services & Resources, Inc.,
Buford, GA
Moore House, Inc., Baltimore, MD
New Hopewell Community Outreach,
Inc., Bernice, LA
One Family at a Time / Love Academy,
Incorporated, Milwaukee, WI
Ont Art, Pomona, CA
Order Sons of Italy in America Housing
Corp., Bellmore, NY
Pathways to Family Communication, Inc.,
Fayetteville, NC
Pine Foundation, Inc., Lone Tree, CO
Poteet Community Commodity,
Poteet, TX
Project Star, Inc., Apopka, FL
Praise & Worship Outreach for the Poor,
Sawyerville, AL
Pyramid Health Network, Montclair, NJ
Quality Tech Employment Services, Inc.,
Brooklyn, NY
Riverflow, Inc., Gary, IN
Seek Ye First the Kingdom of God
Ministries, American Canyon, CA
Society of Non Profit Public Relations,
Taylorsville, NC
Spirit of Religious Charity, Inc.,
Gastonia, NC
Stallions of Honor, Inc., Riverside, CA
Synergy Project, Richmond, VA
Three Suns, Cutbank, MT
True Fellowship Community
Development, Inc., Detroit, MI
Turentine Twins Quarter Horse Ranch,
Inc., Indianapolis, IN
United Enterprises Development
Corporation, Kansas City, MO
Universal Housing Development
Corporation, St. Louis, MO
Unlimited Goals Foundation, Tenino, WA
Veritas Dei, Silver Spring, MD
2008–17 I.R.B.850April 28, 2008

Walter Adams Community Development
Corporation, Bronx, NY
Youth and Family Impact, Inc.,
Columbus, OH
Youth for a Violence Free Community,
Carson, CA
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as
a private operating foundation, the Inter-
nal Revenue Service will issue a ruling or
determination letter with the revised clas-
sification as to foundation status. Grantors
and contributors maythereafter rely upon
such ruling or determination letter as pro-
vided in section 1.509(a)–7 of the Income
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
Simplification of Entity
Classification Rules;
Correction
Announcement 2008–38
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correcting amendment.
SUMMARY: This document contains a
correction to final regulations (T.D. 8697,
1997–1 C.B. 215) that were published
in theFederal Registeron Wednesday,
December 18, 1996 (61 FR 66584). The
final regulations classify certain business
organizations under an elective regime.
DATES: This correction is effective April
4, 2008, and is applicable on January 1,
1997.
FOR FURTHER INFORMATION
CONTACT: Stephen J. Hawes, (202)
622–3860 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (T.D. 8697) that
is the subject of this correction is under
section 7701 of the Internal Revenue Code.
Need for Correction
As published, T.D. 8697 contains an er-
ror that may prove to be misleading and is
in need of clarification.
*****
Correction of Publication
Accordingly, 26 CFR part 301 is cor-
rected by making the following correcting
amendment:
PART 301—PROCEDURE AND
ADMINISTATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority:26USC7805***
Par. 2. Section 301.7701–2(b)(8)(i)
is amended by revising the entry for
“Romania, Societe pe Actiuni” to read as
follows:
§301.7701–2 Business entities;
definitions.
*****
(b) * * *
(8)***(i)***
Romania, Societate pe Actiuni
*****
Cynthia E. Grigsby,
Senior Federal Register Liaison Officer,
Publications and Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).
(Filed by the Office of the Federal Register on April 3, 2008,
8:45 a.m., and published in the issue of the Federal Register
for April 4, 2008, 73 F.R. 18442)
April 28, 20088512008–17 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2008–17 I.R.B.iApril 28, 2008

Numerical Finding List
1
Bulletins 2008–1 through 2008–17
Announcements:
2008-1, 2008-1 I.R.B.246
2008-2, 2008-3 I.R.B.307
2008-3, 2008-2 I.R.B.269
2008-4, 2008-2 I.R.B.269
2008-5, 2008-4 I.R.B.333
2008-6, 2008-5 I.R.B.378
2008-7, 2008-5 I.R.B.379
2008-8, 2008-6 I.R.B.403
2008-9, 2008-7 I.R.B.444
2008-10, 2008-7 I.R.B.445
2008-11, 2008-7 I.R.B.445
2008-12, 2008-7 I.R.B.446
2008-13, 2008-8 I.R.B.480
2008-14, 2008-8 I.R.B.481
2008-15, 2008-9 I.R.B.511
2008-16, 2008-9 I.R.B.511
2008-17, 2008-9 I.R.B.512
2008-18, 2008-12 I.R.B.667
2008-19, 2008-11 I.R.B.624
2008-20, 2008-11 I.R.B.625
2008-21, 2008-13 I.R.B.691
2008-22, 2008-13 I.R.B.692
2008-23, 2008-14 I.R.B.731
2008-24, 2008-13 I.R.B.692
2008-25, 2008-14 I.R.B.732
2008-26, 2008-13 I.R.B.693
2008-27, 2008-15 I.R.B.751
2008-28, 2008-14 I.R.B.733
2008-29, 2008-15 I.R.B.786
2008-30, 2008-16 I.R.B.825
2008-31, 2008-15 I.R.B.787
2008-32, 2008-16 I.R.B.826
2008-33, 2008-16 I.R.B.826
2008-34, 2008-17 I.R.B.849
2008-35, 2008-17 I.R.B.849
2008-36, 2008-16 I.R.B.827
2008-37, 2008-17 I.R.B.850
2008-38, 2008-17 I.R.B.851
Court Decisions:
2085, 2008-17 I.R.B.828
Notices:
2008-1, 2008-2 I.R.B.251
2008-2, 2008-2 I.R.B.252
2008-3, 2008-2 I.R.B.253
2008-4, 2008-2 I.R.B.253
2008-5, 2008-2 I.R.B.256
2008-6, 2008-3 I.R.B.275
2008-7, 2008-3 I.R.B.276
2008-8, 2008-3 I.R.B.276
Notices— Continued:
2008-9, 2008-3 I.R.B.277
2008-10, 2008-3 I.R.B.277
2008-11, 2008-3 I.R.B.279
2008-12, 2008-3 I.R.B.280
2008-13, 2008-3 I.R.B.282
2008-14, 2008-4 I.R.B.310
2008-15, 2008-4 I.R.B.313
2008-16, 2008-4 I.R.B.315
2008-17, 2008-4 I.R.B.316
2008-18, 2008-5 I.R.B.363
2008-19, 2008-5 I.R.B.366
2008-20, 2008-6 I.R.B.406
2008-21, 2008-7 I.R.B.431
2008-22, 2008-8 I.R.B.465
2008-23, 2008-7 I.R.B.433
2008-24, 2008-8 I.R.B.466
2008-25, 2008-9 I.R.B.484
2008-26, 2008-9 I.R.B.487
2008-27, 2008-10 I.R.B.543
2008-28, 2008-10 I.R.B.546
2008-29, 2008-12 I.R.B.637
2008-30, 2008-12 I.R.B.638
2008-31, 2008-11 I.R.B.592
2008-32, 2008-11 I.R.B.593
2008-33, 2008-12 I.R.B.642
2008-34, 2008-12 I.R.B.645
2008-35, 2008-12 I.R.B.647
2008-36, 2008-12 I.R.B.650
2008-37, 2008-12 I.R.B.654
2008-38, 2008-13 I.R.B.683
2008-39, 2008-13 I.R.B.684
2008-40, 2008-14 I.R.B.725
2008-41, 2008-15 I.R.B.742
2008-42, 2008-15 I.R.B.747
2008-43, 2008-15 I.R.B.748
2008-44, 2008-16 I.R.B.799
2008-45, 2008-17 I.R.B.835
Proposed Regulations:
REG-147290-05, 2008-10 I.R.B.576
REG-153589-06, 2008-14 I.R.B.730
REG-104713-07, 2008-6 I.R.B.409
REG-104946-07, 2008-11 I.R.B.596
REG-110136-07, 2008-17 I.R.B.838
REG-111583-07, 2008-4 I.R.B.319
REG-114126-07, 2008-6 I.R.B.410
REG-119518-07, 2008-17 I.R.B.844
REG-124590-07, 2008-16 I.R.B.801
REG-127391-07, 2008-13 I.R.B.689
REG-136701-07, 2008-11 I.R.B.616
REG-137573-07, 2008-15 I.R.B.750
REG-139236-07, 2008-9 I.R.B.491
REG-141399-07, 2008-8 I.R.B.470
REG-143468-07, 2008-17 I.R.B.848
REG-147832-07, 2008-8 I.R.B.472
Proposed Regulations— Continued:
REG-149475-07, 2008-9 I.R.B.510
REG-151135-07, 2008-16 I.R.B.815
Revenue Procedures:
2008-1, 2008-1 I.R.B.1
2008-2, 2008-1 I.R.B.90
2008-3, 2008-1 I.R.B.110
2008-4, 2008-1 I.R.B.121
2008-5, 2008-1 I.R.B.164
2008-6, 2008-1 I.R.B.192
2008-7, 2008-1 I.R.B.229
2008-8, 2008-1 I.R.B.233
2008-9, 2008-2 I.R.B.258
2008-10, 2008-3 I.R.B.290
2008-11, 2008-3 I.R.B.301
2008-12, 2008-5 I.R.B.368
2008-13, 2008-6 I.R.B.407
2008-14, 2008-7 I.R.B.435
2008-15, 2008-9 I.R.B.489
2008-16, 2008-10 I.R.B.547
2008-17, 2008-10 I.R.B.549
2008-18, 2008-10 I.R.B.573
2008-19, 2008-11 I.R.B.594
2008-21, 2008-12 I.R.B.657
2008-22, 2008-12 I.R.B.658
2008-23, 2008-12 I.R.B.664
2008-24, 2008-13 I.R.B.684
2008-25, 2008-13 I.R.B.686
Revenue Rulings:
2008-1, 2008-2 I.R.B.248
2008-2, 2008-2 I.R.B.247
2008-3, 2008-2 I.R.B.249
2008-4, 2008-3 I.R.B.272
2008-5, 2008-3 I.R.B.271
2008-6, 2008-3 I.R.B.271
2008-7, 2008-7 I.R.B.419
2008-8, 2008-5 I.R.B.340
2008-9, 2008-5 I.R.B.342
2008-10, 2008-13 I.R.B.676
2008-11, 2008-10 I.R.B.541
2008-12, 2008-10 I.R.B.520
2008-13, 2008-10 I.R.B.518
2008-14, 2008-11 I.R.B.578
2008-15, 2008-12 I.R.B.633
2008-16, 2008-11 I.R.B.585
2008-17, 2008-12 I.R.B.626
2008-18, 2008-13 I.R.B.674
2008-19, 2008-13 I.R.B.669
2008-20, 2008-14 I.R.B.716
2008-21, 2008-15 I.R.B.734
2008-22, 2008-16 I.R.B.796
Tax Conventions:
2008-8, 2008-6 I.R.B.403
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin
2007–52, dated December 26, 2007.
April 28, 2008ii2008–17 I.R.B.

Treasury Decisions:
9368, 2008-6 I.R.B.382
9369, 2008-6 I.R.B.394
9370, 2008-7 I.R.B.428
9371, 2008-8 I.R.B.447
9372, 2008-8 I.R.B.462
9373, 2008-8 I.R.B.463
9374, 2008-10 I.R.B.521
9375, 2008-5 I.R.B.344
9376, 2008-11 I.R.B.587
9377, 2008-11 I.R.B.578
9378, 2008-14 I.R.B.720
9379, 2008-14 I.R.B.715
9380, 2008-14 I.R.B.718
9381, 2008-14 I.R.B.694
9382, 2008-9 I.R.B.482
9383, 2008-15 I.R.B.738
9384, 2008-16 I.R.B.792
9385, 2008-15 I.R.B.735
9386, 2008-16 I.R.B.788
9387, 2008-16 I.R.B.789
9388, 2008-17 I.R.B.832
2008–17 I.R.B.iiiApril 28, 2008

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2008–1 through 2008–17
Announcements:
2006-88
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
Notice 2008-36, 2008-12 I.R.B.650
2008-6
Superseded by
Ann. 2008-19, 2008-11 I.R.B.624
Notices:
2001-16
Modified by
Notice 2008-20, 2008-6 I.R.B.406
2001-60
Modified and superseded by
Notice 2008-31, 2008-11 I.R.B.592
2002-44
Superseded by
Notice 2008-39, 2008-13 I.R.B.684
2003-51
Superseded by
Rev. Proc. 2008-24, 2008-13 I.R.B.684
2006-27
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
2006-28
Clarified and superseded by
Notice 2008-36, 2008-12 I.R.B.650
2006-52
Clarified and amplified by
Notice 2008-40, 2008-14 I.R.B.725
2006-77
Clarified and amplified by
Notice 2008-25, 2008-9 I.R.B.484
2006-107
Modified by
Notice 2008-7, 2008-3 I.R.B.276
2007-30
Modified and superseded by
Notice 2008-14, 2008-4 I.R.B.310
2007-54
Clarified by
Notice 2008-11, 2008-3 I.R.B.279
2008-27
Clarified, amended, supplemented, and
superseded by
Notice 2008-41, 2008-15 I.R.B.742
Proposed Regulations:
REG-209020-86
Corrected by
Ann. 2008-11, 2008-7 I.R.B.445
REG-107592-00
Partial withdrawal by
Ann. 2008-25, 2008-14 I.R.B.732
REG-149856-03
Hearing scheduled by
Ann. 2008-26, 2008-13 I.R.B.693
REG-113891-07
Hearing scheduled by
Ann. 2008-4, 2008-2 I.R.B.269
REG-114126-07
Corrected by
Ann. 2008-36, 2008-16 I.R.B.827
REG-127770-07
Hearing scheduled by
Ann. 2008-24, 2008-13 I.R.B.692
REG-133300-07
Hearing scheduled by
Ann. 2008-34, 2008-17 I.R.B.849
REG-141399-07
Hearing cancelled by
Ann. 2008-31, 2008-15 I.R.B.787
Revenue Procedures:
97-36
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
2001-23
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
2002-9
Modified by
Rev. Proc. 2008-18, 2008-10 I.R.B.573
Modified and amplified by
Rev. Proc. 2008-25, 2008-13 I.R.B.686
2007-1
Superseded by
Rev. Proc. 2008-1, 2008-1 I.R.B.1
2007-2
Superseded by
Rev. Proc. 2008-2, 2008-1 I.R.B.90
2007-3
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-4
Superseded by
Rev. Proc. 2008-4, 2008-1 I.R.B.121
Revenue Procedures— Continued:
2007-5
Superseded by
Rev. Proc. 2008-5, 2008-1 I.R.B.164
2007-6
Superseded by
Rev. Proc. 2008-6, 2008-1 I.R.B.192
2007-7
Superseded by
Rev. Proc. 2008-7, 2008-1 I.R.B.229
2007-8
Superseded by
Rev. Proc. 2008-8, 2008-1 I.R.B.233
2007-26
Obsoleted in part by
Rev. Proc. 2008-17, 2008-10 I.R.B.549
2007-31
Obsoleted in part by
Rev. Proc. 2008-19, 2008-11 I.R.B.594
2007-39
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-52
Superseded by
Rev. Proc. 2008-9, 2008-2 I.R.B.258
2008-13
Corrected by
Ann. 2008-15, 2008-9 I.R.B.511
Revenue Rulings:
58-612
Clarified and amplified by
Rev. Rul. 2008-15, 2008-12 I.R.B.633
64-250
Amplified by
Rev. Rul. 2008-18, 2008-13 I.R.B.674
89-42
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
92-19
Supplemented in part by
Rev. Rul. 2008-19, 2008-13 I.R.B.669
97-31
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2001-48
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2007-4
Supplemented and superseded by
Rev. Rul. 2008-3, 2008-2 I.R.B.249
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin 2007–52, dated December 26,
2007.
April 28, 2008iv2008–17 I.R.B.

Treasury Decisions:
8697
Corrected by
Ann. 2008-38, 2008-17 I.R.B.851
9273
Corrected by
Ann. 2008-33, 2008-16 I.R.B.826
9362
Corrected by
Ann. 2008-9, 2008-7 I.R.B.444
Ann. 2008-12, 2008-7 I.R.B.446
9363
Corrected by
Ann. 2008-10, 2008-7 I.R.B.445
9368
Corrected by
Ann. 2008-29, 2008-15 I.R.B.786
Ann. 2008-30, 2008-16 I.R.B.825
9375
Corrected by
Ann. 2008-16, 2008-9 I.R.B.511
9386
Corrected by
Ann. 2008-35, 2008-17 I.R.B.849
2008–17 I.R.B.vApril 28, 2008

INDEX
Internal Revenue Bulletins 2008–1 through
2008–17
The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parenthesis refers to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Alternative funding schedule, amortization (Ann 2) 3,307
Automatic contribution agreements,hearing for
REG–133300–07 (Ann 34) 17,849
Benefit restrictions for underfunded pension plans, hearing for
REG–113891–07 (Ann 4) 2,269
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Defined benefit plans:
Accrued benefits (RR 7) 7,419
Measurement of assets and liabilities for pension funding pur-
poses (REG–139236–07) 9,491
Defined contribution plans:
Diversification of employer securities, extension of certain
transitional rules (Notice 7) 3,276
Diversification requirements for certain defined contribu-
tion plans and to publicly traded employer securities
(REG–136701–07) 11,616
Determination letters, issuing procedures (RP 6) 1,192
Full funding limitations, weighted average interest rates, seg-
ment rates for:
January 2008 (Notice 17) 4,316
February 2008 (Notice 24) 8,466
March 2008 (Notice 37) 12,654
April 2008 (Notice 45) 17,835
Letter rulings:
And determination letters, areas which will not be issued
from:
Associates Chief Counsel and Division Counsel (TE/GE)
(RP 3) 1,110
Associate Chief Counsel (International) (RP 7) 1,229
And general information letters, procedures (RP 4) 1,121
User fees, request for letter rulings (RP 8) 1,233
EMPLOYEE PLANS—Cont.
Master and prototype (M&P) andvolume submitter (VS) plans,
EGTRRA opinion and advisory letters (Ann 23) 14,731
Mortality tables, disability (Notice 29) 12,637
Multiemployer plan funding guidance (REG–151135–07) 16,
815
Pension plan amendments, notice requirements, significantly re-
ducing rate of future benefit accrual (REG–110136–07) 17,
838
Performance-based compensation (RR 13) 10,518
Proposed Regulations:
26 CFR 401, 402, 411, 414, and 4979; automatic contribution
arrangements, hearing for REG–133300–07 (Ann 34) 17,
849
26 CFR 1.401(a)(35)–1, added; diversification requirements
for certain defined contribution plans and to publicly traded
employer securities (REG–136701–07) 11,616
26 CFR 1.411(a)(13)–1, added; 1.411(b)(5)–1, added; hybrid
retirement plans (REG–104946–07) 11,596
26 CFR 1.411(d)–3, amended; 54.4980F–1, amended; no-
tice requirements for certain pension plan amendments
significantly reducing the rate of future benefit accrual
(REG–110136–07) 17,838
26 CFR 1.430; 1.436; benefit restrictions for underfunded
pension plans, hearing for REG–113891–07 (Ann 4) 2,269
26 CFR 1.430(d)–1, added; 1.430(g)–1, added;
1.430(h)(2)–1, added; 1.430(i)–1, added; measurement
of assets and liabilities for pension funding purposes
(REG–139236–07) 9,491
26 CFR 1.432(a)–1, (b)–1, added; multiemployer plan fund-
ing guidance (REG–151135–07) 16,815
Qualified retirement plans:
Distributions (Notice 30) 12,638
Hybrid retirement plans (REG–104946–07) 11,596
Stocks, statutory stock options, information reporting require-
ments (Notice 8) 3,276
Supplemental healthinsurance, HIPAA (Notice 23) 7,433
Technical advice to IRS employees (RP 5) 1,164
Transitional guidance for new funding rules and funding-related
benefits limitations under PPA ’06, uniform effective date (No-
tice 21) 7,431
EMPLOYMENT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Corporations, S corporation, status in reorganization where S
corporation becomes a QSub of newly formed holding com-
pany, assignment of EINs (RR 18) 13,674
Frivolous tax return positions (Notice 14) 4,310
Interest-free adjustments and claims for refund of employment
taxes (REG–111583–07) 4,319
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
April 28, 2008vi2008–17 I.R.B.

EMPLOYMENT TAX—Cont.
Proposed Regulations:
26 CFR 31.6011(a)–1, –4, –5, amended; 31.6205–1,
amended; 31.6302–0, –1, amended; 31.6402(a)–1, –2,
amended; 31.6413(a)–2, amended; 31.6414–1, amended;
interest-free adjustments and claims for refund of employ-
ment taxes (REG–111583–07) 4,319
Technical Advice Memoranda (TAMs) (RP 2) 1,90
ESTATE TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Grantor’s retained power to substitute assets of equivalent value
(RR 22) 16,796
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
Technical Advice Memoranda (TAMs) (RP 2) 1,90
EXCISE TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Corporations, S corporation, status in reorganization where S
corporation becomes a QSub of newly formed holding com-
pany, assignment of EINs (RR 18) 13,674
Frivolous tax return positions (Notice 14) 4,310
Insurance excise tax treatment of premiums paid by one foreign
insurer to another (RR 15) 12,633
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Supplemental health insurance, HIPAA (Notice 23) 7,433
Technical Advice Memoranda (TAMs) (RP 2) 1,90
Voluntary compliance program for foreign insurers and reinsur-
ers subject to insurance excise tax imposed by section 4371
(Ann 18) 12,667
EXEMPT ORGANIZATIONS
Annual notice to donors regarding pending and settled declara-
tory judgment suits (Ann 1) 1,246
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Form 990-T, procedures to request a 501(c)(3) organization’s
Form 990-T (Ann 21) 13,691
Frivolous tax return positions (Notice 14) 4,310
Letter rulings:
And determination letters:
Areas which will not be issued from Associates Chief
Counsel and Division Counsel (TE/GE) (RP 3) 1,110
EXEMPT ORGANIZATIONS—Cont.
Exemption application determination letter rulings under
sections 501 and 521 (RP 9) 2,258
And general information letters, procedures (RP 4) 1,121
User fees, request for letter rulings (RP 8) 1,233
List of organizations classifiedas private foundations (Ann 13)
8,476; (Ann 28) 14,733; (Ann 37) 17,850
Proposed Regulations:
26 CFR 1.664–1, amended; guidance under section 664
regarding the effect of unrelated business taxable income
(UBTI) on charitable remainder trusts (REG–127391–07)
13,689
Revocations (Ann 3) 2,269; (Ann 14) 8,477; (Ann 20) 11,625;
(Ann 22) 13,692; (Ann 32) 16,826
Technical advice to IRS employees (RP 5) 1,164
Transitional relief and filing procedures, charitable trust
(Notice 6) 3,275
Trusts, charitable remainder trusts, calculation of excise tax on
unrelated business taxable income (UBTI) (REG–127391–07)
13,689
GIFT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
Technical Advice Memoranda (TAMs) (RP 2) 1,90
INCOME TAX
Accounting methods:
Procedure for election under section 1361(g) for banks (RP
18) 10,573
Safe harbor method of accounting for payroll taxes (RP 25)
13,686
Advance Pricing Agreement (APA) Program, annual report to the
public, 2007 (Ann 27) 15,751
Allocation of section 179D deduction to designers of government
owned buildings, certification requirements for interim light-
ing rule, application of interim lighting rule to unconditioned
garage space (Notice 40) 14,725
Annual notice to donors regarding pending and settled declara-
tory judgment suits (Ann 1) 1,246
Annuity contracts, partial exchange (RP 24) 13,684
Calculating and apportioning the section 11(b)(1) additional tax
under section 1561 for controlled groups (TD 9369) 6,394;
(REG–104713–07) 6,409
Capital assets, musical compositions (TD 9379) 14,715;
(REG–153589–06) 14,730
2008–17 I.R.B.viiApril 28, 2008

INCOME TAX—Cont.
Cell captive guidance:
Insurance, protected cell company (Notice 19) 5,366
Insurance, risk shifting and risk distribution (RR 8) 5,340
Certain outbound reorganizations and section 351 exchanges
(Notice 10) 3,277
Charitable contributions:
Appreciated property, S corporation (RR 16) 11,585
Recordkeeping requirements (Notice 16) 4,315
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Clarification of transitional relief under Notice 2007–54
(Notice 11) 3,279
Coal project program, special allocation round for qualifying ad-
vanced coal projects (Notice 26) 9,487
Consolidated returns:
Intercompany insurance transactions, withdrawal of a portion
of REG–107592–00 (Ann 25) 14,732
Loss disallowance (Notice 9) 3,277
Consumer Price Index (CPI) adjustments, certain loans under
section 1274A for 2008 (RR 3) 2,249
Contingent fees under Circular 230 (Notice 43) 15,748
Corporations:
Entity classification, foreign entities, per se corporations (TD
9388) 17,832; (REG–143468–07) 17,848
Health insurance costs of 2-percent shareholder-employees, S
corporation (Notice 1) 2,251
S corporations:
Charitable contributions, appreciated property (RR 16) 11,
585
Status in reorganization where S corporation becomes a
QSub of newly formed holding company, assignment of
EINs (RR 18) 13,674
Succession to items of a liquidating corporation by members
of a consolidated group (TD 9376) 11,587
Credits:
Alternative motor vehicle credit, qualified fuel cell motor ve-
hicles (Notice 33) 12,642
Energy efficient home credit,calculation of heating and cool-
ingenergyconsumption:
Dwelling unit (Notice 35) 12,647
Manufactured home (Notice 36) 12,650
Foreign tax credit:
Redeterminations,correctiontoT.D.9362(Ann9)7,444;
additional correction to TD 9362 (Ann 12) 7,446;cor-
rection to REG–209020–86 (Ann 11) 7,445
Reduction of foreign tax credit limitation categories un-
der section 904(d) (TD 9368) 6,382; corrections (Ann
29) 15,786; additional corrections (Ann 30) 16,825;
(REG–114126–07) 6,410; hearing cancellation (Ann
36) 16,827
Increasing research activities, centralized filing of certain
claims (Notice 39) 13,684
Low-income housing credit:
2008 population figures used for calculation (Notice 22) 8,
465
INCOME TAX—Cont.
Indian Housing Block Grant (IHBG) Program (RR 6) 3,
271
Nonconventional source fuel credit, inflation adjustment
factor and phase-out amount for CY 2007 (Notice 44)
16,799
Satisfactory bond, “bond factor” amounts for the period:
January through March 2008 (RR 2) 2,247
January through June 2008 (RR 21) 15,734
Deductions:
Certain itemized, federal taxable income (CD 2085) 17,828
Dependency exemption, qualifying relative (Notice 5) 2,256
Depreciation, 2008 limitations on depreciation deductions for
passenger automobiles (RP 22) 12,658
Disclosure of return information to the Bureau of the Census (TD
9372) 8,462; (TD 9373) 8,463; (REG–147832–07) 8,480
Disciplinary actionsinvolving attorneys,certified public accoun-
tants, enrolled agents, and enrolled actuaries (Ann 5) 4,333
Domestic production activities, Tax Increase Prevention and
Reconciliation Act of 2005 (TIPRA) amendments to section
199 (TD 9381) 14,694
Economic stimulus payments, filing instructions (Notice 28) 10,
546
Electronic tax administration, guidance necessary to facilitate –
updating section 7216 regulations (TD 9375) 5,344; correction
(Ann 16) 9,511
Employer-provided vehicles, cents-per-mile valuation rule, max-
imum vehicle values (RP 13) 6,407;correction(Ann15)9,
511
Exclusions from gross income, update of Rev. Rul. 2001–48
(RR 17) 12,626
Exemptions, dependents, hearing on REG–149856–03 (Ann 26)
13,693
Federal tax lien, procedures for obtaining release or discharge
(TD 9378) 14,720
Foreign base company sales income rules, application
(REG–124590–07) 16,801
Foreign currency, debt characterization, exchange traded notes,
prepaid forwards (RR 1) 2,248
Frivolous tax return positions (Notice 14) 4,310
GO Zone bonus depreciation recapture, like-kind exchanges and
involuntary conversions (Notice 25) 9,484
Guidance to:
Government entities regarding a requirement to withhold on
certain payments made by them (Notice 38) 13,683
Tax return preparers, consents to disclose and consents to use
tax return information in the Form 1040 series (RP 12) 5,
368
Income tax returns, 2007, guidance for the Service not challeng-
ing the accuracy of 2007 returns filed in compliance with No-
tice 2008–28 (RP 21) 12,657
Insurance companies:
Application of section 338 (TD 9377) 11,578
Diversification requirements under section 817 (TD 9385) 15,
735
Loss payment patterns and discount factors for the 2007 acci-
dent year (RP 10) 3,290
April 28, 2008viii2008–17 I.R.B.

INCOME TAX—Cont.
Prevailing state assumed interest rate tables, 2008 (RR 19) 13,
669
Proposed AG VACARVM and Proposed Life PBR (Notice
18) 5,363
Salvage discount factors for the 2007 accident year (RP 11) 3,
301
Interest:
Deductibility, application of section 163(d) to noncorporate
limited partner that does not materially participate in a
trader partnership’s trading activity (RR 12) 10,520
Investment:
Federal short-term, mid-term, and long-term rates for:
January 2008 (RR 4) 3,272
February 2008 (RR 9) 5,342
March 2008 (RR 11) 10,541
April 2008 (RR 20) 14,716
Rates:
Underpayments and overpayments, quarter beginning:
April 1, 2008 (RR 10) 13,676
Interim standards under section 6694(a) (Notice 13) 3,282
Inventory, dollar-value last-in, first-out (LIFO) pooling method
for certain resellers of cars and light-duty trucks (RP 23) 12,
664
Letter rulings:
And determination letters, areas which will not be issued
from:
Associates Chief Counsel and Division Counsel (TE/GE)
(RP 3) 1,110
Associate Chief Counsel (International) (RP 7) 1,229
And information letters issued by Associate Offices, determi-
nation letters issued by Operating Divisions (RP 1) 1,1
Life insurance contracts, modifications of split-dollar arrange-
ments (Notice 42) 15,747
Like–kind exchanges, safe harbor, rental property used for per-
sonal purposes (RP 16) 10,547
Listed transaction under sections 6011, 6111, and 6112 (Notice
34) 12,645
Losses, deduction for abandonedstock or securities (TD 9386)
16,788; correction (Ann 35) 17,849
Marketing of refund anticipation loans (RALs) and certain other
products in connection with thepreparation of a tax return
(Ann 7) 5,379
Mortgage insurance premiums, allocation and information re-
porting for 2007 (Notice 15) 4,313
National and area median gross income figures, guidance for
2008 (RP 19) 11,594
Normalization accounting rules, application (TD 9387) 16,789
Partnerships, application of section 163(d) to noncorporate lim-
ited partners in a trader partnership’s trading activity (RR 12)
10,520
Penalties, substantial understatement, preparer penalty (RP 14)
7,435
Performance-based compensation (RR 13) 10,518
Prepaid forward contracts, exchange traded notes (Notice 2) 2,
252
INCOME TAX—Cont.
Preparer signature requirements under section 6695(b)
(Notice 12) 3,280
Presidential Primary Matching Payment Account:
Payments from (RP 15) 9,489
Timing of payments (TD 9382) 9,482; (REG–149475–07) 9,
510
Private foundations, organizations now classified as (Ann 13) 8,
476; (Ann 28) 14,733;(Ann37)17,850
Proposed Regulations:
26 CFR 1.152; dependent child of divorced or separated par-
ents or parents who live apart, hearing on REG–149856–03
(Ann 26) 13,693
26 CFR 1.162–24, added; 301.9100–4T, amended; travel ex-
penses of state legislators (REG–119518–07) 17,844
26 CFR 1.468A–0 thru –9, added; nuclear decommissioning
funds (REG–147290–05) 10,576
26 CFR 1.664–1, amended; guidance under section 664
regarding the effect of unrelated business taxable income
(UBTI) on charitable remainder trusts (REG–127391–07)
13,689
26 CFR 1.860A, 1.860G, modifications of commercial mort-
gage loans held by a real estate mortgage investment con-
duit (REMIC), hearing for REG–127770–07 (Ann 24) 13,
692
26 CFR 1.904–0, amended; 1.904(f)–1, –2, amended;
1.904(f)–7, –8, added; 1.904(g)–0 thru –3, added;
1.1502–9, revised; treatment ofoverall foreign and domes-
tic losses (REG–141399–07) 8,470; hearing cancellation
(Ann 31) 15,787
26 CFR 1.904–2(i), added; 1.904–4, –5, revised; 1.904–7(g),
added; 1.904(f)–12(h), added; reduction of foreign
tax credit limitation categories under section 904(d)
(REG–114126–07) 6,410; hearing cancellation (Ann 36)
16,827
26 CFR 1.954–3, amended; guidance regarding foreign base
company sales income (REG–124590–07) 16,801
26 CFR 1.1221–3, added; time and manner for electing cap-
ital asset treatment for certain self-created musical works
(REG–153589–06) 14,730
26 CFR 1.1502–13, amended; amendment of matching rule
for certain gains on member stock (REG–137573–07) 15,
750
26 CFR 1.1502–13(e)(2)(ii)(C), withdrawn from
REG–107592–00; consolidated returns, intercompany
obligations (Ann 25) 14,732
26 CFR 1.1561–0, –2, added; 1.1563–1, amended; calculating
and apportioning the section 11(b)(1) additional tax under
section 1561 for controlled groups (REG–104713–07) 6,
409
26 CFR 301.6103(j)(1)–1, amended; disclosure of return in-
formation to the Bureau of the Census (REG–147832–07)
8,480
26 CFR 301.7701–2, amended; classification of certain for-
eign entities (REG–143468–07) 17,848
2008–17 I.R.B.ixApril 28, 2008

INCOME TAX—Cont.
26 CFR 702.9037–1, –2, revised; payments from the
Presidential Primary Matching Payment Account
(REG–149475–07) 9,510
Publications:
Update to Publication 1187, Specifications for Filing Form
1042-S, Foreign Person’s U.S. Source Income Subject
to Withholding, Electronically or Magnetically (Revised
12-2006) (Ann 6) 5,378;(Ann19)11,624
Qualified films under section 199 (TD 9384) 16,792
Qualified mortgage bonds (QMBs) and mortgage credit certifi-
cates (MCCs), average area housing purchase prices for 2008
(RP 17) 10,549
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
Real estate mortgage investment conduit (REMIC) commercial
mortgage loan modification, hearing for REG–127770–07
(Ann 24) 13,692
Regulations:
26 CFR 1.46–6, amended; 1.168(i)–3, added; application of
normalization accounting rules to balances of excess de-
ferred income taxes and accumulated deferred investment
tax credits of publicutilities whose assets cease to be pub-
lic utility property (TD 9387) 16,789
26 CFR 1.165–5, amended; abandonment of stock or other
securities (TD 9386) 16,788; correction (Ann 35) 17,849
26 CFR 1.197–0, amended; 1.197–2(g)(5)(ii), revised;
1.197–2T, removed; 1.338–0, –1, –11, amended;
1.338–1T, –11T, removed; 1.338(i)–1, amended;
1.381(c)(22)–1(b)(7)(v), amended; 1.846–0, –4, amended;
1.846–2(d), revised; 602.101, amended; application of
section 338 to insurance companies (TD 9377) 11,578
26 CFR 1.199–0 thru –4, –7 thru –9, amended; 1.199–2T, –3T,
–5T, –7T, –8T, removed; 1.199–5, added; TIPRA amend-
ments to section 199 (TD 9381) 14,694
26 CFR 1.199–0, –3, –7, –8, amended; qualified films under
section 199 (TD 9384) 16,792
26 CFR 1.367(b)–6, amended; stock transfer rules, carryover
of earnings and taxes, correction to TD 9273 (Ann 33) 16,
826
26 CFR 1.468A–0 thru –8, removed; 1.468A–0T thru –9T,
added; 602.101, amended; nuclear decommissioning funds
(TD 9374) 10,521
26 CFR 1.817–5, amended; diversification requirements for
variable annuity, endowment, and life insurance contracts
under section 817 (TD 9385) 15,735
26 CFR 1.904–0, amended; 1.904(b)–0, added; 1.904(f)–0,
–0T, –1T, –2T, –7, –7T, –8, –8T, added; 1.904(f)–1, –2,
–3, amended; 1.904(g)–0, –0T, –1, –1T, –2, –2T, –3, –3T,
added; 1.904(i)–0, added; 1.904(j)–0, added; 1.1502–9, re-
vised; 1.1502–9T, added; treatment of overall foreign and
domestic losses (TD 9371) 8,447
INCOME TAX—Cont.
26 CFR 1.904–0, –2, –2T, –4, –4T, –5, –5T, –7, –7T, amended;
1.904(f)–12, –12T, amended; reduction of foreign tax credit
limitation categories under section 904(d) (TD 9368) 6,
382; corrections (Ann 29) 15,786; additional corrections
(Ann 30) 16,825
26 CFR 1.905–3T, –4T, amended;foreign tax credit, notifica-
tion of foreign tax redeterminations, correction to TD 9362
(Ann 9) 7,444
26 CFR 1.1221–3T, added; time and manner for electing cap-
ital asset treatment for certain self-created musical works
(TD 9379) 14,715
26 CFR 1.1502–13, amended; 1.1502–13T, added; amend-
ment of matching rule for certain gains on member stock
(TD 9383) 15,738
26 CFR 1.1502–47T, added; 1.1561–0T, added; 1.1561–2, re-
moved; 1.1561–2T, amended; 1.1563–1T, amended; calcu-
lating and apportioning the section 11(b)(1) additional tax
under section 1561 for controlled groups (TD 9369) 6,394
26 CFR 1.1502–80, amended; miscellaneous operating rules
for successor persons, succession to items of the liquidating
corporation (TD 9376) 11,587
26 CFR 300.0, amended; 300.7, .8, added; user fees relating to
enrollment to perform actuarial services (TD 9370) 7,428
26 CFR 301.6020–1, added; 301.6020–1T, removed; substi-
tute for return (TD 9380) 14,718
26 CFR 301.6103(j)(1)–1, amended; disclosure of return in-
formation to the Bureau of the Census (TD 9372) 8,462
26 CFR 301.6103(j)(1)–1T, amended; disclosure of return in-
formation to the Bureau of the Census (TD 9373) 8,463
26 CFR 301.6325–1, amended; 301.6503(f)–1, amended;
301.7426–1, amended; 401.6325–1, removed; release of
lien or discharge of property (TD 9378) 14,720
26 CFR 301.7216–0, added; 301.7216–1, –2, –3, revised;
guidance necessary to facilitate electronic tax administra-
tion, update (TD 9375) 5,344; correction (Ann 16) 9,511
26 CFR 301.7701–2(b)(8)(i), amended; simplification of en-
tity classification rules, correction to TD 8697 (Ann 38) 17,
851
26 CFR 301.7701–2(b)(8)(vi), (e)(7), added; 301.7701–2T,
added; classification of certain foreign entities (TD 9388)
17,832
26 CFR 702.9037–1, –2, amended; 702.9037–1T, –2T, added;
payments from the Presidential Primary Matching Payment
Account (TD 9382) 9,482
Reissuance standards for state or local bonds (Notice 27) 10,543;
(Notice 41) 15,742
Returns required on magnetic media, corrections to TD 9363
(Ann 10) 7,445
Revocations, exempt organizations (Ann 3) 2,269;(Ann14)8,
477;(Ann20)11,625; (Ann 22) 13,692; (Ann 32) 16,826
Safe harbor, guidance for the Service not challenging the accu-
racy of 2007 returns filed in compliance with Notice 2008–28
(RP 21) 12,657
Section 67 limitations on estates or trusts for bundled investment
management and advisory costs (Notice 32) 11,593
April 28, 2008x2008–17 I.R.B.

INCOME TAX—Cont.
Simplification of entity classification rules, correction to TD
8697 (Ann 38) 17,851
Standard Industry Fare Level (SIFL) formula (RR 14) 11,578
Stocks:
Losses, deduction for abandoned stock or securities (TD
9386) 16,788; correction (Ann 35) 17,849
Redetermination of intercompany gain as excluded from gross
income (TD 9383) 15,738; (REG–137573–07) 15,750
Statutory stock options, information reporting requirements
(Notice 8) 3,276
Stock transfer rules, carryover of earnings and taxes, correc-
tion to TD 9273 (Ann 33) 16,826
Substitute for return (TD 9380) 14,718
Tax conventions:
Exclusions from gross income, update of Rev. Rul. 2001–48
(RR 17) 12,626
Insurance excise tax treatment of premiums paid by one for-
eign insurer to another (RR 15) 12,633
Updated tax tables for Belgium, Denmark, Finland, and Ger-
many tax conventions (Ann 8) 6,403
U.S.-Mexico income tax treaty, treatment of Mexico’s im-
puesto empresarial a tasa unica (IETU) (Notice 3) 2,253
Voluntary compliance program for foreign insurers and rein-
surers subject to insurance excise tax imposed by section
4371 (Ann 18) 12,667
Tax shelter, listed transactions (Notice 20) 6,406
Travel expenses of state legislators (REG–119518–07) 17,844
Technical Advice Memoranda (TAMs) (RP 2) 1,90
Treatment of overall foreign and domestic losses (TD 9371) 8,
447; (REG–141399–07) 8,470; hearing cancellation (Ann 31)
15,787
Trusts:
Charitable remainder trusts, calculation of excise tax on unre-
lated business taxable income (UBTI) (REG–127391–07)
13,689
Deductions for contributions to qualified nuclear decommis-
sioning trusts (TD 9374) 10,521; (REG–147290–05) 10,
576
User fees relating to enrollment to perform actuarial services (TD
9370) 7,428
Voluntary closing agreement program for tax-exempt bonds and
tax credit bonds (TEB VCAP) (Notice 31) 11,592
Wash sales, individual retirement accounts, Roth IRAs (RR 5) 3,
271
SELF-EMPLOYMENT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Technical Advice Memoranda (TAMs) (RP 2) 1,90
2008–17 I.R.B.xiApril 28, 2008

April 28, 20082008–17 I.R.B.

2008–17 I.R.B.April 28, 2008

April 28, 20082008–17 I.R.B.

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