Internal Revenue Bulletin 2018-24 (PDF rendition): IRS Announcements

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

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
Announcement 2018–09, page 752.
This announcement corrects a typographical error in Notice
2018 – 40, which published the inflation adjustment factor for
the carbon oxide sequestration credit under § 45Q for calendar
year 2018.
Notice 2018–42, page 750.
This notice modifies Notice 2018 – 03, 2018 –2 I.R.B. 285
(released to the Public Dec. 14, 2017), in light of Public Law
115–97 (Dec. 22, 2017), which made amendments to §§ 67
and 217 of the Internal Revenue Code. Notice 2018 – 03 pro-
vided the optional 2018 standard mileage rates for taxpayers
to use in computing the deductible costs of operating an
automobile for business, charitable, medical, or moving ex-
pense purposes.
Notice 2018–54, page 750.
Notice 2018 –54 informs taxpayers that the Treasury Depart-
ment and the IRS intend to propose regulations addressing the
federal income tax treatment of certain payments made by
taxpayers for which taxpayers receive a credit against their
state and local taxes.
Finding Lists begin on page ii.
Bulletin No. 2018–24
June 11, 2018

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
June 11, 2018Bulletin No. 2018–24

Part III. Administrative, Procedural, and Miscellaneous
Update of 2018 Standard
Mileage Rates Notice
Notice 2018–42
This notice modifies Notice 2018–03,
2018–2 I.R.B. 285 (released to the Public
Dec. 14, 2017), in light of Public Law
115–97 (Dec. 22, 2017), which made
amendments to §§ 67 and 217 of the In-
ternal Revenue Code. Notice 2018–03
provided the optional 2018 standard mile-
age rates for taxpayers to use in comput-
ing the deductible costs of operating an
automobile for business, charitable, med-
ical, or moving expense purposes.
Section 3 of Notice 2018–03 identified
a standard mileage rate of 54.5 cents per
mile for all miles of business use (busi-
ness standard mileage rate) that taxpayers
were to use, including to deduct unreim-
bursed employee travel expenses as a mis-
cellaneous itemized deduction under § 67.
Public Law 115–97 (section 11045) sus-
pends all miscellaneous itemized deduc-
tions that are subject to the two-percent of
adjusted gross income floor under § 67,
including unreimbursed employee travel
expenses. This suspension applies to tax-
able years beginning after December 31,
2017, and before January 1, 2026. Thus,
the business standard mileage rate listed
in Notice 2018–03 cannot be used to
claim an itemized deduction for unreim-
bursed employee travel expenses during
the suspension. Notwithstanding the fore-
going suspension of miscellaneous item-
ized deductions, deductions for expenses
that are deductible in determining ad-
justed gross income are not suspended.
For example, members of a reserve com-
ponent of the Armed Forces of the United
States, state or local government officials
paid on a fee basis, and certain performing
artists are entitled to deduct unreimbursed
employee travel expenses as an adjust-
ment to total income on line 24 of Form
1040 (2017), not as an itemized deduction
on line 21 of Schedule A of Form 1040
(2017), and therefore may continue to use
the business standard mileage rate.
For the use of an automobile as a part
of a move for which the expenses are
deductible under § 217, section 3 of No-
tice 2018–03 provided a standard mileage
rate of 18 cents per mile. For taxable years
beginning after December 31, 2017, and
before January 1, 2026, Public Law
115–97 (section 11049) suspends the de-
duction for moving expenses. This sus-
pension does not apply to members of the
Armed Forces of the United States on
active duty who move pursuant to a mil-
itary order and incident to a permanent
change of station to whom § 217(g) ap-
plies. Thus, other than those to whom
§ 217(g) applies, the standard mileage rate
is not applicable for the use of an auto-
mobile as part of a move occurring during
the suspension.
Section 5 of Notice 2018–03 identified
a maximum standard automobile cost of
$27,300 for passenger automobiles (ex-
cluding trucks and vans) and $31,000 for
trucks and vans for purposes of computing
the allowance under a fixed and variable
rate (FAVR) plan. Public Law 115–97
(section 13202), however, increases the
depreciation limitations for passenger au-
tomobiles placed in service after Decem-
ber 31, 2017. As a result, the maximum
standard automobile cost may not exceed
$50,000 for passenger automobiles (in-
cluding trucks and vans) placed in service
after December 31, 2017.
EFFECT ON OTHER DOCUMENTS
Notice 2018–03 is modified.
DRAFTING INFORMATION
The principal author of this notice is
Bernard P. Harvey of the Office of Asso-
ciate Chief Counsel (Income Tax and Ac-
counting). For further information on this
notice contact Bernard P. Harvey on (202)
317-7005 (not a toll-free phone call).
Guidance on Certain
Payments Made in
Exchange for State and
Local Tax Credits
Notice 2018–54
SECTION 1. PURPOSE
This notice informs taxpayers that the
Department of the Treasury (Treasury De-
partment) and the Internal Revenue Ser-
vice (IRS) intend to propose regulations
addressing the federal income tax treat-
ment of certain payments made by taxpay-
ers for which taxpayers receive a credit
against their state and local taxes.
SECTION 2. BACKGROUND
Section 11042 of “The Tax Cuts and
Jobs Act,” Pub. L. No. 115–97, limits an
individual’s deduction under § 164 for the
aggregate amount of state and local taxes
paid during the calendar year to $10,000
($5,000 in the case of a married individual
filing a separate return). State and local
tax payments in excess of those amounts
are not deductible. This new limitation
applies to taxable years beginning after
December 31, 2017, and before January 1,
2026.
In response to this new limitation,
some state legislatures are considering or
have adopted legislative proposals that
would allow taxpayers to make transfers
to funds controlled by state or local gov-
ernments, or other transferees specified by
the state, in exchange for credits against
the state or local taxes that the taxpayer is
required to pay. The aim of these propos-
als is to allow taxpayers to characterize
such transfers as fully deductible charita-
ble contributions for federal income tax
purposes, while using the same transfers
to satisfy state or local tax liabilities.
Despite these state efforts to circum-
vent the new statutory limitation on state
and local tax deductions, taxpayers should
be mindful that federal law controls the
proper characterization of payments for
federal income tax purposes.
SECTION 3. GUIDANCE TO BE
ISSUED
The Treasury Department and the IRS
intend to propose regulations addressing the
federal income tax treatment of transfers to
funds controlled by state and local govern-
ments (or other state-specified transferees)
that the transferor can treat in whole or in
part as satisfying state and local tax obliga-
tions. The proposed regulations will make
clear that the requirements of the Internal
Revenue Code, informed by substance-
over-form principles, govern the federal in-
June 11, 2018Bulletin No. 2018–24
750

come tax treatment of such transfers. The
proposed regulations will assist taxpayers in
understanding the relationship between the
federal charitable contribution deduction
and the new statutory limitation on the de-
duction for state and local tax payments.
SECTION 4. DRAFTING
INFORMATION
The principal authors of this notice are
Mon Lam and Merrill Feldstein of the
Office of Associate Chief Counsel (In-
come Tax & Accounting). Other person-
nel from the Treasury Department and the
IRS participated in its development. For
further information regarding this notice,
contact Ms. Lam or Ms. Feldstein at (202)
317-5100 (not a toll-free number).
Bulletin No. 2018–24June 11, 2018
751

Part IV. Items of General Interest
Announcement 2018–09
Notice 2018–40, 2018–20 I.R.B. 583
(May 14, 2018), contains a typographical
error in the first sentence of section 3 on
page 584. The sentence states that the
inflation adjustment factor for calendar
year 2017 is 1.1437. The correct year is
2018. The sentence is amended to delete
“2017” and replace it with “2018.”
June 11, 2018Bulletin No. 2018–24
752

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2018–24June 11, 2018
i

Numerical Finding List
1
Bulletin 2018–1 through 2018–24
Announcements:
2018-01, 2018-9 I.R.B.387
2018-02, 2018-9 I.R.B.387
2018-03, 2018-9 I.R.B.387
2018-04, 2018-10 I.R.B.401
2018-05, 2018-13 I.R.B.461
2018-07, 2018-16 I.R.B.503
2018-08, 2018-19 I.R.B.552
2018-09, 2018-24 I.R.B.752
Notices:
2018-01, 2018-3 I.R.B.285
2018-02, 2018-2 I.R.B.281
2018-03, 2018-2 I.R.B.285
2018-05, 2018-6 I.R.B.341
2018-06, 2018-3 I.R.B.300
2018-07, 2018-4 I.R.B.317
2018-08, 2018-7 I.R.B.352
2018-10, 2018-8 I.R.B.359
2018-11, 2018-11 I.R.B.425
2018-12, 2018-12 I.R.B.441
2018-13, 2018-6 I.R.B.341
2018-14, 2018-7 I.R.B.353
2018-15, 2018-9 I.R.B.376
2018-16, 2018-10 I.R.B.390
2018-17, 2018-9 I.R.B.376
2018-18, 2018-12 I.R.B.443
2018-19, 2018-12 I.R.B.443
2018-20, 2018-12 I.R.B.444
2018-21, 2018-15 I.R.B.472
2018-22, 2018-14 I.R.B.464
2018-23, 2018-15 I.R.B.474
2018-24, 2018-17 I.R.B.507
2018-25, 2018-15 I.R.B.476
2018-26, 2018-16 I.R.B.480
2018-27, 2018-20 I.R.B.580
2018-28, 2018-16 I.R.B.492
2018-29, 2018-16 I.R.B.495
2018-30, 2018-21 I.R.B.610
2018-31, 2018-16 I.R.B.501
2018-32, 2018-17 I.R.B.507
2018-33, 2018-17 I.R.B.508
2018-34, 2018-19 I.R.B.549
2018-35, 2018-18 I.R.B.520
2018-36, 2018-20 I.R.B.582
2018-37, 2018-18 I.R.B.521
2018-38, 2018-18 I.R.B.522
2018-39, 2018-20 I.R.B.582
2018-40, 2018-20 I.R.B.583
2018-41, 2018-20 I.R.B.584
2018-42, 2018-24 I.R.B.750
2018-43, 2018-20 I.R.B.590
2018-44, 2018-21 I.R.B.611
2018-45, 2018-21 I.R.B.620
Notices:—Continued
2018-46, 2018-21 I.R.B.621
2018-47, 2018-21 I.R.B.621
2018-49, 2018-22 I.R.B.624
2018-50, 2018-22 I.R.B.626
2018-51, 2018-22 I.R.B.628
2018-52, 2018-22 I.R.B.629
2018-53, 2018-22 I.R.B.631
2018-54, 2018-24 I.R.B.750
Proposed Regulations:
REG-119514-15, 2018-04 I.R.B.325
REG-129260-16, 2018-14 I.R.B.470
REG-118067-17, 2018-08 I.R.B.360
REG-132197-17, 2018-10 I.R.B.404
REG-132197-17, 2018-10 I.R.B.404
REG-132434-17, 2018-16 I.R.B.503
Revenue Procedures:
2018-1, 2018-1 I.R.B.1
2018-2, 2018-1 I.R.B.106
2018-3, 2018-1 I.R.B.130
2018-4, 2018-1 I.R.B.146
2018-5, 2018-1 I.R.B.244
2018-7, 2018-1 I.R.B.282
2018-8, 2018-2 I.R.B.286
2018-9, 2018-2 I.R.B.290
2018-10, 2018-7 I.R.B.355
2018-11, 2018-5 I.R.B.334
2018-12, 2018-6 I.R.B.349
2018-13, 2018-7 I.R.B.356
2018-14, 2018-9 I.R.B.378
2018-15, 2018-9 I.R.B.379
2018-16, 2018-9 I.R.B.383
2018-17, 2018-9 I.R.B.384
2018-18, 2018-10 I.R.B.392
2018-19, 2018-14 I.R.B.466
2018-20, 2018-11 I.R.B.427
2018-21, 2018-14 I.R.B.467
2018-22, 2018-18 I.R.B.524
2018-23, 2018-17 I.R.B.516
2018-24, 2018-18 I.R.B.525
2018-25, 2018-18 I.R.B.543
2018-26, 2018-18 I.R.B.546
2018-27, 2018-20 I.R.B.591
2018-28, 2018-20 I.R.B.592
2018-29, 2018-22 I.R.B.634
2018-30, 2018-21 I.R.B.622
2018-31, 2018-22 I.R.B.637
2018-32, 2018-23 I.R.B.739
2018-33, 2018-22 I.R.B.734
2018-34, 2018-23 I.R.B.748
Revenue Rulings:
2018-01, 2018-2 I.R.B.275
2018-02, 2018-2 I.R.B.277
2018-03, 2018-2 I.R.B.278
Revenue Rulings:—Continued
2018-04, 2018-4 I.R.B.304
2018-05, 2018-6 I.R.B.339
2018-06, 2018-10 I.R.B.388
2018-07, 2018-13 I.R.B.445
2018-09, 2018-14 I.R.B.462
2018-10, 2018-16 I.R.B.477
2018-11, 2018-18 I.R.B.518
2018-12, 2018-20 I.R.B.575
2018-13, 2018-20 I.R.B.576
2018-14, 2018-23 I.R.B.736
2018-15, 2018-23 I.R.B.736
2018-16, 2018-23 I.R.B.737
Treasury Decisions:
9829, 2018-04 I.R.B.308
9830, 2018-11 I.R.B.423
9831, 2018-13 I.R.B.459
9832, 2018-16 I.R.B.477
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
June 11, 2018Bulletin No. 2018–24
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2018–1 through 2018–24
Notices:
2003-65
Modified by
Notice 2018-30, 2018-21 I.R.B.610
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
Bulletin No. 2018–24June 11, 2018
iii

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available atwww.irs.gov/irb/.
We Welcome Comments About the Internal Revenue Bulletin
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.
Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300