Internal Revenue Bulletin 2008-48 (PDF rendition): IRS Revenue Procedures

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.

Bulletin No. 200
8-48
December 1, 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
T.D. 9430, page 1205.
REG–118327–08, page 1218.
Final, temporary, and proposed regulations under section
6050P of the Code relate to information returns for cancella-
tion of indebtedness by certain entities. The regulations will
avoid premature information reporting from certain businesses
that are currently required to report and will reduce the number
of information returns required to be filed. A public hearing on
the proposed regulations is scheduled for March 13, 2009.
Rev. Proc. 2008–69, page 1217.
This procedure provides real estate investment trusts (REITs)
with a method of applying the prohibited transactions safe har-
bor under section 857(b)(6) of the Code for a taxable year that
begins on or before July 30, 2008, and ends on or after July
31, 2008.
Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.
Announcement 2008–115, page 1228.
This document describes issues that the IRS and Treasury De-
partment are considering addressing in a notice of proposed
rulemaking (REG–130342–08) regarding the definition of an
interest in real property. The notice of proposed rulemaking
would address certain rights granted by a governmental unit
that are related to the lease, ownership, or use of real prop-
erty.
EMPLOYEE PLANS
Notice 2008–105, page 1208.
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 November
2008; the 24-month average segment rates; the funding
transitional segment rates applicable for November 2008;
and the minimum present value transitional rates for October
2008.
Rev. Proc. 2008–67, page 1211.
This document sets forth the procedure by which the sponsor
of a multiemployer pension plan may request and obtain ap-
proval of an extension of an amortization period in accordance
with section 431(d) of the Code and section 304(d) of the Em-
ployee Retirement Income Security Act of 1974 (ERISA). Rev.
Proc. 2004–44 superseded. Rev. Proc. 2008–4 modified.
Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.
(Continued on the next page)
Finding Lists begin on page ii.

EXEMPT ORGANIZATIONS
Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.
EMPLOYMENT TAX
Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.
EXCISE TAX
Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.
ADMINISTRATIVE
Announcement 2008–110, page 1224.
This announcement will extend the test of the Fast Track Settle-
ment (FTS) for SB/SE Taxpayers Pilot Program for an additional
two years to further evaluate the program and seek additional
cases for fast track settlement.
Announcement 2008–111, page 1224.
This announcement modifies Revenue Procedures 2002–44,
2002–2 C.B. 10, and 2006–44, 2006–2 C.B. 800, by estab-
lishing a two-year test of the mediation and arbitration proce-
dures for Offer in Compromise and Trust Fund Recovery Penalty
cases that are under the jurisdiction of the Office of Appeals.
Rev. Procs. 2002–44 and 2006–44 modified.
Announcement 2008–114, page 1226.
This document contains corrections to final regulations under
section 1502 of the Code (T.D. 9424, 2008–44 I.R.B. 1012)
that provide rules for determining the tax consequences of a
member’s transfer (including by deconsolidation and worthless-
ness) of loss shares of subsidiary stock. The regulations also
provide that section 362(e)(2) generally does not apply to trans-
actions between members of a consolidated group.
Announcement 2008–116, page 1230.
This document cancels a public hearing on proposed regu-
lations (REG–102822–08, 2008–38 I.R.B. 744) that provide
guidance on the manner in which an S corporation reduces its
tax attributes under section 108(b) for taxable years in which
the S corporation has discharge of indebtedness income that
is excluded from gross income under section 108(a).
December 1, 20082008–48 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top quality service by helping them
understand an
d meet their tax responsibilities and by applying
the tax 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 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.
2008–48 I.R.B.December 1, 2008

December 1, 20082008–48 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 431.—Minimum
Funding Standards for
Multiemployer Plans
A revenue procedure sets forth the procedure by
which the sponsor of a multiemployer pension plan
may request and obtain approval of an extension of
an amortization period inaccordance with section
431(d). See Rev. Proc. 2008-67, page 1211.
Section 6050P.—Returns
Relating to the Cancellation
of Indebtedness by Certain
Entities
26 CFR 1.6050P–1: Information reporting for dis-
charges of indebtedness by certain entities.
T.D. 9430
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Information Reporting for
Discharges of Indebtedness
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and temporary regula-
tions.
SUMMARY: This document contains fi-
nal and temporary regulations relating to
information returns for cancellation of in-
debtedness by certain entities. The tem-
porary regulations will avoid premature
information reporting from certain busi-
nesses that are currently required to report
and will reduce the number of information
returns required to be filed. The tempo-
rary regulations will impact certain lenders
whoarecurrentlyrequiredtofileinfor-
mation returns under the existing regula-
tions. The text of these temporary regula-
tions also serves as the text of the proposed
regulations (REG–118327–08) as set forth
in this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on November 10, 2008.
Applicability Date:For dates of appli-
cability, see §1.6050P–1T(h).
FOR FURTHER INFORMATION
CONTACT: Barbara Pettoni at (202)
622–4910 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to
the Income Tax Regulations (26 CFR part
1) under section 6050P relating to informa-
tion reporting for cancellation of indebt-
edness by certain entities. The amend-
ments will reduce the number of informa-
tion reports required to be filed under sec-
tion 6050P.
In general, section 6050P requires cer-
tain entities to file information returns
with the IRS, and to furnish information
statements to debtors, reporting discharges
of indebtedness of $600 or more. As orig-
inally enacted by the Omnibus Budget
Reconciliation Act of 1993, Public Law
103–66 (107 Stat. 312, 531–532 (1993)),
section 6050P applied solely to “appli-
cable financial entities,” which was then
defined to include only financial institu-
tions, credit unions, and Federal executive
agencies.
In 1996, final regulations were pub-
lished implementing section 6050P. See
T.D. 8654, 1996–1 C.B. 298 [61 FR 262]
(January 4, 1996) (the 1996 regulations).
The 1996 regulations required applica-
ble financial entities, as then defined, to
issue Forms 1099–C, “Cancellation of
Debt,” upon the occurrence of one of
several “identifiable events” as provided
in §1.6050P–1(b)(2)(i)(A) through (H).
One of these identifiable events requiring
the issuance of a Form 1099–C was the
expiration of a “non-payment testing pe-
riod” pursuant to §1.6050P–1(b)(2)(i)(H).
The 1996 regulations created a rebut-
table presumption (the “36-month rule”)
under §1.6050P–1(b)(2)(iv) that this pe-
riod expired if a creditor had not re-
ceived a payment for 36 months. Section
1.6050P–1(b)(2)(iv) provides that the
presumption that an identifiable event oc-
curred can be rebutted by a creditor if the
creditor had engaged in significant,bona
fidecollection activity.
After the issuance of the 1996 reg-
ulations, the Debt Collection Improve-
ment Act of 1996, Public Law 104–134
(110 Stat. 1321, 368–369 (1996)) (the
1996 Act), expanded section 6050P
to cover any executive, judicial, or
legislative agency (as defined in 31 U.S.C.
3701(a)(4)) as well as any applicable
financial entity. The 1996 Act was
effective April 26, 1996. The Ticket to
Work and Work Incentives Improvement
Act of 1999, Public Law 106–170
(113 Stat. 1860, 1931 (1999)) (the
1999 Act), further expanded section
6050P by expanding the definition of
“applicable financial entity” to include
any organization “a significant trade
or business of which is the lending of
money.” The 1999 Act was effective for
discharges of indebtedness occurring after
December 31, 1999.
In 2002, the IRS and the Treasury De-
partment published proposed regulations
to reflect the changes to section 6050P.
See REG–107524–00, 2002–2 C.B. 110
[67 Fed Reg 40629] (June 13, 2002).
The IRS received written (including
electronic) comments on the proposed
regulations and a public hearing was held
on October 8, 2002. After consideration
of the comments received, the IRS
adopted the proposed regulations with
amendments. See T.D. 9160, 2004–2 C.B.
785 [69 FR 62181] (October 25, 2004)
(the 2004 regulations). Section 1.6050P–2
of the 2004 regulations describes the
circumstances in which an organization
has a significant trade or business of
lending money, thereby triggering an
information reporting requirement when it
cancels debt.
Reasons for Change
The 36-month rule of §1.6050P–
1(b)(2)(iv) was drafted at a time when
section 6050P applied only to financial
institutions, credit unions, and Federal
executive agencies and did not extend
to any executive, judicial, or legislative
agency or any organization “a significant
trade or business of which is the lending
of money.” Since the publication of the
2004 regulations, commenters have raised
the concern that the application of the
36-month rule to entities with a significant
2008–48 I.R.B.1205December 1, 2008

trade or business of lending money might
trigger a reporting requirement even when
the entity has not legally or practically
discharged the debt. The IRS and the
Treasury Department agree that it is
appropriate to limit the application of the
36-month rule to the entities for which
it was originally intended in order to
avoid premature information reporting
of cancellation of indebtedness income.
Doing so will reduce the information
reportingburdenonentitiesthatwere
not originally within the scope of the
36-month rule and will protect debtors
from receiving information returns
that prematurely report cancellation of
indebtedness income from such entities.
The Treasury Department and IRS are
still considering other comments received
since the publication of the 2004 regula-
tions, including a request to clarify the
meaning of “stated principal” in section
1.6050P–1(c) and (d)(3) when it is ap-
plied to those who acquire a loan from
a person other than the debtor. Section
1.6050P–1(c) provides that “indebted-
ness” for purposes of section 6050P means
anyamountowedtoanapplicableentity,
including stated principal, fees, stated in-
terest, penalties, administrative costs, and
fines. Section 1.6050P–1(d)(3) further
provides that, in the case of a lending
transaction, the discharge of an amount
other than stated principal is not required
to be reported under section 6050P. Com-
menters have stated that it is unclear
whether the simplifying rule limiting an
information report to the amount of stated
principal can be applied to loan acquir-
ers. Commenters have asserted that loan
acquirers might know only the aggregate
amount due on the loans they are purchas-
ing, not the breakdown of that amount
into principal and accrued interest or fees.
Therefore, if loan acquirers discharge an
aggregate amount, it is difficult for them to
determine how much is required to be re-
ported under section 6050P. The Treasury
Department and IRS are considering issu-
ing future guidance under section 6050P
to address these concerns.
Explanation of Provisions
The temporary regulations and amend-
ments to existing regulations limit the
application of the 36-month rule to the
entities described in the 1993 Act. The
temporary regulations avoid premature
information reporting from certain entities
that are currently required to report under
section 6050P. Notwithstanding this limi-
tation, the temporary regulations provide
that,inthecaseofanentitypreviously
subject to the 36-month rule that was re-
quired to file information returns in a tax
year prior to 2008 due to application of
the 36-month rule, and who failed to so
file, the date of discharge is the first iden-
tifiable event, if any, described in section
1.6050P–1(b)(2)(i)(A) through (G) that
occurs after 2007. Thus, any entity pre-
viously subject to the 36-month rule that
hasneverfiledaninformationreturnre-
mains subject to the information reporting
requirement upon the occurrence of any of
the other identifiable events.
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 also has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations.
For the applicability of the Regulatory
Flexibility Act (5 U.S.C. chapter 6) refer
to the Special Analyses section of the pre-
amble to the cross-reference notice of pro-
posedrulemakingpublishedinthisissueof
the Bulletin. Pursuant to section 7805(f)
of the Internal Revenue Code, these reg-
ulations have been submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on its
impact on small business.
Drafting Information
The principal author of these temporary
regulations is Barbara Pettoni, Office of
Associate Chief Counsel (Procedure and
Administration).
*****
Amendments to the Regulations
Accordingly, 26 CFR part 1 is 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 1.6050P–0 is amended
as follows:
1. The introductory text is revised.
2. A new entry for §1.6050P–1(b)(2)(v)
is added.
3. The entry for §1.6050P–1(h) is re-
vised.
4. A new entry for §1.6050P–1T is
added.
The revisions and additions read as fol-
lows:
§1.6050P–0. Table of contents.
This section l
ists the major captions that
appear in §1.
6050P–1, §1.6050P–1T, and
§1.6050P–2.
*****
1.6050P–1 Information reporting for
discharges of indebtedness by certain
entities.
(b) * * *
(2) * * *
(v) [Rese
rved]. For further guidance,
see the en
try for §1.6050P–1T(b)(2)(v).
*****
(h) Effective/applicability date.
*****
§1.6050P–1T Information reporting for
discharges of indebtedness by certain
entities (temporary).
(b) * * *
(2) * * *
(v) Special rule for certain entities re-
quired to file in a year prior to 2008.
*****
Par. 3. Section 1.6050P–1 is amended
as follows:
1. Paragraph (b)(2)(i)(H) and the head-
ing for paragraph (h) are revised.
2. A new entry for (b)(2)(v) is added.
The addition and revisions read as fol-
lows:
§1.6050P–1 Information reporting for
discharges of indebtedness by certain
entities.
*****
(b)***(2)***
(i) * * *
(H) [Reserved]. For further guidance,
see §1.6050P–1T(b)(2)(i)(H).
December 1, 200812062008–48 I.R.B.

*****
(v) [Reserved]. For further guidance,
see §1.6050P–1T(b)(2)(v).
*****
(h)Effective/applicability date.***
Par. 4. Section 1.6050P–1T is added to
read as follows:
§1.6050P–1T Information reporting for
discharges of indebtedness by certain
entities (temporary).
(a) through (b)(2)(i)(G) [Reserved].
For further guidance, see §1.6050P–1(a)
through (b)(2)(i)(G).
(H) In the case of an entity described
in section 6050P(c)(2)(A) through (C), the
expiration of the non-payment testing pe-
riod, as described in §1.6050P–1(b)(2)(iv).
(b)(2)(ii) through (iv) [Reserved]. For
further guidance, see §1.6050P–1(b)(2)(ii)
through (iv).
(v)Special rule for certain entities re-
quired to file in a year prior to 2008.In
the case of an entity described in section
6050P(c)(1)(A) or (c)(2)(D) required to
file an information return in a tax year
prior to 2008 due to an identifiable event
described in paragraph (b)(2)(i)(H), and
who failed to so file, the date of discharge
is the first event, if any, described in para-
graphs (b)(2)(i)(A) through (G) of this
section that occurs after 2007.
(b)(3) through (g) [Reserved]. For
further guidance, see §1.6050P–1(b)(3)
through (g).
(h)Effective/applicability date—(1)In
general. The rules in this section apply
to discharges of indebtedness after Decem-
ber 21, 1996, except paragraphs (e)(1) and
(e)(3) of this section, which apply to dis-
charges of indebtedness after December
31, 1994, except paragraph (e)(5) of this
section, which applies to discharges of in-
debtedness occurring after December 31,
2004, and except paragraphs (b)(2)(i)(H)
and (b)(2)(v) of this section, which apply
to discharges of indebtedness occurring af-
ter November 10, 2008.
(2) [Reserved]. For further guidance,
see §1.6050P–1(h)(2).
(i)Expiration date. The applicability
of this section will expire on or before
November 7, 2011.
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
Approved October 28, 2008.
Eric Solomon
,
Assistant S
ecretary of
the Treasur
y(TaxPolicy).
(Filed by the Office of the Federal Register on November 7,
2008, 8:45 a.m., and published in the issue of the Federal
Register for November 10, 2008, 73 F.R. 66539)
Section 6672.—Failure
to Collect and Pay Over
Tax, or Attempt to Evade
or Defeat Tax
An announcement modifies Revenue Procedure
2002-44, 2002-2 C.B. 10, and Revenue Procedure
2006-44, 2006-2 C.B. 800, by establishing a two-year
test of the mediation and arbitration procedures
for Offer in Compromise (OIC) and Trust Fund
Recovery Penalty (TFRP) cases that are under the
jurisdiction of the Office of Appeals. See Announce-
ment 2008-111, page 1224.
Section 7122.—Com-
promises
An announcement modifies Revenue Procedure
2002-44, 2002-2 C.B. 10, and Revenue Procedure
2006-44, 2006-2 C.B. 800, by establishing a two-year
test of the mediation and arbitration procedures
for Offer in Compromise (OIC) and Trust Fund
Recovery Penalty (TFRP) cases that are under the
jurisdiction of the Office of Appeals. See Announce-
ment 2008-111, page 1224.
Section 7123.—Appeals
Dispute Resolution
Procedures
An announcement modifies Revenue Procedure
2002-44, 2002-2 C.B. 10, and Revenue Procedure
2006-44, 2006-2 C.B. 800, by establishing a two-year
test of the mediation and arbitration procedures
for Offer in Compromise (OIC) and Trust Fund
Recovery Penalty (TFRP) cases that are under the
jurisdiction of the Office of Appeals. See Announce-
ment 2008-111, page 1224.
2008–48 I.R.B.1207December 1, 2008

Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2008–105
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
Sections 412(b)(5)(B)(ii) and 412(l)
(7)(C)(i), as amended by the Pension
Funding Equity Act of 2004 and by the
Pension Protection Act of 2006 (PPA),
provide that the interest rates used to
calculate 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
conservatively 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
October 2008 is 7.90 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%
November20086.20
5.58
6.20
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 seg-
ment rates, and the funding transitional
segment rates used to compute the tar-
get normal cost and the funding target.
Pursuant to Notice 2007–81, the monthly
corporate bond yield curve derived from
October 2008 data is in Table I at the end
of this notice. The spot first, second, and
third segment rates for the month of Oc-
tober 2008 are, respectively, 7.35, 8.61,
and 7.26. The three 24-month average
corporate bond segment rates applicable
for November 2008 under the election of
§ 430(h)(2)(G)(iv) are as follows:
First
Segment
Second
Segment
Third
Segment
5.17
6.286.62
December 1, 200812082008–48 I.R.B.

The transitional segment rates under
§ 430(h)(2)(G) applicable for November
2008, taking into account the corporate
bond weighted average of 6.20 stated
above, are as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
2008
5.86
6.236.34
2009
5.516.25
6.48
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 October 2008 is 4.17 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 May 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%
November20084.684.214.91
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 October 2008, tak-
ing into account the October 2008 30-year
Treasury rate of 4.17 stated above, are as
follows:
For Plan Y
ears
Beginning
in
First
Segment
Second
Segment
Third
Segment
20084.81
5.06
4.79
2009
5.445.955.41
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.
2008–48 I.R.B.1209December 1, 2008

Table I
Monthly Yield Curve for October 2008
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.55.4520.5
8.11
40.5
7.17
60.5
6.87
80.5
6.72
1.0
6.19
21.08.0641.0
7.15
61.06.8681.06.72
1.56.8321.58.0241.57.1461.56.8681.56.71
2.07.3222.07.9742.07.1362.0
6.85
82.06.71
2.5
7.64
22.5
7.93
42.5
7.12
62.56.8582.5
6.71
3.07.8323.0
7.89
43.07.1163.0
6.85
83.06.71
3.5
7.95
23.57.8543.5
7.10
63.5
6.84
83.5
6.70
4.08.0324.07.8144.0
7.09
64.06.8484.06.70
4.58.1124.57.7744.5
7.09
64.56.8384.56.70
5.0
8.18
25.0
7.74
45.0
7.08
65.0
6.83
85.0
6.70
5.58.2525.5
7.71
45.5
7.07
65.5
6.82
85.5
6.69
6.08.3326.07.6846.07.0666.06.8286.0
6.69
6.5
8.41
26.57.6546.57.0566.5
6.81
86.5
6.69
7.0
8.50
27.07.6247.07.0467.06.8187.0
6.69
7.58.5727.57.5947.57.0367.56.8187.56.68
8.0
8.65
28.0
7.57
48.07.0368.06.8088.06.68
8.5
8.71
28.57.5448.5
7.02
68.5
6.80
88.5
6.68
9.0
8.77
29.0
7.52
49.0
7.01
69.0
6.80
89.0
6.68
9.58.8129.5
7.50
49.57.0069.5
6.79
89.56.67
10.0
8.85
30.07.48
50.0
7.0070.0
6.7990.0
6.67
10.58.8730.57.4650.5
6.99
70.56.7890.56.67
11.08.8931.07.44
51.0
6.9871.06.7891.06.67
11.5
8.89
31.5
7.42
51.5
6.97
71.5
6.7891.56.67
12.0
8.89
32.07.40
52.0
6.97
72.06.77
92.0
6.66
12.5
8.87
32.5
7.39
52.5
6.96
72.5
6.7792.56.66
13.0
8.85
33.07.37
53.0
6.9573.06.77
93.0
6.66
13.58.8233.57.3553.56.9573.56.7693.56.66
14.08.7934.07.34
54.0
6.9474.06.7694.06.66
14.5
8.74
34.5
7.32
54.5
6.94
74.5
6.7694.5
6.65
15.0
8.70
35.0
7.31
55.0
6.93
75.06.75
95.0
6.65
15.58.6535.5
7.29
55.5
6.92
75.56.75
95.5
6.65
16.08.6036.07.28
56.0
6.92
76.0
6.75
96.0
6.65
16.58.5436.57.2656.5
6.91
76.56.7496.56.65
17.08.4937.0
7.2557.0
6.9177.06.7497.06.64
17.5
8.43
37.5
7.24
57.5
6.90
77.5
6.7497.56.64
18.08.3838.07.22
58.0
6.89
78.06.73
98.0
6.64
18.5
8.32
38.5
7.21
58.5
6.89
78.5
6.7398.56.64
19.0
8.27
39.0
7.2059.06.88
79.0
6.73
99.0
6.64
19.58.2239.5
7.19
59.56.8879.56.7399.56.63
20.08.1640.07.1860.06.8780.06.72100.06.63
December 1, 200812102008–48 I.R.B.

26 CFR 601.201: Rulings and determination letters.
(Also: Part I, § 431.)
Rev. Proc. 2008–67
SECTION 1. PURPOSE
This revenue procedure describes the
procedure by which the plan sponsor of a
multiemployer pension plan may request
and obtain approval of an extension of
an amortization period in accordance with
§ 431(d) of the Internal Revenue Code of
1986 (Code).
SECTION 2. BACKGROUND
INFORMATION
.01Statute—Section 431(d) was added
to the Code as part of a significant revi-
sion of the funding rules for qualified pen-
sion plans under § 401(a) made by the Pen-
sion Protection Act of2006 (PPA). Parallel
provisions to § 431(d) can be found at sec-
tion 304(d) of the Employee Retirement
Income Security Act of 1974 (ERISA).
The Secretary of the Treasury has inter-
pretive and enforcement jurisdiction over
both provisions.
Section 431(d)(1) provides that if the
plan sponsor of a multiemployer plan sub-
mits to the Secretary of the Treasury an
application for an extension of the amor-
tization period for any unfunded liability,
and includes the certification by the plan’s
actuary described in § 431(d)(1)(B), the
Secretary shall extend the amortization
period for the period (not in excess of 5
years) requested in the application. An
extension under § 431(d)(1) is referred
to as an automatic extension. In addi-
tion, § 431(d)(2)(A) provides that the plan
sponsor of a multiemployer plan may sub-
mit an application for an extension of the
amortization period for an unfunded lia-
bility, and the Secretary may extend the
amortization period for a period of time
not in excess of 10 years less the num-
ber of years of any automatic extension
with respect to such unfunded liability,
if the Secretary makes the determination
describedin§431(d)(2)(B).Anexten-
sion under § 431(d)(2) is referred to as an
alternative extension. Section 431(d)(3)
requires that an applicant provide notice
of the extension request to each affected
party described in section 4001(a)(21) of
ERISA.
Before amendment by PPA, § 412(e)
of the Code and § 304(a) of ERISA pro-
vided that the period of years required to
amortize any unfunded liability of any plan
may, upon application by the plan spon-
sor, be extended for a period up to 10
years. Those provisions were replaced
with new § 431(d) of the Code and new
section 304(d) of ERISA, effective for plan
years starting after December 31, 2007.
Effective for plan years starting after
December 31, 2007, there is no provision
in the Code for single employer plans to
receive an extension of the amortization
period for any unfunded liability.
SECTION 3. APPLICATIONS TO
EXTEND AN AMORTIZATION
PERIOD — IN GENERAL
.01Who may submit—A request for ap-
proval to extend the period of years re-
quired to amortize any unfunded liabil-
ity must be submitted by the plan spon-
sor (i.e., the board of trustees of the plan,
and referred to in this revenue procedure
as the applicant, or Board) or by an autho-
rized representative of the applicant. The
request must be signed by an authorized
trustee who is a current member of the
Board or by an authorized representative
of the applicant who either must be identi-
fied in (a), (b), or (c) of subsection 9.02(11)
of Rev. Proc. 2008–4, 2008–1 I.R.B. 121,
or must be an enrolled actuary within the
meaning of § 7701(a)(35). Where an au-
thorized representative signs the request or
will appear before the Service in connec-
tion with the request, a Form 2848,Power
of Attorney and Declaration of Represen-
tative, must be submitted with the request.
An individual is not an authorized repre-
sentative of the applicant merely on ac-
count of being an administrator or trustee
of the plan.
.02Submission.—Applications to ex-
tend an amortization period must be sub-
mitted to:
Employee Plans
Internal Revenue Service
Commissioner, TE/GE
Attention: SE:T:EP:RA
P.O. Box 27063
McPherson Station
Washington, D.C. 20038
The user fee required by Rev. Proc.
2008–8, 2008–1 I.R.B. 233, or its succes-
sors, must be sent with such requests.
.03Necessary Procedural Docu-
ments.—A request will not be considered
unless it complies with (1) and (2) below.
(1) The request must contain a decla-
ration in the following form: “Under the
penalties of perjury, I declare that I have
examined this request, including accom-
panying documents, and to the best of my
knowledge and belief, the facts presented
in support of the request are true, correct,
and complete.” This declaration must be
signed by an authorized trustee who is a
current member of the Board. The signa-
ture of an individual with a power of attor-
ney will not suffice for the declaration. See
§ 9.02(13) of Rev. Proc. 2008–4.
(2) Because an application for an ex-
tension constitutes a request for a ruling,
compliance with § 6110 is also required.
Section 601.201 of theStatement of Pro-
cedural Rules sets forth the requirements
applicable to requests for rulings and de-
termination letters which are subject to
§ 6110. Section 601.201(e) furnishes spe-
cific instructions to applicants.
Theapplicantmustprovidewiththe
request either a statement of proposed
deletions and the statutory basis for each
proposed deletion, or a statement that no
information other than names, addresses,
and taxpayer identifying numbers need be
deleted.
.04Notification.—The applicant must
provide a copy of a written notification to
each employee organization representing
employees covered by the plan, to each
contributing employer, and to each par-
ticipant, beneficiary, and alternate payee
of the plan, that an application for an ex-
tension of the amortization period under
§ 431(d) has been submitted to the Ser-
vice. The original of this notice must bear
a signature by an authorized trustee who is
a current member of the Board and must
be in substantially the form set forth in the
Model Notice found in the Appendix A to
this revenue procedure. The Service does
not require the applicant to furnish any in-
formation in addition to that required by
the Model Notice in the Appendix A to
plan participants, beneficiaries, alternate
payees, or employee organizations as part
of the extension application process, but
additional information may, of course, be
2008–48 I.R.B.1211December 1, 2008

provided by the applicant pursuant to the
collective bargaining process or otherwise.
The notice must be hand-delivered or
mailed to the last known address of each
employee organization, participant, ben-
eficiary, and alternate payee (within the
meaning of § 414(p)(8)) within 14 days
prior to the date of the application. Alter-
natively, the notice may be delivered elec-
tronically in accordance with the require-
ments of § 1.401(a)–21 of the Income Tax
Regulations. Merely posting the notice on
a bulletin board is not sufficient to satisfy
this notice requirement. If the applicant
makes a reasonable effort to carry out the
provisions of this paragraph, then failure
of an employee organization, participant,
beneficiary, or alternate payee to receive
the notice will not cause the applicant to
fail the notice requirement.
The application must state the method
used by the applicant to satisfy this notice
requirement.
.05ProvidingInformation.—
Employers who have difficulty in
furnishing the information specified in this
revenue procedure may call the Employee
Plans Customer Assistance Service at
1–877–829–5500 (a toll-free number),
or write for guidance to the following
address:
Internal Revenue Service
Commissioner, TE/GE
Attention: SE:T:EP:RA:T:A2
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
In appropriate instances, pre-submis-
sion conferences may be afforded in ad-
dition to conferencesavailable under Rev.
Proc. 2008–8.
.06Coordination of Extension Appli-
cations.—The total period of extensions
permitted under paragraphs (1) and (2)
of § 431(d) of the Code is limited to 10
years. Section 4 of this revenue proce-
dure relates to automatic extensions under
§ 431(d)(1). Section 5 of this revenue
procedure relates to alternative extensions
under § 431(d)(2). An automatic exten-
sion for a plan may not exceed 5 years.
An alternative extension may be for up
to 10 years less any automatic extension
approved. An applicant requesting both
typesofextensionmaydosoinasingle
application. However, such a submission
must include the information specified in
section 4.01 below (including the actuarial
certification described in section 4.01(4)),
the information required in section 5.01
below and a completed copy of the check-
list that appears as Appendix B of this
revenue procedure. Such a combined ap-
plication will be considered a single ruling
request. If the applicant requests both
types of extensions in a single application,
the Service may approve the automatic ex-
tension without approving the alternative
extension.
.07Interim Effect of Applica-
tion.—Whether the Service has ruled on
the application does not affect the 90 day
deadline for certification under § 432(b)(3)
of the Code. In making this certification,
the actuary should not take into account
any extension application under § 431(d)
before the application receives a favorable
ruling.
SECTION 4—APPLICATION FOR
AUTOMATIC EXTENSION
.01Informationtobeprovided.—The
applicant must furnish the following infor-
mation:
1. The unfunded liability for which an
extension of the amortization period is re-
quested.
2. The length of the extension of the
amortization period being requested (up to
a maximum of 5 years).
3. Whether a prior application for
an amortization extension (automatic or
alternative) was submitted, whether an
application was granted under § 412(e)
with respect to the prior 15 plan years,
andwhethertheplanisinendangeredor
critical status as determined under section
432(b)(3) in the first plan year for which
the extension is requested.
4. A certification by the plan’s actuary
that, based on reasonable assumptions:
(i) absent the extension for which the
plan is applying, the plan would have an
accumulated funding deficiency in the cur-
rent plan year or any of the 9 succeeding
plan years,
(ii) the plan sponsor has devised a plan
to improve the plan’s funding status,
(iii) the plan is projected to have suffi-
cient assets to timely pay expected bene-
fits and anticipated expenditures over the
amortization period as extended, and
(iv) the notice required under
§ 431(d)(3)(A) has been provided, in
accordance with § 3.04 this revenue pro-
cedure.
.02Ruling.—Upon receipt of the appli-
cation with the necessary information, and
verification that the criteria stated above
have been met, the Secretary shall issue
a statement to the applicant providing ap-
proval for the requested extension.
.03Applicable Period.—The proce-
dures of this § 4 shall not apply with
respect to any application submitted after
December 31, 2014, in accordance with
§ 431(d)(1)(C).
SECTION 5—APPLICATION FOR
ALTERNATIVE EXTENSION
.01Informationtobeprovided.—The
applicant must furnish appropriate evi-
dence that the extension of the amortiza-
tion period would carry out the purposes
of ERISA and PPA and would provide
adequate protection for the participants
and their beneficiaries, and that the fail-
ure to permit the extension would (I)
result in a substantial risk to the voluntary
continuation of the plan, or a substantial
curtailment of pension benefit levels or
employee compensation, and (II) would be
adverse to the interests of the plan partic-
ipants in the aggregate. What constitutes
appropriate evidence will depend on the
facts and circumstances of each case. A
response must be furnished for each of the
paragraphs (1) through (6) below. In cer-
tain cases, some of the material described
in paragraphs (1) through (6) may be in-
applicable, unavailable, inappropriate or
burdensome to furnish. In such cases, the
applicant must furnish a statement indi-
cating why the material for a particular
paragraph is inapplicable, unavailable,
inappropriate or burdensome.
(1)General facts concerning the partic-
ipating employers.
A brief statement should be submitted
concerning: (a) the history of the con-
tributing employers and the industry or
industries covered by the plan; (b) the
ownership of the principal employers
(as identified below) and any recent
or contemplated changes (such as ac-
quisitions, mergers, discontinuances of
operations) which might have a bear-
ing on the employers’ organizations or
general financial condition; (c) any re-
cently withdrawn principal employers
with the withdrawal liability amounts
December 1, 200812122008–48 I.R.B.

and dates applicable; and (d) a general
description of the financial state of the
industry in which employees covered
by the plan are employed.
(2)The financial condition of the prin-
cipal employers.
For purposes of this revenue procedure,
the principal employers are those employ-
ers who are (1) directly represented on the
applicant board of trustees or (2) made or
are required to make five percent or more
of the total required contributions under
the collective bargaining agreements relat-
ing to the plan for which the extension is
requested. Each of the principal employ-
ers must submit the latest available annual
financial report of the employer and each
of the other entities included within the
controlled group of which the employer is
a member. This submission must include
at least the balance sheet, profit and loss
statement, cash flow statement, and notes
to the financial statement. Recent interim
financial reports for each of the controlled
group members, if available, must also be
submitted along with an interim financial
report covering the corresponding period
for the previous year. If the employer sub-
mits financial reports to the Securities and
Exchange Commission, these reports must
be submitted for the same period as the an-
nual financial report.Preferably, the finan-
cial report should include certified finan-
cial statements. If certified financial state-
ments have not been prepared, an uncerti-
fied report is acceptable. If neither certi-
fied nor uncertified reports are available, a
copy of the company’s latest available fed-
eral income tax return, including all of the
supporting schedules, must be submitted.
The required financial information of the
principal employers should be submitted
directly from each employer to the Service
at the following address, at the same time
that the application is made:
Employee Plans
Internal Revenue Service
Commissioner, TE/GE
Attention: SE:T:EP:RA
P.O. Box 27063
McPherson Station
Washington, D.C. 20038
(3)Information concerning the exten-
sion of the amortization period.Informa-
tion concerning the extension of the amor-
tization period must include the following.
1. The unfunded liability for which an
extension of the amortization period is re-
quested.
2. The reasons why an extension of the
amortization period is needed.
3. The length of the extension of the
amortization period desired (up to a maxi-
mum of 10 years less any automatic exten-
sion).
4. Information concerning the actions
taken by the applicant to reduce the plan’s
unfunded liability before the request for an
extension has been made. Such actions
would include the reduction of future plan
benefit accruals and increases in employer
contribution rates. Also describe any ben-
efit reductions, contribution rate increases,
or other actions that are intended to be
takeninthefuture.
5. Projections of (i) funding standard
account credit balance/accumulated fund-
ing deficiencies, (ii) actuarial value of as-
sets and market value of assets, (iii) cur-
rent liabilities, and (iv) funding ratios, for
the length of the extension of the amor-
tization period requested and for the pe-
riod 10 years afterwards. For example,
if the applicant requests an extension of
10 years (including a five-year automatic
extension), the projections must be for a
20-year period. These projections must be
prepared by an enrolled actuary.
6. The plan year for which the exten-
sion is requested,i.e., the first plan year
for which the extension of the amortization
period will be reflected in the determina-
tion of the minimum funding standard for
the plan (e.g., 1/1/2008–12/31/2008).
The Service may request additional in-
formation as needed.
(4)Facts concerning the pension plan.
For each pension plan for which an exten-
sion is requested, the following informa-
tion must be supplied.
1. The name of the plan, the plan’s iden-
tification number, and file folder number
(if any).
2. The date the plan was adopted.
3. The effective date of the plan.
4. The classes of employees covered.
5. The number of employees covered.
6. A copy of the current plan document
and the most recent summary plan descrip-
tion.
7. A copy of the most recent determi-
nation letter issued to the plan.
8. A brief description of all plan amend-
ments adopted during the year for which
the extension is requested and the previous
four years which affect plan costs, includ-
ing the approximate effect of each amend-
ment on such costs.
9. The most recent actuarial report plus
any available actuarial reports for the pre-
ceding two plan years. Also, if not shown
in that report, the present value of accrued
benefits, present value of vested benefits,
and fair market value of assets (excluding
contributions not yet paid).
10. A description of how the plan is
funded (i.e., trust fund, individual insur-
ance policies, etc.).
11. A list of the contributions actually
paid in each month, from the twenty-fourth
month prior to the beginning of the plan
year for which the extension is requested
through the date of the request and the
plan year to which the contributions were
applied, with the employee contributions
and the employer contributions listed sep-
arately.
12. The approximate contribution
required to meet the minimum funding
standard. For defined benefit plans, this
amount must be determined by the plan’s
enrolled actuary.
13. A copy of the most recently com-
pletedAnnual Return/Report of Employee
Benefit Plan(Form 5500 series, as appli-
cable) and in the case of a defined bene-
fit plan, a copy of the correspondingAc-
tuarial Informationschedule (Schedule B
of Form 5500 for plan years beginning be-
fore 2008, or Schedule MB for plan years
beginning after 2007).
14. A copy of each ruling letter that
waived the minimum funding standard
during the last 15 plan years, a statement
of the amount waived for each plan year,
and a statement of the outstanding balance
of the amortization base for each waived
funding deficiency. The outstanding bal-
ance of the amortization base for each
waiver is to be calculated as of the first day
of the plan year for which an extension is
being requested.
15. A copy of each ruling letter that
granted under § 431(d) or under § 412(e)
of the Code as in effect prior to January
1, 2008, an extension of time to amortize
any unfunded liability which became ap-
plicable at any time during the last 15 plan
years.
16.A copy of the certification of
whether or not the plan is in critical status
or endangered status, in accordance with
2008–48 I.R.B.1213December 1, 2008

the requirements of § 432(b)(3), for the
first plan year for which the extension is
requested.
17. A copy of any funding improve-
ment plan or rehabilitation plan to which
the plan is currently subject in accordance
with§432,ortowhichtheplanhasbeen
subject at any time within the 10 years pre-
ceding the date of this application and all
updates to the funding improvement plan
or rehabilitation plan.
(5)Other information.
1. Describe the nature of any matters
pertaining to the plan which are currently
pending or are intended to be submitted to
the Service, the Department of Labor or the
Pension Benefit Guaranty Corporation.
2. Furnish details of any existing ar-
bitration, litigation, or court procedure
which involves the plan.
.02Checklist.—A checklist has been
provided in Appendix B for the conve-
nience of the applicant submitting the re-
quest. The checklist must be signed by the
applicant or authorized representative and
dated and placed on top of the request.
SECTION 6. DEADLINE FOR
REQUESTING AN EXTENSION
All extension requests must be submit-
tedbythelastdayofthefirstplanyear
for which the extension is intended to take
effect. The Service will consider appli-
cations for extensions submitted after this
date only upon a showing of good cause.
In seeking an extension of an amortization
period with respect to a plan year which
has not yet ended, the applicant may have
difficulty in furnishing sufficient current
evidence in support of the request. For this
reason, it is generally advised that a request
not be submitted earlier than 90 days prior
to the end of the plan year for which the
extension is requested. This 90 day period
does not apply to applications for an auto-
matic extension. Section 431(d)(2)(C) of
the Code requires that the Service act on
the submission within 180 days of receiv-
ing an application for extension. An appli-
cation will not be considered received un-
til the applicable information required as
stated in sections 4.01, 5.01, and 5.02 of
this revenue procedure has been received.
The Service will provide notification to the
applicant of the date upon which it has full
receipt of required information. The Ser-
vice will close the file on a submission for
which not all of the required documenta-
tion is provided in a timely manner with-
out issuing a ruling.
SECTION 7. BANKRUPTCY
PETITIONS
If significant number of employers or
any of the principal employers file a bank-
ruptcy petition after the request for an ex-
tension of an amortization period is sub-
mitted to the Service, the applicant must
providetotheServiceanupdatetothein-
formationrequiredtobesubmittedin§5
of this revenue procedure, especially the fi-
nancial information in sections 5.01(2) and
(3).
SECTION 8. EFFECTIVE DATE
This revenue procedure is effective for
all ruling requests received with respect
to plan years starting after December 31,
2007.
SECTION 9. EFFECT ON OTHER
REVENUE PROCEDURES
Rev. Proc. 2008–4 is modified to the
extent that this revenue procedure provides
special procedures for issuing rulings with
respect to requests for an extension of an
amortization period.
Rev. Proc. 2004–44, 2004–2 C.B.
134, is superseded effective for applica-
tions submitted with respect to plan years
starting after December 31, 2007.
SECTION 10. PAPERWORK
REDUCTION ACT
The collection of information con-
tained in this revenue procedure has been
reviewed and approved by the Office
of Management and Budget in accor-
dance with the Paperwork Reduction Act
(44 U.S.C. § 3507) under control number
1545–1890
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this
revenue procedure is in §§ 3, 4 and 5 and
Appendix B. This collection of informa-
tion is required to evaluate, process and
obtain approval of the request for an ex-
tension of an amortization period. This in-
formation will be used to make determi-
nations on extensions of the amortization
period under § 431(d). The likely respon-
dents are businesses or other for-profit in-
stitutions and nonprofit institutions.
The estimated total annual report-
ing/recordkeeping burden is 2500 hours.
The estimated annual burden per re-
spondent/recordkeeper varies from 71 to
129 hours, depending on individual cir-
cumstances, with an estimated average
burden of 100 hours. The estimated num-
ber of respondents/recordkeepers is 25.
The estimated annual frequency of re-
sponses is one.
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.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Tony Montanaro of the
Employee Plans, Tax Exempt and Gov-
ernment Entities Division. Questions
about this revenue procedure and its ap-
plication may be directed by email to
RetirementPlanQuestions@irs.gov.
December 1, 200812142008–48 I.R.B.

APPENDIX A: MODEL NOTICE
MODEL NOTICE OF APPLICATION FOR AN
EXTENSION OF AN AMORTIZATION PERIOD
TO EMPLOYEE ORGANIZATIONS (UNIONS),
PARTICIPANTS, BENEFICIARIES, AND ALTERNATE PAYEES
This notice is to inform you that an application for an extension of an amortization period for unfunded liability under § 431(d)
of the Internal Revenue Code (Code) and § 304(d) of the Employee Retirement Income Security Act of 1974 (ERISA) has been
submitted by [INSERT APPLICANT’S NAME] to the Internal Revenue Service (Service) for the [INSERT PLAN NAME] for the
plan year beginning [INSERT DATE].
Under § 431(d)(3)(B) of the Code and § 304(d)(3)(B) of ERISA, the Service will consider any relevant information submitted
concerning this application for an extension of the amortization period for unfunded liability. You may send this information to the
following address:
Director, Employee Plans
Internal Revenue Service
Attn: SE:T:EP:RA:T:A2
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
Any such information should be submitted as soon as possible after you have received this notice. Due to the disclosure restric-
tions of § 6103 of the Code, the Service can not provide any information with respect to the extension request itself.
In accordance with § 104 of ERISA, annual financial reports for this plan, which include employer contributions made to the
plan for any plan year, are available for inspection at the Department of Labor in Washington, D.C. Copies of such reports may be
obtained upon request and upon payment of copying costs from the following address:
Public Disclosure Room
Room N–1513
Employee Benefits Security Administration
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, D.C. 20210
In addition, pension plan actuarial information filed for 2008 and later plan years filed with the Department of Labor may be
obtained athttp://dol.gov/ebsa/actuarialsearch.html.
As required by § 104(b)(2) of ERISA, copies of the latest annual plan report are available for inspection at the principal office
of the plan administrator, who is located at [INSERT ADDRESS]. As required under § 101(k)(1) of ERISA, copies of periodic
actuarial reports, quarterly, semi-annual,or annual financial reports, and copies of any application for extension under § 304 of
ERISA or § 431(d) of the Code may be obtained upon requestand upon payment of a copying charge of [INSERT CHARGES]
by writing to the plan administrator at the above address.
The following information is provided pursuant to § 304(d)(3) of ERISA and 431(d)(3) of the Code:
Present Value of Vested Benefits $
Present Value of Benefits, calculated as though the plan terminated $
Fair Market Value of Plan Assets $
The above present values were calculated using an interest rate or rates of [INSERT INTEREST RATE(S)].
[SIGNATURE OF APPROPRIATE OFFICER OF THE PLAN SPONSOR]
[INSERT NAME]
[INSERT TITLE]
2008–48 I.R.B.1215December 1, 2008

APPENDIX B. REQUEST FOR ALTERNATIVE EXTENSION OF AN AMORTIZATION PERIOD CHECKLIST
IS YOUR SUBMISSION COMPLETE?
Instructions
The Service will be able to respond more quickly to your request for an alternative extension of anamortization period if it is
carefully prepared and complete. To ensure your request is in order, use this checklist. Answer each question in the checklist by
inserting Y for yes, N for no, or N/A for not applicable, as appropriate, in the blank next to the item. Sign and date the checklist
(as applicant or authorized representative) and place it on top of your request.
You must submit a completed copy of this checklist with your request. If a completed checklist is not submitted with your request,
substantive consideration of your submission will be deferred until a completed checklist is received.
1. If you want to designate an authorized representative, have you included a properly executed
Form 2848 (Power of Attorney and Declaration of Representative)?
2. Have you satisfied all the requirements of Rev. Proc. 2008–4 or its successors (especially
concerning signatures and penalties ofperjury statement)? (See § 3.03(1))
3. Have you included a statement of proposed deletions? (See § 3.03(2))
4. Have you included the user fee required under Rev. Proc. 2008–8 or its successors? (See § 3.02)
5.
Have you included a copy of the written notification that an application for an extension of an
amortization period has been submitted and a statement that such notice was hand delivered or
mailed to each employee organization, participant, beneficiary and alternate payee? (See § 5.02
and Appendix A)
6.
Have you included the general facts concerning the employer? (See § 5.01(1))
7.
Have you included a description of the industry’s financial condition? (See § 5.01(2))
8. Have you included information concerning the extension of the amortization period? (See
§ 5.01(3))
9.
Have you included information concerning the pension plan? (See § 5.01(4))
10.
Have you included information concerning other matters pertaining to the plan? (See § 5.01(5))
SignatureDate
Typed or printed name of person signing checklist
Title or Authority
December 1, 200812162008–48 I.R.B.

26 CFR 601.601: Rules and regulations.
(Also: Part I, § 857.)
Rev. Proc. 2008–69
SECTION 1. PURPOSE
This revenue procedure provides
real estate investment trusts (REITs)
with a method for applying the prohib-
ited transactionstax safe harbor under
§§ 857(b)(6)(C)(iii) and (D)(iv) of the
Internal Revenue Code for a taxable year
that begins on or before July 30, 2008,
and ends on or after July 31, 2008. Sec-
tions 857(b)(6)(C)(iii) and (D)(iv) were
amended by the Housing Assistance Tax
Act of 2008, Division C of Pub. L. No.
110–289 (“2008 Housing Act”), effective
for sales made after July 30, 2008, the date
of the 2008 Housing Act’s enactment.
SECTION 2. BACKGROUND
.01 Section 857(b)(6) of the Code im-
poses a tax for each taxable year of a REIT
equal to 100 percent of the net income de-
rived from prohibited transactions. Under
§ 857(b)(6)(B)(iii), the term “prohibited
transaction” means a sale or other disposi-
tion of property described in § 1221(a)(1)
that is not foreclosure property.
.02 Section 857(b)(6)(C) excludes cer-
tain sales from the definition of a prohib-
ited transaction (“theprohibited transac-
tion safe harbor”). Under § 857(b)(6)(C),
a sale of property that is a real estate asset
as defined in § 856(c)(5)(B) is not a pro-
hibited transaction if several requirements
are satisfied. A similar safe harbor applies
under § 857(b)(6)(D) for sales of property
in connection with the trade or business of
producing timber.
.03 Prior to the enactment of the 2008
Housing Act, §§ 857(b)(6)(C)(iii) and
(D)(iv) provided that the prohibited trans-
action safe harbor applied only if—
•During the taxable year, the REIT
made no more than 7 sales of property
(other than sales of foreclosure prop-
erty or sales to which § 1033 applies)
(“7-Sales Test”) ; or
•The aggregate adjusted bases (as de-
termined for purposes of computing
earnings and profits) of property (other
than sales of foreclosure property or
sales to which § 1033 applies) sold dur-
ing the taxable year did not exceed 10
percent of the aggregate bases (as so
determined) of all of the assets of the
REIT as of the beginning of the tax-
able year (“10-Percent Adjusted Bases
Test”).
.04 Section 3052 of the 2008 Hous-
ing Act amended §§ 857(b)(6)(C)(iii)
and (D)(iv) to provide an additional al-
ternative test. Under this alternative test,
the requirements of § 857(b)(6)(C)(iii) or
(D)(iv) are satisfied if the aggregate fair
market value of property (other than sales
of foreclosure property or sales to which
§ 1033 applies) sold during the taxable
year does not exceed 10 percent of the
fair market value of all of the assets of
the REIT as of the beginning of the tax-
able year (“10-Percent Fair Market Value
Test”). This amendment is effective for
sales made after July 30, 2008.
.05 Because this effective date is ex-
pressed in terms of sales made after a par-
ticular date, questions have arisen about
how to interpret it for substantive provi-
sions that apply as alternatives and are ex-
pressed in terms of sales during a taxable
year.
SECTION 3. SCOPE
This revenue procedure applies to
a REIT that seeks to apply the pro-
hibited transaction safe harbor under
§ 857(b)(6)(C)(iii) or (D)(iv) for a tax-
able year that begins on or before July 30,
2008, and ends on or after July 31, 2008.
SECTION 4. APPLICATION
For a REIT’s taxable year that begins
on or before July 30, 2008, and ends on
or after July 31, 2008, satisfaction of
§ 857(b)(6)(C)(iii) or of § 857(b)(6)(D)(iv)
means that either—
•The REIT satisfies the 7-Sales Test (for
the entire taxable year);
•The REIT satisfies the 10-Percent Ad-
justed Bases Test (for the entire taxable
year); or
•Both —
•The aggregate adjusted bases (as
determined for purposes of com-
puting earnings and profits) of
property (other than sales of fore-
closure property or sales to which
§ 1033 applies) sold during the
portion of the taxable year ending
on July 30, 2008, did not exceed 10
percent of the aggregate bases (as
so determined) of all of the assets
of the REIT as of the beginning of
the taxable year (that is, the REIT
satisfies the 10-Percent Adjusted
BasesTestasiftheportionofthe
taxable year ending on July 30,
2008, were an entire taxable year);
and
•The REIT satisfies the 10-Percent
Fair Market Value Test (for the en-
tire taxable year).
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective
November 13, 2008.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Jonathan D. Silver of the Of-
fice of Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Mr. Silver at (202) 622–3930 (not
a toll-free call).
2008–48 I.R.B.1217December 1, 2008

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
and Notice of
Public Hearing
Information
Reporting for
Discharges
of Indebtedness
REG–118327–08
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: No
tice of proposed rulemaking
by cross-r
eference to temporary regula-
tions and n
otice of public hearing.
SUMMARY: In this issue of the Bulletin,
the IRS is issuing final and temporary reg-
ulations (T.D. 9430) relating to informa-
tion returns for cancellation of indebted-
ness by certain entities. The temporary
regulations will avoid premature informa-
tion reporting from certain businesses that
are currently required to report and will
reduce the number of information returns
required to be filed. The regulations will
impact certain lenders who are currently
required to file information returns under
the existing regulations. The text of those
temporary regulations also serves as text
of these proposed regulations. This docu-
ment also provides a notice of public hear-
ing on these proposed regulations.
DATES: Written or electronic comments
must be received by February 9, 2009.
Outlines of topics to be discussed at the
public hearing scheduled for March 13,
2009, must be received by February 13,
2009.
ADDRE
SSES: Send submissions to:
CC:P
A:LPD:PR(REG–118327–08),
room
5203, Internal Revenue Service,
PO Bo
x 7604, Ben Franklin Station,
Wash
ington, DC 20044. Submissions may
be ha
nd-delivered Monday through Friday
betw
een the hours of 8 a.m. and 4 p.m.
to C
C:PA:LPD:PR (REG–118327–08),
Cou
rier’s Desk, Internal Revenue
Ser
vice, 1111 Constitution Avenue, NW,
Was
hington, DC, or sent electronically
viatheFedera
leRulemaking
Portal athttp
://www.regulations.gov
(IRS REG–1183
27–08). The public
hearing will b
e held in the IRS Auditorium,
Internal Reve
nue Building, 1111
Constitutio
n Avenue, NW, Washington,
DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Barbara Pettoni at (202) 622–4910; con-
cerning submission of comments, the
hearing, and/or to be placed on the
building access list to attend the hear-
ing, Oluwafunmilayo Taylor at (202)
622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Backgroun
d
Temporary regulations in this issue of
the Bulletin contain amendments to the In-
come Tax Regulations (26 CFR Part 1) un-
der section 6050P relating to information
reporting for cancellation of indebtedness
by certain entities. The text of those regu-
lations also serves as the text of these pro-
posed regulations. The preamble to the
temporary regulations explains the tempo-
rary regulations and these proposed regu-
lations.
Special Analyses
It has be
en determined that this notice
of propo
sed rulemaking is not a sig-
nifican
t regulatory action as defined in
Executi
ve Order 12866. Therefore, a reg-
ulator
y assessment is not required. It has
also be
en determined that section 553(b)
of the A
dministrative Procedure Act
(5 U.S.
C. chapter 5) does not apply to these
regula
tions. The proposed regulations
under
section 6050P do not impose a
colle
ction of information on small entities.
There
fore, the Regulatory Flexibility
Act (5
U.S.C. chapter 6) does not apply.
The pr
oposed regulations will reduce the
numb
er of information returns required to
be fi
led under section 6050P rather than
impo
se a collection of information on
enti
ties. Pursuant to section 7805(f) of the
Inte
rnal Revenue Code, these regulations
have
been submitted to the Chief Counsel
for Advocacy o
f the Small Business
Administrati
on for comment on its impact
on small busin
ess.
Comments and P
ublic Hearing
Before these p
roposed regulations are
adopted as fin
al regulations, consideration
will be given
to any electronic or written
comments (a s
igned original and eight (8)
copies) that
are submitted timely to the
IRS. The Trea
sury Department and the
IRS request c
omments on the clarity of
the propose
d rules and how they may be
made easier
to understand. All comments
will be avai
lable for public inspection and
copying. A p
ublic hearing has been sched-
uled for Ma
rch 13, 2009, beginning at
10:00 a.m.
in the IRS Auditorium, Internal
Revenue Bu
ilding, 1111 Constitution
Avenue, NW
, Washington, DC. Due to
building
security procedures, visitors must
enter at t
he Constitution Avenue entrance.
In additi
on, all visitors must present
photo ide
ntification to enter the building.
Because o
f access restrictions, visitors
will not b
e admitted beyond the immediate
entranc
e more than 30 minutes before
the hear
ing starts. For information about
having y
our name placed on the building
access l
ist to attend the hearing, see
theFOR
FURTHER INFORMATION
CONTAC
Tsection of this preamble.
The rul
es of 26 CFR 601.601(a)(3) ap-
plytot
he hearing. Persons who wish to
presen
t oral comments at the hearing must
submit
electronic or written comments by
Februa
ry 9, 2009, and an outline of the
topic
s to be discussed and the time to be
devot
ed to each topic (signed original and
eight
(8) copies) by February 13, 2009.
Aperi
od of 10 minutes will be allot-
ted to
each person for making comments.
An age
nda showing the scheduling of
the sp
eakers will be prepared after the
dead
line for receiving outlines has passed.
Copi
es of the agenda will be available free
of ch
arge at the hearing.
Draf
ting Information
The p
rincipal author of these proposed
regu
lations is Barbara Pettoni, Office of
Asso
ciate Chief Counsel (Procedure and
Admi
nistration).
December 1, 200812182008–48 I.R.B.

*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
PART 1—INCOME TAXES
Par. 1. The authority citation for part 1
continues to read inpart as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.6050P–0 is amended
as follows:
1. The introductory text is revised.
2. The entries in §1.6050P–1(b)(2)(v)
and (h)(1) are revised.
3. The entry for §1.6050P–1T is re-
moved.
The revisions read as follows:
§1.6050P–0 Table of contents.—This
section lists the major captions that appear
in §1.6050–P–1 and §1.6050P–2.
*****
§1.6050P–1 Information reporting for
discharges of indebtedness by certain
entities.
*****
(b) * * *
(2) * * *
(v) [The text of the proposed entry for
§1.6050P–1(b)(2)(v) is the same as the text
in §1.6050P–1T(b)(2)(v) in §1.6050P–0
published elsewhere in this issue of the
Bulletin].
*****
(h) * * *
(1) [The text of the proposed entry for
§1.6050P–1(h)(1) is the same as the text
of §1.6050P–1T(h)(1) in §1.6050P–0 pub-
lished elsewhere in this issue of the Bul-
letin].
Par. 3. Section 1.6050P–1 is amended
by revising paragraphs (b)(2)(i)(H),
(b)(2)(v) and (h)(1) to read as follows:
§1.6050P–1 Information reporting for
discharges of indebtedness by certain
entities.
*****
(b) * * *
(2) * * *
(i) * * *
(H) [The text of the proposed
amendments to §1.6050P–1(b)(2)(i)(H)
is the same as the text of
§1.6050P–1T(b)(2)(i)(H) published else-
whereinthisissueoftheBulletin].
*****
(v) [The text of the proposed amend-
ments to §1.6050P–1(b)(2)(v) is the same
as the text of §1.6050P–1T(b)(2)(v) pub-
lished elsewhere in this issue of the Bul-
letin].
*****
(h)(1) [The text of the proposed amend-
ments to §1.6050P–1(h) is the same as
the text of §1.6050P–1T(h) published else-
whereinthisissueoftheBulletin].
*****
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on November 7,
2008, 8:45 a.m., and published in the issue of the Federal
Register for November 10, 2008, 73 F.R. 66568)
Fast Track Settlement For
TE/GE Taxpayers
Announcement 2008–105
DESCRIPTION OF TE/GE FAST
TRACK SETTLEMENT
This announcement provides an op-
portunity for entities with issues under
examination by the Tax Exempt and Gov-
ernmental Entities Division (TE/GE) to
use Fast Track Settlement (FTS) to ex-
pedite case resolution. The TE/GE FTS
will enable TE/GE entities that currently
have unagreed issues in at least one open
period under examination to work together
with TE/GE and the Office of Appeals
(Appeals) to resolve outstanding disputed
issues while the case is still in TE/GE
jurisdiction. TE/GE and Appeals will
jointly administer the TE/GE FTS process.
TE/GE FTS will be used to resolve factual
and legal issues, and it may be initiated
at any time after an issue has been fully
developed, but before the issuance of a
30-day letter (or its equivalent). TE/GE
FTS will be available to taxpayers for a
pilotperiodofuptotwoyears,begin-
ning upon the date of publication of this
announcement. Upon completion of the
two-year pilot period, TE/GE and Appeals
will evaluate the program, consider neces-
sary adjustments, and determine whether
to make the program permanent.
RELIANCE ON AND DIFFERENCES
FROM LMSB AND SB/SE FAST
TRACK SETTLEMENT
The procedures for using TE/GE FTS
rely on the provisions of Revenue Pro-
cedure 2003–40, 2003–1 C.B. 1044,
and Announcement 2006–61, 2006–2
C.B. 390, which implement Large and
Mid-Size Business (LMSB) and Small
Business/Self-Employed (SB/SE) Tax-
payer FTS Dispute Resolution Programs,
respectively.
TE/GE FTS, during the two-year pi-
lot period, extends the provisions of
the LMSB and SB/SE FTS programs
to TE/GE cases and provides for direct
oversight of the program by TE/GE and
Appeals. TE/GE FTS therefore involves
procedures almost identical to the LMSB
and SB/SE FTS procedures described in
Rev. Proc. 2003–40 and Ann. 2006–61.
The key differences between the LMSB,
SB/SE and TE/GE FTS procedures are as
follows:
•The TE/GE Group Manager or de-
signee fulfills the duties of the LMSB
Team Manager or SB/SE Group Man-
ager;
•The Appeals FTS Program Manager,
after consultation with the TE/GE
Group Manager, selects and manages
cases eligible for TE/GE FTS. The
Appeals Team Manager responsible
for TE/GE Programs serves as the FTS
Program Manager; and
•The TE/GE FTS process is designed to
be completed within 60 days of accep-
tance of the TE/GE FTS Application.
The process can be extended beyond
the 60-day period if agreed to by all
parties.
CASE ELIGIBILITY AND
EXCLUSIONS
Generally, TE/GE FTS is available for
cases involving: income tax, exclusion
of income from interest paid on munic-
ipal obligations, employment tax, estate
and gift tax, excise tax, and exemption,
2008–48 I.R.B.1219December 1, 2008

foundation or qualification issues or other
such TE/GE functional issues as appropri-
ate when:
•Issues are fully developed;
•The taxpayer has stated a position in
writing; and
•There are a limited number of un-
agreed issues.
TE/GE FTS willnotbe available for:
•Issues that can be resolved through
other established settlement initiatives,
such as, but not limited to, the Self
Correction Program“SCP”, the Audit
Closing Agreement Program “Audit
CAP”, or other programs described
in Rev. Proc. 2006–27, 2006–1 C.B.
945;
•Correspondence examination cases;
•Cases in which the taxpayer has failed
to respond to IRS communications and
no documentation has been previously
submitted for consideration by TE/GE;
•Cases in which Appeals does not have
jurisdiction (including determination
of penalties under § 6700 of the Code);
•Listed Abusive Tax Avoidance Trans-
actions (ATAT);
•Cases involving potential for civil or
criminal fraud;
•Rebate claim cases;
•Selected initiatives as determined on
an annual basis by the TE/GE Com-
missioner or his delegate;
•Tax Equity & Fiscal Responsibility Act
(TEFRA) partnership cases;
•Issues designated for litigation;
•Issues under consideration for designa-
tion for litigation;
•Frivolous issues, such as, but not lim-
ited to, those identified in Rev. Proc.
2008–2, 2008–1 I.R.B. 90, or any suc-
cessor guidance;
•“Whipsaw” issues,i.e., issues for
which resolution with respect to one
party might result in inconsistent treat-
ment in the absence of the participation
of another party; or
•Issues that have been identified in a
Chief Counsel Notice, or equivalent
publication, as excluded from the FTS
process.
If an issue is determined not to be el-
igible for the FTS program, all issues in
the case are not eligible for the FTS pro-
gram. Additionally, the Appeals FTS Pro-
gram Manager will determine whether Ap-
peals has the necessary staffing resources
before accepting the case into the program.
TE/GE FTS will not be the appropri-
ate dispute resolution process for all cases
involving TE/GE taxpayers. The TE/GE
Group Manager or designee and the tax-
payer will evaluate their individual cir-
cumstances of their case to determine if
this process meets their needs.
APPLICATION PROCESS
A taxpayer that is interested in partic-
ipating in TE/GE FTS, or that has ques-
tions about the program and its suitabil-
ity for the taxpayer’s case, may contact
the TE/GE Group Manager of the Exam-
ining Agent conducting the audit for the
period(s) currently under examination. Ei-
ther the taxpayer, Examining Agent or the
TE/GE Group Manager may initiate an
application to the TE/GE FTS process at
any time after an issue has been fully de-
veloped but before a 30-day letter (or its
equivalent) is issued.
A FTS Application, attached as Exhibit
1, should be submitted. A Form 5701,
(Notice of Proposed Adjustment)oraRev-
enue Agent Report will be prepared by
the TE/GE Examining Agent. To facili-
tate the understanding of the parties’ op-
posing views, a written response from the
taxpayer must be included with the FTS
Application.
If the case is not accepted for inclusion
in TE/GE FTS, the TE/GE or Appeals rep-
resentative will discuss other dispute reso-
lution opportunities with the taxpayer, in-
cluding 30-day letter procedures contained
in IRS Publications 1,Your Rights As A
Taxpayer,or5,Your Appeal Rights and
HowToPrepareaProtestIfYouDon’t
Agree. The decision not to accept a case
into the TE/GE FTS program is not subject
to administrative appeal or judicial review.
SETTLEMENT PROCESS
TE/GE FTS employs various alterna-
tive dispute resolution techniques to pro-
mote agreement. An FTS Appeals Offi-
cial will serve as a neutral party. The FTS
Appeals Official will not perform in a tra-
ditional Appeals role, but will use dispute
resolution techniques to facilitate settle-
ment between the parties. A TE/GE Ap-
peals Officer trained in mediation or, in
limited cases, a mediation-trained Appeals
Team Case Leader, will serve as the neu-
tral FTS Appeals Official.
During TE/GE FTS, the taxpayer (or
taxpayer’s authorized representative) and
TE/GE representatives, including at least
one representative with decision-making
authority from both TE/GE and the tax-
payer, will meet with the FTS Appeals Of-
ficial. Any person engaged in practice be-
fore the IRS must have a power of attor-
ney from the taxpayer (Form 2848,Power
of Attorney and Declaration of Represen-
tative). The taxpayer and TE/GE represen-
tatives should include individuals with the
information and expertise necessary to as-
sist the parties and the FTS Appeals Of-
ficial during the settlement process. The
FTS Appeals Official may ask the parties
to limit the number of participants to facil-
itate the process.
The FTS Appeals Official will hold the
FTS session at the date and location agreed
to by both parties. Prior to the FTS ses-
sion, the FTS Appeals Official will advise
the participants of the procedures and es-
tablish ground rules. The FTS Appeals Of-
ficial may modify the rules and procedures
during the session to adapt to changes in
circumstances. The FTS session may in-
clude joint sessions with all parties, sep-
arate meetings, or both as determined ap-
propriate in the sole judgment of the FTS
Appeals Official.
The FTS Appeals Official will use a
FTS Session Report to assist in planning
the FTS session and to report on develop-
ments during the session. The FTS Ses-
sion Report will include a list of all issues
approved for the FTS program, a descrip-
tion of the issues, the amounts in dispute,
conference dates, a plan of action for the
FTS session and other information useful
to the process as determined by the parties
and the FTS Appeals Official. The FTS
Appeals Official also will prepare and up-
date an Agenda to guide the communica-
tion, set the order of issue discussion, and
pose questions to clarify the issues. During
the session, the FTS Appeals Official will
provide decision makers from both parties
with copies of the Agenda and the FTS
Session Report.
Generally, the FTS Appeals Official
will consider only those issues outlined in
the FTS Session Report, except by mutual
agreement of the parties. If the taxpayer
presents information during the session
December 1, 200812202008–48 I.R.B.

that the taxpayer had not previously pre-
sented during the audit, the FTS Appeals
Official will adjust the targeted completion
date to give the appropriate IRS officials
time to evaluate the information.
During the session, the FTS Appeals
Official may propose settlement terms for
any or all issues. If the taxpayer accepts
the FTS Appeals Official’s settlement pro-
posal, but the TE/GE Group Manager re-
jects it, the TE/GE Area Manager or equiv-
alent TE/GE management official with ju-
risdiction for the case must review the re-
jection of the settlement proposal and ei-
ther concur in writing with the rejection
or accept the settlement proposal on be-
half of TE/GE. If the TE/GE Area Man-
ager or equivalent TE/GE management of-
ficial concurs with the Group Manager’s
rejection of the settlement proposal, and an
acceptable alternative settlement cannot be
reached, the issue will be closed out of the
FTS program as unagreed.
If the parties resolve any of the dis-
puted issues at the conclusion of the ses-
sion, the parties and the FTS Appeals Of-
ficial shall sign the FTS Session Report
acknowledging acceptance of the terms of
settlement for purposes of preparing com-
putations. The signature of the parties on
the FTS Session Report does not constitute
a final settlement, nor does it waive restric-
tions on assessment, terminate consents to
extend periods of limitation, start the run-
ning of any periods of limitation, or consti-
tute agreement to close the case. Post-set-
tlement procedures are described below.
The TE/GE FTS process is confiden-
tial. IRS employees involved in any way
with the TE/GE FTS process are subject
to the confidentiality and disclosure pro-
visions of the Internal Revenue Code. By
signing the FTS Agreement, attached as
Exhibit 1, the taxpayer consents, pursuant
to section 6103(c), to the disclosure of the
taxpayer’s returns and return information
pertaining to the issues being considered
in the TE/GE FTS process to those persons
named on the Agreement as participants in
the process. IRS employees, the taxpayer
and persons invited to participate by the
IRS or the taxpayer shall not voluntarily
disclose information regarding any com-
munication made during the TE/GE FTS
session, except as provided by statute.
The prohibition againstex partecom-
munications between Appeals Officers
and other IRS employees provided by
§ 1001(a) of the Internal Revenue Service
Restructuring and Reform Act of 1998
does not apply to the communications
arising in the TE/GE FTS process because
the Appeals personnel are facilitating
an agreement between the taxpayer and
TE/GE and are not acting in their tradi-
tional Appeals settlement role.
Any recommended settlement by the
FTSAppealsOfficialofanissueinFTS
shall be subject to the procedures including
procedures in the Internal Revenue Man-
ual and existing published guidance, which
would be applicable if the issue was be-
ing considered by Appeals. FTS therefore
creates no special authority for settlement
by the FTS Appeals Official. For exam-
ple, if the FTS issue is coordinated in ei-
ther the Technical Advisor Program or the
Appeals Technical Guidance program, the
proposed settlement of that issue is subject
to established procedures, including sub-
mission of the proposed settlement to the
Appeals Coordinator for review and con-
currence.
If the parties fail to resolve any issue
in FTS, the taxpayer retains the option of
requesting that the issue be heard through
the traditional Appeals process.
Except as specifically provided above,
both parties retain the right to withdraw
throughout the entire TE/GE FTS process.
A party wishing to withdraw should pro-
vide written notice to the FTS Appeals Of-
ficial and the other party.
POST-SETTLEMENT PROCEDURE
If the parties reach an agreement on all
or some issues through the TE/GE FTS
process, the TE/GE or Appeals FTS Of-
ficial, as appropriate, will use established
issue or case closing procedures and appli-
cable agreement forms, including prepa-
ration of a Form 906,Closing Agreement
On Final Determination Covering Specific
Matters, if appropriate.
If applicable, the IRS will report a
proposed resolution reached as a result
of TE/GE FTS to the Joint Committee
on Taxation in accordance with section
6405. The IRS may reconsider a proposed
settlement, as reflected in a signed FTS
Session Report, upon receipt of comments
on the proposed settlement from the Joint
Committee on Taxation. If the taxpayer
declines to agree with any changes by the
IRS upon reconsideration, TE/GE will
close the case unagreed, and the taxpayer
will retain all the usual rights to request
Appeals consideration of any unagreed
issues.
UNRESOLVED CASES
With respect to TE/GE FTS cases that
are returned for traditional Appeals con-
sideration for any reason,ex parterestric-
tions will not be imposed on intra-Ap-
peals communications. Appeals manage-
ment will take appropriate measures to en-
sure these cases are handled impartially.
PRECEDENTIAL VALUE OF
SETTLEMENT AGREEMENTS
A resolution reached by the parties
through the TE/GE FTS process will not
bind the parties for taxable periods or
issues not covered by the TE/GE FTS
agreement, unless such taxable periods or
issues are addressed expressly in a closing
agreement reached as part of the TE/GE
FTS process.
DELEGATION OF AUTHORITY
This announcement constitutes a del-
egation by the Commissioner of Internal
Revenue of settlement authority to Grade
14, 13 and 12 Appeals Officers who are
assigned to be Appeals FTS Officials for
TE/GE FTS cases described in this an-
nouncement. This delegation of settle-
ment authority includes the responsibility
for arriving at the final disposition from
the Government’s perspective, approving
the final settlement in accordance with the
delegated authority, and executing the ap-
propriate closing documents. This author-
ity may not be redelegated.
EFFECTIVE DATE
TE/GE FTS is effective upon publica-
tion of this announcement in the Internal
Revenue Bulletin.
COMMENTS
The IRS invites interested persons to
comment on this program. Send submis-
sions to:
2008–48 I.R.B.1221December 1, 2008

Internal Revenue Service-Appeals
Attn: Leonard C. Horton
4050 Alpha Road
Farmers Branch, TX 75244–4201
Leonard.C.Horton@irs.gov
FURTHER INFORMATION
For further information regard-
ing this announcement, contact ei-
ther: Charles F. Fisher, TE/GE Team
Leader, at (302) 286–1510 (not a toll-free
number),Charles.F.Fisher@irs.govor
Leonard C. Horton, Appeals Program
Analyst, Tax Policy & Procedure
(Alternative Dispute Resolution) at
(972) 308–7330 (not a toll-free number),
Leonard.C.Horton@irs.gov.
December 1, 200812222008–48 I.R.B.

2008–48 I.R.B.1223December 1, 2008

Extension of Fast Track
Settlement For SB/SE
Taxpayers Pilot Program
Announcement 2008–110
SUMMARY AND BACKGROUND
This announcement extends the test
of the Fast Track Settlement for Small
Business/Self-Employed division (SB/SE)
Taxpayers Pilot Program set forth in An-
nouncement 2006–61, 2006–2 C.B. 390,
for an additional two-year period, begin-
ning on December 1, 2008, the date this
announcement is published in the Internal
Revenue Bulletin.
SB/SE and the Office of Appeals (Ap-
peals) concluded a two-year test of the
Fast Track Settlement for SB/SE Taxpay-
ers Pilot Program on September 4, 2008.
During the additional two-year test period,
SB/SE and Appeals will seek additional
cases for fast track settlement in the same
seven cities designated in Ann. 2006–61
and IR 2007–200, to further evaluate the
program. The extended program will con-
tain no changes from the provisions set
forth in Ann. 2006–61.
This procedure allows taxpayers with
eligible cases, as listed in Ann. 2006–61,
under examination by SB/SE to request
fast track settlement. Using the services
of a trained mediator from Appeals, the
taxpayer and SB/SE will attempt to re-
solve unagreed issues on an expedited ba-
sis. The fast track settlement program is
consistent with the Internal Revenue Ser-
vice’s efforts to improve tax administra-
tion, provide customer service, and reduce
taxpayer burden.
EFFECTIVE DATE
This program is effective beginning De-
cember 1, 2008, the date it is published
in the Internal Revenue Bulletin, and ap-
plications to the program will be accepted
through November 30, 2010.
COMMENTS
The Service invites interested persons
to comment on this pilot program. Written
comments should be delivered or mailed
by January 15, 2009, to:
Internal Revenue Service — Appeals
Attn: Nancy J. Talajkowski
160 Spears Street, Suite 800
San Francisco, CA 94105
Alternatively, comments may be sub-
mitted by e-mail to the following address:
notice.comments@irscounsel.treas.gov.
FURTHER INFORMATION
For further information regarding
this announcement, contact either:
Xavier Guerrero, SB/SE Program Analyst,
at (415) 552–6195 (not a toll-free number);
or Nancy J. Talajkowski, Appeals
Program Analyst, Tax Policy & Procedure
(Alternative Dispute Resolution) at (415)
227–5007 (not a toll-free number).
Test of Procedures for
Mediation and Arbitration
for Offer in Compromise and
Trust Fund Recovery Penalty
Cases in Appeals
Announcement 2008–111
SECTION 1. PURPOSE
Section 7123 requires the Internal Rev-
enue Service to prescribe procedures by
which a taxpayer or the Office of Appeals
may request non-binding mediation on
any issue unresolvedat the conclusion
of Appeals procedures, or unsuccessful
attempts to enter into a closing agreement
under section 7121 or a compromise under
section 7122. Section 7123 also requires
the Internal Revenue Service to estab-
lish a pilot program by which a taxpayer
and the Office of Appeals may jointly
request binding arbitration for any issue
unresolved under the same circumstances.
This announcement modifies Revenue
Procedure 2002–44, 2002–2 C.B. 10, and
Revenue Procedure 2006–44, 2006–2 C.B.
800, by establishing a two-year test of
the mediation and arbitration procedures
for Offer in Compromise (OIC) and Trust
Fund Recovery Penalty (TFRP) cases that
are under the jurisdiction of the Office of
Appeals.
SECTION 2. DESCRIPTION
Alternative dispute resolution (ADR)
programs are consistent with the IRS’s ef-
forts to improve tax administration and
enhance customer service. Appeals will
seek appropriate OIC and TFRP cases for
both mediation and arbitration during the
two-year test period in order to evaluate
the effectiveness of alternative dispute res-
olution for such cases.
During the two-year test period, effec-
tive from the date of publication of this
announcement, Appeals will initially of-
fer mediation and arbitration for OIC and
TFRP cases for taxpayers whose appeals
are considered at an Appeals office located
in one of the following cities:
•Atlanta, Georgia
•Chicago, Illinois
•Cincinnati, Ohio
•Houston, Texas
•Indianapolis, Indiana
•Louisville, Kentucky
•Phoenix, Arizona
•San Francisco, California
Appeals may expand the availability of
this program to other locations during the
two-year test period. Upon completion of
the two-year test period, Appeals will eval-
uate this program, consider necessary ad-
justments to both the mediation and arbi-
tration components of the program, and
determine whether to make the arbitration
component permanent.
SECTION 3. GENERAL SCOPE OF
MEDIATION AND ARBITRATION
PROCEDURES
01. The general provisions set forth
in Revenue Procedures 2002–44 and
2006–44 apply to the mediation and ar-
bitration, respectively, of OIC and TFRP
cases under this two-year pilot program
except as specifically stated herein. In
accordance with Revenue Procedure
2006–44, arbitration is not available for
legal issues.
02. The mediation and arbitration
procedures do not create any special au-
thority for settlement by Appeals. During
the mediation and arbitration processes,
Appeals is still subject to the procedures
that would apply if the issue were be-
ing considered via the standard Appeals
process, including procedures in the In-
ternal Revenue Manual (IRM), found at
http://www.irs.gov/irm/index.html,and
other administrative guidance.
December 1, 200812242008–48 I.R.B.

03. The overall determination whether
a taxpayer was required to collect, truth-
fully account for, and pay over income,
employment or excise taxes, and/or
whether a taxpayer willfully failed to col-
lect or truthfully account for and pay over
such tax or willfully attempted in any
manner to evade or defeat the payment of
such tax are legal issues for which arbitra-
tion is not available. These legal issues,
however, are based on factual components
that are eligible for arbitration.
04. The overall determination whether
a taxpayer’s offer is acceptable under sec-
tion 7122 may only be made by the Sec-
retary or his delegate and is not a matter
for arbitration. See section 7122(a) (giv-
ing the Secretary the discretionary author-
ity to compromise tax liabilities) and Del-
egation Order 5–1 (delegating that discre-
tionary authority to Appeals). Factual de-
terminations are generally required as part
of making the overall offer acceptability
determination, however, and these individ-
ual factual determinations are eligible for
arbitration.
05. The Appeals Area Director must
approve the acceptance of all cases for me-
diation or arbitration.
SECTION 4. SCOPE OF MEDIATION
AND ARBITRATION FOR OIC CASES
01. In addition to the exclusions con-
tained in Revenue Procedure 2002–44 and
Revenue Procedure 2006–44, the follow-
ing limitations on OIC cases apply:
(1) Neither mediation nor arbitration is
available for:
i. Cases in which the taxpayer has the
ability to pay in full based on the unad-
justed financial information submit-
ted by the taxpayer, except when eco-
nomic hardship exists;
ii. Cases in which the taxpayer declines
to amend or increase the offer without
stating any specific disagreement with
the valuations, figures, or methodol-
ogyusedbyAppealsindetermining
reasonable collection potential;
iii. Cases in which the disputed issue is
explicitly addressed in established
guidance (for example, the issues ad-
dressed in the instructions for Form
656, “Offer in Compromise,” such as
unsecured debt, college expenses, and
non-qualifying charitable contribu-
tions);
iv. Cases in which an OIC is submitted as
an alternative to collection in a Collec-
tion Due Process or equivalent hear-
ing case;
v. Cases in which the issue of liability
was previously determined by Ap-
peals; or
vi. Cases in which Delegation Order 5–1
requires a level of approval higher
than that of the Appeals Team Man-
ager, such as Effective Tax Admin-
istration offers or those in which a
determination is made by Appeals that
acceptance is not in the best interest of
the government (see Policy Statement
P–5–100 and IRM 5.8.7.6(6)).
(2) Meditation is not available for:
i. Cases in which the taxpayer has al-
ready attempted to resolve the matter
through Fast Track Mediation.
(3) Arbitration is not available for:
i. Corporate OIC cases in which the is-
sue to be arbitrated is whether an indi-
vidual is responsible for a Trust Fund
Recovery Penalty or Personal Liabil-
ity for Excise Tax assessment; or
ii. Doubt as to liability cases.
02. Provided all facts are known by
both parties, appropriate issues for medi-
ation or arbitration in OIC cases generally
include:
(1) The value of assets, including those
held by a third party;
(2) The value of dissipated assets and
what amount should be included in the
overall determination of reasonable collec-
tion potential;
(3) A taxpayer’s proportionate interest
in jointly held assets;
(4) Projections of future income based
on calculations other than current income;
(5) The calculation of a taxpayer’s fu-
ture ability to pay when living expenses are
shared with a non-liable person; and
(6) Other factual determinations, such
as whether a taxpayer’s contributions into
a retirement savings account are discre-
tionary or mandatory as a condition of em-
ployment.
03. Additionally, provided all facts are
known by both parties, appropriate issues
for mediation in OIC cases generally in-
clude whether the taxpayer meets the crite-
ria for deviating from national and/or local
expense standards.
04. For cases with liabilities of $50,000
or more, any settlement or agreement
reached through mediation or arbitration
must be reviewed by the Office of Chief
Counsel pursuant to section 7122(b) be-
fore being finalized. When review is
required, Appeals will forward the case to
Area Counsel for an opinion concerning
whether the case is subject to compromise.
See IRM sections 5.8.8.5 and 8.23.4.2.2.
SECTION 5. SCOPE OF MEDIATION
AND ARBITRATION FOR TFRP
CASES
01. Appropriate issues for mediation in
TFRP cases generally include:
(1) Whether a person was required to
collect, truthfully account for, and pay
over income, employment, or excise taxes;
(2) Whether a responsible person will-
fully failed to collect or truthfully account
for and pay over such tax, or willfully at-
tempted in any manner to evade or defeat
the payment of such tax;
(3) Whether a taxpayer sufficiently des-
ignated a payment to the trust fund portion
of the unpaid tax; and
(4) Whether the taxpayer provided
sufficient corporate payroll records to es-
tablish that a corporate tax deposit was
in the amount required by Treas. Reg.
§ 31.6302–1(c) and therefore was consid-
ered a designated payment to be applied to
both the trust fund and non-trust fund por-
tions of the employment taxes associated
with that specific payroll. See the Note to
IRM 5.7.4.3(7).
02. Appropriate issues for arbitration in
TFRP cases generally include:
(1) Specific factual determinations con-
cerning whether a person was required to
collect, account for, and pay over income,
employment, or excise taxes. Common
factors include whether the taxpayer:
a. was an officer, director, or shareholder
of the corporation;
b. had the authority to sign checks;
c. exercised significant control over the
corporation’s financial affairs;
d. had the authority to determine which
creditors would be paid;
e. was involved in payroll disburse-
ments;
f. had control over the voting stock of
the corporation;
2008–48 I.R.B.1225December 1, 2008

g. was involved in making federal tax
deposits; and
h. had the ability to hire and fire employ-
ees.
(2) Specific factual determinations con-
cerning whether a responsible person will-
fully failed to collector truthfully account
for and pay over such tax, or willfully at-
tempted in any manner to evade or defeat
the payment of such tax. Common factors
to be determined include:
a. when the taxpayer became aware of
the failure to pay over the withheld
tax;
b. whether the taxpayer had knowledge
of payments to other creditors, includ-
ing employees, after becoming aware
of the failure to pay over the withheld
tax;
c. whether there were unencumbered
funds available to satisfy pre-existing
employment tax liabilities; and
d. whether the taxpayer failed to use
unencumbered funds to satisfy pre-ex-
isting tax liabilities after becoming
aware of such liabilities.
(3) A factual determination of the
amount designated by the taxpayer as a
payment to the trust fund portion of the
unpaid tax; and
(4) A factual determination whether
the taxpayer provided sufficient corporate
payroll records to establish that a corpo-
rate tax deposit was in the amount required
by Treas. Reg. § 31.6302–1(c) and there-
fore was considered a designated payment
to be applied to both the trust fund and
non-trust fund portions of the employment
taxes associated with that specific payroll.
See Note to IRM 5.7.4.3(7).
SECTION 6. APPLICATION PROCESS
01. Either the taxpayer or Appeals may
submit a request to mediate or arbitrate af-
ter consulting with and obtaining the con-
currence of the other party.
02. A taxpayer may submit a request to
mediate or arbitrate by sending a written
request to the appropriate Appeals Team
Manager and a copy to:
ChiefofAppeals
Attn: Tax Policy & Procedure —
Collection & Processing
1099 14
th
St. NW, Suite 4200 East
Washington, DC 20005
03. For an OIC case, the written request
to mediate or arbitrate should include:
a. The taxpayer’s name, address, and
taxpayer identification number, and
the name, title, address, and telephone
number of the person to contact;
b. The name of the Appeals Team Man-
ager, Appeals Officer, or Settlement
Officer;
c. The taxable periods involved;
d. A detailed description of the issue(s)
for which the taxpayer is requesting
mediation or arbitration, including
both the specific dollar amount and
the basis by which that amount was
determined; and
e. A representation that the disputed is-
sue is not an excluded issue listed in
section 4.01 above or in Revenue Pro-
cedure 2002–44 or Revenue Proce-
dure 2006–44.
04. For a TFRP case, the written re-
quest to mediate or arbitrate should contain
itemsathrougheinsection6.03aboveand
a detailed explanation of the taxpayer’s po-
sition, including explanations of the fol-
lowing (where applicable):
a. Why the taxpayer was not required to
collect, truthfully account for, and pay
over the income, employment or ex-
cise taxes;
b. Why the taxpayer did not willfully fail
to collect or truthfully account for and
pay over such tax, or willfully attempt
in any manner to evade or defeat the
payment of such tax; and
c. Why the computation of the Trust
Fund Recovery Penalty should reflect
payment(s) designated specifically to
the trust fund portion of the unpaid
tax.
05. If the taxpayer wants to use a
non-IRS co-mediator (at the taxpayer’s
expense) or a non-IRS arbitrator (expense
shared equally by the taxpayer and Ap-
peals), the application should state this
preference.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Revenue Procedure 2002–44 and Rev-
enue Procedure 2006–44 are modified.
SECTION 8. EFFECTIVE DATE
The procedures in this announcement
are effective December 1, 2008.
SECTION 9. CONTACT
INFORMATION
The principal authors of this announce-
ment are Dale Veer, Appeals, Tax Policy
and Procedure (Collection & Processing),
and Sarah Sheldon, Office of Associate
Chief Counsel (Procedure & Administra-
tion). For further information regarding
this announcement, contact Dale Veer at
(651) 726–7430 or Sarah Sheldon at (202)
622–7950 (not toll-free calls).
UnifiedRuleforLosson
Subsidiary Stock; Correction
Announcement 2008–114
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correcting amendment.
SUMMARY: This document contains cor-
rections to final regulations (T.D. 9424,
2008–44 I.R.B. 1012) that were published
in theFederal Registeron Wednesday,
September 17, 2008 (73 FR 53934) under
sections 358, 362(e)(2), and 1502 of the
Internal Revenue Code. The final regula-
tions apply to corporations filing consoli-
dated returns, and corporations that enter
into certain tax-free reorganizations. The
final regulations provide rules for deter-
mining the tax consequences of a mem-
ber’s transfer (including by deconsolida-
tion and worthlessness) of loss shares of
subsidiary stock. In addition, the final
regulations provide that section 362(e)(2)
generally does not apply to transactions
between members of a consolidated group.
Finally, the final regulations conform or
clarify various provisions of the consoli-
dated return regulations, including those
relating to adjustments to subsidiary stock
basis.
EFFECTIVE DATE: This correction is ef-
fective October 20, 2008, and is applicable
on September 17, 2008.
FOR FURTHER INFORMATION
CONTACT: Marcie P. Barese,
(202) 622–7790, Sean P. Duffley,
December 1, 200812262008–48 I.R.B.

(202) 622–7770, or Theresa Abell (202)
622–7700 (none of the numbers are
toll-free).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
jects of this document are under sections
337, 358, 362, 1502 of the Internal Rev-
enue Code.
Need for Correction
As published, final regulations (T.D.
9424) contain errors that may prove to be
misleading and are in need of clarification.
*****
Correction of Publication
Accordingly, 26 CFR part 1 is cor-
rected by making the following correcting
amendments:
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 1.358–6(f)(3) is
amended by revising the last sentence to
read as follows:
§1.358–6 Stock basis in certain triangular
reorganizations.
*****
(f) * * *
(3) * * * However, taxpayers may apply
paragraph (b)(2)(v) of this section to tri-
angular reorganizations occurring before
September 17, 2008 and on or after De-
cember 23, 1994.
Par. 3. Section 1.1502–13(l)(1) is
amended by revising the last sentence to
read as follows:
§1.1502–13 Intercompany transactions.
*****
(l) * * *
(1) * * * However, taxpayers may ap-
ply paragraph (j)(5)(i)(A) of this section to
transactions that occurred prior to Septem-
ber 17, 2008.
*****
Par. 4. Section 1.1502–19(h)(1) is
amended by revising the second sentence
to read as follows:
§1.1502–19 Excess loss accounts.
*****
(h) * * *
(1) * * * However, taxpayers may ap-
ply paragraph (c)(3)(i)(A) of this section to
transactions that occurred prior to Septem-
ber 17, 2008.
*****
Par. 5. Section 1.1502–33(j)(1) is
amended by revising the last sentence to
read as follows:
§1.1502–33 Earnings and profits.
*****
(j) * * *
(1) * * * However, taxpayers may apply
paragraph (e)(2)(i)(A)ofthissectionwith
respect to determinations of the earnings
and profits of a member in consolidated
return years beginning prior to September
17, 2008.
*****
Par. 6. Section 1.1502–36 is amended
by revising the last sentence of the para-
graph (b)(3)Example 3.(i)(D); the fourth
sentence of the paragraph (c)(8)Exam-
ple 6.(iii)(A); the only sentence of the
paragraph (d)(3)(i)(B); the third through
fifth sentences of the paragraph (d)(5)(ii);
the third sentence of the paragraph (d)(8)
Example 6.(ii)(B); the second sentence of
the paragraph (d)(8)Example 6.(ii)(D)(3);
the fifth sentence of the paragraph (d)(8)
Example 8.(i)(F); the first sentence of
the paragraph (d)(8)Example 8.(ii)(E);
the first sentence ofthe paragraph (d)(8)
Example 8.(ii)(F); the first sentence of
the paragraph (d)(8)Example 9.(ii); the
second sentence of the paragraph (g)(2)
Example 5.(i); and the third sentence of
the paragraph (g)(2)Example 5.(iii) to
read as follows:
§1.1502–36 Unified loss rule.
*****
(b) * * *
(3) * * *
Example 3.***
(i) * * *
(D) * * * The results would be the same
if, in addition to the facts in paragraph
(i)(A) of thisExample 3, M transferred
its S share to X in a fully taxable trans-
action and, as permitted under paragraph
(b)(1)(ii)(B) of this section, P elected to re-
determine basis under this paragraph (b).
*****
(c) * * *
(8) * * *
Example 6.***
(iii) * * *
(A)***Aftertakingintoaccount the
effects of all applicable rules of law, M’s
basis in the S share at the end of year
5is$100(M’soriginal$100basisde-
creased under §1.1502–32 by $40 at the
end of the year 1 and then increased un-
der §1.1502–32 by $40 at end of the year
5 (the net of the $100 tax exempt income
from the excluded COD applied to reduce
attributes and the $60 noncapital, nonde-
ductible expense from the reduction of S’s
portion of the CNOL)).* * *
*****
(d) * * *
(3) * * *
(i) * * *
(B) S’s aggregate inside loss (as defined
in paragraph (d)(3)(iii) of this section).
*****
(5) * * *
(ii)***S’sattributereductionamount
is allocated proportionately (by basis) be-
tween (among) the non-stock Category
D asset and S’s deemed single share(s)
of subsidiary stock. (See paragraphs
(d)(4)(ii)(B)(2)and(d)(4)(ii)(C)ofthis
section regarding the portion of S’s at-
tribute reduction amount allocated to the
Category D assets other than lower-tier
subsidiary stock.) For allocation purposes,
S’s basis in each deemed single share
of S1 stock is its deemed basis (deter-
mined under paragraphs (d)(5)(i)(B) and
(d)(5)(i)(C) of this section), reduced by—
*****
(8) * * *
Example 6.***
(ii) * * *
(B) * * * However, S’s gain recognized
on the transfer of Share E is computed
and immediately adjusts members’ bases
in subsidiary stock under §1.1502–32 (be-
cause M and S are not members of the
same group immediately after the transac-
tion, the sale is not an intercompany trans-
action subject to §1.1502–13).
2008–48 I.R.B.1227December 1, 2008

*****
(D) * * *
(3) * * * See paragraph (d)(5)(v)(A) of
this section.
*****
Example 8.***
(F)***Under
§1.1502–32(c)(1)(ii)(A)(1) this $90
expense is allocated to the transferred loss
shares of S stock in proportion to the loss
in the shares, or $.90 per share.
*****
(ii) * * *
(E) * * * The facts are the same as in
paragraph (ii)(A) of thisExample 8, except
that P elects under paragraph (d)(6) of this
section to reduce M’s basis in the S shares
by the full attribute reduction amount of
$22, in lieu of S reducing its attributes.* * *
(F)***Thefactsarethesameasin
paragraph (ii)(A) of thisExample 8.
Example 9.***
(ii) * * * However, S1’s gain recognized
on the transfer of the S2 share is computed
and immediately adjusts members’ bases
in subsidiary stock under §1.1502–32.
*****
(g) * * *
(2) * * *
Example 5.***
(i) * * * S owns Asset 1 with a basis of
$100 and a value of $20.* * *
(iii) * * * However, because all the
shares are transferred, the group’s income
is clearly reflected.
*****
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 October 17,
2008, 8:45 a.m., and published in the issue of the Federal
Register for October 20, 2008, 73 F.R. 62204)
Infrastructure Improvements
Under Section 897
Announcement 2008–115
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Advanced notice of proposed
rulemaking.
SUMMARY: This document describes
issues that the IRS and the Treasury
Department are considering address-
ing, in a notice of proposed rulemaking
(REG–130342–08), under section 897
of the Internal Revenue Code (Code) re-
garding the definition of an interest in
real property. The notice of proposed
rulemaking would address certain rights
granted by a governmental unit that are
related to the lease, ownership, or use of
real property. This document also invites
comments from the public regarding these
contemplated rules. All materials submit-
ted will be available for public inspection
and copying.
DATES: Written and electronic comments
must be submitted by January 29, 2009.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–130342–08), 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–130342–08),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC, or sent electroni-
cally via the Federal eRulemaking Por-
tal atwww.regulations.gov(IRS and
REG–130342–08).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposals,
Jeffrey P. Cowan at (202) 622–3850; con-
cerning submissions,Richard A. Hurst at
(202) 622–7180 (TDD Telephone) (not
toll-free numbers) and his e-mail address
isRichard.A.Hurst@irscounsel.treas.gov.
SUPPLEMENTARY INFORMATION:
Overview
This document describes issues that
the IRS and the Treasury Department
are considering addressing, in a notice
of proposed rulemaking, regarding the
definition of an interest in real property
within the meaning of section 897(c) of the
Code. The notice of proposed rulemaking
would address certain rights granted by a
governmental unit that are related to the
lease, ownership, or use of toll roads, toll
bridges, and certain other physical infra-
structure. The proposed regulations would
amend the § 1.897–1 regulations.
Transactions at Issue
In a typical transaction at issue, a
domestic partnership (DP) leases or pur-
chases from an unrelated party infrastruc-
ture assets and any land underlying these
infrastructure assets (together, specified
infrastructure) within the United States.
The DP’s partners include domestic cor-
porations with foreign shareholders. Ex-
amples of specified infrastructure include
a toll road or toll bridge.
Often, as a condition to operating the
specified infrastructureandtocollecting
tolls for its use, DP is also required to ob-
tain a governmental license, permit, fran-
chise, or other similar right (governmental
permit). The DP may also own or acquire
property that would be used in the trade or
business of operating the specified infra-
structure, such as signs, snow plows, and
electronic sensors.
The physical attributes of the specified
infrastructure, for example, a relatively
narrow roadway, and terms and conditions
related to the specified infrastructure, for
example, that the lessee is required to
maintain and operate a roadway, mean that
in many cases there may practically be
no potential alternative commercial uses
for the specified infrastructure. In those
cases, the value of the leasehold interest in
the specified infrastructure derives from
the right to charge and collect tolls.
Background
Section 897(a)(1) of the Code treats
the gain or loss of a nonresident alien or
foreign corporation from the disposition
of a U.S. real property interest (USRPI)
as if the taxpayer were engaged in a trade
or business in the United States, and
as if such gain or loss were effectively
connected with such trade or business
under sections 871(b) or 882. In gen-
eral, a USRPI includes an interest in real
property located in the United States or
the Virgin Islands, and any interest (other
than an interest solely as a creditor) in a
domestic corporation unless the taxpayer
establishes that the corporation was at
no time a U.S. real property holding
December 1, 200812282008–48 I.R.B.

corporation (USRPHC) within the period
described in section 897(c)(1)(A)(ii).
Section 897(c)(1)(A).
Real property includes land and unsev-
ered natural products of the land, improve-
ments, and personal property associated
with the use of real property. Section
1.897–1(b)(1). Section 1.897–1(b)(1) pro-
vides that local law definitions will not
be controlling for purposes of determin-
ing the meaning of the term “real prop-
erty” as it is used under section 897 and
the regulations thereunder. The regula-
tions define an “improvement” as a build-
ing, any other inherently permanent struc-
ture, or the structural components of either.
Section 1.897–1(b)(3). For this purpose,
an inherently permanent structure includes
any property not otherwise described in
§ 1.897–1(b)(3) that is affixed to real prop-
erty and that will ordinarily remain affixed
for an indefinite period of time. Further,
§ 1.897–1(b)(3)(iii)(B) provides that an in-
herently permanent structure includes, for
example, pavements and bridges.
The Code defines an “interest in real
property” to include fee ownership and
co-ownership of land or improvements
thereon, leaseholds of land or improve-
ments thereon, options to acquire land or
improvements thereon, and options to ac-
quire leaseholds of land or improvements
thereon. Section 897(c)(6)(A). Section
1.897–1(c)(1) further provides that the
term USRPI also includes any interest,
other than an interest solely as a credi-
tor, in real property located in the United
States or the Virgin Islands. Section
1.897–1(d)(2)(i) provides that an inter-
est in real property other than an interest
solely as a creditor includes any direct or
indirect right to sharein the appreciation
in the value, or in the gross or net proceeds
or profits generated by, the real property.
A USRPHC is generally defined as a
corporation the fair market value of whose
USRPIs equals or exceeds 50 percent of
the fair market value of its worldwide
interests in real property, including its
USRPIs, plus its other assets which are
used or held for use in a trade or busi-
ness. Section 897(c)(2). For this purpose,
assets used or held for use in a trade or
business include, among other things,
certain intangible property described in
§ 1.897–1(f)(1)(ii).
For purposes of determining whether
any corporation is a USRPHC, assets
held by a partnership, trust, or estate are
generally treated as held proportionately
by its partners or beneficiaries. Section
897(c)(4)(B) and § 1.897–2(e)(2). The
interest in the entity itself is disregarded
when a proportionate share of the entity’s
assets are attributed to the interest-holder.
Section 1.897–2(e)(2). Further, any asset
treated as held by a partner or beneficiary
by reason of this rule which is used or held
for use by the partnership, trust, or estate in
a trade or business is treated as so used or
held by the partner or beneficiary. Section
897(c)(4)(B) and § 1.897–2(e)(2). The
proportionate ownership rules of Section
897(c)(4)(B) and § 1.897–2(e)(2) apply
successively upward through a chain of
ownership. Section 1.897–2(e)(2).
Explanation of Contemplated
Regulations
The IRS and the Treasury Department
are aware that in the transactions at issue
taxpayers may be taking the position that
for purposes of section 897 the govern-
mental permit is not a USRPI within the
meaning of section 897(c). Instead, these
taxpayers may take the position that the
governmental permit is an asset used or
held for use in a trade or business. Fur-
ther, these taxpayers may take the position
that a significant portion of the fair mar-
ket value of a DP’s assets is allocable to
the governmental permit rather than to the
assets comprising the specified infrastruc-
ture.
As noted in the Background section, un-
der section 897(c)(2), a corporation is a
USRPHC only if the fair market value of
its USRPIs equals or exceeds 50 percent
of the fair market value of its USRPIs plus
its interests in real property located out-
side the United States, plus any other of
its assets which are used or held for use in
a trade or business. Therefore, if the fair
market value of the governmental permit
were treated as an asset used or held for use
in a trade or business, and not a USRPI, the
governmental permit would be taken into
account in the denominator, but not the
numerator, of the calculation provided for
in section 897(c)(2) in order to determine
whether any domestic corporation that is a
partner in a DP is a USRPHC. Accounting
for the governmental permit in this manner
for purposes of the section 897(c)(2) cal-
culation reduces the likelihood that a do-
mestic corporation to which such a right
was attributed under section 897(c)(4)(B)
would be treated as a USRPHC under sec-
tion 897(c)(2).
The IRS and the Treasury Department,
however, are of the view that in some of
the transactions at issue the governmental
permit may properly be characterized as a
USRPI. Accordingly, the IRS and the Trea-
sury Department are considering issuing
proposed regulations regarding the defi-
nitionofaninterestin real property that
would address certain licenses, permits,
franchises, or other similar rights granted
by a governmental unit (including, for pur-
poses of section 897, an agency or instru-
mentality thereof) that are related to the
value of the use or ownership of an inter-
est in real property. The proposed regu-
lations would address how the fair market
value of such licenses, permits, franchises,
or other similar rights should be taken into
account when determining the fair market
value of a corporation’s USRPIs and in-
terests in real property located outside the
United States under section 897(c)(2).
Proposed Effective Date
The IRS and the Treasury Department
anticipate that the proposed regulations
would apply for transactions occurring
on or after the date of publication in the
Federal Registeras final or temporary
regulations. No inference is intended as
to how these arrangements are treated or
characterized under current law.
Request for Comments
Before the notice of proposed rulemak-
ing is issued, consideration will be given
to any written comments (a signed origi-
nal and eight (8) copies)orelectroniccom-
ments that are timely submitted to the IRS.
All comments will be available for public
inspection and copying.
The IRS and Treasury Department
specifically request comments on:
1. The scope of this regulatory project,
the types of licenses, permits, fran-
chises, or other similar rights granted
by a governmental unit with respect to
specified infrastructure that might be
treated as related to the value of the
lease, ownership, or use of an interest
in real property, and what character-
2008–48 I.R.B.1229December 1, 2008

istics should be taken into account in
making that determination.
2. Whether this regulatory project
should address the allocation of the
consideration paid for the lease or
purchase of a specified infrastructure
and the license, permit, franchise,
or other similar right to operate that
specified infrastructure for purposes
of determining the fair market value
of such property.
In regard to the allocation of pur-
chase price, comments are also sought
as to whether, for purposes of allocat-
ing the consideration paid for a lease
of the specified infrastructure and the
license, permit, franchise, or other
similar right to operate that specified
infrastructure, the length of the lease
(including whether the lease is for the
useful life of the property) should be
taken into account.
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on October 30,
2008, 8:45 a.m., and published in the issue of the Federal
Register for October 31, 2008, 73 F.R. 64901)
Section 108 Reduction of Tax
Attributes for S Corporations;
Hearing Cancellation
Announcement 2008–116
AGENCY: Internal Revenue Service
(IRS), Treasury
ACTION: Cancellation of notice of public
hearing on proposed rulemaking.
SUMMARY: This document cancels a
public hearing on proposed rulemaking
(REG–102822–08, 2008–38 I.R.B. 744)
that provides guidance on the manner in
which an S corporation reduces its tax
attributes under section 108(b) for tax-
able years in which the S corporation has
discharge of indebteness income that is
excluded from gross income under section
108(a).
DATES: The public hearing, originally
scheduled for December 8, 2008 at 10 a.m.
is cancelled.
FOR FURTHER INFORMATION
CONTACT: Funmi Taylor of the Publica-
tions and RegulationsBranch, Legal Pro-
cessing Division, Associate Chief Counsel
(Procedure and Administration) at (202)
622–7180 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
A notice of proposed rulemaking and
a notice of public hearing that appeared
in theFederal Registeron Wednesday,
August 6, 2008 (73 FR 45656) announced
that a public hearing was scheduled for
December 8, 2008, at 10 a.m. in the IRS
Auditorium, Internal Revenue Building,
1111 Constitution Avenue, NW, Washing-
ton, DC. The subject of the public hearing
is under section 108 of the Internal Rev-
enue Code.
The public comment period for the pro-
posed rulemaking expired on November 4,
2008. The notice of proposed rulemak-
ing and notice of public hearing instructed
those interested in testifying at the public
hearing to submit an outline of the topics to
be addressed. As of Thursday, November
13, 2008, no one has requested to speak.
Therefore, the public hearing scheduled
for December 8, 2008, is cancelled.
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 November 19,
2008, 8:45 a.m., and published in the issue of the Federal
Register for November 20, 2008, 73 F.R. 70289)
December 1, 200812302008–48 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.
2008–48 I.R.B.iDecember 1, 2008

Numerical Finding List
1
Bulletins 2008–27 through 2008–48
Announcements:
2008-62, 2008-27 I.R.B.74
2008-63, 2008-28 I.R.B.114
2008-64, 2008-28 I.R.B.114
2008-65, 2008-31 I.R.B.279
2008-66, 2008-29 I.R.B.164
2008-67, 2008-29 I.R.B.164
2008-68, 2008-30 I.R.B.244
2008-69, 2008-32 I.R.B.318
2008-70, 2008-32 I.R.B.318
2008-71, 2008-32 I.R.B.321
2008-72, 2008-32 I.R.B.321
2008-73, 2008-33 I.R.B.391
2008-74, 2008-33 I.R.B.392
2008-75, 2008-33 I.R.B.392
2008-76, 2008-33 I.R.B.393
2008-77, 2008-33 I.R.B.394
2008-78, 2008-34 I.R.B.453
2008-79, 2008-35 I.R.B.568
2008-80, 2008-37 I.R.B.706
2008-81, 2008-37 I.R.B.706
2008-82, 2008-37 I.R.B.708
2008-83, 2008-37 I.R.B.709
2008-84, 2008-38 I.R.B.748
2008-85, 2008-38 I.R.B.749
2008-86, 2008-40 I.R.B.843
2008-87, 2008-40 I.R.B.843
2008-88, 2008-40 I.R.B.843
2008-89, 2008-40 I.R.B.844
2008-90, 2008-41 I.R.B.896
2008-91, 2008-42 I.R.B.963
2008-92, 2008-42 I.R.B.963
2008-93, 2008-41 I.R.B.896
2008-94, 2008-42 I.R.B.964
2008-95, 2008-42 I.R.B.964
2008-96, 2008-43 I.R.B.1010
2008-97, 2008-43 I.R.B.1010
2008-98, 2008-44 I.R.B.1087
2008-99, 2008-44 I.R.B.1089
2008-100, 2008-44 I.R.B.1090
2008-101, 2008-44 I.R.B.1090
2008-102, 2008-43 I.R.B.1011
2008-103, 2008-46 I.R.B.1161
2008-104, 2008-45 I.R.B.1136
2008-105, 2008-48 I.R.B.1219
2008-106, 2008-45 I.R.B.1137
2008-107, 2008-46 I.R.B.1162
2008-108, 2008-46 I.R.B.1165
2008-109, 2008-46 I.R.B.1166
2008-110, 2008-48 I.R.B.1224
2008-111, 2008-48 I.R.B.1224
2008-112, 2008-47 I.R.B.
1199
2008-113, 2008-47 I.R.B.1199
Announcements— Continued:
2008-114, 2008-48 I.R.B.1226
2008-115, 2008-48 I.R.B.1228
2008-116, 2008-48 I.R.B.1230
Court Decisions:
2087, 2008-41 I.R.B.845
Notices:
2008-55, 2008-27 I.R.B.11
2008-56, 2008-28 I.R.B.79
2008-57, 2008-28 I.R.B.80
2008-58, 2008-28 I.R.B.81
2008-59, 2008-29 I.R.B.123
2008-60, 2008-30 I.R.B.178
2008-61, 2008-30 I.R.B.180
2008-62, 2008-29 I.R.B.130
2008-63, 2008-31 I.R.B.261
2008-64, 2008-31 I.R.B.268
2008-65, 2008-30 I.R.B.182
2008-66, 2008-31 I.R.B.270
2008-67, 2008-32 I.R.B.307
2008-68, 2008-34 I.R.B.418
2008-69, 2008-34 I.R.B.419
2008-70, 2008-36 I.R.B.575
2008-71, 2008-35 I.R.B.462
2008-72, 2008-43 I.R.B.998
2008-73, 2008-38 I.R.B.717
2008-74, 2008-38 I.R.B.718
2008-75, 2008-38 I.R.B.719
2008-76, 2008-39 I.R.B.768
2008-77, 2008-40 I.R.B.814
2008-78, 2008-41 I.R.B.851
2008-79, 2008-40 I.R.B.815
2008-80, 2008-40 I.R.B.820
2008-81, 2008-41 I.R.B.852
2008-82, 2008-41 I.R.B.853
2008-83, 2008-42 I.R.B.905
2008-84, 2008-41 I.R.B.855
2008-85, 2008-42 I.R.B.905
2008-86, 2008-42 I.R.B.925
2008-87, 2008-42 I.R.B.930
2008-88, 2008-42 I.R.B.933
2008-89, 2008-43 I.R.B.999
2008-90, 2008-43 I.R.B.1000
2008-91, 2008-43 I.R.B.1001
2008-92, 2008-43 I.R.B.1001
2008-93, 2008-43 I.R.B.1002
2008-94, 2008-44 I.R.B.1070
2008-95, 2008-44 I.R.B.1076
2008-96, 2008-44 I.R.B.1077
2008-97, 2008-44 I.R.B.1080
2008-98, 2008-44 I.R.B.1080
2008-99, 2008-47 I.R.B.1194
2008-100, 2008-44 I.R.B.1081
2008-101, 2008-44 I.R.B.1082
Notices— Continued:
2008-102, 2008-45 I.R.B.1106
2008-103, 2008-46 I.R.B.1156
2008-105, 2008-48 I.R.B.1208
Proposed Regulations:
REG-209006-89, 2008-41 I.R.B.867
REG-157711-02, 2008-44 I.R.B.1087
REG-143544-04, 2008-42 I.R.B.947
REG-160868-04, 2008-45 I.R.B.1115
REG-161695-04, 2008-37 I.R.B.699
REG-164965-04, 2008-34 I.R.B.450
REG-142339-05, 2008-45 I.R.B.1116
REG-143453-05, 2008-32 I.R.B.310
REG-146895-05, 2008-37 I.R.B.700
REG-155087-05, 2008-38 I.R.B.726
REG-164370-05, 2008-46 I.R.B.1157
REG-142680-06, 2008-35 I.R.B.565
REG-156779-06, 2008-46 I.R.B.1160
REG-120476-07, 2008-36 I.R.B.679
REG-120844-07, 2008-39 I.R.B.770
REG-128841-07, 2008-45 I.R.B.1124
REG-129243-07, 2008-27 I.R.B.32
REG-138355-07, 2008-32 I.R.B.311
REG-140029-07, 2008-40 I.R.B.828
REG-142040-07, 2008-34 I.R.B.451
REG-142333-07, 2008-43 I.R.B.1008
REG-149404-07, 2008-40 I.R.B.839
REG-149405-07, 2008-27 I.R.B.73
REG-100464-08, 2008-32 I.R.B.313
REG-101258-08, 2008-28 I.R.B.111
REG-102122-08, 2008-31 I.R.B.278
REG-102822-08, 2008-38 I.R.B.744
REG-103146-08, 2008-37 I.R.B.701
REG-106251-08, 2008-39 I.R.B.774
REG-107318-08, 2008-45 I.R.B.1131
REG-115457-08, 2008-33 I.R.B.390
REG-118327-08, 2008-48 I.R.B.1218
REG-121698-08, 2008-29 I.R.B.163
Revenue Procedures:
2008-32, 2008-28 I.R.B.82
2008-33, 2008-28 I.R.B.93
2008-34, 2008-27 I.R.B.13
2008-35, 2008-29 I.R.B.132
2008-36, 2008-33 I.R.B.340
2008-37, 2008-29 I.R.B.137
2008-38, 2008-29 I.R.B.139
2008-39, 2008-29 I.R.B.143
2008-40, 2008-29 I.R.B.151
2008-41, 2008-29 I.R.B.155
2008-42, 2008-29 I.R.B.160
2008-43, 2008-30 I.R.B.186
2008-44, 2008-30 I.R.B.187
2008-45, 2008-30 I.R.B.224
2008-46, 2008-30 I.R.B.238
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2008–1 through 2008–26 is in Internal Revenue Bulletin
2008–26, dated June 30, 2008.
December 1, 2008ii2008–48 I.R.B.

Revenue Procedures— Continued:
2008-47, 2008-31 I.R.B.272
2008-48, 2008-36 I.R.B.586
2008-49, 2008-34 I.R.B.423
2008-50, 2008-35 I.R.B.464
2008-51, 2008-35 I.R.B.562
2008-52, 2008-36 I.R.B.587
2008-53, 2008-36 I.R.B.678
2008-54, 2008-38 I.R.B.722
2008-55, 2008-39 I.R.B.768
2008-56, 2008-40 I.R.B.826
2008-57, 2008-41 I.R.B.855
2008-58, 2008-41 I.R.B.856
2008-59, 2008-41 I.R.B.857
2008-60, 2008-43 I.R.B.1006
2008-61, 2008-42 I.R.B.934
2008-62, 2008-42 I.R.B.935
2008-63, 2008-42 I.R.B.946
2008-64, 2008-47 I.R.B.1195
2008-65, 2008-44 I.R.B.1082
2008-66, 2008-45 I.R.B.1107
2008-67, 2008-48 I.R.B.1211
2008-69, 2008-48 I.R.B.1217
Revenue Rulings:
2008-32, 2008-27 I.R.B.6
2008-33, 2008-27 I.R.B.8
2008-34, 2008-28 I.R.B.76
2008-35, 2008-29 I.R.B.116
2008-36, 2008-30 I.R.B.165
2008-37, 2008-28 I.R.B.77
2008-38, 2008-31 I.R.B.249
2008-39, 2008-31 I.R.B.252
2008-40, 2008-30 I.R.B.166
2008-41, 2008-30 I.R.B.170
2008-42, 2008-30 I.R.B.175
2008-43, 2008-31 I.R.B.258
2008-44, 2008-32 I.R.B.292
2008-45, 2008-34 I.R.B.403
2008-46, 2008-36 I.R.B.572
2008-47, 2008-39 I.R.B.760
2008-48, 2008-38 I.R.B.713
2008-49, 2008-40 I.R.B.811
2008-50, 2008-45 I.R.B.1098
2008-51, 2008-47 I.R.B.1171
Social Security Contribution and Benefit
Base; Domestic Employee Coverage
Threshold:
2008-103, 2008-46 I.R.B.1156
Treasury Decisions:
9401, 2008-27 I.R.B.1
9402, 2008-31 I.R.B.254
9403, 2008-32 I.R.B.285
9404, 2008-32 I.R.B.280
9405, 2008-32 I.R.B.293
9406, 2008-32 I.R.B.287
9407, 2008-33 I.R.B.330
Treasury Decisions— Continued:
9408, 2008-33 I.R.B.323
9409, 2008-29 I.R.B.118
9410, 2008-34 I.R.B.414
9411, 2008-34 I.R.B.398
9412, 2008-37 I.R.B.687
9413, 2008-34 I.R.B.404
9414, 2008-35 I.R.B.454
9415, 2008-36 I.R.B.570
9416, 2008-46 I.R.B.1142
9417, 2008-37 I.R.B.693
9418, 2008-38 I.R.B.713
9419, 2008-40 I.R.B.790
9420, 2008-39 I.R.B.750
9421, 2008-39 I.R.B.755
9422, 2008-42 I.R.B.898
9423, 2008-43 I.R.B.966
9424, 2008-44 I.R.B.1012
9425, 2008-45 I.R.B.1100
9426, 2008-46 I.R.B.1153
9427, 2008-47 I.R.B.1179
9428, 2008-47 I.R.B.1174
9429, 2008-47 I.R.B.1167
9430, 2008-48 I.R.B.1205
2008–48 I.R.B.iiiDecember 1, 2008

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2008–27 through 2008–48
Announcements:
2008-19
Superseded by
Ann. 2008-95, 2008-42 I.R.B.964
2008-64
Corrected by
Ann. 2008-71, 2008-32 I.R.B.321
2008-72
Corrected by
Ann. 2008-78, 2008-34 I.R.B.453
Notices:
88-80
Modified by
Notice 2008-79, 2008-40 I.R.B.815
99-48
Superseded by
Rev. Proc. 2008-40, 2008-29 I.R.B.151
2000-9
Obsoleted by
Rev. Proc. 2008-41, 2008-29 I.R.B.155
2004-2
Amplified by
Notice 2008-59, 2008-29 I.R.B.123
2004-50
Amplified by
Notice 2008-59, 2008-29 I.R.B.123
2005-11
Superseded by
T.D. 9425, 2008-45 I.R.B.1100
2005-91
Obsoleted by
T.D. 9422, 2008-42 I.R.B.898
2006-88
Modified and superseded by
Notice 2008-60, 2008-30 I.R.B.178
2007-22
Amplified by
Notice 2008-59, 2008-29 I.R.B.123
2007-36
Clarified, modified, and amplified by
Rev. Proc. 2008-54, 2008-38 I.R.B.722
2007-52
Updated and amplified by
Notice 2008-96, 2008-44 I.R.B.1077
2007-53
Updated by
Notice 2008-97, 2008-44 I.R.B.1080
Notices— Continued:
2008-41
Amended and supplemented by
Notice 2008-88, 2008-42 I.R.B.933
Proposed Regulations:
REG-161695-04
Corrected by
Ann. 2008-92, 2008-42 I.R.B.963
REG-143453-05
Hearing cancelled by
Ann. 2008-96, 2008-43 I.R.B.1010
REG-129243-07
Corrected by
Ann. 2008-75, 2008-33 I.R.B.392
REG-151135-07
Hearing scheduled by
Ann. 2008-64, 2008-28 I.R.B.114
REG-101258-08
Corrected by
Ann. 2008-73, 2008-33 I.R.B.391
REG-102822-08
Hearing cancelled by
Ann. 2008-116, 2008-48 I.R.B.1230
REG-103146-08
Hearing scheduled by
Ann. 2008-102, 2008-43 I.R.B.1011
REG-115457-08
Hearing scheduled by
Ann. 2008-108, 2008-46 I.R.B.1165
Revenue Procedures:
92-25
Superseded by
Rev. Proc. 2008-41, 2008-29 I.R.B.155
92-83
Obsoleted by
Rev. Proc. 2008-37, 2008-29 I.R.B.137
2001-10
Section 6.02(1)(a) modified and amplified by
Rev. Proc. 2008-52, 2008-36 I.R.B.587
2001-42
Superseded by
Rev. Proc. 2008-39, 2008-29 I.R.B.143
2002-9
Clarified, modified, amplified, and superseded by
Rev. Proc. 2008-52, 2008-36 I.R.B.587
Modified and amplified by
Rev. Proc. 2008-43, 2008-30 I.R.B.186
2002-28
Section 7.02(1)(a) modified and amplified by
Rev. Proc. 2008-52, 2008-36 I.R.B.587
Revenue Procedures— Continued:
2002-44
Modified by
Ann. 2008-111, 2008-48 I.R.B.1224
2002-64
Superseded by
Rev. Proc. 2008-55, 2008-39 I.R.B.768
2004-44
Superseded by
Rev. Proc. 2008-67, 2008-48 I.R.B.1211
2005-29
Superseded by
Rev. Proc. 2008-49, 2008-34 I.R.B.423
2006-27
Modified and superseded by
Rev. Proc. 2008-50, 2008-35 I.R.B.464
2006-29
Superseded by
Rev. Proc. 2008-34, 2008-27 I.R.B.13
2006-34
Superseded by
Rev. Proc. 2008-44, 2008-30 I.R.B.187
2006-44
Modified by
Ann. 2008-111, 2008-48 I.R.B.1224
2007-14
Superseded by
Rev. Proc. 2008-52, 2008-36 I.R.B.587
2007-19
Superseded by
Rev. Proc. 2008-39, 2008-29 I.R.B.143
2007-37
Updated by
Rev. Proc. 2008-62, 2008-42 I.R.B.935
2007-42
Superseded by
Rev. Proc. 2008-32, 2008-28 I.R.B.82
2007-43
Superseded by
Rev. Proc. 2008-33, 2008-28 I.R.B.93
2007-44
Modified by
Rev. Proc. 2008-56, 2008-40 I.R.B.826
2007-49
Section 3 modified and superseded by
Rev. Proc. 2008-50, 2008-35 I.R.B.464
2007-50
Superseded by
Rev. Proc. 2008-36, 2008-33 I.R.B.340
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2008–1 through 2008–26 is in Internal Revenue Bulletin 2008–26, dated June 30, 2008.
December 1, 2008iv2008–48 I.R.B.

Revenue Procedures— Continued:
2007-63
Superseded by
Rev. Proc. 2008-59, 2008-41 I.R.B.857
2007-66
Modified and superseded by
Rev. Proc. 2008-54, 2008-38 I.R.B.722
2007-70
Modified by
Ann. 2008-63, 2008-28 I.R.B.114
2007-72
Amplified and superseded by
Rev. Proc. 2008-47, 2008-31 I.R.B.272
2008-3
Modified and amplified by
Rev. Proc. 2008-61, 2008-42 I.R.B.934
2008-4
Modified by
Rev. Proc. 2008-67, 2008-48 I.R.B.1211
2008-12
Modified and superseded by
Rev. Proc. 2008-35, 2008-29 I.R.B.132
2008-43
Modified by
Rev. Proc. 2008-52, 2008-36 I.R.B.587
2008-52
Modified by
Ann. 2008-84, 2008-38 I.R.B.748
Revenue Rulings:
67-213
Amplified by
Rev. Rul. 2008-40, 2008-30 I.R.B.166
71-234
Modified by
Rev. Proc. 2008-43, 2008-30 I.R.B.186
76-273
Obsoleted by
T.D. 9414, 2008-35 I.R.B.454
77-480
Modified by
Rev. Proc. 2008-43, 2008-30 I.R.B.186
82-105
Obsoleted by
T.D. 9414, 2008-35 I.R.B.454
91-17
Amplified by
Rev. Proc. 2008-41, 2008-29 I.R.B.155
Rev. Proc. 2008-42, 2008-29 I.R.B.160
Superseded in part by
Rev. Proc. 2008-40, 2008-29 I.R.B.151
2005-6
Amplified by
Rev. Proc. 2008-38, 2008-29 I.R.B.139
Revenue Rulings— Continued:
2006-57
Modified by
Notice 2008-74, 2008-38 I.R.B.718
2008-12
Amplified by
Rev. Rul. 2008-38, 2008-31 I.R.B.249
Clarified by
Ann. 2008-65, 2008-31 I.R.B.279
Treasury Decisions:
8073
Corrected by
Ann. 2008-99, 2008-44 I.R.B.1089
9391
Corrected by
Ann. 2008-74, 2008-33 I.R.B.392
9417
Corrected by
Ann. 2008-91, 2008-42 I.R.B.963
9424
Corrected by
Ann. 2008-114, 2008-48 I.R.B.1226
2008–48 I.R.B.vDecember 1, 2008

December 1, 20082008–48 I.R.B.

2008–48 I.R.B.December 1, 2008

December 1, 20082008–48 I.R.B.

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin-
tendent of Documents when their subscriptions must be renewed.
CUMULATIVE BULLETINS
The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are
sold on a single copy basis andare notincluded as part of the subscription to the Internal Revenue Bulletin. Subscribers to the weekly
Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print
and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the
Superintendent of Documents.
ACCESS THE INTERNAL REVENUE BULLETIN ON THE INTERNET
You may view the Internal Revenue Bulletin on the Internet at www.irs.gov. Under information for: select Businesses. Under
related topics, select More Topics. Then select Internal Revenue Bulletins.
INTERNAL REVENUE BULLETINS ON CD-ROM
Internal Revenue Bulletins are available annually as part ofPublication 1796 (Tax Products CD-ROM). The CD-ROM can be
purchased from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders (discount for online orders)
or by calling 1-877-233-6767. The first release is available in mid-December and the final release is available in late January.
HOW TO ORDER
Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,
detach entire page, and mail to the Superintendent of Documents, P.O. Box 371954, Pittsburgh PA, 15250–7954. Please allow two to
six weeks, plus mailing time, for delivery.
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 e-mail us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the IRS Bulletin Unit, SE:W:CAR:MP:T:T:SP, Washington, DC 20224
Internal Revenue Service
W
ashington,DC20224
Official Business
Penalty for Private Use, $300