Internal Revenue Bulletin 2010-34 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 201
0-34
August 23, 2010
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.
EMPLOYEE PLANS
Notice 2010–57, page 267.
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 August 2010;
the 24-month average segment rates; the funding transitional
segment rates applicable for August 2010; and the minimum
present value transitional rates for July 2010.
EXEMPT ORGANIZATIONS
Announcement 2010–49, page 272.
The IRS has revoked its determination that Advanced Debt Man-
agement Solutions, Inc., of Tampa, FL; Aviation Volunteer Fire
Department Engine Company 3, Inc., of Bronx, NY; C.C. Fi-
nancial Health and Life Skills, Inc., of Chesterfield, VA; Con-
sumer Counseling Centers of America of Fort Lauderdale, FL;
Continental Credit Counseling Services, Inc., of North Miami
Beach, FL; Credit Counseling Concepts, Inc., of Indianapolis,
IN; The Credit Counseling Foundation, Inc., of Fort Lauderdale,
FL; Credit Debt Consolidators and Counselors Foundation, Inc.,
of North Bergen, NJ; Debt Reduction Solutions, Inc., of St. Pe-
tersburg, FL; Debticated Consumer Counseling, Inc., of Hunt-
ington, NY; Friends of Child Abuse Prevention of Farmington
Hills, MI; Giving Tree Foundation of Park City, UT; Greater ST.
James Holiness Community Development Corporation of Fre-
mont, OH; Independence Restoration, Inc., of Tampa, FL; Merri-
mac Camping Club of College Park, GA; One World Online Char-
itable Foundation, of Springville, UT; Project Oz Adoption, Inc.,
of Tarboro, NC; Southeastern Anthropological Institute, Inc.,
of Huntsville, AL; Southeastern Kentucky Association of Native
People, Inc., of Corbin, KY; Tricap Academy of Olive Branch,
MS; and Yonkers Alliance for Latino and Immigrant Services,
Inc., of Yonkers, NY, qualify as organizations described in sec-
tions 501(c)(3) and 170(c)(2) of the Code.
ADMINISTRATIVE
Rev. Proc. 2010–28, page 270.
This procedure proposes a safe harbor for contracts with a
maturity date of 100, which are intended to qualify as life in-
surance contracts under section 7702 of the Code and avoid
characterization as a MEC under section 7702A, provided the
contract complies with certain testing methodologies set out
in the revenue procedure. Notice 2009–47 obsoleted.
Finding Lists begin on page ii.

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Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
August 23, 20102010–34 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2010–57
This notice provides guidance as to the
corporate bond weighted average interest
rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code as in ef-
fect for plan years beginning before 2008.
It also provides guidance on the corpo-
rate bond monthly yield curve (and the
corresponding spot segment rates), the
24-month average segment rates, and
the funding transitional segment rates
under § 430(h)(2). In addition, this no-
tice provides guidance as to the interest
rate on 30-year Treasury securities un-
der § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008, the
30-year Treasury weighted average rate
under § 431(c)(6)(E)(ii)(I), and the min-
imum present value segment rates under
§ 417(e)(3)(D) as in effect for plan years
beginning after 2007.
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections412(b)(5)(B)(ii)and
412(l)(7)(C)(i), as amended by the Pen-
sion Funding Equity Act of 2004 and by
the Pension Protection Act of 2006 (PPA),
provide that the interest rates used to cal-
culate current liability and to determine
the required contribution under § 412(l)
for plan years beginning in 2004 through
2007 must be within a permissible range
based on the weighted average of the rates
of interest on amounts invested conser-
vatively in long term investment grade
corporate bonds during the 4-year period
ending on the last day before the beginning
of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–2 C.B. 366.
The composite corporate bond rate for
July 2010 is 5.44 percent. Pursuant to No-
tice 2004–34, the Service has determined
this rate as the average of the monthly
yields for the included corporate bond in-
dices 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%
August20106.28
5.65
6.28
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, 2007–2 C.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, the
24-month average corporate bond segment
rates, and the funding transitional segment
rates used to compute the target normal
cost and the funding target. Pursuant to
Notice 2007–81, the monthly corporate
bond yield curve derived from July 2010
data is in Table I at the end of this notice.
The spot first, second, and third segment
rates for the month of July 2010 are, re-
spectively, 2.06, 5.10, and 6.11. The three
24-month average corporate bond segment
rates applicable for August 2010 under
the election of § 430(h)(2)(G)(iv) are as
follows:
First
Segment
Second
Segment
Third
Segment
3.926.406.61
2010–34 I.R.B.267August 23, 2010

The transitional segment rates under
§ 430(h)(2)(G) applicable for August 2010,
taking into account the corporate bond
weighted average of 6.28 stated above,
are as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20094.716.36
6.50
The transitional rule of § 430(h)(2)(G)
does not apply to plan years starting in
2010. Therefore, for a plan year start-
ingin2010withalookbackmonthtoAu-
gust 2010, the funding segment rates are
the three 24-month average corporate bond
segment rates applicable for August 2010,
listed above without blending for the tran-
sitional period.
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-
bleinterestrateforamonthistheannual
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 Trea-
sury securities for July 2010 is 3.99 per-
cent. The Service has determined this rate
as the average of the daily determinations
of yield on the 30-year Treasury bond ma-
turing in May 2040.
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
Average90%to100%
August20104.333.90
4.55
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 rates are the monthly spot seg-
ment rates 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 July 2010, taking into
account the July 2010 30-year Treasury
rate of 3.99 stated above, are as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20093.224.434.84
20102.834.66
5.26
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.
August 23, 20102682010–34 I.R.B.

Table I
Monthly Yield Curve for July 2010
Derived from July 2010 Data
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.5
0.97
20.55.8040.5
6.14
60.5
6.26
80.5
6.32
1.01.1321.0
5.82
41.0
6.15
61.06.2781.06.33
1.51.3321.55.8341.56.1561.56.2781.56.33
2.0
1.57
22.0
5.85
42.06.1662.06.2782.06.33
2.51.8522.55.8642.5
6.16
62.5
6.27
82.5
6.33
3.0
2.15
23.0
5.87
43.06.1763.06.2783.06.33
3.5
2.46
23.5
5.89
43.5
6.17
63.5
6.28
83.5
6.33
4.02.7624.05.9044.06.1764.06.2884.06.33
4.53.0524.55.9144.56.1864.56.2884.56.33
5.0
3.31
25.0
5.92
45.0
6.18
65.0
6.28
85.0
6.33
5.53.5525.5
5.93
45.5
6.18
65.5
6.28
85.5
6.34
6.03.7626.05.9446.0
6.19
66.06.2886.06.34
6.5
3.96
26.5
5.95
46.5
6.19
66.5
6.29
86.5
6.34
7.04.1427.05.9647.0
6.19
67.0
6.29
87.06.34
7.54.3027.55.9747.56.2067.5
6.29
87.56.34
8.0
4.45
28.05.9848.06.2068.06.2988.06.34
8.54.5828.5
5.99
48.5
6.20
68.5
6.29
88.5
6.34
9.0
4.70
29.0
6.00
49.0
6.21
69.06.2989.0
6.34
9.54.8129.56.0149.56.2169.56.3089.56.34
10.0
4.91
30.06.02
50.0
6.2170.06.30
90.0
6.34
10.55.0030.56.0350.56.2270.56.3090.56.34
11.0
5.08
31.06.03
51.0
6.2271.06.3091.0
6.35
11.55.1631.5
6.04
51.5
6.22
71.5
6.3091.5
6.35
12.0
5.23
32.0
6.0552.0
6.2272.06.30
92.0
6.35
12.5
5.29
32.5
6.06
52.5
6.23
72.5
6.3092.5
6.35
13.0
5.35
33.06.06
53.0
6.2373.06.31
93.0
6.35
13.55.4033.56.0753.56.2373.56.3193.56.35
14.0
5.45
34.06.08
54.0
6.2474.06.3194.0
6.35
14.5
5.49
34.5
6.08
54.5
6.24
74.5
6.3194.5
6.35
15.05.5335.0
6.09
55.0
6.24
75.0
6.3195.0
6.35
15.55.5735.5
6.09
55.5
6.24
75.5
6.3195.5
6.35
16.0
5.60
36.06.10
56.0
6.2476.06.31
96.0
6.35
16.55.6336.56.1056.56.2576.56.3296.56.36
17.0
5.65
37.06.11
57.06.25
77.06.3297.06.36
17.55.6837.5
6.12
57.56.2577.5
6.3297.56.36
18.0
5.70
38.06.12
58.06.25
78.06.32
98.0
6.36
18.55.7338.5
6.13
58.5
6.26
78.5
6.3298.56.36
19.0
5.75
39.0
6.1359.06.26
79.0
6.32
99.0
6.36
19.55.7739.56.1459.56.2679.56.3299.56.36
20.0
5.78
40.06.1460.06.2680.06.32100.06.36
2010–34 I.R.B.269August 23, 2010

Section 7702.—Life
Insurance Contract Defined
(Also§7702A.)
Rev. Proc. 2010–28
SECTION 1. PURPOSE
This revenue procedure provides a
safe harbor concerning the application
of §§ 7702 and 7702A of the Internal
Revenue Code to life insurance contracts
that (1) have mortality guarantees based
upon the 2001 Commissioners’ Standard
Ordinary Mortality Tables (“2001 CSO ta-
bles”), and (2) may continue in force after
the day on which the insured individual
(“the insured”) attains age 100. Notice
2009–47, 2009–24 I.R.B. 1083, is obso-
leted.
SECTION 2. BACKGROUND
.01 Section 7702 of the Code defines
the term “life insurance contract” for pur-
poses of the Code. Section 7702(a) pro-
vides that a “life insurance contract” is any
contract that is a life insurance contract un-
der the applicable law, but only if such con-
tract either (1) meets the cash value ac-
cumulation test of § 7702(b), or (2) both
meets the guideline premium requirements
of § 7702(c) and falls within the cash value
corridor of § 7702(d). Section 7702 was
added to the Code by the Deficit Reduction
Act of 1984, P.L. 98–369 (the 1984 Act).
.02 A contract meets the cash value ac-
cumulation test of § 7702(b) if, by the
terms of the contract, the cash surrender
value of the contract may not at any time
exceed the net single premium that would
have to be paid at that time to fund future
benefits under the contract.
.03 A contract meets the guideline pre-
mium requirements of § 7702(c) if the sum
of the premiums paid under the contract
does not at any time exceed the guideline
premium limitation as of that time. The
guideline premium limitation as of any
date is the greater of the guideline single
premium, or the sum of the guideline level
premiums to that date. The guideline sin-
gle premium is the premium that would
be required on the date the contract is is-
sued to fund the future benefits under the
contract. The guideline level premium is
the level annual premium, computed on the
same basis as the guideline single premium
but with a lower interest rate, that would be
required on the date the contract is issued
to fund the future benefits under the con-
tract.
.04 A contract falls within the cash
value corridor of § 7702(d) if the death
benefit under the contract at any time is
not less than the applicable percentage of
the cash surrender value, as determined
under the table set forth in § 7702(d)(2).
Under that table, the applicable percentage
for an insured with an attained age of 95
is 100 percent.
.05 Section 7702(e) provides compu-
tational rules that must be used for pur-
poses of § 7702, other than for purposes of
applying the cash value corridor. In par-
ticular, under § 7702(e)(1)(B) the matu-
rity date (including the date on which any
death benefit is payable) under a contract
is deemed to be no earlier than the day on
which the insured attains age 95, and no
later than the day on which the insured at-
tains age 100. Section 1.7702–2 of the In-
come Tax Regulations provides guidance
on determining the attained age of the in-
sured for this purpose.
.06 Section 7702A(a) provides that a
life insurance contract is a modified en-
dowment contract (MEC) if the contract
is entered into on or after June 21, 1988,
and fails to meet the 7-pay test, or is re-
ceived in exchange for a contract which
is a MEC. A contract fails to meet the
7-pay test if the accumulated amount paid
under the contract at any time during the
first 7 contract years exceeds the sum of
the net level premiums that would have
to be paid on or before such time if the
contract were to provide for paid-up future
benefits (including death benefits) after the
payment of 7 level annual premiums. Un-
der § 7702A(c)(1)(B), the determination of
the 7 level annual premiums generally is
made by applying the computational rules
of § 7702(e), including the rule requiring
a deemed maturity date no earlier than the
day on which the insured attains age 95 and
no later than the day on which the insured
attains age 100.
.07 The 2001 CSO tables became the
prevailing commissioners’ standard tables
within the meaning of § 807(d)(5) dur-
ing calendar year 2004, and have been
adopted by all 50 states and the District
of Columbia. For tax purposes, the 2001
CSO tables generally must be used for pur-
poses of applying the reasonable mortality
charge requirements of § 7702(c)(3)(B)(i)
with regard to contracts issued af-
ter December 31, 2008.SeeNotice
2006–95, 2006–2 C.B. 848,modifying
and supersedingNotice 2004–61, 2004–2
C.B. 596,supplementingNotice 88–128,
88–2 C.B. 540.
.08 Unlike the 1958 Commission-
ers Standard Ordinary Mortality Tables
(“1958 CSO tables”) and the 1980 Com-
missioners’ Standard Ordinary Mortality
Tables (“1980 CSO tables”), the 2001 CSO
tables extend to age 121. As a result, an
increasing number of issuers now develop
contracts with maturity dates beyond age
100, even though the qualification of a
contract as a life insurance contract (and
as a MEC) is tested using computational
rules that deem the contract to mature be-
tween the day on which the insured attains
age 95 and the day on which the insured
attains age 100.
.09 The 2001 CSO Maturity Age Task
Force of the Taxation Section of the So-
ciety of Actuaries (“Task Force”) recom-
mended a series of computational rules
for compliance with the requirements of
§§ 7702 and 7702A in a manner that is
actuarially sound in the case of contracts
that do not provide for actual maturity be-
fore age 100.See 2001 CSO Implementa-
tion Under IRC Sections 7702 and 7702A,
2 Taxing Times 23 (May 2006).
.10 Notice 2009–47, 2009–24 I.R.B.
1083, proposed a safe harbor drawn from
the recommendations of the Task Force,
with modifications. Specifically, the no-
tice addressed the application §§ 7702
and 7702A to a contract that has mortality
guarantees based on the 2001 CSO tables
and that may continue in force after the
day on which the insured attains age 100.
The notice requested comments on the
proposed safe harbor and on other issues,
including the applicability of pre–1984
Act case law for purposes of defining a life
insurance contract, and the applicability
of the doctrine of constructive receipt to a
contract that, by its terms, matures while
the insured is still alive.
.11 Treasury and the Service have de-
termined that it is in the interest of sound
tax administration to adopt the safe har-
bor that was proposed in Notice 2009–47,
with modifications, in the form of a rev-
enue procedure.See§ 601.601(d)(2)(vi)
August 23, 20102702010–34 I.R.B.

of the Procedure and Administration reg-
ulations. In particular, this revenue proce-
dure removes a proposed requirement that,
in order to qualify for the safe harbor, a
contract must providea death benefit equal
to or greater than 105 percent of the cash
value. This revenue procedure does not
address the other issues on which com-
ments were requested in Notice 2009–47.
SECTION 3. APPLICATION
.01In general. The Service will not
challenge the qualification of a contract
as a life insurance contract under § 7702,
or assert that a contract is a MEC under
§ 7702A, if the contract satisfies the re-
quirements of those provisions using all of
the Age 100 Safe Harbor Testing Method-
ologies of section 3.02 of this revenue pro-
cedure.
.02Age 100 Safe Harbor Testing
Methodologies. The Age 100 Safe Harbor
Testing Methodologies are as follows:
(a) All determinations under §§ 7702
and 7702A (other than the cash value cor-
ridor) assume that the contract will mature
by the day on which the insured attains
age 100, notwithstanding that the contract
specifies a later maturity date (such as by
reason of using the 2001 CSO mortality ta-
bles).
(b) The net single premium determined
for purposes of the cash value accumu-
lation test under § 7702(b), and the nec-
essary premiums determined for purposes
of § 7702A(c)(3)(B)(i), assume an endow-
ment on the day on which the insured at-
tains age 100.
(c) The guideline level premium deter-
mined under § 7702(c)(4) assumes pre-
mium payments through the day on which
the insured attains age 99.
(d) Under § 7702(c)(2)(B), the guide-
line level premiums accumulate through a
date no earlier than the day on which the
insured attains age 95 and no later than
the day on which the insured attains age
99. Thereafter, premium payments are al-
lowed and are tested against the guide-
line premium limitation, but in determin-
ing the guideline premium limitation the
sum of the guideline level premiums does
not change after the day on which the in-
sured attains age 100.
(e) In the case of a contract issued or
materially changed within fewer than 7
years of the day on which the insured at-
tains age 100, the net level premium under
§ 7702A(b) is computed assuming level
annual premium payments over the num-
ber of years between the date on which
the contract is issued or materially changed
and the date on which the insured attains
age 100.
(f) In the case of a contract issued or ma-
terially changed within fewer than 7 years
of the day on which the insured attains age
100, the sum of the net level premiums in-
creases until the day on which the insured
attains age 100. Thereafter, the sum of
the net level premiums does not increase,
but premium payments are allowed and are
tested against this limit for the remainder
of the 7-year period.
(g) In the case of a contract that (i) is not
subject to § 7702A(c)(6) and (ii) is issued
or materially changed within fewer than 7
years of the day on which the insured at-
tains age 100 and thereafter has a reduction
in benefits, the reduction in benefits rule
of § 7702A(c)(2) applies for 7 years from
thedateofissueorthedateofthemate-
rial change. In the case of a contract that is
subject to § 7702A(c)(6) (generally, a con-
tract with more than one insured), the rule
of § 7702A(c)(6) concerning reductions in
benefits applies as long as the contract re-
mains in force whether or not the contract
is issued or materially changed fewer than
7 years before the day on which the insured
attains age 100.
(h) A change in benefits under (or
in other terms of) a life insurance con-
tract that occurs on or after the day on
which the insured attains age 100 is not
treated as a material change for pur-
poses of § 7702A(c)(3) or as an adjust-
ment event for purposes of § 7702(f)(7).
Thus, necessary premium testing under
§ 7702A(c)(3)(B)(i) ceases on the day on
which the insured attains age 100.
.03No inference.Noadverseinference
should be drawn with respect to the qual-
ification of a contract as a life insurance
contract under § 7702, or its status as not a
MEC under § 7702A, merely by reason of
a failure to satisfy all of the requirements
of this section 3. Furthermore, this revenue
procedure neither answers nor comments
on any issue raised in Notice 2009–47 that
is not specifically covered by the safe har-
bor in this revenue procedure.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Notice 2009–47 is obsoleted.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective Au-
gust 23, 2010.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Christine K. Lane of the
Office of Associate Chief Counsel (Finan-
cial Institutions & Products). For further
information regarding this revenue proce-
dure, contact Christine K. Lane at (202)
622–4653 (not a toll-free call).
2010–34 I.R.B.271August 23, 2010

Part IV. Items o
fGeneralInterest
Deletions Fro
m Cumulative
List of Organi
zations
Contribution
stoWhich
are Deductib
le Under Section
170 of the Cod
e
Announcemen
t 2010–49
The Internal Re
venue Service has re-
voked its deter
mination that the organi-
zations liste
d below qualify as organiza-
tions describ
ed in sections 501(c)(3) and
170(c)(2)oft
he Internal Revenue Code of
1986.
Generally, th
e Service will not disallow
deductions f
or contributions made to a
listed organ
ization on or before the date
of announcem
ent in the Internal Revenue
Bulletin tha
t an organization no longer
qualifies.
However, the Service is not
precluded f
rom disallowing a deduction
for any cont
ributions made after an or-
ganization
ceases to qualify under section
170(c)(2) i
f the organization has not timely
filed a suit
for declaratory judgment under
section 74
28 and if the contributor (1) had
knowledge
of the revocation of the ruling
or determi
nation letter, (2) was aware that
such revoc
ation was imminent, or (3) was
in part re
sponsible for or was aware of the
activiti
es or omissions of the organization
that brou
ght about this revocation.
If on the o
ther hand a suit for declara-
tory judg
ment has been timely filed, con-
tributio
ns from individuals and organiza-
tions describ
ed in section 170(c)(2) that
are otherwise
allowable will continue to
be deductible
. Protection under section
7428(c) would
begin on August 23, 2010,
and would end o
n the date the court first
determines t
hat the organization is not de-
scribedinse
ction 170(c)(2) as more partic-
ularly set fo
rthinsection7428(c)(1). For
individual c
ontributors, the maximum de-
duction pro
tected is $1,000, with a hus-
band and wif
e treated as one contributor.
This benefi
t is not extended to any indi-
vidual, in w
hole or in part, for the acts or
omissions
of the organization that were the
basis for r
evocation.
Advanced D
ebt Management Solutions,
Inc.
Tampa, FL
Aviation V
olunteer Fire Department
Engine Com
pany 3, Inc.
Bronx, NY
C. C. Finan
cial Health and Life Skills, Inc.
Chesterf
ield, VA
Consumer C
ounseling Centers of America
Fort Laud
erdale, FL
Continen
tal Credit Counseling Services,
Inc.
North Mai
mi Beach, FL
Credit Co
unseling Concepts, Inc.
Indianap
olis, IN
The Credi
t Counseling Foundation, Inc.
Fort Laud
erdale, FL
Credit De
bt Consolidators and Counselors
Foundati
on, Inc
North Ber
gen, NJ
Debt Reductio
n Solutions, Inc.
St. Petersbur
g, FL
Debticated Co
nsumer Counseling, Inc.
Huntington, N
Y
Friends of Chi
ld Abuse Prevention
Farmington Hi
lls, MI
Giving Tree Fo
undation
Park City, UT
Greater ST. Ja
mesHolinessCommunity
Development C
orporation
Fremont, OH
Independence
Restoration, Inc.
Tampa, FL
Merrimac Camp
ing Club
College Park
,GA
One World Onli
ne Charitable Foundation
Springville
,UT
Project Oz Ado
ption, Inc
Springville
Tarboro, NC
Southeastern
Anthropological Institute,
Inc.
Huntsville,
AL
Southeaster
n Kentucky Association of
Native Peopl
e, Inc.
Corbin, KY
Tricap Acade
my
Olive Branch
,MS
Yonkers Alli
ance for Latino and
Immigrant Se
rvices, Inc.
Yonkers, NY
August 23, 20102722010–34 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.
2010–34 I.R.B.iAugust 23, 2010

Numerical Finding List
1
Bulletins 2010–27 through 2010–34
Announcements:
2010-43, 2010-27 I.R.B.42
2010-44, 2010-28 I.R.B.54
2010-45, 2010-29 I.R.B.87
2010-46, 2010-29 I.R.B.87
2010-47, 2010-30 I.R.B.173
2010-48, 2010-32 I.R.B.234
2010-49, 2010-34 I.R.B.272
2010-50, 2010-33 I.R.B.260
2010-51, 2010-33 I.R.B.261
Notices:
2010-48, 2010-27 I.R.B.9
2010-49, 2010-27 I.R.B.10
2010-50, 2010-27 I.R.B.12
2010-51, 2010-29 I.R.B.83
2010-52, 2010-30 I.R.B.88
2010-53, 2010-31 I.R.B.182
2010-55, 2010-33 I.R.B.253
2010-56, 2010-33 I.R.B.254
2010-57, 2010-34 I.R.B.267
Proposed Regulations:
REG-139343-08, 2010-33 I.R.B.256
REG-151605-09, 2010-31 I.R.B.184
REG-112841-10, 2010-27 I.R.B.41
REG-118412-10, 2010-29 I.R.B.85
REG-120399-10, 2010-32 I.R.B.239
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
2010-27, 2010-31 I.R.B.183
2010-28, 2010-34 I.R.B.270
Revenue Rulings:
2010-18, 2010-27 I.R.B.1
2010-19, 2010-31 I.R.B.174
Tax Conventions:
2010-48, 2010-32 I.R.B.234
Treasury Decisions:
9486, 2010-27 I.R.B.3
9487, 2010-28 I.R.B.48
9488, 2010-28 I.R.B.51
9489, 2010-29 I.R.B.55
9490, 2010-31 I.R.B.176
9491, 2010-32 I.R.B.186
9492, 2010-33 I.R.B.242
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin
2010–26, dated June 28, 2010.
August 23, 2010ii2010–34 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–34
Notices:
2003-19
Revoked by
Notice 2010-53, 2010-31 I.R.B.182
2009-47
Obsoleted by
Rev. Proc. 2010-28, 2010-34 I.R.B.270
Revenue Procedures:
81-18
Obsoleted by
Rev. Proc. 2010-27, 2010-31 I.R.B.183
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
2009-18
Obsoleted in part by
Rev. Proc. 2010-25, 2010-27 I.R.B.16
2009-30
Superseded by
Rev. Proc. 2010-26, 2010-30 I.R.B.91
Treasury Decisions:
9487
Corrected by
Ann. 2010-50, 2010-33 I.R.B.260
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
2010–34 I.R.B.iiiAugust 23, 2010

August 23, 20102010–34 I.R.B.

2010–34 I.R.B.August 23, 2010

August 23, 20102010–34 I.R.B.

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