Internal Revenue Bulletin 2011-8 (PDF rendition): IRS Announcements

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Bulletin No. 201
1-8
February 22, 201
1
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. 9513, page 501.
Final regulations under section 1001 of the Code clarify the ex-
tent to which the deterioration in an issuer’s financial condition
is taken into account to determine whether a modified debt in-
strument will be recharacterized as an instrument that is not
debt.
REG–131151–10, page 519.
Proposed regulations under section 7623(a) of the Code relate
to the payment of rewards and awards under section 7623(b).
REG–131947–10, page 521.
Proposed regulations under section 1273 of the Code clarify
the circumstances in which property is traded on an established
market (that is, publicly traded) for purposes of determining the
issue price of a debt instrument. A public hearing is scheduled
for April 13, 2011.
REG–146097–09, page 516.
Proposed regulations under section 6049 of the Code extend
the annual information reporting requirement with respect to
bank deposit interest to all nonresident alien individuals who
are residents of any foreign country. These proposed regu-
lations withdraw the 2002 proposed regulations which would
require reporting only for nonresident aliens that are residents
of Canada. A public hearing is scheduled for April 28, 2011.
Notice 2011–8, page 503.
This notice provides adjusted limitations on housing expenses
for tax year 2011 for purposes of section 911 of the Code.
Notices 2006–87, 2007–25, 2007–77, 2008–107, and
2010–27 superseded.
EXEMPT ORGANIZATIONS
Announcement 2011–13, page 525.
A list is provided of organizations now classified as private foun-
dations.
Announcement 2011–15, page 526.
The IRS has revoked its determination that Acclimation Incor-
porated of Stockton, CA; At Your Service: Prestigious In-Home
Care, Inc., of San Antonio, TX; Civil Liberty and Indigent Parents
Institution and Charity of Adams Run, SC; Debt Serve, Inc., of
Fort Lauderdale, FL; and International Fund for Protection of
Victims of Crimes, Inc., of New York, NY, qualify as organi-
zations described in sections 501(c)(3) and 170(c)(2) of the
Code.
ESTATE TAX
REG–131151–10, page 519.
Proposed regulations under section 7623(a) of the Code relate
to the payment of rewards and awards under section 7623(b).
GIFT TAX
REG–131151–10, page 519.
Proposed regulations under section 7623(a) of the Code relate
to the payment of rewards and awards under section 7623(b).
(Continued on the next page)
Finding Lists begin on page ii.

EMPLOYMENT TAX
REG–131151–10, page 519.
Proposed regulations under section 7623(a) of the Code relate
to the payment of rewards and awards under section 7623(b).
EXCISE TAX
REG–131151–10, page 519.
Proposed regulations under section 7623(a) of the Code relate
to the payment of rewards and awards under section 7623(b).
ADMINISTRATIVE
Notice 2011–12, page 514.
This notice provides that the procedure for determining the
amount of income tax withholding on wages of nonresident
alien employees changes for wages paid after December 31,
2010.
February 22, 20112011–8 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th 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.
2011–8 I.R.B.February 22, 2011

February 22, 20112011–8 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 1001.
—Determi-
nation of Amou
nt of and
Recognition o
fGainorLoss
26 CFR 1.1001–
3: Modifications of debt instruments.
T.D. 9513
DEPARTMENT O
FTHE
TREASURY
Internal Rev
enue Service
26 CFR Part 1
Modificati
ons of Debt
Instrumen
ts
AGENCY: In
ternal Revenue Service
(IRS), Tre
asury.
ACTION: Fi
nal regulation.
SUMMARY: T
his document contains fi-
nal regula
tions relating to the modification
of debt ins
truments. The regulations clar-
ify the ext
ent to which the deterioration
in the fin
ancial condition of the issuer is
taken int
o account to determine whether a
modified
debt instrument will be recharac-
terized a
s an instrument or property right
that is n
ot debt. The regulations provide
needed g
uidance to issuers and holders of
debt ins
truments.
DATES:E
ffective Date:These regulations
are effe
ctive on January 7, 2011.
Applica
bility Date:For dates of appli-
cabilit
y, see §1.1001–3(h).
FOR FURT
HER INFORMATION
CONTACT
: Diana Imholtz at (202)
622–39
20 (not a toll-free number).
SUPPLE
MENTARY INFORMATION:
Backgr
ound
This do
cument contains amendments to
26 CFR p
art1.OnJune4,2010,anoticeof
propos
ed rulemaking (REG–106750–10,
2010–2
5 I.R.B. 765) was published in
theFed
eral Register(75 FR 31736) that
propos
ed amendments to §1.1001–3 to
clari
fy the circumstances in which the
credi
t quality of the issuer should be con-
sider
ed in determining the nature of the
instrument re
sulting from an alteration or
modification
of a debt instrument. Be-
cause no reque
sts to speak were submitted
by August 11,
2010, no public hearing
was held. One
written comment was
received in r
esponse to the notice of pro-
posed rulema
king. After consideration of
this commen
t, the proposed regulations
are adopted
as revised by this Treasury
decision. T
he revisions are discussed in
this preamb
le.
Explanatio
n and Summary of
Comments
The only comm
ent received on the pro-
posed regul
ations requested that the regu-
lations cla
rify that §1.1001–3 applies not
only to dete
rmine whether an exchange of
the origina
l debt instrument for a modified
instrumen
t has occurred but also to classify
the modifi
ed instrument resulting from the
exchange.
The IRS and the Treasury De-
partment i
ntend that Federal income tax
principle
s be used to determine the clas-
sificati
on of a modified instrument result-
ing from a
n exchange except as specif-
ically pr
ovided in §1.1001–3(f)(7). To
avoid dou
bt on the operation of the rules
in the pro
posed regulations, the final regu-
lations
add language to the general rule of
§1.1001
–3(b) to make clear that the rules
provide
d in §1.1001–3(f)(7) apply to de-
termine
whether the modified instrument
receive
dinanexchangewillbeclassified
as debt
for Federal income tax purposes.
Thus, u
nless there is a substitution of a
new obl
igor or the addition or deletion of a
co-obl
igor, all relevant factors (for exam-
ple, cr
editor rights or subordination) other
than a
ny deterioration in the financial con-
ditio
n of the issuer are taken into account
in det
ermining whether a modified instru-
ment i
s properly classified as debt for Fed-
eral i
ncome tax purposes.
Effec
tive/Applicability Date
The reg
ulations apply to alterations of
the ter
ms of a debt instrument on or after
Janua
ry 7, 2011. A taxpayer, however,
may re
ly on §1.1001–3(f)(7) for alterations
of the
terms of a debt instrument occurring
befor
e that date.
Special Analy
ses
It has been determined that this Trea-
sury decision is not asignificant 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, and because
the regulation does not impose a collection
of information on small entities, the Regu-
latory Flexibility Act (5 U.S.C. chapter 6)
does not apply. Pursuant to section 7805(f)
of the Internal Revenue Code, the notice of
proposed rulemaking preceding this regu-
lation was submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on its impact on
small business.
Drafting Information
The principal author of these final reg-
ulations is Diana Imholtz, Office of Asso-
ciate Chief Counsel (Financial Institutions
& Products), IRS. However, other person-
nel from the IRS and the Treasury Depart-
ment participated in their development.
*****
Adoption of the 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 1.1001–3 is amended
by:
1. Revising paragraphs (b), (c)(2)(ii),
(e)(5)(i) and (h).
2. Adding paragraph (f)(7).
The revisions and addition read as fol-
lows:
§1.1001–3 Modifications of debt
instruments.
****
*
2011–8 I.R.B.501February 22, 2011

(b)General rule. For purposes of
§1.1001–1(a), a significant modification
of a debt instrument, within the meaning
of this section, results in an exchange of
the original debt instrument for a modified
instrument that differs materially either
in kind or in extent. A modification that
is not a significant modification is not an
exchange for purposes of §1.1001–1(a).
Paragraphs (c) and (d) of this section de-
fine the termmodificationand contain
examples illustrating the application of
the rule. Paragraphs (e) and (f) of this sec-
tion provide rules for determining when
a modification is a significant modifica-
tion. Paragraph (f) of this section also
provides rules for determining whether
the modified instrument received in an ex-
change will be classified as an instrument
or property right that is not debt for federal
income tax purposes. Paragraph (g) of this
section contains examples illustrating the
application of the rules in paragraphs (e)
and (f) of this section.
(c) * * *
(2) * * *
(ii)Property that is not debt. An alter-
ation that results in an instrument or prop-
erty right that is not debt for Federal in-
come tax purposes is a modification unless
the alteration occurs pursuant to a holder’s
option under the terms of the instrument to
convert the instrument into equity of the is-
suer (notwithstandingparagraph (c)(2)(iii)
of this section). The rules of paragraph
(f)(7) of this section apply to determine
whether an alteration or modification re-
sults in an instrument or property right that
is not debt.
*****
(e) * * *
(5)Changes in the nature of a debt in-
strument—(i)Property that is not debt.A
modification of a debt instrument that re-
sults in an instrument or property right that
is not debt for Federal income tax purposes
is a significant modification. The rules of
paragraph (f)(7) of this section apply to de-
termine whether a modification results in
an instrument or property right that is not
debt.
*****
(f) * * *
(7)Rules for determining whether an
alteration or modification results in an
instrument or property right that is not
debt—(i)In general. Except as provided
in paragraph (f)(7)(ii) of this section, the
determination of whether an instrument re-
sulting from an alteration or modification
of a debt instrument will be recharacter-
ized as an instrumentor property right
that is not debt for Federal income tax
purposes shall take into account all of the
factors relevant to such a determination.
(ii)Financial condition of the
obligor—(A)Deterioration in financial
condition of the obligor generally disre-
garded. Except as provided in paragraph
(f)(7)(ii)(B) of this section, in making a
determination as to whether an instrument
resulting from an alteration or modifica-
tion of a debt instrument will be recharac-
terized as an instrument or property right
that is not debt, any deterioration in the
financial condition of the obligor between
the issue date of the debt instrument and
the date of the alteration or modification
(as it relates to the obligor’s ability to
repay the debt instrument) is not taken
into account. For example, any decrease
in the fair market value of a debt instru-
ment (whether or not the debt instrument
is publicly traded) between the issue date
of the debt instrument and the date of the
alteration or modification is not taken into
account to the extent that the decrease
in fair market value is attributable to the
deterioration in the financial condition of
the obligor and not to a modification of
the terms of the instrument.
(B)Substitution of a new obligor; ad-
dition or deletion of co-obligor.Ifthereis
a substitution of a new obligor or the ad-
dition or deletion of a co-obligor, the rules
in paragraph (f)(7)(ii)(A) of this section do
not apply.
*****
(h)Effective/applicability date—(1)In
general. Except as otherwise provided in
paragraph (h)(2) of this section, this sec-
tion applies to alterations of the terms of a
debt instrument on or after September 24,
1996. Taxpayers, however, may rely on
this section for alterations of the terms of
a debt instrument after December 2, 1992,
and before September 24, 1996.
(2)Exception. Paragraph (f)(7) of this
section applies to an alteration of the terms
of a debt instrument on or after January 7,
2011. A taxpayer, however, may rely on
paragraph (f)(7) of this section for alter-
ations of the terms of a debt instrument oc-
curring before that date.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved December 21, 2010.
Michael Mundaca,
Assistant Secretary of
theTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on January 6,
2011, 8:45 a.m., and published in the issue of the Federal
Register for January 7, 2011, 76 F.R. 1063)
February 22, 20115022011–8 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Determination of Housing Cost
Amounts Eligible for Exclusion
or Deduction for 2011
Notice 2011–8
SECTION 1. PURPOSE
This notice provides adjustments to the
limitation on housing expenses for pur-
poses of section 911 of the Internal Rev-
enue Code (Code) for specific locations for
2011. These adjustments are made on the
basis of geographic differences in housing
costs relative to housing costs in the United
States.
SECTION 2. BACKGROUND
Section 911(a) of the Code allows a
qualified individual to elect to exclude
from gross income the foreign earned in-
come and housing cost amount of such
individual. Section 911(c)(1) defines the
term “housing cost amount” as an amount
equal to the excess of (A) the housing
expenses of an individual for the taxable
year to the extent such expenses do not
exceed the amount determined under sec-
tion 911(c)(2), over (B) 16 percent of the
exclusion amount (computed on a daily
basis) in effect under section 911(b)(2)(D)
for the calendar year in which such taxable
year begins ($254.52 per day for 2011, or
$92,900 for the full year), multiplied by
the number of days of that taxable year
within the applicable period described in
section 911(d)(1). The applicable period
is the period during which the individual
meets the tax home requirement of section
911(d)(1) and either thebona fideresi-
dence requirement of section 911(d)(1)(A)
or the physical presence requirement of
section 911(d)(1)(B). Assuming that the
entire taxable year ofa qualified individ-
ual is within the applicable period, the
section 911(c)(1)(B) amount for 2011 is
$14,864 ($92,900 x .16).
Section 911(c)(2)(A) of the Code lim-
its the housing expenses taken into account
in section 911(c)(1)(A) to an amount equal
to (i) 30 percent (adjusted as may be pro-
vided under the Secretary’s authority un-
der section 911(c)(2)(B)) of the amount in
effect under section 911(b)(2)(D) for the
calendar year in which the taxable year of
the individual begins, multiplied by (ii) the
number of days of that taxable year within
the applicable period described in section
911(d)(1). Thus, under this general limi-
tation, a qualified individual whose entire
taxable year is within the applicable period
is limited to maximum housing expenses
of $27,870 ($92,900 x .30) in 2011.
Section 911(c)(2)(B) of the Code au-
thorizes the Secretary to issue regulations
or other guidance to adjust the percentage
under section 911(c)(2)(A)(i) based on
geographic differences in housing costs
relative to housing costs in the United
States. Pursuant to this authority, the
Internal Revenue Service (IRS) and the
Treasury Department published Notice
2006–87, 2006–2 C.B. 766, and Notice
2007–25, 2007–1 C.B. 760, for 2006, No-
tice 2007–77, 2007–2 C.B. 735, for 2007,
Notice 2008–107, 2008–2 C.B. 1266, for
2008 and 2009, and Notice 2010–27, for
2009 and 2010 to provide adjustments
to the limitation on housing expenses for
qualified individuals incurring housing
expenses in countries with high hous-
ing costs relative to housing costs in the
United States.
SECTION 3. TABLE OF ADJUSTED
LIMITATIONS FOR 2011
The following table provides adjusted
limitations on housing expenses (in lieu
of the otherwise applicable limitation of
$27,870) for 2011.
CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
AngolaLuanda230.1484,000
ArgentinaBuenos Aires
154.7956,500
AustraliaAdelaide89.8632,800
AustraliaBrisbane88.7732,400
AustraliaCanberra78.08
28,500
AustraliaGold Coast88.7732,400
AustraliaMelbourne113.70
41,500
AustraliaOakey88.7732,400
AustraliaPerth121.6444,400
AustraliaSydney89.8132,782
AustraliaToowoomba88.7732,400
AustriaVienna96.99
35,400
Bahamas, TheNassau136.1649,700
BahrainAll cities in Bahrain
120.55
44,000
2011–8 I.R.B.503February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
BarbadosAll cities in Barbados103.2937,700
BelgiumAntwerp98.9036,100
BelgiumBrussels
134.52
49,100
BelgiumGosselies121.92
44,500
BelgiumHoogbuul98.9036,100
BelgiumMons121.92
44,500
BelgiumSHAPE/Chievres121.92
44,500
BermudaBermuda
246.58
90,000
Bosnia-HerzegovinaSarajevo83.8430,600
BrazilBrasilia
152.3355,600
BrazilRio de Janeiro96.16
35,100
BrazilSao Paulo127.40
46,500
CanadaCalgary116.44
42,500
CanadaDartmouth97.26
35,500
CanadaEdmonton101.1036,900
CanadaHalifax97.26
35,500
CanadaLondon, Ontario86.30
31,500
CanadaMontreal164.6660,100
CanadaOttawa
143.5652,400
CanadaQuebec77.2628,200
CanadaToronto140.00
51,100
CanadaVancouver133.9748,900
CanadaVictoria
95.34
34,800
CanadaWinnipeg93.9734,300
Cayman IslandsGrand Cayman
131.51
48,000
ChileSantiago
151.5155,300
ChinaBeijing
195.07
71,200
ChinaHong Kong
313.15
114,300
ChinaShanghai
156.1757,001
ColombiaBogota148.22
54,100
ColombiaAll cities other than Bogota
and Barranquilla
135.34
49,400
Costa RicaSan Jose83.2930,400
DenmarkCopenhagen119.7443,704
Dominican RepublicSanto Domingo124.66
45,500
EcuadorGuayaquil84.3830,800
EcuadorQuito88.7732,400
EstoniaTallinn127.6746,600
FranceGarches232.3384,800
February 22, 20115042011–8 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
FranceLe Havre96.16
35,100
FranceLyon
134.25
49,000
FranceMarseille
125.2145,700
FranceMontpellier
107.95
39,400
FranceParis232.3384,800
FranceSevres232.3384,800
FranceSuresnes232.3384,800
FranceVersailles232.3384,800
GermanyBabenhausen113.9741,600
GermanyBad Aibling97.26
35,500
GermanyBad Nauheim91.2333,300
GermanyBaumholder109.0439,800
GermanyBerlin139.18
50,800
GermanyBirkenfeld109.0439,800
GermanyBoeblingen138.08
50,400
GermanyBonn
115.07
42,000
GermanyButzbach89.04
32,500
GermanyCologne
153.9756,200
GermanyDarmstadt113.9741,600
GermanyFrankfurt am Main118.9043,400
GermanyFriedberg91.2333,300
GermanyGarmisch-Partenkirchen103.8437,900
GermanyGelnhausen
143.5652,400
GermanyGermersheim86.0331,400
GermanyGiebelstadt98.36
35,900
GermanyGiessen98.6336,000
GermanyGrafenwoehr
112.05
40,900
GermanyHanau
143.5652,400
GermanyHannover84.9331,000
GermanyHeidelberg
107.95
39,400
GermanyIdar-Oberstein109.0439,800
GermanyIngolstadt
160.5558,600
GermanyKaiserslautern, Landkreis
139.4550,900
GermanyKitzingen98.36
35,900
GermanyLeimen
107.95
39,400
GermanyLudwigsburg138.08
50,400
GermanyMainz
153.9756,200
GermanyMannheim
107.95
39,400
2011–8 I.R.B.505February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GermanyMunich
160.5558,600
GermanyNellingen138.08
50,400
GermanyNeubruecke109.0439,800
GermanyOber Ramstadt113.9741,600
GermanyOberammergau103.8437,900
GermanyPirmasens
139.4550,900
GermanyRheinau
107.95
39,400
GermanySchwetzingen
107.95
39,400
GermanySeckenheim
107.95
39,400
GermanySembach
139.4550,900
GermanyStuttgart138.08
50,400
GermanyVilseck
112.05
40,900
GermanyWahn
115.07
42,000
GermanyWertheim98.36
35,900
GermanyWiesbaden
153.9756,200
GermanyWuerzburg98.36
35,900
GermanyZweibruecken
139.4550,900
February 22, 20115062011–8 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GermanyAll cities other than Augsburg,
Babenhausen, Bad Aibling,
Bad Kreuznach, Bad
Nauheim, Baumholder,
Berchtesgaden, Berlin,
Birkenfeld, Boeblingen, Bonn,
Bremen, Bremerhaven,
Butzbach, Cologne,
Darmstadt, Delmenhorst,
Duesseldorf, Erlangen,
Flensburg, Frankfurt am Main,
Friedberg, Fuerth, Garlstedt,
Garmisch-Partenkirchen,
Geilenkirchen, Gelnhausen,
Germersheim, Giebelstadt,
Giessen, Grafenwoehr,
Grefrath, Greven, Gruenstadt,
Hamburg, Hanau, Handorf,
Hannover, Heidelberg,
Heilbronn, Herongen,
Idar-Oberstein, Ingolstadt,
Kaiserslautern, Landkreis,
Kalkar, Karlsruhe, Kerpen,
Kitzingen, Koblenz, Leimen,
Leipzig, Ludwigsburg,
Mainz, Mannheim, Mayen,
Moenchen-Gladbach,
Muenster, Munich,
Nellingen, Neubruecke,
Noervenich, Nuernberg, Ober
Ramstadt, Oberammergau,
Osterholz-Scharmbeck,
Pirmasens, Rheinau,
Rheinberg, Schwabach,
Schwetzingen, Seckenheim,
Sembach, Stuttgart,
Twisteden, Vilseck, Wahn,
Wertheim, Wiesbaden,
Worms, Wuerzburg, Zirndorf,
and Zweibruecken
110.1440,200
GhanaAccra98.6336,000
GreeceArgyroupolis88.7732,400
GreeceAthens113.9741,600
GreeceElefsis113.9741,600
GreeceEllinikon113.9741,600
GreeceMt. Hortiatis88.7732,400
GreeceMt. Parnis113.9741,600
GreeceMt. Pateras113.9741,600
GreeceNea Makri113.9741,600
GreecePerivolaki88.7732,400
2011–8 I.R.B.507February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
GreecePiraeus113.9741,600
GreeceTanagra113.9741,600
GreeceThessaloniki88.7732,400
GuatemalaGuatemala City
112.05
40,900
GuyanaGeorgetown
95.8935,000
Holy See, TheHoly See, The
154.7956,500
HungaryBudapest89.04
32,500
HungaryPapá121.92
44,500
IndiaMumbai186.0867,920
IndiaNew Delhi82.88
30,252
IndonesiaJakarta
103.50
37,776
IrelandDublin
134.52
49,100
IrelandShannon Area106.3038,800
IsraelTel Aviv139.18
50,800
ItalyCatania90.4133,000
ItalyGenoa
114.52
41,800
ItalyGioia Tauro
85.48
31,200
ItalyLa Spezia110.6840,400
ItalyLeghorn96.99
35,400
ItalyMilan231.2384,400
ItalyNaples
146.8553,600
ItalyParma
117.53
42,900
ItalyPisa96.99
35,400
ItalyPordenone-Aviano
117.53
42,900
ItalyRome
154.7956,500
ItalySardinia
79.45
29,000
ItalySigonella90.4133,000
ItalyTurin
115.62
42,200
ItalyVicenza118.6343,300
ItalyAll cities other than Avellino,
Brindisi, Catania, Florence,
Gaeta, Genoa, Gioia Tauro,
La Spezia, Leghorn, Milan,
Mount Vergine, Naples,
Nettuno, Parma, Pisa,
Pordenone-Aviano, Rome,
Sardinia, Sigonella, Turin,
Verona, and Vicenza.
92.8833,900
JamaicaKingston112.8841,200
JapanAkashi108.22
39,500
JapanAkizuki
95.34
34,800
February 22, 20115082011–8 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
JapanAtsugi136.7149,900
JapanCamp Zama136.7149,900
JapanChiba-Ken136.7149,900
JapanFussa136.7149,900
JapanGifu
203.56
74,300
JapanGotemba103.2937,700
JapanHaneda136.7149,900
JapanIwakuni97.81
35,700
JapanKanagawa-Ken136.7149,900
JapanKomaki
203.56
74,300
JapanMachidi-Shi136.7149,900
JapanMisawa118.9043,400
JapanNagoya
203.56
74,300
JapanOkinawa Prefecture188.4968,800
JapanOsaka-Kobe248.3990,664
JapanSagamihara136.7149,900
JapanSaitama-Ken136.7149,900
JapanSasebo
112.05
40,900
JapanTachikawa136.7149,900
JapanTokyo324.66
118,500
JapanTokyo-to136.7149,900
JapanYokohama178.36
65,100
JapanYokosuka163.01
59,500
JapanYokota136.7149,900
KazakhstanAlmaty
131.51
48,000
KoreaCamp Carroll80.82
29,500
KoreaCamp Colbern148.49
54,200
KoreaCamp Market148.49
54,200
KoreaCamp Mercer148.49
54,200
KoreaK–16148.49
54,200
KoreaKimhae76.4427,900
KoreaKimpo Airfield148.49
54,200
KoreaMunsan88.2232,200
KoreaOsan AB93.9734,300
KoreaPusan76.4427,900
KoreaPyongtaek89.3232,600
KoreaSeoul148.49
54,200
KoreaSuwon148.49
54,200
2011–8 I.R.B.509February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
KoreaTaegu89.04
32,500
KoreaTongduchon79.1828,900
KoreaUijongbu
85.21
31,100
KoreaWaegwan80.82
29,500
KoreaAll cities other than Ammo
Depot #9, Camp Carroll, Camp
Colbern, Camp Market, Camp
Mercer, Changwon, Chinhae,
Chunchon, K–16, Kimhae,
Kimpo Airfield, Kunsun,
Kwangju, Munsan, Osan AB,
Pusan, Pyongtaek, Seoul,
Suwon, Taegu, Tongduchon,
Uijongbu, and Waegwan
83.0130,300
KuwaitKuwait City176.4464,400
KuwaitAll cities other than Kuwait
City
158.0857,700
LuxembourgLuxembourg
126.85
46,300
MacedoniaSkopje96.99
35,400
MalaysiaKuala Lumpur
126.58
46,200
MalaysiaAll cities other than Kuala
Lumpur
92.3333,700
MaltaAll cities in Malta
131.51
48,000
MexicoMazatlan84.9331,000
MexicoMerida103.8437,900
MexicoMexico City
134.52
49,100
MexicoMonterrey90.9633,200
MexicoAll cities other than
Ciudad Juarez, Cuernavaca,
Guadalajara, Hermosillo,
Matamoros, Mazatlan,
Merida, Metapa, Mexico
City, Monterrey, Nogales,
Nuevo Laredo, Reynosa,
Tapachula, Tijuana, Tuxtla
Gutierrez, and Veracruz
107.95
39,400
MicronesiaPohnpei77.2628,200
MozambiqueMaputo98.6336,000
NamibiaWindhoek
87.95
32,100
NetherlandsAmsterdam144.93
52,900
NetherlandsAruba98.6336,000
NetherlandsBrunssum109.0439,800
NetherlandsEygelshoven109.0439,800
NetherlandsHague, The184.3867,300
February 22, 20115102011–8 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
NetherlandsHeerlen109.0439,800
NetherlandsHoensbroek109.0439,800
NetherlandsHulsberg109.0439,800
NetherlandsKerkrade109.0439,800
NetherlandsLandgraaf109.0439,800
NetherlandsMaastricht109.0439,800
NetherlandsPapendrecht110.96
40,500
NetherlandsRotterdam110.96
40,500
NetherlandsSchaesburg109.0439,800
NetherlandsSchinnen109.0439,800
NetherlandsSchiphol144.93
52,900
NetherlandsYpenburg184.3867,300
NetherlandsAll locations other than
Amsterdam, Aruba,
Brunssum, Coevorden,
Eygelshoven, The Hague,
Heerlen, Hoensbroek,
Hulsberg, Kerkrade,
Landgraaf, Maastricht,
Margraten, Papendrecht,
Rotterdam, Schaesburg,
Schinnen, Schiphol, and
Ypenburg.
111.2340,600
Netherlands AntillesCuracao
125.4845,800
New ZealandAuckland97.81
35,700
New ZealandWellington92.6033,800
NicaraguaManagua87.1231,800
NigeriaAbuja98.6336,000
NorwayOslo
135.89
49,600
NorwayStavanger
115.62
42,200
NorwayAll cities other than Oslo and
Stavanger
103.2937,700
PanamaPanama City97.26
35,500
PhilippinesCavite100.00
36,500
PhilippinesManila100.00
36,500
PhilippinesAll cities other than Cavite
and Manila
76.4427,900
PolandAll cities other than Krakow
and Warsaw
80.55
29,400
PortugalAlverca141.64
51,700
PortugalLisbon141.64
51,700
QatarDoha
99.35
36,264
2011–8 I.R.B.511February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
QatarAll cities other than Doha88.7732,400
RussiaMoscow
295.89
108,000
RussiaSaint Petersburg164.3860,000
RussiaSakhalin Island212.33
77,500
RussiaVladivostok212.33
77,500
RussiaYekaterinburg129.8647,400
RwandaKigali86.30
31,500
Saudi ArabiaJeddah84.0230,667
Saudi ArabiaRiyadh
109.59
40,000
SingaporeSingapore
183.56
67,000
South AfricaPretoria107.6739,300
SpainBarcelona111.2340,600
SpainMadrid188.7768,900
SpainRota
112.05
40,900
SpainValencia108.4939,600
SpainAll cities other than Barcelona,
Madrid, Rota, and Valencia
81.9229,900
SurinameParamaribo90.4133,000
SwitzerlandBern
173.15
63,200
SwitzerlandGeneva238.9087,200
SwitzerlandZurich
107.45
39,219
SwitzerlandAll cities other than Bern,
Geneva, and Zurich
90.1432,900
TaiwanTaipei
126.54
46,188
TanzaniaDar Es Salaam
120.55
44,000
ThailandBangkok161.64
59,000
TurkeyAnkara92.3333,700
TurkeyElmadag92.3333,700
TurkeyIzmir-Cigli
86.58
31,600
TurkeyManzarali92.3333,700
TurkeyYamanlar
86.58
31,600
UkraineKiev197.2672,000
United Arab EmiratesAbu Dhabi136.1349,687
United Arab EmiratesDubai
156.6457,174
United KingdomBasingstoke112.6041,099
United KingdomBath112.3341,000
United KingdomBracknell170.1462,100
United KingdomBristol106.0338,700
United KingdomBrookwood116.44
42,500
February 22, 20115122011–8 I.R.B.

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
United KingdomCambridge117.8143,000
United KingdomCaversham202.1973,800
United KingdomCheltenham143.29
52,300
United KingdomCroughton
117.53
42,900
United KingdomFairford116.9942,700
United KingdomFarnborough149.86
54,700
United KingdomFelixstowe113.4241,400
United KingdomGibraltar122.2444,616
United KingdomHarrogate127.1246,400
United KingdomHigh Wycombe170.1462,100
United KingdomKemble116.9942,700
United KingdomLakenheath146.03
53,300
United KingdomLiverpool106.3038,800
United KingdomLondon228.4983,400
United KingdomLoudwater173.97
63,500
United KingdomMenwith Hill127.1246,400
United KingdomMildenhall146.03
53,300
United KingdomOxfordshire
117.53
42,900
United KingdomPlymouth
117.53
42,900
United KingdomPortsmouth
117.53
42,900
United KingdomReading170.1462,100
United KingdomRochester122.1944,600
United KingdomSouthampton121.1044,200
United KingdomSurrey132.6148,402
United KingdomWaterbeach119.7343,700
United KingdomWiltshire113.9741,600
2011–8 I.R.B.513February 22, 2011

CountryLocation
Limitation on
Housing Expenses
(daily)
Limitation on
Housing Expenses
(full year)
United KingdomAll cities other than
Basingstoke, Bath, Belfast,
Birmingham, Bracknell,
Bristol, Brookwood,
Brough, Bude, Cambridge,
Caversham, Chelmsford,
Cheltenham, Chicksands,
Croughton, Dunstable,
Edinburgh, Edzell, Fairford,
Farnborough, Felixstowe,
Ft. Halstead, Gibraltar,
Glenrothes, Greenham
Common,Harrogate,High
Wycombe, Hythe, Kemble,
Lakenheath, Liverpool,
London, Loudwater, Menwith
Hill, Mildenhall, Nottingham,
Oxfordshire, Plymouth,
Portsmouth, Reading,
Rochester, Southampton,
Surrey, Waterbeach, Welford,
West Byfleet, and Wiltshire
116.44
42,500
VenezuelaCaracas
156.1657,000
VietnamHanoi128.2246,800
VietnamHo Chi Minh City
115.07
42,000
SECTION 4. ELECTION TO APPLY
2011 ADJUSTED LIMITATIONS TO
2010 TAXABLE YEAR
For some locations, the limitation on
housing expenses provided in section 3 of
this notice may be higher than the limita-
tion on housing expenses provided in the
“Table of Adjusted Limitations for 2010”
in Notice 2010–27. A qualified individ-
ual incurring housing expenses in such a
location during 2010 may apply the ad-
justed limitation on housing expenses pro-
videdinsection3ofthisnoticeinlieu
of the amounts provided in the “Table of
Adjusted Limitations for 2010” in Notice
2010–27 (and as set forth in the Instruc-
tions to Form 2555 (2010)).
Treasury and the IRS anticipate that fu-
ture annual notices providing adjustments
to housing expense limitations will make a
similar election available to qualified indi-
viduals that incur housing expenses in the
immediately preceding year. For example,
when adjusted housing expense limitations
for 2012 are issued, it is expected that tax-
payers will be permitted to apply those ad-
justed limitations to the 2011 taxable year.
EFFECT ON OTHER DOCUMENTS
This notice supersedes Notice 2006–87,
2006–2 C.B. 766, Notice 2007–25, 2007–1
C.B. 760, Notice 2007–77, 2007–2 C.B.
735, Notice 2008–107, 2008–2 C.B. 1265,
and Notice 2010–27, 2010–15 I.R.B. 531.
EFFECTIVE DATE
This notice is effective for taxable years
beginning on or after January 1, 2011.
However, as provided in section 4, a tax-
payer may elect to apply the 2011 adjusted
housing limitations contained in section
3 of this notice to his or her taxable year
beginning in 2010.
DRAFTING INFORMATION
The principal author of this notice is
Susan E. Massey of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Ms. Massey at (202) 622–3840 (not a toll-
free call).
Withholding on Wages of
Nonresident Alien Employees
Performing Services Within
the United States
Notice 2011–12
I. PURPOSE
This notice provides that Notice
2009–91, 2009–48 I.R.B. 717, will not
apply to wages paid on or after January 1,
2011.Notice 2009–91 concerned
procedures for determining the amount
of income tax employers must withhold
under section 3402 of the Internal Revenue
Code (Code) from wages paid for services
performed by nonresident alien employees
within the United States.
February 22, 20115142011–8 I.R.B.

II. BACKGROUND
Notice 2009–91 was published to pro-
vide procedures to take account of changes
made in the withholding tables to reflect
the Making Work Pay Credit (section 36A
of the Code). The Making Work Pay
Credit does not apply to taxable years be-
ginning after December 31, 2010. There-
fore, the withholding tables for wages paid
on or after January 1, 2011, will not reflect
the Making Work Pay Credit, and Notice
2009–91 will not apply in determining the
withholding on nonresident aliens.
Notice 1036, Early Release Copies of
the 2011 Percentage Method Tables for In-
come Tax Withholding, explains that em-
ployers should implement the 2011 with-
holding tables as soon as possible, but not
later than January 31, 2011.
III. WITHHOLDING RULES THAT
WILL BE IN EFFECT FOR WAGES
PAID TO NONRESIDENT ALIEN
EMPLOYEES ON OR AFTER
JANUARY 1, 2011
For wages paid on or after January 1,
2011, employers must determine the
amount of income tax to withhold from
wages paid to nonresident alien employees
for services performed within the United
States, using the procedure explained
in Notice 2005–76, 2005–2 C.B. 947,
together with the tables in the revisions of
Publication 15(Circular E), Employer’s
Tax Guide, and Notice 1036 that are in
effect when the wages are paid. This
procedure is explained in Publication 15
and Notice 1036.
IV. EFFECT ON OTHER DOCUMENTS
Notice 2009–91 has no effect for wages
paid on or after January 1, 2011. There-
fore, the modification to Notice 2005–76
made by Notice 2009–91 does not apply
for wages paid on or after January 1, 2011.
Notice 2005–76 continues in effect for
wages paid on or after January 1, 2011.
V. DRAFTING INFORMATION
The principal author of this notice is
A. G. Kelley of the Office of Associate
Chief Counsel (Tax Exempt and Govern-
ment Entities). For further information re-
garding this notice, contact A. G. Kelley at
(202) 622–6040 (not a toll-free call).
2011–8 I.R.B.515February 22, 2011

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking; N
otice of Public
Hearing; and W
ithdrawal
of Previousl
yProposed
Rulemaking
Guidance on R
eporting
Interest Pa
id to Nonresident
Aliens
REG–146097
–09
AGENCY: Int
ernal Revenue Service
(IRS), Trea
sury.
ACTION: Noti
ce of proposed rulemaking;
notice of pub
lic hearing; and withdrawal of
previously
proposed rulemaking.
SUMMARY: Thi
s document contains pro-
posed regul
ations that provide guidance
on the repor
ting requirements for interest
on deposits
maintained at U.S. offices
of certain f
inancial institutions and paid
to nonresid
ent alien individuals. These
proposed r
egulations affect persons mak-
ing paymen
ts of interest with respect to
such depos
its. This document also pro-
vides a not
ice of public hearing on these
proposed r
egulations and withdraws the
notice of
proposed rulemaking published
on August
2, 2002 (REG–133254–02,
2002–2 C.
B. 412 [67 FR 50386]).
DATES: Wr
itten or electronic comments
must be re
ceived by April 7, 2011. Out-
lines of t
opics to be discussed at the pub-
lic heari
ng scheduled for April 27, 2011, at
10 a.m. mu
st be received by April 8, 2011.
The prop
osed rule published on August 2,
2002 is w
ithdrawn as of January 7, 2011.
ADDRESSE
S: Send submissions to:
CC:PA:L
PD:PR(REG–146097–09),
room 520
3, Internal Revenue Service,
PO Box 76
04, Ben Franklin Station,
Washing
ton, DC 20044.Submis-
sions ma
y be hand-delivered Monday
throug
h Friday between the hours of
8a.m. a
nd 4 p.m. to: CC:PA:LPD:PR
(REG–1
46097–09), Courier’s Desk,
Intern
al Revenue Service, 1111
Consti
tution Avenue, NW, Washington,
DC 2022
4 or sent electronically
viath
eFederaleRulemaking
Portal atwww.
regulations.gov(IRS
REG–146097–0
9). The public hearing
will be held in
auditorium of the Internal
Revenue Build
ing, 1111 Constitution
Avenue, NW, Wa
shington, DC.
FOR FURTHER IN
FORMATION
CONTACT: Con
cerning the proposed
regulations
, Kathryn Holman, (202)
622–3840; co
ncerning submissions
of comments,
the hearing, and/or
to be placed
on the building
access list
to attend the hearing,
Richard.A.
Hurst@irscounsel.treas.gov,
(202) 622–7
180 (not toll-free numbers).
Paperwork R
eduction Act
The collect
ions of information con-
tained in t
his notice of proposed rulemak-
ing have be
en submitted to the Office of
Managemen
t and Budget for review in
accordanc
e with the Paperwork Reduc-
tion Act of
1995 (44 U.S.C. 3507(d)).
Comments
on the collections of infor-
mation sh
ould be sent to theOffice of
Manageme
nt and Budget,Attn: Desk
Office fo
r the Department of the Treasury,
Office o
f Information and Regulatory
Affairs
, Washington, DC 20503, with
copies t
otheInternal Revenue Service,
Attn: IR
S Reports Clearance Officer,
SE:W:CA
R:MP:T:T:SP, Washington, DC
20224.
Comments on the collection
of info
rmation should be received by
March 8
, 2011. Comments are specifically
reques
ted concerning:
Whethe
r the proposed collection of in-
format
ion is necessary for the proper per-
forman
ce of the functions of the Internal
Reven
ue Service, including whether the
infor
mation will have practical utility;
The ac
curacy of the estimated burden
assoc
iated with the proposed collection of
infor
mation;
How th
e quality, utility, and clarity of
the in
formation to be collected may be en-
hance
d;
How th
e burden of complying with the
propo
sed collections of information may
be min
imized, including through the appli-
cati
on of automated collection techniques
or ot
her forms of information technology;
and
Estimates of c
apital or start-up costs
and costs of op
eration, maintenance and
purchase of se
rvice to provide information.
The collectio
n of information
in these propo
sed regulations is in
§1.6049–4(b)
(5)(i) and §1.6049–6(e)(4)(i)
and (ii). This
information is required to
determine if
taxpayers have properly re-
ported amoun
ts received as income. The
collection o
f information is mandatory.
The likely re
spondents are businesses and
other for-p
rofit institutions.
Estimated to
tal annual reporting bur-
den: 500 hou
rs.
The estimat
ed annual burden per re-
spondent: 1
5minutes.
Estimated n
umber of respondents:
2,000.
Estimated a
nnual frequency of re-
sponses: An
nually.
An agency ma
y not conduct or sponsor,
and a person
is not required to respond to, a
collection
of information unless it displays
a valid con
trol number assigned by the Of-
fice of Man
agement and Budget.
Books or re
cords relating to a collection
of informa
tion must be retained as long
as their co
ntents may become material in
the admini
stration of any internal revenue
law. Gener
ally, tax returns and tax return
informat
ion are confidential as required by
26 U.S.C.
6103.
SUPPLEME
NTARY INFORMATION:
Backgrou
nd and Explanation of
Provisio
ns
On Januar
y 17, 2001, the IRS and Trea-
sury Depa
rtment published a notice of
propose
d rulemaking (REG–126100–00,
2001–1 C
.B. 862) in theFederal Register
(66 FR 39
25, corrected by 66 FR 15820
and 66 FR
16019) under Section 6049 (the
2001 pro
posed regulations), which would
provide
that U.S. bank deposit interest
paid to
any nonresident alien individual
must be
reported annually to the IRS. On
August
2, 2002, the Treasury Department
and the
IRS published a notice of
propos
ed rulemaking (REG–133254–02)
in the
Federal Register(67 FR 50386)
which
withdrew these regulations and
propo
sed narrower regulations (the 2002
regul
ations) that would require reporting
only o
n interest payments to nonresident
February 22, 20115162011–8 I.R.B.

alien individuals that are residents of
certain designated countries or, at the
option of the payor, on interest payments
to all nonresident alien recipients of
bank deposit interest. Under the 2002
regulations currentlyin effect, reporting
of U.S. bank deposit interest is required
only if the interest is paid to a U.S.
person or a nonresident alien individual
who is a resident of Canada. These
proposed regulations withdraw the 2002
regulations and provide new proposed
regulations that extend the information
reporting requirement to include bank
deposit interest paid to nonresident alien
individuals who are residents of any
foreign country.
This extension is appropriate for several
reasons. First, since the 2002 proposed
regulations were released, there is a grow-
ing global consensus regarding the impor-
tance of cooperative information exchange
for tax purposes that has developed. Sig-
nificant agreements have been reached on
international standards for the exchange of
information, including, for example, the
understanding that information exchange
will not be limited by bank secrecy or the
absence of a domestic tax interest. Sec-
ond, requiring routine reporting to the IRS
of all U.S. bank deposit interest paid to
any nonresident alien individual will fur-
ther strengthen the United States exchange
of information program, consistent with
adequate provisions for reciprocity, usabil-
ity, and confidentiality in respect of this in-
formation. Finally, this extension will help
to improve voluntary compliance by U.S.
taxpayers by making it more difficult to
avoid the U.S. information reporting sys-
tem (such as through false claims of for-
eign status).
In addition to requiring reporting of
U.S. bank deposit interest paid to any
nonresident alien individual, the proposed
regulations also make the following mi-
nor changes and clarifications. Section
1.6049–6 provides that a copy of Form
1042–S, “Foreign Person’s U.S. Source
Income Subject to Withholding”, must
be furnished to the recipient for interest
paid on deposits maintained at a bank’s
office within the United States. Section
1.6049–6(e)(4) has been revised to clarify
that the payor or middleman can satisfy
this requirement by furnishing a copy of
Form 1042–S either in person or to the last
known address of the recipient.
Proposed Effective Date
These regulations are proposed to apply
to payments made after December 31 of
the year in which they are published as
final regulations in theFederal Register.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866. Therefore a regulatory as-
sessment is not required. It has also been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to this regulation.
These regulations impose a collection
of information on small entities, and the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) applies. This rule regulates com-
mercial banks, savings institutions, credit
unions, and securities brokerages. The
Small Business Administration (SBA) has
established size standards for types of eco-
nomic activities which are classified based
on the North American Industry Classi-
fication Codes (NAICS). The regulations
specifying size standards are set forth in
Title 13, Code of Federal Regulations, part
121 (13 CFR part 121), Small Business
Size Regulations. The NAICS Code for
small commercial banks, savings institu-
tions, credit unions, and securities bro-
kerages is specified at 13 CFR 121.201.
Pursuant to subsectors 522110, 522120,
and 522130 of NAICS 2007, a small com-
mercial bank, savings institution, or credit
union is one with $175 million or less in
assets. Pursuant to subsector 523120 of
NAICS 2007, a small securities brokerage
is one with receipts of less than $7 mil-
lion. Because this rule will affect all insti-
tutions that maintain accounts for nonresi-
dent alien individuals, this rule may affect
a substantial number of small entities.
The U.S. Census Bureau American
FactFinder provides data based on the
2007 Economic Census released Novem-
ber 24, 2009 including the number of
establishments and the annual revenue of
the establishments within each NAICS
Code. According to this data, for Sector
52: ECO752I1: Finance and Insurance
Industry Series, there were 94,192 com-
mercial banking establishments with rev-
enue of approximately $609,748,098,000,
16,098 savings institutions with rev-
enue of approximately $91,626,050,000,
17,984 credit unions with revenue of
approximately $55,521,199,000, and
30,989 NAICS Code securities broker-
ages with revenue of approximately
$167,337,807,000. It is estimated that
approximately 25,000 commercial banks,
4,000 savings banks, and 4,000 credit
unions with less than $175,000,000 in
assets, and 15,000 securities brokerages
with receipts of less than $7,000,000 that
would be classified as small businesses.
Pursuant to section 605(b) of the Reg-
ulatory Flexibility Act, 5 U.S.C. Section
605, the Chief Counsel certifies that this
rule will not have a significant economic
impact on a substantial number of small
entities. This conclusion is based on all
of the following. The depository accounts,
the interest on which is subject to report-
ing under these regulations, tend to be with
larger financial institutions operating in the
United States, and therefore the number of
small entities that will be required to un-
dertake this collection of information is ex-
pected to be limited. Banks are already
required to gather the underlying informa-
tion from nonresident aliens on Form W–8,
so there will be no change in the collec-
tion of information. Currently under the
2002 regulations, banks, including small
financial institutions, are required to report
this information to the IRS with respect
to Canadian account holders. This rule
would simply extend the reporting require-
ment to all nonresident aliens. The report-
ing required by this rule would be done on
Form 1042 and Form 1042–S. This rule
also requires that institutions prepare and
deliver a statement to nonresident alien in-
dividuals to the effect that the informa-
tion on the 1042 form is being furnished
totheIRSandmaybefurnishedtothe
government of the foreign country where
the recipient resides. The amount of time
required to complete the Form 1042 and
Form 1042–S is brief, and the statement
that is required to be collected is brief.
The IRS requests information regard-
ing the economic impact of this rule on
small commercial banks, savings institu-
tions, credit unions, and small securities
brokerages engaged in business involv-
ing payment of bank deposit interest to a
nonresident alien. The IRS invites spe-
cific comments on the economic impact of
compliance from members of the public
who believe there will be a significant
2011–8 I.R.B.517February 22, 2011

economic impact on small businesses that
are regulated by this rule. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
this regulation has been submitted to the
Chief Counsel of Advocacy of the Small
Business Administration for comment on
its impact on small businesses.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments
(a signed original and eight (8) copies)
or electronic comments that are submitted
timely to the IRS. The IRS and Treasury
Department request comments on the clar-
ity of the proposed rules and how they can
be made easier to understand. All com-
ments will be available for public inspec-
tion and copying.
A public hearing has been scheduled for
April 27, 2011, beginning at 10 a.m. in the
auditorium of the Internal Revenue Build-
ing, 1111 Constitution Avenue, NW, Wash-
ington, DC. Due to building security pro-
cedures, visitors must enter at the Consti-
tution Avenue entrance. In addition, all
visitors must presentphoto identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER IN-
FORMATION CONTACT” section of this
preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing must
submit electronic or written comments and
an outline of the topics to be discussed
and the time to be devoted to each topic
(signed original and eight (8) copies) by
April 8, 2011. A period of 10 minutes will
be allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receiving outlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of the regulations
is Kathryn Holman, Office of Associate
Chief Counsel (International). However,
other personnel from the IRS and Treasury
Department participated in their develop-
ment.
*****
Withdrawal of Proposed Amendments
Accordingly, under the authority of
26 U.S.C. 7805, the proposed amend-
ment to 26 CFR parts 1 and 31 that was
published in theFederal Registeron
Friday, August 2, 2002 (67 FR 50386) is
withdrawn.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 31 are
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority26U.S.C.7805***
Par. 2. In §1.6049–4, paragraph (b)(5)
is revised to read as follows:
§1.6049–4 Return of information as
to interest paid and original issue
discount includible in gross income after
December 31, 1982.
*****
(b) * * *
(5)Interest payments to nonresident
alien individuals—(i)General rule.In
the case of interest aggregating $10 or
more paid to a nonresident alien individ-
ual (as defined in section 7701(b)(1)(B))
that is reportable under §1.6049–8(a), the
payor shall make an information return
on Form 1042–S, “Foreign Person’s U.S.
Source Income Subject to Withholding”,
for the calendar year in which the interest
is paid. The payor or middleman shall
prepare and file Form 1042–S at the time
and in the manner prescribed by section
1461 and the regulations under that sec-
tion and by the form and its accompanying
instructions. See §§1.1461–1(b) (rules
regarding the preparation of a Form 1042)
and 1.6049–6(e)(4) (rules for furnishing a
copy of the Form 1042–S to the payee).
To determine whether an information re-
turn is required for original issue discount,
see §§1.6049–5(f) and 1.6049–8(a). The
Commissioner may by ruling or other
administrative pronouncement prescribe
rules pursuant to a treaty or executive
agreement for uniform formatting, stan-
dards for sharing information, and for
usability, reciprocity, and confidentiality
of taxpayer information.
(ii)Effective/applicability date. Para-
graph (b)(5)(i) of this section shall
be effective for payments made after
December 31 of the year in which the final
regulations are published in theFederal
Register. (For interest paid to a Canadian
nonresident alien individual on or before
December 31 of the year in which final
regulations are published in theFederal
Register, see paragraph (b)(5) of this
section as in effect and contained in 26
CFR part 1 revised April 1, 2000.)
*****
Par. 3. Section 1.6049–5 is amended as
follows:
1. In paragraph (b)(12) the last sentence
is revised.
2. In paragraph (f) the last sentence is
revised.
The revisions read as follows:
§1.6049–5 Interest and original issue
discount subject to reporting after
December 31, 1982.
*****
(b) * * *
(12) * * * This paragraph (b)(12)
does not apply to interest paid after
December 31 of the year in which the final
regulations are published in theFederal
Registerto a nonresident alien individual
as provided in §1.6049–8.
*****
(f) * * * Original issue discount on an
obligation (including an obligation with a
maturity of not more than 6 months from
the date of original issue) held by a non-
resident alien individual or foreign corpo-
ration is interest described in paragraph
(b)(1)(vi)(A) or (B) of this section and,
therefore is not interest subject to reporting
under section 6049 unless it is described in
§1.6049–8(a) (relating to bank deposit in-
terest paid after December 31 of the year in
which the final regulations are published in
theFederal Registerto a nonresident alien
individual).
*****
Par. 4. Section 1.6049–6 is amended as
follows:
1. Paragraph (e)(4) is revised.
February 22, 20115182011–8 I.R.B.

2. In paragraph (e)(5), the first sentence
is revised and a new sentence is added at
the end of the paragraph.
The additions and revisions read as fol-
lows:
§1.6049–6 Statements to recipients
of interest payments and holders of
obligations for attributed original issue
discount.
*****
(e) * * *
(4)Special rule for amounts described
in §1.6049–8(a).In the case of amounts
describedin§1.6049–8(a)(relatingtopay-
ments of deposit interest to nonresident
alien individuals) paid after December 31
of the year in which the final regulations
are published in theFederal Register,any
person who makes a Form 1042–S, “For-
eign Person’s U.S. Source Income Subject
to Withholding”, under section 6049(a)
and §1.6049–4(b)(5) shall furnish a state-
ment to the recipient either in person or by
first class mail to the recipient’s last known
address. The statement shall include a
copy of the Form 1042–S required to be
prepared pursuant to §1.6049–4(b)(5) and
a statement to the effect that the informa-
tion on the form is being furnished to the
United States Internal Revenue Service
and may be furnished to the government
of the foreign countrywhere the recipient
resides.
(5)Effective/applicability date. Para-
graph (e)(4) of this section applies to payee
statements reporting payments of deposit
interest to nonresident alien individuals
paid after December 31 of the year in
which the final regulations are published
in theFederal Register.***(Forinter-
est paid to a Canadian nonresident alien
individual on or before December 31 of
the year in which final regulations are
published in theFederal Register,see
paragraph (e)(4) of this section as in effect
and contained in 26 CFR part 1 revised
April 1, 2000.)
Par. 5. In §1.6049–8 the section head-
ing and paragraph (a) are revised to read as
follows:
§1.6049–8 Interest and original issue
discount paid to nonresidents.
(a)Interest subject to reporting re-
quirement. For purposes of §§1.6049–4,
1.6049–6, and this section and except as
provided in paragraph (b) of this section,
the term interest means interest paid to
a nonresident alien individual after De-
cember 31 of the year in which the final
regulations are published in theFederal
Register, where the interest is described
in section 871(i)(2)(A) with respect to
a deposit maintained at an office within
the United States. For purposes of the
regulations under section 6049, a nonresi-
dent alien individual is a person described
in section 7701(b)(1)(B). The payor or
middleman may rely upon a valid Form
W–8BEN, “Beneficial Owners Certificate
of Foreign Status for U.S. Tax Withhold-
ing” to determine whether the payment
is made to a nonresident alien individ-
ual. Generally, amounts described in this
paragraph (a) are not subject to backup
withholding under section 3406. See
§31.3406(g)–1(d) of this chapter. How-
ever, if the payor or middleman does not
have either a valid Form W–8BEN or
valid Form W–9, “Request for Taxpayer
Identification Number and Certification”,
the payor or middleman must report the
payment as made to a U.S. non-exempt
recipient if it must so treat the payee under
the presumption rules of §1.6049–5(d)(2)
and §1.1441–1(b)(3)(iii) and must also
backup withhold under section 3406. (For
interest paid to a Canadian nonresident
alien individual on or before December 31
of the year in which final regulations are
published in theFederal Register,see
paragraph (a) of this section as in effect
and contained in 26 CFR part 1 revised
April 1, 2000.)
*****
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME TAX
AT THE SOURCE
Par. 6. The authority citation for part
31 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 7. In §31.3406(g)–1, paragraph (d)
is revised to read as follows:
§31.3406(g)–1 Exceptions for payments
to certain payees and certain other
payments.
*****
(d)Reportable payments made to
nonresident alien individuals.Apay-
ment of interest that is reported on Form
1042–S, “Foreign Person’s U.S. Source
Income Subject to Withholding,” as paid
to a nonresident alien individual under
§1.6049–8(a) of this chapter is not subject
to withholding under section 3406. (For
interest paid to a Canadian nonresident
alien individual on or before December 31
of the year in which final regulations are
published in theFederal Register,see
paragraph (d) of this section as in effect
andcontainedin26CFRpart1revised
April 1, 2000.)
*****
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on January 6,
2011, 8:45 a.m., and published in the issue of the Federal
Register for January 7, 2011, 76 F.R. 1105)
Notice of Proposed
Rulemaking
Rewards and Awards for
Information Relating to
Violations of Internal Revenue
Laws
REG–131151–10
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains a
proposed regulation relating to the pay-
ment of rewards under section 7623(a)
of the Internal Revenue Code and awards
under section 7623(b). The guidance is
necessary to clarify the definition of pro-
ceeds of amounts collected and collected
proceeds under section 7623. This reg-
ulation provides needed guidance to the
general public as well as officers and em-
ployees of the IRS who review claims
under section 7623.
DATES: Written or electronic comments
and requests for a public hearing must be
received by April 18, 2011.
ADDRESSES: Send submissions to
CC:PA:LPD:PR(REG–131151–10),
Room 5203, Internal Revenue Service, PO
2011–8 I.R.B.519February 22, 2011

Box 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–131151–10),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, NW,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal
atwww.regulations.gov(IRS —
REG–131151–10).
FOR FURTHER IN
FORMATION
CONTACT: Conc
erning the pro-
posed regula
tion, Kirsten N. Witter, at
(202) 927–09
00; concerning submis-
sions of comm
ents and requests for
a public hear
ing, Richard A. Hurst at
Richard.A.
Hurst@irscounsel.treas.govor
(202) 622–7
180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provision
Section 7623(a) provides the Secre-
tary with the authority to pay such sums
as he deems necessary from proceeds
of amounts collected based on informa-
tion provided to the Secretary when the
information relates to the detection of un-
derpayments of tax or the detection and
bringing to trial and punishment persons
guilty of violating the internal revenue
laws or conniving at the same. Section
7623(b) provides the Secretary with the
authority to pay awards to individuals if
the Secretary proceeds with an administra-
tive or judicial action described in section
7623(a) that resultsin collected proceeds
based on information provided by the
individuals. Section 301.7623–1(a) cur-
rently provides that proceeds of amounts
(other than interest) collected by reason
of the information provided include both
amounts collected because of the infor-
mation provided and amounts collected
prior to receipt of the information if the
information leads to the denial of a claim
for refund that otherwise would have been
paid. 63 Fed. Reg. 44777.
Section 301.7623–1(a) was promul-
gated prior to amendments of section 7623
as part of the Tax Relief and Health Care
Act of 2006, division A, section 406,
Public Law 109–432, 120 Stat. 2958.
The amendments designated the existing
section 7623 as section 7623(a). As orig-
inally enacted, section7623providedthat
rewards shall be paid “from the proceeds
of amounts (other than interest) collected
by reason of the information provided
. . . ” The 2006 amendments to sec-
tion 7623 struck the “other than interest”
language. The amendments also added
section 7623(b), which provides that in
certain cases individuals shall receive an
award of at least 15% but not more than
30% of the collected proceeds resulting
from the action with which the Secretary
proceeded based on information brought
to the attention of the Secretary by the in-
dividual. The 2006 amendments to section
7623 also created the IRS Whistleblower
Office, which is responsible for adminis-
tering a whistleblower program within the
IRS.
This regulation clarifies the definitions
of proceeds of amounts collected and col-
lected proceeds for purposes of section
7623 and that the provisions of Treas.
Reg. §301.7623–1(a) concerning refund
prevention claims are applicable to claims
under section 7623(a) and (b). In clarify-
ing the definitions of proceeds of amounts
collected and collected proceeds, this reg-
ulation provides that the reduction of an
overpayment credit balance is also con-
sidered proceeds of amounts collected and
collected proceeds under section 7623.
Special Analysis
It has been determined that this no-
tice of proposed rulemaking is not a
significant regulatory 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, and, because the
regulations do not impose a collection
of information on small entities, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant
to section 7805(f) of the Code, these
regulations have been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small businesses.
Comments and Requests for a Public
Hearing
Before this proposed regulation is
adopted as a final regulation, consider-
ation will be given to any electronic or
written comments (a signed original and
eight (8) copies) that are submitted timely
to the IRS. The Treasury Department and
the IRS request comments on the clarity
of the proposed rule and how it may be
made easier to understand. All comments
will be available for public inspection and
copying. A public hearing may be sched-
uled if requested in writing by a person
that timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place of the hearing will be
published in theFederal Register.
Drafting Information
The principal author of this regulation is
Kirsten N. Witter, Office of the Associate
Chief Counsel (General Legal Services).
*****
Proposed Amendment to the
Regulations
Accordingly, 26 CFR part 301 is pro-
posed to be amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 is amended by adding an entry in
numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.7623–1 also issued under
26 U.S.C. 7623. * * *
Par. 2. Section 301.7623–1 is amended
by:
Revising the section heading, and para-
graphs (a) and (g) to read as follows:
§301.7623–1 Rewards and awards for
information relating to violations of
internal revenue laws.
(a)In general—(1)Rewards and
awards. When information that has been
provided to the Internal Revenue Service
results in the detection of underpayments
of tax or the detection and bringing to trial
and punishment persons guilty of violating
the internal revenue laws or conniving at
the same, the IRS may approve a reward
February 22, 20115202011–8 I.R.B.

under section 7623(a) in a suitable amount
from the proceeds of amounts collected in
cases when rewards are not otherwise pro-
vided by law, or shall determine an award
under section 7623(b) from collected pro-
ceeds.
(2)Proceeds of amounts collected and
collected proceeds. For purposes of sec-
tion 7623 and this section, both proceeds
of amounts collected and collected pro-
ceeds include: tax, penalties, interest,
additions to tax, and additional amounts
collected by reason of the information
provided; amounts collected prior to re-
ceipt of the information if the information
provided results in the denial of a claim
for refund that otherwise would have been
paid; and a reduction of an overpayment
credit balance used to satisfy a tax liability
incurred because of the information pro-
vided.
*****
(g)Effective/applicability date.This
section is applicable with respect to re-
wards paid after January 29, 1997, except
the rules of paragraph (a) of this section
apply with respect to rewards and awards
paid after these regulations are published
as final regulations in theFederal Regis-
ter.
Heather C. Maloy,
(Acting) Deputy Commissioner
for Services and Enforcement.
(Filed by the Office of the Federal Register on January 14,
2011, 8:45 a.m., and published in the issue of the Federal
Register for January 18, 2010, 76 F.R. 2852)
Notice of Proposed
Rulemaking and Notice of
Public Hearing
Property Traded on an
Established Market
REG–131947–10
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains pro-
posed regulations relating to determining
when property is traded on an established
market (that is, publicly traded) for pur-
poses of determining the issue price of a
debt instrument. The regulations amend
the current regulations to clarify the cir-
cumstances that cause property to be
publicly traded. The regulations provide
needed guidance to issuers and holders
of debt instruments. This document also
provides a notice of a public hearing on
these proposed regulations.
DATES: Written or electronic comments
must be received by March 8, 2011. Out-
lines of topics to be discussed at the pub-
lic hearing scheduled for April 13, 2011, at
10:00 a.m. must be received by March 4,
2011.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–131947–10), 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–131947–10),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, N.W.,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal
athttp://www.regulations.gov(IRS
REG–131947–10).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed reg-
ulations, William E. Blanchard at (202)
622–3950; concerning submission of com-
ments, the hearing, and/or to be placed on
the building access list to attend the hear-
ing,Oluwafunmilayo.P.Taylor@irscoun-
sel.treas.gov, at (202) 622–7180 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The issue price of a debt instrument
is determined under section 1273(b) of
the Internal Revenue Code or, in the case
of certain debt instruments issued for
property, under section 1274. Section
1273(b)(3) generally provides that in the
case of a debt instrument that is issued
for property and that is part of an issue
some or all of which is traded on an estab-
lished securities market (often referred to
as “publicly traded”), the issue price of the
debt instrument is the fair market value of
the debt instrument. Similarly, if the debt
instrument is issued for stock or securities
(or other property) that are publicly traded,
the issue price of the debt instrument is the
fair market value of the property. Section
1.1273–2 of the Income Tax Regulations
(the “current regulations”) also applies
to determine the issue price of a debt
instrument that is publicly traded or is
issued for publicly traded property. Under
§1.1273–2(c)(1), the termpropertymeans
a debt instrument, stock, security, contract,
commodity, or nonfunctional currency.
Section 1.1273–2(f) defines when prop-
erty is traded on an established market
(that is, publicly traded) for purposes of
section 1273(b)(3) and §1.1273–2.
In general, under §1.1273–2(f) of the
current regulations, a debt instrument is
traded on an established market if either
the debt instrument or the property for
which the debt instrument is exchanged
is described in §1.1273–2(f)(2) through
(f)(5) in the time period 30 days before or
after the exchange. Property is described
in §1.1273–2(f)(2) if it is listed on a spec-
ified exchange. Property is described in
§1.1273–2(f)(3) if it is of a kind that is
traded on a contract market designated by
the Commodities Futures Trading Com-
mission or an interbank market. Property
is described in §1.1273–2(f)(4) if it ap-
pears on a system of general circulation
that disseminates price quotations or re-
cent trading prices. Property is described
in §1.1273–2(f)(5) if price quotations are
readily available from dealers, brokers or
traders, subject to certain exceptions.
The issue price of a debt instrument has
important income tax consequences. As
an initial matter, the difference between
the issue price of a debt instrument and its
stated redemption price at maturity mea-
sures whether there is any original issue
discount associated with the instrument. A
debt-for-debt exchange (including a sig-
nificant modification of existing debt) in
the context of a work-out may result in
a reduced issue price for the new debt,
which generally would produce cancella-
tion of indebtedness income for the issuer,
a loss to the holder whose basis is greater
than the issue price of the new debt, and
original issue discount that generally must
be accounted for by both the issuer and
the holder of the new debt. These conse-
quences, exacerbated by recent turmoil in
the debt markets, have focused attention on
2011–8 I.R.B.521February 22, 2011

thedefinitionofwhenpropertyistraded
on an established market for purposes of
§1.1273–2(f).
Commenters have criticized the def-
inition of an established market in
§1.1273–2(f) of the current regulations.
They argue that comparatively little debt
is listed on an exchange described in
§1.1273–2(f)(2), and that even debt that
is listed rarely trades on the exchange.
They point out that the list of foreign
exchanges in §1.1273–2(f)(2)(iii) is out-
dated. Commenters also struggle to inter-
pret the meaning of an interbank market in
§1.1273–2(f)(3).
Even more troublesome for com-
menters is the question of what consti-
tutes a quotation medium for purposes
of §1.1273–2(f)(4) of the current regula-
tions. Debt instruments typically trade in
various ways in the current markets, but
the vast majority of debt instruments are
purchased or sold over-the-counter for a
price negotiated between a financial entity
(such as a securities dealer or broker) and
a customer. A dealer or broker may quote
a firm price, sometimes referred to as a
“firm” or “executable” quote, entitling a
customer to purchase or sell at that price,
subject to volume limits or other specified
restrictions. Alternatively, a dealer, broker
or listing service may quote a price that
indicates a willingness to purchase and/or
sell a specified debt instrument, again sub-
ject to volume limits or other limitations,
but not necessarily at the quoted price.
This is sometimes referred to as a “soft”
or an “indicative” quote. The decision
to send a price quote to a customer (or
customers) may be initiated by a dealer
or broker, or a customer may request a
price quote from one or more dealers or
brokers. Additionally, a service provider
may provide subscribers with valuations
based on data collected from contributors
that may reflect actual sales, price quotes,
or any other information it deems rele-
vant to the value of the debt instrument in
question. Commenters struggled to apply
the description of a quotation medium in
§1.1273–2(f)(4) to this informal market-
place, which has evolved considerably
since the regulations were originally pro-
mulgated in 1994.
Finally, commenters pointed out that
the general rule in §1.1273–2(f)(5) of
the current regulations, which treats a
debt instrument as publicly traded if price
quotations are readily available from
dealers, brokers or traders could cause
almost every debt instrument to be within
this definition but for the safe harbors in
§1.1273–2(f)(5)(ii).
Explanation of Provisions
As a general matter, the Treasury De-
partment and the IRS believe that the
“traded on an established market” stan-
dard established by section 1273(b)(3) is
intended to be interpreted broadly. When
section 1275(a)(4) was repealed by section
11325(a)(2) of the Revenue Reconcilia-
tion Act of 1990, Public Law 101–508,
104 Stat. 1388, 1388–466 (1990), issue
price was required to be determined under
section1273andsection1274evenina
debt-for-debt exchange that qualified as
a corporate reorganization. As the depth
of trading and the transparency of the
markets that trade debt instruments has
improved, the earlier concerns that trad-
ing prices may not reflect the fair market
value of a debt instrument have dimin-
ished. Thus, to the extent accurate pricing
information exists, whether it derives from
executed sales, reliable price quotations,
or valuation estimates that are based on
some combination of sales and quotes, the
Treasury Department and the IRS believe
that that information should be the basis
for the issue price determined under sec-
tion 1273(b)(3).
To address concerns with the current
regulations, the proposed regulations sim-
plify and clarify the determination of when
property is traded on an established mar-
ket. The proposed regulations identify
four ways for property to be traded on an
established market. In each case, the time
period for determining whether the prop-
erty is publicly traded is the 31-day period
ending 15 days after the issue date of the
debt instrument.
First, property that is listed on an ex-
change continues to be publicly traded
property under §1.1273–2(f)(2) of the pro-
posed regulations. Although relatively
few debt instruments are listed or traded
on an exchange, the regulations may still
apply to other propertythat is listed, such
as stock for which a debt instrument is
issued in a debt-for-stock exchange. The
proposed regulations, however, delete
the reference to an interdealer quotation
system that is sponsored by a national
securities association registered under sec-
tion 15A of the Securities Exchange Act
of 1934 because none exist or are contem-
plated. Rather than list foreign exchanges,
the proposed regulations specify that a
foreign securities exchange that is offi-
cially recognized, sanctioned, regulated or
supervised by a governmental authority of
the foreign country in which the market is
located is an exchange that causes prop-
erty to be publicly traded.
Second, §1.1273–2(f)(3) of the pro-
posed regulations treats property as pub-
licly traded when a sales price for the
property is reasonably available. Market
participants have access to information
about the securities markets from a va-
riety of sources, which are constantly
changing and evolving. If information
about the sales price of a debt instrument
(or information sufficient to calculate the
sales price) appears in a medium that is
made available to persons that regularly
purchase or sell debt instruments, or per-
sons that broker purchases or sales of debt
instruments, the sales price will be consid-
ered reasonably available. For example,
in the case of a debt instrument, a sale
that is reported electronically at any time
in the 31-day time period, such as in the
Trade Reporting and Compliance Engine
(“TRACE”) database maintained by the
Financial Industry Regulatory Authority,
would cause the instrument to be publicly
traded, as would other pricing services
and trading platforms that report prices
of executed sales on a general basis or to
subscribers.
Third, property is considered to be
traded on an established market if a firm
price quote to buy or sell the property is
available. A firm, or executable, price
quote may be labeled as such, or a price
quote may function as a firm quote as a
matter of law or industry practice. In ei-
ther case, §1.1273–2(f)(4) of the proposed
regulations treats property with a firm
quote as publicly traded.
Finally, a price quote (other than a
firm quote) that is provided by a dealer, a
broker, or a pricing service (an indicative
quote) will cause property to be publicly
traded under §1.1273–2(f)(5) of the pro-
posed regulations.
The proposed regulations provide that
the fair market value of property described
in §1.1273–2(f) will be presumed to be
equal to its trading price, sales price, or
February 22, 20115222011–8 I.R.B.

quoted price, whichever is applicable.
However, if there is more than one price or
quote, a taxpayer is permitted to reconcile
competing prices or quotes in a reasonable
manner. In the case of an indicative quote,
if a taxpayer determines that the quoted
price or prices misrepresents the fair mar-
ket value of the property by a material
amount, §1.1273–2(f)(6)(ii) of the pro-
posed regulations permits the taxpayer to
use any method that provides a reasonable
basis to determine the fair market value
of the property, provided the taxpayer can
establish that the method chosen more ac-
curately reflects the value of the property
than the extant quote or quotes for the
property.
In response to commenters, the pro-
posed regulations also contain guidance
in areas ancillary to publicly traded debt,
such as proposed regulations clarifying
and revising the rules to determine when
an issue of debt instruments is eligible
to be part of a qualified reopening under
§1.1275–2(k) and proposed regulations
clarifying the treatment of a debt instru-
ment issued in a debt-for-debt exchange
under the potentially abusive rules in sec-
tion 1274(b)(3). In addition, in response
to commenters, the proposed regulations
include a business day convention to de-
termine if certain stated interest payments
affect whether the payments are qualified
stated interest.
Proposed Effective Date
The regulations, as proposed, apply to
debtinstrumentsthathaveanissuedateon
or after the publication date of the Treasury
decision adopting these rules as final reg-
ulations in theFederal Register.
Special Analyses
It has been determined that this no-
tice of proposed rulemaking is not a
significant regulatory action as defined
in Executive Order12866. Therefore,
a regulatory assessment is not required.
It also has been determined that sec-
tion 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does
not apply to these regulations, and
because the regulation does not impose
a collection of information on small
entities, the Regulatory Flexibility Act
(5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, these regulations have
been submitted to the Chief Counsel
for Advocacy of the Small Business
Administration for comment on its impact
on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments
(a signed original and eight (8) copies)
or electronic comments that are submitted
timely to the IRS. The IRS and the Trea-
sury Department request comments on the
clarity of the proposed rules and how they
can be made easier to understand. All
comments will be available for public in-
spection and copying.
A public hearing has been scheduled
for April 13, 2011, beginning at 10 a.m.
in the Auditorium, Internal Revenue
Building, 1111 Constitution Avenue,
NW, Washington, DC. Due to building
security procedures, visitors must enter
at the Constitution Avenue entrance. All
visitors must presentphoto identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER
INFORMATION CONTACT” section
of this preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing must
submit electronic or written comments and
an outline of the topics to be discussed and
the time to be devoted to each topic by
March4,2011. Aperiodof10minutes
will be allotted to each person for making
comments. An agenda showing the sched-
uling of the speakers will be prepared af-
ter the deadline for receiving outlines has
passed. Copies of the agenda will be avail-
able free of charge at the hearing.
Drafting Information
These regulations were drafted by per-
sonnel in the Office of Associate Chief
Counsel (Financial Institutions and Prod-
ucts) and the Treasury Department.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
PART 1— INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1273–1 is amended
by adding a new paragraph (c)(6) to read
as follows:
§1.1273–1 Definition of OID.
*****
(c) * * *
(6)Business day convention—(i)Rule.
For purposes of this paragraph (c), if a
scheduled payment date for stated interest
falls on a Saturday, Sunday, or Federal hol-
iday (within the meaning of 5 U.S.C. 6103)
but, under the terms of the debt instrument,
the stated interest is payable on the first
business day that immediately follows the
scheduled payment date, the stated interest
is treated as payable on the scheduled pay-
ment date, provided no additional interest
is payable as a result of the deferral.
(ii) Effective/applicability date. Para-
graph (c)(6)(i) of this section applies to
debt instruments that are issued on or after
the date of publication of the Treasury de-
cision adopting these rules as final regula-
tions in theFederal Register. A taxpayer,
however, may rely on paragraph (c)(6)(i)
of this section for debt instruments issued
before that date.
*****
Par. 3. Section 1.1273–2 is amended by
revising paragraph (f) to read as follows:
§1.1273–2 Determination of issue price
and issue date.
*****
(f)Traded on an established market
(publicly traded)—(1)In general. Except
as provided in paragraph (f)(7) or (f)(8)
of this section, property (including a debt
instrument described in paragraph (b)(1)
of this section) is traded on an established
market for purposes of this section if, at
any time during the 31-day period ending
15 days after the issue date—
2011–8 I.R.B.523February 22, 2011

(i) The property is listed on an exchange
described in paragraph (f)(2) of this sec-
tion;
(ii) There is a sales price for the prop-
erty as described in paragraph (f)(3) of this
section;
(iii) There are one or more firm quotes
for the property as described in paragraph
(f)(4) of this section; or
(iv) There are one or more indicative
quotes for the property as described in
paragraph (f)(5) of this section.
(2)Exchange listed property.Property
is listed on an exchange for purposes of
this paragraph (f)(2) if it is listed on—
(i) A national securities exchange regis-
tered under section 6 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78f);
(ii) A board of trade designated as a
contract market by the Commodities Fu-
tures Trading Commission;
(iii) A foreign securities exchange that
is officially recognized, sanctioned, regu-
latedorsupervisedbyagovernmentalau-
thority of the foreign country in which the
market is located; or
(iv) Any other exchange, board of
trade, or other market which the Com-
missioner identifies in guidance published
in the Internal Revenue Bulletin (see
§601.601(d)(2)(ii)) as an exchange for
purposes of this paragraph (f)(2).
(3)Sales price—(i)In general.Asales
price exists if the price for an executed pur-
chase or sale of the property is reasonably
available.
(ii)Pricing information for a debt
instrument. For purposes of paragraph
(f)(3)(i) of this section, the price of a
debt instrument is considered reasonably
available if the sales price (or informa-
tion sufficient to calculate the sales price)
appears in a medium that is made avail-
able to persons that regularly purchase or
sell debt instruments (including a price
provided only to certain customers or to
subscribers), or persons that broker pur-
chases or sales of debt instruments.
(4)Firm quote. A firm quote is consid-
ered to exist when a price quote is avail-
able from at least one broker, dealer, or
pricing service (including a price provided
only to certain customers or to subscribers)
for property and the quoted price is sub-
stantially the same as the price for which
the property could be purchased or sold.
The identity of the person providing the
quote must be reasonably ascertainable for
a quote to be considered a firm quote for
purposes of this paragraph (f)(4). A quote
will be considered a firm quote if market
participants typically purchase or sell, as
the case may be, at the quoted price, even if
the party providing the quote is not legally
obligated to do so.
(5)Indicative quote. An indicative
quote is considered to exist when a price
quote is available from at least one bro-
ker, dealer, or pricing service (including a
price provided only to certain customers
or to subscribers) for property and the
price quote is not a firm quote described
in paragraph (f)(4) of this section.
(6)Presumption that price or quote is
equal to fair market value—(i)In gen-
eral. The fair market value of property de-
scribed in this section will be presumed to
be equal to its trading price on an exchange
described in paragraph (f)(2) of this sec-
tion, or its sales price or quoted price de-
termined under paragraphs (f)(3) through
(f)(5) of this section. If there is more than
one trading price under paragraph (f)(2) of
this section, sales price under paragraph
(f)(3) of this section, or quoted price un-
der paragraph (f)(4) or (f)(5) of this sec-
tion, a taxpayer may use any reasonable
method, consistently applied, to determine
the price.
(ii)Special rule for property for which
thereisonlyanindicativequote.Ifprop-
erty is described only in paragraph (f)(5)
of this section, and the taxpayer deter-
mines that the quote (or an average of the
quotes) materially misrepresents the fair
market value of the property, the taxpayer
can use any method that provides a rea-
sonable basis to determine the fair market
value of the property. A taxpayer must es-
tablish that the method chosen more ac-
curately reflects the value of the property
than the quote or quotes for the property to
use the method provided in this paragraph
(f)(6)(ii). For an equity or debt instrument,
a volume discount or control premium will
not be considered to create a material mis-
representation of value for purposes of this
paragraph (f)(6).
(7)Exception for property for which
there is de minimis trading—(i)In gen-
eral. Notwithstanding any other provision
in this section, property will not be treated
as traded on an established market if there
is no more thande minimistrading of the
property.
(ii)Definition of de minimis trading for
debt instruments. For purposes of para-
graph (f)(7)(i) of this section, a debt instru-
ment will be treated as traded inde minimis
quantities only if—
(A) Each trade of such debt instrument
during the 31-day period ending 15 days
after the issue date is for quantities of
US$1 million or less (or, for debt denom-
inated in a currency other than the U.S.
dollar, the equivalent amount in the cur-
rency in which the debt is denominated);
and
(B) The aggregate amount of all such
trades does not exceed US$5 million (or,
for debt denominated in a currency other
than the U.S. dollar, the equivalent amount
in the currency in which the debt is denom-
inated).
(8)Exception for small debt issues.
Notwithstanding any other provision in
this section, a debt instrument will not be
treated as traded on an established market
if the original stated principal amount of
the issue that includesthe debt instrument
does not exceed US$50 million (or, for
debt denominated in a currency other than
the U.S. dollar, the equivalent amount in
the currency in which the debt is denomi-
nated).
(9)Anti-abuse rules—(i)Effect of cer-
tain temporary restrictions on trading.If
there is any temporary restriction on trad-
ing a purpose of which is to avoid the char-
acterization of the property as one that is
traded on an established market for Federal
income tax purposes, then the property is
treated as traded on an established market.
For purposes of the preceding sentence, a
temporary restriction on trading need not
be imposed by the issuer.
(ii)Artificial pricing information.Ifa
principal purpose for the existence of any
sale or price quotation is to materially mis-
represent the value of property, that sale or
price quotation may be disregarded.
(10)Convertible debt instruments.A
debt instrument is not treated as traded on
an established market solely because the
debt instrument is convertible into prop-
erty that is so traded.
(11)Effective/applicability date. Para-
graph (f) of this section applies to a debt in-
strument issued on or after the date of pub-
lication of the Treasury decision adopting
these rules as final regulations in theFed-
eral Register.
February 22, 20115242011–8 I.R.B.

*****
Par. 4. Section 1.1274–3 is amended
by adding a new paragraph (b)(4) to read
as follows:
§1.1274–3 Potentially abusive situations
defined.
*****
(b) * * *
(4)Debt-for-debt exchange—(i)Rule.
A debt instrument issued in a debt-for-debt
exchange, including a deemed exchange
under §1.1001–3, will not be treated as the
subject of a recent sales transaction for pur-
poses of section 1274(b)(3)(B)(ii)(I) even
if the debt instrument exchanged for the
newly issued debt instrument was recently
acquired prior to the exchange. There-
fore, the issue price of the debt instru-
ment will not be determined under section
1274(b)(3). However, if the debt instru-
ment or the property for which the debt in-
strument is issued is publicly traded within
the meaning of §1.1273–2(f), the rules of
§1.1273–2 will apply to determine the is-
sue price of the debt instrument.
(ii)Effective/applicability date. Para-
graph (b)(4)(i) of this section applies to
a debt instrument issued on or after the
date of publication of the Treasury deci-
sion adopting these rules as final regula-
tions in theFederal Register.
*****
Par. 5. Section 1.1275–2 is amended
by revising paragraphs (k)(3)(ii)(A),
(k)(3)(iii)(A) and (k)(5) and adding a new
paragraph (k)(3)(v) to read as follows:
§1.1275–2 Special rules relating to debt
instruments.
*****
(k) * * *
(3) * * *
(ii) * * *
(A) The original debt instruments are
publicly traded (within the meaning of
§1.1273–2(f)) as of the reopening date of
the additional debt instruments;
*****
(iii) * * *
(A) The original debt instruments are
publicly traded (within the meaning of
§1.1273–2(f)) as of the reopening date of
the additional debt instruments;
*****
(v)Non-publicly traded debt issued
for cash. Notwithstanding paragraphs
(k)(3)(ii)(A) and (k)(3)(iii)(A) of this
section, a qualified reopening includes a
reopening of original debt instruments if
the additional debt instruments are issued
for cash to persons unrelated to the issuer
(as determined under section 267(b) or
707(b)) for an arm’s length price and the
other requirements in paragraph (k)(3)(ii)
or (k)(3)(iii) of this section are satisfied,
whichever is applicable. For purposes of
paragraph (k)(3)(ii)(C) of this section, the
yield test is satisfiedif, on the reopening
date of the additional debt instruments, the
yield of the additional debt instruments
(based on their cash purchase price) is not
more than 110 percent of the yield of the
original debt instruments on their issue
date (or, if the original debt instruments
were issued with no more than ade min-
imisamount of OID, the coupon rate).
*****
(5)Effective/applicability dates—(i)
Except as provided in paragraph (k)(5)(ii)
of this section, this paragraph (k) applies
to debt instruments that are part of a re-
opening where the reopening date is on or
after March 13, 2001.
(ii) Paragraph (k)(3)(v) of this section
applies to debt instruments that are part of
a reopening if the reopening date is on or
after the date of publication of the Treasury
decision adopting these rules as final reg-
ulations in theFederal Register.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on January 6,
2011, 8:45 a.m., and published in the issue of the Federal
Register for January 7, 2011, 76 F.R. 1101)
Foundations Status of Certain
Organizations
Announcement 2011–13
The following organizations have failed
to establish or have been unable to main-
tain their status as public charities or as op-
erating foundations. Accordingly, grantors
and contributors may not, after this date,
rely on previous rulings or designations
in the Cumulative List of Organizations
(Publication 78), or on the presumption
arising from the filing of notices under sec-
tion 508(b) of the Code. This listing does
notindicate that the organizations have lost
their status as organizations described in
section 501(c)(3), eligible to receive de-
ductible contributions.
Former Public Charities. The follow-
ing organizations (which have been treated
as organizations that are not private foun-
dations described in section 509(a) of the
Code) are now classified as private foun-
dations:
African American Future Society,
Carrollton, GA
After That, Inc., Lehigh Acres, FL
Al Moreland Productions, LTD,
Milwaukee, WI
Association of Gospel Songwriters,
Atlanta, GA
Ballet Fedotov, Bradenton, FL
Change Your Life Foundation,
New Bern, NC
Crossroads Folkloric Arts Association,
Chicago, IL
Daiscan, Inc., Union, NJ
Dan Ashnic, Inc., Westland, MI
Day Star Arise Production Company,
Stockbridge, GA
Eaton Youth Family Foundation,
Los Angeles, CA
Ellison’s Community Outreach Center,
San Bernardino, CA
Greater Sacramento Grandparent
Network, Carmichael, CA
Hair and Hope, Dallas, TX
Health Care Africa, Inc.,
New Carrollton, MD
Help, Hope, and Life, Inc., St. Louis, MO
Indianapolis Symphonic Winds,
Indianapolis, IN
Institute of Physical and Postural
Repatterning, Los Angeles, CA
John H Shorter Community Service and
Development Corporation, Newark, NJ
Joy in Christ Ministries, Inc.,
Hernando, FL
Kingdom Economic Development,
Pinellas Park, FL
Koreatown Police Booster Association,
Inc., Los Angeles, CA
Lanihuli Hawaiian Civic Club, Laie, HI
Living Room Theatre Company,
Vanderbilt, PA
Neighborhood Housing Services of Lake
County, Waukegan, IL
News-2-Use, Inc., Raeford, NC
2011–8 I.R.B.525February 22, 2011

Nicol’s Women and Children Shelter,
Gadsden, AL
Oakland Box Theater, Oakland, CA
One Group Charities, Inc., Durham, NC
Opens Arms Daycare Center, Inc.,
Camden, MS
Organization for Urban and Rural Health
and Nutritional Development Services,
Memphis, TN
River Cities Rollers Corporation,
Sterling, IL
Rotimi Foundation, Jackson, NJ
Seeds of Greatness, Inc., Houston, TX
Self Image, Inc., Lake Worth, FL
(S I S) Stay in School, Inc., Chicago, IL
Still The One, Naperville, IL
Sutton Community Development
Corporation, Inc., LaGrange, NC
Waves of Glory Ministries, Inc.,
Catasauqua, PA
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as
a private operating foundation, the Inter-
nal Revenue Service will issue a ruling or
determination letter with the revised clas-
sification as to foundation status. Grantors
and contributors maythereafter rely upon
such ruling or determination letter as pro-
vided in section 1.509(a)–7 of the Income
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2011–15
The Internal Revenue Service has re-
voked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin February 22, 2011,
and would end on the date the court first
determines that the organization is not de-
scribed in section 170(c)(2) as more partic-
ularly set forth in section 7428(c)(1). For
individual contributors, the maximum de-
duction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were the
basis for revocation.
Acclimation Incorporated
Stockton, CA
At Your Service: Prestigious In-Home
Care, Inc.
San Antonio, TX
Civil Liberty and Indigent Parents
Institution and Charity
Adams Run, SC
Debt Serve, Inc.
Fort Lauderdale, FL
International Fund for Protection of
Victims of Crimes, Inc.
New York, NY
February 22, 20115262011–8 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.
2011–8 I.R.B.iFebruary 22, 2011

Numerical Finding List
1
Bulletin 2011–1 through 2011–8
Announcements:
2011-1, 2011-2 I.R.B.304
2011-2, 2011-3 I.R.B.324
2011-3, 2011-3 I.R.B.324
2011-4, 2011-4 I.R.B.424
2011-5, 2011-4 I.R.B.430
2011-6, 2011-4 I.R.B.433
2011-7, 2011-5 I.R.B.446
2011-8, 2011-5 I.R.B.446
2011-9, 2011-7 I.R.B.499
2011-10, 2011-7 I.R.B.499
2011-11, 2011-7 I.R.B.500
2011-13, 2011-8 I.R.B.525
2011-15, 2011-8 I.R.B.526
2011-16, 2011-7 I.R.B.500
Notices:
2011-1, 2011-2 I.R.B.259
2011-2, 2011-2 I.R.B.260
2011-3, 2011-2 I.R.B.263
2011-4, 2011-2 I.R.B.282
2011-5, 2011-3 I.R.B.314
2011-6, 2011-3 I.R.B.315
2011-7, 2011-5 I.R.B.437
2011-8, 2011-8 I.R.B.503
2011-9, 2011-6 I.R.B.459
2011-10, 2011-6 I.R.B.463
2011-11, 2011-7 I.R.B.497
2011-12, 2011-8 I.R.B.514
Proposed Regulations:
REG-149335-08, 2011-6 I.R.B.468
REG-146097-09, 2011-8 I.R.B.516
REG-124018-10, 2011-2 I.R.B.301
REG-131151-10, 2011-8 I.R.B.519
REG-131947-10, 2011-8 I.R.B.521
REG-132724-10, 2011-7 I.R.B.498
Revenue Procedures:
2011-1, 2011-1 I.R.B.1
2011-2, 2011-1 I.R.B.90
2011-3, 2011-1 I.R.B.111
2011-4, 2011-1 I.R.B.123
2011-5, 2011-1 I.R.B.167
2011-6, 2011-1 I.R.B.195
2011-7, 2011-1 I.R.B.233
2011-8, 2011-1 I.R.B.237
2011-9, 2011-2 I.R.B.283
2011-10, 2011-2 I.R.B.294
2011-11, 2011-4 I.R.B.329
2011-12, 2011-2 I.R.B.297
2011-13, 2011-3 I.R.B.318
Revenue Procedures— Continued:
2011-14, 2011-4 I.R.B.330
2011-15, 2011-3 I.R.B.322
2011-16, 2011-5 I.R.B.440
2011-17, 2011-5 I.R.B.441
2011-18, 2011-5 I.R.B.443
2011-19, 2011-6 I.R.B.465
Revenue Rulings:
2011-1, 2011-2 I.R.B.251
2011-2, 2011-2 I.R.B.256
2011-3, 2011-4 I.R.B.326
2011-4, 2011-6 I.R.B.448
Treasury Decisions:
9507, 2011-3 I.R.B.305
9508, 2011-7 I.R.B.495
9509, 2011-6 I.R.B.450
9510, 2011-6 I.R.B.453
9511, 2011-6 I.R.B.455
9512, 2011-7 I.R.B.473
9513, 2011-8 I.R.B.501
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2010–27 through 2010–52 is in Internal Revenue Bulletin
2010–52, dated December 27, 2010.
February 22, 2011ii2011–8 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2011–1 through 2011–8
Announcements:
85-88
Obsoleted by
Rev. Proc. 2011-10, 2011-2 I.R.B.294
2008-11
Modified by
Ann. 2011-6, 2011-4 I.R.B.433
2009-62
Obsoleted by
Rev. Proc. 2011-10, 2011-2 I.R.B.294
Notices:
2006-87
Superseded by
Notice 2011-8, 2011-8 I.R.B.503
2007-25
Superseded by
Notice 2011-8, 2011-8 I.R.B.503
2007-77
Superseded by
Notice 2011-8, 2011-8 I.R.B.503
2008-107
Superseded by
Notice 2011-8, 2011-8 I.R.B.503
2010-27
Superseded by
Notice 2011-8, 2011-8 I.R.B.503
2010-59
Modified by
Notice 2011-5, 2011-3 I.R.B.314
2010-71
Modified and superseded by
Notice 2011-9, 2011-6 I.R.B.459
2010-79
Clarified and modified by
Notice 2011-4, 2011-2 I.R.B.282
Proposed Regulations:
REG-132554-08
Corrected by
Ann. 2011-11, 2011-7 I.R.B.500
Revenue Procedures:
72-50
Modified and superseded by
Rev. Proc. 2011-10, 2011-2 I.R.B.294
Revenue Procedures— Continued:
76-34
Modified and supersed by
Rev. Proc. 2011-10, 2011-2 I.R.B.294
83-23
Modified and superseded by
Rev. Proc. 2011-15, 2011-3 I.R.B.322
94-17
Modified and superseded by
Rev. Proc. 2011-15, 2011-3 I.R.B.322
97-27
Clarified and modified by
Rev. Proc. 2011-4, 2011-1 I.R.B.330
2001-10
Modified by
Rev. Proc. 2011-4, 2011-4 I.R.B.330
2002-28
Modified by
Rev. Proc. 2011-4, 2011-4 I.R.B.330
2003-21
Modified and superseded by
Rev. Proc. 2011-15, 2011-3 I.R.B.322
2004-34
Modified by
Rev. Proc. 2011-14, 2011-4 I.R.B.330
Modified and clarified by
Rev. Proc. 2011-18, 2011-5 I.R.B.443
2006-44
Modified by
Ann. 2011-6, 2011-4 I.R.B.433
2006-56
Modified by
Rev. Proc. 2011-14, 2011-4 I.R.B.330
2008-52
Modified by
Notice 2011-4, 2011-2 I.R.B.282
Rev. Proc. 2011-17, 2011-5 I.R.B.441
Superseded in part by
Rev. Proc. 2011-14, 2011-4 I.R.B.330
2009-39
Superseded in part by
Rev. Proc. 2011-14, 2011-4 I.R.B.330
2009-44
Modified by
Ann. 2011-6, 2011-4 I.R.B.433
2010-1
Superseded by
Rev. Proc. 2011-1, 2011-1 I.R.B.1
2010-2
Superseded by
Rev. Proc. 2011-2, 2011-1 I.R.B.283
Revenue Procedures— Continued:
2010-3
Superseded by
Rev. Proc. 2011-3, 2011-1 I.R.B.111
2010-4
Superseded by
Rev. Proc. 2011-4, 2011-1 I.R.B.123
2010-5
Superseded by
Rev. Proc. 2011-5, 2011-1 I.R.B.167
2010-6
Superseded by
Rev. Proc. 2011-6, 2011-1 I.R.B.195
2010-7
Superseded by
Rev. Proc. 2011-7, 2011-1 I.R.B.233
2010-8
Superseded by
Rev. Proc. 2011-8, 2011-1 I.R.B.237
2010-9
Superseded by
Rev. Proc. 2011-9, 2011-2 I.R.B.283
2010-15
Updated by
Rev. Proc. 2011-13, 2011-3 I.R.B.318
2011-1
Corrected by
Ann. 2011-7, 2011-5 I.R.B.446
2011-8
Corrected by
Ann. 2011-8, 2011-5 I.R.B.446
2011-11
Corrected by
Ann. 2011-9, 2011-7 I.R.B.499
Revenue Rulings:
81-100
Modified by
Rev. Rul. 2011-1, 2011-2 I.R.B.251
2004-67
Modified by
Rev. Rul. 2011-1, 2011-2 I.R.B.251
2008-40
Modified by
Rev. Rul. 2011-1, 2011-2 I.R.B.251
2011-3
Corrected by
Ann. 2011-16, 2011-7 I.R.B.500
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–27 through 2010–52 is in Internal Revenue Bulletin 2010–52, dated December 27,
2010.
2011–8 I.R.B.iiiFebruary 22, 2011

Treasury Decisions:
9505
Corrected by
Ann. 2011-10, 2011-7 I.R.B.499
February 22, 2011iv2011–8 I.R.B.

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