Internal Revenue Bulletin 2008-13 (PDF rendition): IRS Notices

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

Bulletin No. 200
8-13
March 31, 2008
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2008–10, page 676.
Interest rates; underpayments and overpayments.The
rates of interest determined under section 6621 of the Code
for the calender quarter beginning April 1, 2008, will be 6 per-
cent for overpayments (5 percent in the case of a corporation),
6 percent for underpayments, and 8 percent for large corpo-
rate underpayments. The rate of interest paid on the portion of
a corporate overpayment exceeding $10,000 will be 3.5 per-
cent.
Rev. Rul. 2008–18, page 674.
S corporation; qualified subchapter S subsidiary (QSub).
This ruling describes situations where an S corporation under-
goes a reorganization pursuant to section 368(a)(1)(F) of the
Code where the operating S corporation becomes a QSub of a
newly formed holding company. The ruling holds that the newly
formed parent does not have to make a new S election pursuant
to Rev. Rul. 64–250. The ruling further holds that, effec-
tive 1/1/09, the new parent will have to get its own EIN rather
than take over the QSub’s EIN. However, for S corporations
that have previously reorganized under section 368(a)(1)(F) in
a manner described in this ruling, where the parent took the
QSub’s EIN, the parent should continue to use that EIN and the
QSub will have to get a new EIN when it is treated as a separate
corporation. Rev. Rul. 64–250 amplified.
Rev. Rul. 2008–19, page 669.
Insurance companies; interest rate tables.Prevailing
state assumed interest rates are provided for the determina-
tion of reserves under section 807 of the Code for contracts
issued in 2007 and 2008. Rev. Rul. 92–19 supplemented in
part.
REG–127391–07, page 689.
Proposed regulations amend regulations under section 664(c)
of the Code to provide that charitable remainder trusts with
unrelated business taxable income (UBTI) in taxable years be-
ginning after December 31, 2006, are exempt from federal
income tax, but are subject to a 100-percent excise tax on the
UBTI of the charitable remainder trust pursuant to section 424
of the Tax Relief and Health Care Act of 2006. The regula-
tions provide that the excise tax is reported and payable in ac-
cordance with appropriate forms. The regulations clarify that,
consistent with regulations section 1.664–1(d)(2), the excise
tax imposed upon the charitable remainder trust with UBTI is
treated as paid from corpus and the trust income that is UBTI is
income of the trust for purposes of determining the character
of the distribution made to the beneficiary. A public hearing is
scheduled for April 11, 2008.
Notice 2008–38, page 683.
This notice invites public comments regarding guidance to be
provided to federal, state, and local governments required to
withhold on payments made by the government entities or their
paying agents for services and property.
Rev. Proc. 2008–24, page 684.
This procedure provides guidance concerning the treatment un-
der sections 1035 and 72 of the Code of the partial exchange
of an annuity contract. Specifically, the procedure makes those
interim rules final, with clarifications concerning (i) the length
of time a taxpayer must wait before withdrawing or annuitizing
amounts from either of the contracts that were subject to the
exchange (ii) the status of the transactions in which the same
insurance company issued both contracts involved in the ex-
change and (iii) the treatment of transactions that fall outside
of these rules. Notice 2003–51 superseded.
(Continued on the next page)
Fi
nding Lists begin on page ii.
Index for January through March begins on page iv.

Rev. Proc. 2008–25, page 686.
This procedure provides a safe harbor method of accounting
for accrual method taxpayers that incur payroll tax liabilities
for compensation (including bonuses and vacation pay). It also
provides procedures for taxpayers to obtain the automatic con-
sent of the Commissioner of Internal Revenue to change to the
safe harbor method of accounting. Rev. Proc. 2002–9 modi-
fied and amplified.
EXEMPT ORGANIZATIONS
REG–127391–07, page 689.
Proposed regulations amend regulations under section 664(c)
of the Code to provide that charitable remainder trusts with
unrelated business taxable income (UBTI) in taxable years be-
ginning after December 31, 2006, are exempt from federal
income tax, but are subject to a 100-percent excise tax on the
UBTI of the charitable remainder trust pursuant to section 424
of the Tax Relief and Health Care Act of 2006. The regula-
tions provide that the excise tax is reported and payable in ac-
cordance with appropriate forms. The regulations clarify that,
consistent with regulations section 1.664–1(d)(2), the excise
tax imposed upon the charitable remainder trust with UBTI is
treated as paid from corpus and the trust income that is UBTI is
income of the trust for purposes of determining the character
of the distribution made to the beneficiary. A public hearing is
scheduled for April 11, 2008.
Announcement 2008–21, page 691.
This announcement explains the procedures the public may use
to request from the Service the inspection and copying of a
section 501(c)(3) organization’s annual return reporting section
511 unrelated business income (Form 990–T).
Announcement 2008–22, page 692.
The IRS has revoked its determination that Young Lions Founda-
tion of Sausalito, CA; Med-School, Inc., of Warner Robbins, GA;
National Housing Foundation, Inc., of Schaumburg, IL; Vernon
Parish School Board of Leesville, VA; Credit Success Company
of St. Augustine, FL; and Computer Programming Institute of
N. Royalton, OH, qualify as organizations described in sections
501(c)(3) and 170(c)(2) of the Code.
EMPLOYMENT TAX
Rev. Rul. 2008–18, page 674.
S corporation; qualified subchapter S subsidiary (QSub).
This ruling describes situations where an S corporation under-
goes a reorganization pursuant to section 368(a)(1)(F) of the
Code where the operating S corporation becomes a QSub of a
newly formed holding company. The ruling holds that the newly
formed parent does not have to make a new S election pursuant
to Rev. Rul. 64–250. The ruling further holds that, effec-
tive 1/1/09, the new parent will have to get its own EIN rather
than take over the QSub’s EIN. However, for S corporations
that have previously reorganized under section 368(a)(1)(F) in
a manner described in this ruling, where the parent took the
QSub’s EIN, the parent should continue to use that EIN and the
QSub will have to get a new EIN when it is treated as a separate
corporation. Rev. Rul. 64–250 amplified.
EXCISE TAX
Rev. Rul. 2008–18, page 674.
S corporation; qualified subchapter S subsidiary (QSub).
This ruling describes situations where an S corporation under-
goes a reorganization pursuant to section 368(a)(1)(F) of the
Code where the operating S corporation becomes a QSub of a
newly formed holding company. The ruling holds that the newly
formed parent does not have to make a new S election pursuant
to Rev. Rul. 64–250. The ruling further holds that, effec-
tive 1/1/09, the new parent will have to get its own EIN rather
than take over the QSub’s EIN. However, for S corporations
that have previously reorganized under section 368(a)(1)(F) in
a manner described in this ruling, where the parent took the
QSub’s EIN, the parent should continue to use that EIN and the
QSub will have to get a new EIN when it is treated as a separate
corporation. Rev. Rul. 64–250 amplified.
ADMINISTRATIVE
Rev. Rul. 2008–18, page 674.
S corporation; qualified subchapter S subsidiary (QSub).
This ruling describes situations where an S corporation under-
goes a reorganization pursuant to section 368(a)(1)(F) of the
Code where the operating S corporation becomes a QSub of a
newly formed holding company. The ruling holds that the newly
formed parent does not have to make a new S election pursuant
to Rev. Rul. 64–250. The ruling further holds that, effec-
tive 1/1/09, the new parent will have to get its own EIN rather
than take over the QSub’s EIN. However, for S corporations
that have previously reorganized under section 368(a)(1)(F) in
a manner described in this ruling, where the parent took the
QSub’s EIN, the parent should continue to use that EIN and the
QSub will have to get a new EIN when it is treated as a separate
corporation. Rev. Rul. 64–250 amplified.
Notice 2008–39, page 684.
This notice describes filing rules for certain claims arising un-
der section 41 of the Code. Notice 2002–44 superseded.
(Continued on the next page)
March 31, 20082008–13 I.R.B.

Announcement 2008–24, page 692.
This document provides notice of a public hearing on pro-
posed regulations (REG–127770–07, 2007–50 I.R.B. 1171)
that would expand the list of permitted loan modifications to in-
clude certain modifications of commercial mortgages. A public
hearing is scheduled for April 4, 2008.
Announcement 2008–26, page 693.
This document contains a notice of public hearing on proposed
regulations (REG–149856–03, 2007–24 I.R.B. 1394) relating
to a claim that a child is a dependent by parents who are di-
vorced, legally separated under a decree of separate mainte-
nance, agreement, or who live apart at all times during the last
6 months of the calendar year. A public hearing is scheduled
for April 3, 2008.
2008–13 I.R.B.March 31, 2008

The IRS Mission
Provide Americ
a’s taxpayers top quality service by helping them
understand an
d meet their tax responsibilities and by applying
the tax law with
integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
March 31, 20082008–13 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 41.—C
redit for
Increasing Re
search
Activities
A notice describes filing rules for certain claims
arising under section 41 of the Code. See Notice
2008-39, page 684.
Section 72.—Annuities;
Certain Proceeds of
Endowment and Life
Insurance Contracts
A revenue procedure supersedes the interim guid-
ance provided in Notice 2003–51, 2003–2 C.B. 361,
concerning the treatment under sections 1035 and
72 of the partial exchange of an annuity contract.
Specifically, the revenue procedure makes those
interim rules final, with clarifications concerning
(i) the length of time a taxpayer must wait before
withdrawing or annuitizing amounts from either of
the contracts that were subject to the exchange, (ii)
the status of the transactions in which the same insur-
ance company issued both contracts involved in the
exchange, and (iii) the treatment of transactions that
fall outside of these rules. See Rev. Proc. 2008-24,
page 684.
Section 368.—Definitions
Relating to Corporate
Reorganizations
A revenue ruling describes a reorganization that
qualifies under § 368(a)(1)(F) that involves S corpo-
rations and QSubs. See Rev. Rul. 2008-18, page 674.
Section 446.—General Rule
for Methods of Accounting
A revenue procedure provides a safe harbor
method of accounting for accrual method taxpayers
that incur payroll tax liabilities on compensation (in-
cluding bonuses and vacation pay). It also provides
procedures for taxpayers to obtain the automatic
consent of the Commissioner of Internal Revenue to
change to the safe harbor method of accounting. See
Rev. Proc. 2008-25, page 686.
Section 461.—
General
Rule for Taxab
le Year
of Deduction
A revenue proc
edure provides a safe harbor
method of acco
unting for accrual method taxpayers
that incur pa
yroll tax liabilities on compensation (in-
cluding bonu
ses and vacation pay). It also provides
procedures f
or taxpayers to obtain the automatic
consent of th
e Commissioner of Internal Revenue to
change to th
e safe harbor method of accounting. See
Rev. Proc. 2
008-25, page 686.
Section 481.—Adjustments
Required by Changes in
Method of Accounting
A revenue procedure provides a safe harbor
method of accounting for accrual method taxpayers
that incur payroll tax liabilities on compensation (in-
cluding bonuses and vacation pay). It also provides
procedures for taxpayers to obtain the automatic
consent of the Commissioner of Internal Revenue to
change to the safe harbor method of accounting. See
Rev. Proc. 2008-25, page 686.
Section 807.—Rules for
Certain Reserves
Insurance companies; interest rate
tables.Prevailing state assumed interest
rates are provided for the determination of
reserves under section 807 of the Code for
contracts issued in 2007 and 2008. Rev.
Rul. 92–19 supplemented in part.
Rev. Rul. 2008–19
For pu
rposes of § 807(d)(4) of the In-
tern
al Revenue Code, for taxable years be-
ginn
ing after December 31, 2006, this rul-
ing s
upplements the schedules of prevail-
ing s
tate assumed interest rates set forth
in Re
v. Rul. 92–19, 1992–1 C.B. 227.
This
information is to be used by insurance
com
panies in computing their reserves for
(1)
life insurance and supplementary total
and permanent
disability benefits, (2) in-
dividual annu
ities and pure endowments,
and (3) group a
nnuities and pure endow-
ments. As § 80
7(d)(2)(B) requires that the
interest rat
e used to compute these reserves
be the greate
r of (1) the applicable federal
interest rat
e, or (2) the prevailing state as-
sumed inter
est rate, the table of applicable
federal int
erest rates in Rev. Rul. 92–19 is
also supple
mented.
Following a
re supplements to schedules
A, B, C, and D
to Part III of Rev. Rul.
92–19, prov
iding prevailing state assumed
interest r
ates for insurance products with
different
features issued in 2007 and 2008,
and a suppl
ement to the table in Part IV of
Rev. Rul. 9
2–19, providing the applica-
ble federa
l interest rates under § 807(d) for
2007 and 2
008. This ruling does not sup-
plement P
arts I and II of Rev. Rul. 92–19.
This is th
e sixteenth supplement to the
interest
rates provided in Rev. Rul. 92–19.
Earlier s
upplements were published in
Rev. Rul.
93–58, 1993–2 C.B. 241 (inter-
est rates
for insurance products issued in
1992 and
1993); Rev. Rul. 94–11, 1994–1
C.B. 196
(1993 and 1994); Rev. Rul.
95–4, 19
95–1 C.B. 141 (1994 and 1995);
Rev. Rul
. 96–2, 1996–1 C.B. 141 (1995
and 199
6); Rev. Rul. 97–2, 1997–1 C.B.
134 (19
96 and 1997); Rev. Rul. 98–2,
1998–1
C.B. 259 (1997 and 1998); Rev.
Rul. 99
–10, 1999–1 C.B. 671 (1998 and
1999);
Rev. Rul. 2000–17, 2000–1 C.B.
842 (1
999 and 2000); Rev. Rul. 2001–11,
2001–
1 C.B. 780 (2000 and 2001); Rev.
Rul. 2
002–12, 2002–1 C.B. 624 (2001 and
2002)
; Rev. Rul. 2003–24, 2003–1 C.B.
557 (2
002 and 2003); Rev. Rul. 2004–14,
2004
–1 C.B. 511 (2003 and 2004); Rev.
Rul.
2005–29, 2005–1 C.B. 1080 (2004
and 2
005); Rev. Rul. 2006–25, 2006–1
C.B.
882 (May 15, 2006) (2005 and 2006);
and R
ev. Rul. 2007–10, 2007–10 I.R.B.
660 (
Mar. 5, 2007) (2006 and 2007).
2008–13 I.R.B.669March 31, 2008

Part III. Prevailing State Assumed Interest Rates — Products Issued in Years After 1982.*
Schedule A
STATUTORY VALUATION INTEREST RATES
BASED ON THE 1980 AMENDMENTS TO THE
N
AICSTANDARDVALUATIONLAW
A. Life insurance valuation:
Guarantee Duration
(
years)
Calendar Year of Issue
2
008
10 or fewer
5.75**
More than 10
but not more than 205.25**
More than 20
5.00**
Source: Rates calculated from the monthly averages, ending June 30, 2007, of Moody’s Composite Yield on Seasoned Corporate
Bonds.
* The terms used in the schedules in this ruling and in Part IIIof Rev. Rul. 92–19 are those used in the Standard Valuation
Law; the terms are defined in Rev. Rul. 92–19.
** As these rates exceed the applicable federal interest rate for 2008 of 4.06 percent, the valuation interest rate to be used for this
product under § 807 is the applicable rate specified in this table.
March 31, 20086702008–13 I.R.B.

Part III, Schedule B
STATUTORY VALUATION INTEREST RATES
BASED ON THE 1980 AMENDMENTS TO THE
N
AICSTANDARDVALUATIONLAW
B. Single premium immediate annuities and annuity benefits involving life contingencies arising from other annuities with cash
settlement options and from guaranteed interest contracts with cash settlement options:
C
alendarYearofIssueValuationInterestRate
2007
5.50*
Source: Rates calculated from the monthly averages, ending June 30, 2007, of Moody’s Composite Yield on Seasoned Corporate
Bonds (formerly known as Moody’s Corporate Bond Yield Average — Monthly Average Corporates). The terms used in this
schedule are those used in the Standard Valuation Law as defined in Rev. Rul. 92–19.
*As this prevailing state assumed interest exceeds the applicable federal interest rate for 2007 of 3.97 percent, the valuation
interest rate of 5.50 percent is to be used for this product under § 807.
2008–13 I.R.B.671March 31, 2008

Part III, Schedule C24 — 2007
STATUTORY VALUATION INTEREST RATES
BASED ON NAIC STANDARD VALUATION LAW
FOR2007CALENDAR YEAR BUSINESS
G
OVERNEDBYTHE1980AMENDMENTS
C. Valuation interest rates for other annuities and guaranteed interest contracts that are valued on an issue year basis:
Valuation Interest Rate (%)
For Plan Type
Cash
Settlement
O
ptions?
Future
Interest
G
uarantee?
Guarantee Duration
(
years)ABC
YesYes
5 or fewer5.504.754.50
More than 5, but not
more than 10
5.254.754.50
More than 10, but not
more than 20
4.754.504.25*
More than 20
4.25*
4.00*4.00*
YesNo
5 or fewer5.505.004.75
More than 5, but not
more than 10
5.505.004.75
More than 10, but not
more than 20
5.004.504.50
More than 20
4.50*4.25*4.25*
NoYes or No
5 or fewer5.50
More than 5, but not
more than 10
5.25
NOT
APPLICABLE
More than 10, but not
more than 20
5.00
More than 20
4.25*
Source: Rates calculated from the monthly averages, ending June 30, 2007, of Moody’s Composite Yield on Seasoned Corporate
Bonds.
*As these rates exceed the applicable federal interest rate for 2007of 3.97 percent, the valuation interest rate to be used for this
product under § 807 is the applicable rate specified in the above table.
March 31, 20086722008–13 I.R.B.

Part III, Schedule D24 — 2007
STATUTORY VALUATION INTEREST RATES
BASED ON NAIC STANDARD VALUATION LAW
FOR2007CALENDAR YEAR BUSINESS
G
OVERNEDBYTHE1980AMENDMENTS
D. Valuation interest rates for other annuities and guaranteed interest contracts that are contracts with cash settlement options
and that are valued on a change in fund basis:
Valuation Interest Rate
For Plan Type
Cash
Settlement
O
ptions?
Future
Interest
G
uarantee?
Guarantee Duration
(
years)ABC
YesYes
5 or fewer5.755.504.75
More than 5, but not
more than 10
5.755.504.75
More than 10, but not
more than 20
5.505.254.50
More than 20
4.754.754.25*
YesNo
5 or fewer
6.00
5.754.75
More than 5, but not
more than 10
5.755.754.75
More than 10, but not
more than 20
5.505.504.75
More than 20
5.005.004.25*
Source: Rates calculated from the monthly averages, ending June 30, 2007, of Moody’s Composite Yield on Seasoned Corporate
Bonds.
*As the applicable federal interest rate for 2007 of 3.97 percent is less than the prevailing state assumed interest rate, the valuation
interest rate to be used for this product under § 807 is the applicable rate specified in the above table.
2008–13 I.R.B.673March 31, 2008

Part IV. Applicable Federal Interest Rates
TABLE OF
APPLICABLE FEDERAL INTEREST RATES
F
ORPURPOSESOF§807
YearInterestRate
20073.97
20084.06
Sources: Rev. Rul. 2004–106, 2004–2 C.B. 893, for the 2005 rate; Rev. Rul. 2005–77, 2005–2 C.B. 1071, for the 2006 rate;
Rev. Rul. 2006–61, 2006–2 C.B. 1028 (Dec. 11, 2006) for the 2007 rate; and Rev. Rul. 2007–70, 2007–50 I.R.B. 1158 (Nov.
20, 2007) for the 2008 rate.
EFFECT ON OTHER REVENUE
RULINGS
Rev. Rul. 92–19 is supplemented by
the addition to Part III of that ruling of pre-
vailing state assumed interest rates under
§ 807 for certain insurance products issued
in 2007 and 2008 and is further supple-
mented by an addition to the table in Part
IV of Rev. Rul. 92–19 listing applicable
federal interest rates. Parts I and II of Rev.
Rul. 92–19 are not affected by this ruling.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Josephine H. Firehock of the Office
of Associate Chief Counsel (Financial In-
stitutions and Products). For further infor-
mation regarding this revenue ruling, con-
tact her at (202) 622–3970 (not a toll-free
call).
Section 1361.—S Corpor-
ation Defin
ed
Arevenueru
ling describes a reorganization that
qualifies u
nder § 368(a)(1)(F) that involves S corpo-
rations an
d QSubs. See Rev. Rul. 2008-18, page 674.
Section 1362.—Election;
Revocatio
n; Termination
Arevenuer
uling describes a reorganization that
qualifies
under § 368(a)(1)(F) that involves S corpo-
rations a
nd QSubs. See Rev. Rul. 2008-18, page 674.
Section 6109.—Identifying
Numbers
26 CFR 301.6109–1: Identifying numbers.
(Also: Sections 368, 1361, 1362; 1.1361–4,
1.1361–5.)
S corporation; qualified subchapter
S subsidiary (QSub).This ruling de-
scribes situations where an S corporation
undergoes a reorganization pursuant to
section 368(a)(1)(F) of the Code where the
operating S corporation becomes a QSub
of a newly formed holding company. The
ruling holds that the newly formed parent
does not have to make a new S election
pursuant to Rev. Rul. 64–250. The ruling
further holds that, effective 1/1/09, the new
parent will have to get its own EIN rather
than take over the QSub’s EIN. However,
for S corporations that have previously
reorganized under section 368(a)(1)(F) in
a manner described in this ruling, where
the parent took the QSub’s EIN, the parent
should continue to use that EIN and the
QSub will have to get a new EIN when it
is treated as a separate corporation. Rev.
Rul. 64–250 amplified.
Rev. Rul. 2008–18
ISSUE
In the transactions described inSitua-
tions 1and2below, does an S corpora-
tion election under § 1362(a) of the In-
ternal Revenue Code (the Code) terminate
and what are the proper employer identifi-
cation numbers (EINs) for the entities par-
ticipating in the transactions?
FACTS
Situation 1.B, an individual, owns all
of the stock inY, an S corporation.Y’s EIN
is 22–2222222. InYear 1,BformsNewco
and contributes all of theYstock toNewco.
Newcomeets the requirements for qualifi-
cation as a small business corporation and
timely elects to treatYas a qualified sub-
chapter S subsidiary (QSub), effective im-
mediately following the transaction. The
transaction meets the requirements of a re-
organization under § 368(a)(1)(F). InYear
2,Newcosells a 1% interest inYtoD.
Situation 2.C, an individual owns all
of the stock ofZ, an S corporation.Z’s
EIN is 33–3333333. InYear 1,Zforms
Newco, which in turn formsMergeco.Pur-
suant to a plan of reorganization,Mergeco
merges with and intoZ,withZsurviv-
ing and C receiving solelyNewcostock in
exchange forZstock.Newcomeets the
requirements for qualification as a small
business corporation and timely elects to
treatZas a QSUB, effective immediately
following the transaction. The transaction
meets the requirementsof a reorganization
under § 368(a)(1)(F).
LAW AND ANALYSIS
S Corporation Election
Section 368(a)(1)(F) provides that a re-
organization includes a mere change in
identity, form, or place of organization of
one corporation, however effected.
Section 1.381(b)–1(a)(2) provides that,
in the case of a reorganization qualify-
ing under § 368(a)(1)(F) (whether or not
March 31, 20086742008–13 I.R.B.

such reorganization also qualifies under
any other provision of § 368(a)(1)), the
acquiring corporation shall be treated (for
purposes of § 381) just as the transferor
corporation would have been treated if
there had been no reorganization.
Section 1361(a)(1) provides that the
term “S corporation” means, with re-
spect to any taxable year, a small business
corporation for whichanelectionunder
§ 1362(a) (S election) is in effect for such
year.
Section 1361(b)(1) defines a “small
business corporation” as a domestic cor-
poration which is not an ineligible cor-
poration and which does not — (A) have
more than 100 shareholders, (B) have as a
shareholder a person (other than an estate,
a trust described in § 1361(c)(2), or an or-
ganization described in § 1361(c)(6)) who
is not an individual, (C) have a nonresident
alien as a shareholder, and (D) have more
than 1 class of stock.
Section 1361(b)(3)(A) provides that,
except as provided in regulations, a QSub
shall not be treated as a separate corpora-
tion and all assets, liabilities, and items of
income, deduction, and credit of the QSub
shall be treated as assets, liabilities and
such items of the S corporation. Section
1361(b)(3)(B) provides that a QSub means
any domestic corporation which is not
an ineligible corporation, if 100 percent
of the stock of the QSub is held by the
S corporation and the S corporation elects
to treat the corporation as a QSub.
Section 1.1361–4(a)(2) provides that, if
an S corporation makes a valid QSub elec-
tion with respect to a subsidiary, the sub-
sidiary is deemed to have liquidated into
the S corporation and that, except as pro-
vided in § 1.1361–4(a)(5), the tax treat-
ment of the liquidation of a larger transac-
tion that includes the liquidation is deter-
mined under the Code and general princi-
ples of tax law, including the step transac-
tion doctrine.
The rules applicable to corporate re-
organizations, as well as other provi-
sions, recognize the unique characteris-
tics of reorganizations qualifying under
§ 368(a)(1)(F). In contrast to other types of
reorganizations, which can involve two or
more operating corporations, a reorganiza-
tion of a corporation under § 368(a)(1)(F)
involves a single operating entity.
Rev. Rul. 64–250, 1964–2 C.B. 333,
provides that when an S corporation
merges into a newly formed corporation
in a transaction qualifying as a reorganiza-
tion under § 368(a)(1)(F), and the newly
formed surviving corporation also meets
the requirements of an S corporation, the
reorganization does not terminate the S
election. Thus, the S election remains in
effect for the new corporation. See also
Rev. Rul. 2004–85, 2004–2 C.B. 189.
Identifying Numbers
Section 6011(b) authorizes the Secre-
tary to require such information with re-
spect to persons subject to taxes as is nec-
essary or helpful in securing proper identi-
fication of such persons.
Section 6109(a)(1) provides generally
that when required by regulations, any per-
son required to make a return, statement,
or other document shall include such iden-
tifying number as may be prescribed for
securing proper identification of such per-
son.
Section 6109(c) provides that the Sec-
retary is authorized to require such infor-
mation as may be necessary to assign an
identifying number to any person.
Section 301.6109–1(a)(1)(ii)(C) pro-
vides that any person other than an indi-
vidual (such as corporations, partnerships,
nonprofit associations, trusts, estates, and
similar nonindividual persons) that is re-
quired to furnish a taxpayer identifying
number must use an EIN. Situation 3 of
Rev. Rul. 73–526, 1973–2 C.B. 404,
issued prior to the amendment to the
Code providing for QSubs, describes a
transaction that qualifies as a reorgani-
zation under § 368(a)(1)(F). The ruling
states that the broad language contained
in §§ 6011(b) and 6109(a) indicates that
Congress has vested in the Secretary or his
delegate discretionary authority to require
the use of whatever identifying number is
deemed necessary or helpful for the proper
identification of a taxpayer, employer,
employee, or other person. Based on this
authority, Rev. Rul. 73–526 in Situation 3
concludes that, in a transaction qualifying
as a reorganization under § 368(a)(1)(F),
the acquiring corporation should use the
EIN of the transferor corporation.
However, since the publication of Rev.
Rul. 73–526, the Code was amended
to provide the classification of certain
wholly-owned subsidiaries of S corpora-
tions as QSubs and the regulations under
§ 6109 have been amended to address the
effect of QSub elections under § 1361.
Section 301.6109–1(i)(1) provides that
any entity that has an EIN will retain
that EIN if a QSub election is made for
the entity under § 1.1361–3 or if a QSub
election that was in effect for the entity
terminates under § 1.1361–5. Section
301.6109–1(i)(2) provides that, except
as otherwise provided in regulations or
other published guidance, a QSub must
use the parent S corporation’s EIN. Sec-
tion 301.6109–1(i)(3) provides that if an
entity’s QSub election terminates, it may
not use the EIN of the parent S corporation
after the termination. If the entity had an
EIN prior to becoming a QSub or obtained
an EIN while it was a QSub in accordance
with regulations or other published guid-
ance, the entity must use that EIN. If the
entityhadnoEIN,itmustobtainanEIN
upon termination of the QSub election.
For tax years beginning after De-
cember 31, 2004, Congress amended
§ 1361(b)(3)(E) to provide that, except
to the extent provided by the Secretary,
QSubs are not disregarded for purposes of
information returns under part III of sub-
chapter A of chapter 61. Further, QSubs
are not disregarded for certain other pur-
poses as provided in regulations. For
example, § 1.1361–4(a)(7) provides that a
QSub is treated as a separate corporation
for purposes of employment tax and re-
lated reporting requirements (effective for
wages paid on or after January 1, 2009),
and § 1.1361–4(a)(8) provides that a QSub
is treated as a separate corporation for
purposes of certain excise taxes (effective
for liabilities imposed and actions first
required or permitted in periods beginning
on or after January 1, 2008).
Because the QSub is treated as a sepa-
rate corporation for certain federal tax pur-
poses, the QSub must retain and use its
EIN when it is treated as a separate cor-
poration for federal tax purposes. Thus,
it would not be appropriate for the ac-
quiring corporation in a reorganization un-
der § 368(a)(1)(F) to retain the EIN of
the transferor corporation that becomes a
QSub.
HOLDING
Situation 1.InSituation 1, consistent
with Rev. Rul. 64–250,Y’s original S elec-
tion does not terminate but continues for
2008–13 I.R.B.675March 31, 2008

Newco.Newcomust obtain a new EIN.
Ymust retain its EIN (EIN 22–2222222)
even though a QSub election is made for
it and must use its original EIN any time
the QSub is otherwise treated as a separate
entity for federal tax purposes (including
for employment and certain excise taxes)
or if the QSub election terminates. InYear
2,whenNewcosells a 1% interest ofYto
D,Y’s QSub election terminates pursuant
to § 1361(b)(3)(C).Ymust use its original
EIN of 22–2222222 following the termina-
tion ofY’s QSub election.
Situation 2.InSituation 2, consistent
with Rev. Rul. 64–250,Z’soriginal S
election does not terminate but continues
forNewco.Newcomust obtain a new EIN.
Zmust retain its EIN (EIN 33–3333333)
even though a QSub election is made for
Zand must use its original EIN any time
the QSub is otherwise treated as a separate
entity for federal tax purposes (including
for employment and certain excise taxes)
or if the QSub election terminates.
EFFECT ON OTHER RULINGS
Rev. Rul. 64–250 is amplified for
transactions qualifying as a reorganization
under § 368(a)(1)(F) where the transferor
S corporation becomes a QSub of the ac-
quiring corporation. The holding ofSitu-
ation 3in Rev. Rul. 73–526 continues to
apply to its facts.
EFFECTIVE DATE
This revenue ruling applies to
§ 368(a)(1)(F) reorganizations occur-
ring on or after January 1, 2009. For
§ 368(a)(1)(F) reorganizations occurring
on or after March 7, 2008 and before the
effective date of this ruling, taxpayers
may rely on this revenue ruling. The Ser-
vice is aware that, prior to the effective
date of this revenue ruling, some S cor-
porations have undergone reorganizations
under § 368(a)(1)(F) in a manner similar
to those described inSituations 1and2
above in which the acquiring corporation
continued to use the transferor corpora-
tion’sEINinanefforttocomplywithRev.
Rul. 73–526. In the cases described in
the immediately preceding sentence, the
acquiring corporation should continue to
follow Rev. Rul. 73–526 and use the trans-
feror corporation’s EIN, and furthermore,
after the § 368(a)(1)(F) reorganization, the
transferor (QSub) should use the parent’s
EIN until such time the transferor (QSub)
is otherwise treated as a separate corpora-
tion for federal tax purposes (including for
employment and certain excise taxes) or
until such time that the QSub terminates.
At such time, the QSub must obtain a new
EIN.
The IRS will need to make administra-
tive adjustments to ensure that its Cam-
puses recognize the continuation of the
S election in the fact situations presented
in this revenue ruling. Consequently, for
a § 368(a)(1)(F) reorganization occurring
prior to January 1, 2009, it may be pru-
dent for the acquiring corporation to make
a protective S election.
DRAFTING INFORMATION
The principal authors of this rev-
enue ruling are Charles J. Langley, Jr.,
of the Office of Associate Chief Coun-
sel (Passthroughs and Special Industries)
and Rebecca O. Burch of the Office of
Associate Chief Counsel (Corporate).
For further information regarding this
revenue ruling, contact Mr. Langley at
(202) 622–3060 (not a toll-free call) or
Ms. Burch at (202) 622–7750 (not a
toll-free call).
Section 6402.—Authority to
Make Credits or Refunds
A notice describes filing rules for certain claims
arising under section 41 of the Code. See Notice
2008-39, page 684.
Section 6621.—Determina-
tion of Rate of Interest
26 CFR 301.6621–1: Interest rate.
Interest rates; underpayments and
overpayments.The rates of interest de-
termined under section 6621 of the Code
for the calender quarter beginning April 1,
2008, will be 6 percent for overpayments
(5 percent in the case of a corporation), 6
percent for underpayments, and 8 percent
for large corporate underpayments. The
rate of interest paid on the portion of a
corporate overpayment exceeding $10,000
will be 3.5 percent.
Rev. Rul. 2008–10
Section 6621 of the Internal Revenue
Code establishes the rates for interest
on tax overpayments and tax underpay-
ments. Under section 6621(a)(1), the
overpayment rate is the sum of the federal
short-term rate plus 3 percentage points
(2 percentage points in the case of a cor-
poration), except the rate for the portion
of a corporate overpayment of tax exceed-
ing $10,000 for a taxable period is the
sum of the federal short-term rate plus
0.5 of a percentage point. Under section
6621(a)(2), the underpayment rate is the
sum of the federal short-term rate plus 3
percentage points.
Section 6621(c) provides that for pur-
poses of interest payable under section
6601 on any large corporate underpay-
ment, the underpayment rate under section
6621(a)(2) is determined by substituting
“5 percentage points” for “3 percentage
points.” See section 6621(c) and section
301.6621–3 of the Regulations on Proce-
dure and Administration for the definition
of a large corporate underpayment and
for the rules for determining the appli-
cable date. Section 6621(c) and section
301.6621–3 are generally effective for
periods after December 31, 1990.
Section 6621(b)(1) provides that the
Secretary will determine the federal
short-term rate for the first month in each
calendar quarter.
Section 6621(b)(2)(A) provides that the
federal short-term rate determined under
section 6621(b)(1) for any month applies
during the first calendar quarter beginning
after that month. Section 6621(b)(2)(B)
provides that in determining the addition to
tax under section 6654 for failure to pay es-
timated tax for any taxable year, the federal
short-term rate that applies during the third
month following the taxable year also ap-
plies during the first 15 days of the fourth
month following the taxable year. Sec-
tion 6621(b)(3) provides that the federal
short-term rate for any month is the fed-
eral short-term rate determined during that
month by the Secretary in accordance with
section 1274(d), rounded to the nearest full
percent (or, if a multiple of
1
/2of 1 percent,
the rate is increased to the next highest full
percent).
Notice 88–59, 1988–1 C.B. 546, an-
nounced that, in determining the quarterly
interest rates to be used for overpayments
March 31, 20086762008–13 I.R.B.

and underpayments of tax under section
6621, the Internal Revenue Service will
use the federal short-term rate based on
daily compounding because that rate is
most consistent with section 6621 which,
pursuant to section 6622, is subject to daily
compounding.
Rounded to the nearest full percent, the
federal short-term rate based on daily com-
pounding determined during the month of
January 2008 is 3 percent. Accordingly, an
overpayment rate of 6 percent (5 percent
in the case of a corporation) and an under-
payment rate of 6 percent are established
for the calendar quarter beginning April 1,
2008. The overpayment rate for the por-
tion of a corporate overpayment exceeding
$10,000 for the calendar quarter beginning
April 1, 2008, is 3.5 percent. The under-
payment rate for large corporate underpay-
ments for the calendar quarter beginning
April 1, 2008, is 8 percent. These rates ap-
ply to amounts bearing interest during that
calendar quarter.
Under section 6621(b)(2)(B), the 7 per-
cent rate that applies to estimated tax un-
derpayments for the first calendar quar-
ter in 2008, as provided in Rev. Rul.
2007–68, 2007–52 I.R.B. 1236, also ap-
plies to estimated tax underpayments for
the first 15 days in April 2008.
Interest factors for daily compound in-
terest for annual rates of 3.5 percent, 5 per-
cent, 6 percent, and 8 percent are published
in Tables 60, 63, 65, and 69 of Rev. Proc.
95–17, 1995–1 C.B. 556, 614, 617, 619,
and 623.
Annual interest rates to be compounded
daily pursuant to section 6622 that apply
for prior periods are set forth in the tables
accompanying this revenue ruling.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Wendy Kribell of the Office of
Associate Chief Counsel (Procedure &
Administration). For further informa-
tion regarding this revenue ruling, contact
Ms. Kribell at (202) 622–4570 (not a
toll-free call).
TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 — PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
PERIODRATE
In 1995–1 C.B.
DAILY RATE TABLE
Before Jul. 1, 1975
6%
Table 2, pg. 557
Jul. 1, 1975—Jan. 31, 1976
9%
Table 4, pg. 559
Feb. 1, 1976—Jan. 31, 19787%
Table 3, pg. 558
Feb. 1, 1978—Jan. 31, 19806%
Table 2, pg. 557
Feb. 1, 1980—Jan. 31, 198212%
Table 5, pg. 560
Feb. 1, 1982—Dec. 31, 198220%
Table 6, pg. 560
Jan. 1, 1983—Jun. 30, 198316%
Table 37, pg. 591
Jul. 1, 1983—Dec. 31, 198311%
Table 27, pg. 581
Jan. 1, 1984—Jun. 30, 198411%
Table 75, pg. 629
Jul. 1, 1984—Dec. 31, 198411%
Table 75, pg. 629
Jan. 1, 1985—Jun. 30, 1985
13%
Table 31, pg. 585
Jul. 1, 1985—Dec. 31, 1985
11%
Table 27, pg. 581
Jan. 1, 1986—Jun. 30, 198610%
Table 25, pg. 579
Jul. 1, 1986—Dec. 31, 19869%
Table 23, pg. 577
TABLE OF INTEREST RATES
FROM JAN. 1, 1987 — DEC. 31, 1998
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATE TABLEPGRATE TABLEPG
Jan. 1, 1987—Mar. 31, 19878%21
575
9%23
577
Apr. 1, 1
987—Jun. 30, 1987
8%21
575
9%23
577
Jul. 1, 1987—Sep. 30, 19878%21
575
9%23
577
Oct. 1, 1987—Dec. 31, 19879%23
577
10%
25579
Jan. 1,
1988—Mar. 31, 1988
10%7362711%
75
629
Apr. 1, 1988—Jun. 30, 19889%71
625
10%73627
Jul. 1, 1988—Sep. 30, 19889%71
625
10%73627
Oct. 1
, 1988—Dec. 31, 1988
10%7362711%
75
629
Jan. 1, 1989—Mar. 31, 198910%
25579
11%27
581
Apr. 1, 1989—Jun. 30, 198911%27
581
12%29
583
Jul. 1
, 1989—Sep. 30, 1989
11%27
581
12%29
583
2008–13 I.R.B.677March 31, 2008

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 — DEC. 31, 1998 – Continued
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATE TABLEPGRATE TABLEPG
Oct. 1, 1989—Dec. 31, 198910%
25579
11%27
581
Jan. 1, 1990—Mar. 31, 199010%
25579
11%27
581
Apr. 1, 1990—Ju
n. 30, 1990
10%
25579
11%27
581
Jul. 1, 1990—Sep. 30, 199010%
25579
11%27
581
Oct. 1, 1990—Dec. 31, 199010%
25579
11%27
581
Jan. 1, 1991—M
ar. 31, 1991
10%
25579
11%27
581
Apr. 1, 1991—Jun. 30, 19919%23
577
10%
25579
Jul. 1, 1991—Sep. 30, 19919%23
577
10%
25579
Oct. 1, 1991—
Dec. 31, 1991
9%23
577
10%
25579
Jan. 1, 1992—Mar. 31, 19928%696239%71
625
Apr. 1, 1992—Jun. 30, 19927%676218%69623
Jul. 1, 1992
—Sep. 30, 1992
7%676218%69623
Oct. 1, 1992—Dec. 31, 19926%
65
6197%67621
Jan. 1, 1993—Mar. 31, 19936%17
571
7%19
573
Apr. 1, 1993
—Jun. 30, 1993
6%17
571
7%19
573
Jul. 1, 1993—Sep. 30, 19936%17
571
7%19
573
Oct. 1, 1993—Dec. 31, 19936%17
571
7%19
573
Jan. 1, 19
94—Mar. 31, 1994
6%17
571
7%19
573
Apr. 1, 1994—Jun. 30, 19946%17
571
7%19
573
Jul. 1, 1994—Sep. 30, 19947%19
573
8%21
575
Oct. 1, 19
94—Dec. 31, 1994
8%21
575
9%23
577
Jan. 1, 1995—Mar. 31, 1995
8%21
575
9%23
577
Apr. 1, 1
995—Jun. 30, 1995
9%23
577
10%
25579
Jul. 1, 1995—Sep. 30, 1995
8%21
575
9%23
577
Oct. 1, 1995—Dec. 31, 1995
8%21
575
9%23
577
Jan. 1, 1996—Mar. 31, 19968%696239%71
625
Apr. 1,
1996—Jun. 30, 1996
7%676218%69623
Jul. 1, 1996—Sep. 30, 19968%696239%71
625
Oct. 1, 1996—Dec. 31, 19968%696239%71
625
Jan. 1
, 1997—Mar. 31, 1997
8%21
575
9%23
577
Apr. 1, 1997—Jun. 30, 19978%21
575
9%23
577
Jul. 1, 1997—Sep. 30, 19978%21
575
9%23
577
Oct.
1, 1997—Dec. 31, 1997
8%21
575
9%23
577
Jan. 1, 1998—Mar. 31, 19988%21
575
9%23
577
Apr. 1, 1998—Jun. 30, 19987%19
573
8%21
575
Jul
. 1, 1998—Sep. 30, 1998
7%19
573
8%21
575
Oct. 1, 1998—Dec. 31, 19987%19
573
8%21
575
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995–1 C.B.
RATETABLEPG
Jan. 1, 1999—Mar. 31, 19997%19
573
Apr
. 1, 1999—Jun. 30, 1999
8%21
575
Jul. 1, 1999—Sep. 30, 19998%21
575
Oct. 1, 1999—Dec. 31, 19998%21
575
Jan
. 1, 2000—Mar. 31, 2000
8%69623
Apr. 1, 2000—Jun. 30, 20009%71
625
Jul. 1, 2000—Sep. 30, 20009%71
62
5
Oc
t. 1, 2000—Dec. 31, 2000
9%71
625
Jan. 1, 2001—Mar. 31, 20019%23
577
March 31, 20086782008–13 I.R.B.

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT – Continued
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995–1 C.B.
RATETABLEPG
Apr. 1, 2001—Jun. 30, 20018%21
575
Jul. 1, 2001—Sep. 30, 20017%19
573
Oct. 1, 2001—Dec. 31, 20017%19
573
Jan. 1, 2002—Mar. 31, 20026%17
571
Apr. 1, 2002—Jun. 30, 20026%17
571
Jul. 1, 2002—Sep. 30, 20026%17
571
Oct. 1, 2002—Dec. 31, 20026%17
571
Jan. 1, 2003—Mar. 31, 2003
5%15569
Apr. 1, 2003—Jun. 30, 2003
5%15569
Jul. 1, 2003—Sep. 30, 2003
5%15569
Oct. 1, 2003—Dec. 31, 20034%13
567
Jan. 1, 2004—Mar. 31, 20044%61
615
Apr. 1, 2004—Jun. 30, 2004
5%
63617
Jul. 1, 2004—Sep. 30, 20044%61
615
Oct. 1, 2004—Dec. 31, 2004
5%
63617
Jan. 1, 2005—Mar. 31, 20055%15569
Apr. 1, 2005—Jun. 30, 2005
6%17
571
Jul. 1, 2005—Sep. 30, 2005
6%17
571
Oct. 1, 2005—Dec. 31, 2005
7%19
573
Jan. 1, 2006—Mar. 31, 20067%19
573
Apr. 1, 2006—Jun. 30, 20067%19
573
Jul. 1, 2006—Sep. 30, 20068%21
575
Oct. 1, 2006—Dec. 31, 20068%21
575
Jan. 1, 2007—Mar. 31, 20078%21
575
Apr. 1, 2007—Jun. 30, 20078%21
575
Jul. 1, 2007—Sep. 30, 20078%21
575
Oct. 1, 2007—Dec. 31, 20078%21
575
Jan. 1, 2008—Mar. 31, 20087%67621
Apr. 1, 2008—Jun. 30, 20086%
65
619
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATE TABLEPGRATE TABLEPG
Jan. 1,
1999—Mar. 31, 1999
6%17
571
7%19
573
Apr. 1, 1999—Jun. 30, 19997%19
573
8%21
575
Jul. 1, 1999—Sep. 30, 19997%19
573
8%21
575
Oct. 1
, 1999—Dec. 31, 1999
7%19
573
8%21
575
Jan. 1, 2000—Mar. 31, 20007%676218%69623
Apr. 1, 2000—Jun. 30, 20008%696239%71
625
Jul.
1, 2000—Sep. 30, 2000
8%696239%71
625
Oct. 1, 2000—Dec. 31, 20008%696239%71
625
Jan. 1, 2001—Mar. 31, 20018%21
575
9%23
577
Apr
. 1, 2001—Jun. 30, 2001
7%19
573
8%21
575
Jul. 1, 2001—Sep. 30, 20016%17
571
7%19
573
Oct. 1, 2001—Dec. 31, 20016%17
571
7%19
573
Jan
. 1, 2002—Mar. 31, 2002
5%15569
6%17
571
Apr. 1, 2002—Jun. 30, 2002
5%15569
6%17
571
Jul. 1, 2002—Sep. 30, 2002
5%1556
9
6%17
57
1
2008–13 I.R.B.679March 31, 2008

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT – Continued
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATE TABLEPGRATE TABLEPG
Oct. 1, 2002—Dec. 31, 2002
5%15569
6%17
571
Jan. 1, 2003—Mar. 31, 20034%13
5675%15569
Apr. 1, 2003—Ju
n. 30, 2003
4%13
5675%15569
Jul. 1, 2003—Sep. 30, 20034%13
5675%15569
Oct. 1, 2003—Dec. 31, 20033%11
565
4%13
567
Jan. 1, 2004—M
ar. 31, 2004
3%
59
6134%61
615
Apr. 1, 2004—Jun. 30, 20044%61
6155%
63617
Jul. 1, 2004—Sep. 30, 20043%
59
6134%61
615
Oct. 1, 2004—
Dec. 31, 2004
4%61
6155%
63617
Jan. 1, 2005—Mar. 31, 2005
4%13
5675%15569
Apr. 1, 2005—
Jun. 30, 2005
5%15569
6%17
571
Jul. 1, 2005—Sep. 30, 20055%15569
6%17
571
Oct. 1, 2005—Dec. 31, 2005
6%17
571
7%19
573
Jan. 1, 2006—Mar. 31, 20066%17
571
7%19
573
Apr. 1, 2006
—Jun. 30, 2006
6%17
571
7%19
573
Jul. 1, 2006—Sep. 30, 20067%19
573
8%21
575
Oct. 1, 2006—Dec. 31, 20067%19
573
8%21
575
Jan. 1, 200
7—Mar. 31, 2007
7%19
573
8%21
575
Apr. 1, 2007—Jun. 30, 20077%19
573
8%21
575
Jul. 1, 2007—Sep. 30, 20077%19
573
8%21
575
Oct. 1, 20
07—Dec. 31, 2007
7%19
573
8%21
575
Jan. 1, 2008—Mar. 31, 20086%
65
6197%67621
Apr. 1, 2008—Jun. 30, 2008
5%
636176%
65
619
TABLE OF INTEREST RATES FOR
LARGE CO
RPORATE UNDERPAYMENTS
FROM JAN
UARY 1, 1991 — PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1991—Mar. 31, 199113%31
585
Apr. 1, 1991—Jun. 30, 199112%29
583
Jul. 1, 1
991—Sep. 30, 1991
12%29
583
Oct. 1, 1991—Dec. 31, 199112%29
583
Jan. 1, 1992—Mar. 31, 199211%
75
629
Apr. 1,
1992—Jun. 30, 1992
10%73627
Jul. 1, 1992—Sep. 30, 199210%73627
Oct. 1, 1992—Dec. 31, 19929%71
625
Jan. 1
, 1993—Mar. 31, 1993
9%23
577
Apr. 1, 1993—Jun. 30, 19939%23
577
Jul. 1, 1993—Sep. 30, 19939%23
577
Oct.
1, 1993—Dec. 31, 1993
9%23
577
Jan. 1, 1994—Mar. 31, 19949%23
577
Apr. 1, 1994—Jun. 30, 19949%23
577
Jul
. 1, 1994—Sep. 30, 1994
10%
25579
Oct. 1, 1994—Dec. 31, 199411%27
581
Jan
. 1, 1995—Mar. 31, 1995
11%27
581
Apr. 1, 1995—Jun. 30, 1995
12%29
583
Jul. 1, 1995—Sep. 30, 1995
11%27
581
Oc
t. 1, 1995—Dec. 31, 1995
11%27
58
1
Ja
n. 1, 1996—Mar. 31, 1996
11%
75
62
9
Apr. 1, 1996—Jun. 30, 199610%73627
March 31, 20086802008–13 I.R.B.

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 — PRESENT – Continued
1995–1 C.B.
RATETABLEPG
Jul. 1, 1996—Sep. 30, 199611%
75
629
Oct. 1, 1996—Dec. 31, 199611%
75
629
Jan. 1, 1997—Mar. 31, 199711%27
581
Apr. 1, 1997—Jun. 30, 199711%27
581
Jul. 1, 1997—Sep. 30, 199711%27
581
Oct. 1, 1997—Dec. 31, 199711%27
581
Jan. 1, 1998—Mar. 31, 199811%27
581
Apr. 1, 1998—Jun. 30, 199810%
25579
Jul. 1, 1998—Sep. 30, 199810%
25579
Oct. 1, 1998—Dec. 31, 199810%
25579
Jan. 1, 1999—Mar. 31, 19999%23
577
Apr. 1, 1999—Jun. 30, 199910%
25579
Jul. 1, 1999—Sep. 30, 199910%
25579
Oct. 1, 1999—Dec. 31, 199910%
25579
Jan. 1, 2000—Mar. 31, 200010%73627
Apr. 1, 2000—Jun. 30, 200011%
75
629
Jul. 1, 2000—Sep. 30, 200011%
75
629
Oct. 1, 2000—Dec. 31, 200011%
75
629
Jan. 1, 2001—Mar. 31, 200111%27
581
Apr. 1, 2001—Jun. 30, 200110%
25579
Jul. 1, 2001—Sep. 30, 20019%23
577
Oct. 1, 2001—Dec. 31, 20019%23
577
Jan. 1, 2002—Mar. 31, 20028%21
575
Apr. 1, 2002—Jun. 30, 20028%21
575
Jul. 1, 2002—Sep. 30, 20028%21
575
Oct. 1, 2002—Dec. 30, 20028%21
575
Jan. 1, 2003—Mar. 31, 20037%19
573
Apr. 1, 2003—Jun. 30, 20037%19
573
Jul. 1, 2003—Sep. 30, 20037%19
573
Oct. 1, 2003—Dec. 31, 20036%17
571
Jan. 1, 2004—Mar. 31, 20046%
65
619
Apr. 1, 2004—Jun. 30, 20047%67621
Jul. 1, 2004—Sep. 30, 20046%
65
619
Oct. 1, 2004—Dec. 31, 20047%67621
Jan. 1, 2005—Mar. 31, 2005
7%19
573
Apr. 1, 2005—Jun. 30, 2005
8%21
575
Jul. 1, 2005—Sep. 30, 2005
8%21
575
Oct. 1, 2005—Dec. 31, 2005
9%23
577
Jan. 1, 2006—Mar. 31, 20069%23
577
Apr. 1, 2006—Jun. 30, 20069%23
577
Jul. 1, 2006—Sep. 30, 200610%
25579
Oct. 1, 2006—Dec. 31, 200610%
25579
Jan. 1, 2007—Mar. 31, 200710%
25579
Apr. 1, 2007—Jun. 30, 200710%
25579
Jul. 1, 2007—Sep. 30, 200710%
25579
Oct. 1, 2007—Dec. 31, 200710%
25579
Jan. 1, 2008—Mar. 31, 20089%71
625
Apr. 1, 2008—Jun. 30, 20088%69623
2008–13 I.R.B.681March 31, 2008

TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 — PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1995—Mar. 31, 19956.5%
18
572
Apr. 1, 1995—Jun. 30, 19957.5%
20
574
Jul. 1, 1995—Sep. 30, 19956.5%
18
572
Oct. 1, 1995—Dec. 31, 19956.5%
18
572
Jan. 1, 1996—Mar. 31, 1996
6.5%
66620
Apr. 1, 1996—Jun. 30, 1996
5.5%
64618
Jul. 1, 1996—Sep. 30, 1996
6.5%
66620
Oct. 1, 1996—Dec. 31, 1996
6.5%
66620
Jan. 1, 1997—Mar. 31, 1997
6.5%
18
572
Apr. 1, 1997—Jun. 30, 1997
6.5%
18
572
Jul. 1, 1997—Sep. 30, 1997
6.5%
18
572
Oct. 1, 1997—Dec. 31, 1997
6.5%
18
572
Jan. 1, 1998—Mar. 31, 1998
6.5%
18
572
Apr. 1, 1998—Jun. 30, 1998
5.5%
16
570
Jul. 1, 1998—Sep. 30, 1998
5.5%
16
570
Oct. 1, 1998—Dec. 31, 1998
5.5%
16
570
Jan. 1, 1999—Mar. 31, 1999
4.5%
14
568
Apr. 1, 1999—Jun. 30, 1999
5.5%
16
570
Jul. 1, 1999—Sep. 30, 1999
5.5%
16
570
Oct. 1, 1999—Dec. 31, 1999
5.5%
16
570
Jan. 1, 2000—Mar. 31, 2000
5.5%
64618
Apr. 1, 2000—Jun. 30, 2000
6.5%
66620
Jul. 1, 2000—Sep. 30, 2000
6.5%
66620
Oct. 1, 2000—Dec. 31, 2000
6.5%
66620
Jan. 1, 2001—Mar. 31, 2001
6.5%
18
572
Apr. 1, 2001—Jun. 30, 2001
5.5%
16
570
Jul. 1, 2001—Sep. 30, 2001
4.5%
14
568
Oct. 1, 2001—Dec. 31, 2001
4.5%
14
568
Jan. 1, 2002—Mar. 31, 2002
3.5%
12
566
Apr. 1, 2002—Jun. 30, 2002
3.5%
12
566
Jul. 1, 2002—Sep. 30, 2002
3.5%
12
566
Oct. 1, 2002—Dec. 31, 2002
3.5%
12
566
Jan. 1, 2003—Mar. 31, 2003
2.5%
10
564
Apr. 1, 2003—Jun. 30, 2003
2.5%
10
564
Jul. 1, 2003—Sep. 30, 2003
2.5%
10
564
Oct. 1, 2003—Dec. 31, 2003
1.5%
8
562
Jan. 1, 2004—Mar. 31, 2004
1.5%56
610
Apr. 1, 2004—Jun. 30, 2004
2.5%58
612
Jul. 1, 2004—Sep. 30, 2004
1.5%56
610
Oct. 1, 2004—Dec. 31, 2004
2.5%58
612
Jan. 1, 2005—Mar. 31, 20052.5%
10
564
Apr. 1, 2005—Jun. 30, 20053.5%
12
566
Jul. 1, 2005—Sep. 30, 20053.5%
12
566
Oct. 1, 2005—Dec. 31, 20054.5%
14
568
Jan. 1, 2006—Mar. 31, 2006
4.5%
14
568
Apr. 1, 2006—Jun. 30, 2006
4.5%
14
568
Jul. 1, 2006—Sep. 30, 2006
5.5%
16
570
Oct. 1, 2006—Dec. 31, 2006
5.5%
16
570
Jan. 1, 2007—Mar. 31, 2007
5.5%
16
570
Apr. 1, 2007—Jun. 30, 2007
5.5%
16
570
Jul. 1, 2007—Sep. 30, 2007
5.5%
16
570
Oct. 1, 2007—Dec. 31, 2007
5.5%
16
570
Jan. 1, 2008—Mar. 31, 2008
4.5%
62616
Apr. 1, 2008—Jun. 30, 2008
3.5%
60614
March 31, 20086822008–13 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Government Entities Required
to Withhold 3% on Payments
for Services and Property
Notice 2008–38
PURPOSE
This notice invites public comments re-
garding guidance to be provided to Gov-
ernment entities, Federal, State and local,
required to withhold on payments made
by the Government entities or their pay-
ing agents for services and property.See
sections 3401(d) and 3402(t)(3). The new
withholding is required by section 3402(t)
of the Internal Revenue Code (the Code),
which was added by section 511 of the
Tax Increase Prevention and Reconcilia-
tion Act of 2005, Pub. L. No. 109–222
(TIPRA). Section 511 of TIPRA is effec-
tive for payments made after December 31,
2010.
The Department of the Treasury and
Internal Revenue Service propose to is-
sue guidance on compliance with the with-
holding requirements of section 3402(t).
The Treasury and Service are requesting
comments from all affected entities. The
information collected will assist the Trea-
sury and Service in drafting guidance un-
der section 3402(t).
BACKGROUND
Under section 3402(t), all Government
entities (except for certain small State enti-
ties) will be required to withhold 3 percent
of all payments for services or property
made after December 31, 2010. Section
3402(t) identifies certain payments, such
as payments that were already subject to
withholding or payments that would not
be subject to tax, as being excluded from
the 3 percent withholding requirements.
Except for those payments, all payments
by affected Government entities, however
made, will be subject to the mandatory 3
percent withholding requirements.
LEGISLATION
Section 3402(t)(1) of the Code pro-
vides that the Government of the United
States, every State, every political subdi-
vision thereof and every instrumentality
of the foregoing making any payment
to any person providing any property or
services (including any payment made in
connection with a Government voucher
or certificate program which functions as
a payment for property or services) shall
deduct and withhold from such payment
a tax in an amount equal to 3 percent of
such payment.
Political subdivisions of a State (or any
instrumentality thereof) making less than
$100,000,000 of payments for property
or services are exempt from this require-
ment.Seesection 3402(t)(2)(G). There
is no statutory exception forde minimis
payments for property or services made by
a Government entity (or any instrumen-
tality thereof) that is not exempt from this
withholding requirement.
Section 3402(t)(1) of the Code does not
apply to any payments made through a
Federal, State, or local Government public
assistance or public welfare program for
which eligibility is determined by a needs
or income test.Seesection 3402(t)(2)(H).
For example, payments under Government
programs providing food vouchers or med-
ical assistance to low-income individuals
are not subject to withholding under sec-
tion 3402(t). However, payments under
Government programs to provide health
care or other services that are not based
on the needs or income of the recipients
are subject to withholding, including pro-
grams where eligibility is based on the
age of the beneficiary. H.R. Conf. Rept.
109–455,109
th
Cong., 2
nd
Sess.,at 301
(2006).
Section 3402(t)(1) of the Code does not
apply to payments of wages or to any other
payment with respect to which manda-
tory (e.g., U.S. source income of foreign
taxpayers) or voluntary (e.g., unemploy-
ment benefits) withholding applies under
present law.Seesection 3402(t)(2)(A).
Section 3402(t) does not exclude payments
that are potentially subject to backup with-
holding under section 3406. If, however,
payments are actually being withheld
under backup withholding, withholding
under section 3402(t) does not apply.See
section 3402(t)(2)(B); H.R. Conf. Rept.
109–455 at 301.
In addition, section 3402(t)(1) of the
Code does not apply to the following: pay-
ments of interest; payments for real prop-
erty; payments to tax-exempt entities or
foreign Governments; intra-Governmental
payments; payments made pursuant to a
classified or confidential contract (as de-
fined in section 6050M(e)(3)); and pay-
ments to Government employees that are
not otherwise excludable from the new
withholding provision with respect to the
employees’ services as employees.See
section 3402(t)(2)(C)—(F),(I).Section
3402(t) is effective for payments made af-
ter December 31, 2010.Seesection 511(b)
of TIPRA.
The withholding requirement will apply
regardless of whether the Government en-
tity making the payment is the recipient of
the property or services. For example, pay-
ments to a commodity producer under a
Government commodity support program
will be subject to the withholding require-
ment.SeeH.R. Conf. Rept. 109–455 at
301.
REQUESTS FOR PUBLIC COMMENT
The Treasury and Service request com-
ments on issues as to which Government
entities and their paying agents will need
guidance in order to implement the re-
quirements of section 3402(t). The Trea-
sury and Service are particularly interested
in any comments regarding:
•How to apply the withholding require-
ments to purchases made with credit
cards or other forms of payment cards;
•How to apply the withholding require-
ments if the payee is not subject to U.S.
tax;
•How to apply the withholding require-
ments to partnerships and other pass-
through entities in which a Govern-
ment entity is a partner or owner;
•How to apply the withholding require-
ments to Government contractors and
Subcontractors;
•The application of the withholding re-
quirements to so-called Government
— Sponsored Entities;
•The application of the withholding re-
quirements tode minimispayments for
2008–13 I.R.B.683March 31, 2008

property or services made by affected
Government entities; and
•When and how the withheld amounts
should be transmitted to the IRS.
Written comments should be sent to:
CC:PA:LPD:PR (Notice 2008–38), Room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
D.C. 20044. Alternatively, comments may
be hand delivered between the hours of
8:00 a.m. and 4:00 p.m. Monday to Friday
to CC:PA:LPD:PR (Notice 2008–38),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW, Washington, D.C. Comments
may also be transmitted electronically
via the following e-mail address:
Notice.Comments@irscounsel.treas.gov.
Please include “Notice 2008–38” in
the subject line of any electronic
communications.
All comments will be available for
public inspection and copying. Because
Government entities will need guidance
on compliance with section 3402(t) as
soon as possible, comments, if any, must
be received by April 28, 2008.
DRAFTING INFORMATION
The principal author of this notice is
Stephen J. Coleman of the Office of Asso-
ciate Chief Counsel (Procedure & Admin-
istration). For further information regard-
ing this notice, contact Stephen J. Coleman
at (202) 622–4910 (not a toll-free call).
Credit for Increasing Research
Activities: Filing Address and
Requirements for Certain
Claims for Credit or Refund
Notice 2008–39
SECTION 1. PURPOSE
This notice prescribes filing rules for
certain claims arising under section 41 of
the Code.
An overpayment of tax for a taxable
year generated, in whole or in part, by
the research credit and not taken into ac-
count on a taxpayer’s original return may
be taken into account by the timely filing
of a claim for credit or refund.
Under § 6402(a), the Secretary is au-
thorized to credit, within the applicable
period of limitations, an overpayment
against any liability in respect of an inter-
nal revenue tax of the person who made
the overpayment, and must generally re-
fund any balance to that person. Section
6511(b)(1) provides that no credit or re-
fund shall be allowed or made after the
expiration of the period of limitation pre-
scribed in § 6511(a), unless a claim for
credit or refund is filed by the taxpayer
within such period.
SECTION 2. CLAIMS FOR CREDIT OR
REFUND SUBJECT TO THIS NOTICE
This notice applies to taxpayers re-
quired to file Form 1120,U.S. Corporation
Income Tax Return, with claims for credit
or refund attributable, in whole or in part,
to the research credit that (1) were not re-
ported on an original return or an amended
Income Tax Return, filed on or before the
due date of the original Form 1120, in-
cluding extensions, and (2) were not filed
with the Internal Revenue Service on or
before March 31, 2008.
This notice does not apply to those
claims for credit or refund subject to
the electronic filing requirements for
amended returns stated in Treas. Reg.
§ 301.6011–5.
SECTION 3. REQUIREMENTS FOR
CLAIMS FOR CREDIT OR REFUND
SUBJECT TO THIS NOTICE
All claims for credit or refund subject
to this notice shall be filed with the Ogden
Service Center at the following address:
Internal Revenue Service Center
1973 North Rulon White Road
Ogden, UT 84201
Theclaimforcreditorrefundshallin-
dicate at the top “Refund-Research Credit”
and include a copy of the Form 6765,
Credit for Increasing Research Activities
(if any), filed with the original return and
an amended Form 6765.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Notice 2002–44, 2002–2 C.B. 39, is su-
perseded.
SECTION 5. CONTACT
INFORMATION
For questions regarding this notice,
contact Paul V. Colleran of the Office of
Division Counsel (Large and Mid-Size
Business) at (617) 565–7838 (not a
toll-free call).
26 CFR 1.1035–1: Certain exchanges of insurance
policies.
(Also Sections 1035 and 72.)
Rev. Proc. 2008–24
SECTION 1. PURPOSE
This revenue p
rocedure addresses the
tax treatment
of certain tax-free exchanges
of annuity con
tractsunder§72and§1035
of the Intern
al Revenue Code. The interim
guidance pro
vided by Notice 2003–51,
2003–2 C.B. 3
61, is superseded.
SECTION 2. BACKGROUND
.01 Section 1035(a)(3) provides that no
gain or loss shall be recognized on the ex-
change of an annuity contract for another
annuity contract. Thelegislative history
of § 1035 states that exchange treatment
is appropriate for “individuals who have
merely exchanged one insurance policy for
another better suited to their needs.” H.R.
Rep. No. 1337, 83d Cong., 2d Sess.
81 (1954). Section 1.1035–1 of the In-
come Tax Regulations provides that “the
exchange, without recognition of gain or
loss, of an annuity contract for another an-
nuity contract under §1035(a)(3) is limited
to cases where the same person or persons
are the obligee or obligees under the con-
tract received in the exchange as under the
original contract.”
.02 Section 72(e) governs the federal
tax treatment of distributions from an an-
nuity contract that are not received as an
annuity. Under § 72(e)(2), such amounts
generallyaretaxedonanincome-firstba-
sis. Section 72(e)(12) provides that all an-
nuity contracts issued by the same com-
pany to the same policyholder during any
calendar year are treated as a single annu-
ity contract for purposes of § 72(e).
.03 Section 72(q)(1) imposes a 10 per-
cent penalty on withdrawals or surrenders
March 31, 20086842008–13 I.R.B.

of annuity contracts, unless one of the ex-
ceptions enumerated in § 72(q)(2) applies.
.04 InConway v. Commissioner,111
T.C. 350 (1998),acq., 1999–2 C.B. xvi,
the Tax Court held that the direct exchange
by an insurance company of a portion of
an existing annuitycontract to an unre-
lated insurance company for a new annuity
contract was a tax-free exchange under
§ 1035. Such a transaction is sometimes
referred to as a “partial exchange.” The
Internal Revenue Service (Service) ac-
quiesced inConway v. Commissioner.
1999–2 C.B. xvi.See alsoRev. Rul.
2007–24, 2007–21 I.R.B. 1282 (receipt
of a check under a nonqualified annuity
contract and endorsement of the check
to a second company as consideration
for a second annuity contract treated as
a distribution under § 72(e), rather than
as a tax-free exchange under § 1035);
Rev. Rul. 2003–76, 2003–2 C.B. 355
(direct transfer of a portion of an annuity
contract for a new annuity contract treated
as a tax-free exchange under § 1035);
Rev. Rul. 2002–75, 2002–2 C.B. 812
(assignment of an entire annuity contract
for deposit into a preexisting annuity
contract treated as a tax-free exchange
under § 1035).
.05 Notice 2003–51 provided interim
guidance on partial exchanges. Specifi-
cally, section 4 of the notice stated that
“the Service, using general principles of
tax law, will consider all the facts and cir-
cumstances to determine whether a par-
tial exchange and a subsequent withdrawal
from, or surrender of, either the surviving
annuity contract orthe new annuity con-
tract within 24 months of the date on which
the partial exchangewas completed should
be treated as an integrated transaction, and
thus whether the two contracts should be
viewed as a single contract to determine
the tax treatment of a surrender or with-
drawal under § 72(e).” If however, a tax-
payer could demonstrate that one of the
conditions of § 72(q)(2), or any other sim-
ilar life event, such as a divorce or the loss
of employment, occurred between the par-
tial exchange and the surrender or distri-
bution, and that the surrender or distribu-
tion was not contemplated at the time of
the partial exchange, the taxpayer would
not be treated as having entered into the
surrender or distribution for tax avoidance
purposes.
.06 Treasury and the Service have de-
termined that it is in the interest of sound
tax administration to adopt the provi-
sions of Notice 2003–51, with changes,
in the form of a revenue procedure.See
§601.601(d)(2)(vi) of the Procedure and
Administration Regulations. In doing so,
Treasury and the Service have determined
that the 24-month period referred to in
section 4 of Notice 2003–51 should be
shortenedto12months,andthesubjec-
tive requirement that certain surrenders
or distributions not have been “contem-
plated” at the time of the exchange should
be removed. In addition, Treasury and the
Service have determined it is appropriate
to make the following clarifications to
the rules of Notice 2003–51: First, if the
direct transfer of a portion of an annu-
ity contract for a second annuity contract
does not qualify as a tax-free exchange
under § 1035 and the rules of this revenue
procedure, it will be treated as a taxable
distribution followed by a payment for the
second contract. Second, the rule treat-
ing a transfer as a tax-free exchange if
one of the § 72(q)(2) conditions is met
cannot be satisfied based on a payment
described in §§ 72(q)(2)(D) (distribution
that is part of a series of substantially
equal periodic payments) or (I) (distribu-
tion under an immediate annuity).See
Rev. Proc. 2008–3, 2008–1 I.R.B. 110,
section 5.02 (identifying “partial annuiti-
zation” as an area under study in which
rulings or determination letters will not be
issued until the Service resolves the issue
through publication). Third, the Service
will not require aggregation pursuant to
the authority of § 72(e)(12) or otherwise
of two contracts that are the subject of a
tax-free exchange under § 1035 and sec-
tion 4.01 of this revenue procedure, even
if both contracts were issued by the same
insurance company.
SECTION 3. SCOPE
.01 This revenue procedure applies to
the direct transfer of a portion of the cash
surrender value of an existing annuity con-
tract for a second annuity contract, regard-
less of whether the two annuity contracts
are issued by the same or different compa-
nies.
.02 This revenue procedure does not ap-
ply to transactions (sometimes referred to
as “partial annuitizations”) in which the
holder of an annuity contract irrevocably
elects to apply only a portion of the con-
tract to purchase a stream of annuity pay-
ments under the contract, leaving the re-
mainder of the contract to accumulate in-
come on a tax-deferred basis.
SECTION 4. PROCEDURE
.01 A transfer that is within the scope of
this revenue procedure will be treated as a
tax-free exchange under § 1035 if either—
(a) no amounts are withdrawn from, or
received in surrender of, either of the con-
tracts involved in the exchange during the
12 months beginning on the date on which
amounts are treated as received as premi-
ums or other consideration paid for the
contract received in the exchange (the date
of the transfer); or
(b) the taxpayer demonstrates that
one of the conditions described by
§72(q)(2)(A),(B),(C),(E),(F),(G),(H)
or (J), or any similar life event (such as
divorce or loss of employment), occurred
between (i) the date of the transfer, and (ii)
the date of the withdrawal or surrender.
.02 A transfer that is within the scope
of this revenue procedure but not treated
under § 4.01 as a tax-free exchange under
§ 1035 will be treated as a distribution, tax-
able under § 72(e), followed by a payment
for the second contract.
.03 The Service will not require ag-
gregation pursuant to the authority of
§ 72(e)(12), or otherwise, of two annuity
contracts that are the subject of a tax-free
exchange under § 1035 and section 4.01
of this revenue procedure, even if both
contracts are issued by the same insurance
company, but will instead treat the con-
tracts as separate annuity contracts.See
Rev. Rul. 2003–76.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
transfers described in section 3 of this rev-
enue procedure that are completed on or
after June 30, 2008.
SECTION 6. EFFECT ON OTHER
DOCUMENTS
Notice 2003–51 is superseded.
2008–13 I.R.B.685March 31, 2008

DRAFTING INFORMATION
The principal author of this revenue
procedure is John E. Glover of the Office
of the Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Mr. Glover at (202) 622–3970
(not a toll-free call).
26 CFR 601.204: Changes in accounting periods and
in methods of accounting.
(Also Part I, §§ 446, 461, 481; 1.446–1, 1.461–1,
1.461–4, 1.461–5, 1.481–1.)
Rev. Proc. 2008–25
SECTION 1. PURPOSE
This revenue procedure provides a safe
harbor method of accounting for taxpay-
ers using an accrual method of account-
ing that incur Federal Insurance Contribu-
tions Act (FICA) tax and Federal Unem-
ployment Tax Act (FUTA) tax (“payroll
tax”) liabilities for compensation (includ-
ing bonuses and vacation pay), and also
provides procedures for taxpayers to ob-
tain the automatic consent of the Commis-
sioner of Internal Revenue to change to the
safe harbor method of accounting.
SECTION 2. BACKGROUND
.01 Section 461(a) of the Internal Rev-
enue Code provides that the amount of any
deduction or credit must be taken for the
taxable year that is the proper taxable year
under the method of accounting used in
computing taxable income.
.02 Section 1.461–1(a)(2)(i) of the In-
come Tax Regulations provides that, un-
der an accrual method of accounting, a li-
ability is incurred, and generally is taken
into account for federal income tax pur-
poses, in the taxable year in which (1)
all the events have occurred that establish
the fact of the liability, (2) the amount of
the liability can be determined with rea-
sonable accuracy, and (3) economic per-
formance has occurred with respect to the
liability (the “all events test”).See also
§ 1.446–1(c)(1)(ii)(A).
.03 Section 1.461–4(g)(6) provides
generally that, if a taxpayer is liable to pay
a tax, economic performance occurs as the
tax is paid to the governmental authority
that imposed it.
.04 Section 1.461–5(b)(1) provides a re-
curring item exception to the general rule
of economic performance. Under the re-
curring item exception, a liability is treated
as incurred for a taxable year if: (i) at the
end of the taxable year, all events have oc-
curred that establish the fact of the liabil-
ity and the amount can be determined with
reasonable accuracy; (ii) economic perfor-
mance occurs on or before the earlier of
(a) the date that the taxpayer files a re-
turn (including extensions) for the taxable
year, or (b) the 15th day of the 9th calendar
month after the close of the taxable year;
(iii) the liability is recurring in nature; and
(iv) either the amount of the liability is
not material or accrual of the liability in
the taxable year results in better match-
ing of the liability against the income to
which it relates than would result from ac-
crual of the liability in the taxable year in
which economic performance occurs. Sec-
tion 1.461–5(b)(5)(ii) provides that, in the
case of a liability for taxes, the matching
requirement of the recurring item excep-
tion is deemed satisfied.
.05 Section 3111 imposes a liability on
employers for their share of FICA taxes
and § 3301 imposes a liability on employ-
ers for FUTA taxes. The employer’s por-
tion of FICA taxes consists of a compo-
nent for old-age, survivors, and disability
insurance (social security tax) and a com-
ponent for hospital insurance tax (Medi-
care tax). The social security tax applies
only to wages paid by an employer to an
employee during a calendar year not ex-
ceeding the contribution and benefit base
(as determined under section 230 of the
Social Security Act), which is $102,000
in 2008. Thus, there is a ceiling on the
wages subject to social security tax. In
contrast, there is no ceiling on wages sub-
ject to the Medicare tax.See§§ 3301,
3111, and 3121(a). FUTA taxes are im-
posed on the first $7,000 of wages paid to a
covered employee by an employer during
the calendar year.See§ 3301(2). Employ-
ers are allowed credits against the FUTA
taxthroughparticipationinstateunem-
ployment compensation laws.See§ 3301
et seq.
.06 For many years, Service position
was that FICA and FUTA taxes for accrual
method taxpayers were treated as incurred
only in the taxable year the compensation
giving rise to the payroll tax liability was
paid. For example, Rev. Rul. 69–587,
1969–2 C.B. 108, concludes that, under the
all events test of § 461, an accrual method
employer generally may not deduct pay-
roll taxes payable with respect to bonuses
and vacation pay accrued but unpaid at
year-end until the taxable year in which the
bonuses and vacation pay are paid. Simi-
larly, Rev. Rul. 74–70, 1974–1 C.B. 116,
concludes that, under the all events test of
§ 461, an accrual method employer gener-
ally may not deduct its share of FICA taxes
payable with respect to wages accrued but
unpaid at year-end until the taxable year
in which those wages are actually or con-
structively paid.
The Service’s position on the accrual of
payroll taxes was challenged in litigation.
The Court of Claims inEastman Kodak
Co. v. United States, 534 F.2d 252 (Ct. Cl.
1976),acq., 1996–2 C.B. 1, addressed the
deductibility of FICA and FUTA taxes on
wages, bonuses, and vacation pay accrued
in Year 1 but paid in Year 2. The court
held, contrary to Rev. Rul. 74–70, that
the fact of the liability for payroll taxes on
the wages was established in Year 1 as an
automatic consequence of the definite and
legal obligation to pay the year-end wages.
However, the court also held that the fact
of the liability for payroll taxes on bonuses
and vacation pay was not established in
Year 1 because of the uncertainty as of the
end of Year 1 that the employee may have
reached the payroll tax ceiling at the time
of payment in Year 2.
.07 Consistent with the court’s holding
inEastman Kodak,the Service conceded
the issue of deductibility of payroll taxes
for year-end wages in Rev. Rul. 96–51,
1996–2 C.B. 36. Rev. Rul. 96–51, which
revoked Rev. Rul. 74–70, concludes that,
under the all events test of § 461, an ac-
crual method employer may deduct in Year
1 its otherwise deductible payroll taxes im-
posed on year-end wages properly accrued
in Year 1 but paid in Year 2, provided the
employer satisfies the requirements of the
recurring item exception in § 1.461–5 with
respect to those taxes. In Rev. Rul. 96–51,
the year-end wages were paid before the
15
th
day of the 3
rd
calendar month after
the end of Year 1 and, thus, were not de-
ferred compensation under § 404. Because
the year-end wages were not deferred com-
pensation, Rev Rul. 96–51 does not ad-
dress the application of § 404 to payroll
taxes on deferred compensation.
March 31, 20086862008–13 I.R.B.

.08 Rev. Rul. 2007–12, 2007–11 I.R.B.
685, revoked Rev. Rul. 69–587 and ampli-
fied Rev. Rul. 96–51. Rev. Rul. 2007–12
concludes that if the all events test and re-
curring item exception of § 461 are other-
wise met, an accrual method taxpayer may
treat its payroll tax liability as incurred in
Year 1, regardless of whether the compen-
sation to which the liability relates is de-
ferred compensation that is deductible un-
der § 404 in Year 2.
.09 The Service and the Department
of the Treasury recognize that the proper
accrual of FICA and FUTA tax liabili-
ties continues to be an area of uncertainty
for taxpayers. As noted by the Court of
Claims inEastman Kodak, a taxpayer that
has a fixed liability to pay the compensa-
tion to which the payroll taxes relate may
not know, as of the end of the taxable year,
whether a particular employee will have
reached any applicable payroll tax ceiling
by the time the tax ultimately is paid, rais-
ing a question as to when the payroll tax
liability is fixed. In addition, the ceiling
limitations no longer exist on the Medicare
portionofanemployer’spayrolltaxlia-
bility, and the ceiling limitations that still
exist on other portions of an employer’s
payroll tax liability are significantly higher
than those addressed inEastman Kodak.
Therefore, for reasons of administrative
convenience and to reduce further contro-
versy, the Service will not challenge a tax-
payer’s use of the safe harbor method of
accounting described in section 4.01 of
this revenue procedure for payroll taxes on
compensation.
.10 Under § 446(b), the Commissioner
has broad authority to determine whether
a method of accounting clearly reflects in-
come. Section 1.446–1(c)(2)(ii) provides
that the Commissioner may authorize a
taxpayer to adopt or change to a permis-
sible method of accounting although the
method is not specifically described in the
regulations as permissible if, in the opinion
of the Commissioner, that method clearly
reflects income.
.11Section446(e)and§1.446–
1(e)(2)(i) state that, except as otherwise
provided, a taxpayer must secure the
consent of the Commissioner before
changing a method of accounting
for federal income tax purposes.
Section 1.446–1(e)(3)(ii) authorizes the
Commissioner to prescribe administrative
procedures setting forth the limitations,
terms, and conditions necessary to obtain
the Commissioner’s consent to effect the
change in method of accounting and to
prevent amounts from being duplicated or
omitted.
.12 Section 481(a) requires adjustments
necessary to prevent amounts from be-
ing duplicated or omitted by reason of a
change in method of accounting.
.13 Rev. Proc. 2002–9, 2002–1 C.B.
327 (as modified and amplified by Rev.
Proc. 2002–19, 2002–1 C.B. 696, mod-
ified and clarified by Announcement
2002–17, 2002–1 C.B. 561, and ampli-
fied, clarified, and modified by Rev. Proc.
2002–54, 2002–2 C.B. 432), provides pro-
cedures by which a taxpayer may obtain
automatic consent to change to a method
of accounting described in the Appendix
of Rev. Proc. 2002–9.
SECTION 3. SCOPE
This revenue procedure applies to an
accrual method taxpayer that uses the re-
curring item exception under § 1.461–5 for
its payroll tax liabilities and chooses to ac-
count for its payroll tax liabilities using
the safe harbor method of accounting de-
scribedinsection4.01ofthisrevenuepro-
cedure. This revenue procedure does not
apply to an employee’s portion of FICA
tax imposed under § 3101 and deducted by
the employer from wages paid to the em-
ployee.
SECTION 4. SAFE HARBOR METHOD
.01In General. Under the safe har-
bor method of accounting, and solely for
purposes of the recurring item exception
provided in § 1.461–5, a taxpayer will
be treated as satisfying the requirement in
§ 1.461–5(b)(1)(i) for its payroll tax liabil-
ityinthesametaxableyearinwhichall
events have occurred that establish the fact
of the related compensation liability and
the amount of the related compensation li-
ability can be determined with reasonable
accuracy.
.02Examples.
(1)Example 1.Xuses an accrual method of ac-
counting, including the use of the recurring item ex-
ception, and files its returns on a calendar year ba-
sis.Xproperly changes to the safe harbor method
of accounting described in section 4.01 of this rev-
enue procedure for its payroll tax liabilities. During
Year 1,A,anemployeeofX, earns $10,000 of vested
vacation compensation for services performed dur-
ing Year 1.Xpays the vacation compensation toA
in February and May of Year 2.Xincurs a payroll
tax liability for the $10,000 vested vacation compen-
sation payment. Assume that, as of December 31 of
Year 1, all events have occurred to establish the fact
ofX’s vested vacation compensation liability and the
amount of the liability is determinable with reason-
able accuracy. Under the provisions of this revenue
procedure, and solely for purposes of applying the re-
curring item exception, all events necessary to estab-
lish the fact ofX’s payroll tax liability for the $10,000
vested vacation compensation will be treated as hav-
ing occurred in Year 1 and the amount of the payroll
tax liability will be treated as being determined with
reasonable accuracy in Year 1.
(2)Example 2.Yuses an accrual method of ac-
counting, including the use of the recurring item ex-
ception, and files its returns on a calendar year ba-
sis.Xproperly changes to the safe harbor method of
accounting described in section 4.01 of this revenue
procedure for its payroll tax liabilities. On Decem-
ber28ofYear1,Y’s board of directors approves a
bonus pool of $1,000,000 to be paid toY’s employees
for services provided during Year 1. The $1,000,000
inbonusesispaidtoY’s employees on January 5 of
Year 2.Yincurs a payroll tax liability as a result of
the $1,000,000 in bonuses paid to its employees. As-
sume that, as of December 31 of Year 1, all events
have occurred to establish the fact of the bonus com-
pensation liability and the amount of the liability is
determinable with reasonable accuracy. Under the
provisions of this revenueprocedure, and solely for
purposes of applying the recurring item exception,
all events necessary to establish the fact ofY’s pay-
roll tax liability for the $1,000,000 in bonuses will be
treated as having occurred in Year 1, and the amount
of the payroll tax liability will be treated as being de-
termined with reasonable accuracy in Year 1.
SECTION 5. CHANGE IN METHOD
OF ACCOUNTING
.01In General. A change in the treat-
ment of payroll tax liabilities to conform
to the safe harbor method provided by this
revenue procedure is a change in method
of accounting to which the provisions of
§§ 446 and 481 and the regulations there-
under apply.
.02Automatic change to the safe har-
bor method.A taxpayer within the scope
of this revenue procedure that wants to
change its treatment of payroll tax liabil-
ities to conform to the safe harbor method
of accounting provided in this revenue pro-
cedure (including a change to use the re-
curring item exception for such payroll
tax liabilities) must follow the automatic
change in accounting method provisions of
Rev. Proc. 2002–9, with the following
modifications:
(i) The scope limitations in section 4.02
of Rev. Proc. 2002–9 do not apply to
a taxpayer that wants to make the change
2008–13 I.R.B.687March 31, 2008

for its first taxable year ending on or after
December 31, 2007.
(ii) For purposes of completing line 1a
of Form 3115,Application for Change in
Accounting Method, the designated auto-
matic accounting method change number
for the change in method of accounting
provided in this revenue procedure is
No. 113.
SECTION 6. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2002–9 is modified and
amplified to include this automatic change
in section 10.02 of the APPENDIX.
SECTION 7. EFFECTIVE DATE
This revenue procedure is effective for
taxable years ending on or after December
31, 2007. The Service will not challenge a
taxpayer’s use of the safe harbor method
of accounting described in this revenue
procedure on a federal income tax return
filed before March 11, 2008, if the tax-
payer meets the requirements of this rev-
enue procedure in that taxable year. More-
over, if the taxpayer’s use of the safe har-
bor method on a federal income tax return
filed before March 11, 2008, is an issue un-
der consideration in examination, appeals,
or before a federal court, the issue will not
be further pursued by the Service.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Martin L. Osborne of the
Office of Associate Chief Counsel (In-
come Tax & Accounting). For further
information regarding this revenue proce-
dure, contact Martin L. Osborne at (202)
622–7900 (not a toll-free call).
March 31, 20086882008–13 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking an
dNoticeof
Hearing
Guidance Unde
rSection
664 Regardin
gtheEffect
of Unrelated
Business
Taxable Inc
ome on Charitable
Remainder T
rusts
REG–127391–07
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: No
tice of proposed rulemaking
and notice
of hearing.
SUMMARY: This document contains pro-
posed regulations that provide guidance
under Internal Revenue Code (Code) sec-
tion664onthetaxeffectofunrelatedbusi-
ness taxable income (UBTI) on charita-
ble remainder trusts. The proposed regu-
lations reflect the changes made to section
664(c) by section 424(a) and (b) of the Tax
Relief and Health Care Act of 2006. The
proposed regulations affect charitable re-
mainder trusts that have UBTI in taxable
years beginning after December 31, 2006.
This document also provides notice of a
public hearing on these proposed regula-
tions.
DATES: Written or electronic comments
must be received by May 6, 2008. Out-
lines of topics to be discussed at the public
hearing scheduled for April 11, 2008, must
be received by March 28, 2008.
ADDRES
SES: Send submissions to:
CC:PA
:LPD:PR(REG–127391–07),
Room 5
203, Internal Revenue Service, PO
Box 76
04, Ben Franklin Station, Wash-
ingto
n, DC 20044. Submissions may be
hand-
delivered Monday through Friday
betw
een the hours of 8 a.m. and 4 p.m.
to CC
:PA:LPD:PR (REG–127391–07),
Cour
ier’s Desk, Internal Revenue Ser-
vice
, 1111 Constitution Avenue, NW,
Wash
ington, DC; or sent electroni-
call
y via the Federal eRulemaking Por-
tal
at http://www.regulations.gov(IRS
REG
–127391–07).
FOR FURTHER IN
FORMATION
CONTACT: Conc
erning the proposed
regulations,
Cynthia Morton at (202)
622–3060; con
cerning submissions
of comments, t
he hearing, and/or ac-
cess list to a
ttend the hearing, con-
tact Richard
Hurst at (202) 622–7180
(not toll-fr
ee numbers) or e-mail at
Richard.A.H
urst@irscounsel.treas.gov.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collec
tions of information in this
notice of p
roposed rulemaking have been
submitted
to the Office of Management
and Budget
for review in accordance
with the P
aperwork Reduction Act of
1995 (44 U
.S.C. 3507(d)). Comments
on the col
lection of information should
be sent to
the Office of Management
and Budge
t, Attn: Desk Officer
for the D
epartment of the Treasury,
Office o
f Information and Regulatory
Affairs
, Washington, DC 20503, with
copies t
o the Internal Revenue Service,
Attn: I
RS Reports Clearance Officer,
SE:W:C
AR:MP:T:T:SP; Washington, DC
20224.
Comments on the collection of
inform
ation should be received by May 6,
2008.
Commen
ts are specifically requested
concer
ning:
Whethe
r the proposed collection of in-
format
ion is necessary for the proper per-
forma
nce 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 collection of information may be
mini
mized, including through the appli-
cati
on of automated collection techniques
or ot
her forms of information technology;
and
Esti
mates of capital or start-up costs
and c
osts of operation, maintenance, and
purc
hase of service to provide information.
The c
ollection of information in the
prop
osed regulation is in §1.664–1(c).
This informat
ionisrequiredtoreportthe
excise tax imp
osed by section 664(c) of the
Code. The like
ly respondents are trustees
of charitable
remainder trusts.
Estimated tot
al annual reporting and/or
recordkeepin
g burden: 50 hours.
Estimated ave
rage annual burden per
respondent a
nd/or recordkeeper: .5 hour.
Estimated num
ber of respondents
and/or recor
dkeepers: 100.
Estimated ann
ual frequency of re-
sponses: Onc
e.
An agency may n
ot conduct or sponsor,
and a person i
s not required to respond to, a
collection o
f information unless it displays
a valid contr
ol number assigned by the Of-
fice of Manag
ement and Budget.
Books and rec
ords relating to a collec-
tion of infor
mation must be retained as
long as thei
r contents may become mate-
rial in the a
dministration of any internal
revenue law
. Generally, tax returns and tax
return info
rmation are confidential, as re-
quired by 2
6 U.S.C. 6103.
Background
For taxabl
e years beginning before
January 1,
2007, section 664(c) provided
that a char
itable remainder trust (whether
acharitab
le remainder annuity trust or a
charitabl
e remainder unitrust) would not
be exempt
from income tax for any year
in which t
he trust had any UBTI (within
the meani
ng of section 512). Instead,
such trus
t was taxed for each such year
under sub
chapter J as though it were a
nonexem
pt, complex trust. The proposed
regulat
ions reflect the changes to section
664(c) m
ade by section 424 of the Tax
Relief a
nd Health Care Act of 2006 (Act)
Public L
aw 109–432, 120 Stat. 2922.
Sectio
n 424(a) of the Act, which applies
to taxa
ble years beginning after Decem-
ber 31,
2006, provides that charitable
remain
der trusts that have UBTI remain
exempt
from Federal income tax, but im-
poses
a 100-percent excise tax on their
UBTI.
Pursuant to section 664(c)(2)(A),
the am
ount of UBTI is determined pur-
suant
to section 512. Under section 512,
UBTI i
s computed with the modifications
in se
ction 512(b) including the $1,000 de-
duct
ion in section 512(b)(12). The excise
tax i
mposed under section 664(c)(2)(A)
is tr
eated as imposed under the excise
2008–13 I.R.B.689March 31, 2008

tax rules that apply to private foundations
and other tax-exempt organizations, other
than the rules for abatement of first and
second-tier taxes (chapter 42, other than
subchapter E of chapter 42).
Pursuant to section 664(b), distribu-
tions from a charitableremainder trust for
the year that the annuity or unitrust amount
is required to be distributed are treated
in the following order as: (1) Ordinary
income to the extent of the trust’s ordinary
income for that year and undistributed
ordinary income for all prior years; (2)
Capital gains to the extent of the trust’s
capital gain for that year and undistributed
capital gain for all prior years; (3) Other
income (for example, tax-exempt income)
to the extent of the trust’s other income for
that year and undistributed other income
for all prior years; and (4) Corpus.
For purposes of determining the char-
acter of the distribution made to the ben-
eficiary, the charitable remainder trust in-
come that is UBTI is considered income of
the trust. Specifically, income of the char-
itable remainder trust is allocated among
the trust income categories in Treasury
Regulation §1.664–1(d)(1) without regard
to whether any part of that income con-
stitutes UBTI under section 512. Section
1.664–1(d)(1) assigns charitable remain-
der trust income to one of three categories
(ordinary income, capital gains, or other
income) in the year in which it is required
to be taken into account by the trust.
Explanation of Provisions
The proposed regulations amend the
regulations under section 664(c) to provide
that charitable remainder trusts with UBTI
in taxable years beginning after December
31, 2006, are exempt from Federal in-
come tax, but are subject to a 100-percent
excise tax on the UBTI of the charitable
remainder trust. The proposed regulations
provide that the excise tax is reported and
payable in accordance with the appropri-
ate forms and instructions. Currently, the
appropriate form to report and pay the
excise tax on charitable remainder trusts
with UBTI is Form 4720, “Return of Cer-
tain Excise Taxes Under Chapters 41 and
42 of the Internal Revenue Code.” The
rules that apply with respect to charitable
remainder trusts that have UBTI in taxable
years beginning before January 1, 2007,
are contained in §1.664–1(c) as in effect
for taxable years beginning before January
1, 2007. (See 26 CFR part 1 §1.664–1(c)
revised as of April 2, 2007).
The proposed regulations clarify that,
consistent with §1.664–1(d)(2), the excise
tax imposed upon a charitable remainder
trust with UBTI is treated as paid from cor-
pus and the trust income that is UBTI is in-
come of the trust for purposes of determin-
ing the character of the distribution made
to the beneficiary. The proposed regula-
tions provide examples illustrating the tax
effects of UBTI on a charitable remainder
trust for taxable years beginning after De-
cember 31, 2006. Finally, the proposed
regulations amend §1.664–1(d)(2) to con-
form with section 424 of the Act.
Proposed Effective Date
The proposed regulations are proposed
to be effective for taxable years beginning
after December 31, 2006.
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 the regulations. It is
hereby certified that the collection of infor-
mation in these regulations will not have a
significant economic impact on a substan-
tial number of small entities. This certifi-
cation is based upon the fact that any bur-
den on taxpayers is minimal. Accordingly,
a regulatory flexibility analysis under the
Regulatory Flexibility Act (5 U.S.C. 601)
(RFA) is not required. Pursuant to sec-
tion 7805(f) of the Code, this notice of pro-
posed rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies) or electronic com-
ments that are submitted timely to the IRS.
The IRS and the Treasury Department re-
quest comments on the clarity of the pro-
posed rules and how they can be made eas-
ier to understand. All comments will be
available for public inspection and copy-
ing.
A public hearing has been scheduled for
April 11, 2008, at 10 a.m., in the IRS Au-
ditorium, Internal Revenue Service, 1111
Constitution Avenue, N.W., Washington,
D.C. Due to building security procedures
visitors must enter at the Constitution Av-
enue entrance. In addition, all visitors
must present photo identification to en-
ter the building. Because of access re-
strictions, visitors will not be admitted be-
yond 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 theFOR FURTHER IN-
FORMATION CONTACTsection 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 March
28, 2008. A period of 10 minutes will be
allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receivingoutlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of the pro-
posed regulations is Cynthia Morton,
Office of the Associate Chief Counsel
(Passthroughs and Special Industries).
*****
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 1.664–1 is amended as
follows:
1. In paragraph (a)(1)(i), the last sen-
tence is revised and a sentence is added to
the end of the paragraph.
March 31, 20086902008–13 I.R.B.

2. Paragraph (c) is revised.
3. In paragraph (d)(2), the fourth sen-
tence is revised.
The revisions and addition read as fol-
lows:
§1.664–1 Charitable remainder trusts.
(a)***(1)***(i)***Atrustcre-
ated after July 31, 1969, which is a char-
itable remainder trust, is exempt from all
of the taxes imposed by subtitle A of the
Code for any taxable year of the trust, ex-
cept a taxable year beginning before Jan-
uary 1, 2007, in which it has unrelated
business taxable income. For taxable years
beginning after December 31, 2006, an ex-
cise tax, treated as imposed by chapter 42,
is imposed on charitable remainder trusts
that have unrelated business taxable in-
come. See paragraph (c) of this section.
*****
(c)Excise Tax on Charitable Remain-
der Trusts—(1)In general. For each tax-
able year beginning after December 31,
2006, in which a charitable remainder an-
nuity trust or a charitable remainder uni-
trust has any unrelatedbusiness taxable in-
come, an excise tax is imposed on that trust
in an amount equal to the amount of such
unrelated business taxable income. For
this purpose, unrelated business taxable in-
come is as defined in section 512, deter-
mined as if part III, subchapter F, chap-
ter 1 subtitle A of the Internal Revenue
Code applied to such trust. Such excise
tax is treated as imposed by chapter 42
(other than subchapter E) and is reported
and payable in accordance with the appro-
priate forms and instructions. Such excise
tax shall be allocated to corpus and, there-
fore, is not deductible in determining tax-
able income distributed to a beneficiary.
(See paragraph (d)(2) of this section.) The
charitable remainder trust income that is
unrelated business taxable income consti-
tutes income of the trust for purposes of
determining the character of the distribu-
tion made to the beneficiary. Income of
the charitable remainder trust is allocated
among the charitableremainder trust in-
come categories in paragraph (d)(1) of this
section without regard to whether any part
of that income constitutes unrelated busi-
ness taxable income under section 512.
(2)Examples. The application of the
rules in this paragraph (c) may be illus-
trated by the following examples:
Example 1. For 2007, a charitable remainder an-
nuity trust with a taxable year beginning on January
1, 2007, has $60,000 of ordinary income, includ-
ing $10,000 of gross income from a partnership that
constitutes unrelated business taxable income to the
trust. The trust has no deductions that are directly
connected with that income. For that same year, the
trust has administration expenses (deductible in com-
puting taxable income) of $16,000, resulting in net
ordinary income of $44,000. The amount of unre-
lated business taxable income is computed by taking
gross income from an unrelated trade or business and
deducting expenses directly connected with carrying
on the trade or business, both computed with mod-
ifications under section 512(b). Section 512(b)(12)
provides a specific deduction of $1,000 in comput-
ing the amount of unrelated business taxable income.
Under the facts presented in this example, there are no
other modifications under section 512(b). The trust,
therefore, has unrelatedbusiness taxable income of
$9,000 ($10,000 minus the $1,000 deduction under
section 512(b)(12)). Undistributed ordinary income
from prior years is $12,000 and undistributed capital
gains from prior years are $50,000. Under the terms
of the trust agreement, the trust is required to pay an
annuity of $100,000 for year 2007 to the noncharita-
ble beneficiary. Because the trust has unrelated busi-
ness taxable income of $9,000, the excise tax imposed
under section 664(c) is equal to the amount of such
unrelated business taxable income, $9,000. The char-
acter of the $100,000 distribution to the noncharitable
beneficiary is as follows: $56,000 of ordinary income
($44,000 from current year plus $12,000 from prior
years), and $44,000 of capital gains. The $9,000 ex-
cise tax is allocated to corpus, and does not reduce
the amount in any of the categories of income under
paragraph (d)(1) of this section. At the beginning of
year 2008, the amount of undistributed capital gains
is $6,000, and there is no undistributed ordinary in-
come.
Example 2. During 2007, a charitable remainder
annuity trust with a taxable year beginning on January
1, 2007, sells real estate generating gain of $40,000.
Because the trust had obtained a loan to finance part
of the purchase price of the asset, some of the income
from the sale is treated as debt-financed income un-
der section 514 and thus constitutes unrelated busi-
ness taxable income under section 512. The unre-
lated debt-financed income computed under section
514 is $30,000. Assuming the trust receives no other
income in 2007, the trust will have unrelated busi-
ness taxable income under section 512 of $29,000
($30,000 minus the $1,000 deduction under section
512(b)(12)). Except for section 512(b)(12), no other
exceptions or modifications under sections 512–514
apply when calculating unrelated business taxable in-
come based on the facts presented in this example.
Because the trust has unrelated business taxable in-
come of $29,000, the excise tax imposed under sec-
tion 664(c) is equal to the amount of such unrelated
business taxable income, $29,000. The $29,000 ex-
cise tax is allocated to corpus, and does not reduce
the amount in any of the categories of income un-
der paragraph (d)(1) of this section. Regardless of
how the trust’s income might be treated under sec-
tions 511–514, the entire $40,000 is capital gain for
purposes of section 664 and is allocated accordingly
to and within the second of the categories of income
under paragraph (d)(1) of this section.
(3)Effective/Applicability date. Para-
graph (c) is effective for taxable years be-
ginning after December 31, 2006. The
rules that apply with respect to taxable
years beginning before January 1, 2007,
are contained in 1.664–1(c) in effect prior
to the date these regulations are published
as final regulations in theFederal Regis-
ter. (See 26 CFR part 1, §1.664–1(c)(1)
revised as of April 2, 2007).
(d) * * *
(2) * * * All taxes imposed by chapter
42 of the Code (including without limita-
tion taxes treated under section 664(c)(2)
as imposed by chapter 42) and, for taxable
years beginning prior to January 1, 2007,
all taxes imposed by subtitle A of the Code
for which the trust is liable because it has
unrelated business taxable income, shall be
allocated to corpus. * * *
*****
LindaE.Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on March 6, 2008,
8:45 a.m., and published in the issue of the Federal Register
for March 7, 2008, 73 F.R. 12313)
Procedures to Request for
Public Inspection or Copy a
501(c)(3) Organization’s Form
990–T, Exempt Organization
Business Income Tax Return
Announcement 2008–21
This document explains the procedures
the public may use to request the inspec-
tion and copying of a section 501(c)(3) or-
ganization’s annual return reporting sec-
tion 511 unrelated business income (Form
990–T).
The Tax Technical Corrections Act of
2007, Pub. L. 110–172, H.R. 4839, pro-
vides that the Internal Revenue Service is
required to make Forms 990–T that are
filed by a section 501(c)(3) organization
publicly available for inspection and copy-
ing pursuant to section 6104(b). This pro-
vision is effective for returns filed after
August 17, 2006, the date of enactment
of the Pension Protection Act of 2006,
Pub. L. 109–280 (PPA).
Form 4506–A,Request for Public In-
spection or Copy of Exempt or Political
2008–13 I.R.B.691March 31, 2008

Organization IRS Form,isusedtorequest
from the Internal Revenue Service a copy
of an exempt or political organization’s
return, report, or notice pursuant to sec-
tion 6104(b). The Form 4506–A does not
currently contain a check box for a Form
990–T, although the Internal Revenue Ser-
vice is in the process of revising the Form
4506–A to include this provision. If you
want to inspect or copy a Form 990–T that
was filed after August 17, 2006, please
mail or fax a copy of the Form 4506–A
to the Internal Revenue Service following
the instructions for that form. In line 7 of
the Form 4506–A, however, please write
in “Form 990–T”. Please be advised that
a CD-ROM will not be available for Form
990–T returns. The charges listed on Form
4506–A for copies will apply.
For further information, contact
Melinda Williams at 202–283–9467 (not a
toll-free number).
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2008–22
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 on March 31, 2008,
andwouldendonthedatethecourtfirst
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.
Young Lions Foundation
Sausalito, CA
Med-School, Inc.
Warner Robbins, GA
National Housing Foundation, Inc.
Schaumburg, IL
Vernon Parish School Board
Leesville, VA
Credit Success Company
St. Augustine, FL
Computer Programming Institute
N. Royalton, OH
Modifications of Commercial
Mortgage Loans Held by
a Real Estate Mortgage
Investment Conduit (REMIC);
Hearing
Announcement 2008–24
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of public hearing on pro-
posed rulemaking.
SUMMARY: This document provides no-
tice of public hearing on proposed regu-
lations (REG–127770–07, 2007–50 I.R.B.
1171) that would expand the list of permit-
ted loan modifications to include certain
modifications of commercial mortgages.
DATES: The public hearing is being held
on Friday, April 4, 2008, at 10:30 a.m.
The IRS must receive outlines of the topics
to be discussed at the public hearing by
Friday, March 14, 2008.
ADDRESSES: The public hearing is being
held in the IRS Auditorium, Internal Rev-
enue Service Building, 1111 Constitution
Avenue, NW, Washington, DC 20224.
Send Submissions to CC:PA:LPD:PR
(REG–127770–07), room 5205, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand-delivered Mon-
day through Friday to CC:PA:LPD:PR
(REG–127770–07), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitu-
tion Avenue, NW, Washington, DC, or
sent electronically via the Federal erule-
making Portal atwww.regulations.gov
(IRS-REG–127770–07).
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Diana Imholtz or Susan Thompson Baker
(202) 622–3930; concerning submissions
of comments, the hearing and/or to be
placed on the building access list to at-
tend the hearing Funmi Taylor at (202)
622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
The subject of the public hearing
is the notice of proposed rulemaking
(REG–127770–07) that was published in
theFederal Registeron Friday, Novem-
ber 9, 2007 (72 FR 63523).
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing that
submitted written comments by February
7, 2008 must submit an outline of the top-
ics to be addressed and the amount of time
to be allotted to each topic (signed original
and eight (8) copies).
A period of 10 minutes is allotted to
each person for presenting oral comments.
After the deadline for receiving out-
lines has passed, the IRS will prepare an
agenda containing the schedule of speak-
ers. Copies of the agenda will be made
available, free of charge, at the hearing or
in the Freedom of Information Reading
Room (FOIA RR) (Room 1621) which
is located at the 11
th
and Pennsylvania
Avenue, NW, entrance, 1111 Constitution
Avenue, NW, Washington, DC.
Because of access restrictions, the IRS
will not admit visitors beyond the imme-
diateentranceareamorethan30minutes
March 31, 20086922008–13 I.R.B.

before the hearing starts. For informa-
tion about having your name placed on
the building access list to attend the hear-
ing, see the “FOR FURTHER INFORMA-
TION CONTACT” section of this docu-
ment.
LaNita Van Dyke,
Chief, Publications and
Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration.)
(Filed by the Office of the Federal Register on March 5, 2008,
8:45 a.m., and published in the issue of the Federal Register
for March 6, 2008, 73 F.R. 12041)
Dependent Child of Divorced
or Separated Parents or
Parents Who Live Apart;
Hearing
Announcement 2008–26
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of public hearing on pro-
posed rulemaking.
SUMMARY: This document contains a
notice of public hearing on proposed regu-
lations (REG–149856–03, 2007–24 I.R.B.
1394) relating to a claim that a child is a
dependent by parents who are divorced,
legally separated under a decree of sepa-
rate maintenance, agreement, or who live
apart at all times during the last 6 months
of the calendar year.
DATES: The public hearing is being held
on April 3, 2008, at 10 a.m. The IRS must
receive outlines of the topics to be dis-
cussed at the hearing by March 26, 2008.
ADDRESSES: The public hearing is be-
ing held in Room 2615, Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC.
Send submissions to: CC:PA:LPD:PR
(REG–149856–03), room 5203, Internal
Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand delivered
Monday through Friday between the hours
of8a.m. and4p.m. toCC:PA:LPD:PR
(REG–149856–03), Courier’s Desk,
Internal Revenue Service, 1111
Constitution Avenue, NW, Washington,
DC, or sent electronically, via the IRS
internet site via the Federal eRulemaking
Portal athttp://www.regulations.gov
(IRS-REG–149856–03).
FOR FURTHER INFORMATION: Con-
cerning the regulations, Victoria Driscoll
(202) 622–4920; concerning submissions
of comments, the hearing, and/or to be
placed on the building access list to at-
tend the hearing Regina Johnson (202)
622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
The subject of the public hearing
is the notice of proposed regulations
(REG–149856–03) that was published in
theFederal Registeron Wednesday, May
2, 2007 (72 FR 24192).
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing that
submitted written comments by July 31,
2007, must submit an outline of the top-
ics to be discussed and the amount of time
to be devoted to each topic (signed original
and eight (8) copies).
A period of 10 minutes is allotted to
each person for presenting oral comments.
After the deadline for receiving out-
lines has passed, the IRS will prepare an
agenda containing the schedule of speak-
ers. Copies of the agenda will be made
available, free of charge, at the hearing.
Because of access restrictions, the IRS
will not admit visitors beyond the imme-
diateentranceareamorethan30minutes
before the hearing starts. For informa-
tion about having your name placed on
the building access list to attend the hear-
ing, see the “FOR FURTHER INFORMA-
TION CONTACT” section of this docu-
ment.
LaNita Van Dyke,
Chief, Publications and
Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration.)
(Filed by the Office of the Federal Register on March 17,
2008, 8:45 a.m., and published in the issue of the Federal
Register for March 18, 2008, 73 F.R. 14417)
2008–13 I.R.B.693March 31, 2008

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.
March 31, 2008i2008–13 I.R.B.

Numerical Finding List
1
Bulletins 2008–1 through 2008–13
Announcements:
2008-1, 2008-1 I.R.B.246
2008-2, 2008-3 I.R.B.307
2008-3, 2008-2 I.R.B.269
2008-4, 2008-2 I.R.B.269
2008-5, 2008-4 I.R.B.333
2008-6, 2008-5 I.R.B.378
2008-7, 2008-5 I.R.B.379
2008-8, 2008-6 I.R.B.403
2008-9, 2008-7 I.R.B.444
2008-10, 2008-7 I.R.B.445
2008-11, 2008-7 I.R.B.445
2008-12, 2008-7 I.R.B.446
2008-13, 2008-8 I.R.B.480
2008-14, 2008-8 I.R.B.481
2008-15, 2008-9 I.R.B.511
2008-16, 2008-9 I.R.B.511
2008-17, 2008-9 I.R.B.512
2008-18, 2008-12 I.R.B.667
2008-19, 2008-11 I.R.B.624
2008-20, 2008-11 I.R.B.625
2008-21, 2008-13 I.R.B.691
2008-22, 2008-13 I.R.B.692
2008-24, 2008-13 I.R.B.692
2008-26, 2008-13 I.R.B.693
Notices:
2008-1, 2008-2 I.R.B.251
2008-2, 2008-2 I.R.B.252
2008-3, 2008-2 I.R.B.253
2008-4, 2008-2 I.R.B.253
2008-5, 2008-2 I.R.B.256
2008-6, 2008-3 I.R.B.275
2008-7, 2008-3 I.R.B.276
2008-8, 2008-3 I.R.B.276
2008-9, 2008-3 I.R.B.277
2008-10, 2008-3 I.R.B.277
2008-11, 2008-3 I.R.B.279
2008-12, 2008-3 I.R.B.280
2008-13, 2008-3 I.R.B.282
2008-14, 2008-4 I.R.B.310
2008-15, 2008-4 I.R.B.313
2008-16, 2008-4 I.R.B.315
2008-17, 2008-4 I.R.B.316
2008-18, 2008-5 I.R.B.363
2008-19, 2008-5 I.R.B.366
2008-20, 2008-6 I.R.B.406
2008-21, 2008-7 I.R.B.431
2008-22, 2008-8 I.R.B.465
2008-23, 2008-7 I.R.B.433
2008-24, 2008-8 I.R.B.466
2008-25, 2008-9 I.R.B.484
Notices— Continued:
2008-26, 2008-9 I.R.B.487
2008-27, 2008-10 I.R.B.543
2008-28, 2008-10 I.R.B.546
2008-29, 2008-12 I.R.B.637
2008-30, 2008-12 I.R.B.638
2008-31, 2008-11 I.R.B.592
2008-32, 2008-11 I.R.B.593
2008-33, 2008-12 I.R.B.642
2008-34, 2008-12 I.R.B.645
2008-35, 2008-12 I.R.B.647
2008-36, 2008-12 I.R.B.650
2008-37, 2008-12 I.R.B.654
2008-38, 2008-13 I.R.B.683
2008-39, 2008-13 I.R.B.684
Proposed Regulations:
REG-147290-05, 2008-10 I.R.B.576
REG-104713-07, 2008-6 I.R.B.409
REG-104946-07, 2008-11 I.R.B.596
REG-111583-07, 2008-4 I.R.B.319
REG-114126-07, 2008-6 I.R.B.410
REG-127391-07, 2008-13 I.R.B.689
REG-136701-07, 2008-11 I.R.B.616
REG-139236-07, 2008-9 I.R.B.491
REG-141399-07, 2008-8 I.R.B.470
REG-147832-07, 2008-8 I.R.B.472
REG-149475-07, 2008-9 I.R.B.510
Revenue Procedures:
2008-1, 2008-1 I.R.B.1
2008-2, 2008-1 I.R.B.90
2008-3, 2008-1 I.R.B.110
2008-4, 2008-1 I.R.B.121
2008-5, 2008-1 I.R.B.164
2008-6, 2008-1 I.R.B.192
2008-7, 2008-1 I.R.B.229
2008-8, 2008-1 I.R.B.233
2008-9, 2008-2 I.R.B.258
2008-10, 2008-3 I.R.B.290
2008-11, 2008-3 I.R.B.301
2008-12, 2008-5 I.R.B.368
2008-13, 2008-6 I.R.B.407
2008-14, 2008-7 I.R.B.435
2008-15, 2008-9 I.R.B.489
2008-16, 2008-10 I.R.B.547
2008-17, 2008-10 I.R.B.549
2008-18, 2008-10 I.R.B.573
2008-19, 2008-11 I.R.B.594
2008-21, 2008-12 I.R.B.657
2008-22, 2008-12 I.R.B.658
2008-23, 2008-12 I.R.B.664
2008-24, 2008-13 I.R.B.684
2008-25, 2008-13 I.R.B.686
Revenue Rulings:
2008-1, 2008-2 I.R.B.248
2008-2, 2008-2 I.R.B.247
2008-3, 2008-2 I.R.B.249
2008-4, 2008-3 I.R.B.272
2008-5, 2008-3 I.R.B.271
2008-6, 2008-3 I.R.B.271
2008-7, 2008-7 I.R.B.419
2008-8, 2008-5 I.R.B.340
2008-9, 2008-5 I.R.B.342
2008-10, 2008-13 I.R.B.676
2008-11, 2008-10 I.R.B.541
2008-12, 2008-10 I.R.B.520
2008-13, 2008-10 I.R.B.518
2008-14, 2008-11 I.R.B.578
2008-15, 2008-12 I.R.B.633
2008-16, 2008-11 I.R.B.585
2008-17, 2008-12 I.R.B.626
2008-18, 2008-13 I.R.B.674
2008-19, 2008-13 I.R.B.669
Tax Conventions:
2008-8, 2008-6 I.R.B.403
Treasury Decisions:
9368, 2008-6 I.R.B.382
9369, 2008-6 I.R.B.394
9370, 2008-7 I.R.B.428
9371, 2008-8 I.R.B.447
9372, 2008-8 I.R.B.462
9373, 2008-8 I.R.B.463
9374, 2008-10 I.R.B.521
9375, 2008-5 I.R.B.344
9376, 2008-11 I.R.B.587
9377, 2008-11 I.R.B.578
9382, 2008-9 I.R.B.482
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin
2007–52, dated December 26, 2007.
2008–13 I.R.B.iiMarch 31, 2008

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2008–1 through 2008–13
Announcements:
2006-88
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
Notice 2008-36, 2008-12 I.R.B.650
2008-6
Superseded by
Ann. 2008-19, 2008-11 I.R.B.624
Notices:
2001-16
Modified by
Notice 2008-20, 2008-6 I.R.B.406
2001-60
Modified and superseded by
Notice 2008-31, 2008-11 I.R.B.592
2002-44
Superseded by
Notice 2008-39, 2008-13 I.R.B.684
2003-51
Superseded by
Rev. Proc. 2008-24, 2008-13 I.R.B.684
2006-27
Clarified and superseded by
Notice 2008-35, 2008-12 I.R.B.647
2006-28
Clarified and superseded by
Notice 2008-36, 2008-12 I.R.B.650
2006-77
Clarified and amplified by
Notice 2008-25, 2008-9 I.R.B.484
2006-107
Modified by
Notice 2008-7, 2008-3 I.R.B.276
2007-30
Modified and superseded by
Notice 2008-14, 2008-4 I.R.B.310
2007-54
Clarified by
Notice 2008-11, 2008-3 I.R.B.279
Proposed Regulations:
REG-209020-86
Corrected by
Ann. 2008-11, 2008-7 I.R.B.445
REG-149856-03
Hearing scheduled by
Ann. 2008-26, 2008-13 I.R.B.693
Proposed Regulations— Continued:
REG-113891-07
Hearing scheduled by
Ann. 2008-4, 2008-2 I.R.B.269
REG-127770-07
Hearing scheduled by
Ann. 2008-24, 2008-13 I.R.B.692
Revenue Procedures:
97-36
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
2001-23
Modified by
Rev. Proc. 2008-23, 2008-12 I.R.B.664
2002-9
Modified by
Rev. Proc. 2008-18, 2008-10 I.R.B.573
Modified and amplified by
Rev. Proc. 2008-25, 2008-13 I.R.B.686
2007-1
Superseded by
Rev. Proc. 2008-1, 2008-1 I.R.B.1
2007-2
Superseded by
Rev. Proc. 2008-2, 2008-1 I.R.B.90
2007-3
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-4
Superseded by
Rev. Proc. 2008-4, 2008-1 I.R.B.121
2007-5
Superseded by
Rev. Proc. 2008-5, 2008-1 I.R.B.164
2007-6
Superseded by
Rev. Proc. 2008-6, 2008-1 I.R.B.192
2007-7
Superseded by
Rev. Proc. 2008-7, 2008-1 I.R.B.229
2007-8
Superseded by
Rev. Proc. 2008-8, 2008-1 I.R.B.233
2007-26
Obsoleted in part by
Rev. Proc. 2008-17, 2008-10 I.R.B.549
2007-31
Obsoleted in part by
Rev. Proc. 2008-19, 2008-11 I.R.B.594
Revenue Procedures— Continued:
2007-39
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-52
Superseded by
Rev. Proc. 2008-9, 2008-2 I.R.B.258
2008-13
Corrected by
Ann. 2008-15, 2008-9 I.R.B.511
Revenue Rulings:
58-612
Clarified and amplified by
Rev. Rul. 2008-15, 2008-12 I.R.B.633
64-250
Amplified by
Rev. Rul. 2008-18, 2008-13 I.R.B.674
89-42
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
92-19
Supplemented in part by
Rev. Rul. 2008-19, 2008-13 I.R.B.669
97-31
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2001-48
Modified and superseded by
Rev. Rul. 2008-17, 2008-12 I.R.B.626
2007-4
Supplemented and superseded by
Rev. Rul. 2008-3, 2008-2 I.R.B.249
Treasury Decisions:
9362
Corrected by
Ann. 2008-9, 2008-7 I.R.B.444
Ann. 2008-12, 2008-7 I.R.B.446
9363
Corrected by
Ann. 2008-10, 2008-7 I.R.B.445
9375
Corrected by
Ann. 2008-16, 2008-9 I.R.B.511
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin 2007–52, dated December 26,
2007.
March 31, 2008iii2008–13 I.R.B.

INDEX
Internal Revenue Bulletins 2008–1 through
2008–13
The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parenthesis refers to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Alternative funding schedule, amortization (Ann 2) 3,307
Benefit restrictions for underfunded pension plans, hearing for
REG–113891–07 (Ann 4) 2,269
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Defined benefit plans:
Accrued benefits (RR 7) 7,419
Measurement of assets and liabilities for pension funding pur-
poses (REG–139236–07) 9,491
Defined contribution plans:
Diversification of employer securities, extension of certain
transitional rules (Notice 7) 3,276
Diversification requirements for certain defined contribu-
tion plans and to publicly traded employer securities
(REG–136701–07) 11,616
Determination letters, issuing procedures (RP 6) 1,192
Full funding limitations, weighted average interest rates, seg-
ment rates for:
January 2008 (Notice 17) 4,316
February 2008 (Notice 24) 8,466
March 2008 (Notice 37) 12,654
Letter rulings:
And determination letters, areas which will not be issued
from:
Associates Chief Counsel and Division Counsel (TE/GE)
(RP 3) 1,110
Associate Chief Counsel (International) (RP 7) 1,229
And general information letters, procedures (RP 4) 1,121
User fees, request for letter rulings (RP 8) 1,233
Mortality tables, disability (Notice 29) 12,637
Performance-based compensation (RR 13) 10,518
EMPLOYEE PLANS—Cont.
Proposed Regulations:
26 CFR 1.401(a)(35)–1, added; diversification requirements
for certain defined contribution plans and to publicly traded
employer securities (REG–136701–07) 11,616
26 CFR 1.411(a)(13)–1, added; 1.411(b)(5)–1, added; hybrid
retirement plans (REG–104946–07) 11,596
26 CFR 1.430; 1.436; benefit restrictions for underfunded
pension plans, hearing for REG–113891–07 (Ann 4) 2,269
26 CFR 1.430(d)–1, added; 1.430(g)–1, added;
1.430(h)(2)–1, added; 1.430(i)–1, added; measurement
of assets and liabilities for pension funding purposes
(REG–139236–07) 9,491
Qualified retirement plans:
Distributions (Notice 30) 12,638
Hybrid retirement plans (REG–104946–07) 11,596
Stocks, statutory stock options, information reporting require-
ments (Notice 8) 3,276
Supplemental healthinsurance, HIPAA (Notice 23) 7,433
Technical advice to IRS employees (RP 5) 1,164
Transitional guidance for new funding rules and funding-related
benefits limitations under PPA ’06, uniform effective date (No-
tice 21) 7,431
EMPLOYMENT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Corporations, S corporation, status in reorganization where S
corporation becomes a QSub of newly formed holding com-
pany, assignment of EINs (RR 18) 13,674
Frivolous tax return positions (Notice 14) 4,310
Interest-free adjustments and claims for refund of employment
taxes (REG–111583–07) 4,319
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Proposed Regulations:
26 CFR 31.6011(a)–1, –4, –5, amended; 31.6205–1,
amended; 31.6302–0, –1, amended; 31.6402(a)–1, –2,
amended; 31.6413(a)–2, amended; 31.6414–1, amended;
interest-free adjustments and claims for refund of employ-
ment taxes (REG–111583–07) 4,319
Technical Advice Memoranda (TAMs) (RP 2) 1,90
ESTATE TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
2008–13 I.R.B.ivMarch 31, 2008

ESTATE TAX—Cont.
Technical Advice Memoranda (TAMs) (RP 2) 1,90
EXCISE TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Corporations, S corporation, status in reorganization where S
corporation becomes a QSub of newly formed holding com-
pany, assignment of EINs (RR 18) 13,674
Frivolous tax return positions (Notice 14) 4,310
Insurance excise tax treatment of premiums paid by one foreign
insurer to another (RR 15) 12,633
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Supplemental health insurance, HIPAA (Notice 23) 7,433
Technical Advice Memoranda (TAMs) (RP 2) 1,90
Voluntary compliance program for foreign insurers and reinsur-
ers subject to insurance excise tax imposed by section 4371
(Ann 18) 12,667
EXEMPT ORGANIZATIONS
Annual notice to donors regarding pending and settled declara-
tory judgment suits (Ann 1) 1,246
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Form 990-T, procedures to request a 501(c)(3) organization’s
Form 990-T (Ann 21) 13,691
Frivolous tax return positions (Notice 14) 4,310
Letter rulings:
And determination letters:
Areas which will not be issued from Associates Chief
Counsel and Division Counsel (TE/GE) (RP 3) 1,110
Exemption application determination letter rulings under
sections 501 and 521 (RP 9) 2,258
And general information letters, procedures (RP 4) 1,121
User fees, request for letter rulings (RP 8) 1,233
List of organizations classifiedas private foundations (Ann 13)
8,476
Proposed Regulations:
26 CFR 1.664–1, amended; guidance under section 664
regarding the effect of unrelated business taxable income
(UBTI) on charitable remainder trusts (REG–127391–07)
13,689
Revocations (Ann 3) 2,269;(Ann14)8,477; (Ann 20) 11,625;
(Ann 22) 13,692
Technical advice to IRS employees (RP 5) 1,164
Transitional relief and filing procedures, charitable trust
(Notice 6) 3,275
Trusts, charitable remainder trusts, calculation of excise tax on
unrelated business taxable income (UBTI) (REG–127391–07)
13,689
GIFT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
Technical Advice Memoranda (TAMs) (RP 2) 1,90
INCOME TAX
Accounting methods:
Procedure for election under section 1361(g) for banks (RP
18) 10,573
Safe harbor method of accounting for payroll taxes (RP 25)
13,686
Annual notice to donors regarding pending and settled declara-
tory judgment suits (Ann 1) 1,246
Annuity contracts, partial exchange (RP 24) 13,684
Calculating and apportioning the section 11(b)(1) additional tax
under section 1561 for controlled groups (TD 9369) 6,394;
(REG–104713–07) 6,409
Cell captive guidance:
Insurance, protected cell company (Notice 19) 5,366
Insurance, risk shifting and risk distribution (RR 8) 5,340
Certain outbound reorganizations and section 351 exchanges
(Notice 10) 3,277
Charitable contributions:
Appreciated property, Scorporation (RR 16) 11,585
Recordkeeping requirements (Notice 16) 4,315
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Clarification of transitional relief under Notice 2007–54
(Notice 11) 3,279
Coal project program, special allocation round for qualifying ad-
vanced coal projects (Notice 26) 9,487
Consolidated returns, loss disallowance (Notice 9) 3,277
Consumer Price Index (CPI) adjustments, certain loans under
section 1274A for 2008 (RR 3) 2,249
Corporations:
Health insurance costs of 2-percent shareholder-employees, S
corporation (Notice 1) 2,251
S corporations:
Charitable contributions, appreciated property (RR 16) 11,
585
Status in reorganization where S corporation becomes a
QSub of newly formed holding company, assignment of
EINs (RR 18) 13,674
Succession to items of a liquidating corporation by members
of a consolidated group (TD 9376) 11,587
Credits:
Alternative motor vehicle credit, qualified fuel cell motor ve-
hicles (Notice 33) 12,642
March 31, 2008v2008–13 I.R.B.

INCOME TAX—Cont.
Energy efficient home credit,calculation of heating and cool-
ingenergyconsumption:
Dwelling unit (Notice 35) 12,647
Manufactured home (Notice 36) 12,650
Foreign tax credit, redeterminations, correction (Ann 9) 7,
444;correction(Ann11)7,445; correction (Ann 12) 7,446
Reduction of foreign tax creditlimitation categories under
section 904(d) (TD 9368) 6,382; (REG–114126–07) 6,
410
Increasing research activities, centralized filing of certain
claims (Notice 39) 13,684
Low-income housing credit:
2008 population figures used for calculation (Notice 22) 8,
465
Indian Housing Block Grant (IHBG) Program (RR 6) 3,
271
Satisfactory bond, “bond factor” amounts for the period:
January through March 2008 (RR 2) 2,247
Deductions, dependency exemption, qualifying relative
(Notice 5) 2,256
Depreciation, 2008 limitations on depreciation deductions for
passenger automobiles (RP 22) 12,658
Disclosure of return information to the Bureau of the Census (TD
9372) 8,462; (TD 9373) 8,463; (REG–147832–07) 8,480
Disciplinary actions involving attorneys, certified public accoun-
tants, enrolled agents, and enrolled actuaries (Ann 5) 4,333
Economic stimulus payments, filing instructions (Notice 28) 10,
546
Electronic tax administration, guidance necessary to facilitate –
updating section 7216 regulations (TD 9375) 5,344; correction
(Ann 16) 9,511
Employer-provided vehicles, cents-per-mile valuation rule, max-
imum vehicle values (RP 13) 6,407;correction(Ann15)9,
511
Exclusions from gross income, update of Rev. Rul. 2001–48
(RR 17) 12,626
Exemptions, dependents, hearing on REG–149856–03 (Ann 26)
13,693
Foreign currency, debt characterization, exchange traded notes,
prepaid forwards (RR 1) 2,248
Frivolous tax return positions (Notice 14) 4,310
GO Zone bonus depreciation recapture, like-kind exchanges and
involuntary conversions (Notice 25) 9,484
Guidance to:
Government entities regarding a requirement to withhold on
certain payments made by them (Notice 38) 13,683
Tax return preparers, consents to disclose and consents to use
tax return information in the Form 1040 series (RP 12) 5,
368
Income tax returns, 2007, guidance for the Service not challeng-
ing the accuracy of 2007 returns filed in compliance with No-
tice 2008–28 (RP 21) 12,657
Insurance companies:
Application of section 338 (TD 9377) 11,578
Loss payment patterns and discount factors for the 2007 acci-
dent year (RP 10) 3,290
INCOME TAX—Cont.
Prevailing state assumed interest rate tables, 2008 (RR 19) 13,
669
Proposed AG VACARVM and Proposed Life PBR (Notice
18) 5,363
Salvage discount factors for the 2007 accident year (RP 11) 3,
301
Interest:
Deductibility, application of section 163(d) to noncorporate
limited partner that does not materially participate in a
trader partnership’s trading activity (RR 12) 10,520
Investment:
Federal short-term, mid-term, and long-term rates for:
January 2008 (RR 4) 3,272
February 2008 (RR 9) 5,342
March 2008 (RR 11) 10,541
Rates:
Underpayments and overpayments, quarter beginning:
April 1, 2008 (RR 10) 13,676
Interim standards under section 6694(a) (Notice 13) 3,282
Inventory, dollar-value last-in, first-out (LIFO) pooling method
for certain resellers of cars and light-duty trucks (RP 23) 12,
664
Letter rulings:
And determination letters, areas which will not be issued
from:
Associates Chief Counsel and Division Counsel (TE/GE)
(RP 3) 1,110
Associate Chief Counsel (International) (RP 7) 1,229
And information letters issued byAssociate Offices, determi-
nation letters issued by Operating Divisions (RP 1) 1,1
Like–kind exchanges, safe harbor, rental property used for per-
sonal purposes (RP 16) 10,547
Listed transaction under sections 6011, 6111, and 6112 (Notice
34) 12,645
Marketing of refund anticipation loans (RALs) and certain other
products in connection with the preparation of a tax return
(Ann 7) 5,379
Mortgage insurance premiums, allocation and information re-
porting for 2007 (Notice 15) 4,313
National and area median gross income figures, guidance for
2008 (RP 19) 11,594
Partnerships, application of section 163(d) to noncorporate lim-
ited partners in a trader partnership’s trading activity (RR 12)
10,520
Penalties, substantial understatement, preparer penalty (RP 14)
7,435
Performance-based compensation (RR 13) 10,518
Prepaid forward contracts, exchange traded notes (Notice 2) 2,
252
Preparer signature requirements under section 6695(b)
(Notice 12) 3,280
Presidential Primary Matching Payment Account:
Payments from (RP 15) 9,489
Timing of payments (TD 9382) 9,482; (REG–149475–07) 9,
510
2008–13 I.R.B.viMarch 31, 2008

INCOME TAX—Cont.
Private foundations, organizations now classified as (Ann 13) 8,
476
Proposed Regulations:
26 CFR 1.152; dependent child of divorced or separated par-
ents or parents who live apart, hearing on REG–149856–03
(Ann 26) 13,693
26 CFR 1.468A–0 thru –9, added; nuclear decommissioning
funds (REG–147290–05) 10,576
26 CFR 1.664–1, amended; guidance under section 664
regarding the effect of unrelated business taxable income
(UBTI) on charitable remainder trusts (REG–127391–07)
13,689
26 CFR 1.860A, 1.860G, modifications of commercial mort-
gage loans held by a real estate mortgage investment con-
duit (REMIC), hearing for REG–127770–07 (Ann 24) 13,
692
26 CFR 1.904–0, amended; 1.904(f)–1, –2, amended;
1.904(f)–7, –8, added; 1.904(g)–0 thru –3, added;
1.1502–9, revised; treatment of overall foreign and domes-
tic losses (REG–141399–07) 8,470
26 CFR 1.904–2(i), added; 1.904–4, –5, revised; 1.904–7(g),
added; 1.904(f)–12(h), added; reduction of foreign
tax credit limitation categories under section 904(d)
(REG–114126–07) 6,410
26 CFR 1.1561–0, –2, added; 1.1563–1, amended; calculating
and apportioning the section 11(b)(1) additional tax under
section 1561 for controlled groups (REG–104713–07) 6,
409
26 CFR 301.6103(j)(1)–1, amended; disclosure of return in-
formation to the Bureau of the Census (REG–147832–07)
8,480
26 CFR 702.9037–1, –2, revised; payments from the
Presidential Primary Matching Payment Account
(REG–149475–07) 9,510
Publications:
Update to Publication 1187, Specifications for Filing Form
1042-S, Foreign Person’s U.S. Source Income Subject
to Withholding, Electronically or Magnetically (Revised
12-2006) (Ann 6) 5,378;(Ann19)11,624
Qualified mortgage bonds (QMBs) and mortgage credit certifi-
cates (MCCs), average area housing purchase prices for 2008
(RP 17) 10,549
Qualified tuition programs, applicable transfer tax provi-
sions, publication of advance notice of proposed rulemaking
(REG–127127–05) (Ann 17) 9,512
Real estate mortgage investment conduit (REMIC) commercial
mortgage loan modification, hearing for REG–127770–07
(Ann 24) 13,692
Regulations:
26 CFR 1.197–0, amended; 1.197–2(g)(5)(ii), revised;
1.197–2T, removed; 1.338–0, –1, –11, amended;
1.338–1T, –11T, removed; 1.338(i)–1, amended;
1.381(c)(22)–1(b)(7)(v), amended; 1.846–0, –4, amended;
1.846–2(d), revised; 602.101, amended; application of
section 338 to insurance companies (TD 9377) 11,578
INCOME TAX—Cont.
26 CFR 1.468A–0 thru –8, removed; 1.468A–0T thru –9T,
added; 602.101, amended; nuclear decommissioning funds
(TD 9374) 10,521
26 CFR 1.904–0, amended; 1.904(b)–0, added; 1.904(f)–0,
–0T, –1T, –2T, –7, –7T, –8, –8T, added; 1.904(f)–1, –2,
–3, amended; 1.904(g)–0, –0T, –1, –1T, –2, –2T, –3, –3T,
added; 1.904(i)–0, added; 1.904(j)–0, added; 1.1502–9, re-
vised; 1.1502–9T, added; treatment of overall foreign and
domestic losses (TD 9371) 8,447
26 CFR 1.904–0, –2, –2T, –4, –4T, –5, –5T, –7, –7T, amended;
1.904(f)–12, –12T, amended; reduction of foreign tax credit
limitation categories under section 904(d) (TD 9368) 6,382
26 CFR 1.905–3T, –4T, amended;foreign tax credit, notifica-
tion of foreign tax redeterminations, correction to TD 9362
(Ann 9) 7,444
26 CFR 1.1502–47T, added; 1.1561–0T, added; 1.1561–2, re-
moved; 1.1561–2T, amended; 1.1563–1T, amended; calcu-
lating and apportioning the section 11(b)(1) additional tax
under section 1561 for controlled groups (TD 9369) 6,394
26 CFR 1.1502–80, amended; miscellaneous operating rules
for successor persons, succession to items of the liquidating
corporation (TD 9376) 11,587
26 CFR 300.0, amended; 300.7, .8, added; user fees relating to
enrollment to perform actuarial services (TD 9370) 7,428
26 CFR 301.6103(j)(1)–1, amended; disclosure of return in-
formation to the Bureau of the Census (TD 9372) 8,462
26 CFR 301.6103(j)(1)–1T, amended; disclosure of return in-
formation to the Bureau of the Census (TD 9373) 8,463
26 CFR 301.7216–0, added; 301.7216–1, –2, –3, revised;
guidance necessary to facilitate electronic tax administra-
tion, update (TD 9375) 5,344; correction (Ann 16) 9,511
26 CFR 702.9037–1, –2, amended; 702.9037–1T, –2T, added;
payments from the Presidential Primary Matching Payment
Account (TD 9382) 9,482
Reissuance standards for state or local bonds (Notice 27) 10,543
Returns required on magnetic media, corrections to TD 9363
(Ann 10) 7,445
Revocations, exempt organizations (Ann 3) 2,269;(Ann14)8,
477;(Ann20)11,625; (Ann 22) 13,692
Safe harbor, guidance for the Service not challenging the accu-
racy of 2007 returns filed in compliance with Notice 2008–28
(RP 21) 12,657
Section 67 limitations on estates or trusts for bundled investment
management and advisory costs (Notice 32) 11,593
Standard Industry Fare Level (SIFL) formula (RR 14) 11,578
Stocks, statutory stock options, information reporting require-
ments (Notice 8) 3,276
Tax conventions:
Exclusions from gross income, update of Rev. Rul. 2001–48
(RR 17) 12,626
Insurance excise tax treatment of premiums paid by one for-
eign insurer to another (RR 15) 12,633
Updated tax tables for Belgium, Denmark, Finland, and Ger-
many tax conventions (Ann 8) 6,403
U.S.-Mexico income tax treaty, treatment of Mexico’s im-
puesto empresarial a tasa unica (IETU) (Notice 3) 2,253
March 31, 2008vii2008–13 I.R.B.

INCOME TAX—Cont.
Voluntary compliance program for foreign insurers and rein-
surers subject to insurance excise tax imposed by section
4371 (Ann 18) 12,667
Tax shelter, listed transactions (Notice 20) 6,406
Technical Advice Memoranda (TAMs) (RP 2) 1,90
Treatment of overall foreign and domestic losses (TD 9371) 8,
447; (REG–141399–07) 8,470
Trusts:
Charitable remainder trusts, calculation of excise tax on unre-
lated business taxable income (UBTI) (REG–127391–07)
13,689
Deductions for contributions to qualified nuclear decommis-
sioning trusts (TD 9374) 10,521; (REG–147290–05) 10,
576
User fees relating to enrollment to perform actuarial services (TD
9370) 7,428
Voluntary closing agreement program for tax-exempt bonds and
tax credit bonds (TEB VCAP) (Notice 31) 11,592
Wash sales, individual retirement accounts, Roth IRAs (RR 5) 3,
271
SELF-EMPLOYMENT TAX
Claims submitted to IRS Whistleblower Office under section
7623 (Notice 4) 2,253
Frivolous tax return positions (Notice 14) 4,310
Letter rulings and information letters issued by Associate Of-
fices, determination letters issued by Operating Divisions
(RP 1) 1,1
Technical Advice Memoranda (TAMs) (RP 2) 1,90
2008–13 I.R.B.viiiMarch 31, 2008

March 31, 20082008–13 I.R.B.

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