Internal Revenue Bulletin 2014-44 (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.

# Internal Revenue bulletin
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## 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. Proc. 2014-55, page 753.

This revenue procedure provides that eligible U.S. citizens and
residents with certain Canadian retirement plans will be treated
as making an election under paragraph 7 of Article XVIII of the
U.S .- Canada Income Tax Treaty to defer U.S. income tax on
income accruing in their retirement plans until a distribution is
made. Such individuals will be treated as having made the
election in the first year in which they would have been entitled
to make the election under the treaty. This revenue procedure
also eliminates a reporting requirement associated with such
Canadian retirement plans.

### Notice 2014-58, page 746.

This notice amplifies Notice 2010-62; 2010-40 I.R.B. 411,
by providing additional guidance regarding the codification of
the economic substance doctrine and the related penalty
amendments.

### Notice 2014-59, page 747.

Notice 2014-59 announces the intention of the Department of
the Treasury (Treasury) and the IRS to amend certain provi-
sions of the temporary regulations published under sections
1441, 1442, and 6049 of the Internal Revenue Code (Code) on
March 6, 2014, to provide modified applicability dates with
respect to: (i) the standards of knowledge applicable to a
withholding certificate or documentary evidence to document a
payee that is an entity under § 1.1441-7(b); and (ii) the rules
under § 1.6049-5(c) providing the circumstances under which
a withholding agent or payor may rely on documentary evi-
dence provided by a payee instead of a withholding certificate
to document the foreign status of the payee for purposes of
chapters 3 and 61. Prior to the issuance of these amend-
ments, taxpayers may rely on this notice regarding the modi-
fied applicability dates.

## EMPLOYEE PLANS

Notice 2014-62, page 749.

This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for Septem-
ber 2014 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for October 2014, and the 30-year
Treasury rates. These rates reflect the application of
§ 430(h)(2)(C)(iv), which was added by the Moving Ahead for
Progress in the 21st Century Act, Public Law 112-141 (MAP-
21) and amended by section 2003 of the Highway and Trans-
portation Funding Act of 2014 (HATFA).

## TAX CONVENTIONS

### Rev. Proc. 2014-55, page 753.

This revenue procedure provides that eligible U.S. citizens and
residents with certain Canadian retirement plans will be treated
as making an election under paragraph 7 of Article XVIII of the
U.S .- Canada Income Tax Treaty to defer U.S. income tax on
income accruing in their retirement plans until a distribution is
made. Such individuals will be treated as having made the
election in the first year in which they would have been entitled
to make the election under the treaty. This revenue procedure
also eliminates a reporting requirement associated with such
Canadian retirement plans.

(Continued on the next page)

Finding Lists begin on page ii.
Index for July through October begins on page iv.

Department of the Treasury
Internal Revenue Service

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## ADMINISTRATIVE

### Rev. Proc. 2014-55, page 753.

This revenue procedure provides that eligible U.S. citizens and
residents with certain Canadian retirement plans will be treated
as making an election under paragraph 7 of Article XVIII of the
U.S .- Canada Income Tax Treaty to defer U.S. income tax on
income accruing in their retirement plans until a distribution is
made. Such individuals will be treated as having made the
election in the first year in which they would have been entitled
to make the election under the treaty. This revenue procedure
also eliminates a reporting requirement associated with such
Canadian retirement plans.

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## The IRS Mission

Provide America's taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury's Office of the Assistant Sec-
retary (Enforcement).

### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

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## Part III. Administrative, Procedural, and Miscellaneous

Additional Guidance Under
the Codified Economic
Substance Doctrine and
Related Penalties

Notice 2014-58

### PURPOSE

This notice amplifies Notice 2010-62,
2010-40 I.R.B. 411, by providing addi-
tional guidance regarding the codification
of the economic substance doctrine and
the related penalty amendments. Specifi-
cally, this notice provides guidance re-
garding: (1) the definition of "transaction"
for purposes of applying the codified eco-
nomic substance doctrine under section
7701(0), and (2) the meaning of "similar
rule of law" as described in the accuracy-
related penalty under section 6662(b)(6).
This notice is also relevant with respect to
the availability of the reasonable cause
exceptions under sections 6664(c) and (d)
and the reasonable basis exception under
section 6676 because those exceptions are
inapplicable to transactions described in
section 6662(b)(6).

### BACKGROUND

The economic substance doctrine is a
judicial doctrine that was codified in sec-
tion 7701(o) by section 1409 of the Health
Care and Education Reconciliation Act of
2010, Pub. L. No. 111-152. Section
7701(0)(5)(A) defines "economic sub-
stance doctrine" as the common-law doc-
trine that disallows tax benefits under sub-
title A of the Internal Revenue Code if the
transaction that produces those benefits
lacks economic substance or a business
purpose. Under section 7701(o)(1), a
transaction has economic substance if: (1)
the transaction changes in a meaningful
way (apart from Federal income tax ef-
fects) the taxpayer's economic position;
and (2) the taxpayer has a substantial pur-
pose (apart from Federal income tax ef-
fects) for entering into such transaction.

Section 7701(o)(5)(D) provides that
"[t]he term 'transaction' includes a series
of transactions." The legislative history
explained:

The provision does not alter the
court's ability to aggregate, disaggre-
gate, or otherwise recharacterize a
transaction when applying the [eco-
nomic substance] doctrine. For exam-
ple, the provision reiterates the
present-law ability of the courts to
bifurcate a transaction in which inde-
pendent activities with non-tax objec-
tives are combined with an unrelated
item having only tax-avoidance ob-
jectives in order to disallow those tax-
motivated benefits.

H.R. Rep. No. 111-443(I), at 296-
297, P.L. 111-152, Health Care and Edu-
cation Reconciliation Act of 2010. Al-
though section 7701(o) does not provide a
definition of "transaction," the term has
been defined in the analogous context of
reportable transactions. Specifically,
Treas. Reg. § 1.6011-4(b)(1) provides
that, for purposes of the reportable trans-
action disclosure regime, the term "trans-
action" includes all of the factual elements
relevant to the expected tax treatment of
any investment, entity, plan, or arrange-
ment and also includes any series of steps
carried out as part of a plan.

Section 6662(b)(6) imposes a penalty
on an underpayment attributable to tax
benefits that were disallowed because a
transaction lacks economic substance
(within the meaning of section 7701(o)) or
fails to meet the requirements of any sim-
ilar rule of law. Neither section 7701(o)
nor section 6662 defines "similar rule of
law." However, the legislative history ex-
plained, with respect to a "similar rule of
law," that the "penalty would apply to a
transaction that is disregarded as a result
of the application of the same factors and
analysis that is required under the provi-
sion [section 7701(o)] for an economic
substance analysis, even if a different term
is used to describe the doctrine." H.R.
Rep. 111-443(I), at 304.

Sections 6664(c)(2) and (d)(2) provide
that the reasonable cause and good faith
exception to a section 6662 or 6662A pen-
alty does not apply to the portion of an
underpayment or reportable transaction
understatement attributable to one or more
transactions described in section 6662(b)(6).
For purposes of the penalty for an errone-
ous claim for refund or credit of an exces-
sive amount, section 6676(c) provides that

any excessive amount (within the mean-
ing of section 6676(b)) that is attributable
to any transaction described in section
6662(b)(6) is not treated as having a rea-
sonable basis.

### DISCUSSION

#### A. Transaction

For purposes of determining whether
the codified economic substance doctrine
applies, "transaction" generally includes
all the factual elements relevant to the
expected tax treatment of any investment,
entity, plan, or arrangement; and any or all
of the steps that are carried out as part of
a plan. Facts and circumstances determine
whether a plan's steps are aggregated or
disaggregated when defining a transac-
tion.

Generally, when a plan that generated a
tax benefit involves a series of intercon-
nected steps with a common objective, the
"transaction" includes all of the steps
taken together - an aggregation approach.
This means that every step in the series
will be considered when analyzing
whether the "transaction" as a whole lacks
economic substance. However, when a se-
ries of steps includes a tax-motivated step
that is not necessary to achieve a non-tax
objective, an aggregation approach may
not be appropriate. In that case, the "trans-
action" may include only the tax-
motivated steps that are not necessary to
accomplish the non-tax goals - a disag-
gregation approach.

Whether the economic substance doc-
trine is relevant and whether a transaction
should be disaggregated will be considered
on a case-by-case basis, depending on the
facts and circumstances of each individual
case. For example, if transfers of multiple
assets and liabilities occur and the transfer
of a specific asset or assumption of a spe-
cific liability was tax-motivated and unnec-
essary to accomplish a non-tax objective,
then the economic substance doctrine may
be applied solely to the transfer or assump-
tion of that specific asset or liability. Sepa-
rable activities may take many forms includ-
ing, for example, the use of an intermediary
employed for tax benefits and whose actions
or involvement was unnecessary to accom-
plish an overarching non-tax objective.

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These situations are merely examples in-
tended to illustrate the potential application
of the disaggregation approach and are not
exhaustive or comprehensive.

#### B. Similar Rule of Law

For purposes of section 6662(b)(6),
"similar rule of law" means a rule or doc-
trine that disallows the tax benefits under
subtitle A of the Code related to a trans-
action because:

(1) the transaction does not change a
taxpayer's economic position in a mean-
ingful way (apart from Federal income tax
effects); or

(2) the taxpayer did not have a substan-
tial purpose (apart from Federal income tax
effects) for entering into the transaction.

In other words, "similar rule of law"
means a rule or doctrine that applies the
same factors and analysis that is required
under section 7701(o) for an economic
substance analysis, even if a different term
or terms (for example, "sham transaction
doctrine") are used to describe the rule or
doctrine. See H.R. Rep. 111-443, at 304.

The IRS will not apply a penalty under
section 6662(b)(6) (or otherwise argue
that a transaction is described in section
6662(b)(6)) unless it also raises section
7701(o) to support the underlying adjust-
ments. If the IRS does not raise section
7701(o) to disallow the claimed tax ben-
efits and instead relies upon other judicial
doctrines (e.g., the substance over form or
step transaction doctrines) to support the
underlying adjustments, the IRS will not
apply a section 6662(b)(6) penalty (or oth-
erwise argue that a transaction is de-
scribed in section 6662(b)(6)) because the
IRS will not treat the transaction as failing
to meet the requirements of a similar rule
of law. Code sections and Treasury regu-
lations, other than section 7701(o) and the
regulations under that section, that disal-
low tax benefits are not similar rules of
law for purposes of section 6662(b)(6).

### EFFECT ON OTHER DOCUMENTS

Notice 2010-62, 2010-40 I.R.B. 411,
is amplified.

### EFFECTIVE DATE

This notice is effective for transactions
entered into after March 30, 2010.

### CONTACT INFORMATION

The principal author of this notice is
James G. Hartford of the Office of Asso-
ciate Chief Counsel (Procedure and Ad-
ministration). For further information re-
garding this notice, contact Mr. Hartford
at (202) 317-3400 (not a toll-free number).

### Modified Applicability Dates of Certain Provisions Under Chapters 3 and 61 Notice 2014-59

#### I. PURPOSE

This notice announces the intention of
the Department of the Treasury (Treasury)
and the IRS to amend certain provisions
of the temporary regulations published
under sections 1441, 1442, and 6049 of
the Internal Revenue Code (Code) on
March 6, 2014, to provide modified appli-
cability dates with respect to: (i) the stan-
dards of knowledge applicable to a with-
holding certificate or documentary
evidence to document a payee that is an
entity under § 1.1441-7(b); and (ii) the
rules under § 1.6049-5(c) providing the
circumstances under which a withholding
agent or payor may rely on documentary
evidence provided by a payee instead of a
withholding certificate to document the
foreign status of the payee for purposes of
chapters 3 and 61. Prior to the issuance of
these amendments, taxpayers may rely on
this notice regarding the modified appli-
cability dates.

#### II. BACKGROUND

On March 18, 2010, the Hiring Incen-
tives to Restore Employment Act of 2010,
Pub. L. 111-147 (H.R. 2847), added chapter
4 to Subtitle A of the Code (sections 1471-
1474 (commonly known as "FATCA")).
Chapter 4 generally requires withholding
agents to withhold at a 30 percent rate on
certain payments to a foreign financial
institution (FFI) unless the FFI has en-
tered into an agreement (FFI agreement)
to obtain status as a participating FFI and,
among other things, to report certain in-
formation with respect to U.S. accounts.
Chapter 4 also imposes on withholding
agents withholding, documentation, and

reporting requirements with respect to
certain payments made to non-financial
foreign entities (NFFEs). On January 17,
2013, Treasury and the IRS published fi-
nal regulations under chapter 4 (TD 9610,
78 Fed. Reg. 5873) (final chapter 4 regu-
lations).

On March 6, 2014, Treasury and the
IRS published temporary regulations un-
der chapter 4 (T.D. 9657, 79 Fed. Reg.
12812) (temporary chapter 4 regulations)
and under chapter 3, chapter 61, and sec-
tion 3406 (T.D. 9658, 79 Fed. Reg.
12726) (temporary coordination regula-
tions). The temporary coordination regu-
lations modify certain provisions of the
regulations under chapters 3 and 61 and
section 3406 to coordinate with the chap-
ter 4 regulations, including (i) the stan-
dards of knowledge for withholding
agents under § 1.1441-7(b); and (ii) the
conditions under which a withholding
agent or a payor (as defined for chapter 61
purposes in § 1.6049-5(c)(5)) may rely
on documentary evidence to document a
payee's foreign status. The temporary co-
ordination regulations are generally effec-
tive for payments made by withholding
agents and payors beginning on or after
July 1, 2014.

The temporary coordination regula-
tions in § 1.1441-7(b) amend the stan-
dards of knowledge regarding the circum-
stances under which a withholding agent
has reason to know that a payee's claim of
foreign status is unreliable or incorrect.
These amendments were made to coordi-
nate with the chapter 4 regulations and are
consistent with the standards of knowl-
edge that apply for purposes of chapter 4.
The temporary coordination regulations in
§ 1.1441-7(b)(5) and (b)(8) modify the
circumstances under which a withholding
agent that is described in § 1.1441-7(b)(3)(i)
(including a financial institution) and that
has obtained a withholding certificate or
documentary evidence has reason to know
that a claim of foreign status made by a
direct account holder is unreliable or in-
correct for purposes of chapters 3 and 61.
In particular, the temporary coordination
regulations provide additional U.S. indicia
that will cause a withholding agent to
have reason to know that a claim of for-
eign status by a direct account holder is
unreliable or incorrect for purposes of
chapters 3 and 61. The additional U.S.

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indicia are as follows: (1) the withholding
agent's classification of the account
holder as a U.S. person in its account
information; (2) a current U.S. telephone
number for the account holder if the with-
holding agent has no telephone number
for the account holder outside the United
States; and (3) an unambiguous indication
of a U.S. place of birth for an individual
direct account holder on accompanying doc-
umentation or in the withholding agent's
account information. See § 1.1441-7(b)(5)(i),
(b)(5)(ii), (b)(8)(ii), and (b)(8)(iii). The
temporary coordination regulations under
§ 1.1441-7(b)(3)(ii) do not require a with-
holding agent to take into account these
additional U.S. indicia for a preexisting
obligation if the foreign status of the di-
rect account holder was documented by
the withholding agent for purposes of
chapter 3 or chapter 61 before July 1,
2014, unless the withholding agent is no-
tified of a change in circumstances with
respect to the obligation or, in the case of
an individual account holder, reviews doc-
umentation that contains a U.S. place of
birth.

The regulations under § 1.6049-5(c)(1)
provide guidance on a payor's use of doc-
umentary evidence with respect to an off-
shore obligation to establish a payee's for-
eign status for certain amounts paid
outside the United States under § 1.6049-
5(e). Prior to amendment, an amount was
considered paid outside the United States
under § 1.6049-5(e) if the payor com-
pleted the acts necessary to effect the pay-
ment outside the United States, provided
that the payment was not further described
in § 1.6049-5(e). Section 1.6049-5(e) de-
scribes certain "U.S. tiebacks," which
cause a payment not to be treated as an
amount paid outside the United States,
such as when a payment is transferred to
an account maintained by the payee in the
United States or mailed to a United States
address when certain other conditions ap-
ply. Additionally, prior to amendment, the
regulations under § 1.6049-5(c)(4) modi-
fied the regulations under § 1.6049-5(c)(1)
regarding the use of documentary evidence
for payments of amounts that are not subject
to withholding under § 1.1441-2(a), other
than amounts described in § 1.6049-
5(d)(3)(iii) (dealing with U.S. short-term
original issue discount and U.S. bank de-
posit interest). The temporary coordina-

tion regulations amend § 1.6049-5(e) and
§ 1.6049-5(c)(4) to provide further guid-
ance with respect to when an amount is
considered paid outside the United States
and the types of documentary evidence
permitted for establishing a payee's for-
eign status with respect to certain pay-
ments, including the requirements for
maintaining such documentation.

On May 19, 2014, Treasury and the IRS
issued Notice 2014-33 (2014-21 I.R.B.
1033), which, among other things, states the
intention of Treasury and the IRS to amend
the chapter 4 regulations to allow a with-
holding agent or FFI to treat an obligation
held by an entity that is issued, opened, or
executed on or after July 1, 2014, and before
January 1, 2015, as a preexisting obligation
described in §§ 1.1471-2(a)(4)(ii), 1.1472-
1(b)(2), and 1.1471-4(c)(3), except that an
FFI may not apply the documentation ex-
ception under § 1.1471-4(c)(3)(iii).

#### III. SCOPE

This notice applies to withholding
agents, FFIs, and payors that have with-
holding or information reporting require-
ments under chapter 3, chapter 4, chapter
61, or section 3406 with respect to ac-
counts and obligations they open or enter
into before January 1, 2015, and provides
relief generally consistent with Notice
2014-33. As under Notice 2014-33, the
relief provided by this notice may be used
with respect to all accounts and obliga-
tions to which the relief applies, or sepa-
rately with respect to any such account or
clearly identified group of such accounts
(for example, by line of business).

### IV. MODIFIED APPLICABILITY DATE WITH RESPECT TO THE STANDARDS OF KNOWLEDGE FOR ENTITIES

Following the publication of Notice
2014-33, some commentators noted that,
while the modifications to § 1.1441-7(b)
in the temporary coordination regulations
address the application of the revised rea-
son to know standards for obligations that
were documented before July 1, 2014, the
Notice does not address how § 1.1441-
7(b) applies to entity accounts opened on
or after July 1, 2014, and before January
1, 2015, that are treated as preexisting
obligations by withholding agents and

participating FFIs for purposes of chapter
4 under section IV of the Notice. These
commentators requested that a similar
modified applicability date be added to
§ 1.1441-7(b) for purposes of chapters 3
and 61 (and for chapter 4 purposes by
cross-reference to § 1.1441-7(b) in
§ 1.1471-3(e)(4)) to effectively imple-
ment the Notice's transition relief with
respect to the allowance to treat a new
entity account as a preexisting entity ac-
count. Absent such a modification, a with-
holding agent that makes a payment that is
subject to withholding under sections
1441 and 1442 to a new account held by
an entity that it treats as a preexisting
account under the Notice would be re-
quired to apply the revised standards of
knowledge under § 1.1441-7(b) when val-
idating a withholding certificate or docu-
mentary evidence furnished by the entity
to determine whether withholding under
chapter 3 applies, even though the with-
holding agent may have a longer period of
time to apply the documentation require-
ments (including the revised standards of
knowledge) under chapter 4 with respect
to the same entity. In response to these
comments, Treasury and the IRS intend to
modify the revised standards of knowl-
edge in the temporary coordination regu-
lations to allow a withholding agent to
apply the rules under § 1.1441-7(b)(5)
and (b)(8) as in effect and contained in 26
CFR part 1 revised April 1, 2013, to ac-
counts opened, and obligations entered
into, by an entity, on or after July 1, 2014,
and before January 1, 2015. Therefore,
this notice provides additional time for
withholding agents to apply the new entity
account procedures to document a new
obligation held by an entity and further
facilitates the relief provided by Notice
2014-33.

In addition, certain commentators stated
that the allowance for preexisting obliga-
tions provided in section V of Notice
2014-33 and § 1.1441-7(b)(3)(ii) would
still require a withholding agent to immedi-
ately identify a change in circumstances for
an entity payee that occurs on any date on or
after July 1, 2014, based on the additional
U.S. indicia specified in § 1.1441-7(b) (and
described above). Commentators suggested
that, because withholding agents lack exist-
ing systems that can identify the new U.S.
indicia, additional time should be provided

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for withholding agents to modify their sys-
tems to identify the new U.S. indicia for an
existing entity account holder. In further-
ance of the relief provided by Notice
2014-33 with respect to new obligations
held by an entity, and to coordinate with the
revised applicability date described in the
preceding paragraph, Treasury and the IRS
also intend to amend the temporary coordi-
nation regulations to provide that, with re-
spect to an obligation held by an entity, a
withholding agent will not be required to
treat the additional U.S. indicia specified in
§ 1.1441-7(b) as a change in circumstances
under § 1.1441-1(e)(4)(ii)(D) before Janu-
ary 1, 2015.

The amendments described in this sec-
tion IV apply to withholding agents and
FFIs for purposes of determining a pay-
ee's or account holder's foreign status for
chapter 4 purposes by cross-reference to
§ 1.1441-7(b) in § 1.1471-3(e)(4) and are
available only with respect to obligations
held by entities.

### V. ALLOWANCE TO APPLY PRIOR RULES REGARDING DOCUMENTARY EVIDENCE FOR CERTAIN OFFSHORE PAYMENTS

The temporary coordination regula-
tions revise § 1.6049-5(c)(1) to make the
use of documentary evidence available
with respect to offshore obligations
(rather than just offshore accounts) and
revise § 1.6049-5(e) to remove the U.S.
tiebacks (described above), thus allowing
for a payor's use of documentary evidence
without regard to the presence of U.S.
tiebacks with respect to a payment. In
addition, the temporary coordination reg-
ulations in § 1.6049-5(c)(1) specify the
types of documentary evidence on which
a payor can rely, replacing the generalized
standard for documentary evidence previ-
ously provided in § 1.6049-5(c)(1). The
types of documentary evidence allowed
are consistent with the final chapter 4 reg-
ulations under § 1.1471-3(c)(5)(i). Fi-
nally, the temporary coordination regula-
tions in § 1.6049-5(c)(1) specify the
types of withholding agents and payors
that may use documentary evidence to
document a payee (that is, a financial in-
stitution or a broker or dealer in securi-
ties). The temporary coordination regula-
tions under § 1.6049-5(c)(1) apply to
payments made on or after July 1, 2014,

except to payments made with respect to
preexisting obligations as described in
§ 1.1441-7(b)(3)(ii). An allowance is con-
tained in the temporary coordination reg-
ulations under § 1.1441-6(c)(4) for when
a withholding agent may rely on documen-
tary evidence to provide a reduced rate of
withholding under an income tax treaty.

To allow payors additional time to
modify their systems to implement the
revised requirements of § 1.6049-5(c)(1),
Treasury and the IRS intend to modify the
temporary coordination regulations to al-
low a payor to continue to use, for ac-
counts opened on or after July 1, 2014,
and before January 1, 2015, the rules re-
garding the use of documentary evidence
under § 1.6049-5(c)(1) and (c)(4) as in
effect and contained in 26 CFR part 1
revised April 1, 2013 ("prior § 1.6049-
5(c)"), instead of the new rules regarding
documentary evidence for offshore obli-
gations under § 1.6049-5(c)(1) and (c)(4)
of the temporary coordination regulations.
For consistency, a payor that applies prior
§ 1.6049-5(c) to an account or obligation
will also be required to apply § 1.1441-
6(c)(2) (to the extent applicable) and
§ 1.6049-5(e) as in effect and contained
in 26 CFR part 1 revised April 1, 2013,
with respect to the account or obligation.

### VI. DRAFTING INFORMATION

The principal author of this notice is
Nancy J. Lee of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Ms. Lee at (202) 317-6942 (not a toll-free
number).

### Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

#### Notice 2014-62

This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan

years beginning before 2008 and the 30-
year Treasury weighted average rate under
§ 431(c)(6)(E)(ii)(I). The rates in this notice
reflect the application of § 430(h)(2)(C)(iv),
which was added by the Moving Ahead
for Progress in the 21st Century Act, Pub-
lic Law 112-141 (MAP-21) and amended
by section 2003 of the Highway and
Transportation Funding Act of 2014, Pub-
lic Law 113-159 (HATFA).

##### YIELD CURVE AND SEGMENT RATES

Generally, except for certain plans un-
der sections 104 and 105 of the Pension
Protection Act of 2006 and CSEC plans
under § 414(y), § 430 of the Code speci-
fies the minimum funding requirements
that apply to single-employer plans pursu-
ant to § 412. Section 430(h)(2) specifies
the interest rates that must be used to
determine a plan's target normal cost and
funding target. Under this provision, pres-
ent value is generally determined using
three 24-month average interest rates
("segment rates"), each of which applies to
cash flows during specified periods. To the
extent provided under § 430(h)(2)(C)(iv),
these segment rates are adjusted by the
applicable percentage of the 25-year aver-
age segment rates for the period ending
September 30 of the year preceding the
calendar year in which the plan year be-
gins. However, an election may be made
under § 430(h)(2)(D)(ii) to use the
monthly yield curve in place of the seg-
ment rates.

Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond seg-
ment rates used to compute the target nor-
mal cost and the funding target. In accor-
dance with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from September
2014 data is in Table I at the end of this
notice. The spot first, second, and third
segment rates for the month of September
2014 are, respectively, 1.40, 3.98, and
5.04.

The 24-month average segment rates
determined under § 430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) by the applicable per-
centage of the corresponding 25-year av-
erage segment rates. Section 2003(a) of

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HATFA amended the applicable percent-
ages under § 430(h)(2)(C)(iv). This
change generally applies to plan years be-
ginning on or after January 1, 2013. How-
ever, pursuant to section 2003(e)(2) of
HATFA, a plan sponsor can elect not to
have the amendments made to the appli-
cable percentages by section 2003 of
HATFA apply to any plan year beginning
in 2013. These elections can be made ei-
ther for all purposes or, alternatively, for
purposes of determining the adjusted
funding target attainment percentage un-
der § 436. The 25-year average segment
rates for plan years beginning in 2012,

2013, 2014 and 2015 were published in
Notice 2012-55, 2012-36 I.R.B. 332, No-
tice 2013-11, 2013-11 I.R.B. 610, Notice
2013-58, 2013-40 I.R.B. 294, and Notice
2014-50, 2014-40 I.R.B. 590, respec-
tively.

For plan years beginning in years 2012
through 2017, pursuant to the changes
made by HATFA, the applicable mini-
mum percentage is 90% and the applica-
ble maximum percentage is 110%. These
applicable percentages are referred to as
HATFA applicable percentages. As de-
scribed in the preceding paragraph, a spe-
cial election is available for any plan year

beginning in 2013 under which this
change made by HATFA can be disre-
garded for all purposes or for limited pur-
poses. To the extent such an election is
made, the applicable minimum percentage
for a plan year beginning in 2013 is 85%
and the applicable maximum percentage
for that plan year is 115%. These applica-
ble percentages are referred to as
MAP-21 applicable percentages.

The three 24-month average corporate
bond segment rates applicable for October
2014 without adjustment for the 25-year
average segment rate limits are as follows:

Applicable Month

First Segment

Second Segment

Third Segment

October 2014

1.17

4.07

5.17

Based on § 430(h)(2)(C)(iv)
as
amended by section 2003 of HATFA, the
24-month averages applicable for October

2014 adjusted for the HATFA applicable
percentages of the corresponding 25-year

average segment rates, are as follows:

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates, Based on the HATFA Applicable Percentage of 25-Year Average Rates

Applicable Month

First Segment

Second Segment

Third Segment

2013

October

2014

5.23

6.51

7.16

2014

October

2014

4.99

6.32

6.99

2015

October

2014

4.72

6.11

6.81

Based on § 430(h)(2)(C)(iv) as in ef-
fect prior to amendment by section 2003
of HATFA, the three 24-month averages

applicable for October 2014 adjusted for
the MAP-21 applicable percentages of the
corresponding 25-year average segment

rates, for plan years beginning in 2013,
are as follows:

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates, Based on on MAP-21 Applicable Percentage of 25-Year Average Rates

Applicable Month

First Segment

Second Segment

Third Segment

2013

October 2014

4.94

6.15

6.76

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### 30-YEAR TREASURY SECURITIES INTEREST RATES

Generally for plan years beginning af-
ter 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation de-
scribed in section 431(c)(6)(A), based on

the plan's current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 per-
cent below the weighted average of the
rates of interest on 30-year Treasury se-
curities during the four-year period ending
on the last day before the beginning of the
plan year. Notice 88-73, 1988-2 C.B.

383, provides guidelines for determining
the weighted average interest rate. The
rate of interest on 30-year Treasury secu-
rities for September 2014 is 3.26 percent.
The Service has determined this rate as
the average of the daily determinations of
yield on the 30-year Treasury bond ma-
turing in August 2044. The following
rates were determined for plan years be-
ginning in the month shown below.

For Plan Years Beginning in

30-Year Treasury Weighted Average

Permissible Range

Month

Year

90%

to

105%

October

2014

3.40

3.06

3.56

### MINIMUM PRESENT VALUE SEGMENT RATES

In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-

ment rates determined for September
2014 are as follows:

First Segment

Second Segment

Third Segment

1.40

3.98

5.04

### DRAFTING INFORMATION

The principal author of this notice is
Tony Montanaro of the Employee Plans,

Tax Exempt and Government Entities Di-
vision. Mr. Montanaro may be e-mailed at

RetirementPlanQuestions@irs.gov.

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Table I Monthly Yield Curve for September 2014 Derived from September 2014 Data

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

0.5

0.23

20.5

4.69

40.5

5.08

60.5

5.22

80.5

5.29

1.0

0.52

21.0

4.71

41.0

5.09

61.0

5.22

81.0

5.29

1.5

0.81

21.5

4.73

41.5

5.09

61.5

5.22

81.5

5.29

2.0

1.08

22.0

4.75

42.0

5.10

62.0

5.23

82.0

5.29

2.5

1.34

22.5

4.76

42.5

5.10

62.5

5.23

82.5

5.29

3.0

1.58

23.0

4.78

43.0

5.11

63.0

5.23

83.0

5.29

3.5

1.81

23.5

4.79

43.5

5.11

63.5

5.23

83.5

5.30

4.0

2.02

24.0

4.81

44.0

5.12

64.0

5.24

84.0

5.30

4.5

2.22

24.5

4.82

44.5

5.12

64.5

5.24

84.5

5.30

5.0

2.41

25.0

4.83

45.0

5.13

65.0

5.24

85.0

5.30

5.5

2.59

25.5

4.84

45.5

5.13

65.5

5.24

85.5

5.30

6.0

2.76

26.0

4.86

46.0

5.13

66.0

5.24

86.0

5.30

6.5

2.91

26.5

4.87

46.5

5.14

66.5

5.25

86.5

5.30

7.0

3.06

27.0

4.88

47.0

5.14

67.0

5.25

87.0

5.30

7.5

3.20

27.5

4.89

47.5

5.15

67.5

5.25

87.5

5.31

8.0

3.33

28.0

4.90

48.0

5.15

68.0

5.25

88.0

5.31

8.5

3.45

28.5

4.91

48.5

5.15

68.5

5.25

88.5

5.31

9.0

3.56

29.0

4.92

49.0

5.16

69.0

5.25

89.0

5.31

9.5

3.66

29.5

4.93

49.5

5.16

69.5

5.26

89.5

5.31

10.0

3.76

30.0

4.94

50.0

5.16

70.0

5.26

90.0

5.31

10.5

3.85

30.5

4.95

50.5

5.17

70.5

5.26

90.5

5.31

11.0

3.93

31.0

4.96

51.0

5.17

71.0

5.26

91.0

5.31

11.5

4.01

31.5

4.97

51.5

5.17

71.5

5.26

91.5

5.31

12.0

4.08

32.0

4.98

52.0

5.18

72.0

5.26

92.0

5.31

12.5

4.14

32.5

4.98

52.5

5.18

72.5

5.27

92.5

5.32

13.0

4.20

33.0

4.99

53.0

5.18

73.0

5.27

93.0

5.32

13.5

4.25

33.5

5.00

53.5

5.18

73.5

5.27

93.5

5.32

14.0

4.30

34.0

5.01

54.0

5.19

74.0

5.27

94.0

5.32

14.5

4.35

34.5

5.01

54.5

5.19

74.5

5.27

94.5

5.32

15.0

4.39

35.0

5.02

55.0

5.19

75.0

5.27

95.0

5.32

15.5

4.43

35.5

5.03

55.5

5.20

75.5

5.27

95.5

5.32

16.0

4.46

36.0

5.03

56.0

5.20

76.0

5.28

96.0

5.32

16.5

4.50

36.5

5.04

56.5

5.20

76.5

5.28

96.5

5.32

17.0

4.53

37.0

4.05

57.0

5.20

77.0

5.28

97.0

5.32

17.5

4.55

37.5

5.05

57.5

5.21

77.5

5.28

97.5

5.32

18.0

4.58

38.0

5.06

58.0

5.21

78.0

5.28

98.0

5.33

18.5

4.61

38.5

5.06

58.5

5.21

78.5

5.28

98.5

5.33

19.0

4.63

39.0

5.07

59.0

5.21

79.0

5.28

99.0

5.33

19.5

4.65

39.5

5.07

59.5

5.22

79.5

5.29

99.5

5.33

20.0

4.67

40.0

5.08

60.0

5.22

80.0

5.29

100.0

5.33

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[26 CFR 601.602]: Tax Forms and Instructions (Al-
so: Part I. section 894; Part II. United States- Can-
ada Income Tax Convention)

#### Rev. Proc. 2014-55 SECTION 1. PURPOSE

This revenue procedure provides guid-
ance for applying paragraph 7 of Article
XVIII (Pensions and Annuities) of the
Convention between the United States and
Canada with respect to Taxes on Income
and on Capital, signed on September 26,
1980, as amended by Protocols signed on
June 14, 1983, March 28, 1984, March 17,
1995, July 29, 1997, and September 21,
2007 (the "Convention"). This revenue
procedure supersedes Revenue Procedure
2002-23, 2002-1 C.B. 744, and Notice
2003-75, 2003-2 C.B. 1204. This revenue
procedure also provides guidance concern-
ing information reporting with respect to
interests in certain Canadian retirement plans.

## SECTION 2. BACKGROUND

.01 Domestic Rules. In general, under
the domestic law of the United States, an
individual who is a citizen or resident of
the United States and a beneficiary of a
Canadian retirement plan will be subject
to current U.S. income taxation on income
accrued in the plan even though the in-
come is not currently distributed to the
beneficiary, unless the plan is an employ-
ees' trust within the meaning of section
402(b) of the Internal Revenue Code
("Code") and the individual is not a highly
compensated employee subject to the rule
of section 402(b)(4)(A). The individual
will not be subject to Canadian income
taxation with respect to the accrued in-
come, however, until it is actually distrib-
uted from the plan (or from another Ca-
nadian retirement plan to which it is
transferred in a tax-free rollover), pro-
vided the plan satisfies certain criteria un-
der the domestic law of Canada. Due to
this mismatch between the timing of the
U.S. tax and the Canadian tax, instances
of double taxation may arise for which no
relief is available under U.S. domestic law.

.02 Paragraph 7 of Article XVIII of the
Convention. Article XVIII(7), which was
added to the Convention by the Protocol
signed on March 17, 1995 ("1995 Proto-
col"), addressed this timing mismatch and
provided that a natural person who is a

citizen or resident of the United States and
who is a beneficiary of a trust, company,
organization or other arrangement that is a
resident of Canada, generally exempt
from income taxation in Canada and op-
erated exclusively to provide pension, re-
tirement or employee benefits, may elect
to defer taxation in the United States, un-
der rules established by the competent au-
thority of the United States, with respect
to any income accrued in the plan but not
distributed by the plan, until such time as
and to the extent that a distribution is
made from the plan or any plan substi-
tuted therefor. As amended by the Proto-
col signed on September 21, 2007 (“2007
Protocol"), Article XVIII(7) of the Con-
vention continues to provide a rule with
respect to the taxation of a natural person
on income accrued in a pension or em-
ployee benefit plan in the other Contract-
ing State. Under Article XVIII(7) of the
Convention, as amended by the 2007 Pro-
tocol, a natural person who is a citizen or
resident of the United States and who is a
beneficiary of a trust, company, organiza-
tion or other arrangement that is a resident
of Canada, generally exempt from income
taxation in Canada and operated exclu-
sively to provide pension or employee
benefits, may elect to defer taxation in the
United States, subject to rules established
by the competent authority of the United
States, with respect to any income accrued
in the plan but not distributed by the plan,
until such time as and to the extent that a
distribution is made from the plan or any
plan substituted therefor.

.03 Revenue Procedure 2002-23. Sec-
tion 4 of Revenue Procedure 2002-23 sets
forth the rules for making an election un-
der Article XVIII(7) of the Convention.
Pursuant to those rules, beneficiaries of
certain Canadian retirement plans make
the election by attaching to their timely
filed (including extensions) U.S. Federal
income tax return a statement that in-
cludes the following information: (i) a
statement that the taxpayer is claiming the
benefit of Article XVIII(7) of the Conven-
tion; (ii) the name of the trustee of the
plan and the plan account number; and
(iii) the balance in the plan at the begin-
ning of the taxable year in which the elec-
tion is being made. Beneficiaries must at-
tach a copy of this statement to their
timely filed (including extensions) U.S.

Federal income tax return for each subse-
quent taxable year through the taxable
year in which a final distribution is made
from the plan (or from any transferee plan
within the meaning of section 4.03 of Rev.
Proc. 2002-23). Revenue Procedure
2002-23 is effective for taxable years
ending on or after December 31, 2001.
Section 7 of Revenue Procedure 2002-23
provides that for taxable years ending be-
fore such date and beginning on or after
January 1, 1996, taxpayers may elect to
apply either Revenue Procedure 2002-23
or Revenue Procedure 89-45, 1989-2
C.B. 596 (which was superseded by Rev-
enue Procedure 2002-23).

.04 Section 6048. Code section 6048
requires information reporting with re-
spect to contributions to, distributions
from, and ownership of certain foreign
trusts. Section 6048(a)(3)(B)(ii)(I) pro-
vides an exception for contributions to
certain foreign compensatory trusts, in-
cluding a foreign trust that is described in
section 402(b). Information reporting un-
der section 6048 is generally required
with respect to a U.S. citizen or resident's
contributions to, distributions from, and
ownership of a Canadian trust for which
an election may be made under Article
XVIII(7) of the Convention. Persons who
are subject to the section 6048 reporting
requirements must file Form 3520, Annual
Return to Report Transactions with For-
eign Trusts and Receipt of Foreign Gifts,
or Form 3520-A, Annual Information Re-
turn of Foreign Trust With a U.S. Owner.

.05 Notices 2003-25 and 2003-57. No-
tice 2003-25, 2003-1 C.B. 855, and No-
tice 2003-57, 2003-2 C.B. 397, addressed
the application of section 6048 to certain
Canadian retirement plans and stated that
the Treasury Department and the Internal
Revenue Service (IRS) were considering
the establishment of a simplified reporting
regime that would be coordinated with the
election procedure described in Revenue
Procedure 2002-23.

.06 Notice 2003-75. Notice 2003-75,
2003-2 C.B. 1204, describes the simpli-
fied reporting regime that the Treasury
Department and the IRS developed for
U.S. citizens and residents who hold in-
terests in Canadian registered retirement
savings plans ("RRSPs") and registered
retirement income funds ("RRIFs") and
the custodians of such plans. Section 2.01

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of Notice 2003-75 stated that Treasury
and the IRS were designing a new form
for beneficiaries to report their interests in
an RRSP or an RRIF and that the new
form would coordinate the reporting rules
with the procedure set forth in section 4 of
Revenue Procedure 2002-23 for making
the election under Article XVIII (7) of the
Convention. Sections 2.02 and 2.03 of
Notice 2003-75 provided interim report-
ing rules to be followed until the new
form was available. Section 3 of Notice
2003-75 provides that section 6048 re-
porting is no longer required with respect
to RRSPs and RRIFs that have beneficia-
ries or annuitants who are subject to the
new simplified reporting regime.

.07 Form 8891. In 2004, the IRS re-
leased Form 8891, U.S. Information Re-
turn for Beneficiaries of Certain Cana-
dian Registered Retirement Plans, for
U.S. citizens or residents who hold an
interest in an RRSP or an RRIF to report
distributions received from their RRSP or
RRIF, contributions to their RRSP or
RRIF, and undistributed earnings of the
RRSP or RRIF. U.S. citizens or residents
who have not previously made an election
pursuant to Revenue Procedure 2002-23
to defer U.S. income tax on income that
has accrued in an RRSP or an RRIF, but
that has not been distributed, may make
the election to apply Article XVIII(7) on
Form 8891.

.08 Section 6038D and Form 8938.
Section 6038D requires a U.S. citizen or
resident who holds any interest in a spec-
ified foreign financial asset to attach to
that individual's federal income tax return
certain information with respect to each
such asset if the aggregate value of all
such assets exceeds certain thresholds. An
individual uses Form 8938, Statement of
Specified Foreign Financial Assets, to re-
port the required information. An individ-
ual who timely files Form 8891 with re-
spect to an RRSP or an RRIF is currently
exempt from the reporting obligations im-
posed by section 6038D with respect to
that plan, provided the individual reports
on Form 8938 the filing of the Form 8891
with respect to the RRSP or RRIF. See
Treas. Reg. § 1.6038D-7T(a)(1).

## SECTION 3. SCOPE

For purposes of this revenue proce-
dure, the term "Canadian retirement plan"

means any trust, company, organization,
or other arrangement that is within the
scope of Article XVIII(7) of the Conven-
tion. The term "beneficiary" means any
individual who holds an interest in a Ca-
nadian retirement plan or plans and who
would be subject to current U.S. income
taxation under the domestic law of the
United States on undistributed income ac-
crued in such plan or plans. The term
"annuitant" means an individual who is
designated pursuant to a Canadian retire-
ment plan as an annuitant and is not also a
beneficiary as defined above.

This revenue procedure replaces the
existing procedures under which a bene-
ficiary may make an election under Arti-
cle XVIII(7) of the Convention with re-
spect to a Canadian retirement plan. Any
election made pursuant to this revenue
procedure is made on a plan-by-plan ba-
sis. This revenue procedure applies re-
gardless of whether the beneficiary was a
resident of Canada at the time contribu-
tions were made to the plan.

As described in section 4 of this reve-
nue procedure, there are two different pro-
cedures for taxpayers to make an election
to apply Article XVIII(7) of the Conven-
tion. Under the first method, a taxpayer
elects to apply Article XVIII(7) of the
Convention by reporting on a U.S. federal
income tax return income earned with re-
spect to a Canadian retirement plan on a
distribution basis - that is, by recognizing
income with respect to a Canadian retire-
ment plan only upon receiving distribu-
tions from the plan. This method is only
available to certain eligible individuals
described in section 4.01 of this revenue
procedure. Under the second method, a
taxpayer that is not described in section
4.01 of this revenue procedure (i.e., a tax-
payer that has reported on a U.S. federal
income tax return the undistributed in-
come earned with respect to a Canadian
retirement plan) must request consent of
the Commissioner to make an election to
apply Article XVIII(7) of the Convention.
See section 4.04 of this revenue proce-
dure. An election to apply Article
XVIII(7) of the Convention may not be
revoked except with the consent of the
Commissioner.

Sections 5 and 6 of this revenue proce-
dure apply to any beneficiary or annuitant of
a Canadian retirement plan and address in-

formation reporting with respect to such a
plan and taxation of distributions from such
a plan, respectively. Section 7 of this reve-
nue procedure provides an example of how
an election described under section 4.02 of
this revenue procedure is applied.

## SECTION 4. PROCEDURES FOR MAKING THE ELECTION

.01 Eligible Individuals. This section
applies only to eligible individuals and
only to income accrued in a Canadian
retirement plan and not to any contribu-
tions to the plan. An "eligible individual"
is a beneficiary of a Canadian retirement
plan who:

A) Is or at any time was a U.S. citizen
or resident (within the meaning of section
7701(b)(1)(A)) while a beneficiary of the
plan;

B) Has satisfied any requirement for
filing a U.S. Federal income tax return for
each taxable year during which the indi-
vidual was a U.S. citizen or resident;

C) Has not reported as gross income on
a U.S. Federal income tax return the earn-
ings that accrued in, but were not distrib-
uted by, the plan during any taxable year
in which the individual was a U.S. citizen
or resident; and

D) Has reported any and all distribu-
tions received from the plan as if the in-
dividual had made an election under Ar-
ticle XVIII(7) of the Convention for all
years during which the individual was a
U.S. citizen or resident.

.02 Election Procedure for an Eligible
Individual. An eligible individual who did
not previously make an election under Ar-
ticle XVIII(7) of the Convention to defer
current U.S. income taxation on the un-
distributed income of a Canadian retire-
ment plan will be treated as having made
the election in the first year in which the
individual would have been entitled to
elect the benefits under Article XVIII(7)
with respect to the plan. Consequently,
such eligible individual will not be re-
quired to make the election for that first
year or for any subsequent years either on
Form 8891 or under the procedures set
forth in Revenue Procedure 2002-23. If
an eligible individual has an interest in
more than one Canadian retirement plan,
this paragraph 4.02 applies separately to
each such plan. In accordance with section
6 of this revenue procedure, eligible indi-

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viduals must report on their U.S. Federal
income tax return any income that has
accrued in the plan when it is distributed.

.03 Effect of the Election. Once an elec-
tion is made pursuant to section 4.02 of this
revenue procedure with respect to a Cana-
dian retirement plan, that election is in effect
for all subsequent taxable years through the
year in which a final distribution is made
from the plan, unless the election is revoked
with the consent of the Commissioner.

.04 Election Procedure for an Individ-
ual Other than an Eligible Individual.
Beneficiaries who have reported on their
U.S. Federal income tax return undistrib-
uted income that has accrued in a Cana-
dian retirement plan during a taxable year
are not "eligible individuals" within the
meaning of section 4.01 of this revenue
procedure. Consequently, such beneficia-
ries are not eligible to apply section 4.02
of this revenue procedure to make an elec-
tion under Article XVIII(7) of the Con-
vention and will remain currently taxable
on the undistributed income. If such a
beneficiary desires to make an Article
XVIII(7) election with respect to a Cana-
dian retirement plan, the beneficiary must
seek the consent of the Commissioner.

.05 Effect on Prior Elections. A bene-
ficiary who has previously made an Arti-
cle XVIII(7) election with respect to a
Canadian plan on Form 8891 or under the
procedures set forth in Revenue Procedure
2002-23 (or an eligible individual who is
treated as having made the election pur-
suant to section 4.02 of this revenue pro-
cedure) is not required to file Form 8891
or a similar statement for taxable years
ending after December 31, 2012. A bene-
ficiary (or eligible individual) who wants
to revoke a prior election must seek the
consent of the Commissioner.

.06 Effect on Prior Letter Rulings. Pur-
suant to section 11.04 of Revenue Proce-
dure 2014-1, 2014-1 I.R.B. 1, any letter
ruling issued with respect to a late election
for a Canadian retirement plan under Ar-
ticle XVIII(7) of the Convention is hereby
modified to eliminate the requirement to
file Form 8891 with respect to such plan.

## SECTION 5. INFORMATION REPORTING WITH RESPECT TO CANADIAN RETIREMENT PLANS

.01 Reporting Rules for a Beneficiary
or Annuitant of a Canadian Retirement

Plan. Subject to any future guidance that
may be issued by the Treasury Depart-
ment and the IRS, beneficiaries (regard-
less of whether they are "eligible individ-
uals" within the meaning of section 4.01
of this revenue procedure) and annuitants
are not required to report contributions to,
distributions from, and ownership of a
Canadian retirement plan under the sim-
plified reporting regime established by
Notice 2003-75 (Form 8891) or pursuant
to the reporting obligations imposed by
section 6048 (Form 3520). In addition,
custodians are not required to file Form
3520-A with respect to a Canadian retire-
ment plan. This revenue procedure does
not, however, affect any reporting obliga-
tions that a beneficiary or annuitant of a
Canadian retirement plan may have under
section 6038D or under any other provi-
sion of U.S. law, including the require-
ment to file FinCEN Form 114, Report of
Foreign Bank and Financial Accounts
(FBAR), imposed by 31 U.S.C. § 5314
and the regulations thereunder.

.02 Effect on Form 8891. This revenue
procedure obsoletes Form 8891 as of De-
cember 31, 2014. Beneficiaries who have
a valid extension in effect under section
6081 for taxable year 2013 and who have
not filed a U.S. income tax return for
taxable year 2013 by the date this revenue
procedure is published in the Internal
Revenue Bulletin may wish to attach
Form 8891 to such return in order to sat-
isfy the requirements of Treas. Reg.
§ 1.6038D-7T(a)(1). See section 2.08
above. Even though such beneficiaries are
not required to file Form 8891 pursuant to
the relief set forth in section 5.01, they
may do so in order to report on Form 8938
that they have filed Form 8891 with re-
spect to an RRSP or RRIF.

## SECTION 6. DISTRIBUTIONS FROM CANADIAN RETIREMENT PLANS

Distributions received by any benefi-
ciary or annuitant from a Canadian retire-
ment plan, including the portion thereof
that constitutes income that has accrued in
the plan and has not previously been taxed
in the United States, must be included in
gross income by the beneficiary or annu-
itant in the manner provided under section
72, subject to any applicable provision of
the Convention.

## SECTION 7. EXAMPLE

Example: Taxpayer is a U.S. citizen and a resi-
dent of Canada who established an RRSP in 2004
and filed Form 1040, U.S. Individual Income Tax
Return, for 2004 and all subsequent taxable years.
Taxpayer did not attach to any Form 1040 a Form
8891 with respect to the RRSP and did not make an
election under the procedures set forth in Revenue
Procedure 2002-23. Taxpayer also did not include as
gross income on any Form 1040 any earnings that
accrued in the RRSP during 2004 and subsequent
taxable years. Taxpayer has not received any distri-
butions from the RRSP. Pursuant to section 4.01 of
this revenue procedure, Taxpayer is an eligible indi-
vidual and, pursuant to section 4.02 of this revenue
procedure, will be treated as having made an election
under Article XVIII(7) of the Convention to defer
current U.S. income taxation on the undistributed
income for 2004 and all subsequent taxable years
through the taxable year in which there is a final
distribution from the RRSP. When Taxpayer re-
ceives distributions from the RRSP, the entire
amount of each distribution will be subject to U.S.
Federal income tax. In addition, Taxpayer is not
required to report his interest in the RRSP on Form
8891, Form 3520, or Form 3520-A. However, Tax-
payer may need to report his interest in the RRSP
under section 6038D or under another provision of
U.S. law, including the requirement to file FinCEN
Form 114, Report of Foreign Bank and Financial
Accounts (FBAR), imposed by 31 U.S.C. § 5314 and
the regulations thereunder.

## SECTION 8. EFFECT ON OTHER DOCUMENTS

Revenue Procedure 2002-23, 2002-1
C.B. 744, and Notice 2003-75, 2003-2
C.B. 1204, are superseded. Form 8891 is
obsolete as of December 31, 2014.

## SECTION 9. EFFECTIVE DATE

This revenue procedure is effective for
taxable years beginning on or after Janu-
ary 1, 1996, except that section 5.01 is
effective for taxable years beginning on or
after January 1, 2003, and section 5.02 is
effective as of the date this revenue pro-
cedure is published in the Internal Reve-
nue Bulletin. Form 8891 is obsolete as of
December 31, 2014.

## SECTION 10. DRAFTING INFORMATION

The principal author of this revenue
procedure is Gregory T. Armstrong, for-
merly of the Office of Associate Chief
Counsel (International). For further infor-
mation regarding this revenue procedure,
contact Rosy Lor at (202) 317-6933 (not a
toll free number).

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## Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings ") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.

Modified is 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
with amplified and clarified, above).

Obsoleted describes 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.

Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

## Abbreviations

The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

TFE-Transferee.

CFR-Code of Federal Regulations.

GP-General Partner.

TFR-Transferor.

CI-City.

GR-Grantor.

T.I.R .- Technical Information Release.

COOP-Cooperative.

IC-Insurance Company.

TP-Taxpayer.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

TR-Trust.

CY-County.

LE-Lessee.

TT-Trustee.

D-Decedent.

LP-Limited Partner.

U.S.C .- United States Code.

DC-Dummy Corporation.

LR-Lessor.

X-Corporation.

DE-Donee.

Del. Order-Delegation Order.

Nonacq .- Nonacquiescence.

O Organization.

DR-Donor.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.

PR-Partner.

PRS-Partnership.

PTE-Prohibited Transaction Exemption.
Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S Subsidiary.

S.P.R .- Statement of Procedural Rules.

Stat .- Statutes at Large.

BK-Bank.

T-Target Corporation.

B.T.A .- Board of Tax Appeals.

T.C .- Tax Court.

C-Individual.

T.D .- Treasury Decision.

C.B .- Cumulative Bulletin.

ERISA-Employee Retirement Income Security Act.
EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

M-Minor.

Y-Corporation.

Z-Corporation.

DISC-Domestic International Sales Corporation.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

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Numerical Finding List1

Revenue Procedures-Continued

Bulletins 2014-27 through 2014-44

2014-43, 2014-32 I.R.B. 273 2014-44, 2014-32 I.R.B. 274

Announcements:

2014-45, 2014-34 I.R.B. 388

2014-46, 2014-33 I.R.B. 367

2014-2, 2014-28 I.R.B. 120

2014-47, 2014-35 I.R.B. 393

2014-28, 2014-34 I.R.B. 391

2014-48, 2014-36 I.R.B. 527

2014-29, 2014-35 I.R.B. 452

2014-49, 2014-37 I.R.B. 535

2014-50, 2014-37 I.R.B. 540

Notices:

2014-51, 2014-37 I.R.B. 543

2014-52, 2014-38 I.R.B. 560

2014-40, 2014-27 I.R.B. 100

2014-53, 2014-39 I.R.B. 573

2014-41, 2014-27 I.R.B. 97

2014-54, 2014-41 I.R.B. 675

2014-42, 2014-34 I.R.B. 387

2014-55, 2014-44 I.R.B. 753

2014-43, 2014-31 I.R.B. 249

2014-44, 2014-32 I.R.B. 270

Revenue Rulings:

2014-45, 2014-34 I.R.B. 388

2014-46, 2014-36 I.R.B. 520

2014-14, 2014-27 I.R.B. 12

2014-47, 2014-36 I.R.B. 522

2014-19, 2014-32 I.R.B. 266

2014-48, 2014-36 I.R.B. 523

2014-20, 2014-28 I.R.B. 101

2014-49, 2014-41 I.R.B. 665

2014-21, 2014-34 I.R.B. 381

2014-50, 2014-40 I.R.B. 590

2014-22, 2014-37 I.R.B. 523

2014-51, 2014-40 I.R.B. 594

2014-23, 2014-40 I.R.B. 575

2014-52, 2014-42 I.R.B. 712

2014-24, 2014-37 I.R.B. 529

2014-53, 2014-43 I.R.B. 739

2014-25, 2014-40 I.R.B. 574

2014-54, 2014-41 I.R.B. 670

2014-26, 2014-41 I.R.B. 663

2014-55, 2014-41 I.R.B. 672

2014-56, 2014-41 I.R.B. 674

Treasury Decisions:

2014-57, 2014-42 I.R.B. 723

9664, 2014-32 I.R.B. 254

2014-58, 2014-44 I.R.B. 746

9668, 2014-27 I.R.B. 1

2014-59, 2014-44 I.R.B. 747

9669, 2014-28 I.R.B. 103

2014-60, 2014-43 I.R.B. 743

9670, 2014-29 I.R.B. 121

2014-61, 2014-43 I.R.B. 746

9671, 2014-29 I.R.B. 124

2014-62, 2014-44 I.R.B. 749

9672, 2014-30 I.R.B. 196

9673, 2014-30 I.R.B. 212

Proposed Regulations:

9674, 2014-30 I.R.B. 225

REG-104579-13, 2014-33 I.R.B. 370

9675, 2014-31 I.R.B. 242

REG-120756-13, 2014-31 I.R.B. 252

9676, 2014-32 I.R.B. 260

REG-105067-14, 2014-34 I.R.B. 391

9677, 2014-31 I.R.B. 241

REG-110948-14, 2014-30 I.R.B. 239

9678, 2014-32 I.R.B. 262

REG-121542-14, 2014-28 I.R.B. 119

9679, 2014-32 I.R.B. 267

REG-107012-14, 2014-33 I.R.B. 371

9680, 2014-32 I.R.B. 254

REG-123286-14, 2014-33 I.R.B. 377

9681, 2014-33 I.R.B. 340

REG-209459-78, 2014-31 I.R.B. 253

9682, 2014-33 I.R.B. 342

REG-129507-14, 2014-38 I.R.B. 561

9683, 2014-33 I.R.B. 330

REG-129786-14, 2014-38 I.R.B. 562

9684, 2014-33 I.R.B. 345

REG-105739-11, 2014-41 I.R.B. 704

9685, 2014-34 I.R.B. 379

9686, 2014-34 I.R.B. 382

Revenue Procedures:

9687, 2014-36 I.R.B. 486

9688, 2014-36 I.R.B. 482

2014-26, 2014-27 I.R.B. 26

9689, 2014-36 I.R.B. 456

2014-27, 2014-27 I.R.B. 41

9690, 2014-38 I.R.B. 548

2014-29, 2014-28 I.R.B. 105

9691, 2014-38 I.R.B. 547

2014-37, 2014-33 I.R.B. 363

9692, 2014-40 I.R.B. 574

2014-38, 2014-29 I.R.B. 132

9693, 2014-41 I.R.B. 596

2014-39, 2014-29 I.R.B. 151

9694, 2014-41 I.R.B. 626

2014-40, 2014-30 I.R.B. 229

9695, 2014-42 I.R.B. 707

2014-41, 2014-33 I.R.B. 364

9696, 2014-43 I.R.B. 727

2014-42, 2014-29 I.R.B. 193

9697, 2014-43 I.R.B. 729

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014-01 through 2014-26 is in Internal Revenue Bulletin
2014-26, dated June 30, 2014.

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Finding List of Current Actions on Previously Published Items1

Revenue Procedures-Continued: 2011-14

Revenue Procedures-Continued:

2014-16

Bulletins 2014-27 through 2014-44

Modified by

Modified by

Rev. Proc. 2014-48, 2014-36 I.R.B. 527

Rev. Proc. 2014-51, 2014-37 I.R.B. 543

Announcements:

2011-14

2014-12

Modified by

Modified by

2012-11

Rev. Proc. 2014-54, 2014-41 I.R.B. 675

Rev. Proc. 2014-54, 2014-41 I.R.B. 675

Supplemented by

Ann. 2014-2, 2014-28 I.R.B. 120

2011-16

2014-17

Superseded by

Modified by

2013-11

Rev. Proc. 2014-51, 2014-37 I.R.B. 543

Rev. Proc. 2014-54, 2014-41 I.R.B. 675

Supplemented by

Ann. 2014-2, 2014-28 I.R.B. 120

2011-16 Modified by

Revenue Rulings:

2010-41

Rev. Proc. 2014-51, 2014-51 I.R.B. 543

2008-40

Obsoleted by

Modified by

Rev. Proc. 2014-43, 2014-32 I.R.B. 273

2012-38 Superseded by

Rev. Rul. 2014-24, 2014-37 I.R.B. 529

Revenue Procedures:

Rev. Proc. 2014-27, 2014-27 I.R.B. 26

2011-1 Modified by

1981-38

2012-46

Rev. Rul. 2014-24, 2014-37 I.R.B. 529

Superseded by

Superseded by

Rev. Proc. 2014-42, 2014-29 I.R.B. 193

Rev. Proc. 2014-26, 2014-27 I.R.B. 41

2012-6 Modified by

93-37

2014-4

Rev. Rul. 2014-24, 2014-37 I.R.B. 529

Modified and Superseded by

Amplified by

Rev. Proc. 2014-43, 2014-32 I.R.B. 273

Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Notices:

1981-38

2014-4

2010-62

Modified by

Modified by

Amplified by

Rev. Proc. 2014-42, 2014-29 I.R.B. 193

Rev. Proc. 2014-41, 2014-41 I.R.B. 675

Notice 2014-58, 2014-44 I.R.B. 746

2000-12

2014-5

2013-1

Superseded by

Amplified by

Modified by

Rev. Proc. 2014-39, 2014-29 I.R.B. 151

Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Notice 2014-61, 2014-43 I.R.B. 746

2002-23

2014-8

2013-1

Superseded by

Amplified by

Superseded by

Rev. Proc. 2014-55, 2014-44 I.R.B. 753

Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Notice 2014-61, 2014-43 I.R.B. 746

2002-55

2014-9

2013-11

Revoked by

Amplified by

Modified by

Rev. Proc. 2014-39, 2014-29 I.R.B. 151

Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Notice 2014-48, 2014-36 I.R.B. 523

2003-64

2014-10

2013-23

Superseded by

Amplified by

Modified by

Rev. Proc. 2014-47, 2014-35 I.R.B. 393

Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Notice 2014-48, 2014-36 I.R.B. 523

2003-75

2014-13

2013-28

Superseded by

Modified by

Modified by

Rev. Proc. 2014-55, 2014-44 I.R.B. 753

Rev. Proc. 2014-38, 2014-29 I.R.B. 132

Notice 2014-48, 2014-36 I.R.B. 523

2004-21

2014-13

2013-29

Superseded by

Superseded by

Modified by

Rev. Proc. 2014-47, 2014-35 I.R.B. 393

Rev. Proc. 2014-38, 2014-29 I.R.B. 132

Notice 2014-46, 2014-36 I.R.B. 520

2005-77

2014-16

2013-29

Superseded by

Superseded by

Clarified by

Rev. Proc. 2014-47, 2014-35 I.R.B. 393

Rev. Proc. 2014-51, 2014-37 I.R.B. 543

Notice 2014-46, 2014-36 I.R.B. 520

1A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014-01 through 2014-26 is in Internal Revenue Bulletin 2014-26, dated June 30, 2014.

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Notice-Continued:

2013-32
Modified by
Notice 2014-48, 2014-36 I.R.B. 523

2013-37
Modified by
Notice 2014-48, 2014-36 I.R.B. 523

2013-38
Superseded by
Notice 2014-61, 2014-43 I.R.B. 746

2013-51
Obsoleted by
Notice 2014-42, 2014-34 I.R.B. 387

2013-60
Modified by
Notice 2014-46, 2014-36 I.R.B. 520

2013-60
Clarified by
Notice 2014-46, 2014-36 I.R.B. 520

2013-65
Superseded by
Notice 2014-57, 2014-42 I.R.B. 723

2013-38
Superseded by
Notice 2014-61, 2014-43 I.R.B. 746

2014-44
Supplemented by
Notice 2014-45, 2014-34 I.R.B. 388

### Treasury Decisions:

2005-47
Obsoleted by
T.D. 9668 2014-27 I.R.B. 1

2010-51
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345

2010-71
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345

2011-6
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345

2011-9
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345

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#### Internal Revenue Bulletins 2014-27 through 2014-44

The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parentheses refer to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.

Key to Abbreviations:

Ann
Announcement

CD
Court Decision

DO
Delegation Order

EO
Executive Order

PL
Public Law

PTE
Prohibited Transaction Exemption

RP
Revenue Procedure

RR
Revenue Ruling

SPR
Statement of Procedural Rules

TC
Tax Convention

TD
Treasury Decision

TDO
Treasury Department Order

## ADMINISTRATIVE

AJCA-Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34, 382

Adjusted Applicable Dollar Amount for Fee Imposed by §§ 4375
and 4376 (Notice 56) 41, 674

Announcement to Discontinue the Internal Revenue Bulletin
Index (Ann 27) 28, 120

Annual Filing Season Program (RP 42) 29, 193

Disclosure to Census Bureau (REG-120756-13) 31, 241

Disclosure to Census Bureau (TD 9677) 31, 241

Information reporting by passport applicants (TD 9679) 32, 267

Low-Income Housing Tax Credit (RP 52) 38, 560

Per Capita Payments from Proceeds of Settlements of Indian
Tribal Trust Cases (Notice 61) 43, 744

Procedures to void backup withholding (RP 43) 32, 273
Proposed Regulations:

26 CFR part 301 is amended, section 301.6103(j)(1)-1 is amended,
section 301.6103(j)(1)-1T added (REG-120756-13) 31, 241

Regulations Governing Practice Before the Internal Revenue
Service (REG-138367-06) (TD 9668) 27, 1

Regulations:

31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31,
revised; 10.35, revised; 10.36, revised; 10.37, revised;
10.52, revised; 10.81, revised; 10.82, revised; 10.91, re-
vised. (TD 9668) 27, 1

26 CFR 301.6109-4, added; 1.6042-4, amended; 1.6043-4,
amended; 1.6044-5, amended; 1.6045-2, amended; 1.6045-3,
amended; 1.6045-4, amended; 1.6045-5, amended; 1.6049-6,
amended; 1.6050A-1, amended; 1.6050E-1, amended;
1.6050N-1, amended; 1.6050P-1, amended; 1.6050S-1, amend-
ed; 1.6050S-3, amended (TD 9675) 31, 242

26 CFR part 301 is amended, section 301.6103(j)(1)-1 is
amended, section 301.6103(j)(1)-1T added (TD 9677) 31, 241

## ADMINISTRATIVE-Cont.

26 CFR part 301, amended; 26 CFR 301.6039E-1 added (TD
9679) 32, 267

26 CFR 301.6707-1, added; 301.6707-1T, removed; Rev.
Proc. 2007-21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34, 382

Substantiation by Per Diem Rates (Notice 2014-57) 42, 723
Substitute Forms Preparation for Certain Information Returns
(RP 27) 27, 41

Substitute Forms Preparation for Certain Information Returns
(RP 44) 32, 274

Truncated Taxpayer Identification Numbers (TD 9675) 31, 242

## EMPLOYEE PLANS

Additional Permitted Election Changes for Health Coverage
under § 125 Cafeteria Plans (Notice 55) 41, 672

Cash balance plans and other hybrid defined benefit pension
plans (TD 9693) 41, 596

Excepted benefits

Group Trusts (RR 24) 37, 529

Individual Retirement Account Rollover Limitations (REG-
209459-78) 31, 253

Longevity Annuity Contracts (TD 9673) 30, 212
Proposed Regulations:

26 CFR 408, Individual Retirement Accounts (REG-209459-
78) 31, 253

Qualified Plans

Rollovers (Notice 54) 41, 670

Minimum Funding Requirements (Notice 53) 43, 737

Regulations:

26 CFR 54.9815-2708, as amended (TD 9671) 29, 174

26 CFR 1.401(a)(9)-5, amended; 1.401(a)(9)-6, amended;
1.403(b)-6, amended; 1.408-8, amended; 1.408A-6,
amended; 1.6047-2, added (TD 9673) 30, 212

26 CFR 1.411(a)(13)-1, amended (TD 9693); 26 CFR
1.411(b)-1, amended (TD 9693); 26 CFR 1.411(b)(5)-1,
amended (TD 9693) 41, 596

26 CFR 1.162-31, added (REG-106796-12 TD 9694) 41, 626
26 CFR 301.6057-3 added, 301.6058-2 added, 301.6059-2
added (TD 9695) 42, 707

26 CFR 54.9831-1 is amended (TD 9697) 43, 729

Requirement to File Certain Employee Benefit Statements, No-
tices and Reports Electronically with the Internal Revenue
Service (TD 9695) 42, 707

Rules relating to 90 day waiting period limitation (TD 9671) 29, 174
The $500,000 deduction limitation for remuneration provided by
certain health insurance providers (REG-106796-12) (TD
9694) 41, 626

Weighted average interest rates

Segment rates for June 2014 (Notice 41) 27, 97

Segment rates for July 2014 (Notice 43) 31, 249

Segment rates for August 2014 (Notice 48) 36, 523

Segment rates for September 2014 (Notice 50) 40, 590

Segment rates for October 2014 (Notice 62) 44, 749

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## EMPLOYMENT TAX

Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121

Method of accounting for gains and losses on shares in certain
money market funds; broker returns with respect to sales of
shares in money market funds (REG-107012-14) 33, 371
Publications:

1223, General Rules and Specifications for Substitute Forms
W-2c and W-3c (RP29) 28, 105

4436, General Rules and Specifications for Substitute Form
941 and Schedule B (Form 941), and Schedule R (RP 26)
27, 26

Summons Interview Regulations Under Section 7602 (REG-
121542-14) (TD 9669) 28, 103

Regulations:

26 CFR 301.7602-1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103

26 CFR 1.1361-4, amended; 1.1361-4T, removed;
31.3121(b)(3)-1, amended; 31.3121(b)(3)-1T, removed;
31.3127-1, added; 31.3127-1T, removed;
31.3306(c)(5)-1, amended; 31.3306(c)(5)-1T, removed;
301.7701-2, amended; 301.7701-2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29, 121

26 CFR 1.446-7 added; 1.6045-1 amended; method of ac-
counting for gains and losses on shares in certain money
market funds; broker returns with respect to sales of shares
in money market funds (REG-107012-14) 33, 371

## ESTATE TAX

Section 2032A .- Valuation of Certain Farm, Etc., Real Property
(RR 21) 34, 381

Summons Interview Regulations Under Section 7602 (REG-
121542-14) (TD 9669) 28, 103

Regulations:

26 CFR 301.7602-1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103

## EXCISE TAX

Adjusted Applicable Dollar Amount for Fee Imposed by §§ 4375
and 4376 (Notice 56) 41, 674

Alternative process for religious objections to providing contra-
ceptive coverage under section 9815 (REG-129507-14) 38, 561

Alternative process for religious objections to providing contra-
ceptive coverage under section 9815 (TD 9690) 38, 548
Branded Prescription Drug Fee (REG-123286-14) 33, 377

Branded Prescription Drug Fee (TD 9684) 33, 245

Branded Prescription Drug Fee (Notice 42) 34, 387

Definition of "eligible organization" under section 9815, regard-
ing coverage of preventive services, including contraceptive
coverage (REG-129786-14) 38, 562

## EXCISE TAX-Cont.

Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121

Section 9010 of the ACA; health insurance providers fee (Notice
47) 36, 522

Summons Interview Regulations Under Section 7602 (REG-
121542-14) (TD 9669) 28, 103

Proposed Regulations:

26 CFR 54.9815-2713A is revised; accommodations in con-
nection with coverage of preventive health services under
section 9815 (REG-129507-14) 38, 561

26 CFR 54.9815-2713A(a) amended; accommodations in
connection with coverage of preventive health services
under section 9815 (REG-129786-14) 38, 562

Regulations:

26 CFR 301.7602-1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103

26 CFR 1.1361-4, amended; 1.1361-4T, removed;
31.3121(b)(3)-1, amended; 31.3121(b)(3)-1T, removed;
31.3127-1, added; 31.3127-1T, removed; 31.3306(c)(5)-1,
amended; 31.3306(c)(5)-1T, removed; 301.7701-2, amended;
301.7701-2T, removed; extending religious and family member
FICA and FUTA exceptions to disregarded entities; regulations
regarding the indoor tanning services excise tax and disregarded
entities (TD 9670) 29, 121

26 CFR 54.9815-2708, as amended (TD 9671) 29, 121
26 CFR 51.2(e)(3), amended; (REG-123286-14) 33, 377

26 CFR 54.9815-2713A(b), (c)(1), and (c)(2)(i) introductory
text amended; 54.9815-2713A(f) and 54.9815-2713AT
added; accommodations in connection with coverage of
preventive health services under section 9815 (TD 9690)
38, 548

Rules relating to 90 day waiting period limitation (TD 9671) 29, 121

## EXEMPT ORGANIZATIONS

Streamlined Application for Recognition of Exemption Under
Section 501(c)(3) (RP 2014-40) 30, 229

Streamlined process for 501(c)(3) recognition (REG-110948-
14) 30, 225

Streamlined process for 501(c)(3) recognition (TD 9674) 30, 225
Regulations:

26 CFR 1.501(c)-1 amended 1. 501(a)-1T added;
1.501(c)(3)-1 amended, 1.501(c)(3)-1T added; and
1.508-1 amended, 1.508-1T added (REG-110948-
14)(TD 9674) 30, 225

## GIFT TAX

Summons Interview Regulations Under Section 7602 (REG-
121542-14) (TD 9669) 28, 103

Regulations:

26 CFR 301.7602-1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG-121542-14) (TD
9669) 28, 103

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## INCOME TAX

Accounting method change, retail inventory method (RP 48) 36,
132

Additional Guidance Under the Codified Economic Substance
Doctrine and Related Penalties (Notice 58) 44, 746

AJCA-Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34, 382

Allocation and Apportionment of Interest Expense (TD 9676)
32, 260

Awards for Information Relating to Detecting Underpayments of
Tax or Violations of the Internal Revenue Laws (TD 9687) 36,
486

Basis of indebtedness of S corporations to their shareholders (TD
9682) 33, 342

Business expenses, lodging when not traveling away from home
(TD 9696) 43, 727

Credit for carbon dioxide Sequestration (Notice 40) 27, 100

Debt that is a position in personal property that is part of a
straddle (TD 9691) 38, 547

Disciplinary actions involving attorneys, certified public accoun-
tants, enrolled agents, and enrolled actuaries, enrolled retire-
ment plan agents, and appraisers (Ann 29) 35, 452

Disclosure to Census Bureau (REG-120756-13) 31, 252

Disclosure to Census Bureau (TD 9677) 31, 241

Dispositions of property subject to depreciation under section
168 (TD 9689) 36, 456

Employer shared responsibility; look-back measurement method
(Notice 49) 41, 665

FFI Agreement for Participating FFI and Reporting Model 2 FFI
(RP 38) 29, 132

Foreign Earned Income Exclusion (Ann 2014-28) 34, 391

Foreign tax credit guidance under section 901 (m) (Notice 44)
32, 391

Foreign tax credit guidance under section 901 (m) (Notice 45)
34, 270

Information reporting by passport applicants (TD 9679) 32, 267
Insurance; effectively connected income (RP 53) 39, 573

Interest:

Investment:

Federal short-term, mid-term, and long-term rates for: July
2014 (RR 20) 28, 101

Federal short-term, mid-term, and long-term rates for: Au-
gust 2014 (RR 19) 32, 266

Federal short-term, mid-term, and long-term rates for: Sep-
tember 2014 (RR 22) 37, 533

Federal short-term, mid-term, and long-term rates for: Oc-
tober 2014 (RR 26) 41, 663

Involuntary conversions, livestock sold on account of drought,
extension of replacement period, list of affected counties (No-
tice 60) 43, 741

Method change procedures for dispositions of tangible deprecia-
ble property (RP 2014-54) 41, 675

Modified Applicability Dates of Certain Provisions Under Chap-
ters 3 and 61 (Notice 2014-59) 44, 747

Money market funds and the wash sale rules (RP 45) 34, 388
Premium Tax Credit (REG-104579-13) 33, 370

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## INCOME TAX-Cont.

Premium Tax Credit (RP 37) 33, 363

Premium Tax Credit (RP 41) 33, 364

Premium Tax Credit (TD 9683) 33, 330

Production Tax Credit, Investment Tax Credit, Beginning of
Construction (Notice 46) 36, 520

Proposed Regulations:

26 CFR part 301 is amended, section 301.6103(j)(1)-1 is
amended, section 301.6103(j)(1)-1T added (REG-
120756-13) 31, 252

26 C.F.R. 1.382-3(j)(17), modified; 1.382-3T(j)(17), added,
segregation rules for public groups of shareholders (REG-
105067-14) 34, 391

Publications:

1223, General Rules and Specifications for Substitute Forms
W-2c and W-3c (RP 29) 28, 105

4436, General Rules and Specifications for Substitute Form
941 and Schedule B (Form 941), and Schedule R (RP 26)
27, 26

Qualified Intermediary (QI) Agreement (RP 39) 29, 151
Qualified residential rental projects (RP-105272-13) (RP 50) 37,
540

Regulations:

31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31,
revised; 10.35, revised; 10.36, revised; 10.37, revised;
10.52, revised; 10.81, revised; 10.82, revised; 10.91, re-
vised (TD 9668) 27, 1

26 CFR 301.7602-1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG-121542-14) (TD
9669) 28, 103

26 CFR 1.45R-0, added; 1.45R-1, added; 1.45R-2, added;
1.45R-3, added; 1.45R-4, added; 1.45R-5, added; tax
credit for employee health insurance expenses of small
employers (TD 9672) 30, 196

26 CFR 301.6109-4, added; 1.6042-4, amended; 1.6043-4,
amended; 1.6044-5, amended; 1.6045-2, amended;
1.6045-3, amended; 1.6045-4, amended; 1.6045-5,
amended; 1.6049-6, amended; 1.6050A-1, amended;
1.6050E-1, amended; 1.6050N-1, amended; 1.6050P-1,
amended; 1.6050S-1, amended; 1.6050S-3, amended (TD
9675) 31, 242

26 CFR 1.67-4, amended (TD 9667) 32, 254

26 CFR part 301 is amended, section 301.6103(j)(1)-1 is
amended, section 301.6103(j)(1)-1T added (TD 9677) 31,
241

26 CFR 1.861-9 amended, 1.861-11 amended; (TD 9676) 32,
260

26 CFR 1.1092(b)-6, added; 1.1092(b)-6T, removed;
1.1092(b)-3T, amended; (TD 9678) 32, 262

26 CFR part 301, amended; 26 CFR 301.6039E-1 added (TD
9679) 32, 267

26 CFR 1.174-2 amended; (TD 9680) 32, 254

26 CFR 1.36B-2T, 26 CFR 1.36B-3T, 1.36B-4T, added; 26
CFR 1.36B-2, 26 CFR 1.36B-3\\, 1.36B-4, amended; 26
CFR 1.162(1)-1 and 26 CFR 1.162(1)-1T, added. (REG-
104579-13) 33, 370

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## INCOME TAX-Cont.

26 CFR 1.195-2, added; 26 CFR 1.708-1, amended; 26 CFR
1.709-1, amended. (TD 9681) 33, 340

26 CFR 1.1366-2(a), added new paragraph (a)(2) and moved
current (a)(2) through (a)(6) to (a)(3) through (a)(7), re-
spectively; basis of indebtedness of S corporations to their
shareholders (TD 9682) 33, 342

26 CFR 1.36B-2T, 26 CFR 1.36B-3T, 1.36B-4T added, 26
CFR 1.36B-2, 26 CFR 1.36B-3\\, 1.36B-4, amended, 26
CFR 1.162(1)-1 and 26 CFR 1.162(1)-1T added, (TD
9683) 33, 330

26 C.F.R. 1.382-3(j)(17), modified; 1.382-3T(j)(17), added,
segregation rules for public groups of shareholders (TD
9685) 34, 379

26 CFR 301.6707-1, added; 301.6707-1T, removed; Rev.
Proc. 2007-21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34, 382

26 CFR 301.7623-1, revised; 26 CFR 301.7623-4, added; 26
CFR 301.7623-2, added; 26 CFR 301.6103(h)(4)-1, added
26 CFR 301.7623-3, added; (TD 9687) 36, 486

26 CFR 1.471-8 amended (TD 9688) 36, 482

26 CFR 1.168(i)-8 added; 1.165-2, 1.168(i)-0, 1.168(i)-1,
1.168(i)-7, 1.263(a)-3, 1.1016-3 amended; 1.168(i)-0T,
1.168(i)-1T, 1.168(i)-8T removed; dispositions of prop-
erty subject to depreciation under section 168 (TD 9689)
36, 453

26 CFR 1.1092(d)-1, amended; 1.1092(d)-1T, removed; debt
that is a position in personal property that is part of a
straddle (TD 9691) 38, 547

26 CFR 1.402A-1, amended; Removal of Allocation Rule for
Disbursements from Designated Roth Accounts to Multi-
ple Destinations (REG-105739-11) 41, 704

26 CFR 1.162-32, added; 1.262-1, amended (TD 9696) 43, 727
Regulations Governing Practice Before the Internal Revenue
Service (REG-138367-06) (TD 9668) 27, 1

REIT Distressed Debt (RP 51) 37, 543

Removal of Allocation Rule for Disbursements from Designated
Roth Accounts to Multiple Destinations (REG-105739-11)
41, 704

Research and experimental expenditures (TD 9680) 32, 254
Retail inventory method (TD 9688) 36, 482

Rules Regarding Inversions and Related Transactions (Notice
2014-52) 42, 712

Tax Credit for Employee Health Insurance Expenses of Small
Employers (TD 9672) 30, 196

Tax deferral election procedures and information reporting for
Canadian retirement plans (RP 55) 44, 753

Temporary relief from certain requirements of § 42 (Rev. Proc.
2014-39) (RP 49) 37, 535

Truncated Taxpayer Identification Numbers (TD 9675) 31, 242
Section 67 Limitations on Estates or Trusts; Change of Effective
Date (TD 9664) 32, 254

Section 1298(f) Reporting Requirements for U.S. Persons that
Hold Stock of a Passive Foreign Investment Company that is
Marked to Market Under Section 475 or Another Chapter 1
Code Provision Other Than Section 1296 (Notice 51) 40, 594

## INCOME TAX-Cont.

Section 5000A national average premium for a bronze level of
coverage (RP 46) 33, 367

Segregation rules for public groups of shareholders, (REG-
105067-14) 34, 391

Segregation rules for public groups of shareholders, (TD 9685)
34, 379

Standard Industry Fare Level (RR 2014-25) 40, 574

Substantiation by Per Diem Rates (Notice 2014-57) 42, 723

Substitute Forms Preparation for Certain Information Returns
(RP 27) 27, 41

Substitute Forms Preparation for Certain Information Returns
(RP 44) 32, 274

Summons Interview Regulations Under Section 7602 (REG-
121542-14) (TD 9669) 28, 103

Unamortized organization and syndication expenses following a
partnership technical termination (TD 9681) 33, 340

Underpayment and overpayments, quarter beginning: July 1,
2014 (RR 14) 27, 12

Underpayment and overpayments, quarter beginning: October 1,
2014 (RR-129839-14) 40, 575

Unrealized gain or loss treatment upon establishment of an
identified mixed straddle (TD 9678) 32, 262

Voluntary withholding(TD-9692) 40, 574

26 CFR 31.3402(p)-1, section (c) added (TD 9692) 40, 574
Withholding Foreign Partnership and Trust Agreements (RP 47)
35, 393

## SELF-EMPLOYMENT TAX

Extending religious and family member FICA and FUTA excep-
tions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121

Regulations:

26 CFR 1.1361-4, amended; 1.1361-4T, removed;
31.3121(b)(3)-1, amended; 31.3121(b)(3)-1T, removed;
31.3127-1, added; 31.3127-1T, removed;
31.3306(c)(5)-1, amended; 31.3306(c)(5)-1T, removed;
301.7701-2, amended; 301.7701-2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29, 121

## SPECIAL ANNOUNCEMENT

Annual Filing Season Program (RP 42) 29, 193
Procedures to Avoid Backup Withholding (RP 43) 32, 273

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