Internal Revenue Bulletin 2021-17 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2021–17
April 26, 2021
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
Notice 2021-25, page 1118.
This notice provides guidance regarding the temporary
100-percent deduction for expenses that are paid or incurred
after December 31, 2020, and before January 1, 2023, for
food or beverages provided by a restaurant. In particular, the
notice explains when the temporary 100-percent deduction
applies and when the 50-percent limitation continues to ap-
ply for purposes of § 274 of the Internal Revenue Code, as
amended by § 210 of the Taxpayer Certainty and Disaster
Tax Relief Act of 2020, enacted as Division EE of the Consol-
idated Appropriations Act, 2021, Pub. L. No. 116-260, 134
Stat. 1182 (December 27, 2020).
Rev. Proc. 2021-21, page 1118.
Generally, U.S. citizens or resident aliens living and working
abroad are taxed on their worldwide income. However, if
their tax home is in a foreign country and they meet either the
bona fide residence test or the physical presence test, they
can choose to exclude from their income a limited amount of
their foreign earned income ($107,600 for 2020). Both the
bona fide residence test and the physical presence test con-
tain minimum time requirements. Revenue Procedure 2021-
21 provides a waiver under section 911(d)(4) for the time
requirements for individuals electing to exclude their foreign
earned income who must leave a foreign country because of
war, civil unrest, or similar adverse conditions in that country.
Rev. Proc. 20221-21 adds Iraq to the list of waiver country
for tax year 2020 for which the minimum time requirements
are waived.
Finding Lists begin on page ii.

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 of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, 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 sub-
stantive 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 inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—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,
Legislation 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
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (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.
April 26, 2021 Bulletin No. 2021–17

Part III
Temporary 100-Percent
Deduction for Business
Meal Expenses
Notice 2021-25
I. PURPOSE
This notice provides guidance regard-
ing the temporary 100-percent deduction
for expenses that are paid or incurred after
December 31, 2020, and before January 1,
2023, for food or beverages provided by
a restaurant. In particular, the notice ex-
plains when the temporary 100-percent
deduction applies and when the 50-per-
cent limitation continues to apply for pur-
poses of § 274 of the Internal Revenue
Code (Code), as amended by § 210 of
the Taxpayer Certainty and Disaster Tax
Relief Act of 2020 (Act), enacted as Di-
vision EE of the Consolidated Appropria-
tions Act, 2021, Pub. L. No. 116-260, 134
Stat. 1182 (December 27, 2020).
II. BACKGROUND
Section 274 generally limits or dis-
allows deductions for certain meal and
entertainment expenses that otherwise
would be allowable under chapter 1 of the
Code (chapter 1). Section 274(a)(1) gener-
ally disallows deductions for expenses for
entertainment, amusement, or recreation.
Section 1.274-11 of the Income Tax Reg-
ulations provides that the disallowance
under section 274(a)(1) does not apply to
food or beverages provided at an enter-
tainment activity if the food or beverages
are separately purchased from the enter-
tainment activity or the cost of the food
or beverages is separately stated from the
cost of the entertainment in an invoice,
bill, or receipt. See § 1.274-11(b)(1)(ii).
Section 274(k) generally provides that
no deduction is allowed under chapter 1
for the expense of any food or beverage
unless: (1) such expense is not lavish or
extravagant under the circumstances; and
(2) the taxpayer (or an employee of the
taxpayer) is present at the furnishing of
such food or beverages. Section 274 pro-
vides additional rules that may apply to
the deduction of food or beverage expens-
es, depending on the circumstances.
Section 274(n)(1) provides that a de-
duction for any expense for food or bev-
erages generally is limited to 50 percent
of the amount otherwise deductible under
chapter 1. Section 274(n)(2) provides ex-
ceptions to the 50-percent limitation of
deductions for food or beverage expenses.
Section 210(a) of the Act added § 274(n)
(2)(D) to the Code, which provides a tem-
porary exception to the 50-percent limita-
tion for expenses for food or beverages
provided by a restaurant. Section 274(n)
(2)(D) applies to amounts paid or incurred
after December 31, 2020, and before Jan-
uary 1, 2023. To provide certainty to tax-
payers in determining whether § 274(n)(2)
(D) applies, this notice explains when the
temporary 100-percent deduction applies
and when the 50-percent limitation con-
tinues to apply.
III. APPLICATION OF § 274(n)(2)(D)
Pursuant to § 274(n)(2)(D), the 50-per-
cent limitation of § 274(n)(1) does not ap-
ply to the amount of any deduction other-
wise allowable to a taxpayer under chapter
1 for any expense paid or incurred after
December 31, 2020, and before January
1, 2023, for food or beverages provided
by a restaurant. For this purpose, the term
“restaurant” means a business that pre-
pares and sells food or beverages to retail
customers for immediate consumption, re-
gardless of whether the food or beverages
are consumed on the business’s premises.
However, a restaurant does not include a
business that primarily sells pre-packaged
food or beverages not for immediate con-
sumption, such as a grocery store; special-
ty food store; beer, wine, or liquor store;
drug store; convenience store; newsstand;
or a vending machine or kiosk. The 50-per-
cent limitation of § 274(n)(1) continues
to apply to the amount of any deduction
otherwise allowable to the taxpayer under
chapter 1 for any expense paid or incurred
for food or beverages acquired from such
a business (unless another exception in §
274(n)(2) applies to such expense).
In addition, an employer may not treat
as a restaurant for purposes of § 274(n)
(2)(D), (1) any eating facility located on
the business premises of the employer and
used in furnishing meals excluded from
an employee’s gross income under § 119,
or (2) any employer-operated eating facil-
ity treated as a de minimis fringe under
§ 132(e)(2), even if such eating facility is
operated by a third party under contract
with the employer as described in § 1.132-
7(a)(3).
IV. EFFECTIVE DATE
This notice is effective for amounts
paid or incurred after December 31, 2020,
and before January 1, 2023.
V. DRAFTING INFORMATION
The principal author of this notice
is Deena Devereux of the Office of Asso-
ciate Chief Counsel (Income Tax & Ac-
counting). For further information regard-
ing this notice contact Ms. Devereux at
(202) 317-4602 or Patrick Clinton at (202)
317-4651 (not toll-free numbers).

26 CFR 1.911-2: Qualified Individuals (Also: Part
I, §§911; 1.911-2.)
Rev. Proc. 2021-21
SECTION 1. PURPOSE
This revenue procedure provides in-
formation to any individual who failed
to meet the eligibility requirements of
section 911(d)(1) of the Internal Revenue
Code (Code) for 2020 because adverse
conditions in a foreign country precluded
the individual from meeting those require-
ments.
SECTION 2. BACKGROUND
.01 Section 911 allows a “qualified in-
dividual,” as defined in section 911(d)(1),
to elect to exclude from gross income the
foreign earned income and to exclude or
deduct the housing cost amount of such
individual.
.02 Section 911(d)(1) of the Code de-
fines the term “qualified individual” as an
individual whose tax home is in a foreign
country and who is (A) a citizen of the
April 26, 2021 1118 Bulletin No. 2021–17

United States and establishes to the sat-
isfaction of the Secretary of the Treasury
that the individual has been a bona fide
resident of a foreign country or countries
for an uninterrupted period that includes
an entire taxable year, or (B) a citizen or
resident of the United States who, during
any period of 12 consecutive months, is
present in a foreign country or countries
during at least 330 full days.
.03 In addition, section 911(d)(4) of the
Code provides that an individual will be
treated as a qualified individual with re-
spect to a period in which the individual
was a bona fide resident of, or was pres-
ent in, a foreign country if the individual
left the country during a period for which
the Secretary of the Treasury, after con-
sultation with the Secretary of State, de-
termines that individuals were required
to leave because of war, civil unrest, or
similar adverse conditions that precluded
the normal conduct of business. An indi-
vidual must establish that but for those
conditions the individual could reasonably
have been expected to meet the eligibility
requirements.
.04 The Internal Revenue Service pre-
viously has listed countries for which the
eligibility requirements of section 911(d)
(1) of the Code are waived under section
911(d)(4) because of adverse conditions
in those countries. See Rev. Proc. 2020-
14, 2020-16 I.R.B. 661. In addition to this
revenue procedure, for 2020, the Secre-
tary of the Treasury, in consultation with
the Secretary of State, determined that the
global health emergency caused by the
COVID-19 virus is an adverse condition
that precludes the normal conduct of busi-
ness, and certain relief was provided, as
described in Rev. Proc. 2020-27, 2020-20
I.R.B. 803.
SECTION 3. APPLICATION
.01 For 2020, the Secretary of the Trea-
sury, in consultation with the Secretary
of State, has determined that war, civil
unrest, or similar adverse conditions pre-
cluded the normal conduct of business in
the following country beginning on the
specified date:
Country Date of Departure On or After
Iraq March 25, 2020
For example, for purposes of section
911 of the Code, an individual who left
Iraq on or after March 25, 2020, will be
treated as a qualified individual with re-
spect to the period during which that in-
dividual was present in, or was a bona
fide resident of, Iraq if the individual
establishes a reasonable expectation that
he or she would have met the require-
ments of section 911(d) but for those
conditions.
.02 To qualify for relief under section
911(d)(4) of the Code, an individual must
have established residency, or have been
physically present, in the foreign country
on or before the date that the Secretary of
the Treasury determines that individuals
were required to leave the foreign country.
For example, individuals who were first
physically present or established residen-
cy in Iraq after March 25, 2020, are not
eligible to qualify for the exception pro-
vided in section 911(d)(4) of the Code for
2020.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Previously issued revenue procedures
under section 911(d)(4) remain in full
force and effect. However, Rev. Proc.
2020-14, 2020-16 I.R.B. 661, and Rev.
Proc. 2020-2027, 2020-20 I.R.B. 803, are
supplemented.
SECTION 5. INQUIRIES
A taxpayer who needs assistance on
how to claim this exclusion, or on how to
file an amended return, should consult the
section under the heading Foreign Earned
Income Exclusion at https://www.irs.gov/
individuals/international-taxpayers/us-cit-
izens-and-resident-aliens-abroad; consult
the section under the heading How to Get
Tax Help at the same web address; or con-
tact a local IRS office.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Kate Y. Hwa of the Office
of Associate Chief Counsel (Internation-
al). For further information regarding this
revenue procedure, contact Ms. Hwa on
(202) 317-5001 (not a toll-free number).
Bulletin No. 2021–17 1119 April 26, 2021

Bulletin No. 2021–17 i April 26, 2021
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 be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing 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 transactions.
This term is most commonly used in a ruling
that lists previously published rulings 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
period 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 previous-
ly 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 cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
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.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
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.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

April 26, 2021 ii Bulletin No. 2021–17
Numerical Finding List
1
Bulletin 2021–17
AOD:
2021-1, 2021-15 I.R.B. 985
Announcements:
2021-01, 2021-04 I.R.B. 506
2021-02, 2021-08 I.R.B. 892
2021-03, 2021-08 I.R.B. 892
2021-04, 2021-09 I.R.B. 895
2021-05, 2021-13 I.R.B. 965
2021-06, 2021-15 I.R.B. 1011
2021-07, 2021-15 I.R.B. 1061
Notices:
2021-01, 2021-02 I.R.B. 315
2021-03, 2021-02 I.R.B. 316
2021-04, 2021-02 I.R.B. 319
2021-02, 2021-03 I.R.B. 478
2021-05, 2021-03 I.R.B. 479
2021-07, 2021-03 I.R.B. 482
2021-09, 2021-05 I.R.B. 678
2021-06, 2021-06 I.R.B. 822
2021-08, 2021-06 I.R.B. 823
2021-11, 2021-06 I.R.B. 827
2021-12, 2021-06 I.R.B. 828
2021-13, 2021-06 I.R.B. 832
2021-10, 2021-07 I.R.B. 888
2021-15, 2021-10 I.R.B. 898
2021-16, 2021-10 I.R.B. 907
2021-18, 2021-11 I.R.B. 911
2021-19, 2021-11 I.R.B. 920
2021-20, 2021-11 I.R.B. 922
2021-17, 2021-14 I.R.B. 984
2021-21, 2021-15 I.R.B. 986
2021-22, 2021-15 I.R.B. 987
2021-23, 2021-16 I.R.B. 1113
2021-25, 2021-17 I.R.B. 1118
Proposed Regulations:
REG-130081-19, 2021-02 I.R.B. 321
REG-114615-16, 2021-03 I.R.B. 489
REG-111950-20, 2021-05 I.R.B. 683
REG-115057-20, 2021-05 I.R.B. 714
Revenue Procedures:
2021-01, 2020-01 I.R.B. 1
2021-02, 2020-01 I.R.B. 116
2021-03, 2020-01 I.R.B. 140
2021-04, 2020-01 I.R.B. 157
2021-05, 2020-01 I.R.B. 250
2021-07, 2020-01 I.R.B. 290
2021-09, 2020-03 I.R.B. 485
2021-08, 2020-04 I.R.B. 502
Revenue Procedures:—Continued
2021-10, 2020-04 I.R.B. 503
2021-12, 2020-05 I.R.B. 681
2021-11, 2020-06 I.R.B. 833
2021-15, 2020-08 I.R.B. 891
2021-17, 2020-15 I.R.B. 991
2021-18, 2020-15 I.R.B. 1007
2021-19, 2020-15 I.R.B. 1008
2021-21, 2020-17 I.R.B. 1118
Revenue Rulings:
2021-01, 2021-02 I.R.B. 294
2021-02, 2021-04 I.R.B. 495
2021-03, 2021-05 I.R.B. 674
2021-04, 2021-06 I.R.B. 724
2021-05, 2021-10 I.R.B. 896
2021-06, 2021-12 I.R.B. 946
2021-07, 2021-14 I.R.B. 982
Treasury Decisions:
9925, 2021-02 I.R.B. 296
9940, 2021-02 I.R.B. 311
9932, 2021-03 I.R.B. 345
9939, 2021-03 I.R.B. 376
9941, 2021-03 I.R.B. 396
9942, 2021-03 I.R.B. 450
9937, 2021-04 I.R.B. 495
9936, 2021-05 I.R.B. 508
9943, 2021-05 I.R.B. 577
9945, 2021-05 I.R.B. 627
9946, 2021-06 I.R.B. 726
9947, 2021-06 I.R.B. 748
9948, 2021-06 I.R.B. 801
9938, 2021-07 I.R.B. 838
9944, 2021-16 I.R.B. 1062
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2020.

Bulletin No. 2021–17 iii April 26, 2021
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2021–17
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2020.

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