Internal Revenue Bulletin 2012-23 (PDF rendition): IRS Revenue Rulings

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

Bulletin No. 201
2-23
June 4, 2012
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2012–15, page 975.
Federal rates; adjusted federal rates; adjusted federal
long-term rate and the long-term exempt rate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for June 2012.
T.D. 9588, page 969.
Final regulations under section 163 of the Code provide rules
on allocating prepaid qualified mortgage insurance premiums
to determine the amount of the prepaid premium that is treated
as qualified residence interest each taxable year.
T.D. 9589, page 971.
REG–107548–11, page 977.
Final, temporary, and proposed regulations under section 956
of the Code provide that certain obligations of United States
persons arising from upfront payments made by controlled for-
eign corporations pursuant to contracts that are cleared by a
derivatives clearing organization or clearing agency do not con-
stitute United States property.
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
ESTATE TAX
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
(Continued on the next page)
Announcements of Disbarments and Suspensions begin on page 982.
Finding Lists begin on page ii.

GIFT TAX
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
EMPLOYMENT TAX
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
EXCISE TAX
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
ADMINISTRATIVE
REG–119632–11, page 978.
Proposed regulations under section 6103 of the Code was en-
acted under the Patent Protection and Affordable Care Act,
Public Law 111–48 (124 Stat. 119 (2010)) to permit the dis-
closure of return information in order to determine a taxpayer’s
eligibility in certain health insurance affordability programs. In
addition to items specifically enumerated in the statute, section
6103(1)(21)(A)(iv) permits the disclosure of items prescribed
by the Secretary by regulation as might indicate whether the
taxpayer is eligible for a tax credit under section 36B of the
Code, or a cost-sharing reduction under section 1402 of the
Affordable Act. The regulation contains detailing items of return
information that may be disclosed under section 6101(1)(21).
A public hearing is scheduled for August 31, 2012.
June 4, 20122012–23 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2012–23 I.R.B.June 4, 2012

June 4, 20122012–23 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of June 2012. S
ee Rev. Rul. 2012-15, page 975.
Section 163.—Interest
26 CFR 1.163–11: Allocation of certain prepaid
qualified mortgage insurance premiums.
T.D. 9588
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Allocation of Mortgage
Insurance Premiums
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains fi-
nal regulations that explain how to allocate
prepaid qualified mortgage insurance pre-
miums to determine the amount of the pre-
paid premium that is treated as qualified
residence interest each taxable year. The
final regulations reflect changes to the law
made by the Tax Relief and Health Care
Act of 2006, the Mortgage Forgiveness
Debt Relief Act of 2007, and the Tax Re-
lief, Unemployment Insurance Reautho-
rization, and Job Creation Act of 2010.
The regulations affect taxpayers who pay
prepaid qualified mortgage insurance pre-
miums.
DATES:Effective Date:These regulations
are effective on May 4, 2012.
Applicability Dates:For dates of appli-
cability, see §1.163–11(d).
FO
R FURTHER INFORMATION
CO
NTACT: Charles Kim, (202) 622–5020
(n
ot a toll-free number).
SUPPLEMENTAR
Y INFORMATION:
Background
This documen
t contains amendments
to 26 CFR part
1. On May 7, 2009,
the Treasury
Department and IRS pub-
lished temp
orary regulations (T.D. 9449,
2009–22 I.R
.B. 1044) under section 163
of the Inter
nal Revenue Code (Code) in
theFederal
Register(74 FR 21256) that
explain how
to allocate prepaid qualified
mortgage i
nsurance premiums to deter-
mine the am
ount of the prepaid premium
that is tre
ated as qualified residence inter-
est each ta
xable year. On the same day,
the Treas
ury Department and IRS pub-
lished a n
otice of proposed rulemaking
(REG–107
271–08, 2009–22 I.R.B. 1051)
cross-re
ferencing the temporary regula-
tions in t
heFederal Register(74 FR
21295).
No public hearing was requested
or held.
No comments responding to the
notice o
f proposed rulemaking were re-
ceived.
The proposed regulations under
sectio
n 163 are adopted as amended by this
Treasu
ry decision, and the corresponding
tempor
ary regulations under section 163
are rem
oved.
T.D. 94
49 also contained temporary
regula
tions under section 6050H(h) that
requir
e persons who receive premiums,
inclu
ding prepaid premiums, for mort-
gage i
nsurance to make a return set-
ting f
orth the amount of premiums re-
ceive
d. A notice of proposed rulemaking
(REG–
107271–08) cross-referencing the
temp
orary regulations was published in
theF
ederal Registeron the same day
(74 F
R 21295). Because the deduction
for m
ortgage insurance premiums cur-
rent
ly does not apply to amounts paid
or ac
crued after December 31, 2011, the
Tre
asury Department and the IRS are
not
taking any action at this time with
res
pect to the temporary regulations or
the
proposed regulations under section
605
0H(h). The temporary regulations will
exp
ire on May 4, 2012.
Sec
tion 419 of the Tax Relief and
He
alth Care Act of 2006, Public Law
10
9–432 (120 Stat. 2967) (2006), added
sections 163(
h)(3)(E), (h)(4)(E), and
(h)(4)(F) to t
he Code. Section 3 of
the Mortgage F
orgiveness Debt Re-
lief Act of 20
07, Public Law 110–142
(121 Stat. 18
03) (2007), amended section
163(h)(3)(E
)(iv). Section 759(a) of the
Tax Relief, U
nemployment Insurance
Reauthoriz
ation, and Job Creation Act
of 2010, Pub
lic Law 111–312 (124
Stat. 3296)
(2010), further amended
section 163
(h)(3)(E)(iv). In general, these
new provisi
ons treat certain qualified
mortgage i
nsurance premiums as qualified
residence
interest. This treatment only
applies to
certain qualified mortgage
insurance
premiums paid or accrued
on or afte
r January 1, 2007, and on or
before De
cember 31, 2011, on mortgage
insuranc
e contracts issued on or after
January 1
, 2007.
Section 1
63(h)(3)(E)(i) provides that
premiums
paid or accrued for qualified
mortgage
insurance in connection with
acquisi
tion indebtedness for a qualified
residen
ce are treated as qualified resi-
dence in
terest for purposes of section
163. Sec
tion 163(h)(4)(E) definesquali-
fied mo
rtgage insuranceas (i) mortgage
insura
nce provided by the Veterans Ad-
minist
ration (VA), the Federal Housing
Admini
stration (FHA), or the Rural Hous-
ing Adm
inistration (Rural Housing),
1
and
(ii) p
rivate mortgage insurance (as de-
fined
by section 2 of the Homeowners
Prote
ction Act of 1998 (12 U.S.C. 4901)
as in e
ffect on December 20, 2006). The
amoun
t treated as qualified residence in-
tere
st may be reduced or eliminated under
sect
ion 163(h)(3)(E)(ii), which provides
that
the amount allowed as a deduction is
phas
ed out ratably by 10 percent for each
$1,0
00 ($500 in the case of a married indi-
vidu
al filing a separate return) (or fraction
the
reof) that the taxpayer’s adjusted gross
inc
ome exceeds $100,000 ($50,000 in the
cas
e of a married individual filing a sepa-
rat
e return).
Sec
tion 163(h)(4)(F) states that any
amo
unt paid by the taxpayer for quali-
fie
d mortgage insurance that is properly
al
locable to any mortgage the payment
of
which extends to periods that are af-
1
References in section 163(h)(4)(E)(i) to the Veterans Administration and Rural Housing Administration are interpreted to mean their respective successors, the Department of Veterans
Affairs and Rural Housing Service.
2012–23 I.R.B.969June 4, 2012

ter the close of the taxable year in which
the amount is paid shall be chargeable
to capital account and shall be treated as
paid in the periods to which the amount is
allocated. No deduction shall be allowed
for the unamortized balance of the account
if the mortgage is satisfied before the end
of its term. Section 163(h)(4)(F) provides
that the allocation rules under section
163(h)(4)(F) do not apply to amounts paid
for qualified mortgage insurance provided
by the VA or Rural Housing. Additionally,
section 163(h)(3)(E)(iv)(II) disallows a
deduction for amounts allocable to any
period after December 31, 2011.
Explanation of Provisions
These final regulations provide rules re-
garding the allocation of prepaid quali-
fied mortgage insurance premiums to de-
termine the amount of the prepaid pre-
mium that is treated as qualified residence
interest each taxable year under section
163(h)(4)(F).
These final regulations apply to prepaid
qualified mortgage insurance premiums
paid or accrued on or after January 1, 2011.
The treatment of mortgage insurance
premiums as interest described in these
final regulations is limited to prepaid
qualified mortgage insurance premiums
that are paid or accrued on or after
January 1, 2011, and during periods to
which section 163(h)(3)(E) is applicable.
The temporary regulations are applicable
to prepaid qualified mortgage insurance
premiums paid or accrued on or after
January 1, 2008, and on or before
December 31, 2010.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866, as supplemented by Executive Or-
der 13563. Therefore, a regulatory assess-
ment is not required. It also has been de-
termined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations, and
because the regulations do not impose a
collection of information on small entities,
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to sec-
tion 7805(f) of the Code, the notice of pro-
posed rulemaking preceding these regula-
tions was submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on its impact on
small business, and no comments were re-
ceived.
Drafting Information
The principal author of these regula-
tions is Charles Kim, Office of the Asso-
ciate Chief Counsel (Income Tax and Ac-
counting). However, other personnel from
the IRS and the Treasury Department par-
ticipated in their development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.163–11 is added to
read as follows:
§1.163–11 Allocation of certain prepaid
qualified mortgage insurance premiums.
(a)Allocation—(1)In general.Aspro-
vided in section 163(h)(3)(E), premiums
paid or accrued for qualified mortgage in-
surance during the taxable year in connec-
tion with acquisition indebtedness with re-
spect to a qualified residence (as defined
in section 163(h)(4)(A)) of the taxpayer
shall be treated as qualified residence in-
terest (as defined in section 163(h)(3)(A)).
If an individual taxpayer pays such a pre-
mium that is properly allocable to a mort-
gage the payment of which extends to pe-
riods beyond the close of the taxable year
in which the premium is paid, the taxpayer
must allocate the premium to determine
the amount treated as qualified residence
interest for each taxable year. The pre-
mium must be allocated ratably over the
shorter of—
(i) The stated term of the mortgage; or
(ii) A period of 84 months, beginning
with the month in which the insurance was
obtained.
(2)Limitation. If a mortgage is satis-
fied before the end of its stated term, no de-
duction as qualified residence interest shall
be allowed for any amount of the premium
that is allocable to periods after the mort-
gage is satisfied.
(b)Scope. The allocation requirement
in paragraph (a) of this section applies
only to mortgage insurance provided by
the Federal Housing Administration or pri-
vate mortgage insurance (as defined by
section 2 of the Homeowners Protection
Act of 1998 (12 U.S.C. 4901) as in effect
on December 20, 2006). It does not ap-
ply to mortgage insurance provided by the
Department of Veterans Affairs or the Ru-
ral Housing Service. Paragraph (a) of this
section applies whether the qualified mort-
gage insurance premiums are paid in cash
or are financed, without regard to source.
(c)Limitation on the treatment of mort-
gage insurance premiums as interest.
This section applies to prepaid qualified
mortgage insurance premiums described
in paragraph (a) of this section that are
paid or accrued on or after January 1,
2011, and during periods to which section
163(h)(3)(E) is applicable. This section
does not apply to any amount of prepaid
qualified mortgage insurance premiums
that are allocable to any periods to which
section 163(h)(3)(E) is not applicable.
(d)Effective/applicability date.
This section is applicable on and af-
ter January 1, 2011. For regulations
applicable before January 1, 2011, see
§1.163–11T in effect prior to January 1,
2011 (§1.163–11T as contained in 26 CFR
part 1 edition revised as of April 1, 2011).
§1.163–11T [Removed]
Par. 3. Section 1.163–11T is removed.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved April 24, 2012.
Emily S. McMahon,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on May 4, 2012,
8:45 a.m., and published in the issue of the Federal Register
for May 7, 2012, 77 F.R. 26698)
June 4, 20129702012–23 I.R.B.

Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of June 2012. See Rev.
Rul. 2012-15, page 975.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rates is
set forth for the month of June 2012. See Rev. Rul.
2012-15, page 975.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
Federal short-term, mid-term, and long-term rates
are set forth for the month of June 2012. See Rev.
Rul. 2012-15, page 975.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of June 2012. See Rev.
Rul. 2012-15, page 975.
Section 807.—
Rules for
Certain Rese
rves
The adjusted
applicable federal short-term, mid-
term, and lon
g-term rates are set forth for the month
of June 2012.
See Rev. Rul. 2012-15, page 975.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 956.—Investment
of Earnings in United
States Prop
erty
26 CFR 1.956
–2: Definition of United States prop-
erty.
T.D. 9589
DEPARTMEN
TOFTHE
TREASURY
Internal R
evenue Service
26 CFR Par
t1
Modifica
tions to Definition of
United St
ates Property
AGENCY: I
nternal Revenue Service
(IRS), T
reasury.
ACTION:
Final and temporary regula-
tions.
SUMMARY
: This document contains fi-
nal and t
emporary regulations relating to
the trea
tment of upfront payments made
pursuan
t to certain notional principal
contra
cts for U.S. federal income tax pur-
poses.
The temporary regulations provide
that ce
rtain obligations of United States
person
s arising from upfront payments
made by
controlled foreign corporations
pursua
nt to contracts that are cleared by a
deriv
atives clearing organization or clear-
ing ag
ency do not constitute United States
prope
rty. These regulations affect United
States shareholders of controlled foreign
corporations that make such payments.
The text of the temporary regulations also
serves as the text of the proposed regula-
tions set forth in the notice of proposed
rulemaking (REG–107548–11) on this
subject in this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on May 11, 2012.
Applicability Date:These regula-
tions apply to payments described in
§1.956–2T(b)(1)(xi) made on or after
May 11, 2012.
FOR FURTHER INFORMATION
CONTACT: Kristine A. Crabtree at (202)
622–3840 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
A.Section 956
Section 956 w
as enacted to require an
income inclu
sion by United States share-
holders (as d
efined in section 951(b)) of a
controlled f
oreign corporation (as defined
in section 9
57(a)) that invests certain earn-
ings and pro
fits in United States property
(U.S. prope
rty) “on the grounds that [the
investment
] is substantially the equiva-
lent of a div
idend being paid to them.”
S. Rep. No.
87–1881, 1962–3 C.B. 703,
794 (1962)
. Under section 951(a)(1)(B),
each Unite
d States shareholder (U.S.
sharehold
er) of a controlled foreign
corporati
on (CFC) is generally required
to curren
tly include in its gross income
the amoun
t determined under section 956
with resp
ect to such shareholder.
The amoun
t determined under section
956 with r
espect to a U.S. shareholder of
aCFCfora
ny taxable year is the lesser
of: (1) t
he excess, if any, of the share-
holder’
spro ratashare of the average of
the amou
nts of U.S. property held (di-
rectly o
r indirectly) by the CFC as of
the clos
e of each quarter of such taxable
year, o
ver the amount of earnings and
profit
s of the CFC described in section
959(c)
(1)(A) with respect to such share-
holder
; or (2) the shareholder’spro rata
share o
f the applicable earnings of the
CFC. In
general, the amount taken into ac-
count
with respect to any U.S. property for
this p
urpose is the adjusted basis of such
2012–23 I.R.B.971June 4, 2012

property as determined for purposes of
computing earnings and profits, reduced
by any liability to which the property is
subject. Earnings and profits described
in section 959(c)(1)(A) are attributable
to amounts previously included in gross
income by the U.S. shareholder under
section 951(a)(1)(B) (or which would
have been included except for section
959(a)(2)).
Section 956(c)(1) defines U.S. property
to generally include stock of a domestic
corporation and an obligation of a United
States person (U.S. person). Section
956(c)(2), however, generally excludes
from the definition of U.S. property the
stock or obligations of a domestic corpo-
ration that is neither a U.S. shareholder of
the CFC nor a domestic corporation, 25
percent or more of the total combined vot-
ing power of which, immediately after the
CFC’s acquisition of stock in such domes-
tic corporation, is owned, or is considered
as being owned, by U.S. shareholders of
the CFC. Under §1.956–2T(d)(2), subject
to certain exceptions not relevant here, the
term “obligation” includes any bond, note,
debenture, certificate, bill receivable, ac-
count receivable, note receivable, open
account, or other indebtedness, whether or
not issued at a discount and whether or not
bearing interest.
B.NPCs with Nonperiodic (Upfront)
Payments
When a notional principal contract
(within the meaning of §1.446–3(c)(1))
(NPC) includes a significant nonperiodic
payment, the contract is generally treated
as two separate transactions. One transac-
tion is an on-market, level payment swap;
the other is a loan. For purposes of sec-
tion 956, the Commissioner may treat any
nonperiodic paymentin connection with
an NPC, whether or not it is significant,
as one or more loans.See§1.446–3(g)(4).
If a party to an NPC makes below-market
periodic payments or receives above-mar-
ket periodic payments under the terms of
the contract, typically that party will make
a nonperiodic payment, such as an upfront
payment, to the counterparty in order to
compensate for the off-market coupon
payments specified in the contract.
Forexample,ifAandBenterintoan
off-market interest rate swap the terms of
which require A to make periodic below-
market fixed rate payments to B and re-
quire B to make periodic on-market float-
ing rate payments to A, then A typically
will compensate B (for receiving the be-
low-market fixed rate payments) by mak-
ing a nonperiodic payment at the outset of
the interest rate swap (henceforth, an up-
front payment) so that the present value of
the fixed rate leg of the swap will equal the
present value of the floating rate leg of the
swap.
Recently, certain contracts (cleared
contracts), including some credit de-
fault swaps and interest rate swaps, have
begun to be cleared through U.S.-regis-
tered derivatives clearing organizations or
clearing agencies (collectively, U.S.-reg-
istered clearinghouses). Contracts cleared
through a U.S.-registered clearinghouse
generally are required to have standardized
terms. For example, credit default swaps
that are cleared through a U.S.-registered
clearinghouse have common documenta-
tion and standardizedcoupons (currently
100 or 500 basis points). Consequently,
except for the rare instance when the
market coupon rate for a particular credit
default swap is exactly 100 or 500 ba-
sis points, a credit default swap with a
standardized coupon will be off-market
and will require an upfront payment to
equalize the present value of the payment
obligations under the contract.
The volume of contracts cleared by
U.S.-registered clearinghouses is expected
to increase substantially as a result of
the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010, Pub-
lic Law No. 111–203, 124 Stat. 1376
(the Dodd-Frank Act). Title VII of the
Dodd-Frank Act, among other things: (1)
provides for the registration and com-
prehensive regulation of swap dealers
and major swap participants; (2) imposes
clearing and trade execution requirements
on many swap contracts; and (3) creates
rigorous recordkeeping and real-time re-
porting regimes.
C.Clearinghouse Margin Requirements
to Manage Credit Risk
U.S.-registered clearinghouses manage
credit risk (the risk of counterparty default)
in part by requiring that each party to a
cleared contract provide various types of
margin, including initial variation margin
and daily variation margin (both of which
are discussed in this section of the pre-
amble). Cash margin payments (as well
as other payments made pursuant to the
terms of a cleared contract) to and from
a U.S.-registered clearinghouse are made
to or through a clearing member (that is,
a futures commission merchant, broker, or
dealer who is a member of the clearing-
house) which, in turn, makes correspond-
ing payments to or receives corresponding
payments from a counterparty.
(1)Initial Variation Margin Required to
Offset Upfront Payment
The party that makes an upfront pay-
ment pursuant to a cleared contract (the
first party) has credit risk with respect to
that payment because, if the clearinghouse
(or the first party’s clearing member)
were to default, the first party would not
receive the full benefit it paid for (the
benefit of making below-market fixed
rate payments or receiving above-market
payments for the term of the contract).
When the U.S.-registered clearinghouse
makes the upfront payment to the other
party to the cleared contract (the second
party), the U.S.-registered clearinghouse
similarly has credit risk with respect to
that second party (or its clearing member).
The second party (the ultimate recipient
of the upfront payment) is thus required to
make a payment in the nature of variation
margin (initial variation margin) to the
U.S.-registered clearinghouse, generally
no later than the end of the business day
on which the upfront payment is made,
in an amount that is equal to the upfront
payment.
In some instances, the total amount of
margin posted by the second party on the
day that it is required to post initial vari-
ation margin may not equal the amount of
the first party’s upfront payment, due to ei-
ther: (1) the netting of the second party’s
notional exposure to the first party, or to
the clearinghouse, as a result of other trans-
actions; or (2) changes in the value of the
contract between the time the contract is
entered into and the time when the required
margin is paid, requiring daily variation
margin to be added to or subtracted from
the second party’s initial variation margin
payment, as the case may be. However,
on a transaction-by-transaction basis, the
payment of initial variation margin by the
second party should equal the first party’s
June 4, 20129722012–23 I.R.B.

upfront payment when any daily variation
margin is treated as separate from the ini-
tial variation margin posted on that day.
After receiving the second party’s ini-
tial variation margin payment, the U.S.-
registered clearinghouse will pay the same
amount to the first party. In each case, un-
less the first party and the second party are
clearing members of the U.S.-registered
clearinghouse, the payment will be made
to or through each party’s clearing mem-
ber, which may be an affiliate of that party.
Assume that D (a dealer under sec-
tion 475) and C (a customer) enter into a
contract that is accepted for clearing by a
U.S.-registered clearinghouse, the terms
of which require D to make below-mar-
ket periodic payments to C. D is required
under the contract to make an upfront
payment of $25,000 to compensate C for
the below-market coupon payments that
C will receive. D (not a clearing member)
makes that upfront payment to its clearing
member, who then pays the U.S.-regis-
tered clearinghouse an identical amount.
The U.S.-registeredclearinghouse in turn
pays that amount to the clearing member
for C, which makes the upfront payment
to C. C, on the same business day, makes
an initial variation margin payment of
$25,000 to its clearing member, who then
pays that amount to the U.S.-registered
clearinghouse; the U.S.-registered clear-
inghouse makes the initial variation mar-
gin payment to D’s clearing member; and
D’s clearing member makes the payment
to D. Thus, the upfront payment from D is
immediately offset by an initial variation
margin payment in the same amount from
C.
(2)Daily Variation Margin Required to
Account for Daily Market Fluctuation
In addition to initial variation margin,
U.S.-registered clearinghouses manage
credit risk by requiring that each party to
a cleared contract provide daily variation
margin (also referred to as mark-to-market
or maintenance margin). Daily variation
margin is a cash margin payment made on
a daily or intraday basis between the coun-
terparties to a contract to protect against
the risk of counterparty default. The rules
of U.S.-registered clearinghouses gener-
ally require that daily variation margin be
paid in an amount equal to the change in
the fair market value of the contract.
Explanation of Provisions
The text of these temporary regulations
also serves as the text of the proposed reg-
ulations set forth in the notice of proposed
rulemaking on this subject in this issue of
the Bulletin. These temporary regulations
establish an exception to the definition of
U.S. property for obligations of U.S. per-
sons arising from upfront payments made
with respect to certain cleared contracts
that are properly classified as NPCs. The
temporary regulations provide that obliga-
tions of U.S. persons arising from such up-
front payments by a CFC that is a dealer
in securities or commodities (within the
meaning of section 475) do not consti-
tute U.S. property for purposes of section
956(a).
To qualify for this exception: (1) the
upfront payment must be required under
a contract that is cleared by a derivatives
clearing organization (as such term is de-
finedinsection1aoftheCommodityEx-
change Act (7 U.S.C. 1a)) or a clearing
agency (as such term is defined in sec-
tion 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c)) that is registered as a
derivatives clearing organization under the
Commodity ExchangeAct or as a clearing
agency under the Securities Exchange Act
of 1934, respectively; (2) the CFC must
make the upfront payment to or through
a United States person that is a clearing
member of the derivatives clearing organi-
zation or clearing agency, or directly to the
derivatives clearing organization or clear-
ing agency if the CFC is a clearing mem-
ber of such derivatives clearing organiza-
tion or clearing agency; (3) the upfront
payment must be made, directly or indi-
rectly, to the counterparty to the contract;
(4) the counterparty to the contract must
be required to make a payment in the na-
ture of initial variation margin that is equal
(before taking into account any change in
the value of the contract between the time
the contract is entered into and the time at
which the payment is made) to the amount
of the upfront payment made by the CFC;
and (5) such payment in the nature of ini-
tial variation margin must be paid, directly
or indirectly, to the CFC.
The IRS and the Treasury Department
do not believe that an obligation of a U.S.
person created by an upfront payment re-
sulting from a cleared contract that satis-
fies the requirements listed in this regu-
lation is the type of transaction intended
to be covered by section 956, whether or
not the payment is treated as a loan under
the NPC rules under section 446. While
the section 956 exception in these tem-
porary regulations currently is limited to
cleared contracts, the IRS and the Treasury
Department continue to study, and request
comments on, whether and under what cir-
cumstances it would be appropriate to ex-
tend the exception to contracts that are not
cleared by a U.S.-registered clearinghouse,
but that would otherwise meet the criteria
set forth in these temporary regulations.
Effective/Applicability Date
These regulations apply to payments
described in §1.956–2T(b)(1)(xi) made on
or after May 11, 2012. However, taxpay-
ers may apply the rules of these regula-
tions retroactively to payments made prior
to May 11, 2012.
Special Analyses
It has been determined that this Trea-
sury decision is not asignificant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been deter-
mined that section 553(b) of the Adminis-
trative Procedure Act (5 U.S.C. chapter 5)
does not apply to these regulations. For the
applicability of the Regulatory Flexibility
Act (5 U.S.C. chapter 6), refer to the cross-
reference notice of proposed rulemaking
published in the proposed rules section in
this issue of the Bulletin. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
these regulations have been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact on small entities.
Drafting Information
The principal author of these regula-
tions is Kristine A. Crabtree of the Of-
fice of Associate Chief Counsel (Interna-
tional). However, other personnel from the
IRS and the Treasury Department partici-
pated in their development.
*****
Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
2012–23 I.R.B.973June 4, 2012

PART 1— INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.956–2T(b)(1)(xi) also issued
under 26 U.S.C. 956(e). * * *
Par. 2. Section 1.956–2 is amended by
adding a new paragraph (b)(1)(xi) to read
as follows:
§1.956–2 Definition of United States
property.
*****
(b) * * *
(1) * * *
(xi) [Reserved]. For further guidance,
see §1.956–2T(b)(1)(xi).
*****
Par. 3. Section 1.956–2T is amended
by:
1. Revising paragraphs (a) through
(d)(1).
2. Adding new paragraphs (f) and (g).
The revisions and additions read as fol-
lows:
§1.956–2T Definition of United States
property (temporary).
(a) through (b)(1)(x) [Reserved]. For
further guidance, see §1.956–2(a) through
(b)(1)(x).
(xi) An obligation of a United States
person arising from an upfront payment by
a controlled foreign corporation (within
the meaning of section 957(a)) with re-
spect to a notional principal contract
(within the meaning of §1.446–3(c)(1))
where the following conditions are satis-
fied—
(A) The controlled foreign corporation
that makes the upfront payment is a dealer
in securities or commodities (within the
meaning of section 475(c)(1) or (e)(1));
(B) The upfront payment is required un-
der a contract that is cleared by a deriva-
tives clearing organization (as such term
isdefinedinsection1aoftheCommod-
ity Exchange Act (7 U.S.C. 1a)) or a clear-
ing agency (as such term is defined in sec-
tion 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c)) that is registered as a
derivatives clearing organization under the
Commodity ExchangeAct or as a clearing
agency under the Securities Exchange Act
of 1934, respectively;
(C) The controlled foreign corporation
makes the upfront payment:
(1) To or through a United States person
that is a clearing member of a derivatives
clearing organizationorclearingagency,
or
(2) Directly to the derivatives clearing
organization or clearing agency if the con-
trolled foreign corporation is a clearing
member of such derivatives clearing or-
ganization or clearing agency;
(D) The upfront payment is made by the
derivatives clearing organization or clear-
ing agency, directly or indirectly, to the
original counterparty to the contract;
(E) The original counterparty to the
contract that receives the upfront payment,
as described in paragraph (b)(1)(xi)(D) of
this section, is required by the derivatives
clearing organization or clearing agency
to make, by the end of the business day on
which the upfront payment is made by the
controlled foreign corporation, a payment
in the nature of initial variation margin
that is equal (before taking into account
any change in the value of the contract
between the time the contract is entered
into and the time at which the payment is
made) to the amount of the upfront pay-
ment and such payment is made, directly
or indirectly, to the derivatives clearing
organization or clearing agency; and
(F) The payment in the nature of initial
variation margin is paid by the derivatives
clearing organizationorclearingagency,
directly or indirectly, to the controlled for-
eign corporation.
(G)Examples. The following examples
illustrate the application of this paragraph
(b)(1)(xi):
Example 1. CFC is a controlled foreign corpora-
tion that is wholly owned by USP, a domestic cor-
poration. CFC is a dealer in securities under sec-
tion 475(c)(1). CFC enters into a credit default swap
(that it treats as a notional principal contract for U.S.
federal income tax purposes) with unrelated coun-
terparty B. The credit default swap is accepted for
clearing by a U.S.-registered derivatives clearing or-
ganization (DCO). CFC is not a member of DCO.
CFC uses a U.S. affiliate (CM), which is a member
of DCO, as its clearing member to submit the credit
default swap to be cleared. CM is a domestic cor-
poration that is wholly owned by USP. The standard-
ized terms of the credit default swap provide that, for
a term of X years, CFC will pay B a fixed coupon
of 100 basis points per year on a notional amount of
$Y. At the time CFC and B enter into the credit de-
fault swap, the market coupon for similar credit de-
fault swaps is 175 basis points per year. To compen-
sate B for the below-market annual coupon payments
that B will receive, the contract requires CFC to make
an upfront payment through CM to DCO. DCO then
makes the upfront payment to B through B’s clearing
member. DCO also requires B to post initial variation
margin in an amount equal to the upfront payment. B
pays the initial variation margin through its clearing
member to DCO. DCO then pays the initial variation
margin through CM to CFC. Because the conditions
set out in this paragraph (b)(1)(xi) are satisfied, the
obligation of CM arising from the upfront payment
by CFC does not constitute United States property for
purposes of section 956.
Example 2.AssumethesamefactsasinExample
1, except that counterparty B is, like CM, a domestic
corporation that is wholly owned by USP. Because
the conditions set out in this paragraph (b)(1)(xi) are
satisfied, the obligations of CM and B arising from
the upfront payment by CFC do not constitute United
States property for purposes of section 956.
Example 3.AssumethesamefactsasinExample
2, except that CFC uses an unrelated person as its
clearing member. Because the conditions set out in
this paragraph (b)(1)(xi) are satisfied, the obligation
of B arising from the upfront payment by CFC does
not constitute United States property for purposes of
section 956.
(b)(2) through (d)(1) [Reserved]. For
further guidance, see §1.956–2(b)(2)
through (d)(1).
*****
(f)Effective/applicability date. Para-
graph (b)(1)(xi) applies to payments de-
scribed in §1.956–2T(b)(1)(xi) made on or
after May 11, 2012. Taxpayers may apply
the rules of paragraph (b)(1)(xi) to pay-
ments described in §1.956–2T(b)(1)(xi)
made prior to May 11, 2012.
(g)Expiration date. The applicability
of paragraph (b)(1)(xi) expires on May 8,
2015.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved May 1, 2012.
Emily S. McMahon,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on May 10, 2012,
8:45 a.m., and published in the issue of the Federal Register
for May 11, 2012, 77 F.R. 27612)
June 4, 20129742012–23 I.R.B.

Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382, 642, 1274, 1288, and other
sections of the Code, tables set forth the
rates for June 2012.
Rev. Rul. 2012–15
This revenue ruling provides various
prescribed rates for federal income tax pur-
poses for June 2012 (the current month).
Table 1 contains the short-term, mid-term,
and long-term applicable federal rates
(AFR) for the current month for purposes
of section 1274(d) of the Internal Revenue
Code. Table 2 contains the short-term,
mid-term, and long-term adjusted appli-
cable federal rates (adjusted AFR) for
the current month for purposes of section
1288(b). Table 3 sets forth the adjusted
federal long-term rate and the long-term
tax-exempt rate described in section
382(f). Table 4 contains the appropriate
percentages for determining the low-in-
come housing credit described in section
42(b)(1) for buildings placed in service
during the current month. However, under
section 42(b)(2), the applicable percentage
for non-federally subsidized new build-
ings placed in service after July 30, 2008,
and before December 31, 2013, shall not
be less than 9%. Finally, Table 5 contains
the federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.
REV. RUL. 2012–15 TABLE 1
Applicable Federal Rates (AFR) for June 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.23%.23%.23%.23%
110% AFR
.25%.25%.25%.25%
120% AFR.28%.28%.28%.28%
130% AFR.30%.30%.30%.30%
Mid-term
AFR1.07%1.07%1.07%1.07%
110% AFR1.18%1.18%1.18%1.18%
120% AFR1.28%1.28%1.28%1.28%
130% AFR1.39%1.39%1.39%1.39%
150% AFR
1.62%1.61%1.61%1.60%
175% AFR
1.88%1.87%1.87%1.86%
Long-term
AFR2.64%2.62%2.61%2.61%
110% AFR2.90%2.88%2.87%2.86%
120% AFR3.16%3.14%3.13%3.12%
130% AFR3.44%3.41%3.40%3.39%
REV. RUL. 2012–15 TABLE 2
Adjusted AFR for June 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted
AFR
.26%.26%.26%.26%
Mid-term adjusted AFR1.16%1.16%1.16%1.16%
Long-term adjusted
AFR
3.06%3.04%3.03%3.02%
2012–23 I.R.B.975June 4, 2012

REV. RUL. 2012–15 TABLE 3
Rates Under Section 382 for June 2012
Adjusted federal long-term rate for the current month3.06%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)3.26%
REV. RUL. 2012–15 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for June 2012
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.43%
Appropriate percentage for the 30% present value low-income housing credit3.18%
REV. RUL. 2012–15 TABLE 5
Rate Under Sec
tion 7520 for June 2012
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest1.2%
Section 1288.
—Treatment
of Original I
ssue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of June 2012. See Rev. Rul. 2012-15, page 975.
June 4, 20129762012–23 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Modificatio
ns to Definition of
United State
s Property
REG–107548–11
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary regula-
tions.
SUMMARY: In this issue of the Bulletin,
the IRS and the Treasury Department are
issuing temporary regulations (T.D. 9589)
relating to the treatment of upfront pay-
ments made pursuant to certain notional
principal contracts.The temporary reg-
ulations provide that certain obligations
of United States persons arising from up-
front payments made by controlled foreign
corporations pursuant to contracts that are
cleared by a derivatives clearing organiza-
tion or clearing agency do not constitute
United States property. The text of the
temporary regulations also serves as the
text of these proposed regulations.
DATES: Comments and requests for
a public hearing must be received by
August 9, 2012.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–107548–11), room
5205, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–107548–11),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, NW,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal
athttp://www.regulations.gov(IRS
REG–107548–11).
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Kristine A. Crabtree, (202)
622–3840; con
cerning submissions of
comments or a r
equest for a public hearing,
Oluwafunmila
yo Taylor, (202) 622–7180
(not toll-fre
e numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
The temporary regulations published in
this issue of the Bulletin establish an ex-
ception to the definition of United States
property (within the meaning of section
956(c)) for obligations of United States
persons arising from certain upfront pay-
ments made with respect to certain con-
tracts that are properly classified as no-
tional principal contracts for U.S. Federal
income tax purposes and that are cleared
by a derivatives clearing organization or
clearing agency. The text of those tempo-
rary regulations alsoserves as the text of
these proposed regulations. The preamble
to the temporary regulations explains the
temporary regulations and these proposed
regulations.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations, and because
these regulations do not impose a collec-
tion of information on small entities, the
Requlatory Flexibility Act (5 U.S.C. chap-
ter 6) does not apply. Pursuant to section
7805(f) of the Internal Revenue Code, this
notice of proposed rulemaking has been
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administration
for comment on its impact on small enti-
ties.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are sub-
mitted timely to the IRS as prescribed in
this preamble
under "Addresses.” In ad-
ditiontothes
pecific requests for com-
ments made els
ewhere in this preamble or
thepreamblet
o the temporary regulations,
the IRS and the
Treasury Department re-
quest commen
ts on all aspects of the pro-
posed rules.
All comments will be avail-
able atwww.r
egulations.govor upon re-
quest. A publ
ic hearing will be scheduled
if requeste
dinwritingbyanypersonwho
timely subm
itted written comments. If a
public hear
ing is scheduled, notice of the
date, time,
and place of the hearing will be
published
in theFederal Register.
Drafting I
nformation
The princi
pal author of these regu-
lations is
KristineA.Crabtreeofthe
Office of A
ssociate Chief Counsel
(Internat
ional). However, other personnel
from the I
RS and the Treasury Department
particip
ated in their development.
*****
Proposed Amendment to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.956–2(b)(1)(xi) also issued
under26U.S.C.956(e).***
Par. 2. Section 1.956–2 is amended by
adding new paragraphs (b)(1)(xi) and (f) to
read as follows:
§1.956–2 Definition of United States
property.
*****
(b)(1)(xi) [The text of this proposed
amendment is the same as the text of
§1.956–2T(b)(1)(xi) published elsewhere
in this issue of the Bulletin].
*****
(f)[Thetextofthisproposed
amendment is the same as the text of
§1.956–2T(f) published elsewhere in this
issue of the Bulletin].
2012–23 I.R.B.977June 4, 2012

Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on April 27, 2012,
8:45 a.m., and published in the issue of the Federal Register
for April 30, 2012, 77 F.R. 25378)
Notice of Proposed
Rulemaking and Notice of
Public Hearing
Regulations Pertaining to
theDisclosureofReturn
Information to Carry Out
Eligibility Requirements for
Health Insurance Affordability
Programs
REG–119632–11
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains pro-
posed regulations relating to the disclo-
sure of return information under section
6103(l)(21) of the Internal Revenue Code,
as enacted by the Patient Protection and
Affordable Care Act and the Health Care
and Education Reconciliation Act of 2010.
The regulations define certain terms and
prescribe certain items of return informa-
tion in addition to those items prescribed
by statute that will be disclosed, upon writ-
ten request, under section 6103(l)(21) of
the Internal Revenue Code.
DATES: Written (including electronic)
comments must be received by July 30,
2012. Outlines of topics to be discussed
at the public hearing scheduled for Friday,
August 31, 2012, must be received by
July 30, 2012.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR(REG–119632–11),
Room 5203, Internal Revenue Service,
PO Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may
be hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–119632–11),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, NW,
Washington, DC, or sent electronically
viatheFederaleRulemaking
Portal atwww.regulations.gov(IRS
REG–119632–11). The public hearing
will be held in the IRS Auditorium,
Internal Revenue Building, 1111
Constitution Avenue, NW, Washington,
DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed reg-
ulations, Steven Karon, (202) 622–4570;
concerning the submission of comments,
the public hearing, and to be placed on the
building access list to attend the public
hearing, Olumafunmilayo Taylor, (202)
622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Beginning in 2014, under the Patient
Protection and Affordable Care Act, Pub-
lic Law 111–148 (124 Stat. 119 (2010)),
and the Health Care and Education Recon-
ciliation Act of 2010, Public Law 111–152
(124 Stat. 1029 (2010)) (collectively, the
Affordable Care Act), Affordable Insur-
ance Exchanges (Exchanges) will provide
competitive marketplaces for individuals
and small employers to directly compare
available private health insurance options
(qualified health plans, or QHPs) on the
basis of price, quality, and other factors,
and to purchase such coverage. A Feder-
ally-facilitated Exchange will operate on
behalf of States electing not to pursue a
State-based Exchange. In general, a QHP
is a health plan offered by a health insur-
ance issuer that meets minimum standards
in the law and set by an Exchange.
Qualified individuals and small em-
ployers will be able to purchase private
health insurance through Exchanges. Cer-
tain individuals who choose to obtain
coverage through an Exchange will be
eligible to qualify for a new premium
tax credit and/or cost-sharing reductions
established to help make the purchase of
insurance more affordable.
Section 1401 of the Affordable Care
Act amended the Internal Revenue Code
to add section 36B, providing for the pre-
mium tax credit to help eligible individuals
and families afford health insurance cover-
age. Section 1402 of the Affordable Care
Act provides reduced cost-sharing for cer-
tain individuals enrolled in qualified health
plans through the Exchange, decreasing
the individual’s out-of-pocket limits, de-
ductibles, co-insurance, and co-payments
in certain situations.
Section 1411(a) of the Affordable
Care Act directs the Secretary of the De-
partment of Health and Human Services
(HHS) to establish a program under which
Exchanges will determine whether in-
dividuals are eligible to enroll in QHPs
through the Exchange, and whether they
are eligible for advance payments of the
premium tax credit and cost-sharing re-
ductions. Section 1412 of the Affordable
Care Act directs the Secretary of HHS
to establish a program for determining
eligibility for advance payments of the
premium tax credit and cost-sharing re-
ductions that may be paid directly to an
insurance company on behalf of a tax-
payer. Eligibility for advance payments,
like eligibility for the premium tax credit
itself, is based in part on the household
income of the individual who will claim
the credit. Household income is defined in
section 36B(d)(2) as the total of the modi-
fied adjusted gross incomes (MAGI) of the
taxpayer claiming the premium tax credit
and those other individuals for whom the
taxpayer was allowed a deduction under
section 151 and who were required to file
ataxreturn.
Section 1413(a) of the Affordable Care
Act directs the Secretary of HHS to es-
tablish a system under which an individ-
ual may submit a single, streamlined appli-
cation to apply for specified insurance af-
fordability programs (that is, the premium
tax credit under section 36B, cost-shar-
ing reductions under section 1402 of the
Affordable Care Act, Medicaid, the Chil-
dren’s Health Insurance Program (CHIP),
and a State’s basic health program, if ap-
plicable, under section 1331 of the Afford-
able Care Act). The system must be com-
patible with the processes set up to deter-
mine eligibility for advance payments of
the premium tax credit and cost-sharing
reductions. Where an individual seeking
eligibility for any of these insurance af-
fordability programs is found to be eligi-
ble for Medicaid or CHIP, the individual is
enrolled in that program. If an individual
is not eligible for one of these programs,
the Exchange will make the determination
(or provide for HHS to make the deter-
mination) as to the individual’s eligibility
for advance payments of the premium tax
June 4, 20129782012–23 I.R.B.

credit under section 36B and for cost-shar-
ing reductions, and the amount of any ad-
vance payments. Under section 1412(c)(2)
of the Affordable Care Act, advance pay-
ments are made monthly (or on another pe-
riodic basis as HHS may provide) directly
to the issuer of the qualified health plan in
which the individual enrolls.
Section 1411(b)(3) of the Affordable
Care Act requires that individuals seek-
ing an eligibility determination for ad-
vance payments of the premium tax credit
or for cost-sharing reductions provide
the Exchange with information regard-
ing their household income and family
size to demonstrate that they meet the
income-based eligibility requirements.
However, section 1411(c)(4)(B) of the
Affordable Care Act grants the Secretary
of HHS authority to modify the methods
used for the verification of information
if the Secretary of HHS determines those
modifications would reduce the adminis-
trative costs and burdens on individuals
seeking coverage through an Exchange.
The section explicitly gives the Secretary
of HHS authority to change the manner
in which Exchanges determine eligibility
for advance payments of the premium tax
credit or for cost-sharing reductions, so
long as any applicable requirements un-
der section 6103 of the Internal Revenue
Code with respect to the confidentiality,
disclosure, maintenance and use of return
information would still be met. Section
1411(g) of the Affordable Care Act further
provides that individuals will be required
to provide only the minimum amount of
information needed to authenticate an in-
dividual’s identity and to determine the
individual’s eligibility for, and amount
of, advance payments of the premium tax
credit or cost-sharing reductions.
In proposing regulations in theFed-
eral Registeron August 17, 2011, the
Secretary of HHS concluded that a less
burdensome and more reasonable eli-
gibility process would not require an
individual to provide an Exchange with
specific income-related information, such
as the individual’s MAGI (76 FR 51202
at 51214). Accordingly, the Secretary
of HHS promulgated final regulations
published in theFederal Registeron
March 27, 2012 (77 FR 18310), limiting
the information an individual needs to
provide to an Exchange for purposes
of income verification and allowing the
Exchange to solicit information from
the IRS through HHS with respect to
the individual and his family members
whose names and social security numbers,
or adoption taxpayer identification
numbers, are provided. The regulations
also provide guidance on the eligibility
determination process for enrollment in a
QHP, advance payments of the premium
tax credit and cost-sharing reductions, and
other insurance affordability programs.
Additionally, the Secretary of HHS
promulgated final regulations published
in theFederal Registeron March 23,
2012 (77 FR 17144) that provide
revised eligibility rules for Medicaid.
The Treasury Department and the IRS
proposed regulations in theFederal
Registeron August 17, 2011 (76 FR
51202) to implement the new premium tax
credit.
Section 6103(l)(21) permits the disclo-
sure of return information to assist Ex-
changes in performing certain functions
set forth in section 1311 of the Afford-
able Care Act for which income verifi-
cation is required (including determina-
tions of eligibility for the insurance af-
fordability programs described in the Af-
fordable Care Act), as well as to assist
State agencies administering a State Med-
icaid program under title XIX of the So-
cial Security Act, CHIP under title XXI of
the Social Security Act, or a basic health
program under section 1331 of the Af-
fordable Care Act (if applicable). Sec-
tion 6103(l)(21) identifies specific items of
return information that will be disclosed
and permits the disclosure of such other
items prescribed by regulation that might
indicate whether an individual is eligible
for the premium tax credit under section
36B or cost-sharing reductions under sec-
tion 1402, and the amount thereof. After
an individual submits an application for fi-
nancial assistance in obtaining health cov-
erage provided pursuant to Title I, subtitle
E,oftheAffordableCareAct(“theappli-
cation”) to an Exchange or State agency,
the IRS will disclose the available items
of return information described under sec-
tion 6103(l)(21)(A) to HHS. Pursuant to
section 6103(l)(21)(B), HHS will then dis-
close the information to the Exchange or
State agency that is processing the appli-
cation.
As a condition for receiving return in-
formation under section 6103(l)(21)(A)
and (B), each receiving entity (that is,
HHS, the Exchanges, and State agencies
that administer Medicaid, CHIP, or basic
health plans, and their respective contrac-
tors) is required to adhere to the safeguards
established under section 6103(p)(4). Fi-
nal HHS regulations published in the
Federal Registeron March 27, 2012
(77 FR at 18446, 18450) state that to
be certified by HHS an Exchange must
demonstrate readiness to meet the section
6103 confidentiality requirements with
respect to the items of return information
the Exchange will receive. As described
in section 6103(l)(21)(C), each receiving
entity may then use the return information
received under sections 6103(l)(21)(A)
and (B) only for the purposes of, and to
the extent necessary in, establishing eli-
gibility for participation in the Exchange,
verifying the appropriate amount of any
advance payments of the premium tax
credit or cost-sharing reductions, and de-
termining eligibility for participation in a
State Medicaid program, CHIP, or basic
health program under section 1331 of the
Affordable Care Act.
Under section 6103(l)(21)(A), the IRS
will disclose to HHS (including its con-
tractor(s)) certain items of return informa-
tion, as enumerated in the statute or by
regulation, for any relevant taxpayer. For
purposes of these regulations, a relevant
taxpayer is defined to be any individual
listed, by name and social security number
or adoption taxpayer identification number
(“taxpayer identity information”), on the
application whoseincome may bear upon
a determination of the eligibility of an in-
dividual for an insurance affordability pro-
gram. For each relevant taxpayer, section
6103(l)(21) explicitly authorizes the dis-
closure of the following items of return
information from the reference tax year:
taxpayer identity information, filing sta-
tus, the number of individuals for which a
deduction under section 151 was allowed
(“family size”), MAGI, and the taxable
year to which any such information relates
or, alternatively, that such information is
not available. The “reference tax year”
is the first calendar year or, where no re-
turn information is available in that year
the second calendar year, prior to the sub-
mission of the application. MAGI is de-
fined under section 36B as the taxpayer’s
adjusted gross income defined under sec-
tion 62, increased by three components:
2012–23 I.R.B.979June 4, 2012

(1) any amount excluded from gross in-
come under section 911, (2) any amount
of interest received or accrued by the tax-
payer during the taxable year that is ex-
empt from tax, and (3) the amount of social
security benefits of the taxpayer excluded
from gross income under section 86 for the
tax year.
In some situations, the IRS will be
unable to calculate MAGI. While un-
common, for certain relevant taxpayers
who receive nontaxable social security
benefits, the IRS may not have complete
information from which to determine the
amount of those benefits. If the IRS has
information indicating that a relevant tax-
payer received nontaxable social security
benefits, but is unable to determine the
amount of those benefits, the IRS will
provide the aggregate amount of the other
components used to calculate the relevant
taxpayer’s MAGI, as well as information
indicating that the amount of nontaxable
social security benefits must still be taken
into account to determine MAGI. Simi-
larly, where MAGI is not available, the
IRS will disclose the adjusted gross in-
come, as well as information indicating
that the other components of MAGI must
still be taken into account to determine
MAGI. Because the Affordable Care Act
and HHS’s final regulations (77 FR at
18456–18458) require that Exchanges use
alternative means to verify income where
information is not available from the IRS,
these explanatory items may assist an
Exchange in determining an individual’s
eligibility for, and amount of, any advance
payment of the premium tax credit or
cost-sharing reductions.
The proposed regulations further pro-
vide that, in certain instances, where some
or all of the items of return information
prescribed by statute or regulation is un-
available, the IRS will provide information
indicating why the particular item of return
information is not available. Where an in-
dividual jointly filed with a spouse who is
not a relevant taxpayer (that is, that spouse
is not included on the application), the IRS
will not disclose MAGI from the joint re-
turn because it cannot be appropriately al-
located between the two spouses. Instead,
the IRS will disclose that a joint return
had been filed. This additional informa-
tion may help individuals correct any er-
rors or understand why they need to pursue
alternative routes to verify their income.
This information, therefore, also can assist
Exchanges in determining whether an in-
dividual is eligible for advance payments
of the premium tax credit or cost-sharing
reductions.
Additionally, the IRS may have infor-
mation in its records indicating that a rele-
vant taxpayer had been a victim of iden-
tity theft or that a relevant taxpayer has
been reported as deceased. The proposed
regulations provide that the IRS will dis-
close that, although a return for that tax-
payer is on file, the information described
under section 6103(l)(21) is not being pro-
vided because IRS records suggest that the
Exchange should take additional steps to
authenticate the identities of the relevant
taxpayers and may need to use alternate
means for income verification.
Where an individual who is listed as a
dependent on the application (for the tax
year in which the premium tax credit will
be claimed) filed a return in the reference
tax year but did not have a tax filing re-
quirement for that year (based upon the
return filed), the IRS will provide infor-
mation indicating thedependent listed did
not have a filing requirement because the
information is relevant to the Exchange’s
computation of household income.
The final regulations issued by HHS
provide that advance payments of the
premium tax credit will not be permitted
where the relevant taxpayer has received
advance payments in the reference tax
year and failed to file a return reconcil-
ing the advance payments with the actual
premium tax credit. (77 FR at 18453).
Therefore, these proposed regulations pro-
vide that the IRS will disclose to HHS that
a relevant taxpayer who received an ad-
vance payment of a premium tax credit in
the reference tax year did not file a return
reconciling the advance payments with
anypremiumtaxcreditavailable.
Special Analyses
It has been determined that this Notice
of Proposed RuleMaking is not a signifi-
cant regulatory action as defined in Execu-
tive Order 12866, as supplemented by Ex-
ecutive Order 13563. Therefore, a regu-
latory assessment is not required. It has
also been determined that, because the reg-
ulations proposed do not impose a collec-
tion of information on small entities, the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) does not apply. Pursuant to section
7805(f) of the Code, this notice of pro-
posed rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Public Hearing
The Treasury Department and the IRS
request comments on all aspects of the
proposed rules. A public hearing has
been scheduled for August 31, 2012, at
10:00 a.m., in the IRS Auditorium, Internal
Revenue Building, 1111 Constitution
Avenue, NW, Washington, DC. Due to
building security procedures, visitors
must enter at the Constitution Avenue
entrance. In addition, all visitors must
present photo identification to enter the
building. Because of access restrictions,
visitors will not be admitted beyond the
immediateentranceareamorethan30
minutes before the hearing starts. For
information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER
INFORMATION CONTACT” section of
this preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing must
submit written or electronic comments and
an outline of the topics to be discussed
and the time to be devoted to each topic
(a signed original and eight (8) copies) by
July 30, 2012. A period of 10 minutes will
be allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receivingoutlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of the regulations
is Steven L. Karon of the Office of the
Associate Chief Counsel, Procedure and
Administration.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 301 is
amended as follows:
June 4, 20129802012–23 I.R.B.

PART 301 — PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part301isamendedbyaddingtheentryfor
§301.6103(l)(21) to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.6103(l)(21)–(1) also issued
under 26 U.S.C. 6103(l)(21) and 6103(q).
*****
Par. 2. Add §301.6103(l)(21)–1 to read
as follows:
§301.6103(l)(21)–1 Disclosure of return
information to the Department of
Health and Human Services to carry
out eligibility requirements for health
insurance affordability programs.
(a)General rule. Pursuant to the pro-
visions of section 6103(l)(21)(A) of the
Internal Revenue Code, officers and em-
ployees of the Internal Revenue Service
will disclose, upon written request, for
each relevant taxpayer on a single applica-
tion those items of return information that
are described under section 6103(l)(21)(A)
and paragraphs (a)(1) through (6) of this
section, for the reference tax year, as
applicable, to officers, employees and con-
tractors of the Department of Health and
Human Services, solely for purposes of,
and to the extent necessary in, establishing
an individual’s eligibility for participa-
tion in an Exchange established under the
Patient Protection and Affordable Care
Act, including eligibility for, and deter-
mining the appropriate amount of, any
premium tax credit under section 36B or
cost-sharing reduction under section 1402
of the Patient Protection and Affordable
Care Act, or determining eligibility for
the State programs described in section
6103(l)(21)(A).
(1) With respect to each relevant taxpayer
for the reference tax year where the
amount of social security benefits not
included in gross income under sec-
tion 86 of the Internal Revenue Code
of that relevant taxpayer is unavail-
able:
(i) The aggregate amount of the fol-
lowing items of return informa-
tion —
(A) Adjusted gross income, as de-
finedbysection62oftheIn-
ternal Revenue Code;
(B) Any amount excluded from
gross income under section
911 of the Internal Revenue
Code; and
(C) Any amount of interest re-
ceived or accrued by the tax-
payer during the taxable year
which is exempt from tax.
(ii) Information indicating that the
amount of social security bene-
fits not included in gross income
under section 86 of the Internal
Revenue Code is unavailable.
(2) Adjusted gross income, as defined by
section 62 of the Internal Revenue
Code, of a relevant taxpayer for the
reference tax year, in circumstances
where the modified adjusted gross in-
come (MAGI), as defined by section
36B(d)(2)(B) of the Internal Rev-
enue Code, of that relevant taxpayer
is unavailable, as well as informa-
tion indicating that the components
of MAGI other than adjusted gross
income must be taken into account to
determine MAGI;
(3) Information indicating that certain
return information of a relevant tax-
payer is unavailable for the reference
tax year because the relevant taxpayer
jointly filed a U.S. Individual Income
Tax Return for that year with a spouse
who is not a relevant taxpayer listed
on the same application;
(4) Information indicating that, although a
return for an individual identified on
the application as a relevant taxpayer
for the reference tax year is available,
return information is not being pro-
vided because of possible authentica-
tion issues with respect to the identity
of the relevant taxpayer;
(5)
Information indicating that a relevant
taxpayer who is identified as a depen-
dent for the tax year in which the pre-
mium tax credit under section 36B of
the Internal Revenue Code would be
claimed, did not have a filing require-
ment for the reference tax year based
upon the U.S. Individual Income Tax
Return the relevant taxpayer filed for
the reference tax year; and
(6) Information indicating that a relevant
taxpayer who received advance pay-
ments of the premium tax credit in the
reference tax year did not file a tax
return for the reference tax year rec-
onciling the advance payments of the
premium tax credit with any premium
tax credit under section 36B of the In-
ternal Revenue Code available for that
year.
(b)Relevant
taxpayer defined.Forpur-
poses of para
graph (a) of this section, a
relevant tax
payer is defined to be any in-
dividual lis
ted, by name and social secu-
rity number
or adoption taxpayer identifi-
cation numb
er, on an application submit-
ted pursuan
t to Title I, Subtitle E, of the Pa-
tient Prote
ction and Affordable Care Act,
whose inco
me may bear upon a determi-
nation of a
ny advance payment of any pre-
mium tax cr
edit under section 36B of the
Internal R
evenue Code, cost-sharing re-
duction u
nder section 1402 of the Patient
Protecti
on and Affordable Care Act, or el-
igibilit
y for any program described in sec-
tion 6103
(l)(21)(A) of the Internal Rev-
enue Code
.
(c)Refer
ence tax year defined.Forpur-
poses of s
ection 6103(l)(21)(A) of the In-
ternal R
evenue Code and this section, the
referen
ce tax year is the first calendar year
or, wher
e no return information is avail-
able in t
hat year, the second calendar year,
prior to
the submission of an application
pursua
nttoTitleI,SubtitleE,ofthePa-
tient P
rotection and Affordable Care Act.
(d)Eff
ective/applicability date.This
sectio
n applies to disclosures to the De-
partme
nt of Health and Human Services
on or af
ter these proposed regulations are
publis
hed as final regulations in theFed-
eral R
egister.
Steve
n T. Miller,
Deput
y Commissioner for
Servi
ces and Enforcement.
(Filed by the Office of the Federal Register on April 27, 2012,
8:45 a.m., and published in the issue of the Federal Register
for Ap
ril 30, 2012, 77 F.R. 25378)
2012–23 I.R.B.981June 4, 2012

Announcement of Disciplinary Sanctions From the Office
of Professional Responsibility
Announcement 2012-24
TheOfficeofProfessionalResponsi-
bility (OPR) announcesrecent disciplinary
sanctions involving attorneys, certified
public accountants, enrolled agents, en-
rolled actuaries, enrolled retirement plan
agents, and appraisers. These individuals
are subject to the regulations governing
practice before the Internal Revenue Ser-
vice (IRS), which are set out in Title 31,
Code of Federal Regulations, Part 10, and
which are published in pamphlet form as
Treasury Department Circular No. 230.
The regulations prescribe the duties and
restrictions relating to such practice and
prescribe the disciplinary sanctions for
violating the regulations.
The disciplinary sanctions to be im-
posed for violation of the regulations are:
Disbarred from practice before the
IRS—An individual who is disbarred is
not eligible to represent taxpayers before
the IRS.
Suspended from practice before the
IRS—An individual who is suspended is
not eligible to represent taxpayers before
the IRS during the term of the suspension.
Censured in practice before the
IRS—Censure is a public reprimand. Un-
like disbarment or suspension, censure
does not affect an individual’s eligibility
to represent taxpayers before the IRS, but
OPR may subject the individual’s future
representations to conditions designed to
promote high standards of conduct.
Monetary penalty—A monetary
penalty be imposed on an individual who
engages in conduct subject to sanction
or on an employer, firm, or entity if the
individual was acting on its behalf and if it
knew, or reasonably should have known,
of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in
any administrative proceeding before the
Department of the Treasury or the IRS.
Under the regulations, attorneys, cer-
tified public accountants, enrolled agents,
enrolled actuaries, and enrolled retirement
plan agents may not assist, or accept assis-
tance from, individuals who are suspended
or disbarred with respect to matters consti-
tuting practice (i.e., representation) before
the IRS, and they may not aid or abet sus-
pended or disbarred individuals to practice
before the IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision after hearing,
Suspended by decision after hearing,
Censured by decision after hearing,
Monetary penalty imposed after hear-
ing, and Disqualified after hearing—An
administrative law judge (ALJ) conducted
an evidentiary hearing upon OPR’s com-
plaint alleging violation of the regulations
and issued a decision imposing one of
these sanctions. After 30 days from the
issuance of the decision, in the absence of
an appeal, the ALJ’s decision became the
final agency decision.
Disbarred by default decision, Sus-
pended by default decision, Censured by
default decision, Monetary penalty im-
posed by default decision, and Disqual-
ified by default decision—An ALJ, after
findingthatnoanswertoOPR’scomplaint
had been filed, granted OPR’s motion for a
default judgment and issued a decision im-
posing one of these sanctions.
Disbarment by decision on appeal,
Suspended by decision on appeal, Cen-
sured by decision on appeal, Monetary
penalty imposed by decision on ap-
peal, and Disqualified by decision on
appeal—The decision of the ALJ was
appealed to the agency appeal authority,
acting as the delegate of the Secretary
of the Treasury, and the appeal authority
issued a decision imposing one of these
sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Mone-
tary penalty imposed by consent, and
Disqualified by consent—In lieu of a
disciplinary proceeding being instituted
or continued, an individual offered a con-
sent to one of these sanctions and OPR
accepted the offer. Typically, an offer
of consent will provide for: suspension
for an indefinite term; conditions that the
individual must observe during the sus-
pension; and the individual’s opportunity,
after a stated number of months, to file
with OPR a petition for reinstatement af-
firming compliance with the terms of the
consent and affirming current eligibility
to practice (i.e., an active professional li-
cense or active enrolled agent status). An
enrolled agent or an enrolled retirement
plan agent may also offer to resign in order
to avoid a disciplinary proceeding.
Suspended by decision in expedited
proceeding, Suspended by default de-
cision in expedited proceeding, Sus-
pended by consent in expedited pro-
ceeding—OPR instituted an expedited
proceeding for suspension (based on cer-
tain limited grounds, including loss of a
professional license and criminal convic-
tions).
OPR has authority to disclose the
grounds for disciplinary sanctions in these
situations: (1) an ALJ or the Secretary’s
delegate on appeal has issued a decision
on or after September 26, 2007, which was
theeffectivedateofamendmentstothe
regulations that permit making such deci-
sions publicly available; (2) the individual
has settled a disciplinary case by signing
OPR’s “consent to sanction” form, which
requires consenting individuals to admit to
one or more violations of the regulations
and to consent to the disclosure of the in-
dividual’s own return information related
to the admitted violations (for example,
failure to file Federal income tax returns);
or (3) OPR has issued a decision in an
expedited proceeding for suspension.
Announcements of disciplinary sanc-
tions appear in the Internal Revenue Bul-
letin at the earliest practicable date. The
sanctions announced below are alphabet-
ized first by the names of states and sec-
ond by the last names of individuals. Un-
less otherwise indicated, section numbers
(e.g., § 10.51) refer to the regulations.
June 4, 20129822012–23 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Colorado
Castle RockBaca, Cesar A.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment)
Indefinite from
December 6, 2011
Florida
MiamiFreeman, Lewis B.CPASuspended by decision
in expedited proceeding
under § 10.82 (conviction
under 18 U.S.C. § 1349,
conspiracy to commit
mail fraud)
Indefinite from
January 29, 2012
Massachusetts
DoverBarrett, Donal B.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment)
Indefinite from
December 13, 2011
LynnBeato, Pedro L.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment)
Indefinite from
December 13, 2011
Michigan
DetroitRoss, Mark E.Attorneyuspended by decision
in expedited proceeding
under § 10.82 (suspension
of attorney license)
Indefinite from
December 6, 2011
Missouri
Baca, Cesar A.,
See Colorado
New Jersey
HamiltonCarlin, Kevin J.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(suspension of attorney
license)
Indefinite from
December 13, 2011
HowellMueller, ErikAttorneySuspended by default
decision in expedited
proceeding under § 10.82
(suspension of attorney
license)
Indefinite from
December 13, 2011
2012–23 I.R.B.983June 4, 2012

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
New Jersey (Continued)
Scotch PlainsSchetelich, TimothyCPASuspended by default
decision in expedited
proceeding under § 10.82
(conviction under
26 U.S.C. § 7206(2),
preparation of false
income tax returns)
Indefinite from
December 13, 2011
WoodburyWilliams, Richard F.CPASuspended by consent
for admitted violation
of § 10.51(willfully
counseled or suggested to
clients to violate Federal
tax law)
Indefinite from
November 29, 2011
New York
Barrett, Donal B.,
See Massachusetts
HalesiteDonner, Andrew S.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment)
Indefinite from
December 13, 2011
BuffaloGoods, Robert R.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment
and conviction under
18 U.S.C. § 1344, scheme
to defraud a bank)
Indefinite from
December 13, 2011
Mueller, Erik,
See New Jersey
West Hampton Beach Price, Peter R.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(suspension of attorney
license)
Indefinite from
December 13, 2011
New YorkStarr, Kenneth I.CPASuspended by default
decision in expedited
proceeding under
§ 10.82 (conviction
under 18 U.S.C. § 1343,
wire fraud, conviction
under 18 U.S.C. § 1956,
money laundering and
under 15 U.S.C. § 80b–6,
investment advisor fraud)
Indefinite from
December 13, 2011
June 4, 20129842012–23 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
New York (Continued)
Staten IslandVago, DavidCPASuspended by default
decision in expedited
proceeding under
§ 10.82 (conviction
under 18 U.S.C. § 371,
conspiracy to commit
immigration fraud and
make false statements)
Indefinite from
December 13, 2011
BinghamtonWhiting III, Kenneth P. AttorneySuspended by default
decision in expedited
proceeding under
§ 10.82 (conviction
under 26 U.S.C. § 7203,
willful failure to file an
income tax return)
Indefinite from
December 13, 2011
North Carolina
FayettevilleChestnut, A. JohnsonCPAReinstated
to practice
before the IRS,
December 8, 2011
Tennessee
HixsonMiller, Herbert A.CPAReinstated to
practice before the
IRS,
December 14, 2011
2012–23 I.R.B.985June 4, 2012

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
June 4, 2012i2012–23 I.R.B.

Numerical Finding List
1
Bulletins 2012–1 through 2012–23
Announcements:
2012-1, 2012-1 I.R.B.249
2012-2, 2012-2 I.R.B.285
2012-3, 2012-4 I.R.B.335
2012-4, 2012-4 I.R.B.335
2012-5, 2012-5 I.R.B.348
2012-6, 2012-6 I.R.B.366
2012-7, 2012-6 I.R.B.367
2012-8, 2012-7 I.R.B.373
2012-9, 2012-7 I.R.B.377
2012-11, 2012-13 I.R.B.611
2012-12, 2012-12 I.R.B.562
2012-13, 2012-16 I.R.B.805
2012-14, 2012-14 I.R.B.721
2012-15, 2012-15 I.R.B.794
2012-16, 2012-18 I.R.B.876
2012-17, 2012-18 I.R.B.876
2012-18, 2012-16 I.R.B.845
2012-19, 2012-20 I.R.B.934
2012-20, 2012-18 I.R.B.876
2012-21, 2012-19 I.R.B.898
2012-22, 2012-19 I.R.B.899
2012-23, 2012-22 I.R.B.967
2012-24, 2012-23 I.R.B.982
Notices:
2012-1, 2012-2 I.R.B.260
2012-3, 2012-3 I.R.B.289
2012-4, 2012-3 I.R.B.290
2012-5, 2012-3 I.R.B.291
2012-6, 2012-3 I.R.B.293
2012-7, 2012-4 I.R.B.308
2012-8, 2012-4 I.R.B.309
2012-9, 2012-4 I.R.B.315
2012-10, 2012-5 I.R.B.343
2012-11, 2012-5 I.R.B.346
2012-12, 2012-6 I.R.B.365
2012-13, 2012-9 I.R.B.421
2012-14, 2012-8 I.R.B.411
2012-15, 2012-9 I.R.B.424
2012-16, 2012-9 I.R.B.427
2012-17, 2012-9 I.R.B.430
2012-18, 2012-10 I.R.B.438
2012-19, 2012-10 I.R.B.440
2012-20, 2012-13 I.R.B.574
2012-21, 2012-10 I.R.B.450
2012-22, 2012-13 I.R.B.576
2012-23, 2012-11 I.R.B.483
2012-24, 2012-13 I.R.B.578
2012-25, 2012-15 I.R.B.789
2012-26, 2012-17 I.R.B.847
2012-27, 2012-17 I.R.B.849
Notices— Continued:
2012-28, 2012-17 I.R.B.850
2012-29, 2012-18 I.R.B.872
2012-30, 2012-18 I.R.B.874
2012-31, 2012-20 I.R.B.906
2012-32, 2012-20 I.R.B.910
2012-33, 2012-20 I.R.B.912
2012-34, 2012-21 I.R.B.937
2012-35, 2012-21 I.R.B.937
2012-36, 2012-22 I.R.B.962
Proposed Regulations:
REG-168745-03, 2012-14 I.R.B.718
REG-137589-07, 2012-21 I.R.B.942
REG-139991-08, 2012-21 I.R.B.945
REG-109369-10, 2012-9 I.R.B.434
REG-110980-10, 2012-13 I.R.B.581
REG-113770-10, 2012-13 I.R.B.587
REG-113903-10, 2012-11 I.R.B.486
REG-120282-10, 2012-11 I.R.B.487
REG-130302-10, 2012-8 I.R.B.412
REG-135491-10, 2012-16 I.R.B.803
REG-149625-10, 2012-2 I.R.B.279
REG-102988-11, 2012-4 I.R.B.326
REG-107548-11, 2012-23 I.R.B.977
REG-115809-11, 2012-13 I.R.B.598
REG-117645-12, 2012-22 I.R.B.965
REG-119632-11, 2012-23 I.R.B.978
REG-124627-11, 2012-8 I.R.B.417
REG-124791-11, 2012-15 I.R.B.791
REG-130777-11, 2012-5 I.R.B.347
REG-132736-11, 2012-15 I.R.B.793
REG-135071-11, 2012-12 I.R.B.561
REG-136008-11, 2012-19 I.R.B.881
REG-141268-11, 2012-19 I.R.B.896
REG-144267-11, 2012-21 I.R.B.949
REG-145474-11, 2012-11 I.R.B.495
Revenue Procedures:
2012-1, 2012-1 I.R.B.1
2012-2, 2012-1 I.R.B.92
2012-3, 2012-1 I.R.B.113
2012-4, 2012-1 I.R.B.125
2012-5, 2012-1 I.R.B.169
2012-6, 2012-1 I.R.B.197
2012-7, 2012-1 I.R.B.232
2012-8, 2012-1 I.R.B.235
2012-9, 2012-2 I.R.B.261
2012-10, 2012-2 I.R.B.273
2012-11, 2012-7 I.R.B.368
2012-12, 2012-2 I.R.B.275
2012-13, 2012-3 I.R.B.295
2012-14, 2012-3 I.R.B.296
2012-15, 2012-7 I.R.B.369
2012-16, 2012-10 I.R.B.452
2012-17, 2012-10 I.R.B.453
Revenue Procedures— Continued:
2012-18, 2012-10 I.R.B.455
2012-19, 2012-14 I.R.B.689
2012-20, 2012-14 I.R.B.700
2012-21, 2012-11 I.R.B.484
2012-22, 2012-17 I.R.B.853
2012-23, 2012-14 I.R.B.712
2012-24, 2012-20 I.R.B.913
2012-25, 2012-20 I.R.B.914
2012-26, 2012-20 I.R.B.933
2012-27, 2012-21 I.R.B.940
Revenue Rulings:
2012-1, 2012-2 I.R.B.255
2012-2, 2012-3 I.R.B.286
2012-3, 2012-8 I.R.B.383
2012-4, 2012-8 I.R.B.386
2012-5, 2012-5 I.R.B.337
2012-6, 2012-6 I.R.B.349
2012-7, 2012-6 I.R.B.362
2012-8, 2012-13 I.R.B.563
2012-9, 2012-11 I.R.B.475
2012-10, 2012-14 I.R.B.614
2012-11, 2012-14 I.R.B.686
2012-12, 2012-15 I.R.B.748
2012-13, 2012-19 I.R.B.878
2012-15, 2012-23 I.R.B.975
Treasury Decisions:
9559, 2012-2 I.R.B.252
9560, 2012-4 I.R.B.299
9561, 2012-5 I.R.B.341
9562, 2012-5 I.R.B.339
9563, 2012-6 I.R.B.354
9564, 2012-14 I.R.B.614
9565, 2012-8 I.R.B.378
9566, 2012-8 I.R.B.389
9567, 2012-8 I.R.B.395
9568, 2012-12 I.R.B.499
9569, 2012-11 I.R.B.465
9570, 2012-11 I.R.B.477
9571, 2012-11 I.R.B.468
9572, 2012-11 I.R.B.471
9573, 2012-12 I.R.B.498
9574, 2012-12 I.R.B.559
9575, 2012-15 I.R.B.749
9576, 2012-15 I.R.B.723
9577, 2012-15 I.R.B.730
9579, 2012-16 I.R.B.796
9580, 2012-16 I.R.B.801
9581, 2012-16 I.R.B.798
9582, 2012-18 I.R.B.868
9583, 2012-18 I.R.B.866
9584, 2012-20 I.R.B.900
9585, 2012-21 I.R.B.935
9586, 2011-22 I.R.B.960
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2011–27 through 2011–52 is in Internal Revenue Bulletin
2011–52, dated December 27, 2011.
2012–23 I.R.B.iiJune 4, 2012

Treasury Decisions— Continued:
9587, 2012-22 I.R.B.953
9588, 2012-23 I.R.B.969
9589, 2012-23 I.R.B.971
June 4, 2012iii2012–23 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2012–1 through 2012–23
Announcements:
2002-44
Supplemented by
Notice 2012-13, 2012-9 I.R.B.421
2010-19
Obsoleted by
Ann. 2012-12, 2012-12 I.R.B.562
2011-63
Corrected by
Ann. 2012-9, 2012-7 I.R.B.377
Notices:
2006-52
As clarified and amplified by Notice 2008-40, is
modified by
Notice 2012-26, 2012-17 I.R.B.847
2006-87
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
2006-99
Superseded in part by
Notice 2012-20, 2012-13 I.R.B.574
2007-25
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
2007-47
Obsoleted by
REG-137589-07, 2012-21 I.R.B.942
2007-77
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
2007-95
Obsoleted in part by
T.D. 9576, 2012-15 I.R.B.723
2008-98
Modified by
Notice 2012-29, 2012-18 I.R.B.872
2008-107
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
2009-86
Modified by
Notice 2012-29, 2012-18 I.R.B.872
2010-27
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
Notices— Continued:
2010-88
As modified by Ann. 2011-40, is superseded by
Notice 2012-1, 2012-2 I.R.B.260
2010-92
Obsoleted by
T.D. 9577, 2012-15 I.R.B.730
2011-8
Superseded by
Notice 2012-19, 2012-10 I.R.B.440
2011-28
Superseded by
Notice 2012-9, 2012-4 I.R.B.315
Proposed Regulations:
REG-208274-86
Withdrawn by
Ann. 2012-11, 2012-13 I.R.B.611
REG-151687-10
Withdrawn by
Ann. 2012-23, 2012-22 I.R.B.967
Revenue Procedures:
2000-43
Amplified, modified and superseded by
Rev. Proc. 2012-18, 2012-10 I.R.B.455
2003-61
Superseded by
Notice 2012-8, 2012-4 I.R.B.309
2007-44
Modified by
Ann. 2012-3, 2012-4 I.R.B.335
2010-43
Superseded by
Rev. Proc. 2012-22, 2012-17 I.R.B.853
2011-1
Superseded by
Rev. Proc. 2012-1, 2012-1 I.R.B.1
2011-2
Superseded by
Rev. Proc. 2012-2, 2012-1 I.R.B.92
2011-3
Superseded by
Rev. Proc. 2012-3, 2012-1 I.R.B.113
2011-4
Superseded by
Rev. Proc. 2012-4, 2012-1 I.R.B.125
2011-5
Superseded by
Rev. Proc. 2012-5, 2012-1 I.R.B.169
Revenue Procedures— Continued:
2011-6
Superseded by
Rev. Proc. 2012-6, 2012-1 I.R.B.197
2011-7
Superseded by
Rev. Proc. 2012-7, 2012-1 I.R.B.232
2011-8
Superseded by
Rev. Proc. 2012-8, 2012-1 I.R.B.235
2011-9
Superseded by
Rev. Proc. 2012-9, 2012-2 I.R.B.261
2011-10
Superseded by
Rev. Proc. 2012-10, 2012-2 I.R.B.273
2011-14
Modified and clarified by
Rev. Proc. 2012-19, 2012-14 I.R.B.689
Rev. Proc. 2012-20, 2012-14 I.R.B.700
2011-23
Obsoleted in part by
Rev. Proc. 2012-25, 2012-20 I.R.B.914
2011-37
Obsoleted in part by
Rev. Proc. 2012-16, 2012-10 I.R.B.452
2011-40
Corrected by
Ann. 2012-6, 2012-6 I.R.B.366
2011-49
Modified by
Ann. 2012-3, 2012-4 I.R.B.335
2011-50
Corrected by
Ann. 2012-6, 2012-6 I.R.B.366
2011-51
Corrected by
Ann. 2012-6, 2012-6 I.R.B.366
2011-62
Corrected by
Ann. 2012-17, 2012-18 I.R.B.876
2012-8
Corrected by
Ann. 2012-7, 2012-6 I.R.B.367
Revenue Rulings:
92-19
Supplemented in part by
Rev. Rul. 2012-6, 2012-6 I.R.B.349
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2011–27 through 2011–52 is in Internal Revenue Bulletin 2011–52, dated December 27,
2011.
2012–23 I.R.B.ivJune 4, 2012

Revenue Rulings— Continued:
2008-40
Modified by
Notice 2012-6, 2012-3 I.R.B.293
2011-1
Modified by
Notice 2012-6, 2012-3 I.R.B.293
2012-9
Modified by
Rev. Rul. 2012-12, 2012-15 I.R.B.748
Treasury Decision:
9517
Corrected by
Ann. 2012-4, 2012-4 I.R.B.335
Ann. 2012-5, 2012-5 I.R.B.348
June 4, 2012v2012–23 I.R.B.

Internal Revenue Service
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Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,
detach entire page, and mail to the Superintendent of Documents, P.O. Box 979050, St. Louis, MO 63197–9000. Please allow two to
six weeks, plus mailing time, for delivery.
WE WELCOME COMMENTS ABOUT THE INTERNAL
REVENUE BU
LLETIN
If you have
comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be p
leased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page (www.irs.gov)
or write t
o the IRS Bulletin Unit, SE:W:CAR:MP:T:T:SP, Washington, DC 20224.