Internal Revenue Bulletin 2017-41 (PDF rendition): IRS Revenue Rulings

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HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2017–20, page 273.
Federal rates; adjusted federal rates; adjusted federal long-
term rate and the long-term exempt rate. For purposes of
sections 382, 1274, 1288, and other sections of the Code,
tables set forth the rates for October 2017.
Notice 2017– 46, page 275.
Notice 2017– 46 provides guidance for certain foreign financial
institutions (FFIs) required to report U.S. taxpayer identification
numbers (U.S. TINs) for certain accounts under a Model 1
Intergovernmental Agreement (IGA). If such FFIs comply with
the procedures described in this Notice, then the IRS will not
consider there is significant noncompliance with the obligations
under a Model 1 IGA solely as a result of a failure to report U.S.
TINs associated with the FFI’s U.S. reportable accounts main-
tained as of the determination date specified in the applicable
Model 1 IGA. Notice 2017– 46 also announces that the Depart-
ment of the Treasury and the IRS intend to amend certain
provisions of the temporary regulations under Chapter 3. The
amendments would provide limitations on, and a phase-in of,
the requirement for certain withholding agents to obtain and
report the taxpayer identification number issued by an account
holder’s jurisdiction of tax residence (Foreign TIN) and, for an
account holder that is an individual, the account holder’s date
of birth. Taxpayers may rely on the provisions of this notice
prior to the issuance of the amendments to the temporary
Chapter 3 regulations reflecting the notice.
Rev. Proc. 2017–52, page 283.
This revenue procedure: (1) introduces an 18-month pilot pro-
gram expanding the scope of private letter rulings available
from the Internal Revenue Service to include rulings on the tax
consequences of a distribution of stock, or stock and securi-
ties, of a controlled corporation under § 355 of the Internal
Revenue Code, (2) provides procedures for taxpayers request-
ing these letter rulings, and (3) clarifies procedures for taxpay-
ers requesting letter rulings on significant issues relating to
these transactions.
REG–105004 –16, page 295.
The proposed regulation allows the truncation of taxpayer
identification numbers on copies of Forms W–2, Wage and Tax
Statement, that are furnished to employees. The proposed
regulation would amend the existing regulations to specifically
allow for truncation on those copies, consistent with the rules
regarding truncation in Treas. Reg. section 301.6109 – 4.
REG–125374 –16, page 300.
Several provisions of the Code condition tax benefits and
impose sanctions on issuers and holders of registration-
required obligations that are not issued in registered form. This
project defines a registration-required obligation and describes
when an obligation is in registered form for purposes of these
provisions. The proposed rules update longstanding regula-
tions to account for changes in the operation of debt markets
and to account for the repeal of a statutory exception to the
definition of registration-required obligation.
EMPLOYEE PLANS
Notice 2017–50, page 280.
This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for Septem-
ber 2017 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for September 2017, and the 30-
year Treasury rates. These rates reflect the application of
§ 430(h)(2)(C)(iv), which was added by the Moving Ahead for
Progress in the 21st Century Act, Public Law 112–141 (MAP-
21) and amended by section 2003 of the Highway and Trans-
portation Funding Act of 2014 (HATFA).
Finding Lists begin on page ii.
Bulletin No. 2017– 41
October 10, 2017

EMPLOYMENT TAX
REG–105004 –16, page 295.
The proposed regulation allows the truncation of taxpayer
identification numbers on copies of Forms W–2, Wage and Tax
Statement, that are furnished to employees. The proposed
regulation would amend the existing regulations to specifically
allow for truncation on those copies, consistent with the rules
regarding truncation in Treas. Reg. section 301.6109 – 4.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
October 10, 2017Bulletin No. 2017– 41

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 1274.—Determina-
tion of Issue Price in the
Case of Certain Debt
Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520.)
Rev. Rul. 2017–20
This revenue ruling provides various
prescribed rates for federal income tax
purposes for October 2017 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral 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 applicable federal rates (ad-
justed 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 con-
tains the appropriate percentages for de-
terminingthelow-incomehousing
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 buildings
placed in service after July 30, 2008,
shall not be less than 9%. Finally, Table
5 contains the federal rate for determin-
ing 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. 2017–20 TABLE 1
Applicable Federal Rates (AFR) for October 2017
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR1.27%1.27%1.27%1.27%
110% AFR1.40%1.40%1.40%1.40%
120% AFR1.53%1.52%1.52%1.52%
130% AFR1.66%1.65%1.65%1.64%
Mid-term
AFR1.85%1.84%1.84%1.83%
110% AFR2.03%2.02%2.01%2.01%
120% AFR2.22%2.21%2.20%2.20%
130% AFR2.40%2.39%2.38%2.38%
150% AFR2.78%2.76%2.75%2.74%
175% AFR3.25%3.22%3.21%3.20%
Long-term
AFR2.50%2.48%2.47%2.47%
110% AFR2.75%2.73%2.72%2.71%
120% AFR3.00%2.98%2.97%2.96%
130% AFR3.25%3.22%3.21%3.20%
REV. RUL. 2017–20 TABLE 2
Adjusted AFR for October 2017
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR.94%.94%.94%.94%
Mid-term adjusted AFR1.37%1.37%1.37%1.37%
Long-term adjusted AFR1.85%1.84%1.84%1.83%
REV. RUL. 2017–20 TABLE 3
Rates Under Section 382 for October 2017
Adjusted federal long-term rate for the current month1.85%
Bulletin No. 2017– 41October 10, 2017
273

REV. RUL. 2017–20 TABLE 3
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)
1.93%
REV. RUL. 2017–20 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for October 2017
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings
placed in service after July 30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.50%
Appropriate percentage for the 30% present value low-income housing credit3.21%
REV. RUL. 2017–20 TABLE 5
Rate Under Section 7520 for October 2017
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 interest
2.2%
Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of October 2017. See Rev.
Rul. 2017–20, page 273.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 482.—Allocation of
Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2017. See Rev. Rul. 2017–20, page 273.
Section 7520.—Valuation
Tables
The applicable federal short-term, mid-term, and
long-term rates are set forth for the month of October
2017. See Rev. Rul. 2017–20, page 273.
October 10, 2017Bulletin No. 2017– 41
274

Part III. Administrative, Procedural, and Miscellaneous
Revised Guidance Related
to Obtaining and Reporting
Taxpayer Identification
Numbers and Dates of
Birth by Financial
Institutions
Notice 2017– 46
I. PURPOSE
This Notice provides procedures for
certain foreign financial institutions (FFIs)
required to report U.S. taxpayer identifi-
cation numbers (U.S. TINs) for certain
accounts under a Model 1 intergovern-
mental agreement (IGA). If such FFIs
comply with the procedures described in
this Notice, then the Internal Revenue Ser-
vice (IRS) will not determine that there is
significant non-compliance with the obli-
gations under a Model 1 IGA solely as a
result of a failure to report U.S. TINs
associated with the FFI’s U.S. reportable
accounts maintained as of the determina-
tion date specified in the applicable Model
1 IGA.
This Notice also announces that the
Department of the Treasury (Treasury De-
partment) and the IRS intend to amend
certain provisions of the temporary regu-
lations under chapter 3 of the Internal
Revenue Code (Code). The amendments
would provide limitations on, and a
phase-in of, the requirement for certain
withholding agents to obtain and report
the taxpayer identification number issued
by an account holder’s jurisdiction of tax
residence (Foreign TIN) and, for an ac-
count holder that is an individual, the ac-
count holder’s date of birth. The changes
described in this Notice are intended to
facilitate an orderly implementation of the
obligation to obtain and report taxpayer
identification numbers.
II. BACKGROUND
On March 18, 2010, the Hiring Incen-
tives to Restore Employment Act of 2010,
Pub. L. No. 111–147, 124 Stat. 71 (2010)
(HIRE Act), added chapter 4 of Subtitle A
(chapter 4), comprised of sections 1471
through 1474, to the Code. Chapter 4
(commonly known as the Foreign Ac-
count Tax Compliance Act, or FATCA)
addresses non-compliance by U.S. tax-
payers holding foreign financial accounts
or assets. FATCA requires certain FFIs to
report to the IRS information about finan-
cial accounts held by U.S. taxpayers or
foreign entities in which U.S. taxpayers
hold certain ownership interests. In order
to facilitate the exchange of information
on financial accounts held by U.S. taxpay-
ers, the Treasury Department collaborated
with foreign governments to develop two
alternative model IGAs (Model 1 IGA and
Model 2 IGA) that are intended to provide
an effective and efficient means for com-
plying with FATCA while reducing the
burden FATCA compliance imposes on
financial institutions. The Model 1 IGA
provides that a reporting Model 1 FFI will
report certain information on U.S.report-
able accounts maintained by the FFI to the
partner jurisdiction tax authority, which will
automatically exchange such information
with the U.S. Competent Authority.
On January 17, 2013, the Treasury De-
partment and the IRS published final reg-
ulations under chapter 4 (T.D. 9610, 78
F.R. 5873) (2013 final chapter 4 regula-
tions). On March 6, 2014, the Treasury
Department and the IRS published tempo-
rary regulations under chapter 4 (T.D.
9657, 79 F.R. 12812) (2014 temporary
chapter 4 regulations). On March 6, 2014,
the Treasury Department and the IRS also
published temporary regulations under
chapters 3 and 61 and section 3406 (T.D.
9658, 79 F.R. 12726) (temporary coordi-
nation regulations) to coordinate the reg-
ulations under those provisions with the
2013 final chapter 4 regulations and the
2014 temporary chapter 4 regulations. On
January 6, 2017, the Treasury Department
and the IRS published final regulations
under chapter 3 (T.D. 9808, 82 F.R. 2046)
(final chapter 3 regulations) and chapter 4
(T.D. 9809, 82 F.R. 2124) (final chapter 4
regulations), which generally incorpo-
rated the 2014 temporary chapter 4 regu-
lations and the temporary coordination
regulations. At the same time, the Trea-
sury Department and the IRS published
temporary regulations under chapter 3
(temporary chapter 3 regulations) and
chapter 4 to supplement certain provisions
of the final chapter 3 regulations and the
final chapter 4 regulations.
III.REQUIREMENT FOR REPORTING
MODEL 1 FFIS TO REPORT U.S. TINS
A. Background
Each Model 1 IGA provides that a re-
porting Model 1 FFI shall be treated as
complying with, and not subject to with-
holding under, section 1471 of the Code if
the partner jurisdiction complies with its
obligations under the IGA with respect to
such financial institution and such finan-
cial institution complies with its reporting
and registration obligations in accordance
with the IGA. Each Model 1 IGA also
provides that the United States shall not
require a reporting Model 1 FFI to with-
hold tax under section 1471 or 1472 of the
Code with respect to an account held by a
recalcitrant account holder (as defined in
section 1471(d)(6) of the Code) or to close
such account if the U.S. Competent Au-
thority receives certain information spec-
ified in the Model 1 IGA with respect to
such account.
The information required to be re-
ported by a reporting Model 1 FFI in-
cludes the U.S. TIN of each specified U.S.
person that is an account holder and, in the
case of a non-U.S. entity with one or more
specified U.S. persons who are controlling
persons, the U.S. TIN of each controlling
person (required U.S. TINs). Notwith-
standing this reporting requirement, be-
fore 2017, a reporting Model 1 FFI was
not required to report a required U.S. TIN
for an account maintained as of the deter-
mination date specified in the applicable
Model 1 IGA (preexisting account) that is
a U.S. reportable account if the U.S. TIN
was not in the reporting Model 1 FFI’s
records. Similarly, a reporting Model 1
FFI was required to report the date of birth
only if the date of birth was in the report-
ing Model 1 FFI’s records. Partner juris-
dictions have committed to establish rules
for 2017 and subsequent years requiring
reporting Model 1 FFIs to obtain and re-
port the required U.S. TINs for such
accounts.
Each Model 1 IGA requires that the
partner jurisdiction obtain and exchange
the information specified in the Model 1
Bulletin No. 2017– 41October 10, 2017
275

IGA (including each required U.S. TIN)
with respect to each U.S. reportable ac-
count. The suspension of withholding un-
der sections 1471 and 1472 of the Code
pursuant to each Model 1 IGA is condi-
tioned on adequate reporting and ex-
change of information. If a reporting
Model 1 FFI fails to report required U.S.
TINs for U.S. reportable accounts, the
U.S. Competent Authority may notify the
partner jurisdiction competent authority
that there is significant non-compliance
with respect to the reporting Model 1 FFI,
in accordance with the Model 1 IGA. If
the reporting Model 1 FFI remains non-
compliant for 18 months after such noti-
fication, under the relevant Model 1 IGA,
the United States may treat the reporting
Model 1 FFI as a nonparticipating finan-
cial institution that is subject to withhold-
ing under section 1471 of the Code.
B. U.S. TIN Reporting by Reporting
Model 1 FFIs
The Treasury Department and the IRS
understand that some reporting Model 1
FFIs need additional time to implement
practices and procedures to obtain and
report required U.S. TINs for preexisting
accounts that are U.S. reportable accounts.
Accordingly, with respect to reporting on
preexisting accounts that are U.S. report-
able accounts, for calendar years 2017,
2018, and 2019, the U.S. Competent Au-
thority will not determine that there is
significant non-compliance with the obli-
gations under an applicable Model 1 IGA
with respect to a reporting Model 1 FFI
solely because of a failure to obtain and
report each required U.S. TIN, provided
that the reporting Model 1 FFI: (1) obtains
and reports the date of birth of each ac-
count holder and controlling person
whose U.S. TIN is not reported; (2) re-
quests annually from each account holder
any missing required U.S. TIN; and (3)
before reporting information that relates
to calendar year 2017 to the partner juris-
diction, searches electronically searchable
data maintained by the reporting Model 1
FFI for any missing required U.S. TINs.
The IRS expects to provide further in-
structions regarding appropriate reporting
for the TIN data element for preexisting
accounts that are U.S. reportable accounts
with missing required U.S. TINs.
Reporting Model 1 FFIs should imple-
ment practices and procedures promptly
to ensure that financial accounts are doc-
umented in accordance with the applica-
ble Model 1 IGA and that U.S. reportable
accounts are adequately and timely re-
ported in future years. Nothing in this
Notice affects a reporting Model 1 FFI’s
obligations under chapter 3 or 61 with
respect to a reportable amount or report-
able payment.
IV. REQUIREMENT TO OBTAIN
AND REPORT FOREIGN TINS AND
DATES OF BIRTH
A. Background
Before the temporary chapter 3 regula-
tions were published, the instructions for
Forms W– 8BEN and W– 8BEN–E and
the Instructions for the Requester of
Forms W– 8BEN, W– 8BEN–E, W– 8ECI,
W– 8EXP, and W– 8IMY outlined cir-
cumstances under which the person pro-
viding the form was required to provide a
Foreign TIN and, for an individual, a date
of birth. The instructions for Form
1042–S, “Foreign Person’s U.S. Source
Income Subject to Withholding,” for cal-
endar years 2014, 2015, and 2016 de-
scribed circumstances under which certain
withholding agents were required to re-
port these additional items of information
on Form 1042–S.
The temporary chapter 3 regulations
provide additional changes to the tempo-
rary coordination regulations that modi-
fied the due diligence and reporting
obligations of withholding agents. In par-
ticular, the temporary chapter 3 regula-
tions generally incorporate the require-
ment from the aforementioned form
instructions for certain withholding agents
to obtain and report the Foreign TINs of
their account holders and, in the case of an
individual account holder, a date of birth.
These revisions were made to ensure, in
part, that the IRS would have adequate
information about foreign accountholders
to facilitate the exchange of foreign ac-
count holder information pursuant to an
agreement authorizing or requiring the
exchange of such information. Section
1.1441–1T(e)(2)(ii)(B) provides that,
beginning January 1, 2017, a beneficial
owner withholding certificate provided
to document an account maintained at a
U.S. branch or office of a withholding
agent that is a financial institution is
required to contain the account holder’s
Foreign TIN and, in the case of an indi-
vidual account holder, the account hold-
er’s date of birth in order for the with-
holding agent to treat the withholding
certificate as valid. For withholding cer-
tificates associated with payments made
on or after January 1, 2018, an account
holder that does not provide a Foreign
TIN must provide a reasonable explana-
tion for its absence in order for the with-
holding certificate not to be considered
invalid under § 1.1441–1T(e)(2)(ii)(B).
The temporary chapter 3 regulations
also provide that if the withholding cer-
tificate does not contain the account
holder’s date of birth and the withhold-
ing agent has the date of birth in its files,
the withholding certificate will not be
considered invalid.
For calendar year 2017, the instruc-
tions for Form 1042–S provide that a
withholding agent that is a U.S. office or
branch of a financial institution is required
to report on Form 1042–S a recipient’s
Foreign TIN when the recipient has fur-
nished documentation that provides a For-
eign TIN. The instructions provide that,
beginning for the 2017 calendar year, the
withholding agent is also required to re-
port on Form 1042–S an individual recip-
ient’s date of birth when the recipient has
furnished documentation that provides a
date of birth or the recipient’s date of birth
is identified in any of the withholding
agent’s files.
B. Revised Scope and Phased-In
Timeline of Requirements for Certain
Withholding Agents to Obtain and
Report the Foreign TIN and Date of
Birth of Account Holders
After the publication of the temporary
chapter 3 regulations, the Treasury De-
partment and the IRS received comments
from withholding agents regarding the
difficulty in obtaining and reporting For-
eign TINs and dates of birth from account
holders in the time provided. In response
to these comments, the Treasury Depart-
ment and the IRS intend to amend the
temporary chapter 3 regulations to narrow
the circumstances in which a Foreign TIN
and date of birth are required, as described
in sections IV.B.1 and IV.B.2 of this
October 10, 2017Bulletin No. 2017– 41
276

Notice; to provide exceptions from the
Foreign TIN requirement for certain ac-
count holders, as described in section
IV.B.3 of this Notice; and to provide a
phase-in of the rules for obtaining a For-
eign TIN, as described in section IV.B.4
of this Notice. In addition, the Treasury
Department and the IRS intend to amend
the temporary chapter 3 regulations to
provide relief from obtaining a date of birth
with respect to certain withholding certifi-
cates signed before January 1, 2018, as de-
scribed in section IV.B.5 of this Notice.
For purposes of this section IV, the
term “withholding certificate” means
Forms W– 8BEN, W– 8BEN–E, W– 8ECI,
W– 8EXP and, with respect to a qualified
intermediary acting as a qualified deriva-
tives dealer (QDD) claiming treaty bene-
fits for dividends, Form W– 8IMY. The
term “withholding agent” when used in
this section IV refers to a withholding
agent that is a U.S. branch or office of a
financial institution (as defined in section
IV.B.1 of this Notice).
1. Accounts and Financial Institutions
to Which § 1.1441–1T(e)(2)(ii)(B) Ap-
plies
The Treasury Department and the IRS
intend to amend § 1.1441–1T(e)(2)(ii)(B)
to clarify that the term “account holder”
has the meaning described in § 1.1471–
5(a)(3) and that the term “account”means
a financial account, as defined in § 1.1471–
5(b) (substituting “U.S. office or branch of a
financial institution” for “FFI”). In addition,
the Treasury Department and the IRS intend
to amend § 1.1441–1T(e)(2)(ii)(B) to clarify
that the term “financial institution” means
an entity that is a depository institution, cus-
todial institution, investment entity, or a
specified insurance company, each as de-
fined in § 1.1471–5(e).
2. Payments to Which § 1.1441–1T(e)
(2)(ii)(B) Applies
Section 1.1441–1T(e)(2)(ii)(B) pro-
vides that a Foreign TIN (or a reasonable
explanation for why the account holder
has not been issued a Foreign TIN) and a
date of birth (for an individual) are re-
quired for withholding certificates associ-
ated with “payments,” which includes any
payments under sections 1441 through
1446, chapter 4, and chapter 61 (due to
references in those sections and chapters
to beneficial owner withholding certifi-
cates used to establish foreign status). The
Treasury Department and the IRS believe
that it is not necessary for a withholding
agent to obtain a Foreign TIN (or a rea-
sonable explanation for why the account
holder has not been issued a Foreign TIN)
or (for an individual) a date of birth on a
withholding certificate that the withhold-
ing agent obtains solely to avoid Form
1099 reporting and backup withholding or
in other cases where a payment associated
with a withholding certificate is not oth-
erwise subject to reporting on Form
1042–S. Therefore, the Treasury Depart-
ment and the IRS intend to amend
§ 1.1441–1T(e)(2)(ii)(B) to limit its scope
for this purpose such that a withholding
certificate is required to be treated as in-
valid under § 1.1441–1T(e)(2)(ii)(B) only
for payments of U.S. source income re-
portable on Form 1042–S (before the ap-
plication of § 1.1441–1T(e)(2)(ii)(B)).
Due to this limitation, a withholding agent
will not, for example, be required to with-
hold under section 3406 on gross proceeds
paid to an individual account holder as a
result of the application of the section
1441 presumption rules when the account
holder provides a withholding certificate
that is valid but for the absence of a For-
eign TIN and the account holder’s date of
birth.
3. Exceptions from Foreign TIN Re-
quirement for Certain Accounts
i. Accounts Held by Residents in Ju-
risdictions With Which the United
States Does Not Have an Agree-
ment Relating to the Exchange of
Tax Information in Force
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide that a withholding
agent is not required to obtain a Foreign
TIN (or a reasonable explanation for why
an account holder has not been issued a
Foreign TIN) for an account held by a
resident in a jurisdiction that does not
have in effect with the United States an
income tax or other convention or bilat-
eral agreement relating to the exchange of
tax information within the meaning of
section 6103(k)(4) of the Code pursuant to
which the United States agrees to provide,
as well as receive, tax information. This
limitation is consistent with the limitation
on the information reporting requirement
in § 1.6049 – 8(a) on U.S. source deposit
interest paid to nonresident alien individ-
uals. A list of jurisdictions that a with-
holding agent is required to reference for
purposes of the limitation on reporting
under §§ 1.6049 – 8(a) and 1.1441–
1T(e)(2)(ii)(B) (as revised in accordance
with this Notice) is published in section 3
of Revenue Procedure 2014 – 64, 2014 –53
I.R.B. 1022, as supplemented by Revenue
Procedure 2016 –56, 2016 –52 I.R.B. 920,
and which may be further updated in fu-
ture published guidance. If the Treasury
Department and the IRS further supple-
ment the list of jurisdictions in section 3
of Revenue Procedure 2014 – 64, subject
to the limitations described in this Notice,
a withholding agent must obtain the For-
eign TIN (or a reasonable explanation for
why an account holder has not been issued
a Foreign TIN) of each account holder
resident in any such jurisdiction before the
time for filing Form 1042–S (with any
applicable extension) for the calendar year
following the calendar year in which the
jurisdiction is added to the list.
ii. Accounts Held by Residents in Ju-
risdictions That Do Not Issue For-
eign TINs
The Treasury Department and the IRS
intend to amend § 1.1441–1T(e)(2)(ii)(B)
to provide that a withholding agent is not
required to obtain a Foreign TIN (or a
reasonable explanation for why an ac-
count holder has not been issued a Foreign
TIN) for an account held by a resident of
a jurisdiction that has been identified by
the IRS on a list of jurisdictions that do
not issue Foreign TINs to their residents. A
list of such jurisdictions (when made avail-
able) may be viewed atwww.irs.gov/FATCA.
As of the date of this Notice, thefollowing
jurisdictions have been identified as
ones that do not issue Foreign TINs to
residents and that will be included on
the list:
Bermuda
British Virgin Islands
Cayman Islands
Taxpayers may rely on the jurisdic-
tions identified above for purposes of this
Notice. The IRS intends to update this list
to add jurisdictions that do not issue For-
eign TINs (after consultation with the
competent authority of any such addi-
tional jurisdiction), including in response
to taxpayer comments that identify addi-
tional jurisdictions that do not issue For-
eign TINs. The list maintained by the IRS
Bulletin No. 2017– 41October 10, 2017
277

of jurisdictions that do not issue Foreign
TINs to residents will also be updated if a
jurisdiction included on the list begins to
issue Foreign TINs to its residents.
iii. Accounts Held by a Government,
International Organization, Foreign
Central Bank of Issue, or Resident
of a U.S. Territory
The Treasury Department and the IRS
intend to amend § 1.1441–1T(e)(2)(ii)(B)
to provide that a withholding agent is not
required to obtain an account holder’s
Foreign TIN (or a reasonable explanation
for why the account holder has not been
issued a Foreign TIN) if the withholding
agent has obtained an otherwise valid
withholding certificate on which it can
rely under the section 1441 regulations to
treat the account holder as a government,
an international organization, a foreign
central bank of issue, or a resident of a
U.S. territory.
4. Phase-In of Requirement to Obtain
a Foreign TIN Under § 1.1441–
1T(e)(2)(ii)(B)
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide additional time for
a withholding agent to comply with the
requirement to obtain a Foreign TIN. As
described in more detail below, this sec-
tion IV.B.4 describes how the requirement
to obtain a Foreign TIN under the tempo-
rary chapter 3 regulations will be phased
in over a period ending on December 31,
2019.
Section IV.B.4.i of this Notice pro-
vides rules that will apply to withholding
certificates signed on or after January 1,
2018, including rules for determining
whether a withholding agent may rely on
a Foreign TIN provided on a withholding
certificate. Sections IV.B.4.ii, iii, and iv of
this Notice generally provide rules for de-
termining the validity of a withholding
certificate without a Foreign TIN (or a
reasonable explanation for why the ac-
count holder was not issued a Foreign
TIN) signed before January 1, 2018, dur-
ing the phase-in period. Section IV.B.4.v
of this Notice provides an alternative pro-
cedure for obtaining a Foreign TIN (or a
reasonable explanation for why the ac-
count holder was not issued a Foreign
TIN) for a withholding certificate signed
before January 1, 2018. If a withholding
agent obtains the account holder’s Foreign
TIN (or a reasonable explanation for why
the account holder was not issued a For-
eign TIN) in accordance with the alterna-
tive procedure (rather than obtaining a
new withholding certificate), an otherwise
valid withholding certificate will remain
valid after the end of the phase-in period
until the earlier of when its validity period
ends or it otherwise becomes invalid.
i. Withholding Certificates Signed On
or After January 1, 2018
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide that a withholding
certificate signed on or after January 1,
2018, by an account holder (other than an
account holder excepted under section
IV.B.3 of this Notice) to document an
account maintained at a U.S. branch or
office of a withholding agent must contain
a Foreign TIN (or a reasonable explana-
tion for why the account holder was not
issued a Foreign TIN).
The Treasury Department and the IRS
also intend to amend the temporary chap-
ter 3 regulations to provide that a with-
holding agent may rely on the account
holder’s Foreign TIN unless the withhold-
ing agent has actual knowledge or reason
to know (as described in § 1.1441–
7(b)(2)) that the Foreign TIN is incorrect.
Therefore, a withholding agent will not be
required to validate the format or other
specifications of the Foreign TIN against
the applicable jurisdiction’s TIN system.
For purposes of § 1.1441–1(e)(4)(ii)(D)
(prescribing the requirements for a change
in circumstances), a withholding agent’s
reason to know that a Foreign TIN is
incorrect will include a notification from
the account holder of a new residence
address outside the jurisdiction provided
on the withholding certificate.
The temporary chapter 3 regulations
provide that if an account holder does not
have a Foreign TIN, the account holder is
required to provide a reasonable explana-
tion for its absence (for example, that the
jurisdiction of residence does not issue
TINs). This requirement will be clarified
in the regulations to specify that the rea-
sonable explanation must address why the
account holder was not issued a Foreign
TIN to the extent provided in the instruc-
tions for, as applicable, Forms W– 8BEN,
W– 8BEN–E, W– 8ECI, W– 8EXP, and,
for a QDD claiming treaty benefits for
dividends, Form W– 8IMY. Those in-
structions have each been amended (with
revision dates of June or July 2017) to
provide that a reasonable explanation for
why an account holder was not issued a
Foreign TIN is a statement that the ac-
count holder is not legally required to
obtain a Foreign TIN. If an account holder
provides an explanation other than the one
described in those instructions, the with-
holding agent must determine whether the
explanation is reasonable. A withholding
agent will be permitted to rely on a rea-
sonable explanation unless it has actual
knowledge that the account holder has a
Foreign TIN.
In addition, if a withholding agent
maintains an account on December 31,
2017, that is documented with a valid
withholding certificate as of that date, the
withholding agent’s reason to know that a
Foreign TIN is incorrect, or actual knowl-
edge that an account holder has a Foreign
TIN despite providing an explanation, is
limited to electronically searchable infor-
mation (as defined in § 1.1471–1(b)(38))
that is in the withholding agent’s files.
ii. Withholding Certificates for Payments
Made Before January 1, 2018
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide that an otherwise
valid withholding certificate will not be
treated as invalid for payments made to
the account holder before January 1, 2018,
solely because the withholding certificate
does not include the account holder’s For-
eign TIN (or a reasonable explanation for
why the account holder was not issued a
Foreign TIN).
iii. Withholding Certificates Signed Be-
fore January 1, 2018, That Have a
Three-Year Validity Period
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide that an otherwise
valid withholding certificate signed before
January 1, 2018, that has a three-year valid-
ity period under §§ 1.1441–1(e)(4)(ii)(A)
and 1.1471–3(c)(6)(ii)(A) will not be treated
as invalid for payments made on or after
January 1, 2018, solely because the with-
holding certificate does not include the ac-
count holder’s Foreign TIN (or a reasonable
explanation for why the account holder was
not issued a Foreign TIN), until the time
provided in this section IV.B.4.iii. Such a
October 10, 2017Bulletin No. 2017– 41
278

withholding certificate will be treated as in-
valid for purposes of this section IV.B.4.iii
for payments made after the earlier of (1)
December 31, 2019; (2) the expiration date
of the validity period of the withholding
certificate; or (3) if applicable, the date
when a change in circumstances requiring a
revised withholding certificate occurs. How-
ever, for payments made after December 31,
2019, a withholding agent may rely on the
alternative procedure described in section
IV.B.4.v of this Notice to obtain a Foreign
TIN (or reasonable explanation).
iv. Withholding Certificates Signed Be-
fore January 1, 2018, That Have an
Indefinite Validity Period
The Treasury Department and the IRS
intend to amend the temporary chapter 3
regulations to provide that an otherwise
valid withholding certificate signedbefore
January 1, 2018, that is indefinitely valid
under §§ 1.1441–1(e)(4)(ii)(B) and 1.1471–
3(c)(6)(ii)(B) will not be treated as invalid
for payments made on or after January 1,
2018, solely because the withholding certif-
icate does not include the account holder’s
Foreign TIN (or a reasonable explanation
for why the account holder was not issued a
Foreign TIN), until the time provided in this
section IV.B.4.iv. Such a withholding cer-
tificate will be treated as invalid for pur-
poses of this section IV.B.4.iv for payments
made after the earlier of (1) December 31,
2019, or (2) if applicable, the date when a
change in circumstances requiring a revised
withholding certificate occurs. However, for
payments made after December 31, 2019, a
withholding agent may rely on the alterna-
tive procedure described in section IV.B.4.v
of this Notice to obtain a Foreign TIN (or
reasonable explanation).
v. Alternative Procedure for Obtaining
and Associating Foreign TINs with
Withholding Certificates Signed Be-
fore January 1, 2018
An otherwise valid withholding certif-
icate that does not include the account
holder’s Foreign TIN (or a reasonable ex-
planation for why the account holder was
not issued a Foreign TIN) signed before
January 1, 2018, will continue to remain
valid for payments made after December
31, 2019, if the withholding agent (1) ob-
tains from the account holder its Foreign
TIN (or a reasonable explanation for why
the account holder was not issued a For-
eign TIN) on a written statement (includ-
ing a written statement transmitted by
email) that the withholding agent associ-
ates with the account holder’s withholding
certificate; or (2) otherwise has the ac-
count holder’s Foreign TIN in the with-
holding agent’s files and the withholding
agent associates the account holder’s For-
eign TIN with the account holder’s with-
holding certificate. Notwithstanding the
preceding sentence, an otherwise valid
withholding certificate signed before Jan-
uary 1, 2018, that does not include the
account holder’s Foreign TIN (or reason-
able explanation) ceases to be valid for
payments made after the earlier of the
expiration date of the validity period of
such withholding certificate (in the case of
a withholding certificate with a three-year
validity period) or the date when a with-
holding agent determines that a revised
withholding certificate is otherwise re-
quired (if applicable), and the withholding
agent must obtain on a new withholding
certificate the account holder’s Foreign
TIN (or reasonable explanation). A with-
holding agent’s reliance on a Foreign TIN
(or a reasonable explanation for why the
account holder was not issued a Foreign
TIN) obtained pursuant to the alternative
procedure is subject to the standards of
knowledge described in section IV.B.4.i
of this Notice for a withholding certificate.
5. Requirement to Obtain Date of Birth
The temporary chapter 3 regulations
provide that an otherwise valid withhold-
ing certificate that does not contain the
account holder’s date of birth will not be
considered invalid if the withholding
agent has the account holder’s date of
birth in its files. The Treasury Department
and the IRS intend to amend the tempo-
rary chapter 3 regulations to provide an
exception to this requirement such that an
otherwise valid withholding certificate
signed before January 1, 2018, will not be
treated as invalid for payments made be-
fore January 1, 2019, to an account holder
that is an individual, solely because the
withholding certificate does not include
the account holder’s date of birth and the
date of birth is not in the withholding
agent’s files. This allowance is provided
to give withholding agents additional time
to comply with the date of birth require-
ment for withholding certificates signed
before January 1, 2018. In addition, the
Treasury Department and the IRS intend
to amend the temporary chapter 3 regula-
tions to clarify that a withholding agent
will be considered to have the account
holder’s date of birth in its files if it ob-
tains the date of birth on a written state-
ment (including a written statement trans-
mitted by email) from the account holder.
C. Form 1042–S Reporting
The IRS intends to revise the instruc-
tions for Form 1042–S to provide that,
beginning with reporting for calendar year
2018, a withholding agent must report on
each Form 1042–S required to be filed
with respect to a financial account main-
tained at a U.S. branch or office of the
withholding agent the account holder’s
Foreign TIN in any of the following cases:
(1) the account holder has furnished to the
withholding agent a withholding certifi-
cate that includes its Foreign TIN; (2) the
withholding agent has obtained the For-
eign TIN under the alternative procedure
described in section IV.B.4.v of this No-
tice; or (3) the withholding agent has iden-
tified the account holder’s Foreign TIN in
any of the withholding agent’s electroni-
cally searchable information (as defined in
§ 1.1471–1(b)(38)).
The instructions for Form 1042–S for
calendar year 2017 will be revised with
respect to withholding certificates fur-
nished on or after January 1, 2017, to
require the reporting of an individual ac-
count holder’s date of birth if the date of
birth is on the withholding certificate or is
available in the withholding agent’s elec-
tronically searchable information (as de-
fined in § 1.1471–1(b)(38)). Furthermore,
beginning with reporting forcalendar year
2018, the instructions for Form 1042–S will
require the reporting of an individual ac-
count holder’s date of birth if the date of
birth is on the withholding certificate or is
identified in any of the withholding agent’s
files.
Penalties for failure to comply with
reporting obligations may apply to a fail-
ure to report an account holder’s Foreign
TIN or an individual account holder’s date
of birth on Form 1042–S to the extent the
instructions for Form 1042–S require such
information to be reported.
Bulletin No. 2017– 41October 10, 2017
279

V. TAXPAYER RELIANCE
Before the issuance of the amendments
to the temporary chapter 3 regulations de-
scribed in section IV of this Notice, tax-
payers may rely on the provisions of this
Notice regarding the content of the
amendments.
VI. DRAFTING INFORMATION
The principal author of this Notice is
Kamela Nelan of the Office of Associate
Chief Counsel (International). For further
information regarding this Notice, contact
Ms. Nelan at (202) 317-6942 (not a toll-
free number).
Update for Weighted
Average Interest Rates,
Yield Curves, and
Segment Rates
Notice 2017–50
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008 and
the 30-year Treasury weighted average
rate under § 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Generally, except for certain plans un-
der sections 104 and 105 of the Pension
Protection Act of 2006 and CSEC plans
under § 414(y), § 430 of the Code speci-
fies the minimum funding requirements
that apply to single-employer plans pursu-
ant to § 412. Section 430(h)(2) specifies
the interest rates that must be used to
determine a plan’s target normal cost and
funding target. Under this provision, pres-
ent value is generally determined using
three 24-month average interest rates
(“segment rates”), each of which applies
to cash flows during specified periods. To
the extent provided under § 430(h)(2)
(C)(iv), these segment rates are adjusted
by the applicable percentage of the 25-
year average segment rates for the period
ending September 30 of the year preced-
ing the calendar year in which the plan
year begins.
1
However, an election may
be made under § 430(h)(2)(D)(ii) to use
the monthly yield curve in place of the
segment rates.
Notice 2007– 81, 2007– 44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond seg-
ment rates used to compute the target nor-
mal cost and the funding target. Consis-
tent with the methodology specified in
Notice 2007– 81, the monthly corporate
bond yield curve derived from August
2017 data is in Table I at the end of this
notice. The spot first, second, and third
segment rates for the month of August
2017 are, respectively, 1.93, 3.57, and
4.36.
The 24-month average segment rates de-
termined under § 430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to § 430(h)
(2)(C)(iv) to be within the applicable mini-
mum and maximum percentages of the cor-
responding 25-year average segment rates.
For plan years beginning before 2021, the
applicable minimum percentage is 90% and
the applicable maximum percentage is
110%. The 25-year average segment rates
for plan years beginning in 2016 and 2017
werepublishedinNotice2015– 61,
2015–39 I.R.B. 408 and Notice 2016 –54,
2016 – 40 I.R.B. 429, respectively. For plan
years beginning in 2018, based on the seg-
ment rates applicable for October 1992 to
September 2017, the 25-year averages for
the period ending September 30, 2017, of
the first, second, and third segment rates are
4.35, 6.13, and 6.99 percent, respectively.
24-MONTH AVERAGE
CORPORATE BOND SEGMENT
RATES
The three 24-month average corporate
bond segment rates applicable for Sep-
tember 2017 without adjustment for the
25-year average segment rate limits are as
follows:
Applicable MonthFirst SegmentSecond SegmentThird Segment
September 20171.753.764.66
Based on § 430(h)(2)(C)(iv), the 24-
month averages applicable for September
2017 adjusted to be within the applicable
minimum and maximum percentages of
the corresponding 25-year average seg-
ment rates, are as follows:
For Plan Years
Beginning In
Adjusted 24-Month Average Segment Rates
Applicable MonthFirst SegmentSecond SegmentThird Segment
2016September20174.435.916.65
2017September20174.165.726.48
2018September20173.925.526.29
1
Pursuant to § 433(h)(3)(A), the 3
rd
segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).
October 10, 2017Bulletin No. 2017– 41
280

30-YEAR TREASURY SECURITIES
INTEREST RATES
Generally for plan years beginning af-
ter 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation de-
scribed in § 431(c)(6)(A), based on the
plan’s current liability. Section 431(c)(6)
(E)(ii)(I) provides that the interest rate
used to calculate current liability for this
purpose must be no more than 5 percent
above and no more than 10 percent below
the weighted average of the rates of inter-
est on 30-year Treasury securities during
the four-year period ending on the last day
before the beginning of the plan year.
Notice 88 –73, 1988 –2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The rate of interest
on 30-year Treasury securities for August
2017 is 2.80 percent. The Service deter-
mined this rate as the average of the daily
determinations of yield on the 30-year
Treasury bond maturing in May 2047 de-
termined each day through August 9, 2017
and the yield on the 30-year Treasury
bond maturing in August 2047 determined
each day for the balance of the month. For
plan years beginning in the month shown
below, the weighted average of the rates
of interest on 30-year Treasury securities
and the permissible range of rates used to
calculate current liability are as follows:
For Plan Years
Beginning in
30-Year Treasury
Weighted Average
Permissible Range
MonthYear90% to 105%
September20172.882.593.03
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007– 81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-
ment rates determined for August 2017
are as follows:
First SegmentSecond SegmentThird Segment
1.933.574.36
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further
information regarding this notice, contact
Mr. Morgan at 202-317-6700 or Tony
Montanaro at 202-317-8698 (not toll-free
numbers).
Bulletin No. 2017– 41October 10, 2017
281

Table I
Monthly Yield Curve for August 2017
Derived from August 2017 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.51.4420.54.1140.54.3960.54.4980.54.53
1.01.5621.04.1341.04.3961.04.4981.04.54
1.51.6721.54.1441.54.4061.54.4981.54.54
2.01.7822.04.1542.04.4062.04.4982.04.54
2.51.8822.54.1642.54.4062.54.4982.54.54
3.01.9823.04.1743.04.4163.04.4983.04.54
3.52.0923.54.1843.54.4163.54.5083.54.54
4.02.1924.04.1944.04.4164.04.5084.04.54
4.52.2924.54.2044.54.4264.54.5084.54.54
5.02.4025.04.2145.04.4265.04.5085.04.54
5.52.5125.54.2245.54.4265.54.5085.54.54
6.02.6226.04.2346.04.4266.04.5086.04.54
6.52.7326.54.2446.54.4366.54.5086.54.54
7.02.8327.04.2447.04.4367.04.5087.04.55
7.52.9427.54.2547.54.4367.54.5187.54.55
8.03.0428.04.2648.04.4468.04.5188.04.55
8.53.1328.54.2748.54.4468.54.5188.54.55
9.03.2229.04.2749.04.4469.04.5189.04.55
9.53.3129.54.2849.54.4469.54.5189.54.55
10.03.3930.04.2950.04.4470.04.5190.04.55
10.53.4630.54.2950.54.4570.54.5190.54.55
11.03.5331.04.3051.04.4571.04.5191.04.55
11.53.5931.54.3151.54.4571.54.5291.54.55
12.03.6532.04.3152.04.4572.04.5292.04.55
12.53.7032.54.3252.54.4672.54.5292.54.55
13.03.7433.04.3253.04.4673.04.5293.04.55
13.53.7933.54.3353.54.4673.54.5293.54.55
14.03.8334.04.3354.04.4674.04.5294.04.56
14.53.8634.54.3454.54.4674.54.5294.54.56
15.03.8935.04.3455.04.4775.04.5295.04.56
15.53.9235.54.3555.54.4775.54.5295.54.56
16.03.9536.04.3556.04.4776.04.5396.04.56
16.53.9736.54.3656.54.4776.54.5396.54.56
17.04.0037.04.3657.04.4777.04.5397.04.56
17.54.0237.54.3757.54.4877.54.5397.54.56
18.04.0438.04.3758.04.4878.04.5398.04.56
18.54.0538.54.3758.54.4878.54.5398.54.56
19.04.0739.04.3859.04.4879.04.5399.04.56
19.54.0939.54.3859.54.4879.54.5399.54.56
20.04.1040.04.3960.04.4880.04.53100.04.56
October 10, 2017Bulletin No. 2017– 41
282

26 CFR 1.601.201: Rulings and determination let-
ters (Also Part I, §§ 355, 1.355–1.)
Rev. Proc. 2017–52
SECTION 1. PURPOSE
This revenue procedure (1) introduces
a pilot program expanding the scope of
letter rulings available from the Internal
Revenue Service (Service) to include for a
period of time (seesection 6 of this reve-
nue procedure) rulings on the tax conse-
quences of a distribution of stock, or stock
and securities, of a controlled corporation
under § 355 of the Internal Revenue Code
(Code), (2) provides procedures for tax-
payers requesting these rulings, and (3)
clarifies procedures for taxpayers request-
ing rulings on significant issues relating to
these transactions.
SECTION 2. BACKGROUND
.01Law.
Section 355(a)(1) provides that, if cer-
tain requirements are met, a corporation
(Distributing) may distribute stock, or
stock and securities, of a controlled cor-
poration (Controlled) to its shareholders
or to its shareholders and security holders
(Distributees), without recognition of gain
or loss to, or inclusion of any amount in
the income of, the Distributees.
Section 355(c)(1) provides that no gain
or loss is recognized to Distributing upon
a distribution of Controlled stock, or stock
and securities, to which § 355 (or so much
of § 356 as relates to § 355) applies and
which is not in pursuance of a plan of
reorganization.
Section 368(a)(1)(D) provides, in part,
that a reorganization includes a transfer by
Distributing of part of its assets to Con-
trolled if, immediately after the transfer,
Distributing or one or more of the share-
holders of Distributing (including persons
who were shareholders immediately be-
fore the transfer) are in control of Con-
trolled; but only if, in pursuance of the
plan, stock or securities of Controlled are
distributed in a transaction which qualifies
under §§ 355 or 356.
.02Ruling Policy Prior to Pilot
Program.
In Rev. Proc. 2013–32, 2013–28 I.R.B.
55, the Service announced that it would no
longer rule on the tax consequences of
various corporate transactions, including
distributions intended to qualify under
§ 355, but that, instead, it would rule only
on significant issues raised in these trans-
actions (Significant Issue Ruling). This
policy was set forth in section 3.01(51) of
Rev. Proc. 2017–3, 2017–1 I.R.B. 130,
134, prior to its modification by section
5.06 of this revenue procedure. Prior to its
modification by section 5.05 of this reve-
nue procedure, Appendix G of Rev. Proc.
2017–1, 2017–1 I.R.B. 1, 96, provided
that the information and representations
described in Rev. Proc. 96 –30, 1996 –1
C.B. 696, as modified and amplified by
Rev. Proc. 2003– 48, 2003–2 C.B. 86,
should be included in a ruling request
addressing significant issues presented in
a transaction described in § 355, but only
to the extent related to the significant is-
sues involved in the request. Rev. Proc.
96 –30 describes information and repre-
sentations that a taxpayer was required to
submit in a request for a ruling under
§ 355 prior to the Service only issuing
Significant Issue Rulings in accordance
with the ruling policy announced in Rev.
Proc. 2013–32.
The Service has reviewed its ruling
program and determined that it should be
expanded in a pilot program under the
terms and conditions prescribed in this
revenue procedure.
.03Ruling Policy Under Pilot
Program.
(1)Definitions. In this revenue proce-
dure—
(a)Covered Transactionmeans (i) a
transaction intended to qualify under
§§ 368(a)(1)(D) and 355 or (ii) a distribu-
tion that is intended to qualify under
§§ 355(a) and 355(c).
(b)Significant Issue Rulingis defined
in section 2.02 of this revenue procedure.
(c)Transactional Rulingmeans a letter
ruling that addresses the general federal
income tax consequences of a Covered
Transaction.
(2)Ruling policy. Under this revenue
procedure, a taxpayer may request a
Transactional Ruling for a Covered Trans-
action. If a plan includes multiple Covered
Transactions, and the taxpayer requests a
Transactional Ruling with respect to one
or more of the Covered Transactions, the
taxpayer may request a Transactional Rul-
ing, a Significant Issue Ruling, or no rul-
ing with respect to each of the other Cov-
ered Transactions effected pursuant to the
plan.
This revenue procedure does not alter
the Service’s policy that limits rulings on
the device prohibition under § 355(a)(1)
(B) and § 1.355–2(d), the business pur-
pose requirement under § 1.355–2(b), and
whether a distribution is pursuant to a plan
under § 355(e).Seesection 3.01(54) of
Rev. Proc. 2017–3, as modified by section
5.07 of this revenue procedure, and sec-
tions 3.03(6), 3.03(7), and 3.03(16) of this
revenue procedure. More generally, see
Rev. Proc. 2017–3 for other no-rule areas
under § 355.
A Transactional Ruling may include
the tax consequences of a Covered Trans-
action under §§ 312, 355, 357, 358, 361,
362(b), 362(e), 368(a)(1)(D), 368(b),
1032(a), 1223(1) and 1223(2), and rele-
vant consolidated return regulations. The
Service may decline to rule on tax conse-
quences under any provision of the Code
or the regulations or may include rulings
under provisions other than those listed
above.
(3)International rulings. This revenue
procedure does not have an effect on Rev.
Proc. 2017–7, 2017–1 I.R.B. 269, which
provides the current list of those areas of
the Internal Revenue Code under the ju-
risdiction of the Associate Chief Counsel
(International) relating to matters on
which the Internal Revenue Service will
not issue letter rulings or determination
letters. Therefore, routine or comfort rul-
ings will not ordinarily be issued under
the international provisions of the Code
such as § 367.See alsosection 4 of Rev.
Proc. 2017–7, 2017–1 I.R.B. 269.
SECTION 3. PROCEDURES FOR
TRANSACTIONAL RULING
REQUESTS
.01In general.
A taxpayer requesting a Transactional
Ruling must follow the procedures in Rev.
Proc. 2017–1 for requesting a letter ruling.
In addition, the taxpayer must submit the
documentation described in section 3.02
of this revenue procedure, the factual in-
formation and legal analysis described
section 3.03 of this revenue procedure,
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283

and a statement regarding representations
described in section 3.04 of this revenue
procedure. Section 3.05 of this revenue
procedure addresses supplemental ruling
requests.
If the ruling request lacks essential in-
formation or sufficient legal analysis, the
branch representative will request such in-
formation or legal analysis. If the taxpayer
does not provide the requested informa-
tion or legal analysis within 21 calendar
days of the date of the Service’s request,
the ruling request will be closed unless an
extension of time is granted before the
expiration of the 21-day period.Seesec-
tion 8.05 of Rev. Proc. 2017-1.
If there is a need for a letter ruling to be
issued by a particular date, the taxpayer
may request that the Service issue a letter
ruling by that date. In such a case, the
request for the letter ruling must include
the request for issuance by a particular
date and a description of the reason the
letter ruling is needed by that date and the
consequences of not receiving the letter
ruling by that date. The Service will at-
tempt to accommodate reasonable re-
quests made in a timely manner. How-
ever, the Service cannot guarantee that a
letter ruling will be issued by a requested
date.
Taxpayers are encouraged to consider
the scope of ruling requests, especially
requests for Transactional Rulings. For
example, if a plan includes both stock
distributions within a consolidated group
that raise no significant legal issues and a
distribution of stock outside the group, a
request for Transactional Rulings on the
intragroup stock distributions may delay
issuance of the letter ruling.
.02Documentation for Transactional
Rulings.
Notwithstanding the general rule in
section 7.01(2)(a) of Rev. Proc. 2017–1,
as modified by section 5.04 of this reve-
nue procedure, a taxpayer requesting a
Transactional Ruling should submit only
the documents that may be relevant in
determining whether to issue the re-
quested rulings. If only a portion of a
document is relevant to resolving an issue,
the taxpayer must indicate the relevant
portion or portions of the document, gen-
erally by highlighting or underscoring. In
either instance, the taxpayer must summa-
rize the relevant portion or portions and
explain their relevance in the body of its
request.
.03Description of Covered
Transactions, Related Transactions,
and Legal Issues.
(1)In general. A request for a Trans-
actional Ruling with respect to a Covered
Transaction must include a description of
each Covered Transaction and each other
transaction that is part of the same plan or
series of related transactions. The request
must also include a description and anal-
ysis of all legal issues that may affect the
requested rulings (even if arising in a
Covered Transaction for which a Signifi-
cant Issue Ruling or no ruling is re-
quested). The descriptions must include
sufficient factual information and legal
analysis to allow the Service to determine
whether to issue the requested rulings.See
sections 7.01(8) and (9) of Rev. Proc.
2017–1. The information and legal analy-
sis described in this section 3.03 must be
included in the body of the request.
A request for a Transactional Ruling
must be accompanied by a statement de-
scribing the federal income tax conse-
quences of all other material transactions
related to the request.
For purposes of section 11.05(1) of
Rev. Proc. 2017–1 (conditions under
which a letter ruling may be revoked), a
determination whether there has been a
misstatement or omission of controlling
facts is made solely on the basis of the
information in the body of the request and
without regard to any documents or other
attachments, including those provided
pursuant to section 3.02 of this revenue
procedure.
If the Service finds that information
relevant to the requested rulings is not
included in the body of the request
(whether or not it is included in a docu-
ment attached to the request), the Service
will bring the matter to the attention of the
taxpayer’s representative, request a sup-
plemental submission correcting the omis-
sion, and take any other appropriate ac-
tion.
The information required pursuant to
this section 3.03 must include, as applica-
ble, the information and legal analysis de-
scribed in paragraphs (2) through (20) of
this section 3.03.
(2)Control. The taxpayer must de-
scribe how Distributing will have control
of Controlled immediately before the dis-
tribution under § 355(a)(1)(A) and how
Distributing will meet the requirement
that it distribute: (a) all of the Controlled
stock and securities that it holds immedi-
ately before the distribution, or (b) an
amount of Controlled stock constituting
control (within the meaning of § 368(c))
under § 355(a)(1)(D). If Distributing re-
tains any Controlled stock or options after
the distribution, the taxpayer must de-
scribe how Distributing meets the require-
ments of § 355(a)(1)(D)(ii).
(3)Active conduct of a trade or busi-
ness. The taxpayer must provide a com-
plete description of each business (Active
Business) on which each of Distributing
and Controlled relies to satisfy the re-
quirements of § 355(b) and § 1.355–3(b)
(Active Business Requirement). If Dis-
tributing or Controlled meets the Active
Business Requirement by relying on
§ 355(b)(3), the taxpayer must so state and
must describe the separate affiliated group
and its relevant activities. If Distributing
or Controlled relies on activities of a part-
nership to meet the Active Business Re-
quirement, the taxpayer must so state and
describe the facts and circumstances relat-
ing to the partnership. For each of Distrib-
uting and Controlled—
(a) The taxpayer must describe how
each of the requirements of § 1.355–3(b)
is met with respect to each Active Busi-
ness. The information should establish
that each Active Business engages in the
collection of income and the payment of
expenses.
(b) The taxpayer must submit a table
showing the amounts of gross income
earned and salaries and wages paid to
employees during each of the past five
years for each Active Business. The tax-
payer should not submit financial state-
ments to satisfy this requirement unless
requested by the Service.But seepara-
graph (4) of this section 3.03.
(c) The taxpayer must demonstrate the
performance of active and substantial
managerial and operational functions for
each Active Business during each of the
past five years and immediately after the
distribution. To make this demonstration,
the taxpayer must provide information on
the duties and actions of employees in
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284

sufficient detail but should not provide
more detail than necessary regarding the
duties or actions of specific employees or
groups of employees.
(d) If the Active Business or any ma-
terial portion of the Active Business was
acquired within the past five years, the
taxpayer must describe the acquisition.
Specifically, the taxpayer must describe
whether: (1) the acquisition occurred in a
transaction in which gain or loss was rec-
ognized in whole or in part; (2) any stock
of Controlled was acquired in a taxable
transaction; and (3) the acquisition consti-
tuted an expansion of an existing business
(see, for example, § 1.355–3(b)(3)(ii)).
(4)Balance sheets. The taxpayer must
provide the most recent available quar-
terly or annual (book) consolidated bal-
ance sheet. The taxpayer must also in-
clude the following schedules from its
most recent Form 1120, U.S. Corporation
Income Tax Return, or similar Form: L,
M–1, M–2, or M–3, as applicable. In ad-
dition, the taxpayer must provide a pro
forma balance sheet for each of the sepa-
rate affiliated groups of which either Dis-
tributing or Controlled is the common par-
ent (as defined in § 355(b)(3)(B)), as of
immediately after the final distribution
that is part of a plan or series of related
transactions.
(5)Section 355(a)(3)(B). If Distribut-
ing acquired any stock in Controlled
within the past five years, the taxpayer
must describe the acquisition.
(6)Device prohibition. The taxpayer
must describe the facts relevant to deter-
mine whether the distribution constitutes a
device for the distribution of earnings and
profits, within the meaning of § 355(a)
(1)(B). The description must include a
discussion of the applicability or nonap-
plicability of the device and nondevice
factors set forth in § 1.355–2(d). A Trans-
actional Ruling may contain a ruling on a
significant legal issue pertaining to the
device prohibition, but the general issue of
whether the distribution constitutes a de-
vice will not be addressed.Seesection
3.01(54) of Rev. Proc. 2017–3, as modi-
fied by section 5.07 of this revenue pro-
cedure.
(7)Business purpose. The taxpayer
must describe the facts relevant to deter-
mine whether the distribution satisfies the
corporate business purpose requirement
under § 1.355–2(b). A Transactional Rul-
ing may contain a ruling on a significant
legal issue pertaining to the business pur-
pose requirement, but the general issue of
whether the distribution satisfies the busi-
ness purpose requirement will not be ad-
dressed.Seesection 3.01(54) of Rev.
Proc. 2017–3, as modified by section 5.07
of this revenue procedure.
(8)Continuity of interest. The tax-
payer must provide a description of the
facts relevant to determine whether the
continuity-of-interest requirement under
§ 1.355–2(c) will be satisfied.
(9)Transactions between Distributing
and Controlled. The taxpayer must submit
a description of all transfers of property
and all performance of services between
Distributing (or its affiliates) and Con-
trolled (or its affiliates) undertaken in pur-
suance of the plan of reorganization, in
connection with the reorganization or oth-
erwise related to the distribution.
(10)Loss recognized. The taxpayer
must submit a description of any loss that
will be recognized in Covered Transac-
tions or in a related transaction.
(11)Continuity of business enterprise.
For a distribution that is also part of a
reorganization qualifying under § 368(a)
(1)(D), the taxpayer must explain how the
taxpayer will meet the continuity of busi-
ness enterprise (COBE) requirement un-
der § 1.368 –1(d).
(12)Indebtedness. The taxpayer must
describe any issuance of indebtedness by
Distributing (or any of its affiliates), the
proceeds of which will be used to satisfy
any pre-existing indebtedness of Distrib-
uting.See§§ 361(b)(3) and 361(c)(3), and
Rev. Rul. 79 –258, 1979 –2 C.B. 143.
(13)Matching of income and deduc-
tions. The taxpayer must state the current
method of accounting for each of the par-
ties to the transaction. If one or more
parties use the cash method of accounting,
the taxpayer must explain the extent to
which any actions have been or will be
taken that are not in the ordinary course of
business and that might affect the timing
or the amount of any income or deduction
to be recognized by a cash basis party to
the transaction.See, for example, Rev.
Rul. 80 –198, 1980 –2 C.B. 113. In addi-
tion, the taxpayer must submit a statement
as to whether any income item, such as an
account receivable, or any item resulting
from a sale, exchange or disposition that
would have resulted in income to Distrib-
uting, or any item of expense, will be
transferred to Controlled. The taxpayer
must submit a complete list with explana-
tions if any of these items are being trans-
ferred.
(14)Transfer of property to Controlled
and related matters. The taxpayer must
describe (a) any transfer of property by
Distributing (or any of its affiliates) to
Controlled (or any of its affiliates) in pur-
suance of the plan of reorganization or
otherwise related to the distribution (in-
cluding any transfer intended to qualify
under § 351(a)), (b) any Controlled stock
or securities or other consideration re-
ceived therefor (actual or deemed), and (c)
any distribution or other transfer of any
such consideration to shareholders or
creditors of Distributing in pursuance of
the plan or reorganization, in connection
with the reorganization, or otherwise re-
lated to the distribution.
(15)Disqualified distribution. The tax-
payer must explain why the distribution
will not be a disqualified distribution un-
der § 355(d)(2).
(16)Planned 50-percent acquisitions.
The taxpayer must state whether the trans-
action will be part of a plan or series of
related transactions pursuant to which one
or more persons acquire, directly or indi-
rectly, stock representing a 50-percent or
greater interest in the stock of Distributing
or Controlled, and describe any relevant
facts.See§ 355(e) and §§ 1.355–7 and
1.355– 8T (or successor regulations). Ex-
cept as provided in section 3.01(54) of
Rev. Proc. 2017–3, as modified by section
5.07 of this revenue procedure, the issue
of whether a distribution is part of such a
plan will not be addressed in a Transac-
tional Ruling.
(17)Certain intragroup transactions.
The taxpayer must state whether § 355(f),
including by operation of § 1.355– 8T (or
successor regulations), precludes the ap-
plication of § 355(a) to any distribution or
exchange between members of an affili-
ated group, and describe any relevant
facts.
(18)Disqualified investment corpora-
tion. The taxpayer must explain why, im-
mediately after the distribution, neither
Distributing nor Controlled will be a dis-
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285

qualified investment corporation (within
the meaning of § 355(g)(2)).
(19)Real estate investment trust.Ifei-
ther Distributing or Controlled is a real
estate investment trust, the taxpayer must
so state and explain why § 355(a) (and
so much of § 356 as relates to § 355)
otherwise applies to the transaction.See
§ 355(h).
(20)Post-distribution transactions and
relationships. The ruling request must in-
clude a description of any transactions
expected to occur and continuing relation-
ships expected to exist between Distribut-
ing and Controlled, and their respective
affiliates or shareholders, and an explana-
tion of the reasons why these transactions
and relationships should not affect the re-
quested rulings.
.04Representations Required for
Transactional Rulings.
(1)In general. A request for a Trans-
actional Ruling must include a statement
that, except as otherwise set forth in the
submission, the taxpayer makes all the
representations in section 3 of the Appen-
dix to this revenue procedure in the form
set forth therein. The taxpayer should not
state the representations separately.
If a taxpayer requests a Transactional
Ruling and also requests, with respect to
any material transaction related to the re-
quest, either a Significant Issue Ruling or
no ruling, the taxpayer must provide a
representation as to the qualification of the
material transaction under the relevant
provision,e.g., whether the material trans-
action qualifies as an exchange under
§ 351, as a reorganization under § 368(a)
(1) [insert appropriate subparagraph] and/
or under § 355. The taxpayer should not
make the representations in the Appendix
to this revenue procedure with respect to
such material transaction.
If any of the representations in section
3 of the Appendix does not apply to the
Transactional Ruling request (for exam-
ple, representations regarding consoli-
dated return matters if the taxpayers are
not members of a consolidated group), the
taxpayer should so state and explain why
the representation does not apply.
If a representation in section 3 of the
Appendix applies, but the taxpayer cannot
make the representation in the form set
forth in the Appendix, the taxpayer must
explain its inability to make the represen-
tation in that form. If appropriate, the tax-
payer should make a modified representa-
tion that addresses the same issue(s) and
explain why the modification is necessary
and should not prevent the Service from
ruling as requested. In addition, if the tax-
payer cannot make any of the following
three representations in section 3 of the
Appendix, it must provide the discussion
set forth below:
(a) If the taxpayer cannot make repre-
sentation 42, it must discuss the applica-
tion of §§ 897 and 1445 to the distribution
and any related transaction.
(b) If the taxpayer cannot make repre-
sentation 43, it must discuss the applica-
tion of §§ 367 and 1248 to the distribution
and any related transaction.
(c) If the taxpayer cannot make repre-
sentation 44, it must discuss the applica-
tion of § 7874 to the acquisition.
Furthermore, if Distributing cannot
make representation 25, it must enter into
a closing agreement with the Service as a
condition to receiving a letter ruling.
(2)Alternative representations. Repre-
sentations 3, 8, 11, 15, 22, 31, and 41 of
section 3 of the Appendix permit the tax-
payer to make any of two or more alter-
native representations. As to each of these
items, the taxpayer should indicate which
of the alternative representations it makes.
(3)Revisions to representations. Devi-
ations from the required representations
may delay the processing of a request.
Taxpayers are encouraged to revise repre-
sentations only if the revision makes the
representations materially more accurate.
Furthermore, inconsequential changes
to the representations should be avoided.
For example, if Distributing or Controlled
is a limited liability company with “mem-
bership interests” rather than “stock,” and
is classified as a corporation for federal
income tax purposes, it would be appro-
priate to include a description of the eq-
uity interests in the explanation of the
facts and make representations referring
to “stock”.
.05Supplemental Ruling Requests.
If a taxpayer receives a Transactional
Ruling, the taxpayer may request a sup-
plemental ruling if the facts at the time of
submission of the supplemental ruling re-
quest are materially different from the
controlling facts on which the Transac-
tional Ruling was based.
SECTION 4. PROCEDURES FOR
SIGNIFICANT ISSUE RULING
REQUESTS
A taxpayer may request a Significant
Issue Ruling, pursuant to section 3.01(51)
of Rev. Proc. 2017–3, as modified by sec-
tion 5.06 of this revenue procedure, even
if the Covered Transaction would qualify
for a Transactional Ruling. The Service
may, however, decline to issue a Signifi-
cant Issue Ruling if it concludes that issu-
ing a ruling on only part of an integrated
transaction would not be in the best inter-
ests of tax administration.
In submitting a request for a Signifi-
cant Issue Ruling, a taxpayer must submit
the material described in section 6.03(2)
of Rev. Proc. 2017–1, as modified by sec-
tion 5.02 of this revenue procedure, and
comply with the documentation require-
ments set forth in section 3.02 of this
revenue procedure.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
.01 Rev. Proc. 2017–1 is modified by
adding the following subheadings under
section 6.03 in the Table of Contents:
(1) General rule
(2) Significant issue ruling
(a) No rule areas
(b) Section 355 distributions and re-
lated transactions
(3) Submission requirements
.02 Section 6.03 of Rev. Proc. 2017–1
is modified by deleting the text and adding
the following text in its place:
(1)General rule. An Associate office
ordinarily will not issue a letter ruling on
only part of an integrated transaction. If a
part of a transaction falls under a no-rule
area, a letter ruling on other parts of the
transaction may be issued. Before prepar-
ing the letter ruling request, a taxpayer
should call a branch having jurisdiction
for the matters on which the taxpayer is
seeking a letter ruling to discuss whether
the Associate office will issue a letter rul-
ing on part of the transaction.
(2)Significant issue ruling.
(a)No rule areas. The Service will not
rule on the qualification of any transaction
under § 332, § 351, or § 1036, or (except
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286

as provided in paragraph (b) of this sec-
tion 6.03(2)) on whether a transaction
constitutes a reorganization within the
meaning of § 368 (other than under
§§ 368(a)(1)(D) and 355), regardless of
whether such transaction is part of an in-
tegrated transaction (seesection 3.01(51)
of Rev. Proc. 2017–3, 2017–1 I.R.B 130,
134). Instead, the Associate Chief Coun-
sel (Corporate) will only issue a letter
ruling on significant issues (within the
meaning of section 3.01(51) of Rev. Proc.
2017–3) presented in a transaction de-
scribed in § 332, § 351, § 368 (other than
under §§ 368(a)(1)(D) and 355), or
§ 1036. For example, the Service may rule
on significant issues under § 1.368 –1(d)
(continuity of business enterprise) and
§ 1.368 –1(e) (continuity of interest). Let-
ter rulings requested under this section
6.03(2)(a) are subject to the no-rule poli-
cies of Rev. Proc. 2017–3, 2017–1 I.R.B.
130.
(b)Section 355 distributions and re-
lated transactions. Pursuant to section 4
of Rev. Proc. 2017–52, 2017– 41 I.R.B.
283, in lieu of requesting a Transactional
Ruling regarding a Covered Transaction, a
taxpayer may request a Significant Issue
Ruling. Letter rulings requested under this
section 6.03(2)(b) are subject to the poli-
cies of Rev. Proc. 2017–3, 2017–1 I.R.B.
130.
(3)Submission requirements. Before
preparing a letter ruling request under sec-
tion 6.03(2) of this revenue procedure in-
volving significant issues presented in a
transaction described in § 332, § 351,
§ 355, § 368, or § 1036, the taxpayer is
encouraged to call the Office of Associate
Chief Counsel (Corporate) at the tele-
phonenumberprovidedinsection
10.07(1)(a) of this revenue procedure to
discuss whether the Service will entertain
a letter ruling request under section
6.03(2). The Service reserves the right to
rule on any other aspect of the transaction
(including ruling adversely) to the extent
the Service believes it is in the best inter-
ests of tax administration.Cf. section 2.01
of Rev. Proc. 2017–3, 2017–1 I.R.B. 130.
The taxpayer may request rulings on
one or more significant issues in a single
letter ruling request. Letter ruling requests
under section 6.03(2) must include the
following for each significant issue:
(a) A narrative description of the trans-
action that puts the issue in context;
(b) A statement identifying the issue;
(c) An analysis of the relevant law,
which should set forth the authorities most
closely related to the issue and explain
why these authorities do not resolve the
issue, and an explanation concerning why
the issue is significant within the meaning
of section 3.01(51) of Rev. Proc. 2017–3,
2017–1 I.R.B. 130; and
(d) The precise ruling(s) requested.
The taxpayer should consult other pub-
lished authorities (see, for example, Ap-
pendix G of this revenue procedure, which
identifies certain checklist and guideline
revenue procedures including Rev. Proc.
2017–52) to identify information or rep-
resentations but only to the extent that
they relate to the issue.
If the Service issues a letter ruling on a
significant issue under section 6.03(2),
then the letter ruling will state that no
opinion is expressed as to any issue or
step not specifically addressed by the let-
ter. In addition, letter rulings issued under
section 6.03(2) will contain the following
(or similar) language:
This letter is issued pursuant to sec-
tion 6.03(2) of Rev. Proc. 2017–1,
2017–1 I.R.B. 1, regarding one or more
significant issues under § 332, § 351,
§ 355, § 368, or § 1036. The ruling[s]
contained in this letter only address[es]
one or more significant issues involved
in the transaction. This Office expresses
no opinion as to the overall tax conse-
quences of the transactions described in
this letter or as to any issue not specif-
ically addressed by the ruling[s] below.
.03 Section 6.11 of Rev. Proc. 2017–1
is modified by deleting the text and adding
the following text in its place:
Except with respect to a Covered
Transaction within the meaning of Rev.
Proc. 2017–52, a letter ruling will not be
issued with respect to an issue that is
clearly and adequately addressed by stat-
ute, regulations, decision of a court, rev-
enue rulings, revenue procedures, notices,
or other authority published in the Internal
RevenueBulletin(ComfortRuling).
However, except with respect to issues
under § 332, § 351, § 368, or § 1036 and
the tax consequences resulting from the
application of such Code sections (see
generallysection 6.03(2) of this revenue
procedure), the Associate office may, in
its discretion, decide to issue a Comfort
Ruling if the Associate office is otherwise
issuing a letter ruling to the taxpayer on
another issue arising in the same transac-
tion.
.04 Section 7.01(2)(a) of Rev. Proc.
2017–1 is modified by deleting the text
and adding the following text in its place:
(a)Documents. True copies of all con-
tracts, wills, deeds, agreements, instru-
ments, trust documents, proposed dis-
claimers, and other documents pertinent to
the transactions must be submitted with
the request.But seesection 3.02 and sec-
tion 4 of Rev. Proc. 2017–52 for require-
ments relating to ruling requests under
§ 355.
If the request concerns a corporate dis-
tribution, reorganization, or similar trans-
action, the corporate balance sheet and
profit and loss statement should also be
submitted. If the request relates to a pro-
spective transaction, the most recent bal-
ance sheet and profit and loss statement
should be submitted.But seesection 3.02
and section 4 of Rev. Proc. 2017–52 for
requirements relating to ruling requests
under § 355.
If any document, including any balance
sheet and profit and loss statement, is in a
language other than English, the taxpayer
must also submit a certified English trans-
lation of the document, along with a true
copy of the document. For guidelines on
the acceptability of such documents,see
paragraph (c) of this section 7.01(2).
Each document other than the request
should be labeled and attached to the re-
quest in alphabetical sequence. Original
documents such as contracts, wills, etc.,
should not be submitted because they be-
come part of the Service’s file and will not
be returned.
.05 Section .01 of Appendix G to Rev.
Proc. 2017–1 is modified as follows:
(1) In the column titled REVENUE
PROCEDURE AND NOTICE, in the text
corresponding to “Subchapter C—Corpo-
rate Distributions, Adjustments, Trans-
fers, and Reorganizations” found in the
columnCODEORREGULATION
SECTION, deleting the text and adding
the following text in its place:
Rev. Proc. 77–37, 1977–2 C.B. 568, as
modified by Rev. Proc. 89 –30, 1989 –1
C.B. 895, and as amplified by Rev. Proc.
Bulletin No. 2017– 41October 10, 2017
287

77– 41, 1977–2 C.B. 574, Rev. Proc. 83–
81, 1983–2 C.B. 598 (see alsoRev. Proc.
2017–3, 2017–1 I.R.B. 130), Rev. Proc.
84 – 42, 1984 –1 C.B. 521 (superseded, in
part, as to no-rule areas by Rev. Proc.
2017–3, 2017–1 I.R.B. 130), Rev. Proc.
86 – 42, 1986 –2 C.B. 722, Rev. Proc. 89 –
50, 1989 –2 C.B. 631, and Rev. Proc.
2017–52 (relating to Transactional Rul-
ings for Covered Transactions).But see
section 3.01(51) of Rev. Proc. 2017–3,
which states that the Service will not issue
a letter ruling as to whether a transaction
constitutes a reorganization within the
meaning of § 368 (except as provided in
section 6.03(2)(b) of this revenue proce-
dure). However, the Service will issue a
letter ruling addressing significant issues
(within the meaning of section 3.01(51) of
Rev. Proc. 2017–3) presented in a reorga-
nization within the meaning of § 368. The
information and representations described
in these revenue procedures should be in-
cluded in a letter ruling request only to the
extent that they relate to the significant
issues with respect to which the letter rul-
ing is requested.Seesection 6.03(2).
(2) In the column titled REVENUE
PROCEDURE AND NOTICE, in the text
corresponding to “355 Checklist question-
naire” found in the column CODE OR
REGULATION SECTION, deleting the
text and adding the following text in its
place:
Rev. Proc. 2017–52.Seealso section
6.03(2) of this revenue procedure.
.06 Section 3.01(51) of Rev. Proc.
2017–3 is modified by:
(1) deleting the language “Distribution
of Stock and Securities of a Controlled
Corporation;” from the heading,
(2) deleting the language “355,” each
place it appears,
(3) adding the language “except a
transaction intended to qualify under
§§ 368(a)(1)(D) and 355,” after the phrase
“within the meaning of § 368,” and
(4) replacing the reference to “6.03”
with “6.03(2),” each place it appears.
.07 Section 3.01(54) of Rev. Proc.
2017–3 is modified by deleting the text
and adding the following text in its place:
(54) Section 355.—Distribution of
Stock and Securities of a Controlled Cor-
poration.—Whether the distribution of the
stock of a controlled corporation is being
carried out for one or more corporate busi-
ness purposes, whether the transaction is
used principally as a device, and whether
the distribution and an acquisition are part
of a plan under § 355(e). Notwithstanding
the preceding sentence, the Service: (1)
will issue a letter ruling with respect to a
significant issue under § 1.355–2(b) per-
taining to the corporate business purpose
requirement, provided that the issue is a
legal issue and is not inherently factual in
nature, (2) will issue a letter ruling with
respect to a significant issue under
§ 355(a)(1)(B) and § 1.355–2(d) pertain-
ing to device, provided that the issue is a
legal issue and is not inherently factual in
nature, and (3) may issue a ruling regard-
ing the effect of redemptions under
§ 355(e) pending the issuance of tempo-
rary or final regulations regarding re-
demptions under § 355(e) if an adverse
ruling on such question would result in
there being a direct or indirect acquisition
by one or more persons of stock represent-
ing a 50-percent or greater interest in the
distributing corporation or the controlled
corporation that is part of a plan under
§ 355(e).
.08 Section 4.02(2) of Rev. Proc.
2017–3 is modified by replacing the ref-
erence to “6.03” with “6.03(2).”
.09 Section 4.02(9) of Rev. Proc.
2017–3 is modified by deleting the text
and adding the following text in its place:
Except with respect to a Covered
Transaction within the meaning of section
2.03(1)(a) of Rev. Proc. 2017–52, a letter
ruling will not be issued with respect to an
issue that is clearly and adequately ad-
dressed by statute, regulations, decision of
a court, revenue rulings, revenue proce-
dures, notices, or other authority pub-
lished in the Internal Revenue Bulletin
(Comfort Ruling). However, except with
respect to issues under §§ 332, 351, 368,
and 1036 and the tax consequences result-
ing from the application of such Code
sections (see generallysection 6.03(2) of
Rev. Proc. 2017–1, 2017–1 I.R.B. 1), an
Associate office may in its discretion issue
a Comfort Ruling if the Associate office is
otherwise ruling on another issue arising
in the same transaction.
.10 Rev. Proc. 96 –30, 1996 –1 C.B.
696, is superseded.
.11 Rev. Proc. 2003– 48, 2003–2 C.B.
86, is superseded.
.12 Rev. Proc. 2009 –25, 2009 –24
I.R.B. 1088, is superseded.
.13 Rev. Proc. 2013–32, 2013–28
I.R.B. 55, is superseded.
SECTION 6. EFFECTIVE DATE
AND ENDING DATE
.01Effective Date.
(1)In general. This revenue procedure
will apply to all ruling requests post-
marked or, if not mailed, received by the
Service after September 21, 2017.
(2)Application of this Revenue Proce-
dure to Pending Ruling Requests.Ifa
taxpayer has a request for a Significant
Issue Ruling that is postmarked or, if not
mailed, received by the Service on or be-
fore September 21, 2017 (a pending ruling
request), the taxpayer may convert that
pending ruling request to a request for a
Transactional Ruling by submitting the
information and documentation required
under this revenue procedure. All requests
to convert pending ruling requests must be
submitted on or before November 20,
2017 and no extensions to submit a con-
version request will be granted.
.02Ending Date.
(1)In general. This pilot program will
expire on March 21, 2019. At that time,
the Service will evaluate the effectiveness
and sustainability of the program and con-
sider whether the program should be ex-
tended.
(2)Application of this Revenue Proce-
dure to submitted ruling requests. This
revenue procedure will continue to apply
to all ruling requests postmarked or, if not
mailed, received by the Service on or be-
fore March 21, 2019 (a submitted ruling
request) if the submitted ruling request is
a complete and thorough submission.See
section 7.01 of Rev. Proc. 2017–1.
SECTION 7. PAPERWORK
REDUCTION ACT
The collections of information in this
revenue procedure have been reviewed
and approved by the Office of Manage-
ment and Budget (OMB) in accordance
with the Paperwork Reduction Act (44
U.S.C. 3507) under control number 1545-
1522.
October 10, 2017Bulletin No. 2017– 41
288

An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information un-
less the collection of information displays
a valid OMB control number.
The collections of information in this
revenue procedure are in sections 3 and 4,
and the Appendix. This information is re-
quired to determine whether a taxpayer
would qualify for a Transactional Ruling
or a Significant Issue Ruling under this
revenue procedure. The collections of in-
formation are required to obtain a benefit.
The likely respondents are corporations
that control another corporation, as well as
the management of the corporation the
stock of which is being distributed or that
controls the corporation the stock of
which is being distributed.
The estimated total annual reporting
burden for Rev. Proc. 2017–1 is 320,436
hours.
The estimated annual burden per re-
spondent for Rev. Proc. 2017–1 varies
from 1 to 200 hours, depending on indi-
vidual circumstances, with an estimated
average of 80 hours. The estimated num-
ber of respondents is 3,956.
The estimated total annual reporting
burden for this revenue procedure adds
6,000 hours to Rev. Proc. 2017–1.
The estimated annual burden per re-
spondent for this revenue procedure varies
from 150 to 250 hours, depending on in-
dividual circumstances, with an estimated
average of 200 hours. The estimated num-
ber of additional respondents added to
Rev. Proc. 2017–1 by this revenue proce-
dure is 30, increasing the estimated num-
ber of respondents to Rev. Proc. 2017–1
to 3,986.
The estimated average burden for Rev.
Proc. 2017–1, as increased by this revenue
procedure, is 81 hours.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue tax law. Generally tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
SECTION 8. REQUEST FOR
COMMENTS
The Service requests comments on all
aspects of this revenue procedure. In partic-
ular, the Service requests comments con-
cerning the reasonableness of the require-
ments and conditions set forth in this
revenue procedure and recommendations
for increasing efficiencies. The Service also
requests comments regarding the required
representations set forth in section 3 of the
Appendix of this revenue procedure, includ-
ing any additions, deletions, and modifica-
tions. In addition, the Service requests com-
ments regarding whether Transactional
Rulings, as described in section 2.03(1)(c)
of this revenue procedure, should be made
available for other transactions.
SECTION 9. WHERE TO SEND
AND DATE BY WHICH TO
SUBMIT COMMENTS
Written comments, identified by Rev.
Proc. 2017–52, may be submitted using
one of the following methods:
•By Mail:
Internal Revenue Service
Attn: CC:PA:LPD:PR (Rev. Proc.
2017–52)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
•By Hand or Courier Delivery: Sub-
missions may be hand-delivered
Monday through Friday between the
hours of 8 a.m. and 4 p.m. to:
Courier’s Desk
Internal Revenue Service
Attn: CC:PA:LPD:PR
(Rev. Proc. 2017–52)
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
•Electronic: Alternatively, persons may
submit comments electronically to
Notice.Comments@irscounsel.treas.gov.
Please include “Rev. Proc. 2017–52” in
the subject line of any electronic com-
munications.
Comments should be submitted no
later than December 31, 2017.
SECTION 10. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Grid R. Glyer and Richard
M. Heinecke of the Office of Associate
Chief Counsel (Corporate). For further in-
formation regarding this revenue proce-
dure, contact Grid R. Glyer at (202) 317-
6847 or Richard M. Heinecke at (202)
317-5363 (not toll-free numbers).
Bulletin No. 2017– 41October 10, 2017
289

APPENDIX
SECTION 1. INTRODUCTION
This Appendix sets forth the representations the taxpayer must make pursuant to section 3.04 of this revenue procedure.
SECTION 2. DEFINITIONS
For purposes of this Appendix, the following definitions apply:
.01Controlis as defined in § 368(c).
.02DistributingandControlledmean, respectively, the distributing corporation and the controlled corporation, as described in
§ 355(a)(1)(A). In the case of a Split-Up (defined in section 2.11 of this Appendix), a reference to Distributing means, where
applicable, a reference to the resulting Controlled corporations.
.03Distributionmeans either a distribution of stock or securities of Controlled with respect to Distributing stock (i.e., a Spin-Off
(defined in section 2.09 of this Appendix)), an exchange of Distributing stock or securities for Controlled stock or securities (i.e.,
a Split-Off (defined in section 2.10 of this Appendix) or a Split-Up (as defined in section 2.11 of this Appendix)), or a combination
thereof.
.04Expanded Affiliated Grouprefers to all members of an affiliated group, as defined in § 1504(a) without regard to § 1504(b).
.05Liabilitymeans any liability or other obligation without regard to whether it has been taken into account for Federal income
tax purposes.
.06Other Propertymeans property other than stock and securities of Controlled.
.07Propertyis as defined in § 317(a).
.08SAG,DSAG,CSAG.SAGmeans a separate affiliated group as defined in 355(b)(3)(B).DSAGmeans the SAG of which
Distributing is the common parent immediately after the distribution.CSAGmeans the SAG of which Controlled is the common
parent immediately after the distribution.
.09Spin-Offmeans a pro rata Distribution to the shareholders of Distributing of the stock of Controlled.
.10Split-Offmeans a Distribution of the stock of Controlled to some (but not all) of the shareholders of Distributing in redemption
of some or all of their stock of Distributing.
.11Split-Upmeans a liquidating Distribution in which Distributing distributes to its shareholders the stock of more than one
Controlled, either pro rata or non-pro rata.
SECTION 3. REPRESENTATIONS
Control Requirements
Sections 355(a)(1)(A), 355(a)(1)(D)(i) and 368(c)
Seesection 3.03(2) of this revenue procedure
1Distributing will have Control of Controlled immediately before the Distribution.
2In the Distribution, Distributing will distribute on the same day all the stock and securities of Controlled that it holds
immediately before the Distribution.
3Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Distributing will not engage in a transaction, in anticipation of the Distribution, in which either (i) Distributing
obtains Control of Controlled (including a recapitalization into Control but excluding a transaction that includes the
formation of Controlled), or (ii) a corporation of which Distributing is not in Control becomes a member of the
CSAG.
(b) If Distributing engages in a transaction described in paragraph (a), Controlled will comply with one of the safe
harbors set forth in Rev. Proc. 2016–40, 2016–32 I.R.B. 228.
4No indebtedness owed by Controlled to Distributing after the Distribution will constitute stock or securities of
Controlled or any other entity.
Shareholders Participating in a Spin-Off
Sections 355(a)(1) and 356(a)(1)
5None of the Controlled stock, Controlled securities, or Other Property to be distributed in the Distribution will be
received in any capacity other than that of a shareholder of Distributing.
6No shareholder of Distributing will surrender Distributing stock in the Distribution.
October 10, 2017Bulletin No. 2017– 41
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Shareholders Participating in a Split-Up or Split-Off
Sections 355(a)(1) and 356(a)(1)
7The fair market value of Controlled stock, Controlled securities, or Other Property to be received by each
shareholder of Distributing that surrenders Distributing stock will be approximately equal to the fair market value of
Distributing stock surrendered by the shareholder in the transaction.
Distributing Securities
8Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Distributing will have no securities outstanding.
(b) Distributing has securities outstanding, but it will not distribute Controlled stock, Controlled securities or Other
Property to any holder of such securities in the Distribution, in satisfaction thereof.
Active Trade or Business Requirement
Section 355(b)
Seesection 3.03(3) of this revenue procedure
9The business relied on by each of Distributing or the DSAG and Controlled or the CSAG to meet the active trade or
business requirement of § 355(b) is not the holding of Property for investment purposes.
10 With respect to the business relied on by each of Distributing or the DSAG and Controlled or the CSAG to meet the
active trade or business requirement of § 355(b), there have been no substantial operational changes since the end of
the taxpayer’s most recent taxable year.
11 Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Following the Distribution, Distributing or the DSAG and Controlled or the CSAG each will continue,
independently and with its separate employees, the active conduct of the business on which it relies to meet the
active trade or business requirement of § 355(b).
(b) Following the Distribution, Distributing or the DSAG and Controlled or the CSAG each will continue,
independently and with its separate employees, the active conduct of its share of all the integrated activities of the
business on which it relies to meet the active trade or business requirement of § 355(b), as conducted by Distributing
or the DSAG prior to consummation of the transaction.
Note: Distributing or the DSAG and Controlled or the CSAG may share employees after the Distribution as long as
the parties enter into agreements with respect to those employees based on arm’s-length terms for a limited period of
time consistent with Rev. Rul. 2003–75, 2003–75, I.R.B. 79.
12 Immediately after the Distribution, the fair market value of the gross assets of the trade(s) or business(es) in which
each of Distributing or the DSAG and Controlled or the CSAG will rely to satisfy the active trade or business
requirement of § 355(b) will be, in each case, at least 5 percent of the total fair market value of the gross assets of
that corporation or SAG.Seesection 4.01(30) of Rev. Proc. 2017–3.
Hot stock
Section 355(a)(3)(B)
Seesection 3.03(5) of this revenue procedure
13 Distributing will not have acquired any Controlled stock in a transaction in which gain or loss was recognized
during the five-year period immediately preceding the Distribution.
Device
Section 1.355–2(d)
Seesection 3.03(6) of this revenue procedure
14 The transaction will not be used principally as a device for the distribution of the earnings and profits of Distributing
or Controlled or both.See§ 355(a)(1)(B).
15 Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Immediately after the Distribution, the fair market value of the gross investment assets of each of Distributing
and Controlled will be less than two-thirds of the fair market value of its total gross assets.Seesection 5.01(3) of
Rev. Proc. 2017–3.
(b) Immediately after the Distribution, the fair market value of the gross assets of the trade(s) or business(es) on
which each of Distributing and Controlled relies to satisfy the active trade or business requirement of § 355(b) will
be 10 percent or more of the fair market value of its gross investment assets.Seesection 5.01(3) of Rev. Proc.
2017–3.
(c) Immediately after the Distribution, the ratio of the fair market value of the gross investment assets to the fair
market value of the gross assets other than the gross investment assets of Distributing or Controlled will not be three
times or more of such ratio for the other corporation.Seesection 5.01(3) of Rev. Proc. 2017–3.
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Business Purpose
Section 1.355–2(b)
Seesection 3.03(7) of this revenue procedure
16 The Distribution is motivated, in whole or substantial part, by one or more of the corporate business purposes
described in this request for ruling.
Section 357(b)
17 Any Liabilities assumed (within the meaning of § 357(d)) by Controlled were incurred in the ordinary course of
business and are associated with any assets transferred.
Sections 357(c) and 361(b)(3)
18 The total adjusted basis and the fair market value of assets transferred by Distributing to Controlled will each equal
or exceed the sum of:
(a) The total amount of the Liabilities assumed (within the meaning of § 357(d)) by Controlled, and
(b) The total amount of any money and the fair market value of other property, if any, received by Distributing and
transferred to its shareholders and its creditors.
Sections 361(b)(3) and (c)(3)
Seesection 3.03(12) of this revenue procedure
19 Any Other Property issued or transferred by Controlled to Distributing in pursuance of the plan of reorganization
will be transferred by Distributing to its shareholders in pursuance of the plan of reorganization or to its creditors in
connection with the reorganization.
Controlled Securities
20 Any securities issued by Controlled to Distributing in pursuance of the plan of reorganization will be transferred by
Distributing to its shareholders in pursuance of the plan of reorganization or to its creditors in connection with the
reorganization.
Solvency of Distributing and Controlled
21 Immediately after the transaction, the fair market value of the assets of each of Distributing and Controlled will
exceed the amount of its Liabilities.
Investment Tax Credit Recapture
22 Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) No Property will be transferred by Distributing to Controlled as part of the Distribution for which an investment
credit determined under § 46 has been (or will be) claimed.
(b) With respect to Property being transferred by Distributing to Controlled as part of the Distribution for which an
investment credit determined under § 46 has been (or will be) claimed, the income tax obligation for the taxable
year in which the Property is transferred will be adjusted pursuant to § 50(a)(1) or (a)(2) to reflect an early
disposition of the Property.
Matching of income and deductions
Seesections 3.03(13) and 3.04(1) of this revenue procedure
23 The transaction does not involve and will not result in a situation in which one party recognizes income but another
party recognizes the deductions associated with such income or a situation in which one party owns Property but
another party recognizes the income associated with such Property.
24 If one or more parties use the cash method of accounting, Distributing will neither accumulate its receivables nor
make extraordinary payment of its payables in anticipation of the transaction.
25 If Distributing uses the cash method of accounting or a similar method and Controlled uses the accrual method or a
similar method, then:
(a) No income item, including an account receivable, nor any item resulting from a sale, exchange or disposition of
Property that would have resulted in income to Distributing, will be transferred to Controlled if Distributing has
earned the right to receive the income under the accrual or similar method of accounting, and
(b) No item of expense will be transferred to Controlled if Distributing could claim a deduction for the expense
under the accrual or similar method of accounting.
Investment Companies
Section 368(a)(2)(F)
26 No two parties to the transaction are investment companies as defined in § 368(a)(2)(F)(iii) and (iv).
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Section 355(d)
Section 1.355–6
Seesection 3.03(15) of this revenue procedure
27 Immediately after the Distribution, no person will hold stock possessing 50 percent or more of the total combined
voting power of all classes of the Distributing stock entitled to vote, or 50 percent or more of the total value of
shares of all classes of the Distributing stock, that was acquired by purchase during the five-year period ending on
the date of the Distribution.
The term person is determined applying the aggregation rules of § 355(d)(7); the term purchase is used as defined in
§ 355(d)(5) and (8); and the term five-year period is determined applying § 355(d)(6).
28 Immediately after the Distribution, no person will hold stock possessing 50 percent or more of the total combined
voting power of all classes of the Controlled stock entitled to vote, or 50 percent or more of the total value of shares
of all classes of the Controlled stock, that was acquired by purchase during the five-year period ending on the date
of the Distribution.
The term person is determined applying the aggregation rules of § 355(d)(7); the term purchase is used as defined in
§ 355(d)(5) and (8); and the term five-year period is determined applying § 355(d)(6).
Section 355(e)
Sections 1.355–7 and 1.355–8T (or successor regulations)
Seesection 3.03(16) of this revenue procedure
29 Stock representing a 50-percent or greater interest (within the meaning of § 355(d)(4)) in Distributing or Controlled
(including a predecessor or successor within the meaning of § 1.355–8T (or successor regulations)) will not be
acquired by any person or persons in a plan or series of related transactions (within the meaning of § 1.355–7) that
includes the Distribution.
Section 355(g)
Seesection 3.03(18) of this revenue procedure
30 Immediately after the Distribution, neither Distributing nor Controlled will be a disqualified investment corporation
within the meaning of § 355(g)(2).
Section 355(h)
Seesection 3.03(19) of this revenue procedure
31 Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Neither Distributing nor Controlled will be a real estate investment trust (within the meaning of § 856) (a
“REIT”) at the time of the Distribution.
(b) Immediately after the Distribution, Distributing and Controlled will both be REITs.
(c)(i) Distributing has been a REIT at all times during the 3-year period ending on the date of the Distribution; (ii)
Controlled has been a taxable REIT subsidiary (as defined in § 856(l)) of Distributing at all times during such
period; and (iii) Distributing had control (as defined in § 368(c) applied by taking into account stock owned directly
or indirectly, including through one or more corporations or partnerships, by Distributing) of Controlled at all times
during such period.
Controlled will be treated as meeting the requirements of (c)(ii) and (c)(iii) if the stock of Controlled was distributed
by a taxable REIT subsidiary in a transaction to which § 355 (or so much of § 356 as relates to § 355) applies, and
the assets of Controlled consist solely of the stock or assets held by one or more taxable REIT subsidiaries of
Distributing meeting the requirements of (c)(ii) and (c)(iii). For purposes of (c)(iii), control of a partnership means
ownership of 80 percent of the profits interest and 80 percent of the capital interests.
Related Transactions
32 No intercorporate debt will exist between Distributing and Controlled at the time of, or subsequent to, the
Distribution of Controlled stock.
33 Payments made in connection with all continuing transactions, if any, between Distributing and Controlled after the
Distribution will be for fair market value based on arm’s-length terms.
34 Distributing and Controlled each will pay its own expenses, if any, incurred in connection with the Distribution.
35 The payment of cash in lieu of fractional shares of Controlled is solely for the purpose of avoiding the expense and
inconvenience of issuing fractional shares and does not represent separately bargained-for consideration. The
fractional share interests of each Distributing shareholder will be aggregated and no Distributing shareholder of
record will receive cash in an amount equal to or greater than the value of one full share of Controlled.
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Consolidated Return Matters
Intercompany Transactions
Sections 1.1502–13 and 1.1502–14
36 Immediately before the Distribution, items of income, gain, loss, deduction, and credit will be taken into account as
required by the applicable intercompany transaction regulations (See§§ 1.1502–13 and 1.1502–14 as in effect before
the publication of § 1.1502–13 in T.D. 8597, 1995–2 C.B. 147, and as currently in effect).
37 There is no loss subject to § 1.1502–13 that will be taken into account as a result of a transaction related to the
Distribution.
Excess Loss Accounts
Section 1.1502–19
38 Any excess loss account in the stock of Controlled or in the stock of any lower-tier Controlled subsidiary will be
taken into account as required by § 1.1502–19.
Intercompany Obligation
Section 1.1502–13(g)
39 Pursuant to § 1.1502–13(g)(3)(ii), no deemed satisfaction and reissuance will occur with respect to securities or other
obligations of Controlled distributed by Distributing to its shareholders or creditors in pursuance of the plan of
reorganization or in connection with the reorganization.
Affiliated Group and Section 358(g)
40 With respect to any Distribution of stock from one member of an Expanded Affiliated Group to another member of
the Expanded Affiliated Group, the § 358 allocation will not result in the stock of Controlled having a higher basis
than it had immediately prior to the Distribution.
S Corporation Matters
41 Alternative representations (seesection 3.04(2) of this revenue procedure):
(a) Distributing is not an S corporation (within the meaning of § 1361(a)) and will not be an S corporation at the
time of the Distribution, and there is no plan or intention by Distributing or Controlled to make an S corporation
election pursuant to § 1362(a).
(b) If Distributing is an S corporation within the meaning of § 1361(a), Controlled will elect to be an S corporation
pursuant to § 1362(a) on the first available date after the Distribution, and there is no plan or intention to revoke or
otherwise terminate the S corporation election of either Distributing or Controlled.
International Issues
Seesection 3.04(1) of this revenue procedure
FIRPTA
42 Neither Distributing nor Controlled will have been a U.S. real property holding corporation (as defined in
§ 897(c)(2)) at any time during the five-year period preceding the Distribution, and neither will be a U.S. real
property holding corporation immediately after the Distribution.
CFC Status
43 Neither Distributing nor Controlled will be a controlled foreign corporation (within the meaning of § 957(a))
immediately before or after the Distribution.
Inversions
44 The Distribution is not part of a plan (or series of related transactions) resulting in an acquisition described in
§ 7874(a)(2)(B)(i).
Miscellaneous
45 Distributing will not dispose of any Controlled stock in anticipation of the Distribution.
46 Controlled will not issue stock or securities to a person other than Distributing in anticipation of the Distribution.
October 10, 2017Bulletin No. 2017– 41
294

Part IV. Items of General Interest
Use of Truncated Taxpayer
Identification Numbers on
Forms W–2, Wage and Tax
Statement, Furnished to
Employees
REG–105004 –16
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION:Notice of proposed rulemaking.
SUMMARY: This document contains
proposed amendments to the regulations
under sections 6051 and 6052 of the In-
ternal Revenue Code (Code). To aid em-
ployers’ efforts to protect employees from
identity theft, these proposed regulations
would amend existing regulations to per-
mit employers to voluntarily truncate em-
ployees’ social security numbers (SSNs)
on copies of Forms W–2, Wage and Tax
Statement, that are furnished to employees
so that the truncated SSNs appear in the
form of IRS truncated taxpayer identifica-
tion numbers (TTINs). These proposed
regulations also would amend the regula-
tions under section 6109 to clarify the
application of the truncation rules to
Forms W–2 and to add an example illus-
trating the application of these rules. Ad-
ditionally, these proposed amendments
would delete obsolete provisions and up-
date cross references in the regulations
under sections 6051 and 6052. These pro-
posed regulations affect employers who
are required to furnish Forms W–2 and
employees who receive Forms W–2.
DATES: Written or electronic comments
and requests for a public hearing must be
received by December 18, 2017.
ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG–105004 –16), room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-
delivered between the hours of 8 a.m. and
4p.m.toCC:PA:LPD:PR(REG–
105004 –16), Courier’s Desk, Internal
Revenue Service, 1111 Constitution Ave-
nue, N.W., Washington, DC, or sent via
the Federal eRulemaking Portal atwww.
regulations.gov(REG–105004 –16).
FOR FURTHER INFORMATION CON-
TACT:Concerning these proposed regu-
lations, Eliezer Mishory, (202) 317-6844;
concerning submissions of comments
and/or requests for a hearing, Regina
Johnson (202) 317-6901 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background:
This document contains proposed
amendments to the Income Tax Regula-
tions (26 CFR part 1), the Employment
Taxes and Collection of Income Tax at
Source Regulations (26 CFR part 31), and
the Procedure and Administration Regu-
lations (26 CFR part 301) regarding state-
ments that are required to be furnished to
employees by employers or other persons
under sections 6051 and 6052 of the Code.
Section 6051(a) generally requires that an
employer provide to each employee on or
before January 31st of the succeeding year
a written statement that shows the em-
ployee’s total amount of wages and the
total amount deducted and withheld as tax
from those wages, along with other infor-
mation, for each calendar year. Employers
must use Form W-2 (or a substitute state-
ment that complies with applicable reve-
nue procedures relating to such state-
ments)toprovidetheinformation
required by section 6051(a) to employees.
See § 31.6051–1(a)(1)(i); Rev. Proc.
2016 –54, 2016 – 45 I.R.B. 685, also pub-
lished as Publication 1141, “General
Rules and Specifications for Substitute
Forms W–2 and W–3,” or any successor
guidance. Section 6051(d) provides that,
when required to do so by regulations,
employers must file with the Secretary
duplicates of the forms required to be fur-
nished to employees under section 6051.
Section 31.6051–2(a) generally requires
employers to file Social Security Admin-
istration copies of Forms W–2 with the
Social Security Administration. A person
making a payment of third-party sick pay
to an employee of another employer
(payee) is required under section 6051(f)
(1) to furnish a written statement to the
employer for whom services are normally
rendered containing certain information,
including the payee’s SSN. Under certain
conditions, the employer for whom ser-
vices are normally rendered is required
under section 6051(f)(2) to furnish a Form
W–2 to the payee. Thissituation may
arise, for example, when an insurance
company is making payments to an em-
ployee of another employer because the
employee is temporarily absent from
work due to injury, sickness or disabil-
ity, and the insurance company has sat-
isfied the necessary requirements under
§ 32.1(e) of the Temporary Employment
Tax Regulations under the Act of De-
cember 29, 1981 (Pub. L. 97–123) to
transfer the obligation to do Form W–2
reporting to the employer. Employers
also must use Form W–2 to file and
furnish information regarding payment
of wages in the form of group-term life
insurance under section 6052.
Section 6109(a) authorizes the Secre-
tary to prescribe regulations with respect
to the inclusion in returns, statements, or
other documents of an identifying number
as may be prescribed for securing proper
identification of a person. On July 15,
2014, the Treasury Department and the
IRS published in theFederal Register
(79 FR 41127– 02) final regulations (TD
9675) authorizing the use of TTINs on
certain payee statements and certain other
documents. These final regulations were
in response to concerns about the risks of
identity theft, including its effect on tax
administration.
Section 301.6109 – 4(b) generally pro-
vides that a TTIN may be used to identify
any person on any statement or other doc-
ument that the internal revenue laws re-
quire to be furnished to another person.
Under § 301.6109 – 4(a), a TTIN is an
individual’s SSN, IRS individual taxpayer
identification number(ITIN), IRS adop-
tion taxpayer identification number
(ATIN), or IRS employer identification
number (EIN) in which the first five
digits of the nine-digit number are re-
placed with Xs or asterisks. For exam-
ple, a TTIN replacing an SSN appears in
the form XXX–XX–1234 or ***–**–
1234. Section 301.6109 – 4(b)(2)(ii) pro-
hibits using TTINs if, among other
Bulletin No. 2017– 41October 10, 2017
295

things, a statute, regulation, other guid-
ance published in the Internal Revenue
Bulletin, form, or instructions specifi-
cally requires the use of an SSN. Addi-
tionally, § 301.6109 – 4(b)(2)(iii) pro-
hibits the use of TTINs on any return,
statement, or other document that is re-
quired to be filed with or furnished to
the IRS.
Prior to being amended by the Protect-
ing Americans from Tax Hikes (PATH)
Act of 2015, Public Law No. 114 –113,
div. Q, title IV, 129 Stat. 2242, section
6051(a)(2) specifically required employ-
ers to include their employees’ SSNs on
copies of Forms W–2 that are furnished to
employees. In addition, current regula-
tions under § 31.6051–1, as well as forms
and instructions, require employers to in-
clude their employees’ SSNs on copies of
Forms W–2 that are furnished to employ-
ees. Section 409 of the PATH Act
amended section 6051(a)(2) by striking
“his social security account number” from
the list of information required on Form
W–2 and inserting “an identifying number
for the employee” instead. This statutory
amendment is effective for statements is-
sued after December 18, 2015, the date
that the PATH Act was signed into law.
Because an SSN is no longer required by
section 6051, the Treasury Department
and the IRS propose amending the regu-
lations to permit employers to truncate
employees’ SSNs to appear in the form of
TTINs on copies of Forms W–2 that are
furnished to employees. If the proposed
regulations are finalized without change,
the IRS intends to incorporate the revised
regulations into forms and instructions,
permitting employers to use a TTIN on
the employee copy of the Form W–2. See
§ 301.6109 – 4(b)(2)(i) and (ii).
Explanation of Provisions
Truncated SSN permitted on employee’s
copies of Form W–2
These proposed regulations amend
§ 31.6051–1 to permit employers to trun-
cate employees’ SSNs to appear in the
form of a TTIN on copies of Forms W–2
that are furnished to employees under sec-
tion 6051. Consistent with the rule in
§ 301.6109 – 4(b)(2)(iii), prohibiting the
use of TTINs on any return, statement, or
other document that is required to be filed
with or furnished to the IRS, these pro-
posed regulations amend § 31.6051–2 to
clarify that employers may not truncate an
employee’s SSN to appear in the form of
a TTIN on a copy of a Form W–2 that is
filed with the Social Security Administra-
tion. This result is appropriate because
both the IRS and the SSA need to utilize
Forms W–2 to properly identify individu-
als to be able to carry out their respective
duties.
Consistent with the rule in § 301.6109 –
4(b)(2)(ii) that prohibits using TTINs if,
among other things, a statute specifically
requires the use of an SSN, the proposed
regulations also amend § 31.6051–3 to clar-
ify that a payee’s SSN may not be truncated
to appear in the form of a TTIN on a state-
ment furnished to the employer of the payee
who received sick pay from a third party
because section 6051(f)(1)(A)(i) specifically
requires such a statement to contain the em-
ployee’s SSN. Nonetheless, these proposed
regulations permit employers to truncate
payees’ SSNs to appear in the form of
TTINs on copies of Forms W–2 that are
furnished under section 6051(f)(2) to payees
that report such third-party sick pay, in ac-
cordance with the general rule governing the
reporting of wages to employees on Forms
W–2 under section 6051(a), because section
6051(f)(2) does not specifically require the
use of an SSN.
Further, these proposed regulations
amend § 1.6052–2 to permit employers to
truncate employees’ SSNs to appear in the
form of TTINs on copies of Forms W–2
that are furnished to employees under sec-
tion 6052(b) regarding payment of wages
in the form of group-term life insurance.
These proposed regulations amend
§ 301.6109 – 4 to clarify that truncation is
not allowed on any return, statement, or
other document that is required to be filed
with or furnished to the Social Security
Administration under the internal revenue
laws. These proposed regulations also
clarify the rule prohibiting truncation if a
statute, regulation, other guidance pub-
lished in the Internal Revenue Bulletin,
form, or instructions, specifically requires
use of a SSN, ITIN, ATIN, or EIN. The
proposed regulations provide that trunca-
tion is allowed if a statute or IRS guidance
(e.g., regulations, forms, instructions),
that specifically requires use of a SSN,
ITIN, ATIN, or EIN, also specifically
states that the taxpayer identifying num-
ber may be truncated. These proposed reg-
ulations also add an example illustrating
the application of these rules to Forms
W–2. These proposed regulations also
amend the existing example for clarity.
Miscellaneous updates to regulations
under sections 6051 and 6052
In addition to the amendments relating
to the truncation of employees’ SSNs to
appear in the form of TTINs in specific
circumstances, these proposed regulations
eliminate obsolete provisions and update
cross references in the regulations under
sections 6051 and 6052, as explained be-
low.
First, these proposed regulations amend
§ 31.6051–1 to remove obsolete provisions
regarding compensation, as defined in the
Railroad Retirement Tax Act, paid during
1968, 1969, 1970, and 1971 and reported on
the now obsolete Form W–2 (RR); the spe-
cial rule for statements with respect to the
refundable earned income credit for Form
W–2 for 1987 and 1988; and references to
the annual contribution base (repealed in
1993) for wages subject to the Hospital In-
surance tax (commonly known as Medicare
tax).
Second, these proposed regulations
amend § 31.6051–1 to remove obsolete
cross references, including a cross refer-
ence to former § 301.6676 –1 relating to
the penalty for failure to report an identi-
fication number or an account number,
and a cross reference to section 6723
(prior to its amendment in 1989) that was
relevant for Forms W–2 that were due
from the beginning of 1987 through the
end of 1989.
Third,theseproposedregulations
amend § 31.6051–2 to update now inac-
curate cross references resulting from stat-
utory and regulatory changes regarding
penalties for failures to file, and to remove
a cross reference to section 6723 (prior to
its amendment in 1989) that was relevant
for Forms W–2 that were due from the
beginning of 1987 through the end of
1989. These proposed regulations also
change the title of § 31.6051–2 from “In-
formation returns on Form W–3 and In-
ternal Revenue Service copies of Forms
W–2” to “Information returns on Form
W–3 and Social Security Administration
October 10, 2017Bulletin No. 2017– 41
296

copies of Forms W–2,” to conform with
the text of the regulation that refers to the
Social Security Administration copies of
Form W–2. In addition, these proposed
regulations remove obsolete references in
§ 31.6051–2 to the requirements to submit
information on magnetic tape and insert a
reference to the requirements to submit
information on magnetic media.
Fourth, these proposed regulations
amend § 31.6051–3 to remove the obso-
lete transition rule for third-party sick pay
that was paid to a payee after December
31, 1980, and before May 1, 1981.
Fifth, these proposed regulations
amend § 1.6052–2 to remove an obso-
lete rule that allowed employers to use a
statement other than a Form W–2 to
satisfy the requirement to furnish a
statement to an employee with respect to
wages paid in the form of group-term
life insurance. This rule was relevant for
years prior to 1973, before § 1.6052–1
was amended to require employers to
report wages in the form of group-term
life insurance on Form W–2. At the
same time, to conform to this new re-
quirement, § 1.6052–2 was amended to
provide that the requirement to furnish a
statement to an employee with respect to
wages paid in the form of group-term
life insurance may be satisfied by fur-
nishing to the employee the employee’s
copy of Form W–2 that was filed pursu-
ant to § 1.6052–1. Because the transi-
tion period to require employers to file
Form W–2 has long since passed and
because the Treasury Department and
the IRS understand that copies of Forms
W–2 are used to satisfy the requirement
to furnish statements to employees un-
der § 1.6052–2, these proposedregula-
tions require employers to furnish to em-
ployees the employees’ copies of Forms
W–2thatwerefiledpursuantto
§ 1.6052–1, and these proposedregula-
tions make conforming changes through-
out that section.
Finally, these proposed regulations up-
date the now inaccurate cross reference
resulting from statutory changes regarding
penalties for failures to furnish statements
under section 6052 and remove the
deemed compliance rule, which applied
only to years before 1972.
Proposed effective/applicability date
These proposed regulations will be effec-
tive on the date of the publication of the
Treasury Decision adopting these rules as
final in theFederal Register. These pro-
posed regulations amend the effective/appli-
cability date provisions in § 31.6051–1,
§ 31.6051–3, and § 301.6109 – 4, and add
applicability date provisions to § 1.6052–2
and § 31.6051–2. Several state tax adminis-
tratorshave requested additional time to
develop systems to process the copies of
Forms W–2 filed with state income tax
returns that may contain truncated
SSNs. In light of this request, these pro-
posed regulations will not apply to
Forms W–2 required to be furnished be-
fore January 1, 2019. Accordingly, these
proposed regulations provide that these
regulations, as amended, will be appli-
cable for statements required to be filed
and furnished under sections 6051 and
6052 after December 31, 2018.
Statement of Availability of IRS
Documents
IRS Revenue Procedures, Revenue
Rulings notices, and other guidance cited
in this preamble are published in the In-
ternal Revenue Bulletin (or Cumulative
Bulletin) and are available from the Su-
perintendent of Documents, U.S. Govern-
ment Printing Office, Washington, DC
20402, or by visiting the IRS website at
www.irs.gov.
Special Analyses
Certain IRS regulations, including
this one, are exempt from the require-
ments of Executive Order 12866, as sup-
plemented and reaffirmed by Executive
Order 13563. Therefore, a regulatory as-
sessment is not required. Because these
proposed regulations do not impose a
collection of information on small enti-
ties, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Pur-
suant to section 7805(f) of the Code, this
notice of proposed rulemaking has been
submitted to the Chief Counsel for Ad-
vocacy of the Small Business Adminis-
tration for comment on its impact on
small business.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submitted timely to the IRS as prescribed
in the preamble under the ADDRESSES
section. The Treasury Department and the
IRS request comments on all aspects of
these proposed regulations. All comments
submitted will be made available atwww.
regulations.govor upon request. A public
hearing may be scheduled if requested in
writing by any person that timely submits
written comments. If a public hearing is
scheduled, notice of the date, time, and
place for the hearing will be published in
theFederal Register.
Drafting Information
The principal author of these proposed
regulations is Eliezer Mishory of the Of-
fice of the Associate Chief Counsel (Pro-
cedure and Administration).
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1, 31 and
301 are proposed to be amended as fol-
lows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1continues to read in part as follows:
Authority: 26 U.S.C. 7805, unless oth-
erwise noted.
*****
Par. 2. Section 1.6052–2 is amended
by:
1. Revising paragraph (a).
2. Removing paragraph (b).
3. Redesignating paragraph (e) as new
paragraph (b).
4. Revising paragraphs (c) and (d).
5. Removing paragraphs (f) and (g).
The revisions read as follows:
§ 1.6052–2 Statements to be furnished
employees with respect to wages paid in
the form of group-term life insurance.
(a)Requirement. Every employer filing
a return under section 6052(a) and
§ 1.6052–1, with respect to group-term
Bulletin No. 2017– 41October 10, 2017
297

life insurance on the life of an employee,
shall furnish to the employee whose name
is set forth in such return the tax return
copy and the employee’s copy of Form
W–2. Each copy of Form W–2 must show
the information required to be shown on
the Form W–2 filed under § 1.6052–1. An
employer maytruncate an employee’s
social security number to appear in the
form of an IRS truncated taxpayer iden-
tification number (TTIN) on copies of
Form W–2 furnished to the employee.
For provisions relating to the use of
TTINs, see § 301.6109 – 4 of this chap-
ter (Procedure and Administration Reg-
ulations). The rules in § 31.6051–1 of
this chapter (Employment Taxes and
Collection of Income Tax at Source
Regulations) shall apply with respect to
the means and time (including exten-
sions thereof) for furnishing the em-
ployee’s copy of Form W–2 required by
this section to the employee and making
corrections to such form.
*****
(c)Penalty. For provisions relating to
the penalty provided for failure to furnish
a statement under this section, see section
6722 and the regulations thereunder.
(d)Applicability date. This section is
applicable for statements required to be
furnished under section 6052 after De-
cember 31, 2018.
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME
TAX AT SOURCE
Par. 3. The authority citation for part
31 is amended by adding an entry in nu-
merical order to read in part as follows:
Authority: 26 U.S.C. 7805***
Section 31.6051–3 also issued under
26 U.S.C. 6051.
*****
Par. 4. Section 31.6051–1 is amended
by:
1. Revising paragraphs (a)(1)(i)(b) and
(b)(1)(ii).
2. Removing paragraph (d)(1)(ii)(C).
3. Revising paragraphs (f), (h)(2), and
(i).
4. Removing paragraph (j)(8).
5. Adding paragraph (k).
The revisions and addition read as fol-
lows:
§ 31.6051–1 Statements for employees.
(a)***
(1)***
(i)***
(b) The name, address, and social se-
curity number of the employee, which
may be truncated to appear in the form of
an IRS truncated taxpayer identification
number (TTIN) on copies of Forms W–2
that are furnished to the employee (for
provisions relating to the use of TTINs,
see § 301.6109 – 4 of this chapter (Proce-
dure and Administration Regulations)), if
wages as defined in section 3121(a) have
been paid or if the Form W–2 is required
to be furnished to the employee,
*****
(b)***
(1)***
(ii) The name, address, and social se-
curity number of the employee, which
may be truncated to appear in the form of
an IRS truncated taxpayer identification
number (TTIN) on copies of Forms W–2
that are furnished to the employee (for
provisions relating to the use of TTINs,
see § 301.6109 – 4 of this chapter (Proce-
dure and Administration Regulations)),
*****
(f)Statements with respect to compen-
sation, as defined in the Railroad Retire-
ment Tax Act—(1)Notification of possible
credit or refund. With respect to compen-
sation (as defined in section 3231(e)), ev-
ery employer (as defined in section
3231(a)) who is required to deduct and
withhold from an employee (as defined in
section 3231(b)) a tax under section 3201,
shall include on or with the statement re-
quired to be furnished to such employee
under section 6051(a), a notice concerning
the provisions of this title with respect to
the allowance of a credit or refund of the
tax on wages imposed by section 3101(b)
and the tax on compensation imposed by
section 3201 or 3211 which is treated as a
tax on wages imposed by section 3101(b).
(2)Information to be supplied to em-
ployees upon request. With respect to
compensation (as defined in section 3231
(e)), every employer (as defined in section
3231(a)) who is required to deduct and
withhold tax under section 3201 from an
employee (as defined in section 3231(b))
who has also received wages during such
year subject to the tax imposed by section
3101(b), shall upon request of such em-
ployee furnish to him or her a written
statement showing—
(i) The total amount of compensation
with respect to which the tax imposed by
section 3101(b) was deducted;
(ii) The total amount of employee tax
under section 3201 deducted and withheld
(increased by any adjustment in the cal-
endar year for overcollection, or de-
creased by any adjustment in such year for
undercollection, of such tax during any
prior year); and
(iii) The proportion thereof (expressed
either as a dollar amount, or a percentage
of the total amount of compensation as
defined in section 3231(e), or as a percent-
age of the total amount of employee tax
under section 3201) withheld as tax under
section 3201 for financing the cost of hos-
pital insurance benefits.
(h)***
(2)Time for furnishing statement. The
statement required by this paragraph (h)
for a calendar year shall be furnished—
(i) In the case of an employee who is
required to be furnished a Form W–2,
Wage and Tax Statement, for the calendar
year, within one week of (before or after)
the date that the employee is furnished a
timely Form W–2 for the calendar year
(or, if a Form W–2 is not so furnished, on
or before the date by which it is required
to be furnished); and
(ii) In the case of an employee who is
not required to be furnished a Form W–2
for the calendar year, on or before Febru-
ary 7 of the year succeeding the calendar
year.
*****
(i)Cross references. For provisions re-
lating to the penalties provided for the
willful furnishing of a false or fraudulent
statement, or for the willful failure to fur-
nish a statement, see § 31.6674 –1 and
section 7204. For additional provisions
relating to the inclusion of identification
numbers and account numbers in state-
ments on Form W–2, see §§ 31.6109 –1
and 31.6109 – 4. For the penalties applica-
ble to information returns and payee state-
ments, see sections 6721– 6724 and the
regulations thereunder.
*****
(k)Applicability date. This section is
applicable for statements required to be
October 10, 2017Bulletin No. 2017– 41
298

furnished under section 6051 after De-
cember 31, 2018.
Par. 5. Section 31.6051–2 is amended
by revising paragraphs (a) and (c) and
adding paragraph (d) to read as follows:
§ 31.6051–2 Information returns on
Form W–3 and Social Security
Administration copies of Forms W–2.
(a)In general. Every employer who is
required to make a return of tax under
§ 31.6011(a)–1 (relating to returns under
the Federal Insurance Contributions Act),
§ 31.6011(a)– 4 (relating to returns of in-
come tax withheld from wages), or
§ 31.6011(a)–5 (relating to monthly re-
turns) for a calendar year or any period
therein, shall file the Social Security Ad-
ministration copy of each Form W–2 re-
quired under § 31.6051–1 to be furnished
by the employer with respect to wages
paid during the calendar year. An em-
ployer may not truncate an employee’s
social security number to appear in the
form of an IRS truncated taxpayer identi-
fication number (TTIN) on copies of Form
W–2 filed with the Social Security Ad-
ministration. Each Form W–2 and the
transmittal Form W–3 shall together con-
stitute an information return to be filed
with the Social Security Administration as
indicated on the instructions to such forms.
For the requirement to submit the informa-
tion on Form W–2 on magnetic media, see
section 6011(e) and § 301.6011–2 of this
chapter (Procedure and Administration Reg-
ulations).
*****
(c)Cross references. For provisions re-
lating to the time for filing the information
returns required by this section and to
extensions of the time for filing, see sec-
tions 6071 and 6081 and the regulations
thereunder. For the penalties applicable to
information returns and payee statements,
see sections 6721 through 6724 and the
regulations thereunder.
(d)Applicability date. This section is
applicable for statements required to be
filed under section 6051 after December
31, 2018.
Par. 6. Section 31.6051–3 is amended
by revising paragraphs (a)(1)(i), (b)(1),
(e)(3), and (f) and removing paragraph (g)
to read as follows:
§ 31.6051–3 Statements required in case
of sick pay paid by third parties.
(a)***
(1)***
(i) The name and, if there is withhold-
ing from sick pay under section 3402(o)
and the regulations thereunder, the social
security account number of the payee (the
payee’s social security number may not be
truncated to appear in the form of an IRS
truncated taxpayer identification number
(TTIN)),
(b)***
(1) All of the information required to be
furnished under paragraph (a) of this sec-
tion, but the employer may truncate the pay-
ee’s social security number to appear in the
form of an IRS truncated taxpayer identifi-
cation number (TTIN) on copies of Forms
W–2 that are furnished to the payee (for
provisions relating to the use of TTINs, see
§ 301.6109 – 4 of this chapter (Procedure
and Administration Regulations)),
*****
(e)***
(3) The provisions of section 6109 (re-
lating to identifying numbers) and the reg-
ulations thereunder shall be applicable to
Form W–2 and to any payee of sick pay to
whom a statement on Form W–2 is re-
quired by this section to be furnished. The
employer must include the social security
number of the payee on all copies of
Forms W–2. The employer may truncate
the payee’s social security number to ap-
pear in the form of an IRS truncated tax-
payer identification number (TTIN) on
copies of Forms W–2 that are furnished to
the payee. For provisions relating to the
use of truncated taxpayer identification
numbers (TTINs), see § 301.6109 – 4 of
this chapter (Procedure and Administra-
tion Regulations).
(f)Applicability date. This section is
applicable for statements required to be
furnished under section 6051 after De-
cember 31, 2018.
PART 301 - PROCEDURE AND
ADMINISTRATION
Par. 7. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805***
Par. 8. Section 301.6109 – 4 is amended
by revising paragraphs (b)(2)(ii) and (iii),
(b)(3), and (c) to read as follows:
§ 301.6109 – 4 IRS truncated taxpayer
identification numbers.
*****
(b)***
(2)***
(ii) A TTIN may not be used on a state-
ment or document if a statute, regulation,
other guidance published in the Internal
Revenue Bulletin, form, or instructions, spe-
cifically requires use of a SSN, ITIN, ATIN,
or EIN and does not specifically state that
the taxpayer identifying number may be
truncated. For example, a TTIN may not be
used on a Form W– 8ECI or Form
W– 8IMY because the forms and/or form
instructions specifically prescribe use of an
SSN, EIN, or ITIN for the U.S. taxpayer
identification number.
(iii) A TTIN may not be used on any
return, statement, or other document that
is required to be filed with or furnished to
the Internal Revenue Service or the Social
Security Administration in the case of
forms required to be filed with the Social
Security Administration under the internal
revenue laws.
*****
(3)Examples. The provisions of this
paragraph (b) are illustrated by the follow-
ing examples:
(i)Example 1. Pursuant to section 6051(d) and
§ 31.6051–2(a) of this chapter, Employer files the
Social Security Administration copy of Employee’s
Form W–2, Wage and Tax Statement, with the So-
cial Security Administration. Employer may not
truncate any identifying number on the Social Secu-
rity Administration copy. Pursuant to section
6051(a) and § 31.6051–1(a)(1)(i) of this chapter,
Employer furnishes copies of Form W–2 to Em-
ployee.There are no applicable statutes, regula-
tions, other published guidance, forms, or instruc-
tions that prohibit use of a TTIN on Form W–2,
and § 31.6051–1(a)(1)(i) specifically permits trun-
cating employees’ SSNs. Accordingly, Employer
may truncate Employee’s SSN to appear in the
form of a TTIN on copies of Form W–2 furnished
to Employee. Employer may not truncate its own
EIN on copies of Form W–2 furnished to Em-
ployee.
(ii)Example 2. On April 5, year 1, Donor con-
tributes a used car with a blue book value of $1100
to Charitable Organization. On April 20, year 1,
Charitable Organization sends Donor copies B and C
of the Form 1098 –C as a contemporaneous written
acknowledgement of the $1100 contribution as re-
quired by section 170(f)(12). In late-February, year
2, Charitable Organization prepares and files copy A
of Form 1098 –C with the IRS, reporting Donor’s
donation of a qualified vehicle in year 1. Charitable
Organization may truncate Donor’s SSN to appear in
the form of a TTIN in the Donor’s Identification
Bulletin No. 2017– 41October 10, 2017
299

Number box on copies B and C of the Form 1098 –C
because copies B and C of the Form 1098 –C are
documents required by the Internal Revenue Code
and regulations to be furnished to another person;
there are no applicable statutes, regulations, other
published guidance, forms or instructions that pro-
hibit the use of a TTIN on those copies; and there are
no applicable statutes, regulations, other published
guidance, forms, or instructions that specifically re-
quire use of an SSN or other identifying number on
those copies. Charitable Organization may not trun-
cate its own EIN on copies B and C of the Form
1098 –C because a person cannot truncate its own
taxpayer identifying number on any statement or
other document the person furnishes to another per-
son. Charitable Organization may not truncate any
identifying number on copy A of the Form 1098 –C
because copy A is required to be filed with the IRS.
(c)Applicability date. This section is
applicable to returns, statements and other
documents required to be filed or fur-
nished after December 31, 2018.
Kirsten Wielobob,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on September
18, 2017, 11:15 a.m., and published in the issue of the
Federal Register for September 20, 2017, 82 F.R. 43920)
REG–125374 –16
Guidance on the Definition of
Registered Form
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Partial withdrawal of notice of
proposed rulemaking and notice of pro-
posed rulemaking.
SUMMARY:This document contains pro-
posed regulations that provide guidance on
the definitions of registration-required obli-
gation and registered form, including
guidance on the issuance of pass-through
certificates and participation interests in reg-
istered form. This document also withdraws
a portion of previously proposed regulations
regarding the definition of a registration-
required obligation. The proposed regula-
tions generally are necessary to address
changes in market practices as well as issues
raised by the statutory repeal of the foreign-
targeted bearer obligation exception to the
registered form requirement. The proposed
regulations will affect issuers and holders of
obligations in registered form as well as
issuers and holders of registration-required
obligations that are not issued in registered
form.
DATES: Comments and requests for a
public hearing must be received by De-
cember 18, 2017.
ADDRESSES: Send submissions to CC:
PA:LPD:PR (REG–125374 –16), Room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-
delivered Monday through Friday be-
tween the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–125374 –16),
Courier’s Desk, Internal Revenue Service,
1111 Constitution Avenue NW., Wash-
ington, DC 20224, or sent electronically
via the Federal eRulemaking Portal at
www.
regulations.gov (IRS REG–125374 –16).
FOR FURTHER INFORMATION CON-
TACT:Concerning the proposedregula-
tions, Spence Hanemann at (202) 317-
6980;concerningsubmissionsof
comments and requesting a hearing, Re-
gina Johnson at (202) 317-6901 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information con-
tained in this notice of proposed rulemak-
ing has been submitted to the Office of
Management and Budget for review under
control number 1545-0945 in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)). The collection
of information in this proposed regulation
is in § 1.163–5(b), which permits issuers
of registration-required obligations to sat-
isfy the requirement for those obligations
to be in registered form by maintaining a
book entry system. Sections 163(f) and
149(a) require that certain obligations be
in registered form and expressly permit
issuers to satisfy that requirement through
a book entry system. Accordingly, the
proposed regulations permit issuers to sat-
isfy the registration requirement through a
book entry system and detail certain ar-
rangements that qualify as book entry sys-
tems. The collection of information in
proposed § 1.163–5(b) is an increase in
the total annual burden under control
number 1545-0945. The respondents are
businesses and other for-profit organiza-
tions, non-profit organizations, and state,
local and tribal governments.
Estimated total annual recordkeeping
burden: 95,105 hours.
Estimated average annual burden hours
per respondent: 0.5 hours.
Estimated number of respondents:
190,210.
Estimated annual frequency of re-
sponses: 190,210.
Comments on the collection of infor-
mation should be sent to the Office of
Management and Budget, Attn: Desk Of-
ficer for the Department of the Treasury,
Office of Information and Regulatory Af-
fairs, Washington, DC 20503, with copies
to the Internal Revenue Service, Attn: IRS
Reports Clearance Officer, SE:CAR:MP:
T:T:SP, Washington, DC 20224. Com-
ments on the collection of information
should be received by November 20,
2017.
Comments are specifically requested
concerning:
Whether the proposed collection of in-
formation is necessary for the proper per-
formance of the Internal Revenue Service,
including whether the information will
have practical utility;
The accuracy of the estimated burden
associated with the proposed collection of
information;
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with the
proposed collection of information may
be minimized, including through the ap-
plication of automated collection tech-
niques or other forms of information tech-
nology; and
Estimates of capital or start-up costs
and costs of operation, maintenance, and
purchase of service to provide informa-
tion.
An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information un-
less it displays a valid control number
assigned by the Office of Management
and Budget.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
October 10, 2017Bulletin No. 2017– 41
300

revenue law. Generally tax returns and tax
return information are confidential, as re-
quired by section 26 U.S.C. 6103.
Background
This document contains proposed
amendments to 26 CFR parts 1, 5f, and 46
under sections 103, 149, 163, 165, 860D,
871, 881, 1287, 4701, 6045, and 6049 of
the Internal Revenue Code (Code).
1.In General
The classification of an obligation as in
bearer or registered form has significant
tax implications because a number of
Code provisions impose sanctions on is-
suers and holders of registration-required
obligations that are not issued in regis-
tered form. An obligation not issued in
registered form is a bearer form obliga-
tion. Most of the Code provisions that
pertain to registration-required obligations
were enacted as part of the Tax Equity and
FiscalResponsibilityActof1982
(TEFRA), Public Law 97–248, 96 Stat.
324, § 310. Among these provisions, sec-
tion 163(f) denies an issuer an interest
deduction for interest on a registration-
required obligation that is not in registered
form. Section 4701 imposes an excise tax
on the issuer of a registration-required ob-
ligation that is not in registered form. The
excise tax is equal to 1 percent of the
principal amount of the obligation multi-
plied by the number of calendar years (or
portions thereof) between the issue date of
the obligation and the date of maturity.
Section 149(a) provides that interest on a
registration-required bond is not exempt
from tax under section 103(a) unless the
bond is in registered form. In addition,
section 871(h) and section 881(c) exempt
from federal income tax portfolio interest
from sources within the U.S. received by a
nonresident alien or foreign corporation
(portfolio interest exception) only if the
obligation with respect to which the inter-
est was paid is in registered form. Similar
restrictions are found in sections 165(j)
(generallydenying the holder a deduction
for a loss sustained on a registration-
required obligation not in registered form),
312(m) (generally providing that the issu-
er’s earnings and profits cannot be de-
creased by interest paid on a registration-
required obligation not in registered form),
and 1287 (generally treating the holder’s
gain on sale of a registration-required obli-
gation not in registered form as ordinary
income).
Historically, the Code provisions refer-
enced in the preceding paragraph gener-
ally did not apply to obligations that com-
plied with the foreign-targeting rules of
prior section 163(f)(2)(B) and § 1.163–
5(c) (foreign-targeted bearer obligations).
Under the foreign-targeting rules, an is-
suer could issue foreign-targeted bearer
obligations without penalty provided the
obligations were issued under arrange-
ments reasonably designed to ensure that
the obligations were sold only to non-U.S.
persons. The portfolio interest exception
also applied to interest paid on foreign-
targeted bearer obligations issued under
such reasonably designed arrangements.
The Hiring Incentives to Restore Em-
ployment Act (the HIRE Act), Public Law
111-147, 124 Stat. 71, section 502, re-
pealed section 163(f)(2)(B) and generally
eliminated the special treatment of foreign-
targeted bearer obligations. Foreign-targeted
bearer obligations issued after March 18,
2012, are subject to the sanctions on bearer
form obligations under sections 149(a),
163(f), 165(j), 312(m), and 1287. The HIRE
Act also revoked the portfolio interest ex-
ception for foreign-targeted bearer obliga-
tions, thus requiring that obligations issued
after March 18, 2012, be inregistered
form to qualify for that exception. The
HIRE Act did not, however, repeal the
foreign-targeted bearer obligation ex-
ception to the excise tax under section
4701. See section 4701(b)(1)(B)(i).
2.Registration-Required Obligations
A.In General
Under section 163(f)(2)(A), as amended
by the HIRE Act, the termregistration-
required obligationmeans any obligation
other than an obligation that: (1) Is issued by
a natural person; (2) is not of a type offered
to the public; or (3) has a maturity at issue of
not more than 1 year. For purposes of sec-
tions 165(j), 312(m), and 1287, registration-
required obligation has the same meaning as
when used in section 163(f). See also sec-
tion 149(a) (providing a similar definition
except for the exclusion for instruments is-
sued by a natural person). For purposes of
section 4701, that term also has the same
meaning as when used in section 163(f),
except that tax-exempt bonds and foreign-
targeted bearer obligations are excluded.
Section 5f.163-1(b)(2) provides that
the determination as to whether an obli-
gation is of a type offered to the public is
based on whether similar obligations are
in fact publicly offered or traded. On Jan-
uary 21, 1993, the Department of the
Treasury (Treasury) and the IRS pub-
lished in theFederal Register(58 FR
5316) a notice of proposed rulemaking
(INTL– 0115–90) containing proposed
regulations that elaborated upon the
meaning of “of a type offered to the pub-
lic” for purposes of section 163(f)(2)(A)
(the 1993 proposed regulations). See
Prop. Treas. Reg. § 5f.163–1(b)(2). The
preamble to the 1993 proposed regula-
tions cited the report of the Senate Fi-
nance Committee on TEFRA for the con-
clusion that an obligation that represents a
“readily negotiable substitute for cash”
should be a registration-required obliga-
tion. 58 FR 5316 (citing S. Rep. No. 97–
494, at 242 (1982)). Treasury and the IRS
reasoned in the preamble to the 1993 pro-
posed regulations that, because the stan-
dards for determining if an obligation is
“readily tradable in an established securi-
ties market” under section 453(f)(4)(B)
and § 15a.453–1(e)(4) address an analo-
gous concern with negotiability, similar
standards should apply for determining
whether an obligation is “of a type offered
to the public” under section 163(f)(2)(A).
B.Pass-Through Certificates
Section 1.163–5T provides rules to ad-
dress whether pass-through certificates are
registration-required obligations. In their
most common form, pass-through certifi-
cates are issued by an investment entity
(typically a trust) that holds a pool of
obligations, such as mortgage loans. Each
pass-through certificate represents an in-
terest in the investment entity.
To accommodate these securitization
transactions, § 1.163–5T(d)(1) generally
provides that a pass-through certificate ev-
idencing an interest in a pool of mortgage
loans that is treated as a trust of which the
grantor is the owner is considered to be a
registration-required obligation if, standing
alone, the pass-through certificate meets the
Bulletin No. 2017– 41October 10, 2017
301

definition of a registration-required obliga-
tion. Section 1.163–5T(d)(1) also applies to
“similar evidence of interest in a similar
pooled fund or pooled trust treated as a
grantor trust,” although commenters have
noted the ambiguity of the reference. Simi-
larly, § 1.871–14(d)(1) provides that interest
received on a pass-through certificate qual-
ifies for the portfolio interest exception if,
standing alone, the pass-through certificate
is in registered form.
Commenters have asked that Treasury
and the IRS describe the types of arrange-
ments that qualify as pass-through certif-
icates. Specifically, commenters have re-
quested that Treasury and the IRS amend
the definition of a pass-through certificate
to clarify that the issuer of a pass-through
certificate may be either a grantor trust or
another type of entity, such as a partner-
ship or a disregarded entity, so long as the
obligations in the pool are held through an
arrangement that meets the requirements
to be in registered form. Commenters
have also requested that Treasury and the
IRS amend § 1.871–14(d)(1) so that the
definition of pass-through certificate for
purposes of the portfolio interest excep-
tion is identical to the definition of pass-
throughcertificateunder§1.163–
5T(d)(1).
3.Definition of Registered Form
A.In General
For purposes of determining whether
an obligation is in registered form under
section 163(f),
1
the principles of section
149(a)(3) apply. See section 163(f)(3).
Section 149(a)(3)(A) provides that a bond
is treated as being in registered form if the
right to the principal of, and stated interest
on, the bond may be transferred only
through a book entry consistent with reg-
ulations prescribed by the Secretary. Sec-
tion 149(a)(3)(B) authorizes the Secretary
to prescribe regulations to carry out the
requirement that a bond be issued in reg-
istered form when there is one or more
nominee. For purposes of section 149(a),
the conditions for an obligation to be con-
sidered in registered form are described in
§ 5f.103–1(c).
2
The regulations under
both section 163(f) and section 871(h),
specifically §§ 5f.163–1(a) and 1.871–
14(c), refer to § 5f.103–1(c) for a defini-
tion of registered form. Obligations that
do not meet the conditions described in
§ 5f.103–1(c) are treated as issued in
bearer form.
Generally, under § 5f.103–1(c), an ob-
ligation is in registered form if: (1) The
obligation is registered as to both princi-
pal and any stated interest with the issuer
(or its agent) and any transfer of the obli-
gation may be effected only by surrender
of the old obligation and reissuance to the
new holder; (2) the right to principal and
stated interest with respect to the obliga-
tion may be transferred only through a
book entry system maintained by the is-
suer or its agent; or (3) the obligation is
registered as to both principal and stated
interest with the issuer or its agent and
may be transferred both by surrender and
reissuance and through a book entry sys-
tem. An obligation is considered transfer-
able through a book entry system if own-
ership of an interest in the obligation is
required to be reflected in a book entry,
whether or not physical securities are is-
sued. An obligation that would otherwise
be considered to be in registered form is
not considered to be in registered form if
the obligation may be converted at any
time in the future into an obligation that is
not in registered form. See § 5f.103–1(e).
B.Dematerialized Book Entry Systems
Since the publication of § 5f.103–1,
market practices have changed with re-
spect to how interests in obligations are
recorded and transferred. For example,
many obligations trade in fully demateri-
alized form. An obligation that is fully
dematerialized is not represented by a
physical (paper) certificate, and a clearing
organization that is the registered holder
of the obligation operates an electronic
book entry system that identifies the clear-
ing organization’s member or members
holding the obligation (or interests in the
obligation). The clearing organization fa-
cilitates and records transfers of the obli-
gation (or interests in the obligation)
among the clearing organization’s mem-
bers. The members (typically, banks or
broker-dealers), in turn, record their cli-
ents’ ownership of the obligation (or in-
terests in the obligation) in their book
entry systems. Alternatively, an obligation
may be represented by a physical global
certificate that is nominally in bearer form
but that is immobilized in a clearing or-
ganization, which handles the obligation
thereafter exactly as it does an obligation
that was fully dematerialized when issued.
Commenters have requested additional
guidance on how the registered form rules
in § 5f.103–1 apply to these arrangements.
Treasury and the IRS provided guid-
ance on how to apply the registered form
rules to certain of these arrangements in
Notice 2006 –99, 2006 –2 CB 907. Notice
2006 –99 addresses an arrangement in
which no physical certificates are issued
and under which ownership interests in
bonds are required to be represented only
by book entries in a dematerialized book
entry system maintained by a clearing or-
ganization. Notice 2006 –99 provides that
an obligation issued under such an ar-
rangement is treated as in registered form
notwithstanding the ability of holders to
obtain physical certificates in bearer form
upon the termination of the business of the
clearing organization without a successor.
The HIRE Act also addressed demate-
rialized book entry systems. For obliga-
tions issued after March 18, 2012, section
163(f)(3), as amended by the HIRE Act,
provides that, for purposes of section
163(f), a dematerialized book entry sys-
tem or other book entry system specified
by the Secretary will be treated as a book
entry system described in section 149(a)
(3). The Joint Committee on Taxation’s
technical explanation of the HIRE Act
further explained that an obligation “that
is formally in bearer form is treated, for
the purposes of section 163(f), as held in a
book entry system as long as the debt obli-
gation may be transferred only through a
dematerialized book entry system or other
book entry system specified by the Secre-
tary.” J. Comm. on Tax’n,Technical Expla-
nation of the Revenue Provisions Contained
1
For purposes of sections 165(j), 312(m), 871(h)(7), 881(c)(7), 1287, and 4701, the termregistered formhas the same meaning as when used in section 163(f).
2
Section 5f.103–1 was originally published under section 103(j) of the Internal Revenue Code of 1954, which was enacted as part of TEFRA and provided that obligations must be in
registered form to be tax-exempt. Section 103(j) was recodified as section 149(a) by section 1301 of the Tax Reform Act of 1986, Public Law 99 –514, 100 Stat. 2085.
October 10, 2017Bulletin No. 2017– 41
302

in Senate Amendment 3310, the “Hiring
Incentives to Restore Employment Act,”
Under Consideration by the Senate(JCX–
4 –10), Feb. 23, 2010, at 53.
C.Notice 2012–20
Commenters expressed concern that
the explicit reference to a “dematerialized
book entry system” in section 163(f)(3),
as amended by the HIRE Act, would cre-
ate uncertainty about obligations issued in
a manner not specifically described in No-
tice 2006 –99. In particular, commenters
requested guidance to address the treat-
ment of obligations represented by a phys-
ical global certificate that is nominally in
bearer form, but that is immobilized in a
clearing system. Inaddition, commenters
requested guidance regarding whether an
obligation will be considered to be in regis-
tered form if holders may obtain physical
certificates in bearer form under circum-
stances not described in Notice 2006 –99.
In response to these comments, Trea-
sury and the IRS published Notice 2012–
20, 2012–13 IRB 574, on March 26, 2012.
Notice 2012–20 provides additional guid-
ance on the definition of registered form
and further states that Treasury and the
IRS intend to publish regulations consis-
tent with the guidance described in the
notice. Under Notice 2012–20, an obliga-
tion is considered to be in registered form
if it is issued either through a dematerial-
ized book entry system in which benefi-
cial interests are transferable only through
a book entry system maintained by a
clearing organization (or by an agent of
the clearing organization) or through a
clearing system in which the obligation is
effectively immobilized. Notice 2012–20
provides that an obligation is considered
to be effectively immobilized if: (1) The
obligation is represented by one or more
global securities in physical form that are
issued to and held by a clearing organiza-
tion (or by a custodian or depository act-
ing as an agent of the clearing organiza-
tion) for the benefit of purchasers of
interests in the obligation under arrange-
ments that prohibit the transfer of the
global securities except to a successor
clearing organization subject to the same
terms; and (2) beneficial interests in the
underlying obligation are transferable
only through a book entry system main-
tained by the clearing organization (or an
agent of the clearing organization). Notice
2012–20 further states that an interest in
an obligation is considered to be transfer-
able only through a book entry system if
the interest would be considered transfer-
able through a book entry system under
§ 5f.103–1(c)(2), except that holders may
obtain physical certificates in bearer form
in certain limited circumstances stated in
the notice. Finally, Notice 2012–20 states
that, for purposes of determining when an
obligation is a registration-required obli-
gation under section 4701, rules identical
to the foreign-targeting rules under sec-
tion 163(f)(2)(B), prior to its amendment
by the HIRE Act, and § 1.163–5(c) will
apply to obligations issued after March
18, 2012.
Explanation of Provisions
1.In General
Consistent with Notice 2012–20, these
proposed regulations amend the definition
of registered form to take into account
current market practices and changes
made by the HIRE Act, including the re-
peal of the foreign-targeting rules in sec-
tion 163(f)(2)(B). In addition, these pro-
posed regulations amend the definition of
a registration-required obligation in two
ways. First, the proposed regulations
specify the types of obligations that are
treated as “of a type offered to the public”
and withdraw the 1993 proposed regula-
tions. Second, the proposed regulations
take into account comments requesting
clarification on the types of arrangements
that qualify as pass-through certificates.
Though the definitions of the terms
registered formandregistration-required
obligationare generally consistent across
the various provisions in which they are
used, the rules are set forth in a number of
existing regulations, including several
promulgated under section 163(f). To the
extent possible, these proposed regulations
simplify the definitions of registered form
and registration-required obligation by cen-
tralizing the rules in § 1.163–5. Thus, the
applicable rules have been relocated from
§§ 5f.103–1 (definition of registered form),
1.163–5T (pass-through certificates and reg-
ular interests in REMICs), and 5f.163–1
(definition of registration-required obliga-
tion) to paragraphs (a) and (b) of proposed
§ 1.163–5. Appropriate cross-references to
§ 1.163–5 are proposed to be added to
regulations that rely on one or both defini-
tions, including §§ 1.149(a)–1, 1.165–12,
1.860D–1(b)(5)(i)(A), 1.871–14, 1.1287–1,
and 46.4701–1.
2.Registration-Required Obligations
A.Obligation of a Type Offered to the
Public
Consistent with the 1993 proposed reg-
ulations, Treasury and the IRS continue to
believe that it is appropriate to determine
whether an obligation is of a type offered
to the public by reference to whether the
obligation is “traded on an established
market.” Although a number of Code and
regulation sections refer to and define that
phrase (for example, sections 453, 1092,
1273, and 7704, as well as the regulations
promulgated under those Code sections),
Treasury and the IRS have concluded that
the definition provided in § 1.1273–2(f) is
most appropriate for purposes of defining
a registration-required obligation. Thus,
the proposed regulations generally treat an
obligation as of a type offered to the
public if the obligation is traded on an
established market as determined under
§ 1.1273–2(f). For this purpose, however,
the proposed regulations do not take into
account the exception for small debt is-
sues in § 1.1273–2(f)(6).
B.Pass-Through Certificates and
Participation Interests
Commenters indicated that an entity
that issues pass-through certificates may
hold a pool of debt instruments that is
either fixed or that changes over time. For
example, the issuing entity may have the
right to acquire additional assets after for-
mation, or the right to dispose of assets at
any time. Inthose situations, the entity gen-
erally will not be classified as a grantor trust
for federal tax purposes, but that does not
preclude it from issuing pass-through certif-
icates. To address these situations, the pro-
posed regulations amend the definition of a
pass-through certificate to provide that a
pass-through certificate may be issued by
a grantor trust or a similar fund, and specify
that a similar fund includes entities that are
partnerships or disregarded for federal tax
purposes and funds that have the power to
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303

vary the assets they hold or the sequence of
payments to holders. A similar fund, how-
ever, does not include a business entity clas-
sified as a corporation.
In addition, Treasury and the IRS have
concluded that an arrangement that satis-
fies the definition of a registration-
required obligation and the registered
form rules should be treated the same as a
pass-through certificate even if the ar-
rangement is with respect to only one un-
derlying obligation or if the arrangement
is treated as co-ownership of one or more
obligations (rather than, for purposes of
TEFRA or otherwise, ownership of an
entity that holds the underlying obliga-
tions). The proposed regulations eliminate
the requirement that the fund hold a pool
of loans and replace it with a requirement
that the fund primarily hold debt instru-
ments. Thus, a fund can hold one or more
debt instruments, so long as the fund pri-
marily holds debt instruments.
In addition, the proposed regulations
treat an interest that evidences co-
ownership of one or more obligations (in-
cluding a participation interest) as a
registration-required obligation if, stand-
ing alone, the interest satisfies the defini-
tion of a registration-required obligation.
The proposed regulations also propose to
amend § 1.871–14(d)(1) to include a
cross-reference to the rules for pass-
through certificates and participation in-
terests in proposed § 1.163–5(a)(3)(i) and
(ii) such that similar rules apply for pur-
poses of the portfolio interest exception.
3.Definition of Registered Form
The proposed regulations amend the
definition of registered form in a number
of ways. First, the proposed regulations
provide that an obligation is considered to
be in registered form if it is transferable
through a book entry system, including a
dematerialized book entry system, main-
tained by the issuer of the obligation, an
agent of the issuer, or a clearing organi-
zation. A clearing organization includes
an entity that holds obligations for its
members or maintains a system that re-
flects the ownership interests of members
and transfers of obligations among mem-
bers’ accounts without the necessity of
physical delivery of the obligation.
Second, the proposed regulations pro-
vide that an obligation represented by a
physical certificate in bearer form will be
considered to be in registered form if the
physical certificate is effectively immobi-
lized. To be effectively immobilized, the
physical certificate evidencing an obliga-
tion must be issued to and held by a clear-
ing organization for the benefit of pur-
chasers of interests in the obligation under
arrangements that prohibit the transfer of
the physical certificate except to a succes-
sor clearing organization and permit trans-
fers of ownership interests in the underly-
ing obligation only through a book entry
system maintained by the clearing organi-
zation (or a successor clearing organiza-
tion). As suggested in comments, the pro-
posed regulations change the requirement
in Notice 2012–20 that a successor clear-
ing organization hold the physical certifi-
cate subject to the same terms as the pre-
decessor; Treasury and the IRS concluded
that it is sufficient if the successor clearing
organization has rules that effectively im-
mobilize the physical certificate.
Third, the proposed regulations permit
holders of obligations (or interests in ob-
ligations) to have a right to obtain physi-
cal certificates evidencing the obligation
(or interests in the obligation) in bearer
form without causing the obligation to be
treated as not in registered form in two
circumstances: (1) A termination of the
clearing organization’s business without a
successor; or (2) the issuance of physical
securities at the issuer’s request upon a
change in tax law that would be adverse to
the issuer but for the issuance of physical
securities in bearer form. This exception
from bearer form treatment is consistent
with the guidance provided in Notice
2012–20, except that the proposed regula-
tions do not permit a holder to have a right
to obtain a physical bearer certificate if
there is an issuer event of default (default
exception). Treasury and the IRS under-
stand that in certain situations holders
may be required to obtain physical certif-
icates to pursue claims against the issuer,
but in such instances it would be appro-
priate to expect those physical certificates
to be issued in registered form. Taxpayers
may rely on the default exception in No-
tice 2012–20 for obligations issued prior
to publication of a Treasury decision
adopting these rules as final regulations in
theFederal Register.
After the occurrence of one of the two
events described in the first sentence of
the preceding paragraph, an obligation
will no longer be in registered form if a
holder, or a group of holders acting col-
lectively, has a right to obtain a physical
certificate in bearer form, regardless of
whether any option to obtain a physical
certificate in bearer form has actually been
exercised.
4.Section 881
Commenters requested that examples
10 and 19 set forth in § 1.881–3(e) be
removed or revised to take into account
the repeal of the foreign-targeted bearer
obligation exception. Consistent with
these comments, the proposed regulations
propose to remove those examples.
5.Section 4701
Commenters requested clarification
on whether the foreign-targeting rules
under § 1.163–5(c)would apply to obli-
gations issued after March 18, 2012, for
purposes of section 4701. Consistent with
Notice 2012–20, proposed § 46.4701–1 pro-
vides that, for purposes of determining
whether an obligation is a foreign-targeted
bearer obligation, the rules of § 1.163–5(c)
apply.
6.Applicability Dates
Notice 2012–20 stated that regulations
incorporating the guidance described in
that notice will be effective for obligations
issued after March 18, 2012. Accordingly,
the proposed regulations will generally
apply to obligations issued after March
18, 2012. However, taxpayers may apply
the rules in section 3 of Notice 2012–20,
including the default exception, for obli-
gations issued prior to publication of a
Treasury decision adopting these rules as
final regulations in theFederal Register.
The rules related to pass-through certifi-
cates, participation interests, and regular
interests in REMICs and the rules related
to obligations not of a type offered to the
public are not described in Notice
2012–20 and, therefore, will apply only to
obligations issued after the publication of
October 10, 2017Bulletin No. 2017– 41
304

a Treasury decision adopting these rules
as final regulations in theFederal Regis-
ter, except as otherwise provided in the
next sentence. The existing regulations
under § 5f.103–1 will continue to apply to
tax-exempt bonds issued prior to the date
90 days after publication of a Treasury
decision adopting these rules as final reg-
ulations in theFederal Register.
Special Analyses
Certain IRS regulations, including
these, are exempt from the requirements
of Executive Order 12866, as supple-
mented and reaffirmed by Executive Or-
der 13563. Therefore, a regulatory impact
assessment is not required. It is hereby
certified that these regulations will not
have a significant economic impact on a
substantial number of small entities. Sec-
tions 163(f) and 149(a) require that certain
obligations be in registered form which is
satisfied if the obligations are transferable
only through a book entry system. The
existing regulations under these sections
therefore permit issuers to satisfy the reg-
istration requirement through a book entry
system and describe the arrangements that
are necessary for a system to qualify as a
book entry system. Certain systems that
are now common, however, may not qual-
ify as book entry systems under the exist-
ing regulations. Because the proposed reg-
ulations merely clarify that these systems
are book entry systems, the proposed reg-
ulations would not impose a significant
economic impact. Accordingly, a regula-
tory flexibility analysis is not required.
Pursuant to section 7805(f) of the Code,
this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administra-
tion for comment on its impact on small
entities.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submitted timely to the IRS asprescribed
in this preamble under the ADDRESSES
heading. Treasury and the IRS request com-
ments on all aspects of the proposed rules.
All comments will be available at www.
regulations.gov or upon request. A public
hearing will be scheduled if requested in
writing by any person that timely submits
written comments. If a public hearing is
scheduled, notice of the date, time, and
place for the hearing will be published in the
Federal Register.
Drafting Information
The principal authors of these regula-
tions are Spence Hanemann and Diana
Imholtz, Office of Associate Chief Coun-
sel (Financial Institutions and Products),
IRS. However, other personnel from Trea-
sury and the IRS participated in their de-
velopment.
Availability of IRS Documents
The IRS notices cited in this preamble
are published in the Internal Revenue Bul-
letin (or Cumulative Bulletin) and are
available from the Superintendent of Doc-
uments, U.S. Government Publishing Of-
fice, Washington, DC 20402, or by visit-
ing the IRS Web site at www.irs.gov.
*****
Partial Withdrawal of Notice of
Proposed Rulemaking
Accordingly, under the authority of 26
U.S.C. 7805, § 5f.163–1(b)(2) of the no-
tice ofproposed rulemaking (INTL–
0115–90, subsequently converted to
REG–208245–90) that was published in
theFederal Register(58 FR 5316) on
January 21, 1993, is withdrawn.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1, 5f, and
46 are proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding entries in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805***
Section 1.149(a)–1 also issued under
26 U.S.C. 149(a)(3).
*****
Section 1.163–5 also issued under 26
U.S.C. 163(f)(3).
*****
Par. 2. Section 1.149(a)–1 is added to
read as follows:
§ 1.149(a)–1 Obligations required to
be in registered form.
(a)Generalrule.Interestona
registration-required bond shall not be ex-
empt from tax notwithstanding section
103(a) or any other provision of law, exclu-
sive of any treaty obligation of the United
States, unless the bond is issued in regis-
tered form (as defined in § 1.163–5(b)). For
this purpose, registration-required bond has
the same meaning as registration-required
obligation in § 1.163–5(a)(2).
(b)Applicability date. This section ap-
plies to bonds issued on or after the date
90 days after the publication of the Trea-
sury decision adopting these rules as final
regulations in theFederal Register. For
bonds issued before the date 90 days after
the publication of the Treasury decision
adopting these rules as final regulations in
theFederal Register, see § 5f.103–1 of
this chapter.
Par. 3. Section 1.163–5 is amended by
revising the section heading and adding
paragraphs (a), (b), and (c)(3)(iii) to read
as follows:
§ 1.163–5 Denial of interest deduction
on certain obligations unless issued in
registered form.
(a)Denial of deduction—(1)In gen-
eral. No deduction shall be allowed a tax-
payer under section 163 for interest paid
or accrued on a registration-required obli-
gation (as defined in section 163(f) and
paragraph (a)(2) of this section) unless
such obligation is issued in registered
form (as defined in paragraph (b) of this
section). An obligation that is not in reg-
istered form under paragraph (b) of this
section is an obligation in bearer form.
(2)Registration-required obligation—
(i)In general. The termregistration-
required obligationmeans any obligation
(including a pass-through certificate or
participation interest described in para-
graph (a)(3) of this section and a regular
interest in a REMIC described in para-
graph (a)(4) of this section) other than—
(A) An obligation issued by a natural
person;
(B) An obligation not of a type offered
to the public (as described in paragraph
(a)(2)(ii) of this section); or
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(C) An obligation that has a maturity at
the date of issue of not more than 1 year.
(ii)Obligation not of a type offered to
the public. For purposes of section
163(f)(2)(A)(ii) and paragraph (a)(2)(i)
(B) of this section, an obligation is not of
a type offered to the public unless the
obligation is traded on an established mar-
ket as determined under § 1.1273–2(f)
without regard to § 1.1273–2(f)(6).
(3)Pass-through certificates and par-
ticipation interests—(i)Pass-through cer-
tificate—(A)In general. A pass-through
certificate is considered to be a registration-
required obligation if the pass-through cer-
tificate is described in paragraph (a)(2)(i) of
this section without regard to whether any
obligation held by the entity to which the
pass-through certificate relates is described
in paragraph (a)(2)(i) of this section.
(B)Definition of pass-through certifi-
cate. For purposes of paragraph (a) of this
section, apass-through certificateis an
instrument evidencing an interest in a
grantor trust under Subpart E of Part I of
Subchapter J of the Code, or a similar
fund, that principally holds debt instru-
ments. For purposes of this paragraph
(a)(3)(i)(B), a similar fund includes an
entity that, under §§ 301.7701–1 through
301.7701–3 of this chapter, is disregarded
as an entity separate from its owner or
classified as a partnership for federal tax
purposes, without regard to whether the
fund has the power to vary the assets in
the fund or the sequence of payments
made to holders. In addition, for purposes
of this paragraph (a)(3)(i)(B), a similar
fund does not include a business entity
that is classified as a corporation under
§ 301.7701–2 of this chapter.
(ii)Participation interest. A participa-
tion interest that evidences ownership of
some or all of one or more obligations and
that is treated as conveying ownership of a
specified portion of the obligation or ob-
ligations (and not ownership of an entity
treated as created under § 301.7701–
1(a)(2) of this chapter) is considered to be
a registration-required obligation if the
participation interest is described in para-
graph (a)(2)(i) of this section without re-
gard to whether any obligation to which
the participation interest relates is de-
scribed in paragraph (a)(2)(i) of this sec-
tion.
(iii)Treatment of obligation held by a
trust or fund. An obligation held by a trust
or a fund in which ownership interests are
represented by pass-through certificates is
considered to be in registered form or to
be a registration-required obligation if the
obligation held by the trust or fund is in
registered form (as defined in paragraph
(b) of this section) or is a registration-
required obligation described in paragraph
(a)(2)(i) of this section, without regard to
whether the pass-through certificates are
so considered.
(iv)Examples. The application of para-
graph (a)(3) of this section may be illus-
trated by the following examples:
Example 1.Fund, a partnership under the laws of
the state in which it is organized, acquires a pool of
student loans. The student loans are issued by natural
persons and, therefore, are not registration-required
obligations as described in paragraph (a)(2)(i) of this
section. Fund contributes the student loans to Trust,
a business trust under the laws of the state in which
Trust is organized. Trust has the power to vary the
investments in Trust, and is not treated as a trust of
which the grantor is the owner under Subpart E of
Part I of Subchapter J of the Code. Trust issues
certificates evidencing an interest in Trust. The cer-
tificates issued by Trust are offered to the public. The
certificates issued by Trust are pass-through certifi-
cates (as described in paragraph (a)(3)(i)(B) of this
section) and are described in paragraph (a)(2)(i) of
this section, and thus, are registration-required obli-
gations described in paragraph (a)(2)(i) of this sec-
tion, even though the student loans held by Trust are
not registration-required obligations.
Example 2. Partnership U purchases a building
from Partnership V. Partnership U makes a cash
down payment and issues a note secured by a mort-
gage in the building to Partnership V for the remain-
ing purchase price of the building. The note is not a
registration-required obligation described in para-
graph (a)(2)(i) of this section because it is not an
obligation of a type offered to the public. Partnership
V offers participations in the underlying note to the
public. Under the terms of the participation, each
participant will own an interest in the note that will
entitle the participant to a specified portion of the
interest and principal generated by the note. The
participation is a participation interest described in
paragraph (a)(3)(ii) of this section and is described in
paragraph (a)(2)(i) of this section, and, thus, is a
registration-required obligation described in para-
graph (a)(2)(i) of this section, even though the un-
derlying note is not a registration-required obliga-
tion.
(4)REMICs—(i)Regular interest in a
REMIC. A regular interest in a REMIC, as
defined in sections 860D and 860G and
the regulations thereunder, is considered
to be a registration-required obligation if
the regular interest is described in para-
graph (a)(2)(i) of this section, without re-
gard to whether one or more of the obli-
gations held by the REMIC to which the
regular interest relates is described in
paragraph (a)(2)(i) of this section.
(ii)Treatment of obligation held by a
REMIC. An obligation described in para-
graph (a)(2)(i) of this section and held by
a REMIC is treated as a registration-
required obligation regardless of whether
the regular interests in the REMIC are so
treated.
(5)Applicability date—(i)In general.
Except as otherwise provided in para-
graphs (a)(5)(ii) and (iii) of this section,
paragraph (a) of this section applies to
obligations issued after March 18, 2012.
For obligations issued on or before March
18, 2012, see § 5f.163–1 of this chapter.
(ii)Obligations not of a type offered to
the public. Paragraph (a)(2)(ii) of this sec-
tion applies to obligations issued after the
date of publication of a Treasury decision
adopting these rules as final regulations in
theFederal Register.
(iii)Pass-through certificates, partici-
pation interests, and regular interests in
REMICs. Paragraph (a) of this section ap-
plies to pass-through certificates, partici-
pation interests, and regular interests in
REMICs issued after the date of publica-
tion of a Treasury decision adopting these
rules as final regulations in theFederal
Register. For pass-through certificates or
regular interests in REMICs issued on or
before the date of publication of a Trea-
sury decision adopting these rules as final
regulations in theFederal Register, see
§ 1.163–5T.
(b)Registered form—(1)General rule.
Except as provided in paragraph (b)(4) of
this section, an obligation is in registered
form if a transfer of the right to receive
both principal and any stated interest on
the obligation may be effected only—
(i) By surrender of the old obligation
and either the reissuance of the old obli-
gation to the new holder or the issuance of
a new obligation to the new holder;
(ii) Through a book entry system (as
described in paragraph (b)(2) of this sec-
tion) maintained by the issuer of the obli-
gation (or its agent) or by a clearing or-
ganization (as defined in paragraph (b)(3)
of this section); or
(iii) Through both of the methods de-
scribed in paragraphs (b)(1)(i) and (ii) of
this section.
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(2)Book entry system—(i)In general.
An obligation will be considered transfer-
able through a book entry system, includ-
ing a dematerialized book entry system, if
ownership of theobligation or an interest in
the obligation is required to be recorded in
an electronic or physical register maintained
by the issuer of the obligation (or its agent)
or by a clearing organization (as defined in
paragraph (b)(3) of this section).
(ii)Book entry system maintained by
clearing organization that effectively im-
mobilizes a bearer form obligation.An
obligation represented by one or more
physical certificates in bearer form will be
considered to be in registered form if the
physical certificates are effectively immo-
bilized. A physical certificate is effec-
tively immobilized only if—
(A) The physical certificate is issued to
and held by a clearing organization (as
defined in paragraph (b)(3) of this section)
for the benefit of purchasers of interests in
the obligation under arrangements that
prohibit the transfer of the physical certif-
icate except to a successor clearing orga-
nization subject to terms that effectively
immobilize the physical certificate, as pro-
vided in paragraph (b)(2)(ii) of this sec-
tion, in the hands of the successor clearing
organization; and
(B) Ownership of the obligation or an
interest in the obligation is transferable
only through a book entry system (as de-
scribed in paragraph (b)(2)(i) of this sec-
tion) maintained by the clearing organiza-
tion (as defined in paragraph (b)(3) of this
section).
(3)Definition of clearing organization.
For purposes of paragraph (b) of this sec-
tion,clearing organizationmeans an en-
tity that is in the business of holding ob-
ligations for or reflecting the ownership
interests of member organizations and
transferring obligations among such mem-
ber organizations by credit or debit to the
account of a member organization without
the necessity of physical delivery of the
obligation.
(4)Temporal limitations on registered
form—(i)In general. Except as provided
in paragraphs (b)(4)(ii) and (iii) of this
section, an obligation is not considered to
be in registered form as of a particular
time if the obligation may be transferred
at that time or at a time or times on or
before the maturity of the obligation by
any means not described in paragraph
(b)(1) of this section.
(ii)Events that permit issuance of
physical certificates in bearer form—(A)
In general. An obligation transferrable
through a dematerialized book entry sys-
tem is not in bearer form pursuant to para-
graph (b)(4)(i) of this section solely be-
cause a holder of the obligation (or an
interest therein) has a right to obtain a
physical certificate in bearer form upon
the occurrence of one or both of the fol-
lowing events—
(1) A termination of business without a
successor by the clearing organization that
maintains the book entry system; or
(2) The issuance of physical securities
at the issuer’s request upon a change in
tax law that would be adverse to the issuer
but for the issuance of physical securities
in bearer form.
(B)Treatment upon issuance of physi-
cal certificate in bearer form. Upon the
occurrence of one or both of the events
described in paragraph (b)(4)(ii)(A) of
this section, any obligation with respect to
which a holder, or a group of holders
acting collectively, may obtain a physical
certificate in bearer form will no longer be
in registered form, regardless of whether a
physical certificate in bearer form has ac-
tually been issued.
(iii)Obligations in registered form un-
til maturity. An obligation that as of a
particular time is not considered to be in
registered form because the obligation
may be transferred at a time or times
before the maturity of the obligation by a
means not described in paragraph (b)(1)
of this section and that during the period
beginning at a later time and ending at
maturity may be transferred only by a
means described in paragraph (b)(1) of
this section is considered to be in regis-
tered form during the period beginning at
that later time.
(5)Examples.The application of para-
graph (b) of this section may be illustrated
by the following examples:
Example 1. X issues an obligation that is a
registration-required obligation as described in para-
graph (a)(2)(i) of this section. At issuance, X issues
the obligation in the purchaser’s name evidencing
the purchaser’s ownership of the principal and inter-
est under the obligation. The purchaser may transfer
the obligation only by surrendering the obligation to
X and by X issuing a new instrument to the new
holder. X’s obligation is issued in registered form
under paragraph (b)(1) of this section.
Example 2. Corporation A issues US$500 million
of debt (the Note) evidenced by a physical certificate
that is registered in the name of ABC, a clearing orga-
nization (as defined in paragraph (b)(3) of this section).
Under the terms of the Note, Corporation A must
maintain an electronic register identifying the owners
of interests in the Note, and a transfer of the right to
receive either principal or any stated interest on such
ownership interests may be effected only through a
change to the electronic register. Pursuant to an agree-
ment with Corporation A, ABC takes custody of the
physical certificate evidencing the Note and receives all
principal and interest on the Note from Corporation A.
Independently of its agreement with Corporation A,
ABC maintains electronic records of its members’
ownership interests in the Note and distributes principal
and interest to members’ accounts in accordance with
those interests. ABC’s members, in turn, maintain elec-
tronic records of their customers’ ownership interests
in the Note and similarly distribute principal and inter-
est to their customers’ accounts. Corporation A’s elec-
tronic register identifies ABC as the sole owner of the
Note. Corporation A does not record transfers of own-
ership interests in the Note to or among ABC’s mem-
bers, and ABC does not record transfers of ownership
interests in the Note to or among its members’ custom-
ers. Corporation A’s electronic register is a book entry
system as described in paragraph (b)(2)(i) of this sec-
tion, and the Note is in registered form under paragraph
(b)(1) of this section.
Example 3. The facts are the same as inExample
2of paragraph (b)(5) of this section, except that,
instead of maintaining an electronic register, Corpo-
ration A issues a global bearer certificate (Certifi-
cate) to ABC pursuant to an agreement that prohibits
the transfer of Certificate except to a successor clear-
ing organization subject to terms that effectively
immobilize Certificate, as provided in paragraph
(b)(2)(ii) of this section, in the hands of the successor
clearing organization. Further, holders of interests in
Certificate may only obtain physical bearer certifi-
cates upon cessation of ABC’s operations without a
successor or, at Corporation A’s request, upon a
change in tax law that would be adverse to Corpo-
ration A but for the issuance of physical bearer
certificates. Because ownership of interests in Cer-
tificate may be transferred only through a demateri-
alized book entry system maintained by ABC, and
because the circumstances under which definitive
bearer certificates may be issued to holders of inter-
ests in Certificate are limited to the circumstances
described in paragraph (b)(4)(ii)(A) of this section,
Certificate is an immobilized bearer form obligation
described in paragraph (b)(2)(ii) of this section and
is accordingly in registered form under paragraph
(b)(2)(ii) of this section.
Example 4. The facts are the same as inExample
3of paragraph (b)(5) of this section, except that
purchasers of interests in Certificate have the right to
obtain definitive bearer certificates upon request at
any time until maturity of Certificate. Because the
circumstances under which definitive bearer obliga-
tions may be issued to holders of interests in Certif-
icate are not limited to the circumstances described
in paragraph (b)(4)(ii)(A) of this section, Certificate
is not considered to be issued in registered form
under paragraph (b)(4)(i) of this section.
Bulletin No. 2017– 41October 10, 2017
307

Example 5. Bank makes a loan to borrower se-
cured by real property (Loan). Participations in Loan
are traded on an established market. The participa-
tions are participation interests described in para-
graph (a)(3)(ii) of this section and are accordingly
registration-required obligations described in para-
graph (a)(2)(i) of this section. Bank remains the
registered owner of Loan and maintains an electronic
book entry system that identifies participants. Partic-
ipation interests may be transferred only by surren-
der of the old participation interest and reissuance of
the participation interest in the name of the new
participant, or by transfer of the participation interest
from the name of the old participant to the name of
the new participant in the book entry system of
Bank. Bank’s book entry system is described in
paragraph (b)(2)(i) of this section, and, accordingly,
under paragraph (b)(1)(iii) of this section, the par-
ticipation interests are in registered form.
(6)Applicability date. Paragraph (b) of
this section applies to obligations issued
after March 18, 2012. Taxpayers may ap-
ply the rules in section 3 of Notice 2012–
20, 2012–13 IRB 574, for obligations is-
sued prior to the date of publication of the
Treasury decision adopting these rules as
final regulations in theFederal Register.
For obligations issued on or before March
18, 2012, see § 5f.103–1 of this chapter.
(c)***
(3)***
(iii)Applicability to obligations issued
after March 18, 2012. For purposes of
section 163(f), paragraph (c) of this sec-
tion does not apply to obligations issued
after March 18, 2012. However, for pur-
poses of determining whether an obliga-
tion is described in section 4701(b)(1)(B)
or whether the exception in section 6049
from information reporting of interest or
original discount with respect to obliga-
tions that have an original term of 183
days or less applies, paragraph (c) of this
section continues to apply to obligations
issuedafterMarch18,2012.See
§§ 1.4701–1(b)(3) and 1.6049 –5(b)(10).
Par. 4. Section 1.163–5T is amended
by adding paragraph (f) to read as follows:
§ 1.163–5T Denial of interest
deduction on certain obligations issued
after December 31, 1982, unless issued
in registered form (temporary).
*****
(f)Applicability date. This section ap-
plies to obligations to which § 5f.163–1 of
this chapter applies. See § 5f.163–1(d) of
this chapter.
Par. 5. Section 1.165–12 is amended by:
1. Revising paragraph (a).
2. Redesignating paragraphs (b)(1) and
(2) as (b)(2) and (3), respectively.
3. Adding a new paragraph (b)(1).
4. Revising the paragraph heading and
first sentence of newly redesignated para-
graph (b)(2).
5. Redesignating paragraph (d) as para-
graph (d)(1).
6. Revising the paragraph heading and
the first sentence of newly redesignated
paragraph (d)(1).
7. Adding a new paragraph heading for
paragraph (d).
8. Adding paragraph (d)(2).
The revisions and additions read as fol-
lows:
§ 1.165–12 Denial of deduction for
losses on registration-required
obligations not in registered form.
(a)In general. Except as provided in
paragraph (c) of this section, nothing in
section 165(a) and the regulations there-
under, or in any other provision of law,
shall be construed to provide a deduction
for any loss sustained on any registration-
required obligation held after December
31, 1982, unless the obligation is in reg-
istered form or the issuance of the obliga-
tion was subject to tax under section 4701.
The termregistration-required obligation
has the meaning given to that term in
section 163(f)(2) and § 1.163–5(a)(2)(i).
For purposes of this section, the term
holdermeans the person that would be
denied a loss deduction under section
165(j)(1) or denied capital gain treatment
under section 1287(a). For purposes of
this section, the termUnited Statesmeans
the United States and its possessions
within the meaning of § 1.163–5(c)(2)(iv).
(b)Registered form—(1)Obligations
issued after March 18, 2012. With respect
to obligations issued after March 18,
2012, the termregistered formhas the
meaning given that term in § 1.163–5(b).
(2)Obligations issued after September
21, 1984 and on or before March 18,
2012. With respect to any obligation origi-
nally issued after September 21, 1984, and
on or before March 18, 2012, the termreg-
istered formhas the meaning given that
term in § 5f.103–1 of this chapter.***
*****
(d)Applicability date—(1)In general.
Except as provided in paragraph (d)(2) of
this section, these regulations apply gen-
erally to obligations issued after January
20, 1987.***
(2)Obligations issued after March 18,
2012. Paragraph (a) of this section applies
to obligations issued after March 18,
2012. For the rules that apply to obliga-
tions issued on or before March 18, 2012,
see § 1.165–12 as contained in 26 CFR
part 1, revised as of the date of the most
recent annual revision.
§ 1.860D–1 [Amended]
Par. 6. Section 1.860D–1(b)(5)(i)(A) is
amended by removing the language
“§ 5f.103–1(c)” and adding in its place the
language “§ 1.163–5(b).”
Par. 7. Section 1.871–14 is amended
by:
1. Revising the heading for paragraph
(c).
2. Revising paragraph (c)(1)(i).
3. Revising the heading for paragraph
(d).
4. Revising paragraphs (d)(1) and (2).
5. Adding paragraphs (j)(4) and (5).
The revisions and additions read as fol-
lows:
§ 1.871–14 Rules relating to repeal of
tax on interest of nonresident alien
individuals and foreign corporations
received from certain portfolio debt
investments.
*****
(c)Obligations in registered form—(1)
In general—(i)Registered form. For pur-
poses of this section, the rules of § 1.163–
5(b) apply to determine when an obliga-
tion is in registered form.
*****
(d)Application of repeal of 30-percent
withholding to pass-through certificates
or participation interests—(1)In gener-
al—(i)Pass-through certificates. Interest
received on a pass-through certificate (as
defined in § 1.163–5(a)(3)(i)(B)) qualifies
asportfoliointerestundersection
871(h)(2) or 881(c)(2) if the interest sat-
isfies the conditions described in para-
graph (c)(1)(ii) of this section or the con-
ditions described in paragraph (e) of this
section, without regard to whether any
obligation held by the grantor trust, or
similar fund, to which the pass-through
certificate relates is described in para-
October 10, 2017Bulletin No. 2017– 41
308

graph (c)(1)(ii) or (e) of this section. For
purposes of this paragraph (d)(1)(i), a sim-
ilar fund includes an entity that, under
§§ 301.7701–1 through 301.7701–3 of
this chapter, is disregarded as an entity
separate from its owner or classified as a
partnership for federal tax purposes, with-
out regard to the fund has the power to
vary the assets in the fund or the sequence
of payments made to holders. In addition,
for purposes of this paragraph (d)(1)(i), a
similar fund does not include a business
entity that is classified as a corporation
under § 301.7701–2 of this chapter.
(ii)Participation interests. Interest re-
ceived on a participation interest de-
scribed in § 1.163–5(a)(3)(ii) qualifies as
portfolio interest under section 871(h)(2)
or 881(c)(2) if the interest satisfies
the conditions described in paragraph
(c)(1)(ii) of this section or the conditions
described in paragraph (e) of this section,
without regard to whether the obligation
to which the participation interest relates
is described in paragraph (c)(1)(ii) or (e)
of this section.
(2)Interest in REMICs. Interest re-
ceived on a regular or residual interest in
a REMIC, as defined in sections 860D and
860G and the regulations thereunder,
qualifies as portfolio interest under section
871(h)(2) or 881(c)(2) if the interest sat-
isfies the conditions described in para-
graph (c)(1)(ii) of this section or the con-
ditions described in paragraph (e) of this
section. For purposes of paragraphs
(c)(1)(ii) and (e) of this section, interest on
a regular interest in a REMIC is not con-
sidered interest on any mortgage obliga-
tions held by the REMIC. The rule in the
preceding sentence, however, applies only
to payments made to the holder of the
regular interest in the REMIC from the
REMIC and does not apply to payments
made to the REMIC. For purposes of
paragraphs (c)(1)(ii) and (e) of this sec-
tion, interest on a residual interest in a
REMIC is considered to be interest on or
with respect to the obligations held by the
REMIC, and not on or with respect to the
residual interest.
*****
(j)***
(4)Registered form. Paragraph (c)(1)(i)
of this section applies to obligations issued
after March 18, 2012. For the rules that
apply to obligations issued on or before
March 18, 2012, see § 1.871–14 as con-
tained in 26 CFR part 1, revised as of the
date of the most recent annual revision.
(5)Pass-through certificates, partici-
pation interests, and interests in REMICs.
Paragraph (d) of this section applies to
pass-through certificates, participation in-
terests, or interests in REMICs issued af-
ter the date of publication of a Treasury
decision adopting these rules as final reg-
ulations in theFederal Register.
§ 1.881–3 [Amended]
Par. 8. Section 1.881–3(e) is amended
by:
1. RemovingExamples 10and19.
2. RedesignatingExamples 11through
18asExamples 10through17andExam-
ples 20through26asExamples 18
through24.
Par. 9. Section 1.1287–1 is amended
by:
1. Revising paragraph (a).
2. Redesignating paragraphs (b)(1) and
(2) as (b)(2) and (3), respectively.
3. Adding a new paragraph (b)(1).
4. Revising the paragraph heading and
first sentence of newly redesignated para-
graph (b)(2).
5. Redesignating paragraph (d) as para-
graph (d)(1).
6. Revising the paragraph heading and
the first sentence of newly redesignated
paragraph (d)(1).
7. Adding a new paragraph heading for
paragraph (d).
8. Adding paragraph (d)(2).
The revisions and additions read as fol-
lows:
§ 1.1287–1 Denial of capital gains
treatment for gains on registration-
required obligations not in registered
form.
(a)In general. Except as provided in
paragraph (c) of this section, any gain on
the sale or other disposition of a
registration-required obligation held after
December 31, 1982, that is not in regis-
tered form shall be treated as ordinary
income unless the issuance of the obliga-
tion was subject to tax under section 4701.
The termregistration-required obligation
has the meaning given to that term in
section 163(f)(2) and § 1.163–5(a)(2)(i).
The termholdermeans the person that
would be denied a loss deduction under
section 165(j)(1) or denied capital gain
treatment under section 1287(a).
(b)Registered form—(1)Obligations
issued after March 18, 2012. With respect
to obligations issued after March 18,
2012, the termregistered formhas the
meaning given that term in § 1.163–5(b).
(2)Obligations issued after September
21, 1984 and on or before March 18,
2012. With respect to any obligation origi-
nally issued after September 21, 1984, and
on or before March 18, 2012, the termreg-
istered formhas the meaning given that
term in § 5f.103–1 of this chapter.***
*****
(d)Applicability date—(1)In general
.
Except as provided in paragraph (d)(2) of
this section, these regulations apply gen-
erally to obligations issued after January
20, 1987.***
(2)Obligations issued after March 18,
2012. Paragraph (a) of this section applies
to obligations issued after March 18,
2012.
§ 1.6045–1 [Amended]
Par. 10. Section 1.6045–1(n)(2)(ii)(J)
is amended by removing the language
“§ 1.1471–1(b)(18)” and adding in its
place the language “§ 1.1471–1(b)(21)”.
§ 1.6049 –5 [Amended]
Par. 11. Section 1.6049 –5 is amended
by:
1. Removing “§ 5f.103–1(c)),” and
adding in its place “§ 1.163–5(b));” in
paragraph (a)(1)(i).
2. Removing the language “§ 5f.163–1”
and adding in its place the language
“§ 1.163–5(a)(2)” in paragraph (a)(1)(ii).
PART 5f—TEMPORARY INCOME
TAX REGULATIONS UNDER THE
TAX EQUITY AND FISCAL
RESPONSIBILITY ACT OF 1982
Par. 12. The authority citation for part
5f continues to read in part as follows:
Authority: 26 U.S.C. 7805***
Par. 13.Section 5f.103–1(d) is amended
by revising the paragraph heading and add-
ing two sentences at the end of the para-
graph to read as follows:
Bulletin No. 2017– 41October 10, 2017
309

§ 5f.103–1 Obligations issued after
December 31, 1982, required to be in
registered form.
*****
(d)Applicability date.* * * For the
purpose of determining whether bonds
satisfy the requirements of section 149(a),
this section applies to bonds issued prior
to the date 90 days after the publication of
the Treasury decision adopting these rules
as final regulations in theFederal Regis-
ter, and § 1.149(a)–1 of this chapter ap-
plies to bonds issued on or after the date
90 days after the publication of the Trea-
sury decision adopting these rules as final
regulations in theFederal Register. For
all other purposes, see § 1.163–5(a)(2)
and (b) of this chapter for obligations is-
sued after March 18, 2012.
*****
Par.14.Section5f.163–1(d)is
amended by revising the paragraph head-
ing and adding a sentence at the end of the
paragraph to read as follows:
§ 5f.163–1 Denial of interest deduction
on certain obligations issued after
December 31, 1982, unless issued in
registered form.
*****
(d)Applicability date.* * * For obli-
gations issued after March 18, 2012, see
§ 1.163–5 of this chapter.
*****
PART 46 —EXCISE TAX ON
POLICIES ISSUED BY FOREIGN
INSURERS AND OBLIGATIONS NOT
IN REGISTERED FORM
Par. 15. The authority citation for part
46 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 16. Section 46.4701–1 is amended
by:
1. Revising paragraphs (b)(3), (4), and
(5).
2. Redesignating paragraph (e) as para-
graph (e)(1).
3. Revising the paragraph heading of
newly redesignated paragraph (e)(1).
4. Adding a new paragraph heading for
paragraph (e).
5. Adding paragraph (e)(2).
The revisions and additions read as fol-
lows:
§ 46.4701–1 Tax on issuer of
registration-required obligation not in
registered form.
*****
(b)***
(3)Registration-required obligation.
The termregistration-required obligation
has the same meaning as in section 163(f)
and § 1.163–5(a)(2)(i) of this chapter, ex-
cept that the term does not include an
obligation described in section 4701(b)
(1)(B) or any obligation that is required to
be registered under section 149(a), such as
bonds that are tax-exempt under section
103. For purposes of determining whether
an obligation is described in section
4701(b)(1)(B), the rules of § 1.163–5(c)
of this chapter apply.
(4)Registered form. The termregis-
tered formhas the same meaning as in
§ 1.163–5(b) of this chapter.
(5)Issuer—(i)In general. Except as
provided in paragraph (b)(5)(ii) of this
section, the termissueris the person whose
interest deduction would be disallowed
solely by reason of section 163(f)(1).
(ii)Sponsor treated as issuer. A pass-
through certificate (as defined in § 1.163–
5(a)(3)(i)(B) of this chapter), a participa-
tion interest described in § 1.163–
5(a)(3)(ii) of this chapter, or a regular
interest in a REMIC, as defined in sections
860D and 860G and the regulations there-
under, is considered to be issued solely by
the recipient of the proceeds from the is-
suance of the certificate or interest (the
sponsor). The sponsor is therefore liable
for any excise tax under section 4701 that
may be imposed with reference to the
principal amount of the pass-through cer-
tificate, participation interest, or regular
interest.
*****
(e)Applicability date—(1)In general.
***
(2)Exception. Notwithstanding para-
graph (e)(1) of this section, paragraphs
(b)(3), (4), and (5) of this section apply to
obligations issued after March 18, 2012.
For the rules that apply to obligations is-
sued on or before March 18, 2012, see
§ 46.4701–1 as contained in 26 CFR part
46, revised as of the date of the most
recent annual revision.
Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.
(Filed by the Office of the Federal Register on September
15, 2017, 4:15 p.m., and published in the issue of the Federal
Register for September 19, 2017, 82 F.R. 43720)
October 10, 2017Bulletin No. 2017– 41
310

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
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
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
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
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
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 following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2017– 41October 10, 2017
i

Numerical Finding List
1
Bulletin 2017–27 through 2017– 41
Action on Decision:
2017-5, 2017-27 I.R.B.1
2017-6, 2017-33 I.R.B.194
Announcements:
2017-05, 2017-27 I.R.B.5
2017-08, 2017-28 I.R.B.9
2017-09, 2017-35 I.R.B.219
2017-10, 2017-33 I.R.B.210
2017-11, 2017-39 I.R.B.255
2017-12, 2017-38 I.R.B.238
2017-13, 2017-40 I.R.B.271
Notices:
2017-36, 2017-33 I.R.B.208
2017-37, 2017-29 I.R.B.89
2017-38, 2017-30 I.R.B.147
2017-39, 2017-31 I.R.B.150
2017-40, 2017-32 I.R.B.190
2017-41, 2017-34 I.R.B.211
2017-42, 2017-34 I.R.B.212
2017-43, 2017-36 I.R.B.224
2017-44, 2017-36 I.R.B.226
2017-45, 2017-38 I.R.B.232
2017-46, 2017-41 I.R.B.275
2017-47, 2017-38 I.R.B.232
2017-48, 2017-39 I.R.B.254
2017-49, 2017-40 I.R.B.258
2017-50, 2017-41 I.R.B.280
2017-51, 2017-40 I.R.B.260
2017-52, 2017-40 I.R.B.262
Proposed Regulations:
REG-139633-08, 2017-31 I.R.B.175
REG-128483-15, 2017-32 I.R.B.191
REG-136118-15, 2017-28 I.R.B.9
REG-105004-16, 2017-41 I.R.B.295
REG-125374-16, 2017-41 I.R.B.300
Revenue Procedures:
2017-41, 2017-29 I.R.B.92
2017-42, 2017-29 I.R.B.124
2017-43, 2017-31 I.R.B.153
2017-44, 2017-35 I.R.B.216
2017-45, 2017-35 I.R.B.216
2017-47, 2017-38 I.R.B.233
2017-48, 2017-36 I.R.B.229
2017-50, 2017-37 I.R.B.230
2017-52, 2017-41 I.R.B.283
2017-53, 2017-40 I.R.B.263
Revenue Rulings:
2017-14, 2017-27 I.R.B.2
2017-15, 2017-32 I.R.B.176
2017-16, 2017-35 I.R.B.215
2017-17, 2017-36 I.R.B.222
2017-18, 2017-39 I.R.B.239
2017-19, 2017-40 I.R.B.257
2017-20, 2017-41 I.R.B.273
Treasury Decisions:
9819, 2017-29 I.R.B.85
9820, 2017-32 I.R.B.178
9821, 2017-32 I.R.B.181
9822, 2017-33 I.R.B.195
9823, 2017-33 I.R.B.206
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017– 01 through 2017–26 is in Internal Revenue Bulletin
2017–26, dated June 27, 2017.
October 10, 2017Bulletin No. 2017– 41
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2017–27 through 2017– 41
Notices:
2015-77
Amplified by
Notice 2017-40, 2017-32 I.R.B.190
Revenue Procedures:
2016-27
Modified by
Rev. Proc. 2017-43, 2017-31 I.R.B.153
2016-27
Superseded by
Rev. Proc. 2017-43, 2017-31 I.R.B.153
2016-48
Superseded by
Rev. Proc. 2017-48, 2017-36 I.R.B.232
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017– 01 through 2017–26 is in Internal Revenue Bulletin
2017–26, dated June 27, 2017.
Bulletin No. 2017– 41October 10, 2017
iii

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available atwww.irs.gov/irb/.
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