Internal Revenue Bulletin 2009-51 (PDF rendition): IRS Announcements

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

Bulletin No. 200
9-51
December 21, 200
9
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Notice 2009–90, page 859.
This notice provides rules relating to the availability of the pro-
duction tax credit for refined coal.
Rev. Proc. 2009–48, page 864.
Specifications are set forth for the private printing of paper
and laster-printed substitutes for the February 2009 revisions
of Form W-2c,Corrected Wage and Tax Statement,andForm
W-3c,Transmittal of Corrected Wage and Tax Statements.Rev.
Proc. 2006–19 superseded.
EMPLOYEE PLANS
T.D. 9472, page 850.
Final regulations under section 4980F of the Code provide guid-
ance relating to the section’s application to a plan amendment
that is permitted to be effective before the plan amendment’s
applicable amendment date. The regulations also reflect cer-
tain amendments made to section 4980F by the Pension Pro-
tection Act of 2006.
Announcement 2009–85, page 938.
Temporary closing of the determination letter program
for adopters of pre-approved defined benefit plans.The
Service announces that it will temporarily stop accepting de-
termination letter applications for defined benefit plans filed on
Form 5307, beginning February 22, 2010. This announcement
does not affect the ability of adopting employers to apply for
determination letters on Form 5307 for pre-approved defined
contribution plans.
EMPLOYMENT TAX
Notice 2009–80, page 859.
2010 social security contribution and benefit base; do-
mestic employee coverage threshold.TheCommissioner
of the Social Security Administration has announced (1) the
OASDI contribution and benefit base for remuneration paid in
2010 and self-employment income earned in taxable years
beginning in 2010, and (2) the domestic employee coverage
threshold amount for 2010.
Rev. Proc. 2009–48, page 864.
Specifications are set forth for the private printing of paper
and laster-printed substitutes for the February 2009 revisions
of Form W-2c,Corrected Wage and Tax Statement,andForm
W-3c,Transmittal of Corrected Wage and Tax Statements.Rev.
Proc. 2006–19 superseded.
ADMINISTRATIVE
Notice 2009–93, page 863.
This notice creates a pilot program allowing filers of information
returns to truncate an individual payee’s nine-digit identifying
number on paper payee statements for calendar years 2009
and 2010 if the filers meet the requirements set forth in this
notice.
(Continued on the next page)
Finding Lists begin on page ii.

Rev. Proc. 2009–49, page 879.
General rules and specifications for private printing of
substitute forms.This procedure provides requirements for
reproducing paper substitutes and for furnishing substitute re-
cipient statements for Forms 1096, 1098, 1099, 5498, W-2G,
1042–S, and 8935. It will be reproduced as the next revision
of Publication 1179. Rev. Proc. 2008–36 superseded.
Rev. Proc. 2009–54, page 930.
2010 optional standard mileage rates.This procedure an-
nounces 50 cents as the optional rate for deducting or account-
ing for expenses for business use of an automobile, 14 cents
as the optional rate for use of an automobile as a charitable
contribution, and 16.5 cents as the optional rate for use of an
automobile as a medical or moving expense for 2010. The
procedure also provides rules for substantiating the deductible
expenses of using an automobile for business, moving, medi-
cal, or charitable purposes. Rev. Proc. 2008–72 superseded.
December 21, 20092009–51 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top quality service by helping them
understand an
d meet their tax responsibilities and by applying
the tax law with
integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2009–51 I.R.B.December 21, 2009

December 21, 20092009–51 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 62.—A
djusted
Gross Income Defined
26 CFR 1.62–2: Reimbursements and other expense
allowance arrangements.
Rules are provided under which a reimbursement
or other expense allowance arrangement for the cost
of operating an automobile for business purposes will
satisfy the requirements of section 62(c) of the Code
as to business connection, substantiation, and return-
ing amounts in excess of expenses. See Rev. Proc.
2009-54, page 930.
Section 162.—Trade or
Business Expenses
26 CFR 1.162–17: Reporting and substantiation of
certain business expenses of employees.
Rules are provided for substantiating the amount
of a deduction for an expense for business use of an
automobile. See Rev. Proc. 2009-54, page 930.
Section 17
0.—Charitable,
etc., Contributions and Gifts
26 CFR 1.170A–1: Charitable, etc., contributions
and gifts; allowance of deduction.
Rules are provided for substantiating the amount
of a deduction for an expense for charitable use of an
automobile. See Rev. Proc. 2009-54, page 930.
Section 213.—Medical,
Dental, etc., Expenses
26 CFR 1.213–1: Medical, dental, etc., expenses.
Rules are provided for substantiating the amount
of a deduction or an expense for use of an automobile
to obtain medical services. See Rev. Proc. 2009-54,
page 930.
Section 217.—Moving
Expenses
26 CFR 1.217–2: Moving expenses.
Rules are provided for substantiating the amount
of a deduction or an expense for use of an automobile
as part of a move. See Rev. Proc. 2009-54, page 930.
Section 1016.
—Adjust-
ments to Basis
26 CFR 1.1016–3: Exhaustion, wear and tear, ob-
solescence, amortization, and depletion for periods
since February 28, 1913.
Rules are provided for reduction of basis for busi-
ness use of an automobile under either the optional
standard mileage rate method or a mileage allowance
under a reimbursement or other expense allowance
arrangement. See Rev. Proc. 2009-54, page 930.
Section 4980F.—Failure of
Applicable Plans Reducing
Benefit Accruals to Satisfy
Notice Requirements
26 CFR 54.4980F–1: Notice requirements for certain
pension plan amendments significantly reducing the
rate of future benefit accrual.
T.D. 9472
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 54
Notice Requirements for
Certain Pension Plan
Amendments Significantly
Reducing the Rate of Future
Benefit Accrual
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulation.
SUMMAR
Y: This document contains final
regula
tions providing guidance relating to
the app
lication of the section 204(h) notice
requir
ements to a pension plan amendment
that is
permitted to reduce benefits accrued
befor
e the plan amendment’s applicable
amend
ment date. These regulations also
refle
ct certain amendments made to the
secti
on 204(h) notice requirements by the
Pensi
on Protection Act of 2006. These fi-
nal re
gulations generally affect sponsors,
admi
nistrators, participants, and beneficia-
ries
of pension plans.
DATES:Effect
ive date:These regulations
are effective
on November 24, 2009.
Applicabilit
yDate:For dates of appli-
cability of th
ese regulations, see Q&A–18,
§54.4980F–1 o
f these regulations.
FOR FURTHER I
NFORMATION
CONTACT: Pam
ela R. Kinard at (202)
622–6060 (no
t a toll-free number).
SUPPLEMENTA
RY INFORMATION:
Paperwork Re
duction Act
The collecti
on of information contained
in these fina
l regulations were previously
reviewed and
approved by the Office of
Management
and Budget in accordance
with the Pap
erwork Reduction Act of
1995 (44 U.S
.C. 3507(d)) under control
number 1545
–1780, in conjunction with
the Treasu
ry decision (T.D. 9052, 2003–1
C.B. 879),
relating to Notice of Significant
Reduction
in the Rate of Future Benefit
Accrual, p
ublished on April 9, 2003 in the
Federal Re
gister(68 FR 17277). There
are no pro
posals for substantive changes
to this co
llection of information.
An agency
may not conduct or sponsor,
and a pers
on is not required to respond to, a
collecti
on of information unless it displays
a valid co
ntrol number assigned by the Of-
fice of M
anagement and Budget.
Books or r
ecords relating to a collection
of infor
mation must be retained as long
as their
contents may become material in
the admi
nistration of any internal revenue
law. Gen
erally, tax returns and tax return
informa
tion are confidential, as required
by 26 U.
S.C. 6103.
Backgr
ound
Overvi
ew
This doc
ument contains amendments
to 26 CF
R parts 1 and 54 under sections
411(d)
(6) and 4980F of the Internal Rev-
enue Co
de (Code). This Treasury decision
amends
§54.4980F–1 of the Treasury reg-
ulatio
ns to reflect changes made to section
4980F
by the Pension Protection Act of
2006,
Public Law 109–280 (120 Stat.
780) (
PPA ’06). In addition, this Treasury
2009–51 I.R.B.850December 21, 2009

decision amends §1.411(d)–3 to reflect
changes to section 411(d)(6) made by sec-
tion 1107 of PPA ’06.
Section 411(d)(6) Protected Benefits
Section 401(a)(7) of the Code provides
that a trust does not constitute a quali-
fied trust unless the plan under which the
trust is established and maintained satisfies
the requirements of section 411 (relating
to minimum vesting standards). Section
411(d)(6)(A) and §1.411(d)–3(a)(1) pro-
vide that a plan is treated as not satisfying
the requirements of section 411 if the ac-
crued benefit of a participant is decreased
by an amendment of the plan, other than an
amendment described in section 412(d)(2)
(formerly section 412(c)(8)), section 4281
of the Employee Retirement Income Se-
curity Act of 1974 (ERISA), as amended,
or any other applicable law. Applicable
law includes sections 418D and 418E of
the Code and section 1541(a)(2) of the
Taxpayer Relief Act of 1997, Public Law
105–34 (111 Stat. 788, 1085). Section
204(g) of ERISA contains parallel rules to
section 411(d)(6) of the Code.
Notice Requirements for Significant
Reduction in the Rate of Future Benefit
Accruals
Section 4980F imposes an excise tax
when a plan administrator fails to provide
timely notice of a plan amendment that
provides for a significant reduction in the
rate of future benefit accrual. For this pur-
pose, the elimination or reduction of an
early retirement benefit or retirement-type
subsidy is treated as having the effect of
reducing the rate of future benefit accrual.
Section 4980F(e)(3) provides that, except
as provided in regulations, the notice must
be provided within a “reasonable time” be-
fore the effective date of the plan amend-
ment. Section 204(h) of ERISA contains
parallel rules to section 4980F of the Code,
and a notice required under section 4980F
of the Code or section 204(h) of ERISA is
generally referred to as a “section 204(h)
notice.”
The Secretary of the Treasury has inter-
pretive authority over sections 411(d)(6)
and 4980F of the Code as well as sections
204(g) and 204(h) of ERISA, including the
subject matter addressed in these regula-
tions. See section 101(a) of Reorganiza-
tion Plan No. 4 of 1978, 29 U.S.C. 1001nt
(under which the Secretary of the Trea-
sury generally has the authority to issue
regulations under parts 2 and 3 of subti-
tle B of title I of ERISA, including sec-
tions 204(g) and 204(h) of ERISA).
1
Thus,
these Treasury regulations under sections
411(d)(6) and 4980F of the Code also ap-
ply for purposes of sections 204(g) and
204(h) of ERISA.
Provisions of the Pension Protection Act
of 2006
Section 402 of PPA ’06 provides special
funding rules for plans maintained by an
employer that is a commercial passenger
airline or the principal business of which
is providing catering services to a commer-
cial passenger airline. Section 402(h)(4) of
PPA ’06 provides that, in the case of a plan
amendment adopted in order to comply
with the rules in section 402 of PPA ’06,
any notice required under section 4980F(e)
of the Code (or section 204(h) of ERISA)
must be provided within 15 days of the ef-
fective date of the plan amendment. Sec-
tion 402 of PPA ’06 generally applies to
amendments made pursuant to section 402
of PPA ’06 for plan years ending after the
date of enactment of PPA ’06 (August 17,
2006).
Section 502(c) of PPA ’06 amended
section 4980F(e)(1) of the Code (and sec-
tion 204(h) of ERISA) to add a require-
ment that, if a section 204(h) notice is re-
quired with respect to an amendment, any
employer with an obligation to contribute
to the plan receive a section 204(h) notice.
This new disclosure requirement is effec-
tive for plan years beginning after Decem-
ber 31, 2007.
Section1107ofPPA’06providesthat
any plan amendment made pursuant to a
PPA ’06 change may be retroactively ef-
fective and, except as provided by the Sec-
retary of the Treasury, does not violate the
anti-cutback rules of section 411(d)(6) of
theCode(orsection204(g)ofERISA)
if, in addition to satisfying the conditions
specified in section 1107(b)(2) of PPA ’06,
the amendment is made on or before the
last day of the first plan year beginning on
or after January 1, 2009 (January 1, 2011,
with respect to governmental plans).
Notice Requirements Relating to Plan
Amendments Affecting Previously Accrued
Benefits
In addition to the section 204(h) notice
requirement, both the Code and ERISA
include a number of other requirements
to provide information to certain parties
(such as participants, beneficiaries, and
contributing employers) regarding the po-
tential effect of a plan amendment that
is permitted to reduce or eliminate previ-
ously accrued benefits.
Section 412(d)(2) of the Code provides
special rules relating to retroactive plan
amendments. Rev. Proc. 94–42, 1994–1
C.B. 717, see §601.601(d)(2)(ii)(b), sets
forth procedures under which a plan spon-
sor may file notice with and obtain ap-
proval from the Secretary of the Treasury
for a retroactive amendment described
in former section 412(c)(8) (now section
412(d)(2)) that reduces prior accrued ben-
efits. Section 4 of Rev. Proc. 94–42
provides guidance relating to the written
notice that must be provided to affected
parties (employee organizations, partici-
pants, beneficiaries, and alternate payees)
regarding the application for approval of
a retroactive plan amendment to reduce
accrued benefits under section 412(d)(2).
Section 113(a)(1)(B) of PPA ’06 added
Code section 436 which provides rules
limiting benefits and benefit accruals for
single-employer plans with certain fund-
ing shortfalls.
2
In general, these limits
are based on a plan’s adjusted funding
target attainment percentage (AFTAP)
3
and include limits on unpredictable con-
tingent event benefits
4
(where the plan’s
AFTAP is or would be below 60 percent),
certain plan amendments which would
increase liabilities of the plan by reason of
an increase in benefits (where the plan’s
AFTAP is or would be below 80 percent),
and prohibited payments (where the plan’s
1
In addition, sections 204(g) and 204(h) of ERISA include provisions authorizing the Secretary of the Treasury to issue guidance with respect to specific issues.
2
Section 103(a) of PPA ’06 added section 206(g) of ERISA, the parallel provision to section 436 of the Code.
3
For a definition of AFTAP, see section 436(j)(2).
4
For a definition of unpredictable contingent event benefit, see section 436(b)(3).
December 21, 20098512009–51 I.R.B.

AFTAP is below 60 percent or is at least
60 percent but below 80 percent, or during
a period in which the plan sponsor is a
debtor in a case under title 11 U.S.C. or
similar federal or State law and the plan
actuary has not certified that the plan’s
AFTAP is at least 100 percent for the plan
year), and a cessation of benefit accruals
(where the plan’s AFTAP is below 60 per-
cent).
5
Section 101(j) of ERISA requires the
plan administrator to provide a written
notice to plan participants and beneficia-
ries, generally within 30 days after the
plan becomes subjectto the benefit limi-
tations in section 206(g)(1), (3), or (4) of
ERISA (which are parallel to the benefit
limitations in Code section 436(b), (d),
or (e)) relating to unpredictable contin-
gent event benefits, prohibited payments,
and cessation of benefit accruals. Section
101(c)(1)(A)(ii) of the Worker, Retiree,
and Employer Recovery Act of 2008,
Public Law 110–458 (122 Stat. 5092)
(WRERA), amended section 101(j) of
ERISA to authorize the Secretary of the
Treasury, in consultation with the Secre-
tary of Labor, to prescribe rules applicable
to the notice requirements under section
101(j) of ERISA.
Section 418D of the Code (and the par-
allel provision at section 4244A of ERISA)
provides that a multiemployer plan in reor-
ganization is permitted to adopt an amend-
ment reducing or eliminating accrued ben-
efits attributable to employer contributions
under the plan. Under section 418D(b), an
amendment is not permitted to reduce or
eliminate benefits unless notice is given to
plan participants, beneficiaries, and other
affected persons at least 6 months before
the first day of the plan year in which the
amendment reducing benefits is adopted.
The notice must include certain informa-
tion, including an explanation of the rights
and remedies of participants and beneficia-
ries under the plan and notification that,
if contributions under the plan are not in-
creased, accrued benefits under the plan
for certain participants and beneficiaries
will be reduced or an excise tax will be im-
posed on contributing employers.
Section 418E of the Code (and the par-
allel provision at section 4245 of ERISA)
provides rules relating to suspension of
benefits under an insolvent multiemployer
plan. If payments of basic benefits under
the plan exceed the resource benefit level
or the level of basic benefits of the plan
for the plan year, the payment of bene-
fits must be suspended to the extent neces-
sary to reduce such payments to the greater
of the resource benefit level of the plan
or the level of basic benefits. Section
418E of the Code provides that plans in
reorganization that may become insolvent
must provide notice to the Pension Ben-
efit Guaranty Corporation (PBGC), con-
tributing employers, employee organiza-
tions, plan participants, and beneficiaries
that, certain non-basic benefit payments
will be suspended if insolvency occurs.
Section 4281 of ERISA provides rules
relating to the reduction of benefits or the
suspension of benefit payments under cer-
tain terminated multiemployer plans. Sec-
tion 4281(c) of ERISA provides that, if
the value of nonforfeitable benefits under
a terminated plan exceeds the value of a
plan’s assets, the plan must be amended to
reduce benefits under the plan to the ex-
tent necessary to ensure that the plan’s as-
sets are sufficient to meet its obligations.
The regulations at 29 CFR 4281.32 pro-
vide that a plan sponsor must notify the
PBGC and plan participants and beneficia-
ries of a plan amendment reducing benefits
pursuant to section 4281(c) of ERISA.
Section 212(a) of PPA ’06 added sec-
tion 432 of the Code (and section 202(a)
of PPA ’06 added the parallel provision
at section 305 of ERISA), which provides
rules relating to multiemployer plans that
are in endangered or critical status. Under
certain circumstances, a plan may adopt
a plan amendment that reduces previously
accrued benefits. Section 432(b)(3)(D) of
the Code provides that, within 30 days af-
ter a certification by a plan actuary that a
plan is in endangered or critical status, the
plan sponsor must notify plan participants
and beneficiaries, the bargaining parties,
the PBGC, and the Secretary of Labor of
the plan’s endangered or critical status. If
theplaniscertifiedtobeincriticalstatus,
the notice must provide an explanation of
the possibility that (1) adjustable benefits
may be reduced and (2) such reductions
may apply to participants and beneficia-
ries whose benefit commencement date is
on or after the date the notice is provided
for the first plan year in which the plan is
in critical status. Adjustable benefits, de-
fined in section 432(e)(8)(A)(iv), include
certain section 411(d)(6) protected bene-
fits such as early retirement benefits and
retirement-type subsidies.
Section 432(e)(8)(C) requires a plan to
provide notice of a plan amendment reduc-
ing adjustable benefitsto affected parties
(including plan participants, beneficiaries,
and contributing employers) at least 30
days before the general effective date of
the reduction. The notice must include
information that is sufficient for partici-
pants and beneficiaries to understand the
effect of any reduction on their benefits, a
description of the possible rights and reme-
dies of plan participants and beneficiaries,
and information on how to contact the
Department of Labor and the PBGC. See
sections 102(b)(1)(C), 102(b)(1)(E)(iv),
102(b)(2)(B), 102(b)(2)(D)(iv)(III), and
102(b)(2)(D)(iv)(IV) of WRERA for pro-
visions authorizing the Secretary of the
Treasury, in consultation with the Sec-
retary of Labor, to issue guidance relat-
ing to the notice requirements in section
305(b)(3)(D) of ERISA (and the paral-
lel provision at section 432(b)(3)(D) of
the Code) and section 305(e)(8)(C)(iii)
of ERISA (and the parallel provision at
section 432(e)(8)(C) of the Code).
Section 432(f)(2) of the Code also
restricts a plan from making certain accel-
erated benefit payments, effective on the
date a notice of certification of a multi-
employer plan’s critical status is provided,
which include single sum distributions.
On March 18, 2008, proposed regulations
(REG–151135–07, 2008–16 I.R.B. 815)
under section 432 of the Code (432 pro-
posed regulations) were published in the
Federal Register(73 FR 14417). Under
§1.432(b)–1(e)(2) of the 432 proposed reg-
ulations, if a plan in critical status provides
benefits that are restricted under section
432(f)(2), then the notice of critical status
described in section 432(b)(3)(D) must
include an explanation that the plan cannot
pay such restricted benefits, to the extent
the benefits exceedthe monthly amount
paid under a single life annuity (plus social
security supplementsdescribed in section
411(a)(9)).
5
These provisions are reflected in sections 436(b)(1), (c)(1), (d)(1), (d)(2), and (d)(3), and (e)(1) (and the parallel provisions at sections 206(g)(1)(A), (g)(2)(A), (g)(3)(A), (g)(3)(B), and
(g)(3)(C), and (g)(4)(A) of ERISA).
2009–51 I.R.B.852December 21, 2009

On March 21, 2008, proposed regula-
tions (REG–110136–07, 2008–17 I.R.B.
838) under sections 411(d)(6) and 4980F
of the Code (2008 proposed regulations)
were published in theFederal Register
(73 FR 15101). On July 10, 2008, the IRS
held a public hearing on the 2008 proposed
regulations. Written comments respond-
ing to the notice of proposed rulemaking
were also received. After consideration
of the comments, the proposed regulations
are adopted, as amended by this Treasury
decision. The revisions are discussed in
this preamble.
Summary of Comments and
Explanation of Revisions
PPA ’06 Revisions to Section 204(h)
Notice Requirements
This Treasury decision amends the reg-
ulations under section 4980F of the Code
to reflect provisions in PPA ’06. Section
502(c) of PPA ’06 amended section 204(h)
of ERISA and section 4980F of the Code
to require that section 204(h) notice be pro-
vided to any employer that has an obliga-
tion to contribute to the plan. A contribut-
ing employer is defined in the regulations
as an employer that has an obligation to
contribute to a plan (within the meaning of
section 4212(a) of ERISA). A commenta-
tor suggested that the final regulations clar-
ify that the requirement that section 204(h)
notice be given to contributing employers
applies only to employers in a multiem-
ployer plan, not to employers in a single
employer plan. These regulations include
this suggestion.
These final regulations retain from the
proposed regulations a special timing rule
to reflect section 402 of PPA ’06. Section
402 of PPA ’06 provides special funding
rules for plans maintained by an employer
that is a commercial passenger airline or
the principal business of which is pro-
viding catering services to a commercial
passenger airline. Section 402(h)(4) of
PPA ’06 provides that, in the case of a plan
amendment adopted in order to comply
with the rules in section 402 of PPA ’06,
any notice required under section 4980F(e)
of the Code (or section 204(h) of ERISA)
must be provided within 15 days of the
effective date of the plan amendment. The
proposed regulations provided that, for
certain plans maintained by an employer
that is a commercial passenger airline or
the principal business of which is pro-
viding catering services to a commercial
passenger airline, section 204(h) notice
must be provided at least 15 days before
the effective date of the amendment. This
is consistent with the Joint Committee on
Taxation’s Technical Explanation to sec-
tion 402 of PPA ’06 which states that the
section 204(h) notice “allows the notice
to be provided at least 15 days before the
effective date of the plan amendment.”
6
No comments were received on this pro-
posed rule and the final regulations retain
the rule from the proposed regulations.
Plan Amendments Reflecting a Change in
Statutorily Mandated Minimum Present
Value Rules
Section 417(e)(3) of the Code provides
that, in distributing the present value of
an accrued benefit to a plan participant,
the present value of the benefit is not per-
mitted to be less than the present value
calculated using the applicable mortal-
ity table and the applicable interest rate
under section 417(e)(3). Section 302(b)
of PPA ’06 amended section 417(e)(3)
of the Code to provide new actuarial as-
sumptions for calculating the minimum
present value of a participant’s accrued
benefit. Plan sponsors have asked whether
a plan amendment to reflect the change
in these section 417(e)(3) actuarial as-
sumptions would trigger the requirement
to provide a section 204(h) notice. Rev-
enue Ruling 2007–67, 2007–2 C.B. 1047,
see §601.601(d)(2)(ii)(b), which includes
guidance on plan amendments regard-
ing the new applicable mortality table
and applicable interest rate under section
417(e)(3), states that certain amendments
to reflect the new applicable mortality
table and applicable interest rate for dis-
tributions with an annuity starting date
in 2008 or later would not violate the
anti-cutback rules of section 411(d)(6).
The final regulations retain the rule in
the 2008 proposed regulations that no
section 204(h) notice is required if a de-
fined benefit plan is amended to reflect
changes to the applicable interest or mor-
tality assumptions in section 417(e)(3)
made by PPA ’06. For example, a reduced
single-sum distribution resulting from
an amendment to a traditional defined
benefit plan that timely substitutes the
prescribed actuarialassumptions under
section 417(e)(3), as amended by PPA ’06,
for the pre-PPA ’06 actuarial assumptions
under section 417(e)(3) does not require a
section 204(h) notice.
Interaction of the Section 204(h) Notice
Timing Rules with Plan Amendments that
Have a Retroactive Effective Date
Section 1.411(d)–3(a)(1) of the current
Treasury regulations generally provides
that a plan is not a qualified plan if a
plan amendment decreases the accrued
benefit of any plan participant. These
rules are generally based on the “appli-
cable amendment date,” which is defined
in §1.411(d)–3(g)(4) as the later of the
effective date of the amendment or the
date the amendment is adopted. While
§1.411(d)–3(a)(1) generally prohibits a
plan amendment that reduces benefits ac-
crued before the applicable amendment
date, a number of statutory exceptions
apply. These exceptions include amend-
ments permitted under sections 412(d)(2),
418D, and 418E of the Code, section
4281ofERISA,andsection1107ofPPA
’06. The prior regulations under section
411(d)(6) of the Code listed these ex-
ceptions, other than the exception under
section 1107 of PPA ’06. The final regu-
lations provide a conforming amendment
to §1.411(d)–3(a)(1) to include section
1107 of PPA ’06 as a statutory exception
to the general anti-cutback rule in section
411(d)(6) of the Code.
In the case of an amendment that is per-
mitted to be adopted retroactively, the pro-
posed regulations stated that the effective
date of the amendment, for purposes of
section 4980F, is the date the amendment is
put into effect on an operational basis un-
der the plan, so that a section 204(h) notice
must generally be provided at least 45 days
before the date the amendment is put into
effect on an operational basis (15 days for
multiemployer plans).
A commentator suggested that the fi-
nal regulations clarify that there is no spe-
cific time limit on how far in advance
of the effective date of a section 204(h)
6
See Joint Committee on Taxation, Technical Explanation of H.R. 4, the “Pension Protection Act of 2006” (JCX–38–06), August 3, 2006, 109th Cong., 2nd Sess. 87 (2006) at 87.
December 21, 20098532009–51 I.R.B.

amendment
7
a section 204(h) notice may
be provided. The commentator argued that
while the notice requirements under sec-
tion 4980F only restrict how late a no-
tice can be provided, other notice require-
ments, such as the notice required under
section 417(a)(6), provide a timeframe in
which the notice must be provided. The
commentator argued that notification far
in advance of the effective date should
be permitted on the grounds that notice
any time in advance of the effective date
would satisfy the statute, and would pro-
vide a practical solution to the administra-
tive challenges of providing notice for a
large plan with many contributing employ-
ers and with a variety of different amend-
ment effective dates. No change has been
made to the proposed regulations to reflect
these comments.
Another commentator requested clari-
fication on whether section 204(h) notice
is required in the case of a plan amend-
ment that is permitted to reduce prior
benefit accruals. The commentator cited
to Q&A–7(b) of §54.4980F–1, which
provides that any section 411(d)(6) pro-
tected benefit that may be eliminated or
reduced as permitted under §1.411(d)–3
or §1.411(d)–4, Q&A–2(a) or (b), is not
taken into account in determining whether
an amendment is a section 204(h) amend-
ment. This cross-reference to §1.411(d)–3
was added to the regulations in 2005 with
the intent to address amendments that
reduce or eliminate benefits or subsidies
that create significant burdens or com-
plexities for the plan and plan participants
unless the amendment adversely affects
the rights of any participant in more than a
de minimismanner, not to address amend-
ments implementing changes in applicable
law. Similarly, the cross-reference to
§1.411(d)–4, Q&A–2(a) or (b) was not
intended to apply to amendments imple-
menting future changes in applicable law.
In order to reflect this intent, the final
regulations revise the cross-references
in Q&A–7(b) to provide that any plan
amendment that is permitted to eliminate
or reduce a section 411(d)(6) protected
benefit under §1.411(d)–3(c), (d), or (f), or
under §1.411(d)–4, Q&A–2(a)(2), (a)(3),
(b)(1), or (b)(2)(ii) through (b)(2)(xi),
is not an amendment for which section
204(h) notice is required.
The final regulations retain a special
transitional rule which provides that, in
the case of an amendment that is per-
mitted to reduce benefit accruals and is
made to a plan that is a statutory hybrid
to which section 411(a)(13)(C) applies,
a section 204(h) notice must be provided
at least 30 days before the amendment
is effective. No commentators objected
to this rule in the proposed regulations.
Accordingly, the final regulations provide
that for any section 204(h) notice that is
required to be provided in connection with
an amendment to a statutory hybrid plan
under section 411(a)(13)(C) that is first
effective before January 1, 2009, and that
limits the amount of a distribution to the
account balance as permitted under sec-
tion 411(a)(13)(A), section 204(h) notice
does not fail to be timely if the notice is
provided at least 30 days before the date
the amendment is first effective. This spe-
cial timing rule reflects the 30-day timing
rule described in Notice 2007–6, 2007–1
C.B. 272, see §601.601(d)(2)(ii)(b), which
provides transitional guidance on the re-
quirements of sections 411(a)(13) and
411(b)(5).
8
The final regulations, like the
proposed regulations, permit the use of this
transitional timing rule through the end
of 2008. Thereafter, the general 45-day
timing rule applies to such amendments.
Interaction of Section 204(h) Notice
Requirements with Other Notice
Requirements Relating to Plan
Amendments
As stated in the background portion of
this preamble, the Code and ERISA in-
clude a number of other notice require-
mentsrelatingtoplanamendmentsthat
are permitted to reduce or eliminate ac-
crued benefits. To eliminate the need for
a plan to provide multiple notices at differ-
ent dates and with substantially the same
function and information to affected per-
sons, the proposed regulations stated that,
with respect to an amendment that trig-
gers a section 204(h) notice requirement
as well as another statutory notice require-
ment, if a plan provides the latter notice in
accordance with the applicable standards
for such a notice, the plan is treated as
having timely complied with the require-
ment to provide a section 204(h) notice
with respect to the section 204(h) amend-
ment. Under the proposed regulations, this
treatment would apply to the following no-
tices:
•A notice required under Rev. Proc.
94–42 relating to retroactive plan
amendments that reduce accrued ben-
efits described in section 412(d)(2) of
the Code;
•A notice required under section 101(j)
of ERISA if an amendment is adopted
to comply with the benefit limitation
requirements of section 436 of the
Code (section 206(g) of ERISA);
•A notice required under section 418D
of the Code (section 4244A(b) of
ERISA) for an amendment that re-
duces or eliminates accrued benefits
attributable to employer contributions
with respect to a multiemployer plan
in reorganization;
•A notice required under section 418E
of the Code (section 4245(e) of
ERISA), relating to the effects of the
insolvency status for a multiemployer
plan; and
•A notice required under section 4281
of ERISA and 29 CFR 4281.32 for an
amendment of a multiemployer plan
reducing benefits pursuant to section
4281(c) of ERISA.
In general, commentators did not object
to this treatment under the 2008 proposed
regulations. However, some commenta-
tors argued that the regulations should not
apply the excise tax under section 4980F of
the Code if the plan were to fail to satisfy
the requirements of the other applicable
notice. For example, a commentator sug-
gested that if the notice requirements under
section101(j)ofERISA are not satisfied
for an amendment adopted to comply with
section 436 of the Code (or section 206(g)
of ERISA), the plan should still be treated
as having provided section 204(h) notice
even though participants receive no notice
of the amendment. However, there is no
statutory basis for this suggestion, and the
final regulations do not make this change.
Thus, in any case in which notice is re-
7
A section 204(h) amendment is defined in Q&A–4(b) of §54.4980F–1 of the Treasury regulations as an amendment for which section 204(h) notice is required.
8
Section B.4 of Notice 2007–6 provides that, in the case of a plan amendment that is permitted to reduce benefit accruals, a section 204(h) notice must beprovided at least 30 days before the
amendment is effective. This rule wouldrequirethenoticetobeprovidedatleast30daysbeforetheearliestdateonwhichtheplanisoperatedinaccordance with the amendment.
2009–51 I.R.B.854December 21, 2009

quired to be given under section 101(j) of
ERISA and, in addition, section 204(h) no-
tice is required for the related plan amend-
ment under section 4980F of the Code (and
section 204(h) of ERISA), the plan spon-
sor either could provide two notices — at
the times and in the manner required un-
der each such section — or could provide
a notice under section 101(j) of ERISA at
thetimeandinthemannerrequiredun-
der section 101(j). In this respect, provid-
ing section 101(j) notice constitutes a safe
harbor for purposes of any requirement to
provide section 204(h) notice. However,
in general (and depending on the facts and
circumstances), the failure to provide no-
tice under both section 101(j) of ERISA
and section 4980F of the Code (and section
204(h)) of ERISA), where required, would
violate section 101(j) of ERISA and, sepa-
rately, Code section 4980F (as well as sec-
tion 204(h) of ERISA).
With respect to amendments made in
order to comply with the benefit limita-
tions provided by section 436 of the Code,
some commentators asked that the rules in
the final regulations be clarified to provide
explicitly that a plan that is never required
to provide a notice under ERISA section
101(j) (or is not required to do so for a
long period of time) is not treated as failing
to satisfy ERISA section 204(h) or Code
section 4980F. Commentators asserted that
this should be the case even though a sec-
tion 204(h) notice was not sent when the
plan adopted general conditional language
authorizing the benefit restrictions to be-
come effective if and when required. Un-
der the standards set forth in the existing
regulations at §54.4980F–1, A–5(a) and
A–6, whether an amendment to comply
with section 436 requires section 204(h)
notice depends on whether it is reasonably
expected that the amendment will result in
a reduction, taking into account facts and
circumstances at the time of the amend-
ment (in either the rate of future benefit ac-
crual or early retirement benefits or retire-
ment-type subsidies) and, if so, whether
such reduction will be significant. A plan
would still be required to provide notice
under section 101(j) of ERISA when a ben-
efit limitation is triggered under the rules
of section 436 of the Code. The provision
in these final regulations under which pro-
viding timely section 101(j) notice satis-
fies any section 204(h) notice requirement
for a section 436 amendment has the ef-
fect of mooting questions such as when
and whether an amendment to comply with
section 436 requires section 204(h) notice.
Accordingly, no special rules have been
adopted to address these comments.
A conforming change was made to
Q&A–8 of the regulation for plan amend-
ments with retroactive effective dates.
The final regulations provide that whether
an amendment reducing the rate of future
benefit accrual provides for a reduction
that is significant is determined based on
reasonable expectations taking into ac-
count the relevant facts and circumstances
at the time the amendment is adopted, or
earlier, at the time of the effective date of
the amendment.
As stated earlier, a plan is treated as
having timely complied with the require-
ments to provide a section 204(h) notice if
the plan satisfies the requirements for pro-
viding one of the notices listed earlier in
this section. Note that this special treat-
ment does not apply if a plan is amended
to implement benefit reductions indepen-
dent of the reductions permitted under the
relevant notice requirement. Thus, if a
plan that is subject to the requirements of
section 436 of the Code (section 206(g)
of ERISA) is amended to cease all bene-
fit accruals independent of the amendment
implementing the limitations required un-
der section 436(e) (section 206(g)(4) of
ERISA) (for example, an amendment im-
plementing a permanent cessation of bene-
fit accruals), the section 204(h) notice is re-
quired if the plan amendment provides for
a significant reduction in the rate of future
benefit accrual (treating elimination or re-
duction of an early retirement benefit or re-
tirement-type subsidy as a reduction in the
rate of future benefit accrual). A section
101(j) notice, however, is not required to
be provided as a result of such an indepen-
dent plan amendment.
Timing and Content Rules for
Multiemployer Plans in Critical
Status
Section 432 of the Code, relating to
multiemployer plans that are in endan-
gered or critical status (as defined in sec-
tion 432(b)), permits a plan amendment
to be adopted that reduces prior accruals
under certain circumstances. With respect
to any such amendment for a plan that
is in critical status, section 432(e)(8)(C)
requires that notice be provided to partici-
pants, beneficiaries, contributing employ-
ers, and certain employee organizations of
any reduction in adjustable benefits. The
2008 proposed regulations included a rule
under which the timing and content of a
notice under 432(e)(8)(C) also satisfies the
timing and content requirements for a sec-
tion 204(h) notice. As a result, under the
proposed regulations, any notice for a mul-
tiemployer plan in critical status that sat-
isfies the timing and content requirements
under section 432(e)(8)(C) would satisfy
the timing and content requirements of a
section 204(h) notice. Currently, the IRS
and the Treasury Department are estab-
lishing requirements for a notice required
under section 432(e)(8)(C), including the
content requirements. The interaction of
the section 432(e)(8)(C) notice with the
requirements for a section 204(h) notice
will be addressed as part of the section 432
regulation project.
The final regulations add the notice re-
quired under section 432(b)(3)(D) to the
list of similarly-situated benefit reduction
notices discussed in the preamble to these
regulations under the heading, “Interaction
of the Section 204(h) Notice Requirements
with Other Notice Requirements Relating
to Plan Amendments.” As mentioned in
the background section of the preamble
to these regulations, section 432(b)(3)(D)
generally requires notice to plan partici-
pants and beneficiaries, within 30 days af-
ter a plan receives itsannual certification,
on whether the plan is in endangered or
critical status. If the plan is in critical
status, section 432(b)(3)(D) provides that
the notice must provide certain informa-
tion to participants and beneficiaries, in-
cluding the possibility that adjustable ben-
efits may be reduced and a description of
who might be subject to the reductions.
Section 432(f)(2)(A) generally states that,
effective on the date that notice is provided
that a plan is in critical status, the plan
must not pay any payment in excess of the
monthly amount paid under a single-life
annuity (notwithstanding the anti-cutback
rule in section 411(d)(6)). Thus, the pay-
ment of single-sum distributions would not
be permitted under section 432(f)(2)(A)
after a plan provides notification that the
plan is in critical status. The final regu-
lations provide that if a plan provides the
notice under section432(b)(3)(D) in accor-
dance with the applicable timing and con-
December 21, 20098552009–51 I.R.B.

tent standards for such a notice with re-
spect to an amendment, the plan is treated
as having complied with any requirement
to provide a section 204(h) notice with re-
spect to the amendment.
Delegation of Authority to the
Commissioner
Like the 2008 proposed regulations,
these final regulations delegate author-
ity to the Commissioner of the Internal
Revenue Service to publish revenue rul-
ings, notices, or other guidance published
in the Internal Revenue Bulletin (see
§601.601(d)(2)(ii)(b) of this chapter) un-
der section 4980F of the Code (which
would also apply to section 204(h) of
ERISA) that the Commissioner deter-
mines to be necessary or appropriate for
a section 204(h) amendment that applies
with respect to benefits accrued before the
applicable amendment date but that does
not violate section 411(d)(6) of the Code.
This delegation of authority provides the
Commissioner with greater flexibility to
develop special rules to address special
circumstances in the future, such as fu-
ture statutory changes. This delegation of
authority also extends to circumstances
in which a section 204(h) amendment
may require another notice in addition
to a section 204(h) notice, as long as
the amendment is permitted to reduce
accrued benefits, regardless of whether
that amendment actually reduces bene-
fits accrued before the adoption date of
the amendment. This delegation would
permit the Commissioner to treat plans
providing other notices with timing and
content requirements similar to a section
204(h) notice as having complied with the
requirement to provide a section 204(h)
notice.
Effective/Applicability Dates
These rules in these final regulations
are generally applicable to section 204(h)
amendments that are effective on or after
January 1, 2008. With respect to the timing
rules on providing a section 204(h) notice
for a plan amendment that has a retroactive
effective date and the clarification of the
cross-references in Q&A–7(b), these spe-
cial rules apply to section 204(h) amend-
ments adopted in plan years beginning af-
ter July 1, 2008. With respect to any sec-
tion 204(h) amendment to a lump sum-
based benefit formula (or any amendment
adopted pursuant to section 701 of PPA
’06), the special rules under the regulations
relating to an amendment that applies with
respect to benefits accrued before the ap-
plicable amendment date apply to amend-
ments adopted after December 21, 2006.
The special 30-day timing rule for provid-
ing a section 204(h) notice applies to such
amendments effective on or after Decem-
ber 21, 2006, and no later than December
31, 2008. The Treasury Department and
the IRS anticipate issuing guidance in the
near future relating to the application of
section 4980F to plan amendments that are
adopted, in accordancewith section 1107
of PPA ’06, to comply with the require-
ments of section 411(b)(5)(B)(i), relating
to market rates of return. As provided in
Announcement 2009–82, 2009–48 I.R.B.
720, see §601.601(d)(2)(ii)(b), this future
guidance may provide a special timing rule
for when section 204(h) notice must be
provided.
The regulations also reflect special
statutory effective dates for provisions in
PPA ’06. Section 402 of PPA ’06 applies
to section 204(h) amendments adopted
in plan years ending after August 17,
2006. Section 4980F(e)(1) of the Code,
as amended by section 502(c) of PPA ’06,
applies to section 204(h) amendments
adopted in plan years beginning after De-
cember 31, 2007.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to this regulation. Pursuant to
the Regulatory Flexibility Act (5 U.S.C.
chapter 6), it is hereby certified that the
collection of information in this regulation
would not have a significant impact on
a substantial number of small entities.
This certification is based on the fact that
this regulation only provides guidance
on how to satisfy existing collection of
information requirements. Accordingly,
a Regulatory Flexibility Analysis is not
required. Pursuant to section 7805(f)
of the Code, the notice of proposed
rulemaking preceding this regulation
was submitted to the Small Business
Administration for comment on its impact
on small business.
Drafting Information
The principal author of these regula-
tions is Pamela R. Kinard of the Office
of the Division Counsel/Associate Chief
Counsel (Tax Exempt and Government
Entities), Internal Revenue Service. How-
ever, personnel from other offices of the
Internal Revenue Service and Treasury
Department participated in their develop-
ment.
*****
Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 54 are
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.411(d)–3 is amended
by revising the first sentence of paragraph
(a)(1).
The revision reads as follows:
§1.411(d)–3 Section 411(d)(6) protected
benefits.
(a)Protection of accrued benefits—(1)
General rule. Under section 411(d)(6)(A),
a plan is not a qualified plan (and a trust
forming a part of such plan is not a qual-
ified trust) if a plan amendment decreases
the accrued benefit of any plan participant,
except as provided in section 412(d)(2)
(section 412(c)(8) for plan years beginning
before January 1, 2008), section 4281 of
the Employee Retirement Income Security
Act of 1974 as amended (ERISA), or other
applicable law (see, for example, sections
418D and 418E of the Internal Revenue
Code, and section 1107 of the Pension Pro-
tection Act of 2006, Public Law 109–280
(120 Stat. 780, 1063)). * * *
*****
PART 54—PENSION EXCISE TAXES
Par. 3. The authority citation for part
54 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
2009–51 I.R.B.856December 21, 2009

Section 54.4980F–1 also issued under
26 U.S.C. 4980F. * * *
Par. 4. Section 54.4980F–1 is amended
by:
1. Revising the second sentence of
paragraph A–1(a).
2. Revising paragraph A–7(b).
3. Revising paragraph A–8(a) and re-
designating paragraph A–8(d) as A–8(e)
and adding new paragraph A–8(d).
4. Revising the firstsentence of para-
graphs A–9(a), A–9(b), and A–9(c), and
revising paragraph A–9(d)(1).
5. Adding paragraphs A–9(f) and
A–9(g).
6. Revising the firstsentence of para-
graph A–10(a).
7. Revising paragraph A–11(a)(1).
8. Adding paragraphs A–18(a)(4) and
A–18(a)(5).
9. Revising paragraph A–18(b)(1)
and adding paragraphs A–18(b)(3)(i),
A–18(b)(3)(ii), and A–18(b)(3)(iii).
The additions and revisions read as fol-
lows:
§54.4980F–1 Notice requirements
for certain pension plan amendments
significantly reducing the rate of future
benefit accrual.
*****
A–1. (a) * * * The notice is required to
be provided to plan participants and alter-
nate payees who are applicable individu-
als (as defined in Q&A–10 of this section),
to certain employee organizations, and to
contributing employers under a multiem-
ployer plan (as described in Q&A–10(a) of
this section). * * *
*****
A–7. * * *
(b)Plan provisions not taken into ac-
count—(1)In general. Plan provisions
that do not affect the rate of future benefit
accrual of participants or alternate payees
are not taken into account in determining
whether there has been a reduction in the
rate of future benefit accrual.
(2)Interaction with section 411(d)(6).
Any benefit that is not a section
411(d)(6) protected benefit as described
in §§1.411(d)–3(g)(14) and 1.411(d)–4,
Q&A–1(d) of this chapter, or that is a
section 411(d)(6) protected benefit that
may be eliminated or reduced as permit-
ted under §1.411(d)–3(c), (d), or (f), or
under §1.411(d)–4, Q&A–2(a)(2), (a)(3),
(b)(1), or (b)(2)(ii) through (b)(2)(xi) of
this chapter, is not taken into account in
determining whether an amendment is a
section 204(h) amendment. Thus, for ex-
ample, provisions relating to the right to
make after-tax deferrals are not taken into
account.
*****
A–8. (a)General rule. Whether an
amendment reducing the rate of future
benefit accrual or eliminating or reduc-
ing an early retirement benefit or retire-
ment-type subsidy provides for a reduction
that is significant for purposes of section
4980F (and section 204(h) of ERISA) is
determined based on reasonable expec-
tations taking into account the relevant
facts and circumstances at the time the
amendment is adopted, or, if earlier, at the
effective date of the amendment.
*****
(d)Plan amendments reflecting a
change in statutorily mandated minimum
present value rules. If a defined benefit
plan offers a distribution to which the
minimum present value rules of section
417(e)(3) apply (other than a payment to
which section 411(a)(13)(A) applies) and
the plan is amended to reflect the changes
to the applicable interest rate and appli-
cable mortality table in section 417(e)(3)
made by the Pension Protection Act of
2006, Public Law 109–780 (120 Stat. 780)
(PPA ’06) (and no change is made in the
dates on which the payment will be made),
no section 204(h) notice is required to be
provided.
*****
A–9. (a)45-day general rule. Except as
otherwise provided in this Q&A–9, section
204(h) notice must be provided at least 45
days before the effective date of any sec-
tion 204(h) amendment. * * *
(b)15-day rule for small plans.Ex-
cept for amendments described in para-
graphs (d)(2) and (g) of this Q&A–9, sec-
tion 204(h) notice must be provided at least
15 days before the effective date of any
section 204(h) amendment in the case of
asmallplan. ***
(c)15-day rule for multiemployer
plans. Except for amendments described
in paragraphs (d)(2) and (g) of this
Q&A–9, section 204(h) notice must be
provided at least 15 days before the effec-
tive date of any section 204(h) amendment
in the case of a multiemployer plan. * * *
(d)Special timing rule for business
transactions—(1)15-day rule for section
204(h) amendment in connection with
an acquisition or disposition. Except
for amendments described in paragraphs
(d)(2) and (g) of this Q&A–9, if a section
204(h) amendment is adopted in connec-
tion with an acquisition or disposition,
section 204(h) notice must be provided at
least 15 days before the effective date of
the section 204(h) amendment.
*****
(f)Special timing rule for certain plans
maintained by commercial airlines.See
section 402 of PPA ’06 for a special rule
that applies to certain plans maintained
by an employer that is a commercial pas-
senger airline or the principal business of
which is providing catering services to a
commercial passenger airline. Under this
special rule, section 204(h) notice must be
provided at least 15 days before the effec-
tive date of the amendment.
(g)Special timing rules relating to
certain section 204(h) amendments that
reduce section 411(d)(6) protected ben-
efits—(1)Plan amendments permitted
to reduce prior accruals. This para-
graph (g) generally provides special rules
with respect to a plan amendment that
would not violate section 411(d)(6) even
if the amendment were to reduce sec-
tion 411(d)(6) protected benefits, which
are limited to accrued benefits that are
attributable to service before the appli-
cable amendment date. For example,
this paragraph (g) applies to amendments
that are permitted to be effective retroac-
tively under section 412(d)(2) of the Code
(section 412(c)(8) for plan years begin-
ning before January 1, 2008), section
418D of the Code, section 418E of the
Code, section 4281 of ERISA, or sec-
tion 1107 of PPA ’06. See, generally,
§1.411(d)–3(a)(1).
(2)General timing rule for amendments
to which this paragraph (g) applies.For
an amendment to which this paragraph (g)
applies, the amendment is effective on the
first date on which the plan is operated as
if the amendment were in effect. Thus,
except as otherwise provided in this para-
graph (g), a section 204(h) notice for an
amendment to which paragraph (a) of this
section applies that is adopted after the ef-
fective date of the amendment must be pro-
vided, with respect to any applicable in-
December 21, 20098572009–51 I.R.B.

dividual, at least 45 days before (or such
other date as may apply under paragraph
(b), (c), (d), or (f) of this Q&A–9) the date
the amendment is put into operational ef-
fect.
(3)Special rules for section 204(h)
notices provided in connection with other
disclosure requirements—(i)In general.
Notwithstanding the requirements in this
Q&A–9 and Q&A–11 of this section,
if a plan provides one of the notices in
paragraph (g)(3)(ii) of this Q&A–9, in
accordance with the applicable timing and
content rules for such notice, the plan
is treated as timely providing a section
204(h) notice with respect to a section
204(h) amendment.
(ii)Notice requirements. The notices in
this paragraph (g)(3)(ii) are—
(A) A notice required under any rev-
enue ruling, notice, or other guidance
published under the authority of the Com-
missioner in the Internal Revenue Bulletin
to affected parties in connection with a
retroactive plan amendment described in
section 412(d)(2) (section 412(c)(8) for
plan years beginning before January 1,
2008);
(B) A notice required under section
101(j) of ERISA if an amendment is
adopted to comply with the benefit limi-
tation requirements of section 206(g) of
ERISA (section 436 of the Code);
(C) A notice required under section
432(b)(3)(D) of the Code for an amend-
ment adopted to comply with the benefit
restrictions under section 432(f)(2);
(D) A notice required under section
418D, or section 4244A(b) of ERISA, for
an amendment that reduces or eliminates
accrued benefits attributable to employer
contributions with respect to a multiem-
ployer plan in reorganization;
(E) A notice required under section
418E, or section 4245(e) of ERISA, relat-
ing to the effects of the insolvency status
for a multiemployer plan; and
(F) A notice required under section
4281 of ERISA for an amendment of a
multiemployer plan reducing benefits pur-
suant to section 4281(c) of ERISA.
(4)Delegation of authority to Commis-
sioner. The Commissioner may provide
special rules under section 4980F, in rev-
enue rulings, notices, or other guidance
published in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(b)ofthischapter),
that the Commissioner determines to be
necessary or appropriate with respect to a
section 204(h) amendment—
(A) That applies to benefits accrued be-
fore the applicable amendment date but
that does not violate section 411(d)(6); or
(B) For which there is a required notice
relating to a reduction in benefits and such
notice has timing and content requirements
similartoasection204(h)noticewithre-
spect to a significant reduction in the rate
of future benefit accruals.
*****
A–10. (a)In general. Section 204(h)
notice must be provided to each applicable
individual, to each employee organization
representing participants who are applica-
ble individuals, and, for plan years begin-
ning after December 31, 2007, to each em-
ployer that has an obligation to contribute
(within the meaning of section 4212(a) of
ERISA) to a multiemployer plan.* * *
*****
A–11. (a)Explanation of notice re-
quirement—(1)In general. Section 204(h)
notice must include sufficient information
to allow applicable individuals to under-
stand the effect of the plan amendment. In
order to satisfy this rule, a plan adminis-
trator providing section 204(h) notice must
generally satisfy paragraphs (a)(2), (a)(3),
(a)(4), (a)(5), and (a)(6) of this Q&A–11.
See paragraph (g)(3) of Q&A–9 of this
section for special rules relating to sec-
tion 204(h) notices provided in connection
with certain other written notices. See also
paragraph (g)(4) of Q&A–9 of this section
for a delegation of authority to the Com-
missioner to provide special rules.
*****
A–18. (a) * * *
(4)Special effective date for certain
section 204(h) amendments made by plans
of commercial airlines. Section 402 of
PPA ’06 applies to section 204(h) amend-
ments adopted in plan years ending after
August 17, 2006.
(5)Special effective date for rule re-
lating to contributing employers. Section
502(c) of PPA ’06, which amended sec-
tion 4980F(e)(1) of the Internal Revenue
Code, applies to section 204(h) amend-
ments adopted in plan years beginning af-
ter December 31, 2007.
(b)Regulatory effective date—(1)Gen-
eral effective date. Except as otherwise
provided in this paragraph (b) of this sec-
tion, Q&A–1 through Q&A–18 of this sec-
tion apply to amendments with an effective
date that is on or after September 1, 2003.
*****
(3)Effective dates for Q&A–9(g)(1),
(g)(3), and (g)(4)—(i)General effective
date. Except as otherwise provided in
Q&A–18(b)(3)(ii) or (b)(3)(iii) of this sec-
tion, Q&A–9(g)(1), (g)(3), and (g)(4) of
this section apply toamendments that are
effective on or after January 1, 2008.
(ii)Effective dates for Q&A–9(g)(2)
and Q&A–7(b). Except as otherwise pro-
vided in Q&A–18(b)(3)(iii) of this section,
Q&A–9(g)(2) and Q&A–7(b) of this sec-
tion apply to section 204(h) amendments
adopted in plan years beginning after
July 1, 2008.
(iii)Special rules for section 204(h)
amendments to an applicable defined ben-
efit plan. Except as otherwise provided
in paragraph (b)(3)(i) or (b)(3)(ii) of this
Q&A–18, with respect to any section
204(h) notice provided in connection with
a section 204(h) amendment to an applica-
ble defined benefit plan within the mean-
ingofsection411(a)(13)(C)(i)tolimit
distributions as permitted under section
411(a)(13)(A) for distributions made after
August 17, 2006, that is made pursuant
to section 701 of PPA ’06, paragraphs
(g)(1) and (g)(2) of Q&A–9 of this section
apply to amendments that are effective
after December 21, 2006. For such an
amendment that is effective not later than
December 31, 2008, section 204(h) notice
does not fail to be timely if the notice is
provided at least 30 days, rather than 45
days, before the date that the amendment
is first effective.
Steve T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved November 12, 2009.
Michael Mundaca,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on November 25,
2009, 8:45 a.m., and published in the issue of the Federal
Register for November 24, 2009, 74 F.R. 61270)
2009–51 I.R.B.858December 21, 2009

Part III. Administrative, Procedural, and Miscellaneous
Social Security Contribution
and Benefit Base for 2010
Notice 2009–80
Under authority contained in the Social
Security Act (Act), the Commissioner,
Social Security Administration, has de-
termined and announced (74 F.R. 55614,
dated October 28, 2009) that the contri-
bution and benefit base for renumeration
paid in 2010, and self-employment income
earned in taxable years beginning in 2009
is $106,800.
“Old-Law” Contribution and Benefit
Base
General
The “old-law” contribution and bene-
fit base for 2010 is $79,200. This is the
base that would have been effective under
the Act without the enactment of the 1977
amendments.
Domestic Employee Coverage
Threshold
General
The minimum amount a domestic
worker must earn so that such earnings are
covered under Social Security or Medicare
is the domestic employee coverage thresh-
old. For 2010, this threshold is $1,700.
Section 3121(x) of the Internal Revenue
Code provides the formula for increasing
the threshold.
Computation
Under the formula, the domestic em-
ployee coverage threshold amount for
2010 shall be equal to the 1995 amount
of $1,000 multiplied by the ratio of the
national average wage index for 2008 to
that for 1993. If the resulting amount is
not a multiple of $100, it shall be rounded
to the next lower multiple of $100.
Domestic Employee Coverage Threshold
Amount
Multiplying the 1995 domestic em-
ployee coverage threshold amount
($1,000) by the ratio of the national av-
erage wage index for 2008 ($41,334.97)
to that for 1993 ($23,132.67) produces
the amount of $1,786.87. We then round
this amount to $1,700. Accordingly, the
domestic employee coverage threshold
amount is $1,700 for 2010.
(Filed by the Office of the Federal Register on October 27,
2009, 8:45 a.m., and published in the issue of the Federal
Register for October 28, 2009, 74 F.R. 55614)
Production Tax Credit for
Refined Coal
Notice 2009–90
SECTION 1. PURPOSE
This notice sets forth interim guidance
pending the issuance of regulations relat-
ingtothetaxcreditunder§45oftheInter-
nal Revenue Code (Code) for refined coal.
SECTION 2. BACKGROUND
Sections 45(c)(7), (d)(8), and (e)(8) of
the Code provide definitions and rules re-
lating to the tax credit for refined coal (the
refined coal credit). Section 45(e)(8) pro-
vides that the refined coal credit increases
a taxpayer’s credit determined under the
other provisions of § 45. The credit is al-
lowed for qualified refined coal (1) pro-
duced by the taxpayer at a refined coal pro-
duction facility during the ten-year period
beginning on the date the facility is origi-
nally placed in service, and (2) sold by the
taxpayer to an unrelated person during that
ten-year period.
Sections 45(c)(7), (d)(8), and (e)(8)
were added to the Code by sections 710(a),
(b)(1), and (b)(2), respectively, of the
American Jobs Creation Act of 2004,
Pub. L. No. 108–357. These provisions
were amended by sections 403(t) and
412(j)(1) and (2) of the Gulf Opportunity
Zone Act of 2005, Pub. L. No. 109–135,
and by sections 101 and 108 of the Energy
Improvement and Extension Act of 2008,
Division B of Pub. L. No. 110–343.
SECTION 3. DEFINITIONS, ETC.
The following definitions apply for pur-
poses of this notice:
.01Refined Coal.
(1)In General. Except as otherwise
provided in this section 3.01, the term “re-
fined coal” means fuel that—
(a) is a liquid, gaseous, or solid fuel pro-
duced from coal (including lignite) or high
carbon fly ash, including (except to the ex-
tent inconsistent with section 3.01(1)(b) of
this notice) such fuelused as a feedstock;
(b) is sold by the taxpayer (producer),
to an unrelated person, with the reasonable
expectation that it will be used for the pur-
pose of producing steam; and
(c) is certified by the taxpayer as result-
ing (when used in the production of steam)
in a qualified emission reduction.
(2)Steel Industry Fuel. Refined coal
includes steel industry fuel (as defined in
§ 45(c)(7)(C)) that is produced and sold
after September 30, 2008.
(3)Pre-2009 Facilities. Refined coal
does not include fuel (other than steel
industry fuel) that is produced and sold
from a facility placed in service before
January 1, 2009, unless such fuel is
produced in such a manner as to result in
an increase of at least 50 percent in the
market value of the fuel (excluding any
increase caused by materials combined or
added during the production process) as
compared to the feedstock coal.
.02Coal. The term “coal” means an-
thracite, bituminous coal, subbituminous
coal, and lignite. Coal includes waste coal
(that is, usable material that is a byproduct
of the previous processing of anthracite,
bituminous coal, subbituminous coal, or
lignite). Examples of waste coal include
fine coal of any of the listed ranks, coal
of any of the listed ranks obtained from a
refuse bank or slurry dam, anthracite culm,
bituminous gob, and lignite waste.
.03Comparable Coal. The term “com-
parable coal” means, with respect to any
feedstock coal, coal that is of the same rank
as the feedstock coal and that has an emis-
sions profile comparable to the emissions
profile of the feedstock coal.
.04Qualified Emissions Reduction.
The term “qualified emissions reduction”
means—
(1) in the case of refined coal produced
at a facility placed in service after Decem-
ber 31, 2008, a reduction of at least 20
percent of the emissions of nitrogen oxide
December 21, 20098592009–51 I.R.B.

(NOx) and at least 40 percent of the emis-
sions of either sulfur dioxide (SO
2
)ormer-
cury (Hg) released when burning the re-
fined coal (excluding any dilution caused
by materials combined or added during the
production process), as compared to the
emissions released when burning the feed-
stock coal or comparable coal predomi-
nantly available in the marketplace as of
January 1, 2003; and
(2) in the case of production at a facility
placed in service before January 1, 2009, a
reduction of at least 20 percent of the emis-
sions of NOx and at least 20 percent of
the emissions of either SO
2
or Hg released
when burning the refined coal (excluding
any dilution caused by materials combined
or added during the production process), as
compared to the emissions released when
burning the feedstock coal or comparable
coal predominantly available in the mar-
ketplace as of January 1, 2003.
.05Refined Coal Production Facility.
The term “refined coal production facility”
means—
(a) for purposes of the refined coal
credit allowable with respect to steel
industry fuel, any facility (or any modi-
fication to a facility) which is placed in
service before January 1, 2010, and
(b) for purposes of the refined coal
credit allowable with respect to refined
coal other than steel industry fuel, any fa-
cility placed in service after the date of the
enactment of the American Jobs Creation
Act of 2004 and before January 1, 2010,
other than a facility producing fuel for
which a credit under § 45K (or under § 29,
as in effect on the day before the date of
enactment of the Energy Tax Incentives
Act of 2005) was allowed for the taxable
year or any prior taxable year.
.06Related Persons. Persons are
treated as related to each other if they
would be treated as a single employer
under the regulations prescribed under
§ 52(b). A corporation that is a member
of an affiliated group filing a consolidated
return is treated as selling coal to an un-
related person if the coal is sold to an
unrelatedpersonbyanothermemberof
the affiliated group.
.07Placed in service. The year in
which property is placed in service is deter-
mined under the principles of § 1.46–3(d).
SECTION 4. COMPUTATION OF
CREDIT
.01In General. The refined coal credit
for a taxable year is the tentative credit
for the year determined under this section
4.01, reduced to the extent provided in sec-
tions 4.02 and 4.04 of this notice. If the
taxable year is a calendar year, the tenta-
tive credit for the taxable year is the ten-
tative credit for the calendar year. If the
taxable year includes parts of two calen-
dar years, the tentative credit for the tax-
able year is the sum of the tentative cred-
its for each partial calendar year included
in the taxable year. The tentative credit
for any calendar year (or partial calendar
year) is the applicable amount per ton of
qualified refined coal (1) produced by the
taxpayer at a refined coal production facil-
ity during the ten-year period beginning on
the date the facility is originally placed in
service, and (2) sold by the taxpayer to an
unrelated person during that ten-year pe-
riod and during the calendar year (or par-
tial calendar year). The applicable amount
for sales of refined coal during a calendar
year is $4.375 multiplied by the inflation
adjustment factor for the calendar year to
adjust for inflation since 1992.
.02Limitation of the Credit.
(1)In General. The tentative credit
with respect to sales of refined coal during
a calendar year is reduced by an amount
that bears the same ratio to the tentative
credit as the excess reference price for the
calendar year bears to $8.75.
(2)Excess Reference Price.Theex-
cess reference price for a calendar year
is the amount by which (a) the reference
price for the calendar year of fuel used as a
feedstock exceeds (b) an amount equal to
1.7 multiplied by $31.90 and further multi-
plied by the inflation adjustment factor for
the calendar year.
.03Reference Price and Inflation Ad-
justment Factor. The reference price and
inflation adjustment factor for a calendar
year are provided by notice published in
the Internal RevenueBulletin. See, for
example, Notice 2008–48, 2008–21 I.R.B.
1008.
.04Reduction for Grants, Tax-Exempt
Bonds, Subsidized Energy Financing and
Other Credits. The tentative credit, after
the reduction, if any, under section 4.02 of
this notice, is reduced by a prescribed per-
centage if the projectreceived government
grants, subsidies, or other credits. The re-
duction percentage for a tax year is the
lesser of 50 percent or the percentage that
is determined by dividing the sum for the
taxable year and all earlier taxable years of
the four items listed below by the aggre-
gate additions to the capital account attrib-
utable to the project for the taxable year
and all earlier taxable years. Those four
items are (1) governmental grants received
for the project; (2) proceeds from tax-ex-
empt state or local government bonds used
to finance the project; (3) directly and indi-
rectly provided subsidized energy financ-
ing under a federal, state or local program
in connection with theproject and (4) any
other credit allowable with respect to any
property that is part of the project.
SECTION 5. RULES RELATING
TO THE AVAILABILITY OF THE
REFINED COAL CREDIT
.01Leased Refined Coal Production
Facility. The refined coal credit is al-
lowed for qualified refined coal produced
and sold to an unrelated person by the
taxpayer, without regard to whether the
taxpayer owns the refined coal production
facility in which the refined coal is pro-
duced. Accordingly, a taxpayer that leases
or operates a facility owned by another
person may claim the credit for refined
coal that the taxpayer produces in the fa-
cility.
.02Addition or improvement to an ex-
isting facility. A refined coal production
facility will not be treated as placed in
service after October 22, 2004, if more
than 20 percent of the facility’s total value
(the cost of the new property plus the
value of the used property) is attributable
to property placed in service on or before
October 22, 2004. The Service will not
issue private letter rulings relating to when
a refined coal production facility has been
placed in service.
SECTION 6. RULES RELATING TO
EMISSION REDUCTION
.01Emission Reductions Attributable to
Mining Processes Disregarded.
(1)In General. A qualified emission re-
duction does not include any reduction at-
tributable to mining processes or processes
that would be treated as mining if per-
formed by the mine owner or operator. Ac-
cordingly, in determining whether a quali-
2009–51 I.R.B.860December 21, 2009

fied emission reduction has been achieved,
the emissions released when burning the
refined coal must be compared to the emis-
sions that would be released when burn-
ing the feedstock coal. Feedstock coal is
the product resulting from processes that
are treated as mining under section 6.01(2)
of this notice and are actually applied by
a taxpayer in any part of the taxpayer’s
process of producing refined coal from
coal.
(2)Processes Treated as Mining.Any
process described in § 613(c)(2), (3),
(4)(A), (4)(C), or (4)(I), or that would
be described in those provisions if per-
formed by the mine owner or operator,
shall be treated as a mining process for
purposes of this notice. Section 613(c)(2)
provides that the term ’mining’ includes
not merely the extraction of the ores or
minerals from the ground but also the
treatment processes considered as mining
describedin§613(c)(4)(andthetreat-
ment processes necessary or incidental
thereto). Section 613(c)(3) provides that
extraction of ores or minerals from the
ground includes the extraction by mine
owners or operators of ores or minerals
from the waste or residue of prior mining.
Section 613(c)(4)(A) provides, in the case
of coal, that cleaning, breaking, sizing,
dust allaying, treating to prevent freezing
and loading for shipment by a mine owner
or operator shall be considered as mining.
Section 613(c)(4)(C) provides in the case
of minerals that are customarily sold in the
form of a crude mineral product—sorting,
concentrating, sintering, and substantially
equivalent processes to bring to shipping
grade and form (see § 1.613–4(f)(3)(i))
shall be considered as mining. Section
613(c)(4)(I) provides that the Secretary
may prescribe certain treatment processes
that will be treated as mining; for exam-
ple, § 1.613–4(f)(5) provides that drying
to remove free water, provided that such
drying does not change the physical or
chemical identity or composition of the
mineral, is treated as mining. Section
613(c)(5) describestreatment processes
that are not considered as mining unless
they are provided for in § 613(c)(4) or
are necessary or incidental to a process
provided for in § 613(c)(4). Any cleaning
process, such as a process that uses ash
separation, dewatering, scrubbing through
a centrifugal pump, spiral concentration,
gravity concentration,flotation, applica-
tion of liquid hydrocarbons or alcohol
to the surface of the fuel particles or to
the feed slurry, provided such cleaning
does not change thephysical or chemical
structure of the coal, and drying to remove
free water, provided such drying does not
change the physical or chemical identity
of the coal, will be considered as mining.
(3)Exception.
(a)In General. A cleaning process
shall not be treated as a mining process for
purposes of applying this section 6.01 to
refined coal produced from waste coal at a
facility placed in service before January 1,
2010, for the primary purpose of producing
refined coal from waste coal. For purposes
of this section 6.01(3), waste coal means
the waste materials that are separated
through ordinary mining processes during
the process of producing a merchantable
product from the coal extracted from a
natural deposit. This section 6.01(3) does
not apply with respect to the refined coal
produced at a facility during a taxable
year unless a verification of waste coal
supply, as described in section 6.01(3)(b),
is available for such facility.
(b)Verification of Waste Coal Supply.
The verification of the waste coal supply
for a facility required under this section
6.01(3) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person provid-
ing the verification of the waste coal sup-
ply is a qualified individual.
(iii) A statement that the coal to be
processed by the facility is “waste coal”
within the meaning of section 6.01(3)(a).
(iv) A declaration, signed by the qual-
ified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and be-
lief, it is true, correct, and complete.”
(c)Qualified Individual. A qualified
individual for purposes of this section
6.01(3) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a profes-
sional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.01(3).
.02Basis for Determining Emission Re-
duction.
(1)In General. Emission reductions are
determined by comparing the emissions
that result when feedstock coal and refined
coal are used to produce the same amounts
of useful thermal energy.
(2)Emissions Resulting from Produc-
tion Process. Emissions that result from
the process of producing refined coal from
feedstock coal are treated for purposes of
this section 6.02 as emissions that result
when the refined coal is used to produce
useful thermal energy. In any case in
which waste heat from an activity other
than the production of refined coal is used
in the process of producing refined coal
from feedstock coal, the emissions associ-
ated with the waste heat are not treated as
emissions that result from such process.
The emissions that result when refined
coal is produced from feedstock coal must
be determined using a method that accu-
rately measures such emissions.
(3)Adjustment for Additives.Inany
case in which additives are used to pro-
duce the refined coal, appropriate adjust-
ment must be made in determining the use-
ful thermal energy produced by the refined
coal.
.03Emission Reduction Testing Meth-
ods.
(1)CEMS Field Testing.
(a)In General. The emissions reduc-
tion may be determined using continuous
emission monitoring system (CEMS) field
testing. CEMS field testing is testing that
meets all the following requirements:
(i) The boiler used to conduct the test is
coal-fired and steam-producing and is of a
sizeandtypecommonlyusedincommer-
cial operations.
(ii) Emissions are measured using a
CEMS.
(iii) If EPA has promulgated a perfor-
mance standard that applies at the time
of the test to the pollutant emission being
measured, the CEMS must conform to that
standard.
(iv) Emissions for both the feedstock
coal and the refined coal are measured at
the same operating conditions and over a
period of at least 3 hours during which the
boiler is operating at a steady state and at
least 90 percent of full load.
(v) Emissions of SO2 are measured up-
stream of any SO2 scrubber.
(vi) Emissions of Hg are measured up-
stream of any SO2 scrubber or Hg control
device (such as activated carbon injection).
December 21, 20098612009–51 I.R.B.

(vii) Emissions of NOx are measured
upstream of any NOx controls.
(viii) A qualified individual verifies the
test results in a manner that satisfies the
requirements of section 6.03(1)(b) of this
notice.
(b)Verification of Test Results.Averi-
fication of test results for purposes of this
section 6.03(1) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person provid-
ing the verification of test results is a qual-
ified individual.
(iii) A statement that the testing satis-
fied all the requirements specified in sec-
tion 6.03(1)(a)(i) through (vii) of this no-
tice.
(iv) A statement that the amount of the
emissions reduction was determined in ac-
cordance with the provisions of section
6.01 and section 6.02 of this notice.
(v) A declaration, signed by the qual-
ified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and be-
lief, it is true, correct, and complete.”
(c)Qualified Individual. A qualified
individual for purposes of this section
6.03(1) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a profes-
sional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.03(1).
(d)Reliance Permitted.IfCEMSfield
testing is used to determine the emissions
reduction, the IRS will not, on examina-
tion, require any additional proof of the
emission reduction achieved. The IRS
may, however, require the taxpayer to es-
tablish that the testing used qualifies as
CEMS field testing.
(2)Other Testing Methods. Methods
other than CEMS field testing may be used
to determine the emissions reduction. If a
method other than CEMS field testing is
used, the IRS may require the taxpayer to
provide additional proof that the emission
reduction has been achieved. Permissible
methods include the following:
(i) A testing method using a demon-
stration pilot-scale combustion furnace if
it is established that the method accurately
measures the emissions reduction that
would be achieved in a boiler described in
section 6.03(1)(a)(i) of this notice and a
qualified individual verifies the test results
in a manner that satisfies the requirements
of section 6.03(1)(b)(i), (ii), (iv), and (v)
of this notice.
(ii) Laboratory analysis of the feedstock
coal and the refined coal. The laboratory
analysis must complywith a currently ap-
plicable EPA or ASTM standard and may
be used only for purposes of determining
the emissions reduction for SO2 and Hg.
.04Frequency of Testing.
(1)In general. A taxpayer may estab-
lish that a qualified emissions reduction
determined under section 6.03 of this no-
tice applies to production from a facility by
a determination or redetermination that is
valid at the time the production occurs. A
determination or redetermination is valid
for the period beginning on the date of the
determination or redetermination and end-
ing with the occurrence of the earliest of
the following events:
(i) The lapse of six months from the date
of such determination or redetermination.
(ii) A change in the type, source, or rank
of feedstock coal that occurs after the date
of such determination or redetermination.
(iii) A change in the process of produc-
ing refined coal from the feedstock coal
that occurs after the date of such determi-
nation or redetermination.
(2)Redetermination methods.Inthe
case of a redetermination required because
of a change in the process of producing re-
fined coal from the feedstock coal, the re-
determination required under this section
6.04 must use a method that meets the re-
quirements of section 6.03 of this notice.
In any other case, the redetermination re-
quirement may be satisfied by laboratory
analysis establishing that the SO2 and Hg
content of both the feedstock coal and the
refined coal do not vary by more than ten
percent from the SO2 and Hg content of
the feedstock coal and refined coal used in
the most recent determination that meets
the requirements of section 6.03 of this no-
tice.
.05Certification of emissions reduc-
tion. The certification requirement of
section 3.01(1)(c) of this notice is satisfied
with respect to fuel for which the refined
coal credit is claimed only if the taxpayer
attaches to its tax return on which the
credit is claimed a certification that con-
tains the following:
(1) A statement that the fuel will result
in a qualified emissions reduction when
used in the production of steam.
(2) A statement indicating whether
CEMS field testing was used to determine
the emissions reduction.
(3) If CEMS field testing was not used
to determine the emissions reduction, a de-
scription of the method used.
(4) A statement that the emissions re-
duction was determined or redetermined
within the six months preceding the pro-
duction of the fuel and that there have been
no changes in the type, source, or rank
of feedstock coal used or in the process
of producing refinedcoal from the feed-
stock coal since the emissions reduction
was determined or was most recently re-
determined.
(5) A declaration signed by the taxpayer
in the following form: “Under penalties of
perjury, I declare that I have examined this
certification and to the best of my knowl-
edge and belief, it is true, correct, and com-
plete.”
SECTION 7. RECORDKEEPING
Section 6001 provides that every per-
son liable for any tax imposed by the
Code, or for the collection thereof, must
keep such records, render such statements,
make such returns, and comply with such
rules and regulations as the Secretary may
from time to time prescribe. The books
and records required by § 6001 must be
kept at all times available for inspection
by authorized internal revenue officers
or employees, and must be retained so
long as the contents thereof may become
material in the administration of any in-
ternal revenue law. In order to satisfy the
recordkeeping requirements of § 6001 and
the regulations thereunder, a taxpayer that
claims the refined coal credit must retain
adequate books and records so that, for
any taxable year, it can be verified from
those books and records that the property
with respect to which the credit is claimed
satisfies the applicable requirements of
§ 45 and this notice.
SECTION 8. REQUEST FOR
COMMENTS
The IRS and the Treasury Department
invite comments concerning section 6.03
2009–51 I.R.B.862December 21, 2009

of this notice relating to emission reduc-
tion testing methods. Comments should
refer to Notice 2009–90 and be submitted
to:
Internal Revenue Service
CC:PA:LPD:PR (Notice 2009–90)
Room 5203
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions may be hand delivered
Monday through Friday between the hours
of8a.m.and4p.m.to:
Courier’s Desk
Internal Revenue Service
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR
(Notice 2009–90)
Alternatively,taxpayersmay
submit commentselectronically to
notice.comments@irscounsel.treas.gov.
Please include “Notice 2009–90”
in the subject line of any electronic
communications.
All comments will be available for pub-
lic inspection and copying.
SECTION 9. EFFECTIVE DATE
This notice is effective for refined coal
produced after December 7, 2009. Tax-
payers may apply the provisions of this no-
tice with respect to refined coal produced
on or before December 7, 2009.
SECTION 10. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and ap-
proved by the Office of Management and
Budget (OMB) in accordance with the Pa-
perwork Reduction Act (44 U.S.C. § 3507)
under control number 1545–2158.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this no-
tice is in section 6 of this notice. This in-
formation will be used by the Service to
verify that the taxpayer is eligible for the
production tax credit for refined coal. The
collection of information is required to ob-
tain a benefit. The likely respondents are
businesses or other for-profit institutions.
The estimated total annual reporting
burden is 15 hours.
The estimated annual burden per re-
spondent varies from 10 to 20 hours, de-
pending on individual circumstances, with
an estimated average of 15 hours. The es-
timated number of respondents is 100.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and return in-
formation are confidential, as required by
26 U.S.C. § 6103.
SECTION 11. DRAFTING AND
CONTACT INFORMATION
The principal author of this notice is
Philip Tiegerman of the Office of Asso-
ciate Chief Counsel (Passthroughs and
Special Industries). However, other per-
sonnel from the IRS and Treasury par-
ticipated in its development. For further
information regarding this notice, contact
Mr. Tiegerman at (202) 622–3110.
Truncating Social Security
Numbers on Paper Payee
Statements
Notice 2009–93
SECTION 1. PURPOSE
This notice creates a pilot program
allowing filers of information returns to
truncate an individual payee’s nine-digit
identifying number on paper payee state-
ments for calendar years 2009 and 2010 if
the filers meet the requirements set forth
in this notice. This notice only applies to
paper payee statements in the Form 1098
series, Form 1099 series, and Form 5498
series. Filers who meet the requirements
in this notice will be treated as having
satisfied any requirement in Treasury and
IRS guidance, whether in a regulation,
form, or form instructions, to include a
payee’s identifying number on a payee
statement. This notice also invites public
comment.
SECTION 2. BACKGROUND
An information return is a return, state-
ment, form, or other document that must
be filed with the IRS to report certain
payments or distributions to a payee or
amounts received from a payee in a cal-
endar year. See section 6724(d)(1); Treas.
Reg. § 301.6721–1(g)(1). A filer is any
person required to file an information re-
turn. See Treas. Reg. § 301.6721–1(g)(6).
A payee is any person who is required
to receive a copy of the information set
forthonaninformationreturnbythe
filer of the return. See Treas. Reg.
§ 301.6721–1(g)(5). A filer generally
must also furnish a payee statement to
each payee that contains the same infor-
mation as the information return for that
payee. See section 6724(d)(2); Treas.
Reg. § 301.6722–1(d)(2). Generally, filers
are required to furnish payee statements to
payees on or before January 31
st
(in some
instances on or before February 15
th
)of
the year following the calendar year for
which the information return is made. See,
e.g.,sections 6041(d) and 6042(c). Filers
may be subject to penalties for failure to
file correct information returns or furnish
correct payee statements. See sections
6721 and 6722.
Regulations, forms, or instructions to
forms typically require that the payee
statement include the identifying number
of the payee. The three types of identi-
fying numbers applicable to individuals
are social security numbers, IRS indi-
vidual taxpayer identification numbers,
and IRS adoption taxpayer identification
numbers. All three of these identifying
numbers are nine-digit numbers taking
the form 000–00–0000. Treas. Reg.
§ 301.6109–1(a)(1)(i).
A person’s identifying number is sen-
sitive personal information. A risk exists
that this information could be misappropri-
ated from a payee statement and misused
in various ways, such as to facilitate iden-
tity theft. In an effort to minimize this risk,
this notice creates a pilot program allowing
truncation of individual identifying num-
bers on certain paper payee statements.
December 21, 20098632009–51 I.R.B.

SECTION 3. SCOPE
This notice only applies to paper payee
statements in the Form 1098 series, Form
1099 series, and Form 5498 series. Sub-
stitute and composite substitute state-
ments (within the meaning of Treas. Reg.
§ 301.6722–1(a)(1)) that meet the require-
ments of this notice are also included. See
Rev. Proc. 2008–36, 2008–33 I.R.B. 340
(reprinted as Publication 1179,General
Rules and Specifications for Substitute
Forms 1096, 1098, 1099, 5498, W–2G,
and 1042–S).This notice does not apply
to any information return filed with the
IRS, any payee statement furnished elec-
tronically, or any payee statement not in
the Form 1098 series, Form 1099 series,
or Form 5498 series.
SECTION 4. REQUIREMENTS
A filer must satisfy the requirements
set forth in this section to be authorized
to truncate identifying numbers for indi-
viduals on paper payee statements for the
calendar years 2009 and 2010. The IRS
will treat a filer as having satisfied any re-
quirement in Treasury and IRS guidance,
whether in a regulation, form, or form in-
structions, to include a payee’s identifying
number on a payee statement if the follow-
ing requirements are met:
.01 The identifying number is a social
security number, IRS individual taxpayer
identification number, or IRS adoption
taxpayer identification number;
.02 The identifying number is trun-
cated by replacing the first five digits of
the nine-digit number with asterisks or
Xs (for example, a social security number
123–45–6789 would appear on the pa-
per payee statement as ***–**–6789 or
XXX–XX–6789); and
.03 The truncated identifying number
appears on a paper payee statement (in-
cluding substitute and composite substi-
tute statements) in the Form 1098 series,
Form 1099 series, or Form 5498 series for
calendar year 2009 or 2010.
SECTION 5. EFFECTIVE DATE
This notice is effective immediately
as to paper payee statements in the Form
1098 series, Form 1099 series, and Form
5498 series for calendar years 2009 and
2010.
SECTION 6. REQUEST FOR
COMMENTS
The IRS invites the public to submit
comments on this notice by May 1, 2010.
Comments are specifically sought on the
following:
•Whether truncation of an individual’s
identifying number on paper payee
statements should be required, rather
than permitted;
•Whether truncation should be permit-
ted or required for identifying numbers
appearing on paper payee statements
not within the scope of this notice;
•Whether truncation should be permit-
ted or required for payee statements
furnished electronically;
•Whether a filer should be required to
include the complete identifying num-
ber on the payee statement if requested
by the payee; and
•Whether truncation creates difficulties
for filers and/or payees.
Comments on any other matters relating
to the procedures set forth in this notice are
also encouraged.
Comments should be submitted to: In-
ternal Revenue Service, CC:PA:LPD:PR
(Notice 2009–93), Room 5203, P.O. Box
7604, Ben Franklin Station, N.W., Wash-
ington, D.C. 20044. Alternatively, com-
ments may be hand delivered between the
hours of 8:00 a.m. and 4:00 p.m., Mon-
day through Friday, to CC:PA:LPD:PR
(Notice 2009–93), Courier’s Desk, Inter-
nal Revenue Service, 1111 Constitution
Avenue, N.W., Washington, D.C. Com-
ments may also be transmitted electron-
ically via the following e-mail address:
Notice.Comments@irscounsel.treas.gov.
Please include “Notice 2009–93” in the
subject line of any electronic communica-
tions. All comments will be available for
public inspection and copying.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
TammieA.GeieroftheOfficeofthe
Associate Chief Counsel (Procedure and
Administration). For further informa-
tion regarding this notice, please contact
Tammie A. Geier at (202) 622–4940 (not
a toll-free call).
Note.This revenue procedure will be reproduced as the next revision of IRS Publication 1223, General Rules and Specifications for
Substitute Forms W-2c and W-3c.
Rev. Proc. 2009–48
TABLE OF CONTENTS
SECTION 1 - PURPOSE
............................................................................................ 865
SECTION 2 - WHAT’S NEW........................................................................................ 866
SECTION 3 - FILING FORMS W-2C AND W-3C ELECTRONICALLY................................................... 867
SECTION 4 - SPECIFICATIONS FOR RED-INK SUBSTITUTE FORMS W-2C (COPY A) AND W-3C FILED
WITH THE SSA
....................................................................................... 867
SECTION 5 - SPECIFICATIONS FOR LASER-PRINTED SUBSTITUTE FORMS W-2C (COPY A) AND
W-3C FILED WITH THE SSA
........................................................................... 870
2009–51 I.R.B.864December 21, 2009

SECTION 6 - REQUIREMENTS FOR SUBSTITUTE PRIVATELY-PRINTED FORMS W-2C (COPIES B, C,
AND 2) FURNISHED TO EMPLOYEES
................................................................... 871
SECTION 7 - INSTRUCTIONS FOR EMPLOYERS.................................................................... 872
SECTION 8 - OMB REQUIREMENTS FOR BOTH RED-INK AND LASER-PRINTED SUBSTITUTE
FORMS
............................................................................................... 873
SECTION 9 - REPRODUCIBLE COPIES OF FORMS.................................................................. 873
SECTION10-EFFECTONOTHERDOCUMENTS.................................................................... 874
SECTION 11 - EXHIBITS........................................................................................... 874
Section 1 - Purpose
.01The purpose of this revenue procedure is to state the requirements of the Internal Revenue Service (IRS) and the Social Security
Administration (SSA) regarding the preparation and use of substitute forms for Form W-2c,Corrected Wage and Tax Statement, and
Form W-3c, Transmittal of Corrected Wage and Tax Statements.
.02The official IRS Form W-2c is a six-part form and the official IRS Form W-3c is a one-part form. Red-ink substitute forms
that completely conform to the specificationscontained in this document may be privately-printed without the prior approval of the
IRS or the SSA. Only the black-and-white laser-printed forms need to be submitted to the SSA for approval.
Note.Both paper substitute forms filed with the SSA, and those furnished to employees, that do not totally conform to these specifi-
cations are not acceptable. Forms W-2c (Copy A) and Forms W-3c that do not conform may be returned. In addition, penalties may
be assessed.
.03Substitute red-ink forms should not be submitted to either theIRS or the SSA for specific approval. If you are uncertain of any
specification and want clarification, do the following.
(1) Submit a letter to the appropriate address below citing the specification.
(2) State your understanding of the specification.
(3) Enclose an example (if appropriate) of how the formwould appear if produced using your understanding.
(4) Be sure to include your name, complete address, phone number, and, if applicable, your email address with your correspon-
dence.
.04Any questions about the specifications, especially those for the red-ink Form W-2c (Copy A) and Form W-3c, should be emailed
tos
ubstituteforms@irs.gov. Please enter “Substitute Forms” on the subject line. Or send your questions to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:T:T:SP, IR 6526
1111 Constitution Ave., NW
Washington, DC 20224
Any questions about the black-and-white laser-printedForm W-2c (Copy A) and Form W-3c should be emailed to
l
aser.forms@ssa.govor sent to:
Social Security Administration
Data Operations Center
Attn: Laser Forms Approval, Room 348
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Note.You should receive a response from either the IRS or the SSA within 30 days.
.05The IRS maintains a centralizedcustomer service call site at its Enterprise Computing Center-Martinsburg (ECC) to answer
questions related to information returns (Forms W-2, W-3, W-2c, W-3c, 1099 series, 1096, etc.). You can reach the call site at 304-
263-8700 (not a toll-free number) or 1-866-455-7438 (toll-free). The Telecommunication Device for the Deaf (TDD) number is
304-579-4827 (not a toll-free number). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m. Eastern time.
December 21, 20098652009–51 I.R.B.

You may also send questions to the call site via the Internet atmccirp@irs.gov. IRS/ECC does not process information returns which
are filed on paper forms.
.06The following form instructions and publications provide more detailed filing procedures for certain information returns.
•Instructions for Forms W-2 and W-3.
•Instructions for Forms W-2c and W-3c (Rev. February 2009).
•Publication 1141, General Rules and Specifications for Substitute Forms W-2 and W-3.
Section 2 - What’s New
.01We are revising this revenue procedure, which will be reproduced as Publication 1223, GeneralRules and Specifications for
Substitute Forms W-2c and W-3c, because Forms W-2c and W-3c were revised in February 2009. Publication 1223 will only be
availableonlineatw
ww.irs.gov. Several changes have been made to Forms W-2c and W-3c since they were previously revised in
January 2006. The major changes include the following.
•New box a-Employer’s name, address, and ZIP code (was box g).
•New box b-Employer’s Federal EIN (was box d).
•New box c-Tax year/form corrected (was box a).
•New box d-Employee’s correct SSN (was box b).
•New box e-Corrected SSN and/or name (was box c).
•New box f-Employee’s previously reported SSN (was box h).
•New box g-Employee’s previously reported name (was box i).
•New box h-Employee’s first name and initial, Last name, and Suffix (was box e).
•New box i-Employee’s address and ZIP code (was box f).
•Form W
-3c changes include switching the 5-digit identifying number box and box a; and moving the title directly below the form.
.02Th
e following changes have been made to Publication 1223 since the last revision (March 2006). The major changes include
the fo
llowing.
•Revised Sections 4 and 5.Sections 4 and 5 have been revised to add information and to be more consistent with the format of
Publication 1141 (General Rules and Specifications for Substitute Forms W-2 and W-3).
•New email address.The Substitute Forms email address has changed toSubstituteforms@irs.govfrom*taxforms@irs.gov.
•Address change.The room number in the address of the Substitute Forms Unit has changed to Room 6526.
•Logos, slogans, and advertising.Forms W-2c and W-3c are subject to annual review and possible change. The IRS has post-
poned the prohibition against including slogans, advertising, and logos on information returns and employee copies reporting
wages paid during the 2010 calendar year that was announced in Rev. Proc. 2008-33 (Publication 1141). The prohibition is now
in effect for reporting wages paid in 2011 and thereafter. Do not include logos, slogansor advertising on any information returns
or employee copies filed in 2011 or thereafter, except as provided in Section 6.02. This revenue procedure may be revised to
state other requirements of the IRS and the SSA regarding the preparation and use of substitute forms for Form W-2c and Form
W-3c at a future date. If you have comments about the prohibition against including slogans, advertising, and logos on informa-
tion returns and employee copies, send or email your comments to: Internal Revenue Service, Attn: Substitute Forms Program,
SE:W:CAR:MP:T:T:SP, IR 6526, 1111 Constitution Ave., NW, Washington, DC, 20224, orS
ubstituteforms@irs.gov.
•SSA publication changes.A new title and number have been given to SSA Publication MMREF-2. The new number is Publica-
tion EFW2C and its title is Specifications for Filing Forms W-2c Electronically.
•Social security room number change.The room number in the address of the Data Operations Center has changed to Room 348.
2009–51 I.R.B.866December 21, 2009

•TDD number change.The Telecommunication Device for the Deaf (TDD) phone number at the Enterprise Computing Center –
Martinsburg (ECC) has changed to 304-579-4827.
•Revised Section 9.Section 9 has been revised to reflectchanges to IRS Publication 1796.
•Editorial changes.We made editorial chang
es. Redundancies were eliminated as much as possible.
Section 3 - Filing Forms W-2c and W-3c Electronically
.01Employers must file electronically with the SSA if they file250 or more Forms W-2c (Copy A) during a calendar year unless
the IRS granted you a waiver. For details, see the Instructions for Forms W-2c and W-3c. SSA publication EFW2C, Specifications for
Filing Forms W-2c Electronically, contains specifications and procedures for filing Forms W-2c. Employers are cautioned to obtain
the most recent revision of EFW2C (and supplements) due to any subsequent changes in specifications and procedures.
Note.For purposes of the electronic filing requirement, only Forms W-2c for the immediate prior year are taken into account.
.02You may obtain a copy of the EFW2C by:
•Accessing the SSA website atwww.socialsecurity.gov/employer/pub.htm.
•Writing to:
Social Security Administration
OCO, DES; Attn: Employer Reporting Services Center
300 North Greene Street
Baltimore, MD 21290-0300
•Calling your local SSA Employer Services Liaison Officer (ESLO). Their phone numbers are available atwww.socialsecu-
rity.gov/employer/empcontacts.htm.
•Calling the SSA’s Employer Reporting Services staff at 1-800-772-6270.
.03Electronic filers do not file a paper Form W-3c. See the SSApublication EFW2C for guidance on transmitting Form W-2c
(Copy A) information to the SSA electronically.
.04Employers with fewer than 250 Forms W-2 to be corrected are encouraged to electronicallyfile Forms W-2c (Copy A) with
the SSA. Doing so will enhance the timeliness and accuracy of forms processing.
.05Employers who do not comply with the electronic filing requirements for Form W-2c (Copy A) and who are not granted a
waiver by the IRS may be subject to penalties. Employers who fileForm W-2c information with theSSA electronically must not send
the same data to the SSA on paper Forms W-2c (Copy A). Any duplicate reporting may subject filersto unnecessary contacts by the
SSA or the IRS.
Section 4 - Specifications for Red-Ink Substitute Forms W-2c (Copy A) and W-3c Filed With
the SSA
.01The official IRS-printed
red dropout ink Form W-2c (Copy A) and W-3c and their exact substitutes are referred to as red-ink
in this revenue procedure. Em
ployers may file substitute Forms W-2c (Copy A) and W-3c with the SSA. The substitute forms must
be exact replicas of the offic
ial IRS forms with respect to layout and content because they willbe read by scanner equipment.
.02Paper used for cutsheets a
nd continuous pin-fed forms for substitute Form W-2c (Copy A) and Form W-3c that are to be
filed with the SSA must be whit
e 100% bleached chemical wood, 18-20 pound paper only, optical character recognition (OCR) bond
produced in accordance with t
he following specifications:
Acidity: Ph value, average, not less than4.5
Basis weight: 17 x 22 inch 500 cut sheets, pound18-20
Metric equivalent—gm./sq. meter (a tolerance of +5 pct. is allowed)
68-75
Stiffness: Average, each direction, not less than—milligrams
Cross direction
Machine direction
50
80
Tearing strength: Average, each direction, not less than—grams40
December 21, 20098672009–51 I.R.B.

Opacity: Averag
e, not less than—percent
82
Reflectivity: Average,not less than—percent
68
Thickness: Average—inch0.0038
Metric equivalent—mm.
(a tolerance of +0.0005 inch (0.0127 mm) is allowed)
Paper cannot vary more than 0.0004 inch (0.0102 mm) from one edge to the other
0.097
Porosity: Average, not less than—seconds10
Finish (smoothness): Average, each side—seconds
20-55
(for information only) the Sheffield equivalent—units
170-d200
Dirt: Average, each side, not to exceed—parts per million8
Color and paper quality for Copy A (cut sheets and continuou
s pin-fed forms) and Form W-3c, as specified by JCP Code 0-25
dated November 29, 1978, must be white 100% bleached chemic
al wood, optical character recognition (OCR) bond. The contractor
must initiate or have a quality control program to assure OC
R ink density.
Note.Reclaimed fiber in any percentage is permitted, provided the requirements of this standard are met.
.03All printing of substitute Forms W-2c (Copy A) and W-3c must be in Flint red OCR dropout ink except as specified below.
The following must be printed in nonreflective black ink:
•Identifying number “44444” or “55555” at the top of the forms.
•The four (4) corner register marks on the forms.
•The form identification number (“W-3c”) at the bottom of Form W-3c.
•All the instructions below Form W-3c beginning with “Purpose of Form” line to the bottom of Form W-3c.
.04The vertical and horizontal spacingon Forms W-2c and W-3c must meet specifications. See Exhibits A and B.
•On Form W-3c and Form W-2c (Copy A), all the perimeter rules must be 1-p
oint (0.014-inch), while all other rules must be
one-half point (0.007-inch). Vertical rules must be parallel to the
left edge of the form; horizontal rules parallel to the top edge.
•The left and top margins on Form W-2c (Copy A) and Form W-3c must be .5 inches. The width of a substitute Form W-2c (Copy
A) or W-3c must be 7.5 inches. See Exhibits A and B.
•Each column on Form W-2c (Copy A) and Form W-3c must measure 1.9 inches in width .
.05The official red-ink Form W-3c and Form W-2c (Copy A) are 7.5 inches wide. Employers filing Forms W-2c (Copy A) with
the SSA on paper must also file a Form W-3c. Form W-3c must be the same width (7.5 inches) as the Form W-2c. One Form W-2c
or Form W-3c is contained on a standard-size, 8.5 x 11-inch page.
.06The top, left, and right margins for the Form W-2c (Copy A) and Form W-3c are .5 inches (
1
/2inch). All margins must be free
of printing except for the words “DO NOT CUT, FOLD, OR STAPLE THIS FORM” on red-ink Form W-2c (Copy A) or “DO NOT
CUT, FOLD, OR STAPLE” on red-ink Form W-3c.
.07The identifying numbers are “44444” for Form W-2c and “55555” for Form W-3c. No printing should appear anywhere near
the identifying numbers.
Note.The identifying number must be printed in nonreflective black ink in OCR-A font of 10 characters per inch.
.08Continuous pin-fed Forms W-2c (Copy A) must be separated into 11-inch deep pages. The pin-fed strips must be removed
when Forms W-2c (Copy A) are filed with the SSA.
.09Box 12 of Form W-2c (Copy A) contains four entry boxes – 12a, 12b, 12c, and 12d. Do not make more than one entry per box.
Enter your first code in box 12a (for example, enter Code D in box 12a, not 12d, if it is your first entry). If more than four items need
to be reported in box 12, use a second Form W-2c to report the additional items. Do not report the same federal tax data to the SSA on
more than one Form W-2c (Copy A). However, repeat the identifyinginformation (employee’s name, address, and SSN; employer’s
name, address, and EIN) on each additional form.
2009–51 I.R.B.868December 21, 2009

.10The checkboxes in box 13 of Form W-2c (Copy A) must be .14 inches each; the space before the first checkbox is .20 inches;
the spacing on each remaining side of the three checkboxes is .36 inches. The checkboxes in box c of Form W-3c must also be .14
inches.
Note.More than 50% of an applicable checkboxmustbecoveredbyan“X.”
.11All substitute Forms W-2c (Copy A) and W-3c in the red-ink format must have the form number and form title printed on the
bottom face of each form using identical type or a close approximation to that of the official IRS form. The red-ink substitute must
have the form producer’s (not the form filer’s) EIN entered in redin place of the Cat. No. (directly to the left of “Department of the
Treasury” for Form W-2c (Copy A) and at the bottom for Form W-3c).
.12The words “For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.”must be printed on all Forms
W-2c (Copy A) and Forms W-3c.
.13The Office of Management and Budget (OMB) Number must be printed on substitute Forms W-3c and W-2c (on each ply) in
the same location as on the official IRS forms.
.14All substitute Forms W-3c must include the instructions that are printed on the same sheet below the official IRS form.
.15The appropriate SSA addresses must be printed on the front of Form W-3c below the body of the form (see Exhibit B).
If you use the U.S. Postal Service, the address is:
Social Security Administration
Data Operations Center
P.O. Box 3333
Wilkes-Barre, PA 18767-3333.
If you use a carrier other than the U.S. Postal Service, the address is:
Social Security Administration
Data Operations Center
Attn: W-2c Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997.
.16The back of substitute Form W-2c (Copy A) and Form W-3c must be free of all printing.
.17All copies must be clearly legible. Fadingmust be minimized to assure legibility.
.18Chemical transfer paper is permitted for Form W-2c (Copy A) only if the following standards are met:
•Only chemically-backed paper is acceptable for Form W-2c (CopyA). Front and back chemically-treated paper cannot be pro-
cessed properly by scanning equipment.
•Chemically-transferred images must be black.
•Carbon-coated forms are not permitted.
.19The Government Printing Office (GPO) symbol and the Catalog Number (Cat. No.) must be deleted from substitute Form
W-2c (Copy A) and Form W-3c.
.20The sequence for assembling the copies of Form W-2c is as follows.
•Copy A — For Social Security Administration
•Copy 1 — State, City, or Local Tax Department
•CopyB—ToBeFiledwithEmployee’sFEDERALTaxReturn
•Copy C — For EMPLOYEE’s RECORDS
•Copy2—ToBeFiledwithEmployee’sState, City, or Local Income Tax Return
•Copy D — For Employer
December 21, 20098692009–51 I.R.B.

Section 5 - Specifications for Laser-Printed Substitute Forms W-2c (Copy A) and W-3c Filed
With the SSA
.01The SSA-approved, laser-printed, black-and-white Forms W-2c (Copy A) and W-3c are referred to as laser-printed. Specifica-
tions for the laser-printed (black-and-white) Forms W-2c (Copy A) and W-3c are similar to the red-ink forms (Section 4) except for
the items that follow (see Exhibits C and D). You may contact the SSA via email atl
aser.forms@ssa.govfor more information.
Note.Exhibits are samples only and must not be downloaded to meet tax obligations.
(1) Forms must be printed on 8
1
/2x 11-inch single-sheet paper only, not on continuous-feed using a laser printer. There must be
one Form W-2c (Copy A) or W-3c printed on a page.
(2) All forms and data must be printed in nonreflective black ink only.
(3) The data and forms must be programmed to print simultaneously. Forms cannot be produced separately from wage data entries.
(4) The forms must not contain corner register marks.
(5) The forms must not contain any shaded areas including those boxes that are entirely shaded on the red-ink forms.
(6) Identifying numbers on both Form W-2c (“44444”) and Form W-3c (“55555”) must be preprinted in 14-point Arial bold font
or a close approximation.
(7) The form numbers (“W-2c” and “W-3c”) must bein 18-point Arial font or a close approximation.
(8) No part of the box titles or the data printed on the fo
rms may touch any of the vertical or horizontal lines, nor should any of
the data intermingle with the box titles. The data
should be centered in the boxes.
(9) Do not print any information in the margins of the laser-printed forms (for example, do not print “DO NOT CUT, FOLD, OR
STAPLE”inthetopmarginofFormW-3c).
(10) The word “Code” must not appear in box 12 on Form W-2c (Copy A).
(11) A 4-digit vendor code (not filer code) preceded by four zerosand a slash (for example, 0000/9876) must appear in 12-point
Arial font, or a close approximation, in the middle below the title on Form W-2c (Copy A) and in the bottom right corner of Form
W-3c. See Exhibits C and D.
Note.Do not display the form producer’s EIN. The vendor code will be used to identify the form producer.
(12) Do not print Catalog Numbers (Cat. No.) on either Form W-2c (Copy A) or Form W-3c.
(13) Do not print the checkboxes in:
•Box c or the “Yes/No” area above the signature area of Form W-3c. The “X” should be programmed to be printed and centered
directly below the applicable “Kind of Payer” in box c. The “X”s for the “Yes/No” area above the signature area should be
programmed to be printed before “Yes” or “No.”
•Box e or Box 13 of Form W-2c (Copy A). The “X” should be programmed to be printed and centered in the same location as the
checkbox in Box e or directly below the applicable box title in Box 13.
(14) Do not print dollar signs. If there are no money amounts being reported, the entire field should be left blank.
.02The dimensions for the laser-printed Forms W-2c (Copy A) and W-3c are as follows. See Exhibits C and D.
(1) The left and top margins on Form W-2c (Copy A) and Form W-3c must measure
1
/2(.5) inch.
(2) The distance from the top line of Form W-3c to the bottom line of the form must measure 7
1
/6(7.17) inches.
(3) The distance from the top line of Form W-2c (Copy A) to the bottom line of the form must measure 9
1
/3(9.33) inches.
(4) Each box on Form W-2c (Copy A) and Form W-3c must measure
1
/3(.33) inch in height.
(5) BoxbonFormW-3cmustmeasure
5
/6(.83) inch in height.
(6) BoxaonFormW-2c(CopyA)mustmeasure1
1
/3(1.33) inches in height and box 14 must measure
5
/6(.83) inch in height.
2009–51 I.R.B.870December 21, 2009

(7) Each column on Form W-2c (Copy A) and Form W-3c must measure 1
9
/10(1.9) inches in width.
(8) The “Explain decreases here” box and the “Signature” box on Form W-3c must measure
1
/2(.5) inches in height.
.03You must submit samples of your laser-printed substitute forms to the SSA. Only laser-printed, black-and-white substitute
Forms W-2c (Copy A) and W-3c will be accepted for approval by the SSA. Questions regarding other forms (that is, red-ink Forms
W-2, W-2c, W-3, W-3c, 1099 series, 1096, etc.) must be directed to the IRS. Also see IRS Publications 1141 and 1179.
.04You will be required to send one set of blank and one set of dummy-data, laser-printed substitute Forms W-2c (Copy A) and
W-3c for approval. Do not use live taxpayer information. Sample data entries should befilled in to the maximum length for each box
entry, preferably using numeric data or alpha data, depending uponthe type required to be entered. Include in your submission the
name, telephone number, fax number, and email address of a contactperson who can answer questions regarding your sample forms.
.05To receive approval, you may first contact the SSA atl
aser.forms@ssa.govto obtain a template and further instructions in PDF
or Excel format. You may also send your sample, laser-printed substitute forms to:
Social Security Administration
Data Operations Center
Attn: Laser Forms Approval, Room 348
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Send your sample forms via private mail carrie
r or certified mail in order toverify their receipt. You canexpect approval (or disap-
proval) by the SSA within30 days of receipt of y
our sample forms.
.06The 4-digit vendor code preceded by four ze
ros and a slash (0000/9876) must be preprinted on the sample, laser-printed sub-
stitute forms. Forms not containing a vendor
code will be rejected and will not be submitted for testing or approval. If you have a
valid vendor code provided to you through the
National Association of Computerized Tax Processors, you should use that code. If
you do not have a valid vendor code, contact th
e Social Security Administration atl
aser.forms@ssa.govto obtain an SSA-issued code.
(Additional information on vendor codes may
be obtained from the SSA or the National Association of Computerized Tax Processors
via email atp
resident@nactp.org.)
Note.Vendor codes are only required by those companies producing the W-2 family of forms as part of a product for resale to be used
by multiple employers and payroll professionals. Employers developing Forms W-2c or W-3c to be used only for their individual
company do not require a vendor code.
.07 If you use forms produced by a vendor and have questions concerning approval,do not send the forms to the SSA for
approval. Instead, you may contact the software vendor to obtain acopy of SSA’s dated approval notice supplied to that vendor.
Section 6 - Requirements for Substitute Privately-Printed Forms W-2c (Copies B, C, and 2)
Furnished to Employees
.01All employers (including those who file electronically) must furnish employees with at least two copies of Form W-2c (three
or more for employees required to file a state, city, or local incometax return). Employee copies do not require approval as long as
the requirements are followed.
Note.Although substitute Copy 1 of Form W-2c can be printed in black instead of the red dropout ink, it should conform as closely
as possible to Copy A of the official IRS form in content, format, andlayout in order to satisfy state and local reporting requirements.
.02Some Forms W-2c that include logos, slogans, and advertisements(including advertisements for tax preparation software) may
be confused with questionable Forms W-2c. An employee may not recognize the importance of the employee copy for tax reporting
purposes due to the use of logos, slogans, and advertisements. Starting in 2011, for wages paid during the 2011 tax year and thereafter,
the IRS will not allow logos, slogans, and advertising on Forms W-3c, Copy A of Forms W-2c, or any employee copies, with the
following exceptions for logos, slogans, and advertising that:
•are the exact name of the employer or agent, primary trade name,trademark, service mark, or symbol of the employer or agent,
an embossment or watermark on the information return and employee copies that is a representation of the name, a primary trade
name, trademark, service mark, or symbol of the employer or agent;
•are presented in any typeface, font, stylized fashion, or print color normally used by the employer or agent; and used in a non-
intrusive manner;
•do not materially interfere with the ability of the recipient to recognize, understand, and use the tax information on the employee
copies.
December 21, 20098712009–51 I.R.B.

•are used on corrected information returns and employee copies reporting amounts paid before January 1, 2011.
The IRS e-file logo on the IRS official employee copies may be included, but it is not required, on any of the substitute form copies.
The information return and employee copies must clearly identify the employer’s name associated with its employer identification
number.
Forms W-2c and W-3c are subject to annual review and possible change. The IRS has postponed the prohibition against including
slogans, advertising, and logos on information returns and employee copies reporting wages paid during the 2010 calendar year that
was announced in Rev. Proc. 2008-33 (Publication 1141) is postponed. The prohibition is now in effect for reporting wages paid in
2011 and thereafter. Do not include logos, slogans or advertising on any information returns or employee copies filed in 2011 or there-
after, except as provided above. This revenue procedure may be revised to state other requirements of the IRS and the SSA regarding
the preparation and use of substitute forms for Form W-2c and Form W-3c for wages paid during the 2011 calendar year, at a future
date. If you have comments about the prohibition against includingslogans, advertising, and logoson information returns and em-
ployee copies, send or email your comments to: Internal Revenue Service, Attn: Substitute Forms Program, SE:W:CAR:MP:T:T:SP,
IR 6526, 1111 Constitution Ave., NW, Washington, DC, 20224 orS
ubstituteforms@irs.gov.
.03The paper for all copies must be white and printed in black ink.The substitute Copy B (or itsequal), which employees are
instructed to attach to their federal incometax returns, must be at least 9-pound paper (basis 17 x 22-500). Other copies furnished to
employees should also be at least 9-pound paper/basis 17 x 22-500).
.04Chemical transfer paper for employee copies must be clearly legible, have the capability to be photocopied, and not fade to
such a degree as to preclude legibility and the ability to photocopy.
.05Type must be substantially identical in size and shape to that on the official form.
.06Substitute forms for employees need to contain only the payment boxes and captions that are applicable. These boxes, box
numbers, and box titles must, when applicable, match the IRS-printed form. In all cases, the employee name, address, and SSN, as
well as the employer name, address, and EIN, must be present.
.07The dimensions of the boxes on these copies (Copies B, C, and 2), but not Copy A, may be adjusted to allow space for conveying
additional information. This may permit theemployer to eliminate other statements or notices that would otherwise be furnished to
employees.
.08The maximum allowable dimensions for employee copies of Form W-2c are no more than 11 inches deep by 8.5 inches wide.
The minimum allowable dimensions for employee copies of Form W-2c are 2.67 inches deep by 4.25 inches wide.
Note.These maximum and minimum size specifications are subject to future change.
.09Either horizontal or vertical format is permitted for substitute employee copies of Forms W-2c. That is, the width of the form
may be either greater or less than the depth of the form.
.10All copies of Form W-2c must clearly and prominently display the form number and the form title together in one area of the
form. It is recommended (but not required) that this be located on the bottom left of Form W-2c. The reference to the “Department
of the Treasury – Internal Revenue Service” must be on all copies of Form W-2c. It is recommended (but not required) that this be
located on the bottom right of Form W-2c.
.11If the substitute Forms W-2c are not labeled as to the disposition of the copies, then written notification must be provided to
each employee as specified below.
•The first copy of Form W-2c (Copy B) is filed with the employee’s federal tax return.
•The second copy of Form W-2c (Copy C) is for the employee’s records.
•If applicable, the third copy (Copy 2) of Form W-2c is filed with the employee’s state, city, or local income tax return.
If the substitute Forms W-2c are labeled, the forms must contain the applicable description as stated on the official form.
.12Instructions similar to those on the back of Form W-2c (Copy C) of the official form must be provided to each employee.
Section 7 - Instructions for Employers
.01Privately-printed substitute Forms W-2c are not required to contain a copy to be retained by employers (Copy D). However,
employers must be prepared to verify or duplicate this information if the IRS or the SSA requests it. Paper filers who do not keep
Copy D of Form W-2c should be able to generate afacsimile of Form W-2c (Copy A) in case of loss.
.02If Copy D is provided for the employer, instructions contained on the back of Copy D of the official form must appear on the
back of the substitute form. If Copy D is not provided, these instructions must be furnished to the employer on a separate statement.
.03Only originals or compliant substitute copies of Forms W-2c (Copy A) and Forms W-3c may be filed with the SSA. Photocopies
are unacceptable.
2009–51 I.R.B.872December 21, 2009

.04Employers should type or machine print entries on non-lasergenerated forms whenever possible and provide good quality
data entries by using a high quality type face, inserting data in the middle of blocksthat are well separatedfrom other printing and
guidelines, and taking any other measuresthat will guarantee clear, sharp images.
Note.12-point Courier font is preferred by the SSA.
.05Because employers must file a machine-scannable Form W-2c, they should meet the following requirements.
•Use 12-point Courier (SSA-preferred) font for data entries.
•Proportional-spaced fonts are unacceptable.
•Refrain from printing any data in the top margin of the forms.
.06The employer must also furnish payee copies of Forms W-2c (Copies B, C, and 2) that are legible and capable of being photo-
copied (by the employee).
.07When Forms W-2c or W-3c are typed, black ink must be used with no script type, inverted font, italics, or dual-case alpha
characters.
.08The filer’s employer identification number (EIN) must be entered in box (b) of Form W-2c and box (e) of Form W-3c.
.09The employer’s name, address, EIN, and state ID number may be preprinted.
Section 8 - OMB Requirements for Both Red-Ink and Laser-Printed Substitute Forms
.01The Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires the following.
•The Office of Management and Budget (OMB) approves all IRS tax forms that are subject to the Act.
•Each IRS form contains the OMB approval number, if assigned.(The official OMB numbers may be found on the official IRS
forms and are also shown on the forms in the exhibits.)
•Each IRS form (or its instructions) states:
(1) Why the IRS needs the information,
(2) How it will be used, and
(3) Whether or not the information is required to be furnished to the IRS.
.02This information must be provided to any users of official or substitute IRS forms or instructions.
.03The OMB requirements for substitute IRS forms are the following.
•Any substitute form or substitute statement to a recipient must show the OMB number as it appears on the official IRS form.
•For Form W-3c and Form W-2c (Copy A), the OMB number (1545-0008) must appear exactly as shown on the official IRS form.
•For any copy of Form W-3c or Form W-2c, other than Copy A, the OMB number must use one of the following formats.
(1) OMB No. 1545-0008 (preferred) or
(2) OMB # 1545-0008 (acceptable).
.04Any substitute Form W-3c and Form W-2c (Copy A) must state “For Privacy Act and Paperwork Reduction Act Notice, see
separate instructions.” If no instructionsare provided to users of your forms, you must furnish them the exact text of the Privacy Act
and Paperwork Reduction Act Notice.
Section 9 - Reproducible Copies of Forms
.01You can obtain official IRS forms and information copies of federal tax materials at local IRS offices or by calling the IRS
Distribution Center at 1-800-829-3676. Other ways to get federal tax material include the following.
•TheIRSwebsiteatwww.irs.gov.
•IRS Tax Products on DVD (Publication 1796).
Only contact the IRS, not the SSA, for forms.
December 21, 20098732009–51 I.R.B.

Note.Many IRS forms are provided on the IRS website and on the IRS Tax Products on DVD. But copies of Form W-2c (Copy A)
and Form W-3c cannot be used for filing with the IRS or SSA when obtained by these methods because the forms do not meet the
specific printing specifications as described in this publication. Copies of Forms W-2c and W-3c obtained from these sources are for
information purposes only. Additionally, Publication 1796 does not permit electronic filing.
.02The DVD contains approximately 2,800 tax forms and publications for small businesses, return preparers, and others who
frequently need current or prior year tax products. Most current tax forms on the DVD may be filled in electronically, then printed out
for submission and saved for recordkeeping. Other products on the DVD include the Internal Revenue Bulletins, Tax Supplements,
and Internet resources for the tax professional with links to the World Wide Web.
For system requirements, contact the National Technical Information Service (NTIS) ath
ttp://www.ntis.gov. Prices are subject to
change. The cost of the DVD if purchased from NTIS via the Internet atw
ww.irs.gov/formspubs/article/0,,id=108660,00.htmlis $30
(with no handling fee). If purchased using the following methods, the cost for each DVD is $30 (plus a $5 handling fee). These
methods are:
•By phone – 1-877-CDFORMS (1-877-233-6767),
•By fax – 703-605-6900,
•By mail – to:
National Technical Information Service
5301 Shawnee Rd.
Alexandria, VA 22312
Section 10 - Effect on Other Documents
.01Revenue Procedure 2006-19, 2006-1 C.B. 677 (reprintedas Publication 1223, Rev. 3-2006), is superseded.
Section 11 - Exhibits
2009–51 I.R.B.874December 21, 2009

ExhibitA:Red-inkFormW-2c(CopyA)
December 21, 20098752009–51 I.R.B.

ExhibitB:Red-inkFormW-3c
2009–51 I.R.B.876December 21, 2009

ExhibitC:Laser-printFormW-2c(CopyA)–SeeSection5
December 21, 20098772009–51 I.R.B.

ExhibitD:Laser-printFormW-3c–SeeSection5
2009–51 I.R.B.878December 21, 2009

Note.This revenue procedure will be reproduced as the next revision of IRS Publication 1179, General Rules and Specifications for
Substitute Forms 1096, 1098, 1099, 5498, W-2G, 1042-S, and 8935.
26 CFR 601.602: Forms and instructions.
(Also: Part 1, Sections 220, 408, 408A, 529, 530(h), 1441, 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N,
6050P, 6050Q, 6050R, 6050S, 1.408–5, 1.408–7, 1.408A–7, 1.1441–1 through 1.1441–5, 1.6041–1, 7.6041–1, 1.6042–2, 1.6042–4, 1.6044–2, 1.6044–5,1.6045–1,
5f.6045–1, 1.6045–2, 1.6045–4, 1.6047–1, 1.6049–4, 1.6049–6, 1.6049–7, 1.6050A–1, 1.6050B–1, 1.6050D–1, 1.6050E–1, 1.6050H–1, 1.6050H–2, 1.6050J–1T,
1.6050N–1, 1.6050P–1.)
Rev. Proc. 2009–49
TABLE OF CONTENTS
Part 1 General Information
SECTION 1.1 — OVERVIEW OF REVENUE PROCEDURE 2009-49...................................................... 880
SECTION 1.2 — DEFINITIONS..................................................................................... 882
SECTION 1.3 — GENERAL REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1098,
1099, 5498, W-2G, 1042-S, AND 8935
...................................................................... 883
Part 2 Specifications for Substitute Forms 1096 and Copies A of Forms 1098, 1099, 5498, and 8935 (All Filed with the IRS)
SECTION 2.1 — SPECIFICATIONS.................................................................................. 885
SECTION 2.2 — INSTRUCTIONS FOR PREPARINGPAPER FORMS THAT WILL BE FILED WITH THE
IRS
.................................................................................................. 888
Part 3 Specifications for Substitute Form W-2G (Filed with the IRS)
SECTION 3.1 — GENERAL......................................................................................... 890
SECTION 3.2 — SPECIFICATIONS FOR COPY A OF FORM W-2G..................................................... 890
Part 4 Substitute Statements to Form Recipients and Form Recipient Copies
SECTION 4.1 — SPECIFICATIONS.................................................................................. 891
SECTION 4.2 — COMPOSITE STATEMENTS........................................................................ 894
SECTION 4.3 — REQUIRED LEGENDS.............................................................................. 895
SECTION 4.4 — MISCELLANEOUS INSTRUCTIONS FOR COPIES B, C, D, 1, AND 2..................................... 896
SECTION 4.5 — ELECTRONIC DELIVERY OF FORM 1099 AND FORM 5498 PAYEE STATEMENTS....................... 897
Part 5 Additional Instructions for SubstituteForms 1098, 1099, 5498, W-2G, 1042-S, and 8935
SECTION 5.1 — PAPER SUBSTITUTES FOR FORM 1042-S............................................................ 898
SECTION 5.2 — OMB REQUIREMENTS FOR ALL FORMS IN THIS REVENUE PROCEDURE............................ 900
SECTION 5.3 — REPRODUCIBLE COPIES OF FORMS............................................................... 901
SECTION 5.4 — EFFECT ON OTHER REVENUE PROCEDURES....................................................... 901
Part 6 Exhibits
SECTION 6.1 — EXHIBITS OF FORMS IN THE REVENUE PROCEDURE............................................... 902
December 21, 20098792009–51 I.R.B.

Part 1
General Information
Section 1.1 — Overview of Revenue Procedure 2009-49
1.1.1 PurposeThe purpose of this revenue procedure is to set forth the 2009 requirements for:
•Using official Internal Revenue Service (IRS) forms to file information returns with the
IRS,
•Preparing acceptable substitutes of the official IRS forms to file information returns with
the IRS, and
•Using official or acceptable substitute forms to furnish information to recipients.
1.1.2 Which Forms Are Covered?This revenue procedure contains specifications for these information returns:
FormTitle
1096Annual Summary and Transmittal of U.S. Information Returns
1098Mortgage Interest Statement
1098-CContributions of Motor Vehicles, Boats, and Airplanes
1098-EStudent Loan Interest Statement
1098-TTuition Statement
1099-AAcquisition or Abandonment of Secured Property
1099-BProceeds From Broker and Barter Exchange Transactions
1099-CCancellation of Debt
1099-CAPChanges in Corporate Control and Capital Structure
1099-DIVDividends and Distributions
1099-GCertain Government Payments
1099-HHealth Coverage Tax Credit (HCTC) Advance Payments
1099-INTInterest Income
1099-LTCLong-Term Care and Accelerated Death Benefits
1099-MISCMiscellaneous Income
1099-OIDOriginal Issue Discount
1099-PATRTaxable Distributions Received From Cooperatives
1099-Q
Payments From Qualified Education Programs (Under Sections 529
and 530)
1099-RDistributions From Pensions, Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, etc.
1099-SProceeds From Real Estate Transactions
1099-SADistributions From an HSA, Archer MSA, or Medicare Advantage MSA
2009–51 I.R.B.880December 21, 2009

FormTitle
5498
IRA Contribution Information
5498-ESA
Coverdell ESA Contribution Information
5498-SA
HSA, Archer MSA, or Medicare Advantage MSA Information
W-2GCertain Gambling Winnings
1042-SForeign Person’s U.S. Source Income Subject to Withholding
8935
Airline Payments Report
1.1.3 ScopeFor purposes of this revenue procedure, a substitute form or statement is one that is not
published by the IRS. For a substitute form or statement to be acceptable to the IRS, it must
conform to the official form orthe specifications outlined in this revenue procedure. Do not
submit any substitute forms or statements listed above to the IRS for approval. Privately pub-
lished forms may not state, “This is an IRS approved form.”
Filers making payments to certain recipientsduring a calendar year are required by the In-
ternal Revenue Code (the Code) to file information returns with the IRS for these payments.
These filers must also provide this information to their recipients. In some cases, this also
applies to payments received. SeePart 4for specifications that apply to recipient statements
(generally Copy B).
In general, section 6011 of the Code contains requirements for filers of information returns.
A filer must file information returns electronically or on paper. A filer who is required to file
250 or more information returns of any one type during a calendar year must file those returns
electronically.
Although not required, small volume filers (fewer than 250 returns during a calendar year)
may file the forms electronically. See the legal requirementsfor filing information returns
(and providing a copy to a payee) in the 2009 General Instructions for Forms 1099, 1098,
3921, 3922, 5498, and W-2G and the 2009 Instructions for Form 1042-S. In addition, see the
most recent revision of Publication 1220, Specifications for Filing Forms 1098, 1099, 3921,
3922, 5498, 8935, and W-2G Electronically.
1.1.4 For More InformationThe IRS prints and provides the forms on which various payments must be reported. Alter-
natively, filers may prepare substitute copies of these IRS forms and use such forms to report
payments to the IRS.
•For copies of the official forms and instructions, call our toll-free number at 1-800-TAX-
FORM (1-800-829-3676).
•The IRS operates a central call site to answerquestions related to information returns,
penalties, and backup withholding. The hours of operation are Monday through Friday
from 8:30 a.m. to 4:30 p.m., Eastern time. For your convenience, you may call the toll-free
number, 1-866-455-7438. You may still use the original telephone number, 304-263-8700
(not toll-free). For TTY/TDD equipment, call 304-579-4827 (not toll-free).
•For other tax information related to business returns or accounts, call 1-800-829-4933. If
you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax account questions
or to order forms and publications.
1.1.5 What’s NewThe following changes have been madeto this year’s Revenue Procedure:
•New title for Publication 1179.The title of the publication that is reprinted from this rev-
enue procedure has changed to reflect the addition of specifications and procedures for
Form 8935,Airline Payments Report.
December 21, 20098812009–51 I.R.B.

•New title for the 1099 General Instructions for 2009.The title of the 1099, etc., General
Instructions has been changed to General Instructions for Forms 1099, 1098, 3921, 3922,
5498, and W-2G to reflect the addition of Forms 3921 and 3922 beginning in 2009.
Note.At the time these instructions went to print, final regulations had not been issued
for reporting Forms 3921and 3922 and their separate instructions. The 1099, etc., General
Instructions will be re-released when final regulations for Forms 3921 and 3922 are issued.
•Form 1099-C.The form has been revised, moving “Debt description” from box 5 to an
enlarged box 4. Box 5 now contains 2 checkboxes to indicate whether the borrower was
personally liable for repayment of the debt. Also, the “Creditor’s phone number,” a central
phone number for debtors to use to contact a person having knowledge of a canceled debt,
is now required information in the Creditor’s information box.
•Form 1099-G.There is a new box 9 for reporting market gain associated with the repayment
of Commodity Credit Corporation (CCC) loans.
•Form 1099-R.Distribution Code U for distributions under IRC 404(k) was added to the list
of codes.
•Form 5498.The form has been enlarged and reformatted to 2 to a page instead of 3 to a
page to provide additional boxes for reporting information formerly reported in the blank
box next to box 10. Instructions have been added for new boxes 12a through 15b. The
words “presidentially declared disaster areas” have been changed to “federally declared
disaster areas.”
•Logos, slogans, and advertising.The prohibition against including slogans, advertising,
and logos on information returns and payee copies reporting amounts paid during the 2010
calendar year announced in Rev. Proc. 2008-36 is postponed to the 2011 calendar year to
provide further advance notice. The IRS has determined, with some exceptions, that logos,
slogans and advertising will not be allowed on Forms 1096 or Copy A of Forms 1098,
1099, 5498, W-2G, 1042-S, 8935, or any payee copies reporting amounts paid during the
2011 calendar year, and thereafter. See Section 1.3.2 for updated and additional guidance.
•New Section 5.3.3.Section 5.3.3 has been updated to reflect information about the new
IRS Tax Products DVD (Publication 1796).
•Reminder of where to file.All information returns filed on paper are now filed with only
two Internal Revenue Service Centers: Austin, TX, and Kansas City, MO. See Part D,
page 5, of the General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G
and Form 1096, Annual Summary and Transmittal of U.S. Information Returns.
•Reminder that magnetic mediafiling no longer acceptable.After December 1, 2008, elec-
tronic filing is the only acceptable method forfiling returns with the Enterprise Computing
Center - Martinsburg (ECC-MTB). See Part F, page 5, of the General Instructions for Forms
1099, 1098, 3921, 3922, 5498, and W-2G.
•Editorial changes.We made editorial changes. Redundancies were eliminated as much as
possible.
Section 1.2 — Definitions
1.2.1 Form RecipientForm recipient means the person to whom you are required by law to furnish a copy of
the official form or information statement. The form recipient may be referred to by different
names on various Forms 1099 and related forms (“payer,” “borrower,” “student,” “debtor,”
“policyholder,” “insured,” “transferor,” “recipient,” “participant,” “donor,” or, in the case of
Form W-2G, the “winner”). SeeSection 1.3.4.
1.2.2 FilerFiler means the person or organization required by law to file a form listed inSection 1.1.2
with the IRS. As outlined earlier, a filer may be a payer, creditor, recipient of mortgage or stu-
dent loan interest payments, educational institution, broker, barter exchange, person reporting
real estate transactions, trustee or issuer of any individual retirement arrangement or medical
savings account, lender who acquires an interest in secured property or who has reason to know
that the property has been abandoned, or certain donees of motor vehicles, boats, and airplanes.
2009–51 I.R.B.882December 21, 2009

1.2.3 Substitute FormSubstitute form means a paper substitute of Copy A of an official form listed inSection
1.1.2that totally conforms to the provisions in this revenue procedure.
1.2.4 Substitute Form Recipient
Statement
Substitute form recipient statement means a paper statement of the information reported on
a form listed inSection 1.1.2. This statement must be furnished to a person (form recipient),
as defined under the applicable provisions of the Code and the applicable regulations.
1.2.5 Composite Substitute
Statement
Composite substitute statement means one in which two or more required statements (for
example, Forms 1099-INT and 1099-DIV) are furnished to the recipient on one document.
However, each statement must be designated separately and must contain all the requisite Form
1099 information except as provided underSection 4.2. A composite statement may not be
filed with the IRS.
Section 1.3 — General Requirements for A
cceptable Substitute Forms 1096, 1098, 1099, 5498, W-2G,
1042-S, and 8935
1.3.1 IntroductionPaper substitutes for Form 1096 and Copy A of Forms 1098, 1099, 5498, W-2G, 1042-S,
and 8935 that totally conform to the specifications listed in this revenue procedure may be
privately printed and filed asreturns with the IRS. The reference to the Department of the
Treasury — Internal Revenue Service should be included on all such forms.
If you are uncertain of any specification and want it clarified, you may submit a letter cit
-
ing the specification, stating your understanding and interpretation of the specificat
ion, and
enclosing an example of the form (if appropriate) to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:T:T:SP
1111 Constitution Ave., NW
Room 6526
Washington, DC 20224
Note.Allow at least 30 days for the IRS to respond.
You may also contact the Substitute Forms Program via e-mail atS
ubstituteforms@irs.gov.
Please enter “Substitute Forms” on the Subject Line.
Forms 1096, 1098, 1099, 5498, W-2G, 1042-S, and 8935 are subject to annual review and
possible change. Therefore, filers are cautionedagainst overstocking supplies of privately
printed substitutes. The specifications contained in this revenueprocedure apply to 2009 forms
only.
1.3.2 Logos, Slogans, and
Advertisements
Some Forms 1098, 1099, 5498, W-2G, 1042-S, and 8935 that include logos, slogans, and
advertisements (including advertisements for tax preparationsoftware)maybeconfusedwith
questionable forms. A payee may not recognize the importance of the payee copy for tax
reporting purposes due to the use of logos, slogans, and advertisements. Thus, the IRS has
determined that logos, slogans and advertising will not be allowed on Forms 1096 or Copy A
of Forms 1098, 1099, 5498, W-2G, 8935, 1042-S, or any payee copies reporting amounts paid
during the 2011 calendar year, and thereafter, with the following exceptions:
December 21, 20098832009–51 I.R.B.

•The exact name of the payer, broker, or agent, primary trade name, trademark, service
mark, or symbol of the payer, broker, or agent, an embossment or watermark on the infor-
mation return and payee copies that is a representation of the name, a primary trade name,
trademark, service mark, or symbol of the payer, broker, or agent,
•presented in any typeface, font, stylized fashion, or print color normally used by the payer,
broker, or agent, and used in a non-intrusive manner;
•as long as these items do not materially interfere with the ability of the recipient to recog-
nize, understand, and use the tax information on the payee copies.
•corrected information for amounts paid before January 1, 2011.
The IRS e-file logo on the IRS official payee copies may be included, but it is not required,
on any of the substitute form copies.
The information return and payee copies mustclearly identify the payer’s name associated
with its employer identification number.
As indicated in Sections 1.3.1 and 5.1.3, of this revenue procedure, Forms 1096, 1098, 1099,
5498, W-2G, 1042-S, and 8935 are subject to annual review and possible change. The prohibi-
tion against including slogans, advertising, and logos on information returns and payee copies
reporting amounts paid during the 2010 calendar year announced in Rev. Proc. 2008-36 is
postponed. The prohibition against including slogans, advertising, and logos on information
returns and payee copies reporting amounts paidduring the 2011 calendar year, and thereafter,
is being announced at this time to provide further advance notice. This revenue procedure will
be revised to state other requirements of the IRS regarding the preparation and use of substitute
forms for information returns and payee copiesreporting amounts paid during the 2011 calen-
dar year, at a future date. If you have comments about the prohibition against including slogans,
advertising, and logos on information returnsand payee copies, send or email your comments
to: Internal Revenue Service, Attn: Substitute Forms Program, SE:W:CAR:MP:T:T:SP, IR
6526, 1111 Constitution Ave., NW, Washington, DC 20224 ors
ubstituteforms@irs.gov.
1.3.3 Copy A SpecificationsProposed substitutes of Copy A must be exact replicas of the official IRS form with respect
to layout and content. Proposed substitutes forCopy A that do not conform to the specifications
in this revenue procedure are not acceptable. Further, if you file such forms with the IRS, you
may be subject to a penalty for failure to file a correct information return under section 6721
of the Code. Generally, the penalty is $50 foreach return where such failure occurs (up to
$250,000). No IRS office is authorized to allow deviations from this revenue procedure.
Caution:Overuse of proportional fonts may causeyou to be subject to penalties and delays
in processing.
1.3.4 Copy B and Copy C
Specifications
Copy B and Copy C of the following forms must contain the information inPart 4to be
considered a “statement” or “official form” under the applicable provisions of the Code. The
format of this information is at the discretion of the filer with the exception of the location of the
tax year, form number, form name, and the information for composite Form 1099 statements
as outlined underSection 4.2.
Copy B, of the forms below, are for the following recipients.
FormRecipient
1098For Payer
1098-CFor Donor
1098-E; 1099-AFor Borrower
1098-TFor Student
1099-CFor Debtor
2009–51 I.R.B.884December 21, 2009

FormRecipient
1099-CAPFor Shareholder
1099-LTCFor Policyholder
1099-R; W-2GIndicates that these forms may require Copy B to be
attached to the federal income tax return.
1099-SFor Transferor
All other Forms 1099; 1042-S;
8935
For Recipient
5498; 5498-SA
For Participant
5498-ESA
For Beneficiary
Copy C of the following forms are:
FormRecipient
1098-CFor Donor’s Records
1099-CAPFor Corporation
1099-LTCFor Insured
1099-RFor Recipient’s Records
All other Forms 1099SeeSection 4.4.2
5498-ESA
For Trustee
W-2GFor Winner’s Records
Note.On Copy C, Form 1099-LTC, you may reverse the locations of the policyholder’s
and the insured’s name, street address, city, state, and ZIP code for easier mailing.
Part 2
Specifications for Substitute Forms 1096
and Copies A of Forms 1098, 1099,
5498, and 8935 (All Filed with the IRS)
Section 2.1 — Specifications
2.1.1 General RequirementsForm identifying numbers (for example, 9191 for Form 1099-DIV) must be printed in non-
reflective black carbon-basedink in print positions 15 through 19 using an OCR A font. The
check boxes to the right of the form identifying numbers must be 10-point boxes. The “VOID”
checkbox is in print position 25. The “CORRECTED” check box is in position 33. Measure-
ments are from the left edge of the paper, not including the perforated strip. SeeExhibits E and
N.
The substitute form must be an exact replica of the official IRS form with respect to layout
and content. To determine the correct form measurements, seeExhibits A through AAat the
end of this publication.
Hot wax and cold carbon spots are not permitted on any of the internal form plies. These
spots are permitted on the back of a mailer top envelope ply.
Use of chemical transfer paper for Copy A is acceptable.
The Government Printing Office (GPO) symbol must be deleted.
December 21, 20098852009–51 I.R.B.

2.1.2 Color and Paper QualityColor and paper quality for Copy A (cut sheets and continuous pinfeed forms) as specified
by JCP Code 0–25, dated November 29, 1978, must be white 100% bleached chemical wood,
optical character recognition (OCR) bond produced in accordancewith the following specifi-
cations.
Note.Reclaimed fiber in any percentage is permitted provided the requirements of this
standard are met.
• Acidity:Phvalue,average,notlessthan.............................
4.5
•
BasisWeight:17x22-500cutsheets ...............................
18-20
• Metric equivalent–g/m
2
...........................................
75
A tolerance of ±5 pct. is allowed.
• Stiffness: Average, each direction, not less than-milligrams............
50
• Tearing strength: Average, eachdirection, not less than-grams.........40
• Opacity:Average,notlessthan-percent .............................82
• Thickness:Average-inch .......................................... 0.0038
• Metricequivalent-mm.............................................0.097
A tolerance of +0.0005 inch (0.0127 mm) is allowed. Paper cannot vary
more than 0.0004 inch (0.0102 mm) from one edge to the other.
• Porosity:Average,notlessthan-seconds ............................10
• Finish (smoothness): Average, each side-seconds.....................
20-55
• Forinformationonly,theSheffieldequivalent-units................... 170-100
• Dirt: Average, each side, not to exceed-parts per million...............8
2.1.3 Chemical Transfer PaperChemical transfer paper is permitted for Copy A only if the following standards are met:
•Only chemically backed paper is acceptable for Copy A. Front and back chemically treated
paper cannot be processed properly by machine.
•Carbon-coated forms are not permitted.
•Chemically transferred images must be black.
All copies must be clearly legible. Fading must be minimized to assure legibility.
2.1.4 PrintingAll print on Copy A of Forms 1098, 1099, 5498, and the print on Form 1096 above the
statement, “Return this entire page to the Internal Revenue Service. Photocopies are not ac-
ceptable.” must be in Flint J-6983 red OCR dropout ink or an exact match. However, the
four-digit form identifying number must be in nonreflective carbon-based black ink in OCR A
font.
The shaded areas of any substitute form should generally correspond to the format of the
official form.
The printing for the Form 1096 statement and the following text may be in any shade or
tone of black ink. Black ink should only appear on the lower part of the reverse side of Form
1096, where it will not bleed through and interfere with scanning.
Note.The instructions on the front and back of Form 1096, which include filing addresses,
must be printed.
Separation between fields must be 0.1 inch.
2009–51 I.R.B.886December 21, 2009

Except for Form 1099-R and 1099-MISC, the numbered captions are printed as solid with
no shaded background.
Other printing requirements are discussed below.
2.1.5 OCR SpecificationsThe contractor must initiate or have a qualitycontrol program to assure OCR ink density.
Readings will be made when printed on approved 20 lb. white OCR bond with a reflectance of
not less than 80%. Black ink must not have a reflectance greater than 15%. These readings are
based on requirements of the “Scan-Optics Series 9000” Optical Scanner using Flint J-6983
red OCR dropout ink or an exact match.
The following testers and ranges are acceptable:
Important information:The forms produced under these specifications must be guaran-
teed to function properly when processed through High Speed Scan-Optics 9000mm scanners.
Forms require precision spacing, printing, and trimming.
Density readings on the solid J-6983 (red) must be between the ranges of 0.95 to 0.90. The
optimal scanning range is 0.93. Density readings on the solid black must be between the ranges
of 112 to 108. The optimal scanning range is 110.
Note.The readings were taken using an Ex-Rite 500 series densitometer, in Status T with
Obsolute or – paper setting under an Illuminate 5000 Calvin Watt Light. The printing con-
tractor must maintain print contrast specification of ink and densitometer reflectivity reading
throughout entire production run.
•MacBeth PCM-II. The tested Print Contrast Signal (PCS) values when using the MacBeth
PCM-II tester on the “C” scale must range from .01 minimum to .06 maximum.
•Kidder 082A. The tested PCS values when using the Kidder 082A tester on the Infra Red
(IR) scale must range from .12 minimum to .21 maximum. White calibration disc must be
100%. Sensitivity must be set at one (1).
•Alternative testers. Alternative testers must be approved by the government so that tested
PCS values can be established. You may obtain approval by writing to the following ad-
dress:
Commissioner of Internal Revenue
Attn: SE:W:CAR:MP:P:B:T
Business Publishing – Tax Products
1111 Constitution Ave., NW
Washington, DC 20224
2.1.6
Typography
Type must be substantially identical in size and shape to the official form. All rules are
either
1
/2-point or
3
/4-point. Rules must be identical to those on the official IRS form.
Note.The form identifying number must be nonreflective carbon-based black ink in OCR
A font.
2.1.7 DimensionsGenerally, three Forms 1098 or 1099 (Copy A) are contained on a single page, 8 inches
wide (without any snap-stubs and/or pinfeed holes) by 11 inches deep.
Exceptions.Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R, 5498, and 1042-S contain two
documents per page. Form 1098-C is a single page document.
There is a .25 inch right margin. There is a
1
/32(0.0313) inch tolerance for the right margin.
If the right and top margins are properly aligned, the left margin for all forms will be correct.
All margins must be free of print. SeeExhibits A through AAin this publication for the correct
form measurements.
December 21, 20098872009–51 I.R.B.

These measurements are constant for certainForms 1098, 1099, and 5498. These measure-
ments are shown only once in this publication, on Form 1098(Exhibit B). Exceptions to these
measurements are shown onthe rest of the exhibits.
The depth of the individual trim size of each form on a page
must be 3
2
/3inches, the same
depth as the official form.
Exceptions.The depth of Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R, 5498, and
1042-S is 5
1
/2inches.
2.1.8 PerforationCopy A (three per page; two per page for Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R,
5498, or 1042-S) of privately printed continuous substitute forms must be separated at each
11" page depth. No perforations are allowed between the 3
2
/3"forms(5
1
/2" for Forms 1099-B,
1099-DIV, 1099-MISC, 1099-R, 5498, or 1042-S) on a single copy page of Copies A.
The words “Do Not Cut or Separate Forms on This Page” must be printed in red dropout
ink (as required by form specifications) between the threeforms (two for Forms 1099-B,
1099-DIV, 1099-MISC, 1099-R, or 5498).
Note.Perforations or other means of separation arerequired between all the other individual
copies (Copies B and C, and Copies 1 and 2 for Forms 1099-R and 1099-MISC, and Copy D
for Forms 1099-LTC and 1099-R) in the set.
2.1.9 What To IncludeYou must include the OMB Number on Copies A and Form 1096 in the same location as
on the official form.
The words “For Privacy Act and Paperwork Reduction Act Notice, see the 2009 General
Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G” must be printed on Copy A;
“For more information and the Privacy Act and Paperwork Reduction Act Notice, see the 2009
General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G” must be printed on
Form 1096.
A postal indicia may be used if it meets the following criteria:
•It is printed in the OCR ink color prescribed for the form, and
•No part of the indicia is within one print position of the scannable area.
The printer’s symbol (GPO) must not be printed on substitute Copy A. Instead, the employer
identification number (EIN) of the forms printer must be entered in the bottom margin on the
face of each individual form of Copy A, or on the bottom margin on the back of each Form
1096.
The Catalog Number (Cat. No.) shown on the 2009 forms is used for IRS distribution
purposes and need not be printed on any substitute forms.
The form must not contain the statement “IRS approved” or any similar statement.
Section 2.2 — Instructions for Preparing Paper Forms That Will Be
Filed with the IRS
2.2.1 Recipient InformationThe form recipient’s name, street address, city, state, ZIP code, and telephone number (if
required) should be typed or machine printed in black ink in the same format as shown on the
official IRS form. The city, state, and ZIP code must be on the same line.
The following rules apply to theform recipient’s name(s):
•The name of the appropriate form recipient must be shown on the first or second name line
in the area provided for the form recipient’s name.
•No descriptive information or other name may precede the form recipient’s name.
2009–51 I.R.B.888December 21, 2009

•Only one form recipient’s name may appear on the first name line of the form.
•If the multiple recipients’ names are required on the form, enter on the first name line
the recipient name that corresponds to the recipient taxpayer identification number (TIN)
shown on the form. Place the other form recipients’ names on the second name line (only
2 name lines are allowable).
Because certain states requir
e that trust accounts be provided in a different format, generally
filers should provide inform
ation returns reflecting payments to trust accounts with the:
•Trust’s employer identification number (EIN) in the recipient’s TIN area,
•Trust’s name on the recipient’s first name line, and
•Name of the trustee on the recipient’s second name line.
Although handwritten forms will be accepted,the IRS prefers that filers type or machine
print data entries. Also, filers should insertdata in the middle of blocks well separated from
other printing and guidelines, and take measuresto guarantee clear, dark black, sharp images.
Photocopies are not acceptable.
2.2.2 Account Number BoxUse the account number box on all Forms 1098, 1099, 5498, and W-2G for an account
number designation when required by the official IRS form. The account number is required if
you have multiple accounts for a recipient for whom you are filing more than one information
return of the same type. Additionally, the IRS encourages you to include the recipients’ account
numbers on paper forms if your system of records uses the account number rather than the
name or TIN for identification purposes. Also, the IRS will include the account number in
future notices to you about backup withholding. If you use window envelopes and a reduced
rate to mail statements to recipients, be sure the account number does not appear in the window.
Otherwise, the Postal Service may not accept them for mailing.
Exception.Form 1098-T can have third party provider information.
2.2.3 Specifications and
Restrictions
Machine-printed forms should be printed using a 6 lines/inch option, and should be printed
in 10 pitch pica (10 print positions per inch) or12 pitch elite (12 print positions per inch).
Proportional spaced fonts are unacceptable.
Substitute forms prepared in continuous or strip form must be burst and stripped to conform
to the size specified for a single sheet before they are filed with the IRS. The size specified does
not include pin feed holes. Pin feed holes must not be present on forms filed with the IRS.
Do not:
•Use a felt tip marker. The machine used to “read” paper forms generally cannot read this
ink type.
•Use dollar signs ($), ampersands (&), asterisks (*), commas (,), or other special characters
in the numbered money boxes.
Exception.Use decimal points to indicate dollars and cents (for example, 2000.00 is
acceptable).
•Use apostrophes (’), asterisks (*), or other special characters on the payee name line.
•Fold Forms 1098, 1099, or 5498 mailed to the IRS. Mail these forms flat in an appropriately
sized envelope or box. Folded documents cannot be readily moved through the machine
used in IRS processing.
•Staple Forms 1096 to the transmitted returns. Any staple holes near the return code number
may impair the IRS’s ability to machine scan the type of documents.
•Type other information on Copy A.
•Cut or separate the individual forms on the sheet of forms of Copy A (except Forms W-2G).
2.2.4 Where To FileMail completed paper forms to the IRS service center shown in the Instructions for Form
1096 and in the 2009 General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G.
December 21, 20098892009–51 I.R.B.

Specific information needed to complete the forms mentioned in this revenue procedure are
given in the specific form instructions. A chart is included in the 2009 General Instructions for
Forms 1099, 1098, 3921, 3922, 5498, and W-2G giving a quick guide to which form must be
filed to report a particular payment.
Part 3
Specifications for Substitute Form
W-2G (Filed with the IRS)
Section 3.1 — General
3.1.1 PurposeThe following specifications give the format requirements for substitute Form W-2G (Copy
A only), which is filed with the IRS.
A filer may use a substitute Form W-2G to file with the IRS (referred to as “substitute Copy
A”). The substitute form must be an exact replica of the official form with respect to layout
and content.
Section 3.2 — Specifications for Copy A of Form W-2G
3.2.1 Substitute Form W-2G
(Copy A)
You must follow these specifications when printing substitute Copy A of the Form W-2G.
ItemSubstitute Form W-2G (Copy A)
Paper Color and
Quality
Paper for Copy A must be white chemical wood bond, or equivalent,
20 pound (basis 17 x 22-500), plus or minus 5 percent. The paper
must consist substantially of bleached chemical wood pulp. It must
be free from unbleached or ground wood pulp or post-consumer
recycled paper. It also must be suitably sized to accept ink without
feathering.
Ink Color and
Quality
All printing must be in a high quality non gloss black ink.
TypographyThe type must be substantially identical in size and shape to the
official form. All rules on the document are either
1
/2point (.007
inch), 1 point (0.015 inch), or 3 point (0.045). Vertical rules must
be parallel to the left edge of the document, horizontal rules to the
top edge.
DimensionsThe official form is 8 inches wide x 3
2
/3inches deep, exclusive of a
2
/3inch snap stub on the left side of the form. Any substitute Copy
A must be the same dimensions. The snap feature is not required
on substitutes. All margins must be free of print. The top and right
margins must be
1
/4inch plus or minus .0313. If the top and right
margins are properly aligned, the left margin for all forms will be
correct. If the substitute forms are in continuous or strip form,
they must be burst and strippedto conform to the size specified
for a single form.
Hot Wax and Cold
Carbon Spots
Hot wax and cold carbon spots are not permitted on any of the
internal form plies. These spots are permitted on the back of a
mailer top envelope ply.
2009–51 I.R.B.890December 21, 2009

ItemSubstitute Form W-2G (Copy A)
Printer’s SymbolThe Government Printing Office (GPO) symbol must not be printed
on substitute Forms W-2G. Instead, the employer identification
number (EIN) of the forms printer must be printed in the bottom
margin on the face of each individual Copy A on a sheet. The
form must not contain the statement “IRS approved” or any similar
statement.
Catalog NumberThe Catalog Number (Cat. No.) shown on Form W-2G is used for
IRS distribution purposes and need not be printed on any substitute
forms.
Part 4
Substitute Statements to Form Recipients and
Form Recipient Copies
Section 4.1 — Specifications
4.1.1 IntroductionIf you do not use the official IRS form to furnishstatements to recipients, you must furnish
an acceptable substitute statement. To be acceptable, your substitute statement must comply
with the rules in this section. If you are furnishing a substitute form, see Regulations sections
1.6042-4, 1.6044-5, 1.6049-6, and 1.6050N-1 to determine how the following statements must
be provided to recipients for most Forms 1099-DIV and 1099-INT, all Forms 1099-OID and
1099-PATR, and Form 1099-MISC or 1099-S for royalties. Generally, information returns may
be furnished electronically with the consent of the recipient. See Section 4.5.1.
Not
e.A trustee of a grantor-type trust may choose to file Forms 1099 and furnish a state-
men
t to the grantor under Regulations sections 1.671-4(b)(2)(iii) and (b)(3)(ii). The statement
re
quired by those regulations is not subject tothe requirements outlined in this section.
4.1.2 Substitute Statements to
Recipients for Certain Forms
1099-INT and 1099-DIV, and for
Forms 1099-OID and 1099-PATR
The rules in this section apply to Form 1099-INT(except for interest reportable under sec-
tion 6041), 1099-DIV (except for section 404(k) dividends), 1099-OID, and 1099-PATR only.
You may furnish form recipients with Copy B of the official Form 1099 or a substitute Form
1099 (form recipient statement) if it contains the same language as the official IRS form (such
as aggregate amounts paid to the form recipient, any backup withholding, the name, address,
and TIN of the person making the return, and any other information required by the official
form). Except for state income tax withholding information, information not required by the
official form should not be included on the substitute form.
You may enter a total of the individual accounts listed on the form only if they have been
paid by the same payer. For example, if you are listing interest paid on several accounts by
one financial institution on Form 1099-INT, you may also enter the total interest amount. You
may also enter a date next to the corrected box if that box is checked.
A substitute form recipient statement for Forms 1099-INT, 1099-DIV, 1099-OID, or
1099-PATR must comply with the following requirements:
(1) Box captions and numbers that are applicable must be clearly identified, using the same
wordingandnumberingasontheofficialform.
Note.For Form 1099-INT, if box 3 is not on your substitute form, you may drop “not included
in box 3” from the box 1 caption.
(2) The form recipient statement (Copy B) must contain all applicable form recipient in-
structions provided on the front and back of the official IRS form. You may provide those
instructions on a separate sheet of paper.
(3) The form recipient statement must contain the following in bold and conspicuous type:
December 21, 20098912009–51 I.R.B.

This is important tax information and is being furnished to the Internal Revenue Ser-
vice. If you are required to file a return, a negligence penalty or other sanction may be
imposed on you if this income is taxable and the IRS determines that it has not been
reported.
(4) The box caption“Federal income tax withheld”must be in boldface type on the form
recipient statement.
(5) The form recipient statement must contain the Office of Management and Budget
(OMB) number as shown on the official IRS form. SeePart 5.
(6) The form recipient statement must contain the tax year (for example, 2009), form num-
ber (for example, Form 1099-INT), and form name (for example, Interest Income) of the offi-
cial IRS Form 1099. This information must be displayed prominently together in one area of
the statement. For example, the tax year, form number, and form name could be shown in the
upper right part of the statement. Each copy must be appropriately labeled (such as Copy B,
For Recipient). SeeSection 4.4for applicable labels and arrangement of assembly of forms.
Note.Do not include the words “Substitute for” or “In lieu of” on the form recipient statement.
(7) Layout and format of the form is at the discretion of the filer. However, the IRS en-
courages the use of boxes so that the statement has the appearance of a form and can be easily
distinguished from other non-tax statements.
(8) Each recipient statement of Forms 1099-DIV, 1099-INT, 1099-OID, and 1099-PATR
must include the direct access telephone number of an individual who can answer questions
about the statement. Include that telephone number conspicuously anywhere on the recipient
statement.
(9) A mutual fund family may state separately on one document (for example, one piece
of paper) the dividend income earned by a recipient from each fund within the family of funds
as required by Form 1099-DIV. However, each fundand its earnings must be stated separately.
The form must contain an instruction to the recipient that eachfund’s dividends and name, not
the name of the mutual fund family, must be reported on the recipient’s tax return. The form
cannot contain an aggregate total of all funds. In addition, a mutual fund family may furnish a
single statement (as a single filer) for Forms 1099-INT, 1099-DIV, and 1099-OID information.
Each fund and its earnings must be stated separately. The form must contain an instruction
to the recipient that each fund’s earnings and name, not the name of the mutual fund family,
must be reported on the recipient’s tax return. The form cannot contain an aggregate total of
all funds.
4.1.3 Substitute Statements to
Recipients for Certain Forms
1098, 1099, 5498, and W-2G
Statements to form recipients for Forms 1098, 1098-C, 1098-E, 1098-T, 1099-A, 1099-B,
1099-C, 1099-CAP, 1099-G, 1099-H, 1099-LTC, 1099-MISC, 1099-Q, 1099-R, 1099-S,
1099-SA, 5498, 5498-ESA, 5498-SA, W-2G, 1099-DIV (only for section 404(k) dividends
reportable under section 6047), and 1099-INT (only for interest of $600 or more made in the
course of a trade or business reportable under section 6041) can be copies of the official forms
or an acceptable substitute.
Caution.The IRS does not require a donee to use Form 1098-C as the written acknowledg-
ment for contributions of motor vehicles, boats, and airplanes. However, if you choose to use
copies of Form 1098-C or an acceptable substitute as the written acknowledgment, then you
must follow the requirements of this section 4.1.3.
To be acceptable, a substitute form recipient statement must meet the following require-
ments.
(1) The tax year, form number, and form name must be the same as the official form and
must be displayed prominently together in onearea on the statement. For example, they may
be shown in the upper right part of the statement.
(2) The filer’s and the form recipient’s identifying information required on the official IRS
form must be included.
(3) Each substitute recipient statement for Forms W-2G, 1098, 1098-C, 1098-E, 1098-T,
1099-A, 1099-B, 1099-C, 1099-CAP, 1099-DIV,1099-G (excluding state and local income
tax refunds), 1099-H, 1099-INT, 1099-LTC, 1099-MISC (excluding fishing boat proceeds),
1099-OID, 1099-PATR, 1099-Q, and 1099-S must includethe direct access telephone number
2009–51 I.R.B.892December 21, 2009

of an individual who can answer questions about the statement. Include the telephone number
conspicuously anywhere on the recipient statement. Although not required, payers reporting on
Forms 1099-R, 1099-SA, 5498, 5498-ESA, and 5498-SA are encouraged to furnish telephone
numbers.
(4) All applicable money amounts and information, including box numbers, required to be
reported to the form recipient must be titled on the form recipient statement in substantially the
same manner as those on the official IRS form.The box caption “Federal income tax withheld”
must be in boldface type on the form recipient statement.
Exception.If you are reporting a payment as “Other income” in box 3 of Form 1099-MISC,
you may substitute appropriate language for the box title. For example, for payments of ac-
crued wages and leave to a beneficiary of a deceased employee, you might change the title of
box 3 to “Beneficiary payments” or something similar.
Note.You cannot make this change on Copy A.
Note.If federal income tax is withheld and shown on Form 1099-R or W-2G, Copy B and
Copy C must be furnished to the recipient. If federal income tax is not withheld, only Copy C
of Form 1099-R and W-2G must be furnished. However, for Form 1099-R, instructions similar
to those on the back of the official Copy B and Copy C of Form 1099-R must be furnished to the
recipient. For convenience, you may choose to provide both Copies B and C of Form 1099-R
to the recipient.
(5) You must provide appropriate instructionsto the form recipient similar to those on the
official IRS form, to aid in the proper reportingon the form recipient’s income tax return. For
payments reported on Forms 1099-B, and 1099-CAP, the requirement to include instructions
substantially similar to those on the official IRS form may be satisfied by providing form recip-
ients with a single set of instructions for all Forms 1099-B and 1099-CAP statements required
to be furnished in a calendar year.
(6) If you use carbonless sets to produce recipient statements, the quality of each copy in
the set must meet the following standards:
•All copies must be clearly legible,
•All copies must be able to be photocopied, and
•Fading must not diminish legibility and the ability to photocopy.
In general, black chemical transfer inks are preferred, but other colors are permitted if the above
standards are met. Hot wax and cold carbon spots are not permitted on any of the internal form
plies. The back of a mailer top envelope ply may contain these spots.
(7) A mutual fund family may state separately on one document (for example, one piece
of paper) the Form 1099-B information for a recipient from each fund as required by Form
1099-B. However, the gross proceeds, etc., from each transaction within a fund must be stated
separately. The form must contain an instruction to the recipient that each fund’s (not the
mutual fund family’s) name and amount must bereported on the recipient’s tax return. The
form cannot contain an aggregate total of all funds.
(8) You may use a Uniform Settlement Statement (under the Real Estate Settlement Proce-
dures Act of 1974 (RESPA)) for Form 1099-S. The Uniform Settlement Statement is acceptable
as the written statement to the transferorif you include the legend for Form 1099-S inSection
4.3.2and indicate which information on the Uniform Settlement Statement is being reported
to the IRS on Form 1099-S.
(9) For reporting state income tax withholding and state payments, you may add an addi-
tional box(es) to recipient copies as appropriate.
Note.You cannot make this change on Copy A.
(10) On Copy C of Form 1099-LTC, you may reverse the location of the policyholder’s and
the insured’s name, street address, city, state, and ZIP code for easier mailing.
(11) If an institution insurer uses a third party service provider to file Form 1098-T, then in
addition to the institution or insurers name, address, and telephone number, the same informa-
tion may be included for the third party service provider in the space provided on the form.
December 21, 20098932009–51 I.R.B.

Section 4.2 — Composite Statements
4.2.1 Composite Substitute
Statements for Certain Forms
1099-INT, 1099-DIV, 1099-MISC,
and 1099-S, and for Forms
1099-OID and 1099-PATR
A composite form recipient statement is permitted for reportable payments of interest, div-
idends, original issue discount, patronage dividends, and royalties (Forms 1099-INT (except
for interest reportable under section 6041), 1099-DIV (except for section 404(k) dividends),
1099-MISC or 1099-S (for royalties only),1099-OID, or 1099-PATR) when one payer is re-
porting more than one of these payments during a calendar year to the same form recipient.
Generally, do not include any other Form 1099 information (for example, 1098 or 1099-A)
on a composite statement with the information required on the forms listed in the preceding
sentence.
Exception.A filer may include Form 1099-B information on a composite form with the
forms listed above.
Although the composite form recipient statement may be on one sheet, the format of the
composite form recipient statement must satisfy the following requirements in addition to the
requirements listed earlier inSection 4.1.2.
•All information pertaining to a particular type of payment must be located and blocked
together on the form and separate from any information covering other types of payments
included on the form. For example, if you are reporting interest and dividends, the Form
1099-INT information must be presented separately from the Form 1099-DIV information.
•The composite form recipient statement must prominently display the tax year, form num-
ber, and form name of the official IRS form together in one area at the beginning of each
appropriate block of information.
•Any information required by the official IRS forms that would otherwise be repeated in
each information block is required to be listed only once in the first information block on
the composite form. For example, there is no requirement to report the name of the filer
in each information block. This rule does notapply to any money amounts (for example,
federal income tax withheld) or to any other information that applies to money amounts.
•A composite statement is an acceptable substitute only if the type of payment and the recip-
ient’s tax obligation with respect to the payment are as clear as if each required statement
were furnished separately on an official form.
4.2.2 Composite Substitute
Statements to Recipients for
Forms Specified in Section 4.1.3
A composite form recipient statement for the forms specified inSection 4.1.3is permitted
when one filer is reporting more than one type of payment during a calendar year to the same
form recipient. A composite statement is not allowed for a combination of forms listed in
Section 4.1.3and forms listed inSection 4.1.2.
Exceptions:
•Substitute payments in lieu of dividends reported in Box 8 of Form 1099-MISC may be
reported on a composite substitute statement with Form 1099-DIV.
•Form 1099-B information may be reported on a composite form with the forms specified
inSection 4.1.2as described inSection 4.2.1.
•Forms 1099-A and 1099-C transactions, if related, may be combined on Form 1099-C.
•Royalties reported on Form 1099-MISC or 1099-S may be reported on a composite form
only with the forms specified in Section 4.1.2.
Although the composite form recipient statement may be on one sheet, the format of the
composite form recipient statement must satisfy the requirements listed inSection 4.2.1as well
as the requirements inSection 4.1.3. A composite statement of Forms 1098 and 1099-INT (for
interest reportable under section 6049) is not allowed.
2009–51 I.R.B.894December 21, 2009

Section 4.3 — Required Legends
4.3.1 Required Legends for Forms
1098
Form 1098 recipient statements (Copy B) must contain the following legends:
•Form 1098—
(1) “The information in boxes 1, 2, 3, and 4 is important tax information and is being
furnished to the Internal Revenue Service. If you are required to file a return, a negligence
penalty or other sanction may be imposed on you if the IRS determines that an underpayment
of tax results because you overstated a deduction for this mortgage interest or for these points
or because you did not report this refund of interest on your return.”
(2) “Caution.The amount shown may not be fully deductible by you. Limits based on the
loan amount and the cost and value of the secured property may apply. Also, you may only
deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed
by another person.”
•Form 1098-C:
Copy B — “In order to take a deduction of more than $500 for this for contribution, you
must attach this copy to your federal tax return.”
Copy C — “This information is being furnished to the Internal Revenue Service unless
box 7 is checked.”
•Form 1098-E — “This is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence penalty or other sanction
may be imposed on you if the IRS determines that an underpayment of tax results because
you overstated a deduction for student loan interest.”
•Form 1098-T — “This is important tax information and is being furnished to the Internal
Revenue Service.”
4.3.2 Required Legends for
Forms 1099 and W-2G
•Forms 1099-A, 1099-C, and 1099-CAP:
Copy B — “This is important tax information and is being furnished to the Internal Rev-
enue Service. If you are required to file a return, a negligence penalty or other sanction may
be imposed on you if taxable income results from this transaction and the IRS determines
that it has not been reported.”
•Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-OID, 1099-PATR, and
1099-Q:
Copy B — “This is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence penalty or other sanction
may be imposed on you if this income is taxable and the IRS determines that it has not been
reported.”
•Forms 1099-H and 8935:
Copy B — “This is important tax information and is being furnished to the Internal
Revenue Service.”
•Form 1099-LTC:
Copy B — “This is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence penalty or other sanction
may be imposed on you if this item is required to be reported and the IRS determines that
it has not been reported.”
Copy C — “Copy C is provided to you for information only. Only the policyholder is
required to report this information on a tax return.”
•Form 1099-R:
Copy B — “Report this income on your federal tax return. If this form shows federal
income tax withheld in box 4, attach this copy to your return.”
Copy C — “This information is being furnished to the Internal Revenue Service.”
•Form 1099-S:
Copy B — “This is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence penalty or other sanction
December 21, 20098952009–51 I.R.B.

may be imposed on you if this item is required to be reported and the IRS determines that
it has not been reported.”
•Form 1099-SA:
Copy B — “This information is being furnished to the Internal Revenue Service.”
•Form W-2G:
Copy B — “This information is being furnished to the Internal Revenue Service. Report
this income on your federal tax return. If this form shows federal income tax withheld in
box 2, attach this copy to your return.”
Copy C — “This is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence penalty or other sanction
may be imposed on you if this income is taxable and the IRS determines that it has not been
reported.”
4.3.3 Required Legends for Forms
5498
Form 5498 recipient statements (Copy B) must contain the following legends:
•Form 5498 — “This information is being provided to the Internal Revenue Service.”
Note.If you do not provide another statement to the participant because no contributions
were made for the year, the statement of the fair market value and any required minimum
distribution, of the account must contain this legend and a designation of which information
isbeingprovidedtotheIRS.
•Form 5498-ESA — “The information in boxes 1 and 2 is being furnished to the Internal
Revenue Service.”
•Form 5498-SA — “The information in boxes 1 through 6 is being furnished to the Internal
Revenue Service.”
Section 4.4 — Miscellaneous Instructions for Copies B, C, D, 1, and 2
4.4.1 CopiesCopies B, C, and in some cases, D, 1, and 2 are included in the official assembly for the
convenience of the filer. You are not legally required to include all these copies with the pri-
vately printed substitute forms. Furnishing Copies B and, in some cases, C will satisfy the
legal requirement to provide statements of information to form recipients.
Note.If an amount of federal income tax withheld is shown on Form 1099-R or W-2G,
Copy B (to be attached to the tax return) and Copy C must be furnished to the recipient. Copy
D (Forms 1099-R and W-2G) may be used for filer records. Only Copy A should be filed with
the IRS.
4.4.2 Arrangement of AssemblyCopy A (“For Internal Revenue Service Center”) of all forms must be on top. The rest of
the assembly must be arranged, from top to bottom, as follows. For:
•Form 1098 — Copy B “For Payer”; Copy C “For Recipient.”
•Form 1098-C — Copy B “For Donor”; Copy C “For Donor’s Records”; Copy D “For
Donee.”
•Form 1098-E — Copy B “For Borrower”; Copy C “For Recipient.”
•Form 1098-T — Copy B “For Student”; Copy C “For Filer.”
•Form 1099-A — Copy B “For Borrower”; Copy C “For Lender.”
•Forms 1099-B, 1099-DIV, 1099-G, 1099-H,1099-INT, 1099-OID, 1099-PATR, 1099-Q,
1099-SA, and 8935— Copy B “For Recipient”; Copy C “For Payer.”
•Form 1099-C — Copy B “For Debtor”; Copy C “For Creditor.”
•Form 1099-CAP — Copy B “For Shareholder”; Copy C “For Corporation.”
•Form 1099-LTC — Copy B “For Policyholder”; Copy C “For Insured”; and Copy D “For
Payer.”
•Form1099-MISC—Copy1“ForStateTaxDepartment”; Copy B “ForRecipient”; Copy
2 “To be filed with recipient’s state income tax return, when required”; and Copy C “For
Payer.”
2009–51 I.R.B.896December 21, 2009

•Form 1099-R — Copy 1 “For State, City, or Local Tax Department”; Copy B “Report this
income on your federal tax return. If this form shows federal income tax withheld in box
4, attach this copy to your return”; Copy C “For Recipient’s Records”; Copy 2 “File this
copy with your state, city, or local income tax return, when required”; Copy D “For Payer.”
•Form 1099-S — Copy B “For Transferor”; Copy C “For Filer.”
•Form 5498 — Copy B “For Participant”; Copy C “For Trustee or Issuer.”
•Form 5498-ESA — Copy B “For Beneficiary”; Copy C “For Trustee.”
•Form 5498-SA — Copy B “For Participant”; Copy C “For Trustee.”
•Form W-2G — Copy 1 “For State Tax Department”; Copy B “Report this income on your
federal tax return. If this form shows federal income tax withheld in box 2, attach this copy
to your return”; Copy C “For Winner’s Records”; Copy 2 “Attach this copy to your state
income tax return, if required.”; Copy D “For Payer.”
4.4.3 PerforationsPerforations or other means of separation arerequired between forms on all copies except
Copy A to make separating the forms easier.
Exception:Copy A of Form W-2G may be perforated.
Section 4.5 — Electronic Delivery of Form 1099 and Form 5498 Payee Statements
4.5.1 Electronic Recipient
Statements
If you are required to furnish a written statement (Copy B or an acceptable substitute) to a
recipient, then you may furnish the statement electronically instead of on paper. This includes
furnishing the statement to recipients of Forms 1098, 1098-E, 1098-T, 1099-A, B, C, CAP,
DIV, H, INT, G, LTC, MISC, OID, PATR, Q, R, S, SA, 5498, 5498-ESA, 5498-SA, and 8935.
It also includes Form W-2G (except for horse anddog racing, jai alai, sweepstakes, wagering
pools, and lotteries).
Note.Until further guidance is issued, you can not furnish Form 1098-C electronically.
If you meet the requirements listed below, you are treated as furnishing the statement timely.
ConsentThe recipient must consent in the affirmative and not have withdrawn the consent before
the statement is furnished. The consent by therecipient must be made electronically in a way
that shows that he or she can access the statement in the electronic format in which it will be
furnished.
You must notify the recipient of any hardware or software changes prior to furnishing the
statement. A new consent to receive the statement electronically is required after the new
hardware or software is put into service.
Prior to furnishing the statements electronically, you must provide the recipient a statement
with the following statements prominently displayed:
•If the recipient does not consent to receive the statement electronically, a paper copy will
be provided.
•The scope and duration of the consent. For example, whether the consent applies to every
year the statement is furnished or only for the January 31 immediately following the date
of the consent.
•How to obtain a paper copy after giving consent.
•How to withdraw the consent. The consent may be withdrawn at any time by furnishing
the withdrawal in writing (electronically oron paper) to the person whose name appears
on the statement. Confirmation of the withdrawal also will be in writing (electronically or
on paper).
•Notice of termination. The notice must state under what conditions the statements will no
longer be furnished to the recipient.
•Procedures to update the recipient’s information.
December 21, 20098972009–51 I.R.B.

•A description of the hardware and software required to access, print and retain a statement,
and a date the statement will no longer be available on the website.
Format, Posting, and NotificationAdditionally, you must:
•Ensure the electronic format contains all therequired information and complies with the
guidelines in this document.
•Post, on or before the January 31 due date, theapplicable statement on a website accessible
to the recipient through October 15 of that year.
•Inform the recipient, electronically or by mail, of the posting and how to access and print
the statement.
For more information, see Regulations section 31.6051-1. For electronic furnishing of
Forms 1098-E and 1098-T, see Regulations sections 1.6050S-2 and 1.6050S-4. For electronic
furnishing of Forms 1099-R, 1099-SA, 1099-Q, 5498, 5498-ESA, and 5498-SA, see Notice
2004-10, 2004-1 C.B. 433.
Part 5
Additional Instructions for Substitute
Forms 1098, 1099, 5498, W-2G, 1042-S, and 8935
Section 5.1 — Paper Substitutes for Form 1042-S
5.1.1 Paper SubstitutesPaper substitutes of Copy A for Form 1042-S, Foreign Person’s U.S. Source Income Sub-
ject to Withholding, that totally conform to the specifications contained in this procedure may
be privately printed without prior approval from the Internal Revenue Service. Proposed sub-
stitutes not conforming to these specifications must be submitted for consideration.
Note.Copies B, C, D, and E of Form 1042-S may contain multiple income entries for the
same recipient, that is multiple rows of the top boxes 1-10 of the form.
5.1.2 Time Frame For Submission
of Form 1042-S
The request should be submitted by November 15 of the year prior to the year the form is
to be used. This is to allow the Service adequate time to respond and the submitter adequate
time to make any corrections. These requests should contain a copy of the proposed form, the
need for the specific deviation(s), and the number of information returns to be printed.
5.1.3 RevisionsForm 1042-S is subject to annual review and possible change. Withholding agents and form
suppliers are cautioned against overstocking supplies of the privately printed substitutes.
5.1.4 Obtaining CopiesCopies of the official form for the reporting year may be obtained from most Service offices.
The Service provides only cut sheets of these forms. Continuous fan-fold/pin-fed forms are not
provided.
5.1.5 Instructions For Withholding
Agents
Instructions for withholding agents:
•Only original copies may be filed with the Service. Reproductions are not acceptable.
•The term “Recipient’s U.S. TIN” for an individual means the social security number (SSN)
or IRS individual taxpayer identification number (ITIN), consisting of nine digits sepa-
rated by hyphens as follows: 000-00-0000. For all other recipients, the term means em-
ployer identification number (EIN) or qualified intermediary employer identification num-
ber (QI-EIN). The QI-EIN designation includes a withholding foreign partnership employer
identification number (WP-EIN) and a withholding foreign trust employer identification
number (WT-EIN). The EIN and QI-EIN consist of nine digits separated by a hyphen as
2009–51 I.R.B.898December 21, 2009

follows: 00-0000000. The taxpayer identification number (TIN) must be in one of these
formats.
•Withholding agents are requested to type or machine print whenever possible, provide qual-
ity data entries on the forms (that is, use black ink and insert data in the middle of blocks
well separated from other printing and guidelines), and take other measures to guarantee a
clear, sharp image. Withholding agents are notrequired, however, to acquire special equip-
ment solely for the purpose of preparing these forms.
•The “AMENDED” and “PRO-RATA BASIS REPORTING” boxes must be printed at the
top center of the form under the title and checked, if applicable.
•Substitute forms prepared in continuous or strip form must be burst and stripped to conform
to the size specified for a single form beforethey are filed with the Service. The dimen-
sions are found below. Computer cards are acceptable provided they meet all requirements
regarding layout, content, and size.
5.1.6 Substitute Form 1042-S
Format Requirements
PropertySubstitute Form 1042-S Format Requirements
PrintingPrivately printed substitute Forms 1042-S must be exact replicas
of the official forms with respect to layout and content. Only the
dimensions of the substitute form may differ. The Government
Printing Office (GPO) symbol must be deleted. The exact dimensions
are found below.
Box EntriesOnly one item of income may be represented on the copy submitted
to the Service (Copy A). Multiple income items may be shown on
copies provided to recipients or retained by withholding agents. All
boxes appearing on the official form must be present on the substitute
form, with appropriate captions.
Color and Quality
of Ink
All printing must be in high quality non-gloss black ink.
TypographyType must be substantially identical in size and shape to
corresponding type on the official form. All rules on the document
are either 1 point (0.015") or 3 point (0.045"). Vertical rules must be
parallel to the left edge of the document; horizontal rules must be
parallel to the top edge.
AssemblyIf all five parts are present, theparts of the assembly shall be arranged
from top to bottom as follows: Copy A (Original) “for Internal
Revenue Service,” Copies B, C, and D “for Recipient,” and Copy E
“for Withholding Agent.”
• Paper for Copy A must be white chemical wood bond, or
equivalent, 20 pound (basis 17 x 22–500), plus or minus 5
percent; or offset book paper, 50 pound (basis 25 x 38–500). No
optical brighteners may be added to the pulp or paper during
manufacture. The paper must consist of principally bleached
chemical wood pulp or recycled printed paper. It also must be
suitably sized to accept ink without feathering.
Color Quality of
Paper
• Copies B, C, D (for Recipient), and E (For Withholding Agent)
are provided in the official assembly solely for the convenience
of the withholding agent. Withholding agents may choose the
format, design, color, and quality of the paper used for these
copies.
December 21, 20098992009–51 I.R.B.

PropertySubstitute Form 1042-S Format Requirements
•
The official form is 8 inches wide x 5
1
/2inches deep, exclusive
of a
1
/2inch snap stub on the left side of the form. The snap
feature is not required on substitutes.
• The width of a substitute Copy A must be a minimum of 7 inches
and a maximum of 8 inches, although adherence to the size of
the official form is preferred. If the width of substitute Copy A
is reduced from that of the official form, the width of each field
on the substitute form must be reduced proportionately. The left
margin must be
1
/2inch and free of all printing other than that
shown on the official form.
Dimensions
•
The depth of a substitute Copy A must be a minimum of 5
1
/6
inches and a maximum of 5
1
/2inches.
Other CopiesCopies B, C, and D must be furnished for the convenience of payees
who must send a copy of the form with other federal and state returns
they file. Copy E may be used as a withholding agent’s record/copy.
Section 5.2 — OMB Requirements for All Forms in This Revenue Procedure
5.2.1 OMB RequirementsThe Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires that:
•OMB approves all IRS tax forms that are subject to the Act. Each IRS form contains
(in or near the upper right corner) the OMB approval number, if any. (The official OMB
numbers may be found on the official IRS printed forms and are also shown on the forms
in the exhibits inPart 6.)
•Each IRS form (or its instructions) states:
(1) Why the IRS needs the information,
(2) How it will be used, and
(3) Whether or not the information is required to be furnished to the IRS.
This information must be provided to any users of official or substitute IRS forms or in-
structions.
5.2.2 Substitute Form
Requirements
The OMB requirements for substitute IRS forms are:
•Any substitute form or substitute statement to a recipient must show the OMB number as
it appears on the official IRS form.
•For Copy A, the OMB number must appear exactly as shown on the official IRS form.
•For any copy other than Copy A, the OMB number must use one of the following formats.
(1) OMB No. XXXX-XXXX (preferred) or
(2) OMB # XXXX-XXXX (acceptable).
5.2.3 Required Explanation to
Users
All substitute forms (Copy A only) must state “For Privacy Act and Paperwork Reduction
Act Notice, see the 2009 General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and
W-2G.” (or “For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.”
for Copy A of Form 1042-S).
If no instructions are provided to users of your forms, you must furnish them with the exact
text of the Privacy Act and Paperwork Reduction Act Notice.
2009–51 I.R.B.900December 21, 2009

Section 5.3 — Reproducible Copies of Forms
5.3.1 IntroductionYou can obtain official IRS forms and information copies of federal tax materials at local
IRS offices or by calling 1-800-TAX-FORM (1-800-829-3676). Other ways to get federal tax
material include:
•TheIRSwebsiteatwww.irs.gov.
•The IRS Tax Products DVD (Publication 1796).
•GPO Superintendent of Documents Bookstores.
Note.Many IRS forms are provided electronically on the IRS website and on the IRS Tax
Products DVD. But Form 1096 and Copy A of 1098 series, 1099 series, and 5498 series cannot
be used for filing with the IRS when printed from a conventional printer. They are for infor-
mation purposes only. These forms contain drop-out ink requirements as described in Part 2
of this publication.
5.3.2 IRS Tax Products DVD
(Publication 1796)
The DVD contains approximately 2,800 tax forms and publications for small businesses,
return preparers, and others whofrequently need current or prior year tax products. Most cur-
renttaxformsontheDVDmaybefilledinelectronically, then printed out for submission and
saved for recordkeeping. Other products on the DVD include the Internal Revenue Bulletins,
Tax Supplements, and Internet resources for the tax professional with links to the World Wide
Web.
For system requirements, contact the National Technical Information Service (NTIS) at
h
ttp://www.ntis.gov.Prices are subject to change.
The cost of the DVD if purchased from NTIS via the Internet atw
ww.irs.gov/formspubs/ar-
ticle/0,,id=108660,00.htmlis $30 (with no handling fee). If purchased using the following
methods, the cost for each DVD is $30 (plus a $5 handling fee).
These methods are:
•By phone – 1-877-CDFORMS (1-877-233-6767) – for IRS DVD purchase only,
•By fax – 703-605-6900 – for IRS DVD purchase only,
•By mail to:
National Technical Information Service
5301 Shawnee Rd.
Alexandria, VA 22312
5.3.3 GPO Supt. of Documents
Bookstores
The Government Printing Office (GPO) Superintendent of Documents Bookstores also sell
individual copies of tax forms, instructions, and publications.
Section 5.4 — Effect on Other Revenue Procedures
5.4.1 Other Revenue ProceduresRevenue Procedure 2008-36, 2008-33 I.R.B. 340, dated August 18, 2008, which provides
rules and specifications for private printing of2008 substitute forms and statements to recipi-
ents, is superseded.
December 21, 20099012009–51 I.R.B.

Part 6
Exhibits
Section 6.1 — Exhibits of Forms in the Revenue Procedure
6.1.1 PurposeExhibits A through AA illustrate some of the specifications that were discussed earlier in
this revenue procedure. The dimensions apply to the actual size forms, but the exhibits have
been reduced in size.
Generally, the illustrated dimensions apply to all like forms. For example, Exhibit B shows
11.00" from the top edge to the bottom edge of Form 1098 and .85" between the bottom rule
of the top form and the top rule of the second form on the page. These dimensions apply to all
forms that are printed three to a page.
6.1.2 GuidelinesKeep in mind the following guidelines when printing substitute forms.
•Closely follow the specifications to avoid delays in processing the forms.
•Always use the specifications as outlined in this revenue procedure and illustrated in the
exhibits.
•Do not add the text line “Do Not Cut or Separate Forms on This Page” to the bottom form.
This will cause inconsistency with the specifications.
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2009–51 I.R.B.904December 21, 2009

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2009–51 I.R.B.910December 21, 2009

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2009–51 I.R.B.914December 21, 2009

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2009–51 I.R.B.916December 21, 2009

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2009–51 I.R.B.920December 21, 2009

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December 21, 20099292009–51 I.R.B.

26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also: Part I, §§ 62, 162, 170, 213, 217, 274, 1016;
1.62–2, 1.162–17, 1.170A–1, 1.213–1, 1.217–2,
1.274–5, 1.1016–3.)
Rev. Proc. 2009–54
SECTION 1. PURPOSE
This revenue procedure updates Rev.
Proc. 2008–72, 2008–50 I.R.B. 1286,
and provides optional standard mileage
rates for taxpayers to use in computing the
deductible costs of operating an automo-
bile for business, charitable, medical, or
moving expense purposes. This revenue
procedure also provides rules under which
the amount of ordinary and necessary ex-
penses of local travel or transportation
away from home that are paid or incurred
by an employee are deemed substanti-
ated under § 1.274–5 of the Income Tax
Regulations if a payor (an employer, its
agent, or a third party) provides a mileage
allowance under a reimbursement or other
expense allowance arrangement. The
substantiation methods described in this
revenue procedure are not mandatory. A
taxpayer may use actual allowable ex-
pense amounts to substantiate expenses if
the taxpayer maintains adequate records
or other sufficient evidence. The Internal
Revenue Service prospectively adjusts the
business and medical and moving stan-
dard mileage rates annually (to the extent
warranted).
SECTION 2. SUMMARY OF
STANDARD MILEAGE RATES
.01Standard mileage rates
(1) Business (section 5 below)50 cents per mile
(2) Charitable contribution (section 7 below)14 cents per mile
(3) Medical and moving(section7below)
16.5 cents per mile
.02Determination of standard mileage
rates. An independent contractor on be-
half of the Service conducts an annual
study of the fixed and variable costs of
operating an automobile to determine the
business and medical and moving standard
mileage rates reflected in this revenue
procedure. The charitable contribution
standard mileage rate is set by § 170(i) of
the Internal Revenue Code.
SECTION 3. BACKGROUND AND
CHANGES
.01 Under § 162(a), a taxpayer may
deduct the ordinary and necessary ex-
penses the taxpayer pays or incurs during
the taxable year in carrying on any trade or
business. An employee or self-employed
individual may deduct the cost of operat-
ing an automobile to the extent that it is
used in a trade or business. Under § 262,
a taxpayer may not deduct any portion of
the cost of operating an automobile attrib-
utable to personal use.
.02 Section 274(d) provides, in part,
that a taxpayer may not deduct expenses
for travel or listed property unless the tax-
payer complies with certain substantiation
requirements. Under § 280F(d)(4), listed
property includes passenger automobiles
and any other property used as a means of
transportation.
.03 Under § 1.274–5(g) and (j), the
Commissioner may prescribe rules and
establish methods for taxpayers to use
mileage rates and allowances to substanti-
ate the amount of ordinary and necessary
expenses of using a vehicle for local trans-
portation and transportation while travel-
ing away from home. Under these rules,
mileage allowances that comply with rea-
sonable business practice are treated as (1)
equivalent to substantiation, by adequate
records or other sufficient evidence, of the
amount of transportation expenses for pur-
poses of § 1.274–5(c), and (2) satisfying
the requirements of an adequate account-
ing to the employer of the amount of the
expenses for purposes of § 1.274–5(f).
.04 Section 62(a)(2)(A) allows an em-
ployee, in determining adjusted gross in-
come, a deduction for the expenses al-
lowedbyPartVI(§161andfollowing),
subchapter B, chapter 1 of the Code, the
employee pays or incurs in performing ser-
vices as an employee under a reimburse-
ment or other expense allowance arrange-
ment with a payor.
.05 Section 62(c) provides that an ar-
rangement is not treated as a reimburse-
ment or other expense allowance arrange-
ment for purposes of § 62(a)(2)(A) if it—
(1) Does not require the employee to
substantiate the expenses to the payor, or
(2) Allows the employee to retain any
amount in excess of the substantiated ex-
penses.
The substantiation requirements de-
scribedin§62(c)donotapplytoan
expense to the extent that the Commis-
sioner provides that substantiation is not
required.
.06 Under § 1.62–2(c), a reimburse-
ment or other expense allowance arrange-
ment satisfies the requirements of § 62(c)
if it meets the requirements of business
connection, substantiation, and returning
amounts in excess of expenses as speci-
fied in the regulations. If an arrangement
meets these requirements, all amounts
paid under the arrangement are treated as
paid under an accountable plan and are
excluded from income and wages. If an
arrangement does not meet one or more
of these requirements, all amounts paid
under the arrangement are treated as paid
under a nonaccountable plan and are in-
cluded in the employee’s gross income,
must be reported as wages or compen-
sation on the employee’s Form W–2,
and are subject to the withholding and
payment of employment taxes. Section
1.62–2(e)(2) provides that substantiation
of certain business expenses in accordance
with rules prescribed under § 1.274–5(g)
are treated as substantiation of the amount
of the expenses for purposes of § 1.62–2.
Under § 1.62–2(f)(2), the Commissioner
may prescribe rules under which an ar-
rangement providing mileage allowances
is treated as satisfying the requirement of
returning amounts in excess of expenses,
even though the employee is not required
to return the portion of the allowance
for miles of travel substantiated, if the
allowance is reasonably calculated not
to exceed the amount of the employee’s
expenses and the employee is required
2009–51 I.R.B.930December 21, 2009

to return the portion of the allowance for
miles of travel not substantiated.
.07 Section 1.62–2(h)(2)(i)(B) provides
that if a payor pays a mileage allowance
under an arrangement that meets the re-
quirements of § 1.62–2(c)(1), the portion,
if any, of the allowance that relates to
miles of travel substantiated in accordance
with § 1.62–2(e), that exceeds the amount
of the employee’s expenses deemed
substantiated for the travel pursuant to
rules prescribed under § 274(d) and
§ 1.274–5(g), and that the employee is not
required to return, is subject to withhold-
ing and payment of employment taxes.
See§§ 31.3121(a)–3, 31.3231(e)–1(a)(5),
31.3306(b)–2, and 31.3401(a)–4 of the
Employment Tax Regulations.
.08 This revenue procedure includes
modifications to Rev. Proc. 2008–72 as
follows:
(1) Section 5.01 contains revisions to
the business standard mileage rate.
(2) Section 7.02 contains revisions to
the medical and moving standard mileage
rate.
SECTION 4. DEFINITIONS
.01Standard mileage rate.Theterm
“standard mileage rate” means the amount
the Service provides for optional use by
taxpayers to substantiate the amount of—
(1) Deductible costs of operating for
business purposes automobiles (including
vans, pickups, or panel trucks) they own or
lease, or
(2) Deductible costs of operating auto-
mobiles for charitable, medical, or moving
expense purposes.
.02Transportation expenses.Theterm
“transportation expenses” means the ex-
penses of operating an automobile for local
transportation or transportation away from
home.
.03Mileage allowance.Theterm
“mileage allowance” means a payment
under a reimbursement or other expense
allowance arrangement that is—
(1) Paid for the ordinary and neces-
sary business expenses incurred, or that
the payor reasonably anticipates will be in-
curred, by an employee for transportation
expenses in performing services as an em-
ployee of the employer,
(2) Reasonably calculated not to exceed
the amount of the expenses or the antici-
pated expenses, and
(3) Paid at the applicable standard
mileage rate, a flat rate or stated schedule,
or in accordance with any other Ser-
vice-specified rate or schedule.
.04Flat rate or stated schedule.A
mileage allowance is paid at a flat rate or
stated schedule if it is paid on a uniform
and objective basis for the expenses de-
scribedinsection4.03ofthisrevenuepro-
cedure. The allowance may be paid peri-
odically at a fixed rate, at a cents-per-mile
rate, at a variable rate based on a stated
schedule, at a rate that combines any of
these rates, or on any other basis that is
consistently applied and accords with rea-
sonable business practice. Thus, for exam-
ple, a periodic payment at a fixed rate to
cover the fixed costs (including deprecia-
tion or lease payments, insurance, registra-
tion and license fees, and personal prop-
erty taxes) of driving an automobile in per-
forming services as an employee of the
employer, coupled with a periodic pay-
ment at a cents-per-mile rate to cover the
variable costs (including gasoline and all
taxes thereon, oil, tires, and routine main-
tenance and repairs) of using an automo-
bile for those purposes, is an allowance
paid at a flat rate or stated schedule. Like-
wise, a periodic payment at a variable rate
based on a stated schedule for different lo-
cales to cover the costs of driving an au-
tomobile in performing services as an em-
ployee is an allowance paid at a flat rate or
stated schedule.
.05Lease period. The term “lease pe-
riod” includes renewal periods.
SECTION 5. BUSINESS STANDARD
MILEAGE RATE
.01In general. The standard mileage
rate for transportation expenses is 50 cents
per mile for all miles of business use.
.02Use of the business standard
mileage rate. A taxpayer may use the
business standard mileage rate for an au-
tomobile that a taxpayer either owns or
leases. A taxpayer generally may deduct
an amount equal to either the business
standard mileage rate times the number of
business miles traveled or the actual costs
(both fixed and variable) the taxpayer pays
or incurs that are allocable to traveling
those business miles.
.03Business standard mileage rate in
lieu of fixed and variable costs.Atax-
payer computes a deduction using the busi-
ness standard mileage rate on a yearly ba-
sis and in lieu of computing the fixed and
variable costs of the automobile alloca-
ble to business purposes (except as pro-
vided in section 9.06 of this revenue proce-
dure). Items such as depreciation or lease
payments, maintenance and repairs, tires,
gasoline (including all taxes thereon), oil,
insurance, and licenseand registration fees
are included in fixed and variable costs for
this purpose.
.04Parking fees, tolls, interest, and
taxes. A taxpayer may deduct, as separate
items, parking fees and tolls attributable
to use of the automobile for business pur-
poses. A taxpayer also may deduct interest
relating to the purchase of the automobile
and state and local personal property taxes
as separate items to the extent allowable
under § 163 or § 164, respectively. Under
§ 163(h)(2)(A), interest is nondeductible
personal interest if it is paid or incurred
on indebtedness properly allocable to the
trade or business of performing services
as an employee. Section 164 provides that
state and local taxes a taxpayer pays or
incurs in connection with an acquisition or
disposition of property are treated as part
of the cost of the acquired property or as
a reduction in the amount realized on the
disposition of the property. If the automo-
bile is operated less than 100 percent for
business purposes, a taxpayer must allo-
cate the business and nonbusiness portion
of the allowable taxes and interest deduc-
tion.
.05Depreciation. For automobiles
a taxpayer owns and has placed in ser-
vice for business purposes, and for which
the taxpayer used the business standard
mileage rate for any year, 16 cents per
mile is treated as depreciation for 2003
and 2004, 17 cents per mile for 2005
and 2006, 19 cents per mile for 2007, 21
cents per mile for 2008 and 2009, and 23
cents per mile for 2010 for those years in
which the taxpayer used business standard
mileage rate. If the taxpayer used actual
costs for one or more of those years, these
ratesdonotapplytoanyyearinwhich
the taxpayer used actual costs. The depre-
ciation described above reduces the basis
of the automobile (but not below zero) in
determining adjusted basis as required by
§ 1016.
.06Limitations.
(1) A taxpayer may not use the business
standard mileage rate to compute the de-
December 21, 20099312009–51 I.R.B.

ductible expenses of (a) automobiles used
for hire, such as taxicabs, or (b) five or
more automobiles owned or leased by a
taxpayer and used simultaneously (such as
in fleet operations).
(2) A taxpayer may not use the business
standard mileage rate to compute the de-
ductible business expenses of an automo-
bile a taxpayer leases unless the taxpayer
uses either the business standard mileage
rate or a fixed and variable rate allowance
(FAVR allowance) (as provided in section
8 of this revenue procedure) to compute
the deductible business expenses of the au-
tomobile for the lease period.
(3) A taxpayer may not use the busi-
ness standard mileage rate to compute
the deductible expenses of an automobile
for which the taxpayer has (a) claimed
depreciation using a method other than
straight-line for its estimated useful life,
(b) claimed a § 179 deduction, (c) claimed
the additional first-year depreciation al-
lowance under, for example, § 168(k) or
§ 168(n), or (d) used the Accelerated Cost
Recovery System (ACRS) under former
§ 168 or the Modified Accelerated Cost
Recovery System (MACRS) under current
§ 168. By using the business standard
mileage rate, the taxpayer has elected to
exclude the automobile (if owned) from
MACRS pursuant to § 168(f)(1). If, after
using the business standard mileage rate,
the taxpayer uses actual costs, the taxpayer
must use straight-line depreciation for the
automobile’s remaining estimated useful
life (subject to the applicable depreciation
deduction limitations under § 280F).
(4) A taxpayer who is an employee
of the United States Postal Service may
not use the business standard mileage rate
and this revenue procedure to compute
the amount of the taxpayer’s deductible
automobile expensesincurred in perform-
ing services involving the collection and
delivery of mail on a rural route if the tax-
payer receives qualified reimbursements
(as defined in § 162(o)) for the expenses.
See§ 162(o) for the rules that apply to
these qualified reimbursements.
SECTION 6. RESERVED
SECTION 7. CHARITABLE AND
MEDICAL AND MOVING STANDARD
MILEAGE RATES
.01Charitable. Section 170(i) provides
a standard mileage rate of 14 cents per mile
for purposes of computing the charitable
contribution deduction for use of an auto-
mobile in rendering gratuitous services to
a charitable organization under § 170.
.02Medical and moving. The standard
mileage rate is 16.5 cents per mile for use
of an automobile (1) to obtain medical care
described in § 213, or (2) as part of a move
for which the expenses are deductible un-
der § 217.
.03Charitable or medical and moving
standard mileage rates in lieu of variable
expenses. A deduction computed using the
applicable standard mileage rate for chari-
table, medical, or moving expense miles is
in lieu of all variable expenses (including
gasoline and oil) of the automobile alloca-
ble to those purposes. Costs for items such
as depreciation or lease payments, insur-
ance, and license and registration fees are
not deductible, and are not included in the
charitable or medical and moving standard
mileage rates.
.04Parking fees, tolls, interest, and
taxes. A taxpayer may deduct, as separate
items, parking fees and tolls attributable
to the use of the automobile for charitable,
medical, or moving expense purposes.
Interest relating to the purchase of the
automobile and stateand local personal
property taxes are not deductible as char-
itable, medical, or moving expenses, but
they may be deducted as separate items to
the extent allowable under § 163 or § 164,
respectively.
SECTION8.FIXEDANDVARIABLE
RATE ALLOWANCE
.01In general.
(1) The ordinary and necessary ex-
penses an employee pays or incurs in
driving an automobile the employee owns
or leases in performing services as an
employee of the employer are deemed sub-
stantiated (in an amount determined under
section 9 of this revenue procedure) when
a payor reimburses those expenses using
a FAVR allowance. A FAVR allowance
isamileageallowanceusingaflatrate
or stated schedule that combines periodic
fixed and variable rate payments that meet
all the requirements of this section 8.
(2) A payor must base the amount of a
FAVR allowance on data that (a) is derived
from the base locality, (b) reflects retail
prices paid by consumers, and (c) is rea-
sonable and statistically defensible in ap-
proximating the actual expenses employ-
ees receiving the allowance would incur as
owners of the standard automobile.
.02Computation of FAVR allowance.
(1)FAVR allowance.AFAVRal-
lowance includes periodic fixed payments
and periodic variable payments. A payor
may maintain more than one FAVR al-
lowance. A FAVR allowance that uses the
same payor, standard automobile (or an
automobile of the same make and model
that is comparably equipped), retention
period, and business use percentage is con-
sidered one FAVR allowance, even though
other features of the allowance may vary.
A FAVR allowance also includes any op-
tional high mileage payments. However,
optional high mileage payments are in-
cluded in the employee’s gross income,
are reported as wages or other compen-
sation on the employee’s Form W–2, and
are subject to withholding and payment
of employment taxes when paid.Seesec-
tion 9.05 of this revenue procedure. An
optional high mileage payment covers
the additional depreciation for a standard
automobile attributable to business miles
driven and substantiated by the employee
for a calendar year in excess of the annual
business mileage for that year. If an em-
ployee is covered by the FAVR allowance
for less than the entire calendar year, the
annual business mileage may be prorated
on a monthly basis for purposes of the
preceding sentence.
(2)Periodic fixed payment. A periodic
fixed payment covers the projected fixed
costs (including depreciation or lease pay-
ments, insurance, registration and license
fees, and personal property taxes) of driv-
ing the standard automobile in performing
services as an employee of the employer in
a base locality, and must be paid at least
quarterly. A payor may compute a peri-
odic fixed payment by (a) dividing the to-
tal projected fixed costs of the standard au-
tomobile for all years of the retention pe-
riod, determined at the beginning of the re-
tention period, by the number of periodic
fixed payments in the retention period, and
2009–51 I.R.B.932December 21, 2009

(b) multiplying the resulting amount by the
business use percentage.
(3)Periodic variable payment.Aperi-
odic variable payment covers the projected
variable costs (including gasoline and all
taxes thereon, oil, tires, and routine main-
tenance and repairs) of driving a standard
automobile in performing services as an
employee of the employer in a base lo-
cality, and must be paid at least quarterly.
A payor may compute a periodic variable
payment rate for a computation period by
dividing the total projected variable costs
for the standard automobile for the compu-
tation period, determined at the beginning
of the computation period, by the computa-
tion period mileage. A computation period
may be any period of a year or less. Com-
putation period mileage is the total mileage
(business and personal) a payor reason-
ably projects a standard automobile will
be driven during a computation period and
equals the retention mileage divided by the
number of computation periods in the re-
tention period. For each business mile an
employee substantiates for the computa-
tion period, a payor must make a periodic
variable payment at a rate that does not ex-
ceed the rate for that computation period.
(4)Base locality. A base locality is the
particular geographic locality or region of
the United States in which an employee
generally pays or incurs the costs of driv-
ing an automobile in performing services
as an employee of the employer. Thus,
for purposes of determining the amount of
fixed costs, the base locality is generally
the geographic locality or region in which
the employee resides. For purposes of de-
termining the amount of variable costs, the
base locality is generally the geographic
locality or region in which the employee
drives the automobile in performing ser-
vices as an employee of the employer.
(5)Standard automobile. A standard
automobile is the automobile a payor se-
lects on which a specific FAVR allowance
is based.
(6)Standard automobile cost.Thestan-
dard automobile cost for a calendar year
may not exceed 95 percent of the sum of
(a) the retail dealer invoice cost of the stan-
dard automobile in the base locality, and
(b) state and local sales or use taxes on the
purchase of the automobile. The standard
automobile cost may not exceed $27,300.
(7)Annual mileage. Annual mileage is
the total mileage (business and personal)
a payor reasonably projects an employee
will drive a standard automobile during
a calendar year. Annual mileage equals
the annual business mileage divided by the
business use percentage.
(8)Annual business mileage. Annual
business mileage is the mileage a payor
reasonably projects anemployeewilldrive
a standard automobile in performing ser-
vices as an employee of the employer dur-
ing the calendar year, but may not be less
than 6,250 miles for a calendar year. An-
nual business mileage equals the annual
mileage multiplied by the business use per-
centage.
(9)Business use percentage. A payor
determines the business use percentage
by dividing the annual business mileage
by the annual mileage. The business use
percentage may not exceed 75 percent.
In lieu of demonstrating the reasonable-
ness of the business use percentage based
on records of total mileage and business
mileage driven by employees annually, a
payor may use a business use percentage
that is less than or equal to the following
percentages for a FAVR allowance that
is paid for the following annual business
mileage:
Annual business mileageBusiness use percentage
6,250 or more but less than 10,00045 percent
10,000 or more but less than 15,00055 percent
15,000 or more but less than 20,00065 percent
20,000 or more
75 perc
ent
(10)Retention period. A retention pe-
riod is the period in calendar years a payor
selects during which the payor expects an
employee to drive a standard automobile
in performing services as an employee of
the employer before the automobile is re-
placed. The period may not be less than
two calendar years.
(11)Retention mileage. Retention
mileage is the annual mileage multiplied
by the number of calendar years in the
retention period.
(12)Residual value. The residual value
of a standard automobile is the projected
amount for which it could be sold at the
end of the retention period after being
driven the retention mileage. The Ser-
vice will accept the following safe harbor
residual values for a standard automobile
computed as a percentage of the standard
automobile cost:
Retention periodResidual value
2 years70 percent
3 years60 percent
4 years
5
0 percent
.03FAVR allowance in lieu of fixed and
variable costs.
(1) A reimbursement computed using
a FAVR allowance is in lieu of the em-
ployee’s deduction of all the fixed and
variable costs the employee pays or incurs
in driving the automobile in performing
services as an employee of the employer,
except as provided in section 9.06 of this
revenue procedure. Items such as depreci-
ation or lease payments, maintenance and
repairs, tires, gasoline (including all taxes
thereon), oil, insurance, license and reg-
istration fees, and personal property taxes
December 21, 20099332009–51 I.R.B.

are included in fixed and variable costs for
this purpose.
(2) An employee may deduct, as sepa-
rate items, parking fees and tolls attribut-
able to the employee driving the standard
automobile in performing services as an
employee of the employer. Similarly, an
employee may deduct, as a separate item,
interest relating to the purchase of the stan-
dard automobile to the extent that the inter-
est is an allowable deduction under § 163.
.04Depreciation.
(1) A payor may not provide a FAVR
allowance for an automobile for which an
employee has (a) claimed depreciation us-
ing a method other than straight-line for its
estimated useful life, (b) claimed a § 179
deduction, (c) claimed the additional first-
year depreciation allowance under, for ex-
ample, § 168(k) or § 168(n), or (d) used
ACRS under former § 168 or MACRS un-
der current § 168. If an employee uses
actual costs for an owned automobile that
has been covered by a FAVR allowance,
theemployeemustusestraight-linedepre-
ciation for the automobile’s remaining es-
timated useful life (subject to the applica-
ble depreciation deduction limitations un-
der § 280F).
(2) Except as provided in section
8.04(3) of this revenueprocedure, the total
amount of the depreciation component for
the retention period a payor includes in
computing the periodic fixed payments
for that retention period may not exceed
the excess of the standard automobile cost
over the residual value of the standard
automobile. In addition, the total amount
of the depreciation component may not
exceed the sum of the annual § 280F lim-
itations on depreciation in effect at the
beginning of the retention period that ap-
ply to the standard automobile during the
retention period.
(3) If the depreciation component of pe-
riodic fixed payments exceeds the limi-
tations in section 8.04(2) of this revenue
procedure, the Service will treat that sec-
tion as satisfied if the total annual amount
of the FAVR (periodic fixed and variable)
payments a payor makes to an employee
driving 80 percent of the annual business
mileage of the standard automobile does
not exceed the business standard mileage
rate for that year (under section 5.01 of
the applicable revenue procedure) multi-
plied by 80 percent of the annual business
mileage of the standard automobile.
(4) The depreciation included in each
periodic fixed payment portion of a FAVR
allowance paid with respect to an automo-
bile reduces the basis of the automobile
(but not below zero) in determining ad-
justedbasisasrequiredby§1016.See
section 8.07(2) of this revenue procedure
for the requirement that the employer re-
port the depreciation component of a peri-
odic fixed payment to the employee.
.05FAVR allowance limitations.
(1) A payor may provide a FAVR al-
lowance only to an employee who substan-
tiates to the payor for a calendar year at
least 5,000 miles driveninperformingser-
vices as an employee of the employer or,
if greater, 80 percent of the annual busi-
ness mileage of that FAVR allowance. If
the employee is covered by the FAVR al-
lowance for less than the entire calendar
year, the payor may prorate these limits on
a monthly basis.
(2) A payor may not provide a FAVR
allowance to a control employee (as de-
fined in § 1.61–21(f)(5) and (6), exclud-
ing the $100,000 limitation in paragraph
(f)(5)(iii)).
(3) A payor may not provide a FAVR
allowance if at any time during a calen-
dar year a majority of the employees the
FAVR allowance covers are management
employees.
(4) A payor may not provide a FAVR
allowance to any employee unless at all
times during a calendar year FAVR al-
lowances provided by the payor cover at
least five employees in total.
(5) A payor may provide a FAVR al-
lowance only for an automobile (a) the
employee receiving the payment owns or
leases, (b) the cost of which, as a new ve-
hicle (whether or not purchased new by the
employee), was at least 90 percent of the
standard automobile cost included in de-
termining the FAVR allowance for the first
calendar year the employee receives the al-
lowance for that automobile, and (c) for
which the model year does not differ from
the current calendar year by more than the
number of years in the retention period.
(6) A payor may not provide a FAVR
allowance for an automobile an employee
leases for which the employee has used
actual expenses to compute the deductible
business expenses of the automobile for
any year during the lease period.
(7) The insurance cost component of
aFAVRallowancemustbebasedonthe
rates charged in the base locality for insur-
ance coverage on the standard automobile
during the current calendar year without
considering rate-increasing factors such as
poor driving records or young drivers.
(8) A payor may provide a FAVR al-
lowance only to an employee whose insur-
ance coverage limits on the automobile for
which the FAVR allowance is paid are at
least equal to the insurance coverage lim-
its used to compute the periodic fixed pay-
ment under that FAVR allowance.
.06Employee reporting. Within 30
days after a FAVR allowance initially cov-
ers an employee’s automobile, or again
covers the automobile if coverage has
lapsed, the employee by written declara-
tion must provide the payor with the fol-
lowing information: (1) the make, model,
and year of the employee’s automobile,
(2) written proof of the insurance coverage
limits on the automobile, (3) the odometer
reading of the automobile, (4) if owned,
the purchase price of the automobile or, if
leased, the price at which the automobile is
ordinarily sold by retailers (the gross cap-
italized cost of the automobile), and (5) if
owned, whether the employee has claimed
depreciation for the automobile using any
of the depreciation methods prohibited by
section 8.04(1) of this revenue procedure
or, if leased, whether the employee has
computed deductible business expenses
for the automobile using actual expenses.
The employee must provide the informa-
tion in (1), (2), and (3) to the payor within
30 days after the beginning of each calen-
dar year that a FAVR allowance covers the
employee’s automobile.
.07Payor recordkeeping and reporting.
(1) The payor or its agent must maintain
written records stating (a) the statistical
data and projections on which the FAVR
allowance payments are based, and (b) the
information the employees provided under
section 8.06 of this revenue procedure.
(2) Within 30 days of the end of each
calendar year, the payor must provide each
employee covered by a FAVR allowance
during that year with a statement that lists
the amount of depreciation included in
each periodic fixed payment portion of the
FAVR allowance paid during that calendar
year to an automobile owner and explains
that by receiving a FAVR allowance the
employee has elected to exclude the au-
tomobile from the Modified Accelerated
Cost Recovery System under § 168(f)(1).
2009–51 I.R.B.934December 21, 2009

For automobile lessees, the statement
must explain that by receiving the FAVR
allowance the employee may not compute
the deductible business expenses of the
automobile using actual expenses for the
lease period.
.08Failure to meet section 8 require-
ments. If an employee receives a mileage
allowance that fails to meet one or more
of the requirements of this section 8, the
employee may not be treated as covered
by any FAVR allowance of the payor dur-
ing the period of the failure. Neverthe-
less, the expenses to which that mileage
allowance relates may be deemed substan-
tiated using the method described in sec-
tions 5, 9.01(1), and 9.02 of this revenue
procedure to the extent the requirements of
those sections are met.
SECTION 9. APPLICATION
.01 If a payor pays a mileage allowance
in lieu of reimbursing actual transportation
expenses an employee incurs or may incur,
the amount of the expenses that is deemed
substantiated to the payor is either:
(1) For any mileage allowance other
than a FAVR allowance, the lesser of the
amount paid under the mileage allowance
or the applicable standard mileage rate
in section 5.01 of this revenue procedure
multiplied by the number of business miles
the employee substantiates; or
(2) For a FAVR allowance, the amount
paid under the FAVR allowance less the
sum of (a) any periodic variable rate pay-
ment that relates to miles in excess of the
business miles the employee substantiates
and that the employee fails to return to
the payor although required to do so, (b)
any portion of a periodic fixed payment
that relates to a period during which the
employee is treated as not covered by the
FAVR allowance and that the employee
fails to return to the payor although re-
quired to do so, and (c) any optional high
mileage payments.
.02 If the amount of transportation ex-
penses is deemed substantiated under the
rulesprovidedinsection9.01ofthisrev-
enue procedure, and the employee actually
substantiates to the payor the elements of
time, place (or use), and business purpose
of the transportation expenses in accor-
dance with paragraphs (b)(2) (travel away
from home) and (b)(6) (listed property,
which includes passenger automobiles and
any other property used as a means of
transportation) of § 1.274–5T, and para-
graph (c) of § 1.274–5, the employee is
deemed to satisfy the adequate account-
ing requirements of § 1.274–5(f) as well
as the requirement to substantiate by ade-
quate records or other sufficient evidence
for purposes of § 1.274–5(c).
.03 An arrangement providing mileage
allowances will be treated as satisfying the
requirement of § 1.62–2(f)(2) on returning
amounts in excess of expenses as follows:
(1) For a mileage allowance (other
than a FAVR allowance) paid only at a
cents-per-mile rate, the requirement to
return excess amounts is treated as satis-
fied if the employee is required to return
within a reasonable period of time (as de-
fined in § 1.62–2(g)) any portion of the
allowance that relates to miles of travel
not substantiated by the employee, even
though the arrangement does not require
theemployeetoreturntheportionofthe
allowance that relates to the miles of travel
substantiated and that exceeds the amount
of the employee’s expenses deemed sub-
stantiated. For example, assume a payor
provides an employee an advance mileage
allowance of $120.00 based on an antic-
ipated 200 business miles at 60 cents per
mile (at a time when the business standard
mileage rate is 50 cents per mile), and
the employee substantiates 120 business
miles. The requirement to return excess
amounts is treated as satisfied if the em-
ployee is required to return the portion
of the allowance that relates to the 80
unsubstantiated business miles ($40.00)
even though the employee is not required
to return the portion of the allowance
($12.00) that exceeds the amount of the
employee’s expenses deemed substanti-
ated under section 9.01 of this revenue
procedure ($60.00) for the 120 substanti-
ated business miles. However, the $12.00
excess portion of the allowance is treated
as paid under a nonaccountable plan as
discussedinsection9.05.
(2) For a mileage allowance (other than
a FAVR allowance) paid other than only
at a cents-per-mile rate, the requirement to
return excess amounts is treated as satis-
fied if the employee is required to return
within a reasonable period of time (as de-
fined in § 1.62–2(g)) any portion of the
allowance that exceeds the product of the
standard mileage rate and the number of
miles of travel the employee substantiates.
For example, assume a payor provides an
employee an advance mileage allowance
of $400 per month plus 20 cents per mile
based on an anticipated 2000 miles for a
total of $800 (at a time when the business
standard mileage rate is 50 cents per mile),
and the employee substantiates 1000 busi-
ness miles. The requirement to return ex-
cess amounts is treated as satisfied if the
employee is required to return $300, the
portion of the allowance that exceeds the
product of the standard mileage rate and
the miles substantiated ($500).
(3) For a FAVR allowance, the require-
ment to return excess amounts is treated as
satisfied if the employee is required to re-
turn, within a reasonable period of time (as
defined in § 1.62–2(g)), (a) the portion (if
any) of the periodic variable payment re-
ceived that relates to miles in excess of the
business miles the employee substantiates,
and (b) the portion (if any) of a periodic
fixed payment that relates to a period dur-
ing which the employee was not covered
by the FAVR allowance.
.04 An employee is not required to
include in gross income the portion of a
mileage allowance received from a payor
that is less than or equal to the amount
deemed substantiated under section 9.01
of this revenue procedure, provided the
employee substantiates in accordance with
section 9.02.See§ 1.274–5T(f)(2)(i).
Assuming that the remaining require-
ments for an accountable plan provided
in § 1.62–2 are satisfied, that portion of
the allowance is treated as paid under an
accountable plan, is not reported as wages
or other compensation on the employee’s
Form W–2, and is exempt from withhold-
ing and payment of employment taxes.
See§ 1.62–2(c)(2) and (c)(4).
.05Anemployeeisrequiredtoinclude
in gross income the portion of a mileage
allowance received from a payor that ex-
ceeds the amount deemed substantiated
under section 9.01 of this revenue proce-
dure.See§ 1.274–5T(f)(2)(ii). In addi-
tion, the excess portion of the allowance
is treated as paid under a nonaccountable
plan, is reported as wages or other compen-
sation on the employee’s Form W–2, and
is subject to withholding and payment of
employment taxes.See§ 1.62–2(c)(3)(ii),
(c)(5), and (h)(2)(i)(B).
.06 If an employee’s substantiated ex-
penses are less than the employee’s actual
expenses, the following rules apply:
December 21, 20099352009–51 I.R.B.

(1) Except as otherwise provided in
section 9.06(2) of this revenue procedure
on leased automobiles, if the amount of
the expenses deemed substantiated under
the rules provided in section 9.01 of this
revenue procedure is less than the amount
of the employee’s business transporta-
tion expenses, the employee may claim
an itemized deduction for the amount
by which the business transportation ex-
penses exceed the amount that is deemed
substantiated, provided the employee sub-
stantiates all the business transportation
expenses (not just the excess over the
business standard mileage rate), includes
on Form 2106,Employee Business Ex-
penses, the deemed substantiated portion
of the mileage allowance received from
the payor, and includes in gross income
the portion (if any) of the mileage al-
lowance received from the payor that
exceeds the amount deemed substantiated.
See§ 1.274–5T(f)(2)(iii). However, for
purposes of claiming this itemized de-
duction, the employee is not required to
substantiate the amount of the expenses
if the employee is claiming a deduction
that is equal to or less than the applicable
standard mileage rate multiplied by the
number of business miles the employee
substantiated minus the amount deemed
substantiated under section 9.01 of this
revenue procedure. The itemized deduc-
tion is subject to the 2-percent floor on
miscellaneous itemized deductions in § 67.
(2) An employee whose business trans-
portation expenses for a leased automobile
are deemed substantiated under section
9.01(1) of this revenue procedure (relating
to an allowance other than a FAVR al-
lowance) may not claim a deduction based
on actual expenses under section 9.06(1)
unless the employee does so consistently
beginning with the first business use of
the automobile after December 31, 1997.
An employee whose business transporta-
tion expenses for a leased automobile
are deemed substantiated under section
9.01(2) of this revenue procedure (relating
to a FAVR allowance) may not claim a
deduction based on actual expenses.
.07 An employee may deduct an
amount computed under section 5.01 of
this revenue procedure only as an item-
ized deduction. This itemized deduction
is subject to the 2-percent floor on miscel-
laneous itemized deductions in § 67.
.08 A self-employed individual may
deduct an amount computed under sec-
tion 5.01 of this revenue procedure in
determining adjusted gross income under
§ 62(a)(1).
SECTION 10. WITHHOLDING AND
PAYMENT OF EMPLOYMENT TAXES
.01 The portion of a mileage allowance
(other than a FAVR allowance), if any,
that relates to the miles of business travel
substantiated and that exceeds the amount
deemed substantiated for those miles un-
der section 9.01(1) of this revenue pro-
cedure is treated as paid under a nonac-
countable plan and is subject to withhold-
ing and payment of employment taxes.See
§ 1.62–2(h)(2)(i)(B).
(1) In the case of a mileage allowance
paid as a reimbursement, the excess de-
scribed in section 10.01 of this revenue
procedure is subject to withholding and
payment of employment taxes in the pay-
roll period in which a payor reimburses the
expenses for the business miles substanti-
ated.See§ 1.62–2(h)(2)(i)(B)(2).
(2) In the case of a mileage allowance
paid as an advance, the excess described
in section 10.01 of this revenue proce-
dure is subject to withholding and pay-
ment of employment taxes no later than
the first payroll period following the pay-
roll period in which the business miles for
which the advance was paid are substan-
tiated.See§ 1.62–2(h)(2)(i)(B)(3). If
some or all of the business miles for which
the advance was paid are not substantiated
within a reasonable period of time and the
employee does not return the portion of the
allowance that relates to those miles within
a reasonable period of time, the portion of
the allowance that relates to those miles is
subject to withholding and payment of em-
ployment taxes no later than the first pay-
roll period following the end of the reason-
able period.See§ 1.62–2(h)(2)(i)(A).
(3) In the case of a mileage allowance
that is not computed on the basis of a
fixed amount per mile of travel (for ex-
ample, a mileage allowance that combines
periodic fixed and variable rate payments,
but that does not satisfy the requirements
of section 8 of this revenue procedure),
the payor must compute periodically (no
less frequently than quarterly) the amount,
if any, that exceeds the amount deemed
substantiated under section 9.01(1) of this
revenue procedure by comparing the total
mileage allowance paid for the period to
the standard mileage rate in section 5.01
of this revenue procedure multiplied by the
number of business miles the employee
substantiated for the period. Any excess
is subject to withholding and payment of
employment taxes no later than the first
payroll period following the payroll pe-
riod in which the excess is computed.See
§ 1.62–2(h)(2)(i)(B)(4).
(4) For example, assume a payor pro-
vides employees a mileage allowance un-
der an arrangement that otherwise meets
the requirements of an accountable plan
at a rate of 60 cents per mile (when the
business standard mileage rate is 50 cents
per mile). The payor does not require
the return of the portion of the allowance
that exceeds the business standard mileage
rate for the business miles substantiated
(10 cents). In June, the payor advances
an employee $300.00 for 500 miles to be
traveled during the month. In July, the
employee substantiates to the payor 400
business miles traveled in June and returns
$60.00 to the payor for the 100 business
miles not traveled. The amount deemed
substantiated for the 400 miles traveled is
$200.00 and the employee is not required
to return $40.00. No later than the first
payroll period following the payroll period
in which the 400 business miles traveled
are substantiated, the payor must withhold
and pay employment taxes on $40.00.
.02 The portion of a FAVR allowance,
if any, that exceeds the amount deemed
substantiated for those miles under section
9.01(2) of this revenue procedure is sub-
ject to withholding and payment of em-
ployment taxes.See§ 1.62–2(h)(2)(i)(B).
(1) Any periodic variable rate payment
that relates to miles in excess of the busi-
ness miles an employee substantiates and
that the employee fails to return within a
reasonable period, or any portion of a pe-
riodic fixed payment that relates to a pe-
riod during which the employee is treated
as not covered by the FAVR allowance and
that the employee fails to return within a
reasonable period, is subject to withhold-
ing and payment of employment taxes no
later than the first payroll period follow-
ing the end of the reasonable period.See
§ 1.62–2(h)(2)(i)(A).
(2) Any optional high mileage payment
is subject to withholding and payment of
employment taxes when paid.
2009–51 I.R.B.936December 21, 2009

.03 All payments to an employee un-
der a mileage allowance are treated as
paid under a nonaccountable plan if the
arrangement evidences a pattern of abuse.
An arrangement evidences a pattern of
abuse if, for example, it has no process to
determine when an allowance exceeds the
amount that may be deemed substantiated
and the arrangement routinely pays al-
lowances in excess of the amount that may
be deemed substantiated without (1) re-
quiring actual substantiation or repayment
of the excess amount, or (2) treating the ex-
cess allowances as wages for employment
tax purposes. See § 62(c), § 1.62–2(k),
and Rev. Rul. 2006–56, 2006–2 C.B. 874.
Thus, these payments are included in the
employee’s gross income, are reported
as wages or other compensation on the
employee’s Form W–2, and are subject to
withholding and payment of employment
taxes. See §§ 1.62–2(c)(3), (c)(5), and
(h)(2).
SECTION 11. EFFECTIVE DATE
This revenue procedure is effective
for (1) deductible transportation expenses
paid or incurred on or after January 1,
2010, and (2) mileage allowances or re-
imbursements paid to an employee or
to a charitable volunteer (a) on or after
January 1, 2010, and (b) for transporta-
tion expenses the employee or charita-
ble volunteer pays or incurs on or after
January 1, 2010.
SECTION 12. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2008–72 is superseded.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Bernard P. Harvey of the Of-
fice of Associate Chief Counsel (Income
Tax and Accounting). For further infor-
mation regarding this revenue procedure,
contact Mr. Harvey at (202) 622–4930
(not a toll-free call).
December 21, 20099372009–51 I.R.B.

Part IV. Items o
fGeneralInterest
Temporary Clo
sing of the
Determinatio
nLetterProgram
for Adopters o
fPre-Approved
Defined Bene
fit Plans
Announcemen
t 2009–85
On February 2
2, 2010, the Service will
temporarily
stop accepting applications for
determinat
ion letters for defined benefit
plans that a
re filed on Form 5307,Appli-
cation for D
etermination for Adopters of
Master or Pr
ototype or Volume Submit-
ter Plansf
or the GUST
1
program. The
Service is
taking this action because all
pre-appro
ved (i.e., master and prototype
and volume
submitter) defined benefit
plans are r
equiredtoberestatedtocomply
with item
s identified for review in Notice
2007–3, 2
007–1 C.B. 255 (“2006 Cu-
mulative
List”), including the Economic
Growth an
d Tax Relief Reconciliation Act
of 2001,
Pub. L. 107–16, (“EGTRRA”)
(with te
chnical corrections made by the
Job Crea
tion and Worker Assistance Act
of 2002 (
JCWAA), Pub. L. 104–147),
the Pens
ion Funding Equity Act of 2004
(PFEA)
, Pub. L. 108–218, the American
Jobs Cr
eation Act of 2004 (AJCA),
Pub. L.
108–357, the Gulf Opportunity
Zone Ac
t of 2005 (GOZA), Pub. L.
109–13
5, and certain law changes under
the Pe
nsion Protection Act of 2006
(PPA ’
06), Pub. L. 109–280 (“restated
pre-a
pproved plans”). These restated
pre-a
pproved plans will be submitted to
the Se
rvice for a determination letter (if
need
ed) using Form 5307 during a period
of ap
proximately two years, which the
Serv
ice expects to announce early in 2010.
The t
emporary hiatus in accepting Form
5307
applications will allow the Service
to pr
epare to receive the applications
sub
mitted by adopters of these restated
pre
-approved plans.
Rev
. Proc. 2007–44, 2007–2 C.B. 54,
and
Rev. Proc. 2005–16, 2005–1 C.B.
674
, describe a staggered remedial amend-
men
t system for plans that are qualified un-
der
§ 401(a) of the Internal Revenue Code,
with five-yea
r amendment/approval cycles
for individua
lly designed plans and six-
year cycles fo
r pre-approved plans. The
submission pe
riod for the initial six-year
cycle for spon
sors and practitioners main-
taining pre-
approved defined benefit plans
ran from Febr
uary 1, 2007 to January 31,
2008. Sponso
rs and practitioners were
requiredtor
estate their pre-approved de-
fined benef
it plans for EGTRRA and other
changes in p
lan qualification requirements
described i
n the 2006 Cumulative List, and
apply for ne
w opinion and advisory let-
ters durin
gthissubmissionperiod. As
provided i
n Rev. Proc. 2007–44, when
the review
of the pre-approved defined
benefit pl
ans is near completion, the Ser-
vice will p
ublish an announcement provid-
ing the da
te by which adopting employers
must adop
t the newly approved plans. This
date will
also be the deadline for adopting
employer
s to file Form 5307 determination
letter a
pplications for their restated pre-ap-
proved d
efined benefit plans. The Service
expects
to publish this announcement early
in 2010 a
nd anticipates that adopting em-
ployers
will have approximately two years
to adop
t the restated plans and request de-
termin
ation letters.
In orde
r to prepare to receive the Form
5307 ap
plications for the restated defined
benefi
t plans that will be filed starting in
2010, t
he Service will temporarily stop
accept
ing determination letter applications
for de
fined benefit plans filed on Form
5307,
beginning February 22, 2010. The
Servi
ce will continue to process determi-
natio
n letter applications for defined ben-
efit p
lans filed on Form 5307 before Feb-
ruar
y 22, 2010, provided the plan has a fa-
vora
ble GUST opinion or advisory letter.
Any d
etermination letter application for a
defi
ned benefit plan filed on Form 5307
post
marked on or after February 22, 2010
and b
efore the opening of the period of ap-
pro
ximately two years for adopting the re-
sta
ted pre-approved defined benefit plans
wil
l be returned to the applicant.
Thi
s announcement does not affect the
abi
lity of adopting employers to apply for
determinatio
n letters on Form 5307 for
pre-approved
defined contribution plans.
See Announcem
ent 2008–23, 2008–1 C.B.
731. This anno
uncement also does not af-
fect the abili
ty of adopting employers of
pre-approve
d plans (whether defined ben-
efit or defin
ed contribution) to apply on
Form 5307 for
a determination letter for
plan amendme
nts related to a voluntary
correction
program (VCP) submission or
as required
under the correction on audit
program (Au
dit CAP), under the proce-
dures descr
ibed in Rev. Proc. 2008–50,
2008–35 I.
R.B. 464.
Announcement of Disciplinary
Sanctions From the Office of
Professional Responsibility
Announcement 2009–87
The Off
ice of Professional Responsi-
bility
(OPR) announces recent disciplinary
sancti
ons involving attorneys, certified
public
accountants, enrolled agents, en-
rolle
d actuaries, enrolled retirement plan
agent
s, and appraisers. These individuals
are su
bject to the regulations governing
pract
ice before the Internal Revenue Ser-
vice (
IRS), which are set out in Title 31,
Code o
f Federal Regulations, Part 10, and
whic
h are published in pamphlet form as
Trea
sury Department Circular No. 230.
The r
egulations prescribe the duties and
rest
rictions relating to such practice and
pres
cribe the disciplinary sanctions for
vio
lating the regulations.
The d
isciplinary sanctions to be im-
pos
ed for violation of the regulations are:
Disb
arred from practice before the
IRS
—An individual who is disbarred is
not
eligible to represent taxpayers before
the
IRS.
Sus
pended from practice before the
IRS
—An individual who is suspended is
not
eligible to represent taxpayers before
the
IRS during the term of the suspension.
Cen
sured in practice before the
IRS
—Censure is a public reprimand. Un-
1
The term “GUST” refers to the following:
•the Uruguay Round Agreements Act, Pub. L. 103–465;
•the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103–353;
•the Small Business Job Protection Act of 1996, Pub. L. 104–188;
•the Taxpayer Relief Act of 1997, Pub. L. 105–34;
•the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105–206; and
•the Community Renewal Tax Relief Act of 2000, Pub. L. 106–554.
2009–51 I.R.B.938December 21, 2009

like disbarment or suspension, censure
does not affect an individual’s eligibility
to represent taxpayers before the IRS, but
OPR may subject the individual’s future
representations to conditions designed to
promote high standards of conduct.
Monetary penalty—A monetary
penalty may be imposed on an individual
who engages in conduct subject to sanc-
tion or on an employer, firm, or entity
if the individual was acting on its behalf
and if it knew, or reasonably should have
known, of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in
any administrative proceeding before the
Department of the Treasury or the IRS.
Under the regulations, attorneys, cer-
tified public accountants, enrolled agents,
enrolled actuaries, and enrolled retirement
plan agents may not assist, or accept assis-
tance from, individuals who are suspended
or disbarred with respect to matters consti-
tuting practice (i.e., representation) before
the IRS, and they may not aid or abet sus-
pended or disbarred individuals to practice
before the IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision after hearing,
Suspended by decision after hearing,
Censured by decision after hearing,
Monetary penalty imposed after hear-
ing, and Disqualified after hearing—An
administrative law judge (ALJ) conducted
an evidentiary hearing upon OPR’s com-
plaint alleging violation of the regulations
and issued a decision imposing one of
these sanctions. After 30 days from the
issuance of the decision, in the absence of
an appeal, the ALJ’s decision became the
final agency decision.
Disbarred by default decision, Sus-
pended by default decision, Censured by
default decision, Monetary penalty im-
posed by default decision, and Disqual-
ified by default decision—An ALJ, after
findingthatnoanswertoOPR’scomplaint
had been filed, granted OPR’s motion for a
default judgment and issued a decision im-
posing one of these sanctions.
Disbarment by decision on appeal,
Suspended by decision on appeal, Cen-
sured by decision on appeal, Monetary
penalty imposed by decision on ap-
peal, and Disqualified by decision on
appeal—The decision of the ALJ was
appealed to the agency appeal authority,
acting as the delegate of the Secretary
of the Treasury, and the appeal authority
issued a decision imposing one of these
sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Mone-
tary penalty imposed by consent, and
Disqualified by consent—In lieu of a
disciplinary proceeding being instituted
or continued, an individual offered a con-
sent to one of these sanctions and OPR
accepted the offer. Typically, an offer
of consent will provide for: suspension
for an indefinite term; conditions that the
individual must observe during the sus-
pension; and the individual’s opportunity,
after a stated number of months, to file
with OPR a petition for reinstatement af-
firming compliance with the terms of the
consent and affirming current eligibility
to practice (i.e., an active professional
license or active enrollment status). An
enrolled agent or an enrolled retirement
plan agent may also offer to resign in order
to avoid a disciplinary proceeding.
Suspended by decision in expedited
proceeding, Suspended by default de-
cision in expedited proceeding, Sus-
pended by consent in expedited pro-
ceeding—OPR instituted an expedited
proceeding for suspension (based on cer-
tain limited grounds, including loss of a
professional license and criminal convic-
tions).
OPR has authority to disclose the
grounds for disciplinary sanctions in these
situations: (1) an ALJ or the Secretary’s
delegate on appeal has issued a decision
on or after September 26, 2007, which was
theeffectivedateofamendmentstothe
regulations that permit making such deci-
sions publicly available; (2) the individual
has settled a disciplinary case by signing
OPR’s “consent to sanction” form, which
requires consenting individuals to admit to
one or more violations of the regulations
and to consent to the disclosure of the in-
dividual’s own return information related
to the admitted violations (for example,
failure to file Federal income tax returns);
or (3) OPR has issued a decision in an
expedited proceeding for suspension.
Announcements of disciplinary sanc-
tions appear in the Internal Revenue Bul-
letin at the earliest practicable date. The
sanctions announced below are alphabet-
ized first by the names of states and sec-
ond by the last names of individuals. Un-
less otherwise indicated, section numbers
(e.g., §10.51) refer to the regulations.
City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Arizona
MesaJackson, Jeff C.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(attorney disbarment)
Indefinite from
November 24,
2009
December 21, 20099392009–51 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Iowa
BettendorfWilliamson, Kyle D.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(conviction under
18 U.S.C. § 1344,
bank fraud; 18 U.S.C.
§ 1028(a)(1), aggravated
identity theft; and 18
U.S.C. § 513(a), forged
securities)
Indefinite from
December 1, 2009
California
Beverly HillsJason, Robert M.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
Indefinite from
December 1, 2009
Colorado
LakewoodBidwell, Larry C.Enrolled AgentSuspended by ALJ default
decision for violation of
§ 10.51 (willfully failing
to timely file, or willfully
failing to file a personal
Federal income tax return)
Indefinite from
August 17, 2009
Georgia
DahlonegaPowell, Jr., George E.AttorneySuspended by decision
in expedited proceeding
under § 10.82 (suspension
of attorney license)
Indefinite from
December 1, 2009
Illinois
NorthbrookSolovy, Dean E.Attorney/CPADisbarred by ALJ default
decision for violation of
§ 10.51 (willfully failing
to timely file, or willfully
failing to file a personal
Federal income tax return)
Indefinite from
July 14 , 2009
Indiana
GaryHolland, III, Robert M. AttorneySuspended by decision
in expedited proceeding
under § 10.82 (suspension
of attorney license)
Indefinite from
November 23,
2009
EvansvillePerry, Teresa L.AttorneySuspended by default
decision in expedited
proceeding under § 10.82
(suspension of attorney
license)
Indefinite from
November 24,
2009
2009–51 I.R.B.940December 21, 2009

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
New Jersey
Cherry HillSinko, MichaelAttorneySuspended by default
decision in expedited
proceeding under § 10.82
(conviction under
18 U.S.C. § 1956(h),
money laundering
conspiracy; 18 U.S.C.
§ 1953(a)3)(B), money
laundering)
Indefinite from
November 13,
2009
New York
Long BeachFeerst, Barry R.AttorneySuspended by decision
in expedited proceeding
under § 10.82 (conviction
under 18 U.S.C. § 371,
conspiracy to defraud the
united states)
Indefinite from
November 12,
2009
South SetauketRosner, Robert J.CPASuspended by default
decision in expedited
proceeding under
§ 10.82 (conviction under
18 U.S.C. § 201(c)(1)(B),
bribery of a public
official)
Indefinite from
November 13,
2009
Pennsylvania
Lock HavenCoploff, LarryAttorneyDisbarred by ALJ default
decision for violation of
§ 10.51 (willfully failing
to timely file, or willfully
failing to file a personal
Federal income tax return)
Indefinite from
September 9, 2009
Virginia
FairfaxHoang, John T.CPASuspended by decision in
expedited proceeding
under § 10.82
(permanently enjoined
by U.S. district court from
representing taxpayers
under examination and
from other tax-related
activities)
Indefinite from
October 21, 2009
December 21, 20099412009–51 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2009–51 I.R.B.iDecember 21, 2009

Numerical Finding List
1
Bulletins 2009–27 through 2009–51
Announcements:
2009-56, 2009-28 I.R.B.145
2009-57, 2009-29 I.R.B.158
2009-58, 2009-29 I.R.B.158
2009-59, 2009-29 I.R.B.158
2009-60, 2009-30 I.R.B.166
2009-61, 2009-33 I.R.B.246
2009-62, 2009-33 I.R.B.247
2009-63, 2009-33 I.R.B.248
2009-64, 2009-36 I.R.B.319
2009-65, 2009-36 I.R.B.319
2009-66, 2009-37 I.R.B.364
2009-67, 2009-38 I.R.B.388
2009-68, 2009-38 I.R.B.388
2009-69, 2009-40 I.R.B.475
2009-70, 2009-41 I.R.B.499
2009-71, 2009-40 I.R.B.475
2009-72, 2009-41 I.R.B.500
2009-73, 2009-41 I.R.B.500
2009-74, 2009-42 I.R.B.537
2009-75, 2009-42 I.R.B.537
2009-76, 2009-45 I.R.B.627
2009-77, 2009-43 I.R.B.567
2009-78, 2009-44 I.R.B.594
2009-79, 2009-46 I.R.B.628
2009-80, 2009-46 I.R.B.646
2009-81, 2009-46 I.R.B.647
2009-82, 2009-48 I.R.B.720
2009-83, 2009-46 I.R.B.647
2009-84, 2009-47 I.R.B.683
2009-85, 2009-51 I.R.B.938
2009-86, 2009-49 I.R.B.759
2009-87, 2009-51 I.R.B.938
Notices:
2009-51, 2009-28 I.R.B.128
2009-55, 2009-31 I.R.B.170
2009-57, 2009-29 I.R.B.147
2009-58, 2009-30 I.R.B.163
2009-59, 2009-31 I.R.B.170
2009-60, 2009-32 I.R.B.181
2009-61, 2009-32 I.R.B.181
2009-62, 2009-35 I.R.B.260
2009-63, 2009-34 I.R.B.252
2009-64, 2009-36 I.R.B.307
2009-65, 2009-39 I.R.B.413
2009-66, 2009-39 I.R.B.418
2009-67, 2009-39 I.R.B.420
2009-68, 2009-39 I.R.B.423
2009-69, 2009-35 I.R.B.261
2009-70, 2009-34 I.R.B.255
2009-71, 2009-35 I.R.B.262
Notices— Continued:
2009-72, 2009-37 I.R.B.325
2009-73, 2009-38 I.R.B.369
2009-74, 2009-38 I.R.B.370
2009-75, 2009-39 I.R.B.436
2009-76, 2009-43 I.R.B.554
2009-77, 2009-40 I.R.B.449
2009-78, 2009-40 I.R.B.452
2009-79, 2009-40 I.R.B.454
2009-80, 2009-51 I.R.B.859
2009-81, 2009-40 I.R.B.455
2009-82, 2009-41 I.R.B.491
2009-83, 2009-44 I.R.B.588
2009-84, 2009-44 I.R.B.592
2009-85, 2009-45 I.R.B.598
2009-86, 2009-46 I.R.B.629
2009-87, 2009-46 I.R.B.630
2009-88, 2009-47 I.R.B.654
2009-89, 2009-48 I.R.B.714
2009-90, 2009-51 I.R.B.859
2009-91, 2009-48 I.R.B.717
2009-93, 2009-51 I.R.B.863
2009-94, 2009-50 I.R.B.848
Proposed Regulations:
REG-140492-02, 2009-43 I.R.B.559
REG-159704-03, 2009-46 I.R.B.632
REG-160871-04, 2009-47 I.R.B.657
REG-152166-05, 2009-32 I.R.B.183
REG-112994-06, 2009-28 I.R.B.144
REG-127270-06, 2009-42 I.R.B.534
REG-155929-06, 2009-47 I.R.B.665
REG-135005-07, 2009-47 I.R.B.681
REG-136563-07, 2009-41 I.R.B.497
REG-108045-08, 2009-43 I.R.B.557
REG-113289-08, 2009-33 I.R.B.244
REG-116614-08, 2009-42 I.R.B.536
REG-123829-08, 2009-48 I.R.B.719
REG-130200-08, 2009-31 I.R.B.174
REG-139068-08, 2009-43 I.R.B.558
REG-139255-08, 2009-49 I.R.B.747
Revenue Procedures:
2009-30, 2009-27 I.R.B.27
2009-31, 2009-27 I.R.B.107
2009-32, 2009-28 I.R.B.142
2009-33, 2009-29 I.R.B.150
2009-34, 2009-34 I.R.B.258
2009-35, 2009-35 I.R.B.265
2009-36, 2009-35 I.R.B.304
2009-37, 2009-36 I.R.B.309
2009-38, 2009-37 I.R.B.362
2009-39, 2009-38 I.R.B.371
2009-40, 2009-39 I.R.B.438
2009-41, 2009-39 I.R.B.439
2009-42, 2009-40 I.R.B.459
Revenue Procedures— Continued:
2009-43, 2009-40 I.R.B.460
2009-44, 2009-40 I.R.B.462
2009-45, 2009-40 I.R.B.471
2009-46, 2009-42 I.R.B.507
2009-47, 2009-42 I.R.B.524
2009-48, 2009-51 I.R.B.864
2009-49, 2009-51 I.R.B.879
2009-50, 2009-45 I.R.B.617
2009-51, 2009-45 I.R.B.625
2009-52, 2009-49 I.R.B.744
2009-53, 2009-49 I.R.B.746
2009-54, 2009-51 I.R.B.930
Revenue Rulings:
2009-18, 2009-27 I.R.B.1
2009-19, 2009-28 I.R.B.111
2009-20, 2009-28 I.R.B.112
2009-21, 2009-30 I.R.B.162
2009-22, 2009-31 I.R.B.167
2009-23, 2009-32 I.R.B.177
2009-24, 2009-36 I.R.B.306
2009-25, 2009-38 I.R.B.365
2009-26, 2009-38 I.R.B.366
2009-27, 2009-39 I.R.B.404
2009-28, 2009-39 I.R.B.391
2009-29, 2009-37 I.R.B.322
2009-30, 2009-39 I.R.B.391
2009-31, 2009-39 I.R.B.395
2009-32, 2009-39 I.R.B.398
2009-33, 2009-40 I.R.B.447
2009-34, 2009-42 I.R.B.502
2009-35, 2009-44 I.R.B.568
2009-36, 2009-47 I.R.B.650
2009-38, 2009-49 I.R.B.736
Tax Conventions:
2009-79, 2009-46 I.R.B.628
Treasury Decisions:
9452, 2009-27 I.R.B.1
9453, 2009-28 I.R.B.114
9454, 2009-32 I.R.B.178
9455, 2009-33 I.R.B.239
9456, 2009-33 I.R.B.188
9457, 2009-41 I.R.B.482
9458, 2009-43 I.R.B.547
9459, 2009-41 I.R.B.480
9460, 2009-44 I.R.B.584
9461, 2009-41 I.R.B.488
9462, 2009-42 I.R.B.504
9463, 2009-40 I.R.B.442
9464, 2009-48 I.R.B.692
9465, 2009-43 I.R.B.542
9466, 2009-43 I.R.B.551
9467, 2009-50 I.R.B.760
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2009–1 through 2009–26 is in Internal Revenue Bulletin
2009–26, dated June 29, 2009.
December 21, 2009ii2009–51 I.R.B.

Treasury Decisions— Continued:
9468, 2009-44 I.R.B.570
9469, 2009-48 I.R.B.687
9470, 2009-49 I.R.B.738
9471, 2009-49 I.R.B.722
9472, 2009-51 I.R.B.850
2009–51 I.R.B.iiiDecember 21, 2009

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2009–27 through 2009–51
Announcements:
2006-93
Superseded by
Ann. 2009-62, 2009-33 I.R.B.247
Notices:
2002-3
Modified and superseded by
Notice 2009-68, 2009-39 I.R.B.423
2004-67
Supplemented and superseded by
Notice 2009-59, 2009-31 I.R.B.170
2005-76
Modified by
Notice 2009-91, 2009-48 I.R.B.717
2006-70
Obsoleted by
T.D. 9453, 2009-28 I.R.B.114
2006-109
Superseded in part by
Rev. Proc. 2009-32, 2009-28 I.R.B.142
2007-7
Modified by
Notice 2009-82, 2009-41 I.R.B.491
2008-30
Amplified and clarified by
Notice 2009-75, 2009-39 I.R.B.436
2008-43
Obsoleted by
REG-113289-08, 2009-33 I.R.B.244
2009-28
Clarified by
Notice 2009-69, 2009-35 I.R.B.261
2009-31
Amplified by
Rev. Proc. 2009-43, 2009-40 I.R.B.460
2009-42
Amplified by
Rev. Proc. 2009-43, 2009-40 I.R.B.460
2009-54
Amplified by
Notice 2009-89, 2009-48 I.R.B.714
2009-58
Amplified by
Notice 2009-89, 2009-48 I.R.B.714
Proposed Regulations:
REG-130200-08
Hearing cancelled by
Ann. 2009-81, 2009-46 I.R.B.647
Revenue Procedures:
97-27
Clarified and modified by
Rev. Proc. 2009-39, 2009-38 I.R.B.371
97-49
Modified and superseded by
Rev. Proc. 2009-31, 2009-27 I.R.B.107
2002-44
Superseded by
Rev. Proc. 2009-44, 2009-40 I.R.B.462
2002-59
Superseded by
Rev. Proc. 2009-41, 2009-39 I.R.B.439
2005-63
Modified by
Rev. Proc. 2009-39, 2009-38 I.R.B.371
2006-19
Superseded by
Rev. Proc. 2009-48, 2009-51 I.R.B.864
2006-30
Modified by
Rev. Proc. 2009-53, 2009-49 I.R.B.746
2007-44
Modified by
Rev. Proc. 2009-36, 2009-35 I.R.B.304
2007-65
Modified by
Ann. 2009-69, 2009-40 I.R.B.475
2008-34
Superseded by
Rev. Proc. 2009-46, 2009-42 I.R.B.507
2008-36
Superseded by
Rev. Proc. 2009-49, 2009-51 I.R.B.879
2008-38
Superseded by
Rev. Proc. 2009-30, 2009-27 I.R.B.27
2008-44
Superseded by
Rev. Proc. 2009-35, 2009-35 I.R.B.265
2008-52
Amplified, clarified, and modified by
Rev. Proc. 2009-39, 2009-38 I.R.B.371
2008-59
Superseded by
Rev. Proc. 2009-47, 2009-42 I.R.B.524
Revenue Procedures— Continued:
2008-65
Modified by
Rev. Proc. 2009-33, 2009-29 I.R.B.150
2008-72
Superseded by
Rev. Proc. 2009-54, 2009-51 I.R.B.930
2009-16
Modified by
Rev. Proc. 2009-33, 2009-29 I.R.B.150
2009-39
Modified by
Ann. 2009-67, 2009-38 I.R.B.388
Revenue Rulings:
74-346
Superseded by
Rev. Rul. 2009-34, 2009-42 I.R.B.502
75-190
Superseded by
Rev. Rul. 2009-34, 2009-42 I.R.B.502
75-398
Superseded by
Rev. Rul. 2009-34, 2009-42 I.R.B.502
75-526
Superseded by
Rev. Rul. 2009-34, 2009-42 I.R.B.502
2009-22
Corrected by
Ann. 2009-74, 2009-42 I.R.B.537
2009-29
Corrected by
Ann. 2009-74, 2009-42 I.R.B.537
Treasury Decisions:
9456
Corrected by
Ann. 2009-73, 2009-41 I.R.B.500
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2009–1 through 2009–26 is in Internal Revenue Bulletin 2009–26, dated June 29, 2009.
December 21, 2009iv2009–51 I.R.B.

2009–51 I.R.B.December 21, 2009

December 21, 20092009–51 I.R.B.

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