Internal Revenue Bulletin 2016-9 (PDF rendition): IRS Announcements

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# INTERNAL REVENUE BULLETIN

IRS

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## INCOME TAX

Rev. Proc. 2016-14, page 365.

This procedure provides the inflation-adjusted items for 2016
pursuant to the enactment of Protecting Americans from Tax
Hikes Act of 2015.

## EMPLOYEE PLANS

### REG-101701-16, page 368.

These proposed regulations would provide guidance on the
application of a limitation under § 432(e)(9)(D)(vii) on a suspen-
sion of benefits under § 432(e)(9) under a multiemployer de-
fined benefit pension plan that includes benefits directly attrib-
utable to a participant's service with any employer that has
withdrawn from the plan, paid its full withdrawal liability, and,
pursuant to a collective bargaining agreement, assumed liabil-
ity for providing benefits to participants and beneficiaries equal
to benefits for such participants and beneficiaries reduced as
a result of the financial status of the plan.

### Notice 2016-18, page 359.

This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for Febru-
ary 2016 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for February 2016, and the 30-year
Treasury rates. These rates reflect the application of
§ 430(h)(2)(C)(iv), which was added by the Moving Ahead for
Progress in the 21st Century Act, Public Law 112-141
(MAP-21) and amended by section 2003 of the Highway and
Transportation Funding Act of 2014 (HATFA).

Bulletin No. 2016-9
February 29, 2016

## EXEMPT ORGANIZATIONS

Announcement 2016-08, page 367.

Serves notice to potential donors of organizations that have
recently filed a timely declaratory judgment suit under section
7428 of the Code, challenging revocation of its status as an
eligible donee under section 170(c)(2).

### Announcement 2016-09, page 367.

Serves notice to potential donors of a stipulated decision by
the United States Tax Court in declaratory judgment proceed-
ings under Section 7428.

### Announcement 2016-10, page 367.

Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).

## ESTATE TAX

### Notice 2016-19, page 362.

This notice provides that statements required under section
6035, regarding the basis of property distributed from the
estate of a decedent, need not be filed or furnished until March
31, 2016, rather than the current February 29, 2016 deadline.
The notice further recommends that executors and other per-
sons who are required to file an estate tax return wait to
prepare the statements required under section 6035 until the
Treasury Department and IRS issue further guidance.

(Continued on the next page)

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## EXCISE TAX

### Notice 2016-17, page 358.

Notice 2016-17 provides schools (colleges and universities)
with temporary transition relief to address compliance with
certain group market reform provisions of the ACA. The guid-
ance in this notice is being issued in substantially identical form
by DOL and HHS in separate guidance. The Treasury Depart-
ment and IRS, and DOL and HHS will not assert that a premium
reduction arrangement fails to satisfy certain group market
reform provisions of the ACA if the arrangement is offered in
connection with other student health coverage (insured or
self-insured) for a plan year or policy year beginning before
January 1, 2017.

## ADMINISTRATIVE

### Notice 2016-20, page 362.

This notice sets forth the maximum face amount of Qualified
Zone Academy Bonds that may be issued for each State for the
calendar years 2015 and 2016. For this purpose, "State"
includes the District of Columbia and the possessions of the
United States.

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## The IRS Mission

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

## Introduction

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

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

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

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

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

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

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

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

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

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

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

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

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

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

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## Part III. Administrative, Procedural, and Miscellaneous

APPLICATION OF THE
MARKET REFORMS AND
OTHER PROVISIONS OF
THE AFFORDABLE CARE
ACT TO STUDENT HEALTH
COVERAGE

Notice 2016-17

### I. PURPOSE AND OVERVIEW

This notice provides guidance on the ap-
plication of certain provisions of the Afford-
able Care Act1 to premium reduction ar-
rangements offered in connection with
student health plans and provides temporary
transition relief from enforcement by the
Departments of the Treasury, Labor, and
Health and Human Services (collectively,
the Departments) in certain circumstances.

On September 13, 2013, the Treasury
Department (Treasury) and the Internal
Revenue Service (IRS) published Notice
2013-54,2 2013-40 IRB 287, addressing
the application of the market reforms to
health reimbursement arrangements and
employer payment plans under the Af-
fordable Care Act. The Department of La-
bor (DOL) contemporaneously published
parallel guidance in Technical Release
2013-033 and the Department of Health
and Human Services (HHS) issued guid-
ance stating that it concurs in the applica-
tion of the laws under its jurisdiction as
set forth in the guidance issued by DOL
and Treasury and IRS.4 Subsequent guid-
ance reiterated and clarified the applica-

tion of the market reforms to employer
payment plans.5 The guidance set out be-
low provides a transition period for the
application of certain market reforms to
certain arrangements offered by an insti-
tution of higher education to its students
that are designed to reduce the cost of
student health coverage (whether insured
or self-insured) through a credit, offset, re-
imbursement, stipend, or similar arrange-
ment (a premium reduction arrangement).

The Departments continue to work to-
gether to develop coordinated regulations
and other administrative guidance to assist
stakeholders with implementation of the Af-
fordable Care Act. The guidance in this no-
tice is being issued in substantially identical
form by DOL and HHS in separate guidance.

## II. BACKGROUND

Under Notice 2013-54 (the 2013 guid-
ance), an employer payment plan (EPP) is a
group health plan under which an employer
reimburses an employee for some or all of
the premium expenses incurred for an indi-
vidual market health insurance policy or di-
rectly pays a premium for an individual
market health insurance policy covering the
employee. EPPs and health reimbursement
arrangements (HRAs) typically consist of a
promise by an employer to reimburse med-
ical expenses up to a certain amount. The
2013 guidance clarifies that such arrange-
ments are subject to the group market re-
form provisions of the Affordable Care Act,
including the prohibition on annual dollar
limits under PHS Act section 2711 and the
requirement to provide certain preventive

services without cost sharing under PHS
Act section 2713. That guidance generally
provides that EPPs and HRAs will fail to
comply with these group market reform re-
quirements because these arrangements, by
their very definition, include dollar limits on
the amount of reimbursements or payments,
and therefore violate the Affordable Care
Act prohibition on annual dollar limits and
the requirement to provide coverage of cer-
tain recommended preventive services with-
out imposing any cost-sharing requirements.

The 2013 guidance further clarified
that such employer health care arrange-
ments will not violate the market reform
provisions when integrated with a group
health plan that otherwise complies with
those provisions. Importantly, however,
the 2013 guidance provided that these em-
ployer health care arrangements cannot be
integrated with individual market policies
to satisfy the market reforms. Conse-
quently, such an arrangement may be sub-
ject to penalties, including excise taxes
under section 4980D of the Code.

On March 21, 2012, HHS published a final
rule (the student health insurance plan or SHIP
rule) establishing requirements for student
health insurance coverage under the PHS Act
and the Affordable Care Act.º The SHIP rule
defines "student health insurance coverage" as
a type of individual market health insurance
coverage that is offered to students and their
dependents under a written agreement be-
tween an institution of higher education (as
that term is defined for purposes of the Higher
Education Act of 1965) and an issuer.7

"The "Affordable Care Act" refers to the Patient Protection and Affordable Care Act (enacted March 23, 2010, Pub. L. No. 111-148), as amended by the Health Care and Education Reconciliation Act of
2010 (enacted March 30, 2010, Pub. L. No. 111-152), and as further amended by the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (enacted April 15, 2011, Pub. L. No. 112-10).
Section 1001 of the Affordable Care Act added new Public Health Service Act (PHS Act) §§ 2711-2719. Section 1563 of the Affordable Care Act (as amended by § 10107(b) of the Affordable Care Act)
added Internal Revenue Code (Code) § 9815(a) and Employee Retirement Income Security Act (ERISA) § 715(a) to incorporate the provisions of part A of title XXVII of the PHS Act into the Code and
ERISA, and to make them applicable to group health plans and health insurance issuers providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by these
references are §§ 2701 through 2728. Accordingly, these referenced PHS Act sections (the market reforms) are subject to shared interpretive jurisdiction by the Departments.

2Notice 2013-54 is available at http://www.irs.gov/pub/irs-drop/n-13-54.pdf.

3Technical Release 2013-03 is available at http://www.dol.gov/ebsa/newsroom/tr13-03.html.

4See Insurance Standards Bulletin, Application of Affordable Care Act Provisions to Certain Healthcare Arrangements, September 16, 2013, available at https://www.cms.gov/CCIIO/
Resources/Regulations-and-Guidance/Downloads/cms-hra-notice-9-16-2013.pdf.

5There have been several prior issuances on the topics addressed in this notice: (1) FAQs About Affordable Care Act Implementation (Part XI), issued on January 24, 2013 by DOL
(http://www.dol.gov/ebsa/faqs/faq-aca11.html) and HHS (http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs11.html); (2) IRS Notice 2013-54 and
DOL Technical Release 2013-03, issued on September 13, 2013; (3) IRS FAQ on Employer Healthcare Arrangements (http://www.irs.gov/Affordable-Care-Act/Employer-Health-Care-
Arrangements). (4) FAQs About Affordable Care Act Implementation (Part XXII), issued on November 6, 2014 by DOL (http://www.dol.gov/ebsa/faqs/faq-aca22.html) and HHS
(http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-XXII-FINAL.pdf); Notice 2015-17, 2015-14 I.R.B. 845, issued by Treasury and IRS on February 18,
2015, and Notice 2015-87, 2015-52 I.R.B. 889, Q&A-1 to Q&A-6, issued by Treasury and IRS on December 16, 2015.

6See 45 CFR 147.145.

7Student health insurance plans are regulated under the Affordable Care Act individual market reforms. See Affordable Care Act sections 1302 and 1201 (incorporating PHS Act section
2701). These requirements have been modified somewhat for student health insurance taking into account Congressional intent as expressed in section 1560 of the Affordable Care Act.

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Many colleges and universities provide
students (typically graduate students) with
student health coverage at greatly reduced
or no cost as part of their student package,
which often includes tuition assistance and a
stipend for living expenses. The student
health coverage can be provided either
through individual health insurance or
through coverage that is self-insured by the
college or university. For these students,
the bill they receive from the school for the
health coverage premium may take into ac-
count a premium reduction arrangement.
Because some of these students also per-
form services for the school (such as teach-
ing or research), the question has been
raised whether such premium reduction ar-
rangements might be employer-sponsored
group health plans, and, as a result, might be
viewed as EPPs that violate market reform
provisions of the Affordable Care Act.
Whether a particular arrangement consti-
tutes a group health plan will depend on all
of the facts and circumstances.

## III. GUIDANCE

In many cases in which a college or
university offers a premium reduction ar-
rangement to its students, the payment
arrangement will not constitute an EPP
under the 2013 guidance. In other cases,
however, such arrangements might meet
the definition of an EPP. The Departments
understand that some schools that have
been offering such premium reduction ar-
rangements might not have recognized at
the time of the 2013 guidance that, in
certain circumstances, the arrangements
might constitute EPPs within the meaning
of the 2013 guidance and, therefore, vio-
late PHS Act sections 2711 and 2713 be-
cause they are not integrated with group
health plan coverage and (as provided in
the 2013 guidance and other guidance)
cannot integrate with individual insurance
coverage. As a result, the Departments
recognize that schools may need addi-
tional time to adopt a suitable alternative
or make other arrangements to come into
compliance. Accordingly, the Depart-
ments will not assert that a premium re-
duction arrangement fails to satisfy PHS
Act section 2711 or 2713 if the arrange-
ment is offered in connection with other

student health coverage (insured or self-
insured) for a plan year or policy year
beginning before January 1, 2017 (there-
fore including, for example, plan years or
policy years that are roughly coterminous
with academic years beginning in the sum-
mer or fall of 2016 and ending in 2017).

## IV. APPLICABILITY DATE AND EFFECT ON OTHER DOCUMENTS

This notice applies for plan years be-
ginning before January 1, 2017. This no-
tice supplements the guidance provided in
Notice 2013-54 and Notice 2015-87,
2015-52 IRB 889.

## V. DRAFTING INFORMATION

This notice was prepared by personnel
at the Health and Welfare Branch, Office
of Associate Chief Counsel (Tax Exempt
and Governmental Entities), Internal Rev-
enue Service, with the development of the
guidance including personnel at the Trea-
sury Department, Department of Labor
and Department of Health and Human
Services. For further information regard-
ing this guidance, contact the Department
of Labor at (202) 693-8335 or the Internal
Revenue Service at (202) 317-5500 (not a
toll-free number).

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

### Notice 2016-18

This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).

## YIELD CURVE AND SEGMENT RATES

Generally, except for certain plans under
sections 104 and 105 of the Pension Protec-
tion Act of 2006 and CSEC plans under
§ 414(y), § 430 of the Code specifies the
minimum funding requirements that apply
to single-employer plans pursuant to § 412.
Section 430(h)(2) specifies the interest rates
that must be used to determine a plan's
target normal cost and funding target. Under
this provision, present value is generally de-
termined using three 24-month average in-
terest rates ("segment rates"), each of which
applies to cash flows during specified peri-
ods. To the extent provided under
§ 430(h)(2)(C)(iv), these segment rates are
adjusted by the applicable percentage of the
25-year average segment rates for the period
ending September 30 of the year preceding
the calendar year in which the plan year
begins.1 However, an election may be made
under § 430(h)(2)(D)(ii) to use the monthly
yield curve in place of the segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and the
24-month average corporate bond segment
rates used to compute the target normal cost
and the funding target. Consistent with the
methodology specified in Notice 2007-81,
the monthly corporate bond yield curve de-
rived from January 2016 data is in Table I at
the end of this notice. The spot first, second,
and third segment rates for the month of
January 2016 are, respectively, 1.78, 4.08,
and 5.02.

The 24-month average segment rates de-
termined under § 430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the applica-
ble minimum and maximum percentages of
the corresponding 25-year average segment
rates. For plan years beginning before 2018,
the applicable minimum percentage is 90%
and the applicable maximum percentage is
110%. The 25-year average segment rates
for plan years beginning in 2014, 2015, and
2016 were published in Notice 2013-58,
2013-40 I.R.B. 294, Notice 2014-50,
2014-40 I.R.B. 590, and Notice 2015-61,
2015-39 I.R.B. 408, respectively.

1Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

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24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES

The three 24-month average corporate
bond segment rates applicable for Febru-

ary 2016 without adjustment for the 25-
year average segment rate limits are as
follows:

Applicable Month

First Segment

Second Segment

Third Segment

February 2016

1.43

3.94

4.96

Based on § 430(h)(2)(C)(iv), the 24-
2016 adjusted to be within the applicable
minimum and maximum percentages of

month averages applicable for February

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates

Applicable Month

First Segment

Second Segment

Third Segment

2015

February

2016

4.72

6.11

6.81

2016

February

2016

4.43

5.91

6.65

the corresponding 25-year average seg-
ment rates, are as follows:

## 30-YEAR TREASURY SECURITIES INTEREST RATES

Generally for plan years beginning
after 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412.
Section 431(c)(6)(B) specifies a mini-
mum amount for the full-funding limi-
tation described in § 431(c)(6)(A),
based on the plan's current liability.
Section 431(c)(6)(E)(ii)(I) provides that

the interest rate used to calculate current
liability for this purpose must be no
more than 5 percent above and no more
than 10 percent below the weighted av-
erage of the rates of interest on 30-year
Treasury securities during the four-year
period ending on the last day before the
beginning of the plan year. Notice 88-
73, 1988-2 C.B. 383, provides guide-
lines for determining the weighted aver-
age interest rate. The rate of interest on
30-year Treasury securities for January

2016 is 2.86 percent. The Service deter-
mined this rate as the average of the
daily determinations of yield on the 30-
year Treasury bond maturing in Novem-
ber 2045. For plan years beginning in
the month shown below, the weighted
average of the rates of interest on 30-
year Treasury securities and the permis-
sible range of rate used to calculate cur-
rent liability are as follows:

For Plan Years Beginning in

30-Year Treasury Weighted Average

Permissible Range

Month

Year

90%

to

105%

February

2016

3.11

2.80

3.27

MINIMUM PRESENT VALUE
SEGMENT RATES

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

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

ment rates determined for January 2016
are as follows:

First Segment

Second Segment

Third Segment

1.78

4.08

5.02

### DRAFTING INFORMATION

The principal author of this notice is
Tom Morgan of the Office of the Associ-

ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further

information regarding this notice, contact
Mr. Morgan at 202-317-6700 or Tony
Montanaro at 202-317-8698 (not toll-free
numbers).

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# Table I Monthly Yield Curve for January 2016 Derived from January 2016 Data

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

0.5

0.73

20.5

4.80

40.5

5.04

60.5

5.13

80.5

5.18

1.0

1.11

21.0

4.81

41.0

5.05

61.0

5.14

81.0

5.18

1.5

1.43

21.5

4.82

41.5

5.05

61.5

5.14

81.5

5.18

2.0

1.68

22.0

4.83

42.0

5.05

62.0

5.14

82.0

5.18

2.5

1.86

22.5

4.84

42.5

5.06

62.5

5.14

82.5

5.18

3.0

1.99

23.0

4.85

43.0

5.06

63.0

5.14

83.0

5.18

3.5

2.09

23.5

4.86

43.5

5.06

63.5

5.14

83.5

5.19

4.0

2.19

24.0

4.87

44.0

5.07

64.0

5.14

84.0

5.19

4.5

2.30

24.5

4.87

44.5

5.07

64.5

5.15

84.5

5.19

5.0

2.42

25.0

4.88

45.0

5.07

65.0

5.15

85.0

5.19

5.5

2.55

25.5

4.89

45.5

5.07

65.5

5.15

85.5

5.19

6.0

2.69

26.0

4.90

46.0

5.08

66.0

5.15

86.0

5.19

6.5

2.84

26.5

4.90

46.5

5.08

66.5

5.15

86.5

5.19

7.0

3.00

27.0

4.91

47.0

5.08

67.0

5.15

87.0

5.19

7.5

3.15

27.5

4.92

47.5

5.08

67.5

5.15

87.5

5.19

8.0

3.30

28.0

4.92

48.0

5.09

68.0

5.15

88.0

5.19

8.5

3.45

28.5

4.93

48.5

5.09

68.5

5.16

88.5

5.19

9.0

3.59

29.0

4.94

49.0

5.09

69.0

5.16

89.0

5.19

9.5

3.72

29.5

4.94

49.5

5.09

69.5

5.16

89.5

5.19

10.0

3.84

30.0

4.95

50.0

5.10

70.0

5.16

90.0

5.19

10.5

3.96

30.5

4.95

50.5

5.10

70.5

5.16

90.5

5.20

11.0

4.06

31.0

4.96

51.0

5.10

71.0

5.16

91.0

5.20

11.5

4.15

31.5

4.97

51.5

5.10

71.5

5.16

91.5

5.20

12.0

4.24

32.0

4.97

52.0

5.10

72.0

5.16

92.0

5.20

12.5

4.31

32.5

4.98

52.5

5.11

72.5

5.16

92.5

5.20

13.0

4.38

33.0

4.98

53.0

5.11

73.0

5.17

93.0

5.20

13.5

4.44

33.5

4.99

53.5

5.11

73.5

5.17

93.5

5.20

14.0

4.49

34.0

4.99

54.0

5.11

74.0

5.17

94.0

5.20

14.5

4.54

34.5

5.00

54.5

5.11

74.5

5.17

94.5

5.20

15.0

4.58

35.0

5.00

55.0

5.12

75.0

5.17

95.0

5.20

15.5

4.62

35.5

5.01

55.5

5.12

75.5

5.17

95.5

5.20

16.0

4.65

36.0

5.01

56.0

5.12

76.0

5.17

96.0

5.20

16.5

4.67

36.5

5.01

56.5

5.12

76.5

5.17

96.5

5.20

17.0

4.70

37.0

5.02

57.0

5.12

77.0

5.17

97.0

5.20

17.5

4.72

37.5

5.02

57.5

5.13

77.5

5.17

97.5

5.20

18.0

4.74

38.0

5.03

58.0

5.13

78.0

5.18

98.0

5.20

18.5

4.75

38.5

5.03

58.5

5.13

78.5

5.18

98.5

5.21

19.0

4.77

39.0

5.03

59.0

5.13

79.0

5.18

99.0

5.21

19.5

4.78

39.5

5.04

59.5

5.13

79.5

5.18

99.5

5.21

20.0

4.79

40.0

5.04

60.0

5.13

80.0

5.18

100.0

5.21

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# Date for Compliance with Consistent Basis Reporting Between Estate and Person Acquiring Property from Decedent

Notice 2016-19

## SECTION 1: PURPOSE

On July 31, 2015, the President of the
United States signed into law the Surface
Transportation and Veterans Health Care
Choice Improvement Act of 2015, Public
Law 114-41, 129 Stat. 443 (Act). Section
2004 of the Act added new sections
1014(f) and 6035. On August 21, 2015,
the Treasury Department and the IRS is-
sued Notice 2015-57, 2015-36 IRB 294.
That notice delayed until February 29,
2016, the due date for any statements re-
quired under section 6035(a)(3)(A) to be
provided before February 29, 2016. This
notice provides that executors and other
persons required to file or furnish a state-
ment under section 6035(a)(1) or (a)(2)
before March 31, 2016, need not do so
until March 31, 2016. This notice is being
issued in order to provide executors and
such other persons the opportunity to re-
view the proposed regulations to be issued
under sections 1014(f) and 6035 before
preparing a Form 8971 and any Schedule A.

## SECTION 2: BACKGROUND

Section 1014(f) provides rules requir-
ing that the basis of certain property ac-
quired from a decedent, as determined
under section 1014, may not exceed the
value of that property as finally deter-
mined for federal estate tax purposes, or if
not finally determined, the value of that
property as reported on a statement made
under section 6035.

Section 6035 imposes new reporting
requirements with regard to the value of
property included in a decedent's gross
estate for federal estate tax purposes.

Section 6035(a)(1) provides that the
executor of any estate required to file a
return under section 6018(a) must furnish,
both to the Secretary and to the person
acquiring any interest in property included
in the decedent's gross estate for federal
estate tax purposes, a statement identify-
ing the value of each interest in such prop-

erty as reported on such return and such
other information with respect to such in-
terest as the Secretary may prescribe.

Section 6035(a)(2) provides that each
person required to file a return under sec-
tion 6018(b) must furnish, both to the
Secretary and to each other person who
holds a legal or beneficial interest in the
property to which such return relates, a
statement identifying the information de-
scribed in section 6035(a)(1).

Section 6035(a)(3)(A) provides that
each statement required to be furnished
under section 6035(a)(1) or (a)(2) is to be
furnished at such time as the Secretary
may prescribe, but in no case at a time
later than the earlier of (i) the date which
is 30 days after the date on which the
return under section 6018 was required to
be filed (including extensions, if any) or
(ii) the date which is 30 days after the date
such return is filed.

Section 6035(b) authorizes the Secre-
tary to prescribe such regulations as nec-
essary to carry out section 6035. Section
7805(a) provides generally that the Secre-
tary shall prescribe all needful rules and
regulations for the enforcement of this
title, including all rules and regulations as
may be necessary by reason of any alter-
ation of law in relation to internal revenue.
Section 7805(b)(2) provides that regula-
tions may apply retroactively if they are
issued within 18 months of the date of the
enactment of the statutory provision to
which they relate.

## SECTION 3: GUIDANCE

Statements required under sections
6035(a)(1) and (a)(2) to be filed with the
IRS or furnished to a beneficiary before
March 31, 2016, need not be filed with the
IRS and furnished to a beneficiary until
March 31, 2016. The Treasury Depart-
ment and IRS recommend that executors
and other persons required to file a return
under section 6018 wait to prepare the
statements required by section 6035(a)(1)
and (a)(2) until the issuance of proposed
regulations by the Treasury Department
and the IRS addressing the requirements
of section 6035. The Treasury Department
and the IRS expect to issue proposed reg-
ulations under sections 1014(f) and 6035
very shortly.

## SECTION 4: EFFECTIVE DATE

This notice is effective on February 11,
2016. This notice applies to executors of
the estates of decedents and to other per-
sons who are required under section
6018(a) or (b) to file a return if that return
is filed after July 31, 2015.

## DRAFTING INFORMATION

The principal author of this notice is
Eliezer Mishory of the Office of the As-
sociate Chief Counsel (Procedure & Ad-
ministration). For further information re-
garding this notice, please contact Theresa
Melchiorre at (202) 317-6859 (not a toll-
free number).

## Qualified Zone Academy Bond Allocations for 2015 and 2016 Notice 2016-20

SECTION 1. PURPOSE

This notice sets forth the maximum face
amount of Qualified Zone Academy Bonds
("QZABs") that may be issued for each
State for the calendar years 2015 and 2016
under § 54E(c)(2) of the Internal Revenue
Code. Under § 54A(e)(3), the term State
includes the District of Columbia and any
possession of the United States.

## SECTION 2. BACKGROUND .01 INTRODUCTION

Section 313 of the Tax Extenders and
Alternative Minimum Tax Relief Act of
2008, Div. C of Pub. L. No. 110-343, 122
Stat. 3765 (2008) ("Act") added new § 54E,
which provides revised program provisions
for QZABs in lieu of the existing provisions
under § 1397E, effective for obligations is-
sued after October 3, 2008. The Act
amended § 54A(d)(1) to provide that the
term qualified tax credit bond ("QTCB")
means, in part, a qualified zone academy
bond which is part of an issue that meets the
requirements of §§ 54A(d)(2), (3), (4), (5),
and (6) regarding expenditures of bond pro-
ceeds, information reporting, arbitrage, ma-
turity limitations, and prohibitions against
financial conflicts of interest. The Act also
amended § 54A(d)(2)(C) to provide that, for

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purposes of § 54A(d)(2), the term "qualified
purpose" for a QZAB means a purpose
specified in § 54E(a)(1), described below.

The Act added § 54E(c)(1) to provide a
national zone academy bond limitation
authorization for QZABs of $400 million
for each of calendar years 2008 and 2009.
Section 1522 of Title I of Division B of
the American Recovery and Reinvestment
Act of 2009, Pub. L. No. 111-5, 123 Stat.
115 (2009) ("2009 Act") amended
§ 54E(c)(1) to provide an increased na-
tional zone academy bond limitation autho-
rization for QZABs of $1.4 billion for each
of calendar years 2009 and 2010. Section
758 of the Tax Relief, Unemployment In-
surance Reauthorization, and Job Creation
Act of 2010, Public L. No. 111-312, 124
Stat. 3296 (2010) ("2010 Act") amended
§ 54E(c)(1) to provide an authorization for
QZABs of $400 million for calendar year
2011. Section 310 of the American Tax-
payer Relief Act of 2012, Public L. No.
112-240, 126 Stat. 2313 (2012) (“2012
Act") amended § 54E(c)(1) to provide au-
thorization for QZABs of $400 million for
each of calendar years 2012 and 2013. Sec-
tion 120 of the Tax Increase Prevention Act
of 2014, Public L. No. 113-295 (2014)
("2014 Act") amended § 54E(c)(1) to pro-
vide authorization for QZABs of $400 mil-
lion for calendar year 2014. The amendment
made by § 120 of the 2014 Act applies to
obligations issued after December 31, 2013.
Section 202 of the 2014 Act also amended
§ 6431(f)(3)(A)(iii) to provide that the
direct-pay subsidy option does not apply to
any national zone academy bond limitation
for years after 2010 or any carryforward of
any such limitation. Section 164 of the Pro-
tecting Americans from Tax Hikes Act of
2015, Public L. No. 114-113, 129 Stat.
2242 ("2015 Act") amended § 54E(c)(1) to
provide authorization for QZABs of $400
million for each of calendar years 2015 and
2016. The amendment made by § 164 of the
2015 Act applies to obligations issued after
December 31, 2014.

## .02 QUALIFIED ZONE ACADEMY BOND UNDER § 54E

Section 54E(d) defines "qualified zone
academy" as any public school (or aca-
demic program within a public school)
which is established by and operated un-
der the supervision of an eligible local

education agency to provide education or
training below the postsecondary level
provided: (A) the public school or pro-
gram is designed in cooperation with busi-
ness to enhance the academic curriculum,
increase graduation and employment rates
and prepare students for college and the
workforce; (B) students will be subject to
the same academic standards and assess-
ments as other students educated by the
eligible local education agency; (C) the
comprehensive education plan is ap-
proved by the eligible local education
agency; and (D)(i) such public school is
located in an empowerment zone or enter-
prise community including such desig-
nated after October 3, 2008; or (ii) there is
a reasonable expectation (as of the date of
bond issuance) that at least 35 percent of
the students will be eligible for free or
reduced cost lunches under the school
lunch program established under the Na-
tional School Lunch Act.

Section 54E(a) provides that a "qual-
ified zone academy bond" or QZAB
means any bond issued as part of an
issue if: (1) 100 percent of the available
project proceeds of such issue are to be
used for a qualified purpose with respect
to a qualified zone academy established
by an eligible local education agency;
(2) the bond is issued by a State or local
government within the jurisdiction of
which such academy is located, and (3)
the issuer: (A) designates such bond for
purposes of this section; (B) certifies
that it has written assurances that the
private business contribution require-
ment of § 54E(b) will be met; and, (C)
certifies that it has the written approval
of the eligible local education agency
for such bond issuance.

Section 54E(d)(3) provides that a qual-
ified purpose with respect to each acad-
emy means: (A) rehabilitating or repairing
the public school facility; (B) providing
equipment; (C) developing course materi-
als; and, (D) training teachers and other
school personnel. The private business
contribution requirement of § 54E(b) is
met if the eligible local education agency
that established the qualified zone acad-
emy has written commitments from pri-
vate entities to make qualified contribu-
tions having a present value (as of the date
of issuance of the issue) of not less than
10 percent of the proceeds of the issue.

Section 54E(d)(4) defines "qualified con-
tributions" as any contribution (of a type
and quality acceptable to the eligible local
education agency) of: (A) equipment for
use in the qualified zone academy (includ-
ing state-of-the-art technology and voca-
tional equipment); (B) technical assis-
tance in developing curriculum or in
training teachers to promote appropriate
market driven technology in the class-
room; (C) employees' services as volun-
teer mentors; (D) internships, field trips,
or other educational opportunities outside
the academy; or (E) any other property or
service specified by the eligible education
agency. Section 54E(d)(2) defines "eligi-
ble local education agency" as any local
educational agency as defined in § 9101 of
the Elementary and Secondary Education
Act of 1965.

Section 54E(c)(2) provides that the De-
partment of the Treasury shall allocate the
national zone academy bond limitation
among the States on the basis of their re-
spective populations of individuals below
the poverty line (as defined by the Office of
Management and Budget). The limitation
amount allocated to a State under the pre-
ceding sentence shall be allocated by the
State education agency to qualified zone
academies within such State.

Under § 54E(c)(3), the maximum aggre-
gate face amount of bonds issued during any
calendar year which may be designated as
QZABs with respect to any qualified zone
academy shall not exceed the limitation
amount allocated to such academy for
such calendar year. However, under
§ 54E(c)(4)(A), if for any calendar year the
limitation amount for any State exceeds the
amount of bonds issued during such year
which are designated QZABs with respect
to qualified zone academies within such
State, the limitation amount for such State
for the following calendar year shall be in-
creased by the amount of such excess. Un-
der § 54E(c)(4)(B), however, any carryfor-
ward of a limitation amount may be carried
only to the first 2 years following the unused
limitation year. For these purposes, the lim-
itation amount shall be treated as used on a
first-in first-out basis.

Sections 1.1397E-1 (the "Final Regu-
lations") sets forth regulations that were
issued under § 1397E. For other guidance
concerning the applicability of the
regulations issued under § 1397E, the

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credit rate, and the sinking fund yield see
§ 1.397E-1(m), and Notice 2009-15,
2009-6 I.R.B. 449, Notice 2009-30,
2009-16 I.R.B. 852, Notice 2010-22,
2010-10 I.R.B. 435, and Rev. Proc.
2011-19, 2011-6 I.R.B. 465.

## SECTION 3. NATIONAL ZONE ACADEMY BOND LIMITATION FOR 2015 and 2016

The national limitation for QZABs is-
sued under § 54E for calendar years 2015

and 2016 is $400 million. These amounts
are allocated among the States as follows:

Qualified Zone Academy Bond Allocations (in dollars) by State or Territory, 2015 and 2016

State or Territory

2015

2016

Alabama

$ 7,222,000

$ 7,222,000

Alaska

$ 651,000

$ 651,000

Arizona

$ 9,536,000

$ 9,536,000

Arkansas

$ 4,306,000

$ 4,306,000

California

$49,866,000

$49,866,000

Colorado

$ 5,048,000

$ 5,048,000

Connecticut

$ 2,993,000

$ 2,993,000

Delaware

$ 941,000

$ 941,000

DC

$ 915,000

$ 915,000

Florida

$25,766,000

$25,766,000

Georgia

$14,376,000

$14,376,000

Hawaii

$ 1,262,000

$ 1,262,000

Idaho

$ 1,895,000

$ 1,895,000

Illinois

$14,372,000

$14,372,000

Indiana

$ 7,723,000

$ 7,723,000

Iowa

$ 2,940,000

$ 2,940,000

Kansas

$ 3,042,000

$ 3,042,000

Kentucky

$ 6,481,000

$ 6,481,000

Louisiana

$ 7,168,000

$ 7,168,000

Maine

$ 1,449,000

$ 1,449,000

Maryland

$ 4,823,000

$ 4,823,000

Massachusetts

$ 6,062,000

$ 6,062,000

Michigan

$12,499,000

$12,499,000

Minnesota

$ 4,847,000

$ 4,847,000

Mississippi

$ 5,063,000

$ 5,063,000

Missouri

$ 7,244,000

$ 7,244,000

Montana

$ 1,211,000

$ 1,211,000

Nebraska

$ 1,795,000

$ 1,795,000

Nevada

$ 3,432,000

$ 3,432,000

New Hampshire

$ 940,000

$ 940,000

New Jersey

$ 7,754,000

$ 7,754,000

New Mexico

$ 3,352,000

$ 3,352,000

New York

$24,582,000

$24,582,000

North Carolina

$13,269,000

$13,269,000

North Dakota

$ 632,000

$ 632,000

Ohio

$14,180,000

$14,180,000

Oklahoma

$ 4,969,000

$ 4,969,000

Oregon

$ 5,081,000

$ 5,081,000

Pennsylvania

$13,389,000

$13,389,000

Rhode Island

$ 1,195,000

$ 1,195,000

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Qualified Zone Academy Bond Allocations (in dollars) by State or Territory, 2015 and 2016

State or Territory

2015

2016

South Carolina

$ 6,683,000

$ 6,683,000

South Dakota

$ 924,000

$ 924,000

Tennessee

$ 9,292,000

$ 9,292,000

Texas

$ 36,040,000

$ 36,040,000

Utah

$ 2,724,000

$ 2,724,000

Vermont

$ 576,000

$ 576,000

Virginia

$ 7,620,000

$ 7,620,000

Washington

$ 7,284,000

$ 7,284,000

West Virginia

$ 2,621,000

$ 2,621,000

Wisconsin

$ 5,879,000

$ 5,879,000

Wyoming

$ 509,000

$ 509,000

American Samoa

$ 325,000

$ 325,000

Guam

$ 352,000

$ 352,000

Northern Mariana Islands

$ 185,000

$ 185,000

Puerto Rico

$ 14,519,000

$ 14,519,000

Virgin Islands

$ 196,000

$ 196,000

Total Allocation

$400,000,000

$400,000,000

### SECTION 4. EFFECTIVE DATE OF NATIONAL ZONE ACADEMY BOND LIMITATIONS

The national limitation allocated in
section 3 for calendar years 2015 and
2016 is effective for QZABs issued after
December 31, 2014.

## SECTION 5. DRAFTING INFORMATION

The principal authors of this notice are
James A. Polfer and David E. White of the
Office of Associate Chief Counsel (Finan-
cial Institutions and Products). For further

information regarding this notice contact
David White or James Polfer at (202) 317-
6980 (not a toll-free number).

26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 62, 132, 179)

### Rev. Proc. 2016-14

Table of Contents

SECTION 1. PURPOSE

SECTION 2. BACKGROUND

SECTION 3. 2016 ADDITIONAL ADJUSTED ITEMS

Code Section

.01 Certain Expenses of Elementary and Secondary School Teachers

62(a)(2)(D)

.02 Qualified Transportation Fringe Benefit

132(f)

.03 Election to Expense Certain Depreciable Assets

179

SECTION 4. EFFECT ON OTHER DOCUMENTS

SECTION 5. EFFECTIVE DATES

SECTION 6. DRAFTING INFORMATION

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## SECTION 1. PURPOSE

Rev. Proc. 2015-53, 2015-44 I.R.B.
615, provides inflation adjustments for
certain items for 2016. This revenue pro-
cedure provides the inflation adjustments
for additional items that are adjusted for
inflation due to the enactment of the Pro-
tecting Americans from Tax Hikes Act
(PATH Act) of 2015, enacted as part of
the Consolidated Appropriations Act,
2016, Public Law 114-113, div. Q (the
"Act"). This revenue procedure also mod-
ifies part of section 3.17 of Rev. Proc.
2015-53, concerning the inflation adjust-
ment for excludable transit benefits.

## SECTION 2. BACKGROUND

.01 Section 104 of the Act provides
that under § 62(a)(2)(D) of the Internal
Revenue Code the amount of the deduc-
tion allowed under § 162 which consists
of expenses paid or incurred by an eligible
educator in connection with books, sup-
plies (other than nonathletic supplies for
courses of instruction in health or physical
education), computer equipment (includ-
ing related software and services) and
other equipment, and supplementary ma-
terials used by the eligible educator in the
classroom is adjusted for inflation for tax-
able years beginning after December 31,
2015. (See section 3.01 of this revenue
procedure.)

.02 Section 105 of the Act amends
§ 132(f)(2) of the Code to create parity,
for periods after December 31, 2014, be-
tween the transit benefit exclusion for the

aggregate of transportation in a commuter
highway vehicle and any transit pass, and
the exclusion for qualified parking. (See
section 3.02 of this revenue procedure.)

.03 Section 124 of the Act amends
§ 179(b)(1) and (2) of the Code to provide
that the dollar limitation for the aggregate
cost of § 179 property that a taxpayer may
elect to expense is $500,000, and that dol-
lar amount is reduced by the amount by
which the cost of all § 179 property placed
in service during the taxable year exceeds
$2,000,000. For taxable years beginning
in 2016, these amounts are adjusted for
inflation. (See section 3.03 of this revenue
procedure.)

## SECTION 3. 2016 ADDITIONAL INFLATION ADJUSTED ITEMS

.01 Certain Expenses of Elementary
and Secondary School Teachers. For tax-
able years beginning in 2016, under
§ 62(a)(2)(D) the amount of the deduction
allowed under § 162 which consists of
expenses paid or incurred by an eligible
educator in connection with books, sup-
plies (other than nonathletic supplies for
courses of instruction in health or physical
education), computer equipment (includ-
ing related software and services) and
other equipment, and supplementary ma-
terials used by the eligible educator in the
classroom is not in excess of $250.

.02 Qualified Transportation Fringe
Benefit. For taxable years beginning in
2016, the monthly limitation under
§ 132(f)(2)(A) regarding the aggregate
fringe benefit exclusion amount for trans-

portation in a commuter highway vehicle
and any transit pass is $255. This section
modifies section 3.17 of Rev. Proc. 2015-53.
(For taxable years beginning in 2015, see No-
tice 2016-6, 2016-4 I.R.B 287, Application
of Retroactive Increase in Excludable Transit
Benefits.)

.03 Election to Expense Certain Depre-
ciable Assets. For taxable years beginning
in 2016, under § 179(b)(1) the aggregate
cost of any § 179 property that a taxpayer
elects to treat as an expense cannot exceed
$500,000. Under § 179(b)(2)(C), the
$500,000 limitation is reduced (but not
below zero) by the amount the cost of
§ 179 property placed in service during
the 2016 taxable year exceeds $2,010,000.

## SECTION 4. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2015-53 is modified.

## SECTION 5. EFFECTIVE DATES

Section 3 of this revenue procedure
applies to taxable years beginning in
2016.

## SECTION 6. DRAFTING INFORMATION

The principal author of this revenue
procedure is William Ruane of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, contact
Mr. Ruane at (202) 317-4718 (not a toll-
free number).

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## Part IV. Items of General Interest

### Section 7428(c) Validation of Certain Contributions Made During Pendency of Declaratory Judgment Proceedings

### Announcement 2016-08

This announcement serves notice to
potential donors that the organization
listed below has recently filed a timely
declaratory judgment suit under section

7428 of the Code, challenging revocation
of its status as an eligible donee under
section 170(c)(2).

Protection under section 7428(c) of the
Code begins on the date that the notice of
revocation is published in the Internal
Revenue Bulletin and ends on the date on
which a court first determines that an or-
ganization is not described in section
170(c)(2), as more particularly set forth in
section 7428(c)(1).

In the case of individual contributors,
the maximum amount of contributions
protected during this period is limited to

$1,000.00, with a husband and wife being
treated as one contributor. This protection
is not extended to any individual who was
responsible, in whole or in part, for the
acts or omissions of the organization that
were the basis for the revocation. This
protection also applies (but without limi-
tation as to amount) to organizations de-
scribed in section 170(c)(2) which are ex-
empt from tax under section 501(a). If the
organization ultimately prevails in its de-
claratory judgment suit, deductibility of
contributions would be subject to the normal
limitations set forth under section 170.

Name of Organization

Date Suit Filed

Effective Date of Revocation

Location

Columbians of Nampa, Inc.

12/23/2015

1/1/2010

Nampa, ID

### Notice of Disposition of Declaratory Judgment Proceedings under Section 7428

#### Announcement 2016-09

This announcement serves notice to
donors that on November 4, 2015, the
United States Tax Court entered an order
dismissing the case involving the below-
referenced organization. The organization
listed below is not recognized as an orga-
nization described in section 501(c)(3), is
not exempt from tax under section 501(a),
and is not an organization described in
section 170(c)(2).

Dr. R.C. Samantha Roy Institute of
Science and Technology Inc
Green Bay WI

### Deletions From Cumulative List of Organizations, Contributions to Which are Deductible Under Section 170 of the Code

Announcement 2016-10

Table of Contents

The Internal Revenue Service has re-
voked its determination that the organiza-
tions listed below qualify as organizations
described in sections 501(c)(3) and 170(c)(2)
of the Internal Revenue Code of 1986.

Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date of
announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not pre-
cluded from disallowing a deduction for
any contributions made after an organiza-
tion ceases to qualify under section
170(c)(2) if the organization has not

timely filed a suit for declaratory judg-
ment under section 7428 and if the con-
tributor (1) had knowledge of the revoca-
tion of the ruling or determination letter,
(2) was aware that such revocation was
imminent, or (3) was in part responsible
for or was aware of the activities or omis-
sions of the organization that brought
about this revocation.

If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on February 29,
2016 and would end on the date the court
first determines the organization is not
described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.

NAME OF ORGANIZATION

Effective Date of Revocation

LOCATION

Nuestro Futuro Inc.

January 1, 2014

Portland, OR

Senior Rescue

February 4, 2009

San Diego, CA

Enfinite Possibilities, Inc.

January 1, 2012

Los Angeles, CA

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## Notice of proposed rulemaking and notice of public hearing Additional Limitation on Suspension of Benefits Applicable to Certain Pension Plans

### REG-101701-16

Under the Multiemployer Pension Re-
form Act of 2014

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Notice of proposed rulemaking
and notice of public hearing.

SUMMARY: The Multiemployer Pension
Reform Act of 2014 ("MPRA"), which
was enacted by Congress as part of the
Consolidated and Further Continuing Ap-
propriations Act of 2015, relates to mul-
tiemployer defined benefit pension plans
that are projected to have insufficient
funds, within a specified timeframe, to
pay the full plan benefits to which indi-
viduals will be entitled (referred to as
plans in "critical and declining status").
Under MPRA, the sponsor of such a plan
is permitted to reduce the pension benefits
payable to plan participants and beneficia-
ries if certain conditions and limitations
are satisfied (referred to in MPRA as a
"suspension of benefits"). One specific
limitation governs the application of a
suspension of benefits under any plan that
includes benefits directly attributable to a
participant's service with any employer
that has withdrawn from the plan in a
complete withdrawal, paid its full with-
drawal liability, and, pursuant to a collec-
tive bargaining agreement, assumed lia-
bility for providing benefits to participants
and beneficiaries equal to any benefits for
such participants and beneficiaries re-
duced as a result of the financial status of
the plan. This document contains pro-
posed regulations that would provide
guidance relating to this specific limita-
tion. These regulations affect active, re-
tired, and deferred vested participants and

beneficiaries under any such multiem-
ployer plan in critical and declining status
as well as employers contributing to, and
sponsors and administrators of, those
plans.

DATES: Comments must be received by
March 15, 2016. Outlines of topics to be
discussed at the public hearing scheduled
for March 22, 2016 must be received by
March 15, 2016.

ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG-101701-16), room
5205, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington
D.C. 20044. Submissions may be hand-
delivered Monday through Friday be-
tween the hours of 8 a.m. and 4 p.m. to:
CC:PA:LPD:PR (REG-101701-16),
Courier's Desk, Internal Revenue Service,
1111 Constitution Avenue, NW., Wash-
ington, D.C., or sent electronically via the
Federal eRulemaking Portal at http://
www.regulations.gov (IRS REG-
101701-16). The public hearing will be
held in the IRS Auditorium, Internal Rev-
enue Building, 1111 Constitution Avenue,
NW, Washington, DC.

FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
the Department of the Treasury MPRA
guidance information line at (202) 622-
1559; concerning submissions of com-
ments, the hearing, and/or being placed on
the building access list to attend the hear-
ing, Regina Johnson at (202) 317-6901
(not toll-free numbers).

### SUPPLEMENTARY INFORMATION:

#### Background

This document contains proposed
amendments to the Income Tax Regula-
tions (26 CFR part 1) under section
432(e)(9) of the Internal Revenue Code
(Code), as amended by section 201 of the
Multiemployer Pension Reform Act of
2014, Division O of the Consolidated and
Further Continuing Appropriations Act,
2015, Public Law No. 113-235 (128 Stat.
2130 (2014)) (MPRA).1 As amended, sec-
tion 432(e)(9) permits plan sponsors of

certain multiemployer plans to reduce the
plan benefits payable to participants and
beneficiaries by plan amendment (referred
to in the statute as a "suspension of ben-
efits") if specified conditions are satisfied.
A plan sponsor that seeks to implement a
suspension of benefits must submit an ap-
plication that the Secretary of the Trea-
sury, in consultation with the Pension
Benefit Guaranty Corporation and the
Secretary of Labor (generally referred to
in this preamble as the Treasury Depart-
ment, PBGC, and Labor Department, re-
spectively), is required by the statute to
approve upon finding that certain speci-
fied conditions are satisfied. One condi-
tion is that the plan is in critical and de-
clining status, meaning that the plan is
projected to have insufficient funds,
within a specified timeframe, to pay the
full benefits to which individuals will be
entitled under the plan.

Another condition, set forth in section
432(e)(9)(D)(vii), is a specific limitation
on how a suspension of benefits must be
applied under a plan that, as described in
section 432(e)(9)(D)(vii)(III), includes
benefits that are directly attributable to a
participant's service with any employer
that has, prior to the date MPRA was
enacted, withdrawn from the plan in a
complete withdrawal under section 4203
of ERISA, paid the full amount of the
employer's withdrawal liability under sec-
tion 4201(b)(1) of ERISA or an agreement
with the plan, and, pursuant to a collective
bargaining agreement, assumed liability
for providing benefits to participants and
beneficiaries of the plan under a separate,
single-employer plan sponsored by the
employer, in an amount equal to any
amount of benefits for these participants
and beneficiaries reduced as a result of the
financial status of the plan. Such an em-
ployer is referred to in this preamble as a
"subclause III employer," and the agree-
ment to assume liability for those benefits
is referred to as a "make-whole agree-
ment."

If the specific limitation of section
432(e)(9)(D)(vii) applies to a plan, then
section 432(e)(9)(D)(vii)(I) requires that
the suspension of benefits first be applied

1Section 201 of MPRA makes parallel amendments to section 305 of the Employee Retirement Income Security Act of 1974, Public Law 93-406 (88 Stat. 829 (1974)), as amended (ERISA).
The Treasury Department has interpretive jurisdiction over the subject matter of these provisions under ERISA as well as the Code. See also section 101 of Reorganization Plan No. 4 of
1978 (43 FR 47713). Thus, these proposed Treasury regulations issued under section 432 of the Code apply as well for purposes of section 305 of ERISA.

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to the maximum extent permissible to
benefits attributable to a participant's ser-
vice with an employer that withdrew from
the plan and failed to pay (or is delinquent
with respect to paying) the full amount of
its withdrawal liability under section
4201(b)(1) of ERISA or an agreement
with the plan. Such an employer is re-
ferred to in this preamble as a "subclause
I employer." Second, under section
432(e)(9)(D)(vii)(II), except as provided
in section 432(e)(9)(D)(vii)(III), a suspen-
sion of benefits must be applied to all
other benefits. Third, under section
432(e)(9)(D)(vii)(III), a suspension must
be applied to benefits under a plan that are
directly attributable to a participant's ser-
vice with a subclause III employer.

On June 19, 2015, the Treasury Depart-
ment and the IRS published temporary reg-
ulations (TD 9723) under section 432(e)(9)
in the Federal Register (80 FR 35207) pro-
viding general guidance regarding section
432(e)(9) as well as outlining the require-
ments for a plan sponsor of a plan that is in
critical and declining status to apply for ap-
proval of a suspension of benefits and for
the Treasury Department to begin process-
ing such an application. A notice of pro-
posed rulemaking cross-referencing the
temporary regulations (REG-102648-15)
and providing additional guidance was pub-
lished in the same issue of the Federal Reg-
ister (80 FR 35262). Neither the temporary
nor the proposed regulations include guid-
ance regarding the limitation under section
432(e)(9)(D)(vii).

On October 23, 2015, the Treasury De-
partment published a notice in the Federal
Register (80 FR 64508) regarding an appli-
cation for a proposed suspension of benefits,
which represented that the plan is of the type
to which section 432(e)(9)(D)(vii) applies.
The notice requested public comments on
all aspects of the application, including with
respect to the interpretation of section
432(e)(9)(D)(vii) that is reflected in the ap-
plication. The Treasury Department and the
IRS have considered the comments received

in response to that notice in developing
these proposed regulations.

#### Explanation of Provisions

These proposed regulations would
amend the Income Tax Regulations (26
CFR part 1) to provide guidance regarding
section 432(e)(9)(D)(vii). The Treasury
Department consulted with PBGC and the
Labor Department in developing these
proposed regulations. These proposed
regulations would add a new paragraph
(d)(8) to proposed § 1.432(e)(9)-1 and do
not otherwise affect the provisions of the
proposed regulations published in the
Federal Register (80 FR 35262) on June
19, 2015.

Section 432(e)(9)(D)(vii) sets forth a
rule that limits how a suspension may be
applied under a plan that includes benefits
that are directly attributable to a partici-
pant's service with any employer that, as
defined in section 432(e)(9)(D)(vii)(III),
has withdrawn, paid the full amount of its
withdrawal liability, and, pursuant to a
collective bargaining agreement, assumed
liability for providing benefits to partici-
pants and beneficiaries of the plan under a
separate, single-employer plan sponsored
by the employer, in an amount equal to
any amount of benefits for such partici-
pants and beneficiaries reduced as a result
of the financial status of the multiem-
ployer plan. In determining how a suspen-
sion should be allocated consistent with
the statutory framework, the Treasury De-
partment and the IRS analyzed the statute
and applied principles of statutory con-
struction.

Subclause (I) of section 432(e)(9)(D)(vii)
provides that the suspension of benefits
should first be applied "to the maximum
extent permissible." Accordingly, the Trea-
sury Department and the IRS conclude that
reductions with respect to benefits attribut-
able to service with a subclause I employer
must be applied first to the maximum extent
permissible before reductions are permitted
to be applied to any other benefits. Conse-
quently, these proposed regulations require

that a suspension of benefits under a plan
that is subject to section 432(e)(9)(D)(vii) be
applied to the maximum extent permissible
to benefits attributable to service with a sub-
clause I employer. Only if such a suspension
is not reasonably estimated to achieve the
level that is necessary to enable the plan to
avoid insolvency may a suspension then be
applied to other benefits that are permitted
to be suspended and that are attributable to a
participant's service with other employers.

In contrast, subclause (II) does not in-
clude the phrase "to the maximum extent
permissible," and therefore the Treasury
Department and the IRS have concluded
that the best interpretation of section
432(e)(9)(D)(vii) is that a suspension need
not be applied to the maximum extent
permissible to benefits described in sub-
clause (II) before any suspension is ap-
plied to benefits described in subclause
(III).2 This interpretation is also consistent
with the language in subclause (II) pro-
viding for application of a suspension "ex-
cept as provided in subclause (III)," con-
templating a coordinated application of
those subclauses, which are to be applied
"second" and "third," respectively.3 Be-
cause of the order of application of sub-
clauses (II) and (III) and the coordinated
application described in the preceding
sentence, the Treasury Department and
the IRS conclude that the best interpreta-
tion of section 432(e)(9)(D)(vii) is that the
application of a suspension to benefits de-
scribed in subclause (II) must be greater
than or equal to the application of the
suspension to benefits described in sub-
clause (III).

Under these proposed regulations, a
suspension would not be permitted to re-
duce benefits directly attributable to ser-
vice with a subclause III employer, unless
other benefits are first reduced and are
reduced to at least the same extent (thus
protecting a subclause III employer from
the possibility that the suspension would
be expressly designed to take advantage
of the employer's agreement to make par-
ticipants and beneficiaries whole for the

2See Loughrin v. United States, 134 S. Ct. 2384, 2390 (2014) ("We have often noted that when 'Congress includes particular language in one section of a statute but omits it in another'-let
alone in the very next provision-this Court 'presume[s]' that Congress intended a difference in meaning." (quoting Russello v. United States, 464 U.S. 16, 23 (1983)). To read subclause
(II) to require that benefits be suspended "to the maximum extent permissible" without that language would either render that language superfluous in subclause (I), see Marx v. General
Revenue Corp., 133 S. Ct. 1166, 1178 (2013) ("[T]he canon against surplusage is strongest when an interpretation would render superfluous another part of the same statutory scheme."),
or effectively rewrite subclause (II) to include that requirement, see Hall v. United States, 132 S. Ct. 1882, 1893 (2012) ("[I]t is not for us to rewrite the statute.").

3See Corley v. United States, 556 U.S. 303, 314 (2009) (rejecting constructions "at odds with the basic interpretive canon that ""[a] statute should be construed [to give effect] to all its
provisions, so that no part will be inoperative or superfluous, void or insignificant" '" (quoting Hibbs v. Winn, 542 U.S. 88, 101 (2004)).

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reductions). Under these proposed regula-
tions, a suspension would not violate this
restriction if no participant's benefits that
are directly attributable to service with a
subclause III employer are reduced more
than that individual's benefits would have
been reduced if, holding constant the ben-
efit formula, work history, and all other
relevant factors used to determine the in-
dividual's benefits, those benefits were at-
tributable to that participant's service with
any other employer.

These proposed regulations would also
provide that the benefits described in sec-
tion 432(e)(9)(D)(vii)(III) are any benefits
for a participant under a plan that are
directly attributable to service with a sub-
clause III employer, without regard to
whether the employer has assumed liabil-
ity for providing benefits to the participant
that were reduced as a result of the finan-
cial status of the plan. For example, if a
participant commenced receiving retire-
ment benefits under a plan, which are di-
rectly attributable to service with such an
employer, before the date the employer
entered into a make-whole agreement,
then the participant's benefits would be
described in section 432(e)(9)(D)(vii)(III)
even if those benefits were not covered by
the make-whole agreement. This interpre-
tation is based on the statutory language in
section 432(e)(9)(D)(vii)(III), which de-
fines the benefits to which that subclause
applies as those benefits that are directly
attributable to service with an employer
that has met the conditions set forth in
section 432(e)(9)(D)(vii)(III)(aa) and
(bb). In other words, the statutory provi-
sion refers to benefits directly attributable
to service with an employer described in
subclause III, and not only to benefits
covered by the make-whole agreement.

The Treasury Department and the IRS
are also considering an alternative to the
ordering rule set forth in these proposed
regulations. Under the alternative, as un-
der the proposed regulations, the rule
would require that a suspension of bene-
fits under a plan that is subject to section
432(e)(9)(D)(vii) be applied to the maxi-

mum extent permissible to benefits attrib-
utable to service with a subclause I em-
ployer before any suspension is applied to
benefits attributable to service with other
employers. However, in contrast to the
approach described in these proposed reg-
ulations, the alternative would require that
any such suspension of benefits be applied
to provide for a lesser reduction in bene-
fits that are directly attributable to service
with a subclause III employer than to ben-
efits that are attributable to any other ser-
vice. The alternative approach could be
satisfied if, for example, benefits that are
directly attributable to service with a sub-
clause III employer are reduced less, on a
percentage basis, than benefits would have
been reduced if, holding constant the ben-
efit formula, work history, and all other
relevant factors used to determine bene-
fits, those benefits were attributable to ser-
vice with any other employer.

The Treasury Department and the IRS
recognize that the language of section
432(e)(9)(D)(vii) has similarities to other
statutory provisions that establish priority
categories requiring claims to be fully sat-
isfied under each earlier category before
any claims are permitted to be satisfied
under any subsequent category. For exam-
ple, section 4044 of ERISA provides for
the allocation of pension plan assets in the
event of a distress termination and for
categories of payments to be made "in the
following order:" "First," "Second,"
"Third," "Fourth," "Fifth" and "Sixth."4

If such an approach were applied under
section 432(e)(9)(D)(vii), then the maxi-
mum permitted suspension would be re-
quired to be imposed with respect to ben-
efits described in each subclause before
any suspension could apply to benefits
described in a successive subclause. Un-
der that approach, any suspension of ben-
efits would first have to be applied to the
maximum extent permissible to benefits
attributable to a participant's service with
a subclause I employer. Only if such a
suspension were not reasonably estimated
to achieve the level that is necessary to
enable the plan to avoid insolvency would

the suspension then be applied to other
benefits that are permitted to be suspended
and that are attributable to a participant's
service with any other employers (except
for benefits that are directly attributable to
service with a subclause III employer).
Under this approach, only if the additional
suspension were not reasonably estimated
to achieve the level that is necessary to
enable the plan to avoid insolvency would
the suspension then be applied also to
benefits directly attributable to a partici-
pant's service with a subclause III em-
ployer.

Based on the language of the statute as
well as principles of statutory construction
described in this preamble, the proposed
regulations and alternative rule do not re-
flect the approach described in the preceding
paragraph.5 In addition, in contrast to sec-
tion 4044 of ERISA, which includes the
language "in the following order," there is
no similar generally applicable ordering lan-
guage in section 432(e)(9)(D)(vii) and sec-
tion 305(e)(9)(D)(vii) of ERISA. As under
section 4044 of ERISA, in enacting section
432(e)(9)(D)(vii) and its counterpart under
ERISA, Congress could readily have used
consistent language in describing the scope
of permissible benefit suspensions with re-
spect to the benefits described in each of the
three statutory subclauses. Instead of doing
so, Congress created a distinction in describ-
ing the treatment of benefits described in the
three subclauses in section 432(e)(9)(D)(vii).6
For these reasons, the Treasury Depart-
ment and the IRS have concluded that the
best reading of Congressional intent is
that a suspension of benefits described in
section 432(e)(9)(D)(vii)(II) does not
need to be applied "to the maximum ex-
tent permissible" before any suspension is
permitted to be applied to benefits de-
scribed in section 432(e)(9)(D)(vii)(III).
However, the Treasury Department and
the IRS request comments on whether "to
the maximum extent permissible" should
be applied to benefits described in sub-
clause II in the final regulations.

4The regulations interpreting this provision provide: "If the plan has sufficient assets to pay for all benefits in a priority category, the remaining assets shall then be allocated to the next
lower priority category. This process shall be repeated until all benefits in priority categories 1 through 6 have been provided or until all available plan assets have been allocated." See 29
CFR 4044.10(d).

5See footnotes 2 and 3 and accompanying text.

6That is, the phrase "to the maximum extent permissible" appears in subclause (I) but not in subclause (II).

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#### Effective/Applicability Dates

These regulations are proposed to be
effective on and apply with respect to
suspensions for which the approval or de-
nial is issued on or after the date of pub-
lication of the Treasury decision adopting
these rules as final regulations in the Fed-
eral Register.

#### Special Analyses

Certain IRS regulations, including this
one, are exempt from the requirements of
Executive Order 12866, as supplemented
and reaffirmed by Executive Order 13563.
Therefore, a regulatory impact assessment
is not required. It also has been deter-
mined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations.

The Regulatory Flexibility Act (RFA)
(5 U.S.C. chapter 6) requires an agency to
consider whether the rules it proposes will
have a significant economic impact on a
substantial number of small entities. In
this case, the IRS and the Treasury De-
partment believe that the regulations
likely would not have a “significant eco-
nomic impact on a substantial number of
small entities." 5 U.S.C. 605. This certifi-
cation is based on the fact that the number
of small entities affected by this rule is
unlikely to be substantial because it is
unlikely that a substantial number of small
multiemployer plans in critical and declin-
ing status are subject to the limitation con-
tained in section 432(e)(9)(D)(vii). Pursu-
ant to section 7805(f) of the Code, this
notice of proposed rulemaking has been
submitted to the Chief Counsel of Advo-
cacy of the Small Business Administra-
tion for comment on its impact on small
business.

#### Comments and Public Hearing

Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submitted timely to the Treasury Depart-
ment and the IRS as prescribed in this
preamble in the ADDRESSES section.
The Treasury Department and the IRS re-
quest comments on all aspects of these
proposed regulations, including the inter-
action of the provisions of the proposed
regulation with the limitation described in

section 432(e)(9)(D)(vi) relating to the re-
quirement that a suspension of benefits be
equitably distributed.

In addition to the comment request in-
cluded in this preamble under the "Expla-
nation of Provisions" heading, the Trea-
sury Department and the IRS request
comments regarding the alternative rule
also described under the "Explanation of
Provisions" heading or any other alterna-
tive. With respect to the alternative rule
described in this preamble, comments are
specifically requested regarding whether
satisfaction of the alternative rule de-
scribed in this preamble should be re-
quired on an individual-by-individual ba-
sis or on an aggregate basis (comparing
the aggregate suspension of benefits that
are directly attributable to service with a
subclause III employer to what the aggre-
gate would have been if, holding constant
the benefit formula, work history, and all
other relevant factors used to determine
benefits, those benefits were attributable
to service with any other employer).

All comments will be available for
public inspection and copying at www-
.regulations.gov or upon request. Please
Note: All comments will be made avail-
able to the public. Do not include any
personally identifiable information (such
as Social Security number, name, address,
or other contact information) or confiden-
tial business information that you do not
want publicly disclosed. All comments
may be posted on the Internet and can be
retrieved by most Internet search engines.

A public hearing on these proposed
regulations has been scheduled for March
22, 2016 beginning at 10 A.M. in the
Auditorium, Internal Revenue Service,
1111 Constitution Avenue, NW, Wash-
ington, DC. Due to building security pro-
cedures, visitors must enter at the Consti-
tution Avenue entrance. In addition, all
visitors must present photo identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the FOR FURTHER IN-
FORMATION CONTACT section of
this preamble.

The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to

present oral comments at the hearing must
submit written or electronic comments by
March 15, 2016, and an outline of topics
to be discussed and the amount of time to
be devoted to each topic by March 15,
2016. A period of 10 minutes will be
allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receiving outlines has passed.
Copies of the agenda will be available free
of charge at the hearing.

#### Contact Information

For general questions regarding these
regulations, please contact the Depart-
ment of the Treasury MPRA guidance in-
formation line at (202) 622-1559 (not a
toll-free number). For information regard-
ing a specific application for a suspension
of benefits, please contact the Treasury
Department at (202) 622-1534 (not a toll-
free number).

* * * * *

#### Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is pro-
posed to be 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 1.432(e)(9)-1 is added
to read as follows:

§ 1.432(e)(9)-1 Benefit suspensions for
multiemployer plans in critical and
declining status.

(a) through (c) [Reserved]

(d) Limitations on suspension. (1)
through (7) [Reserved]

(8) Additional rules for plans de-
scribed in section 432(e)(9)(D)(vii)-(i)
In general. In the case of a plan that
includes the benefits described in para-
graph (d)(8)(i)(C) of this section, any sus-
pension of benefits under this section
shall-

(A) First, be applied to the maximum
extent permissible to benefits attributable
to a participant's service for an employer
that withdrew from the plan and failed to
pay (or is delinquent with respect to pay-

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ing) the full amount of its withdrawal li-
ability under section 4201(b)(1) of ERISA
or an agreement with the plan;

(B) Second, except as provided by
paragraph (d)(8)(i)(C) of this section, be
applied to all other benefits that may be
suspended under this section; and

(C) Third, be applied to benefits under
a plan that are directly attributable to a
participant's service with any employer
that has, prior to December 16, 2014-

(1) Withdrawn from the plan in a com-
plete withdrawal under section 4203 of
ERISA and paid the full amount of the
employer's withdrawal liability under sec-
tion 4201(b)(1) of ERISA or an agreement
with the plan, and

(2) Pursuant to a collective bargaining
agreement, assumed liability for provid-
ing benefits to participants and beneficia-
ries of the plan under a separate, single-
employer plan sponsored by the employer,
in an amount equal to any amount of
benefits for such participants and benefi-
ciaries reduced as a result of the financial
status of the plan.

(ii) Application of suspensions to ben-
efits that are directly attributable to a

participant's service with certain employ-
ers-(A) Greater reduction in certain
benefits not permitted. A suspension of
benefits under this section must not be
applied to provide for a greater reduction
in benefits described in paragraph
(d)(8)(i)(C) of this section than the reduc-
tion that is applied to benefits described in
paragraph (d)(8)(i)(B) of this section. This
requirement is satisfied if no participant's
benefits that are directly attributable to
service with an employer described in
paragraph (d)(8)(i)(C) of this section are
reduced more than that participant's ben-
efits would have been reduced if, holding
the benefit formula, work history, and all
relevant factors used to compute benefits
constant, those benefits were attributable
to service with an employer that is not
described in paragraph (d)(8)(i)(C) of this
section.

(B) Application of limitation to benefits
of participants with respect to which the
employer has not assumed liability. Ben-
efits under a plan that are directly attrib-
utable to a participant's service with an
employer described in paragraph
(d)(8)(i)(C) of this section include all such

benefits without regard to whether the em-
ployer has assumed liability for providing
benefits to the participant that were re-
duced as a result of the financial status of
the plan as described in paragraph
(d)(8)(i)(C)(2) of this section. Thus, all
benefits under a plan that are directly at-
tributable to a participant's service with
an employer described in paragraph
(d)(8)(i)(C) of this section are subject to
the limitation in paragraph (d)(8)(ii)(A) of
this section, even if the employer has not,
pursuant to a collective bargaining agree-
ment that satisfies the requirements of
paragraph (d)(8)(i)(C)(2) of this section,
assumed liability for providing those ben-
efits to participants and beneficiaries of
the plan.

John Dalrymple,
Deputy Commissioner
for Services and Enforcement.

(Filed by the Office of the Federal Register on February 9,
2016, 4:15 p.m., and published in the issue of the Federal
Register for February 11, 2016, 81 F.R. 7253)

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### Definition of Terms

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

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

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

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

Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.

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

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

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

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

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

### Abbreviations

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

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

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

GE-Grantee.

GP-General Partner.

GR-Grantor.

IC-Insurance Company.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

CY-County.

LE-Lessee.

D-Decedent.

LP-Limited Partner.

LR-Lessor.

M-Minor.

Nonacq .- Nonacquiescence.

O Organization.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.

PR-Partner.

PRS-Partnership.

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

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S-Subsidiary.

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

Stat .- Statutes at Large.

T-Target Corporation.

T.C .- Tax Court.

T.D .- Treasury Decision.

TFE-Transferee.

TFR-Transferor.

T.I.R .- Technical Information Release.

TP-Taxpayer.
TR-Trust.

TT-Trustee.

U.S.C .- United States Code.

DC-Dummy Corporation.

DE-Donee.

Del. Order-Delegation Order.

DISC-Domestic International Sales Corporation.
DR-Donor.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

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

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

BK-Bank.

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

C-Individual.

C.B .- Cumulative Bulletin.

CFR-Code of Federal Regulations.

CI-City.

COOP-Cooperative.

X-Corporation.

Y-Corporation.

Z-Corporation.

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#### Numerical Finding List1

Bulletins 2016-1 through 2016-9

##### Announcements:

2016-1, 2016-3 I.R.B. 283
2016-2, 2016-3 I.R.B. 283
2016-3, 2016-4 I.R.B. 294
2016-4, 2016-6 I.R.B. 313
2016-5, 2016-8 I.R.B. 356
2016-7, 2016-8 I.R.B. 356
2016-8, 2016-9 I.R.B. 367
2016-9, 2016-9 I.R.B. 367
2016-10, 2016-9 I.R.B. 367

##### Notices:

2016-1, 2016-2 I.R.B. 265
2016-2, 2016-2 I.R.B. 265
2016-3, 2016-3 I.R.B. 278
2016-4, 2016-3 I.R.B. 279
2016-5, 2016-6 I.R.B. 302
2016-6, 2016-4 I.R.B. 287
2016-7, 2016-5 I.R.B. 296
2016-8, 2016-6 I.R.B. 304
2016-9, 2016-6 I.R.B. 306
2016-10, 2016-6 I.R.B. 307
2016-11, 2016-6 I.R.B. 312
2016-12, 2016-6 I.R.B. 312
2016-13, 2016-7 I.R.B. 314
2016-14, 2016-7 I.R.B. 315
2016-16, 2016-7 I.R.B. 318
2016-17, 2016-9 I.R.B. 358
2016-18, 2016-9 I.R.B. 359
2016-19, 2016-9 I.R.B. 362
2016-20, 2016-9 I.R.B. 362

##### Proposed Regulations:

REG-147310-12, 2016-7 I.R.B. 336
REG-138344-13, 2016-4 I.R.B. 294
REG-125761-14, 2016-7 I.R.B. 322
REG-100861-15, 2016-8 I.R.B. 356
REG-134122-15, 2016-7 I.R.B. 334
REG-101701-16, 2016-9 I.R.B. 368

#### Revenue Procedures:

2016-1, 2016-1 I.R.B. 1
2016-2, 2016-1 I.R.B. 102
2016-3, 2016-1 I.R.B. 126
2016-4, 2016-1 I.R.B. 142
2016-5, 2016-1 I.R.B. 188
2016-6, 2016-1 I.R.B. 200
2016-7, 2016-1 I.R.B. 239
2016-8, 2016-1 I.R.B. 243
2016-10, 2016-2 I.R.B. 270
2016-11, 2016-2 I.R.B. 274
2016-13, 2016-4 I.R.B. 290
2016-14, 2016-9 I.R.B. 365

#### Revenue Rulings:

2016-1, 2016-2 I.R.B. 262
2016-2, 2016-4 I.R.B. 284
2016-3, 2016-3 I.R.B. 282
2016-4, 2016-6 I.R.B. 299
2016-5, 2016-8 I.R.B. 344

#### Treasury Decisions:

9745, 2016-2 I.R.B. 256
9748, 2016-8 I.R.B. 347

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-27 through 2015-52 is in Internal Revenue Bulletin
2015-52, dated December 28, 2015.

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#### Finding List of Current Actions on Previously Published Items1

Bulletins 2016-1 through 2016-9

##### Announcements:

2007-21
Modified by
Ann. 2016-1, 2016-3 I.R.B. 283

Notices:

2005-50
Modified by
Notice 2016-2, 2016-2 I.R.B. 265

2007-59
Revoked by
Notice 2016-16, 2016-7 I.R.B. 318

2013-54
Supplemented by
Notice 2016-17, 2016-9 I.R.B. 358

2014-79
Superseded by
Notice 2016-1, 2016-2 I.R.B. 265

2015-52
Supplemented by
Notice 2016-17, 2016-9 I.R.B. 358

2015-87
Supplemented by
Notice 2016-17, 2016-9 I.R.B. 358

##### Revenue Procedures:

2015-1
Superseded by
Rev. Proc. 2016-2, 2016-1 I.R.B. 1

2015-2
Superseded by
Rev. Proc. 2016-2, 2016-1 I.R.B. 102

2015-3
Superseded by
Rev. Proc. 2016-3, 2016-1 I.R.B. 126

2015-5
Superseded by
Rev. Proc. 2016-5, 2016-1 I.R.B. 142

2015-7
Superseded by
Rev. Proc. 2016-7, 2016-1 I.R.B. 188

2015-8
Superseded by
Rev. Proc. 2016-8, 2016-1 I.R.B. 200

Revenue Procedures :- Continued

2015-9
Superseded by
Rev. Proc. 2016-5, 2016-1 I.R.B. 239

2015-10
Superseded by
Rev. Proc. 2016-10, 2016-2 I.R.B. 270

2015-22
Superseded by
Rev. Proc. 2016-8, 2016-01 I.R.B. 243

2015-53
Modified by
Rev. Proc. 2016-11, 2016-2 I.R.B. 274

###### Revenue Rulings:

2008-15
Revoked by
Rev. Rul. 2016-3, 2016-3 I.R.B. 282

"A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-27 through 2015-52 is in Internal Revenue Bulletin
2015-52, dated December 28, 2015.

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# INTERNAL REVENUE BULLETIN

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