Internal Revenue Bulletin 2009-48 (PDF rendition): IRS Notices

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Bulletin No. 200
9-48
November 30, 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
T.D. 9469, page 687.
Final regulations under section 108 of the Code provide guid-
ance on the manner in which an S corporation reduces its tax
attributes under section 108(b) for taxable years in which the
S corporation has discharge of indebtedness income that is
excluded from gross income under section 108(a).
Notice 2009–89, page 714.
Thisnoticesetsforthaprocessthatallowsmanufacturesto
certify to the Service that a particular vehicle meets the re-
quirements of section 30D of the Code. Taxpayers purchasing
such vehicles can rely on the domestic manufacturer’s (or, in
the case of a foreign manufacturer, its domestic distributor’s)
certification that a particular make, model, and model year of
vehicle qualifies as a plug-in electric drive motor vehicle un-
der section 30D, and certification of the amount of the credit
allowable with respect to the vehicle. The notice also defines
when the amended section 30D applies. Notices 2009–54 and
2009–58 amplified.
EMPLOYEE PLANS
T.D. 9464, page 692.
REG–123829–08, page 719.
Final, temporary, and proposed regulations under section 9802
of the Code provide guidance on the requirements that group
health plans not charge higher rates based on genetic infor-
mation, not request or require individuals to undergo genetic
tests, and not collect or use genetic information for underwrit-
ing purposes.
Announcement 2009–82, page 720.
Effective date of regulations under section
411(b)(5)(B)(i); relief under section 411(d)(6); and
notice to pension plan participants.The Treasury
Department and the Service are announcing relief for
sponsors of statutory hybrid plans that must amend the
interest crediting rate in those plans. Plan sponsors may rely
on this announcement pending publication of the anticipated
additional guidance described in the announcement.
EMPLOYMENT TAX
Notice 2009–91, page 717.
This notice modifies the rules in Notice 2005–76, 2005–2 C.B.
947, for determining the amount of income tax employers must
withhold under section 3402 from wages paid on or after Jan-
uary 1, 2010, for services performed by nonresident alien em-
ployees within the United States. Notice 2005–76 modified.
EXCISE TAX
T.D. 9464, page 692.
REG–123829–08, page 719.
Final, temporary, and proposed regulations under section 9802
of the Code provide guidance on the requirements that group
health plans not charge higher rates based on genetic infor-
mation, not request or require individuals to undergo genetic
tests, and not collect or use genetic information for underwrit-
ing purposes.
Fi
nding Lists begin on page ii.
Index for July through November begins on page iv.

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
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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
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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
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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.
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t includes notices of proposed rulemakings, disbar-
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d suspension lists, and announcements.
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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.
November 30, 20092009–48 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 108.—Income From
Discharge of Indebtedness
26 CFR 1.108–7: Reduction of attributes.
T.D. 9469
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
Sect
ion 108 Reduction of Tax
Attr
ibutes for S Corporations
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final
regulations that provide guidance on the
manner in which an S corporation reduces
its tax attributes under section 108(b) for
taxable years in which the S corporation
has discharge of indebtedness income that
is excluded from gross income under sec-
tion 108(a). In particular, the regulations
address situations in which the aggregate
amount of the shareholders’ disallowed
section 1366(d) losses and deductions that
are treated as a net operating loss tax at-
tribute of the S corporation exceeds the
amount of the S corporation’s excluded
discharge of indebtedness income. The
regulations affect S corporations and their
shareholders.
DATES:Effective Date:These regulations
are effective on October 30, 2009.
Applicability Date:For dates of appli-
cability, see §1.108–7(f)(2).
FOR FURTHER INFORMATION
CONTACT: Jennifer N. Keeney, (202)
622–3060 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information con-
tained in these final regulations were
previously reviewed and approved by the
Office of Management and Budget in ac-
cordance with the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)) under
control number 1545–2155. The collec-
tions of information in this final regulation
are in §1.108–7(d)(4). This information
must be provided by S corporations that
exclude discharge of indebtedness in-
come from gross income under section
108(a) and shareholders of those S cor-
porations. The information provided by
shareholders will be used by S corpora-
tions to properly reduce their tax attributes
under section 108(b). The information
provided by S corporations will be used
by shareholders of those S corporations
to calculate their taxable income in
succeeding taxable years.
An agency may not conduct or sponsor,
and a person is not required to respond to, a
collection of information unless it displays
a valid control number assigned by the Of-
fice of Management and Budget.
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.
Background
This document contains amendments to
the Income Tax Regulations (26 CFR Part
1) under section 108 of the Internal Rev-
enue Code (Code).
Section 61(a) provides thatgross in-
comemeans all income from whatever
source derived, including (but not limited
to) income from discharge of indebted-
ness, also known as cancellation of debt
income (COD income). Section 108(a)
provides an exclusion from gross income
for COD income if the discharge occurs
while the taxpayer is bankrupt or insol-
vent, or if the indebtedness discharged is
qualified farm indebtedness, certain qual-
ified real property business indebtedness,
or certain qualified principal residence
indebtedness. In the case of a discharge
of indebtedness during insolvency, the
exclusion from income is limited to the
amount by which the taxpayer is insol-
vent. Section 108(b) provides that the
taxpayer must reduce certain specified tax
attributes to the extent COD income is
excluded from gross income under section
108(a)(1)(A), (B), or (C). Section 108(b)
also provides the order in which these tax
attributes must be reduced. Unless the
taxpayer makes an election under section
108(b)(5) to first reduce the basis of de-
preciable property, section 108(b)(2)(A)
provides that the first tax attribute to be
reduced is any net operating loss for the
taxable year of the discharge, and any net
operating loss carryover to such taxable
year.
A notice of proposed rulemak-
ing and a notice of public hearing
(REG–102822–08, 2008–38 I.R.B. 744)
were published in theFederal Regis-
ter(73 FR 45656) on August 6, 2008,
proposing amendments to the regulations
regarding the manner in which an S cor-
poration reduces its tax attributes under
section 108(b) for taxable years in which
the S corporation has discharge of indebt-
edness income that is excluded from gross
income under section 108(a). A public
hearing on the proposed regulations was
scheduled for December 8, 2008, but was
cancelled because no one requested to
speak. However, comments responding to
the proposed regulations were received.
After consideration of these comments,
the proposed regulations are adopted as
revised by this Treasury decision. These
final regulations generally retain the provi-
sions of the proposed regulations, with the
modifications discussed in this preamble.
Summary of Comments and
Explanation of Revisions
A.Allocation of Excess Losses and
Deductions After Section 108(b) Tax
Attribute Reduction
Section 108 provides special rules for
an S corporation that has COD income.
Section 108(d)(7)(A), as amended by the
Job Creation and Worker Assistance Act
of 2002, Public Law 107–147, provides, in
part, that the rules under section 108(a) for
the exclusion of COD income and under
section 108(b) for the reduction of tax at-
tributes are applied at the corporate level,
including by not taking into account un-
der section 1366(a) any amount excluded
2009–48 I.R.B.687November 30, 2009

under section 108(a). Therefore, if an
S corporation excludes COD income from
its gross income under section 108(a), the
amount excluded is applied to reduce the
S corporation’s tax attributes under section
108(b)(2). Under section 108(b)(4)(A),
the reduction of tax attributes occurs
after the S corporation’s items of income,
loss, deduction and credit for the taxable
year of the discharge pass through to its
shareholders under section 1366(a). Under
section 1366(d)(1), the aggregate amount
of losses and deductions a shareholder
can take into account under section
1366(a) cannot exceed the shareholder’s
adjusted basis in the shareholder’s stock
in the S corporation and the shareholder’s
adjusted basis of any indebtedness of the
S corporation to the shareholder. For
purposes of the tax attribute reduction
rule under section 108(b)(2), section
108(d)(7)(B) provides that any loss or
deduction that is disallowed for the
taxable year of the discharge under section
1366(d)(1) is treated as a net operating
loss of the S corporation (deemed NOL).
Several commentators recommended
that net operating losses of an S cor-
poration carried forward from one
or more C corporation taxable years
(C Year NOLs) should be considered
S corporation tax attributes for purposes
of section 108(b)(2). The proposed
regulations are silent on whether attributes
such as net operating losses, capital
losses, and business credits arising in
a C corporation taxable year should
be considered tax attributes of the
S corporation for purposes of section
108(b)(2). Section 1371(b)(1) states that
no carryforward, and no carryback, arising
for a taxable year for which a corporation
is a C corporation may be carried to a
taxable year for which such corporation is
an S corporation. This prohibition applies
to tax attribute carryovers described in
section 108(b)(2). For example, section
108(b)(2)(A) describes a net operating loss
tax attribute as “any net operating loss for
the taxable year of discharge and any net
operating loss carryover to such taxable
year.” Accordingly, section 1371(b)(1)
prohibits an S corporation from using
a C Year NOL as an S corporation tax
attribute for purposes of section 108(b)(2).
The same analysis applies to capital
losses and business credits that arose in
a C corporation taxable year. Therefore,
the final regulations do not adopt this
recommendation.
One commentator suggested that the
final regulations clarify how the allocation
rules in §1.108–7(d)(2) of the proposed
regulations apply when an S corporation,
with the consent of all affected share-
holders, makes an election under section
1377(a)(2) (a terminating election). Re-
gardless of whether a terminating election
is made, all disallowed losses and de-
ductions of a shareholder under section
1366(d)(1), including disallowed losses
and deductions of a terminating share-
holder, are treated as an S corporation’s
deemed NOL. The impact of a terminat-
ing election on the allocation of the COD
income, however, may result in a different
allocation of the S corporation’s excess
deemed NOL among the shareholders.
Therefore, the final regulations add an
example to clarify how the allocation rules
apply when a terminating election is made.
Commentators asked whether a deemed
NOL described in section 108(d)(7)(B)
includes any losses that are suspended
under section 465 or section 469. Sec-
tion 108(d)(7)(B) provides that a deemed
NOL is any loss or deduction which is
disallowed for the taxable year of the dis-
charge under section 1366(d)(1). Section
1366(d)(1) specifically provides for the
disallowance of losses due only to lack of
basis. Therefore, a deemed NOL does not
include losses suspended under section
465 or section 469.
One commentator requested that the
final regulations clarify whether disal-
lowed losses and deductions under section
1366(d)(1) of a shareholder that is an em-
ployee stock ownership plan (ESOP) are
included in the S corporation’s deemed
NOL. Section 108(d)(7)(B) provides that
any loss or deduction that is disallowed
for the taxable year of the discharge under
section 1366(d)(1) is treated as a deemed
NOL of the S corporation. Accordingly,
section 108(d)(7)(B) applies to any share-
holder, including an ESOP shareholder,
that has disallowed losses and deductions
for the taxable year of the discharge under
section 1366(d)(1).
One commentator asked whether
nondeductible, noncapital expenses that
reduce basis under section 1367(a)(2)(D)
are treated as disallowed losses and
deductions under section 1366(d)(1)
for purposes of section 108(d)(7)(B).
These expenses, including any that are
carried over as a result of the elective
ordering rule in §1.1367–1(g) of the
Income Tax Regulations, are not losses
and deductions that can be taken into
account by a shareholder under section
1366(a) and therefore are not included as
disallowed losses and deductions under
section 1366(d)(1) for purposes of section
108(d)(7)(B).
One commentator noted that in some
situations, an S corporation shareholder
may have a different taxable year than the
S corporation. The commentator asked
whether, in these situations, a shareholder
determines its disallowed losses and de-
ductions under section 1366(d)(1) for pur-
poses of section 108(d)(7) as of the close
of the S corporation’s taxable year. The
basis adjustments under section 1367 are
determined as of the close of the S corpo-
ration’s taxable year. See §1.1367–1(d)(1)
and §1.1367–2(d)(1). Therefore, a share-
holder’s disallowed losses and deductions
under section 1366(d)(1) are determined
for purposes of section 108(d)(7) as of the
close of the S corporation’s taxable year.
Finally, one commentator recom-
mended that the final regulations provide
that all shareholders share tax attribute
reductions in proportion to their owner-
ship interests in the S corporation in all
situations. The preamble to the proposed
regulations noted that shareholders may
be disproportionately impacted where the
shareholders’ respective disallowed losses
or deductions are disproportionate to their
respective interests. However, the dispro-
portionate impact that occurs in certain
situations is a result of the statutory pro-
visions of section 108. Therefore, the
final regulations do not adopt this rec-
ommendation. In certain situations, an
S corporation may eliminate or mitigate
inequitable results by making an election
under section 108(b)(5) to reduce the basis
of its depreciable property before reducing
its net operating loss.
B.Character of Excess Deemed NOL
Allocated to a Shareholder
The proposed regulations provide an or-
dering approach for determining the char-
acter of the amount of the S corporation’s
excess deemed NOL that is allocated to
a shareholder. The approach in the pro-
posed regulations is generally consistent
November 30, 20096882009–48 I.R.B.

with the ordering rules of section 108(b)(2)
in that ordinary losses are reduced before
capital losses. One commentator recom-
mended that the final regulations adopt an
approach that is consistent with the method
for determining the character of a share-
holder’s losses and deductions under sec-
tion 1366(d). Under this approach, the
S corporation’s excess deemed NOL that
is allocated to a shareholder consists of
a proportionate amount of each item of
the shareholder’s loss or deduction that
is disallowed for the taxable year of the
discharge under section 1366(d)(1). Af-
ter considering this comment, the IRS and
Treasury have decided to adopt this ap-
proach in the final regulations.
C.Information Sharing Requirements
The proposed regulations require a
shareholder of an S corporation that
excludes COD income from its gross
income in a taxable year to report to
the S corporation the amount of the
shareholder’s losses and deductions that
are disallowed for the taxable year of
the discharge under section 1366(d)(1)
(shareholder-information reporting re-
quirement). The proposed regulations
also require the S corporation to report
to its shareholders the amount of any
excess deemed NOL that is allocated to
a shareholder (S corporation-information
reporting requirement). Commentators
recommendedchangestothe
shareholder-informationreporting
requirement to minimize dependence on
information furnished by shareholders
who provide (intentionally or
unintentionally) incorrect information
or on shareholders who fail to furnish
this information. One commentator
explained that as a practical matter, an
S corporation often maintains records
for its shareholders and may possess all
the requisite information to determine
the amount of a shareholder’s suspended
loss under section 1366(d). Another
commentator requested that the final
regulations provide consequences for
shareholders who do not comply with
the shareholder-information reporting
requirement or who provide incorrect
information.
After considering these comments, the
final regulations modify the shareholder-
information reporting requirement to alle-
viate the dependence on shareholders who
fail to furnish information or who provide
incorrect information. The final regula-
tions provide that in certain situations, the
S corporation may rely on its own books
and records as well as other information
available to the S corporation to deter-
mine a shareholder’s disallowed losses or
deductions under section 1366(d)(1), pro-
vided that the S corporation knows that the
amount reported by the shareholder is in-
accurate, or the information, as provided,
appears to be incomplete or incorrect. The
final regulations do not adopt any special
rules to provide for consequences to share-
holders who either fail to report this infor-
mation to the S corporation or report in-
correct information to the S corporation.
However, the IRS and Treasury note that
section 6037(c) requires that a shareholder
of an S corporation, on the shareholder’s
return, treat a “subchapter S item” in a
manner consistent with the S corporation
return. The IRS and Treasury believe that
the S corporation’s excess deemed NOL
that is allocated to a shareholder is a “sub-
chapter S item” for purposes of section
6037(c) and that the consequences of fail-
ure to comply with section 6037(c) are suf-
ficient to encourage shareholders to coop-
erate with the S corporation in order to
avoid inconsistencies between the S cor-
poration’s return and the shareholder’s re-
turn.
Effective/Applicability Date
The final regulations apply to dis-
charges of indebtedness occurring on or
after October 30, 2009.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been deter-
mined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations. It is
hereby certified that the collection of in-
formation contained in these regulations
will not have a significant economic im-
pact on a substantial number of small en-
tities. This certification is based on the
fact that the collection burden imposed on
S corporations and their shareholders is
minimal in that it requires S corporations
and their shareholder(s) to share informa-
tion that shareholdersalready maintain to
determine their respective tax liabilities.
Moreover, it should take an S corporation
or a shareholder no more than one hour
to satisfy the information sharing require-
ments in these regulations. Finally, the
collection burden imposed applies only to
S corporations that are required to reduce
their tax attributesunder section 108(b)
of the Code — a group estimated to be
less than 1 percent of all existing S cor-
porations. Therefore, a regulatory flexi-
bility analysis under the Regulatory Flex-
ibility Act (5 U.S.C. chapter 6) is not re-
quired. Pursuant to section 7805(f) of the
Code, the notice of proposed rulemaking
that preceded these regulations was sub-
mitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on its impact on small business.
Drafting Information
The principal author of these regula-
tions is Jennifer N. Keeney, Office of the
Associate Chief Counsel (Passthroughs
and Special Industries). However, other
personnel from the IRS and Treasury par-
ticipated in their development. Reporting
and recordkeeping requirements.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 and part
602 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 1.108–7 is amended by:
1. Redesignating paragraphs (d) and (e)
as paragraphs (e) and (f), respectively.
2. Adding new paragraph (d).
3. Adding paragraph (e)Example 5,Ex-
ample 6,andExample 7to newly-redesig-
nated paragraph (e).
4. Revising newly-redesignated para-
graph (f).
The additions and revision read as fol-
lows:
§1.108–7 Reduction of attributes.
*****
2009–48 I.R.B.689November 30, 2009

(d)Special rules for S corpora-
tions—(1)In general. If an S corporation
excludes COD income from gross income
under section 108(a)(1)(A), (B), or (C),
the amount excluded shall be applied to
reduce the S corporation’s tax attributes
under paragraph (a)(1) of this section.
For purposes of paragraph (a)(1)(i) of
this section, the aggregate amount of the
shareholders’ losses or deductions that
are disallowed for the taxable year of the
discharge under section 1366(d)(1), in-
cluding disallowed losses or deductions
of a shareholder that transfers all of the
shareholder’s stock in the S corporation
during the taxable year of the discharge,
is treated as the net operating loss tax at-
tribute (deemed NOL) of the S corporation
for the taxable year of the discharge.
(2)Allocation of excess losses or de-
ductions—(i)In general. If the amount of
an S corporation’s deemed NOL exceeds
the amount of the S corporation’s COD in-
come that is excluded from gross income
under section 108(a)(1)(A), (B), or (C),
the excess deemed NOL shall be allocated
to the shareholder or shareholders of the
S corporation as a loss or deduction that
is disallowed under section 1366(d) for the
taxable year of the discharge.
(ii)Multiple shareholders—(A)In gen-
eral. If an S corporation has multiple
shareholders, to determine the amount of
the S corporation’s excess deemed NOL
to be allocated to each shareholder under
paragraph (d)(2)(i) of this section, calcu-
late with respect to each shareholder the
shareholder’s excess amount. The share-
holder’s excess amount is the amount (if
any) by which the shareholder’s losses
or deductions disallowed under section
1366(d)(1) (before any reduction under
paragraph (a)(1) of this section) exceed
the amount of COD income that would
have been taken into account by that share-
holder under section 1366(a) had the COD
income not been excluded under section
108(a).
(B)Shareholders with a shareholder’s
excess amount. Each shareholder that has
a shareholder’s excess amount, as deter-
mined under paragraph (d)(2)(ii)(A) of this
section, is allocated an amount equal to
the S corporation’s excess deemed NOL
multiplied by a fraction, the numerator of
which is the shareholder’s excess amount
and the denominator of which is the sum
of all shareholders’ excess amounts.
(C)Shareholders with no shareholder’s
excess amount. If a shareholder does not
have a shareholder’s excess amount as de-
termined in paragraph (d)(2)(ii)(A) of this
section, none of the S corporation’s ex-
cess deemed NOL shall be allocated to that
shareholder.
(iii)Terminating shareholder.Any
amount of the S corporation’s excess
deemed NOL allocated under paragraph
(d)(2) of this section to a shareholder that
had transferred all of the shareholder’s
stock in the corporation during the taxable
year of the discharge is permanently dis-
allowed under §1.1366–2(a)(5), unless the
transfer of stock is described in section
1041(a). If the transfer of stock is de-
scribed in section 1041(a), the amount of
the S corporation’s excess deemed NOL
allocated to the transferor under paragraph
(d)(2) of this section shall be treated as
a loss or deduction incurred by the cor-
poration in the succeeding taxable year
with respect to the transferee. See section
1366(d)(2)(B).
(3)Character of excess losses or deduc-
tions allocated to a shareholder. The char-
acter of an S corporation’s excess deemed
NOL that is allocated to a shareholder un-
der paragraph (d)(2) of this section con-
sists of a proportionate amount of each
item of the shareholder’s loss or deduction
that is disallowed for the taxable year of
the discharge under section 1366(d)(1).
(4)Information requirements.Ifan
S corporation excludes COD income from
gross income under section 108(a) for
a taxable year, each shareholder of the
S corporation during the taxable year of the
discharge must report to the S corporation
the amount of the shareholder’s losses
and deductions that are disallowed for
the taxable year of the discharge under
section 1366(d)(1), even if that amount
is zero. If a shareholder fails to report
the amount of the shareholder’s losses
and deductions that are disallowed for
the taxable year of the discharge under
section 1366(d)(1) to the S corporation, or
if the S corporation knows that the amount
reported by the shareholder is inaccurate,
or if the information, as reported, appears
to be incomplete or incorrect, the S
corporation may rely on its own books
and records, as well as other information
available to the S corporation, to determine
the amount of the shareholder’s losses
and deductions that are disallowed for
the taxable year of the discharge under
section 1366(d)(1), provided that the
S corporation knows or reasonably
believes that its information presents an
accurate reflection of the shareholder’s
disallowed losses and deductions under
section 1366(d)(1). The S corporation
must report to each shareholder the amount
of the S corporation’s excess deemed NOL
that is allocated to that shareholder under
paragraph (d)(2) of this section, even if
that amount is zero, in accordance with
applicable forms and instructions.
(e) * * *
Example 5.(i)Facts. During the entire calen-
dar year 2009, A, B, and C each own equal shares
of stock in X, a calendar year S corporation. As of
December 31, 2009, A, B, and C each have a zero
stock basis and X does not have any indebtedness to
A, B, or C. For the 2009 taxable year, X excludes
from gross income $45,000 of COD income under
section 108(a)(1)(A). The COD income (had it not
been excluded) would have been allocated $15,000
to A, $15,000 to B, and $15,000 to C under section
1366(a). For the 2009 taxable year, X has $30,000 of
losses and deductions that X passes throughpro rata
to A, B, and C in the amount of $10,000 each. The
losses and deductions that pass through to A, B, and C
are disallowed under section 1366(d)(1). In addition,
B has $10,000 of section 1366(d) losses from prior
years and C has $20,000 of section 1366(d) losses
from prior years. A’s ($10,000), B’s ($20,000) and
C’s ($30,000) combined $60,000 of disallowed losses
and deductions for the taxable year of the discharge
are treated as a current year net operating loss tax
attribute of X under section 108(d)(7)(B) (deemed
NOL) for purposes of the section 108(b) reduction of
tax attributes.
(ii)Allocation. Under section 108(b)(2)(A),
X’s $45,000 of excluded COD income reduces the
$60,000 deemed NOL to $15,000. Therefore, X
has a $15,000 excess net operating loss (excess
deemed NOL) to allocate to its shareholders. Un-
der paragraph (d)(2)(ii)(C) of this section, none of
the $15,000 excess deemed NOL is allocated to A
because A’s section 1366(d) losses and deductions
immediately prior to the section 108(b)(2)(A) re-
duction ($10,000) do not exceed A’s share of the
excluded COD income for 2008 ($15,000). Thus, A
has no shareholder’s excess amount. Each of B’s and
C’s respective section 1366(d) losses and deductions
immediately prior to the section 108(b)(2)(A) reduc-
tion exceed each of B’s and C’s respective shares
of the excluded COD income for 2008. B’s excess
amount is $5,000 ($20,000 - $15,000) and C’s excess
amount is $15,000 ($30,000 - $15,000). There-
fore, the total of all shareholders’ excess amounts is
$20,000. Under paragraph (d)(2) of this section, X
will allocate $3,750 of the $15,000 excess deemed
NOL to B ($15,000 x $5,000 / $20,000) and $11,250
of the $15,000 excess deemed NOL to C ($15,000
x $15,000 / $20,000). These amounts are treated
as losses and deductions disallowed under section
1366(d)(1) for the taxable year of the discharge. Ac-
cordingly, at the beginning of 2010, A has no section
November 30, 20096902009–48 I.R.B.

1366(d)(2) carryovers, B has $3,750 of carryovers,
and C has $11,250 of carryovers.
(iii)Character. Immediately prior to the sec-
tion 108(b)(2)(A) reduction, B’s $20,000 of section
1366(d) losses and deductions consisted of $8,000
of long-term capital losses, $7,000 of section 1231
losses, and $5,000 of ordinary losses. After the
section 108(b)(2)(A) tax attribute reduction, X will
allocate $3,750 of the excess deemed NOL to B.
Under paragraph (d)(3) of this section, the $3,750
excess deemed NOL allocated to B consists of $1,500
of long-term capital losses (($8,000 / $20,000) x
$3,750), $1,312.50 of section 1231 losses (($7,000 /
$20,000) x $3,750), and $937.50 of ordinary losses
(($5,000 / $20,000) x $3,750). As a result, at the
beginning of 2010, B’s $3,750 of section 1366(d)(2)
carryovers consist of $1,500 of long-term capital
losses, $1,312.50 of section 1231 losses, and $937.50
of ordinary losses.
Example 6. (i) A and B each own 50 percent
of the shares of stock in X, a calendar year S cor-
poration. On March 1, 2009, X realizes $12,000 of
COD income and excludes this amount from gross
income under section 108(a)(1)(A) for X’s 2009 tax-
able year. On June 30, 2009, A sells all of her shares
of stock in X to C in a transfer not described in sec-
tion 1041(a). X does not make a terminating election
under section 1377(a)(2). The COD income (had it
not been excluded) would have been allocated $3,000
to A, $6,000 to B, and $3,000 to C under section
1366(a). Prior to the section 108(b)(2)(A) reduction,
for the taxable year of the discharge the shareholders
have disallowed losses and deductions under section
1366(d) (including disallowed losses carried over to
the current year under section 1366(d)(2)) in the fol-
lowing amounts: A - $5,000, B - $13,000, and C -
$2,000. The combined $20,000 of disallowed losses
and deductions for the taxable year of the discharge
are treated as a current year net operating loss tax
attribute of X under section 108(d)(7)(B) (deemed
NOL).
(ii) Under section 108(b)(2)(A), X’s $12,000 of
excluded COD income reduces the $20,000 deemed
NOL to $8,000. Therefore, X has an $8,000 excess
net operating loss (excess deemed NOL) to allocate
to its shareholders. Under paragraph (d)(2)(ii)(C)
of this section, none of the $8,000 excess deemed
NOL is allocated to C because C’s section 1366(d)
losses and deductions immediately prior to the sec-
tion 108(b)(2)(A) reduction ($2,000) do not exceed
C’s share of the excluded COD income for 2008
($3,000). However, each of A’s and B’s respective
section 1366(d) losses and deductions immediately
prior to the section 108(b)(2)(A) reduction exceed
each of A’s and B’s respective shares of the excluded
COD income for 2009. A’s excess amount is $2,000
($5,000 - $3,000) and B’s excess amount is $7,000
($13,000 - $6,000). Therefore, the total of all share-
holders’ excess amounts is $9,000. Under paragraph
(d)(2) of this section, X will allocate $1,777.78 of the
$8,000 excess deemed NOL to A ($8,000 x $2,000 /
$9,000) and $6,222.22 of the $8,000 excess deemed
NOL to B ($8,000 x $7,000 / $9,000). However,
because A transferred all of her shares of stock in
X in a transaction not described in section 1041(a),
A’s $1,777.78 of section 1366(d) losses and deduc-
tions are permanently disallowed under paragraph
(d)(2)(iii) of this section. Accordingly, at the begin-
ning of 2010, B has $6,222.22 of section 1366(d)(2)
carryovers and C has no section 1366(d)(2) carry-
overs.
Example 7. The facts are the same as inExample
6,exceptthatX,withtheconsentofAandC,makes
a terminating election under section 1377(a)(2) upon
A’s sale of her stock in X to C. Therefore, the COD
income (had it not been excluded) would have been
allocated $6,000 to A, $6,000 to B, and $0 to C.
Under paragraph (d)(2)(ii)(C) of this section, none
of the $8,000 excess deemed NOL is allocated to
A because A’s section 1366(d) losses and deduc-
tions immediately prior to the section 108(b)(2)(A)
reduction ($5,000) do not exceed A’s share of the
excluded COD income for 2009 ($6,000). How-
ever, each of B’s and C’s respective section 1366(d)
losses and deductions immediately prior to the sec-
tion 108(b)(2)(A) reduction exceed each of B’s and
C’s respective shares of the excluded COD income
for 2009. B’s excess amount is $7,000 ($13,000
- $6,000), C’s excess amount is $2,000 ($2,000 -
$0). Therefore, the total of all shareholders’ excess
amounts is $9,000. Under paragraph (d)(2) of this
section, X will allocate $6,222.22 of the $8,000
excess deemed NOL to B ($8,000 x $7,000 / $9,000)
and $1,777.78 of the $8,000 excess deemed NOL
to C. Accordingly, at the beginning of 2010, B has
$6,222.22 of section 1366(d)(2) carryovers and C
has $1,777.78 of section 1366(d)(2) carryovers.
(f)Effective/applicability date—(1)
Paragraphs (a), (b), (c), andExamples 1,
2,3,and4of paragraph (e) of this section
apply to discharges of indebtedness occur-
ring on or after May 10, 2004.
(2) Paragraph (d) andExamples 5,6,
and7of paragraph (e) of this section apply
to discharges of indebtedness occurring on
or after October 30, 2009.
PART 602—OMB CONTROL
NUMBERS UNDER THE PAPERWORK
REDUCTION ACT
Par. 3. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 4. In §602.101, paragraph (b) is
amended by adding the following entry in
numerical order to the table to read as fol-
lows:
§602.101 OMB Control numbers.
*****
(b) * * *
CFR part or section where
identified and described
Current OMB
control No.
*****
1.108–7...........................................................
1545–2155
*****
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
Approved October 21, 2009.
Michael Mundaca,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on October 29,
2009, 8:45 a.m., and published in the issue of the Federal
Register for October 30, 2009, 74 F.R. 56109)
2009–48 I.R.B.691November 30, 2009

Section 9802.—Prohibiting
Discrimination Against
Individual Participants
and Beneficiaries Based
on Health Status
26 CFR 54.9802–1: Prohibiting discrimination
against participants and beneficiaries based on a
health factor.
T.D. 9464
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Centers for Medicare &
Medicaid Services
45 CFR Parts 144, 146, and
148
Interim Final Rules for
Sections 101 through 103
of the Genetic Information
Nondiscrimination Act of 2008
AGENCIES:Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration, Depart-
ment of Labor; Centers for Medicare &
Medicaid Services, Department of Health
and Human Services.
ACTION:Interim final rules with request
for comments.
SUMMARY: This document contains in-
terim final rules implementing sections
101 through 103 of the Genetic Infor-
mation Nondiscrimination Act of 2008.
These provisions prohibit discrimination
based on genetic information in health in-
surance coverage and group health plans.
DATES:Effective date:These interim fi-
nal regulations are effective December 7,
2009.
Comment date. Comments are due on
or before January 5, 2010.
Applicability dates: Group market
rules. These interim final regulations for
the group market apply to group health
plans and group health insurance issuers
for plan years beginning on or after De-
cember 7, 2009.
Individual market rules.Theseinterim
final regulations for the individual market
apply with respect to health insurance cov-
erage offered, sold, issued, renewed, in ef-
fect, or operated in the individual market
on or after December 7, 2009.
ADDRESSES:Written comments may be
submitted to any of the addresses specified
below. Any comment that is submitted to
any Department will be shared with the
other Departments. Please do not submit
duplicates.
Department of Labor.Commentsto
the Department of Labor, identified by
RIN 1210–AB27, by one of the following
methods:
•FederaleRulemakingPortal:
http://www.regulations.gov. Follow
the instructions for submitting com-
ments.
•Email:E-OHPSCA.EBSA@dol.gov.
•Mail or Hand Delivery:Officeof
Health Plan Standards and Compliance
Assistance, Employee Benefits Secu-
rity Administration, Room N–5653,
U.S. Department of Labor, 200 Con-
stitution Avenue NW, Washington, DC
20210,Attention: RIN 1210–AB27.
Comments received by the Depart-
ment of Labor will be posted with-
out change towww.regulations.govand
www.dol.gov/ebsa, and available for pub-
lic inspection at the Public Disclosure
Room, N–1513, Employee Benefits Se-
curity Administration, 200 Constitution
Avenue, NW, Washington, DC 20210,
including any personal information pro-
vided.
Department of Health and Human Ser-
vices (HHS). Comments to HHS, identi-
fied by CMS–4137–IFC, by one of the fol-
lowing methods:
•FederaleRulemakingPortal:
http://www.regulations.gov. Follow
the instructions for submitting com-
ments.
•Mail: Centers for Medicare & Med-
icaid Services, Department of Health
and Human Services, Attention:
CMS–4137–IFC, P.O. Box 8017, Bal-
timore, MD 21244–8010.
•Hand or courier delivery.Comments
may be delivered to either 7500 Se-
curity Boulevard, Baltimore, MD
21244–1850 or Room 445–G, Hubert
H. Humphrey Building, 200 Indepen-
dence Avenue, SW, Washington, DC
20201. For delivery to Baltimore,
please call telephone number (410)
786–7195 in advance to schedule your
arrival with one of our staff members.
For delivery to Washington, because
access to the interior of the HHH
Building is not readily available to
persons without Federal Government
identification, commenters are encour-
aged to leave their comments in the
CMS drop slots located in the main
lobby of the building. A stamp-in
clock is available for persons wishing
to retain proof of filing by stamping
in and retaining an extra copy of the
comments being filed.
All submissions submitted to HHS will
be available for public inspection as they
are received, generally beginning approx-
imately three weeks after publication of a
document, at the headquarters for the Cen-
ters for Medicare & Medicaid Services,
7500 Security Boulevard, Baltimore, MD
21244, Monday through Friday of each
week from 8:30 a.m. to 4 p.m. To schedule
an appointment to view public comments,
phone (410) 786–7195.
Internal Revenue Service.Comments
to the IRS, identified by REG–123829–08,
by one of the following methods:
•FederaleRulemakingPortal:
http://www.regulations.gov. Follow
the instructions for submitting com-
ments.
•Mail:CC:PA:LPD:PR
(REG–123829–08), Room 5205,
Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20044.
•Hand or courier delivery: Monday
through Friday between the hours of
8a.m.and4p.m.to:CC:PA:LPD:PR
(REG–123829–08), Courier’s Desk,
Internal Revenue Service, 1111
November 30, 20096922009–48 I.R.B.

Constitution Avenue, NW, Washington
DC 20224.
All submissions to the IRS will be open
to public inspection and copying in room
1621, 1111 Constitution Avenue, NW,
Washington, DC from 9 a.m. to 4 p.m.
FOR FURTHER INFORMATION
CONTACT:Amy Turner, Employee Ben-
efits Security Administration, Department
of Labor, at (202) 693–8335.
Russ Weinheimer, Internal Revenue
Service, Department of the Treasury, at
(202) 622–6080.
Adam Shaw, Centers for Medicare &
Medicaid Services, Department of Health
and Human Services, at (877) 267–2323,
extension 61091.
CUSTOMERSERVICE
INFORMATION:Individuals inter-
ested in obtaining information from
the Department of Labor concerning
employment-based health coverage laws,
including the nondiscrimination pro-
tections, may call the EBSA Toll-Free
Hotline at 1–866–444–EBSA (3272) or
visit the Department of Labor’s website
(http://www.dol.gov/ebsa). In addition,
individuals may request a copy of CMS’s
publication entitled “Protecting Your
Health Insurance Coverage” by calling
1–800–633–4227.
SUPPLEMENTARY INFORMATION:
I. Background
The Genetic Information Nondiscrim-
ination Act of 2008 (GINA), Public Law
110–233, was enacted on May 21, 2008.
Title I of GINA amended the Employee
Retirement Income Security Act of 1974
(ERISA), the Public Health Service Act
(PHS Act), the Internal Revenue Code
of 1986 (Code), and the Social Security
Act (SSA) to prohibit discrimination in
health coverage based on genetic informa-
tion. GINA builds on existing protections
added by titles I and IV of the Health
Insurance Portability and Accountability
Act of 1996 (HIPAA).
1
Specifically, the
HIPAA portability provisions already pro-
hibit a group health plan or group health
insurance issuer from imposing a preex-
isting condition exclusion based solely on
genetic information. See the 2004 final
HIPAA portability regulations, published
in theFederal Registeron December 30,
2004 (T.D. 9166, 2005–1 C.B. 558 [69 FR
78720]). In addition, the HIPAA nondis-
crimination provisions already prohibit a
group health plan or group health insur-
ance issuer from discriminating against an
individual in eligibility, benefits, or pre-
miums based on genetic information (and
other health factors) of the individual or a
dependent of the individual. See the 2006
final HIPAA nondiscrimination regula-
tions, published in theFederal Register
on December 13, 2006 (T.D. 9298, 2007–1
C.B. 434 [71 FR 75014]).
Sections 101 through 104 of Title I of
GINA prohibit group health plans, health
insurance issuers in the group and indi-
vidual markets,
2
and issuers of Medicare
supplemental (Medigap) policies from dis-
criminating based on genetic information,
and from collecting such information.
3
Section 105 of Title I adds section 1180
of the SSA to require HHS to revise the
HIPAA privacy regulations to clarify that
genetic information is health information
under the rule and to prohibit the use or
disclosure of genetic information for un-
derwriting purposes.
4
TitleIIofGINA
prohibits discrimination in employment
based on genetic information, and limits
the acquisition and disclosure by employ-
ers and other entities covered by GINA
Title II of such information.
5
These in-
terim final regulations (REG–123829–08)
only interpret Sections 101 through 103 of
Title I of GINA, which added provisions
to Subtitle K of the Code, Part 7 of Subtitle
B of Title I of ERISA, and Title XXVII
of the PHS Act.
6
References to GINA in
the remainder of this preamble refer to the
group market provisions of sections 101
through 103 of GINA, unless the context
clearly indicates otherwise.
On October 10, 2008, the Departments
published in theFederal Register(An-
nouncement 2008–107, 2008–46 I.R.B.
1162 [73 FR 60208]) a request for infor-
mation (RFI) soliciting comments on the
requirements of sections 101 through 104
of GINA. In addition, the Departments
consulted with and obtained technical
guidance from the scientific community,
including the National Human Genome
Research Institute within the National
Institutes of Health and the Office for
Human Research Protections, both within
HHS. The Departments also coordinated
with the Equal Employment Opportunity
Commission (EEOC), which has responsi-
bility for Title II of GINA, and the Office
for Civil Rights within HHS, which has
responsibility for section 105 of GINA.
After consideration of the comments re-
ceived in response to the RFI and based on
the consultations with other government
agencies, the Departments are publishing
these interim final regulations. For the
group market, these regulations become
applicable to plans and issuers on the first
day of the plan year beginning on or af-
ter December 7, 2009. For the individual
market, these regulations become applica-
ble with respect to health insurance cover-
age offered, sold, issued, renewed, in ef-
fect, or operated in the individual market
on or after December 7, 2009.
II. Overview of the Regulations
A. Group Market
While GINA does not mandate any spe-
cific benefits for health care services re-
lated to genetic tests, diseases, conditions,
1
These HIPAA provisions generally apply to group health plans and health insurance coverage in the group and individual markets.
2
Rules on GINA’s application in the individual market are solely within the jurisdiction of the Centers for Medicare & Medicaid Services at the Department of Health and Human Services
and are discussed later in this preamble.
3
This regulation does not address the application of GINA to Medigap issuers, which are subject to provisions in section 1882 of the SSA that are implemented by the Centers for Medicare
& Medicaid Services (CMS), and incorporate by reference certain provisionsin a model regulation of the National Association of Insurance Commissioners (NAIC). The model regulation
adopted by the NAIC on September 24, 2008 was published by CMS in theFederal Registeron April 24, 2009 at 74 FR 18808. This regulation also does not address the additional enforcement
authority given to the Secretaries of Labor and HHS, relating to the use of genetic information, which will be addressed in future regulatory guidance.
4
The HIPAA privacy provisions are administered by the Office for Civil Rights within HHS, and will be the subject of a separate rulemaking.
5
Title II of GINA is under the jurisdiction of the Equal Employment Opportunity Commission, which issued a notice of proposed rulemaking on March 2, 2009, 74 FR 9056.
6
Compliance with GINA sections 101 through 103 is not determinative of compliance with any other provision of GINA or any other State or Federal law, including the Americans with
Disabilities Act.
2009–48 I.R.B.693November 30, 2009

or genetic services, GINA establishes rules
that generally prohibit a group health plan
and a health insurance issuer in the group
market from:
•Increasing the group premium or con-
tribution amounts based on genetic in-
formation;
•Requesting or requiring an individual
or family member to undergo a genetic
test; and
•Requesting, requiring or purchasing
genetic information prior to or in con-
nection with enrollment, or at any time
for underwriting purposes.
These three general prohibitions are
subject to rules of construction or excep-
tions included in the statute which are
discussed in further detail later in this pre-
amble.
1. Conforming Changes to Existing
Regulations
Sections 9801 and 9802 of the Code,
701 and 702 of ERISA, and 2701 and 2702
of the PHS Act, as originally added by
HIPAA, included requirements pertaining
to genetic information but did not define
the term. The 2004 final HIPAA portabil-
ity regulations included a definition of ge-
netic information.
GINA contains a statutory definition
of genetic information that differs from
the definition in the 2004 final HIPAA
portability regulations. These interim fi-
nal regulations revise the existing regula-
tions’ definition of genetic information at
26 CFR 54.9801–2, 29 CFR 2590.701–2,
and 45 CFR 144.103, to conform to the
new statutory definition.
Sections 9802 of the Code, 702 of
ERISA, and 2702 of the PHS Act, and
the 2006 final HIPAA nondiscrimination
regulations prohibit discrimination based
on a health factor. GINA retained the
prohibition against increasing an individ-
ual’s premium or contribution amounts
based on genetic information, and added a
new provision to prevent plans and issuers
from adjusting premium or contribution
rates at the group level based on genetic
information of one or more individuals
in the group. Therefore, these interim
final regulations amend the 2006 regula-
tions to add clarifying cross-references.
See 26 CFR 54.9802–1(c)(2)(i) and (iii),
29 CFR 2590.702(c)(2)(i) and (iii), and
45 CFR 146.121(c)(2)(i) and (iii).
2. Definitions
Paragraph (a) of these interim final reg-
ulations
7
provides most of the definitions
used in GINA.
8
Some of these definitions
repeat the statutory language, while others
include regulatory clarifications.
a. Collect
The interim final regulations add the
defined term “collect.” While “collect”
was not defined in the statute, this term
was added to paraphrase the longer phrase
“request, require or purchase.” Thus, un-
der the interim final regulations, “collect”
means, with respect to information, to
request, require, or purchase such infor-
mation.
b. Family Member
GINA adds a definition of family mem-
ber to sections 9832 of the Code, 733 of
ERISA, and 2791 of the PHS Act. The def-
inition of family member determines the
application of GINA in two ways. First,
the definition of genetic information for an
individual includes information about the
manifestation of a disease or disorder in
family members of the individual. Also,
a plan or issuer generally may not request
or require an individual or family member
of the individual to undergo a genetic test.
The statute defines a family member
with respect to any individual as a depen-
dent of such individual (as such term is
used for purposes of sections 9801(f)(2)
of the Code, 701(f)(2) of ERISA, and
2701(f)(2) of the PHS Act (the dependent
special enrollment rules))
9
, and any other
individual that is a first-, second-, third-,
or fourth-degree relative of the individual
or of the dependent of the individual. The
legislative history suggests that the term
“family member” be broadly construed:
“In general, it is intended that the term
‘family member’ be interpreted broadly
so as to provide the maximum protection
against discrimination.” House Report
110–28, Part 2 at 27.
Sections 9801(f)(2) of the Code,
701(f)(2) of ERISA, and 2701(f)(2) of the
PHS Act provide special enrollment rights
to certain dependents that are eligible for
coverage under a group health plan due
to such family events as birth, adoption,
or marriage. The statutory provisions of
neither HIPAA nor GINA define depen-
dent, but the term is defined in the 2004
final HIPAA portability regulations as any
individual who is or may become eligible
for coverage under the terms of a group
health plan because of a relationship to
a participant. This makes clear that it is
necessary to consult the plan document
and other applicable law to determine de-
pendent status for purposes of GINA.
In determining who is a first-, second-,
third-, or fourth-degree relation of an in-
dividual, the interim final regulations treat
relatives by affinity (such as by marriage
or adoption) the same as relatives by con-
sanguinity (relatives who share a common
biological ancestor, or blood relatives).
The definition also treats relatives who
are not full blood relatives (such as half
siblings) the same as full blood relatives.
In addition, the interim final regulations
provide non-exhaustive lists of individ-
uals who are first-, second-, third-, or
fourth-degree relatives. The Departments
invite public comments on this definition.
c. Genetic Information
The interim final regulations contain a
definition of genetic information that re-
states and reorganizes the statutory pro-
visions. Genetic information is defined,
with respect to an individual, as informa-
tion about the individual’s genetic tests or
the genetic tests of family members, the
manifestation of a disease or disorder in
family members of such individual (that
is, family medical history), or any request
of or receipt by the individual or family
7
Because substantively similar regulation text is published separately by the three Departments, and the section numbers will all be different, the preamble refers only to the paragraph
designations within those sections.
8
The same definitions apply to the individual market regulations under GINA,which are discussed later in this preamble, to the extent that they are notinconsistent with respect to health
insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market.
9
This definition of the term “dependent” is solely for purposes of interpreting sections 101 through 103 of GINA, and is not relevant to interpreting the term under Title II of GINA, which
is under the jurisdiction of the EEOC.
November 30, 20096942009–48 I.R.B.

members of genetic services. The defini-
tion further clarifies that genetic informa-
tion does not include information about the
sex or age of any individual. It also clar-
ifies how GINA applies to genetic infor-
mation about a fetus or embryo. As pre-
viously noted, this definition is a change
from the definition of genetic information
that applied under the 2004 final HIPAA
portability regulations.
d. Genetic Services
An individual’s genetic information in-
cludes any request for or receipt of ge-
netic services by such individual, or a fam-
ily member. These interim final regula-
tions follow the statutory definition. “Ge-
netic services” means a genetic test, ge-
netic counseling, or genetic education.
e. Genetic Test
GINA adds a definition of genetic
test to sections 9832 of the Code, 733
of ERISA, and 2791 of the PHS Act.
10
These interim final regulations repeat the
statutory language, which provides that a
genetic test means an analysis of human
DNA, RNA, chromosomes, proteins, or
metabolites, if it detects genotypes, muta-
tions, or chromosomal changes.
The interim final regulations also fol-
low the statutory language providing that
a genetic test does not include an analy-
sis of proteins or metabolites that does not
detect genotypes, mutations, or chromo-
somal changes, or an analysis of proteins
or metabolites that is directly related to a
manifested disease, disorder, or pathologi-
cal condition that could be reasonably de-
tected by a health care professional with
appropriate training and expertise in the
field of medicine involved.
The interim final regulations include
examples of certain tests that currently are
regarded as genetic or non-genetic tests,
as the case may be, based on research in-
cluding consultations with representatives
from the scientific community. However,
due to rapidly evolving scientific knowl-
edge, it is not an exhaustive list.
f. Manifestation or Manifested
The concept of manifestation of a dis-
ease arises in three contexts. First, a plan
or issuer may increase the premium or con-
tribution amount for a group health plan
basedonthemanifestationofadiseaseor
disorder of an individual who is enrolled in
the plan. Second, the definition of genetic
information for an individual includes in-
formation about the manifestation of a dis-
ease or disorder in family members of such
individual. Finally, the definition of ge-
netic test excludes an analysis of proteins
or metabolites that is directly related to a
manifested disease, disorder, or pathologi-
cal condition that could be reasonably de-
tected by a health care professional with
appropriate training and expertise in the
field of medicine involved.
The interim final regulations add a def-
inition of manifestation or manifested. A
disease, disorder, or pathological condi-
tion is manifested when an individual has
been or could reasonably be diagnosed by
a health care professional with appropri-
ate training and expertise in the field of
medicine involved. However, the defini-
tion further provides that a disease, disor-
der, or pathological condition is not mani-
fested if a diagnosis is based principally on
genetic information.
g. Underwriting Purposes
GINA includes a definition of under-
writing purposes. This term is discussed
later in this preamble, in connection with
the discussion of the prohibition on col-
lecting genetic information.
3. Prohibition on Adjusting Group Rates
GINA and these interim final regu-
lations expand the HIPAA prohibitions
against discrimination based on health fac-
tors, by prohibiting group health plans and
health insurance issuers offering health
coverage in connection with a group health
plan from adjusting premium or contribu-
tion amounts for a group health plan or
group of similarly situated individuals on
the basis of genetic information. This is
achangefrompriorlaw,whichallowed
plans and issuers to adjust premium or
contribution amounts for the group health
plan or a group of similarly situated indi-
viduals (but not for individuals within the
group) based on genetic information, as
well as other health factors. This prohibi-
tion against discrimination is distinct from
the prohibition on requesting or requiring
an individual to undergo a genetic test
and the prohibition on collecting genetic
information. Therefore, even when a plan
or issuer has lawfully obtained genetic test
results or other genetic information (for
example, an acquisition that took place
prior to GINA’s effective date), the plan
or issuer is still prohibited — under GINA
and paragraph (b) of these interim final
regulations — from using that information
to discriminate.
GINA and these interim final regula-
tions also provide that the prohibition on
adjusting premiums or contributions based
on genetic information does not limit
the ability of a plan or issuer to increase
the premium or contribution amount for
a group health plan based on the man-
ifestation of a disease or disorder of an
individual enrolled in the plan. However,
a plan or issuer may not use the manifested
disease or disorder of one individual as
genetic information about other group
members to further increase the premium
or contribution amount. Moreover, the
prohibitions on adjusting premium or
contribution amounts based on genetic
information do not prohibit a plan or is-
suer from including costs associated with
providing benefits for covered genetic
tests or genetic services within the costs
of providing other benefits in determin-
ing premiums or contribution amounts.
In particular, a plan or issuer is not re-
quired to reduce the aggregate costs of
providing health benefits for the year by
those costs relating to benefits for genetic
tests and services when adjusting group
rates. These interim final regulations also
make conforming changes to the existing
HIPAA nondiscrimination regulations re-
garding the ability to adjust premium or
contribution amounts based on a health
factor.
4. Limitation on Requesting or Requiring
Genetic Testing
GINA generally prohibits plans and is-
suers from requesting or requiring individ-
uals or their family members to undergo
a genetic test. There are three exceptions
to this prohibition, for certain health care
10
This definition of the term “genetic test” is solely for purposes of interpreting Title I of GINA, and is not relevant to interpreting the term under Title II of GINA, which has a different
statutory definition.
2009–48 I.R.B.695November 30, 2009

professionals, for determinations regard-
ing payment, and for research.
The first exceptionallows a health care
professional who is providing health care
services to an individual to request that
the individual undergo a genetic test. The
health care professional must actually be
providing health care services to the indi-
vidual for the exception to apply. Thus,
for example, the performance of claims re-
view by a health care professional would
never be considered providing health care
services to an individual. The term “health
care professional” is not limited to physi-
cians.
The second exception allows a plan or
issuer to obtain and use the results of a ge-
netic test to make a determination regard-
ing payment. For this purpose, payment
is defined by reference to 45 CFR 164.501
of the HIPAA privacy regulations. How-
ever, plans and issuers are only permitted
to request the minimum amount of infor-
mation necessary to make this determina-
tion. These interim final regulations in-
corporate the standard set forth at 45 CFR
164.502(b) of the HIPAA privacy regula-
tions to determine the minimum amount of
information necessary.
In some cases, the appropriateness of
certain courses of treatment for a patient
depends on the patient’s genetic makeup.
A plan or issuer is permitted to condition
payment for an item or service based on
medical appropriateness that depends on
an individual’s genetic makeup. Under
these narrow circumstances, a plan or is-
suer may condition payment on the out-
come of a genetic test, and may refuse pay-
ment for the item or service if the individ-
ual does not undergo the genetic test. Any
information received by the plan to make a
determination regarding payment, includ-
ing the results of a genetic test, must be
used in accordance with these interim fi-
nal regulations and the 2006 final HIPAA
nondiscrimination regulations.
Under the third exception relating to the
limitation on requesting or requiring ge-
netic testing, a group health plan or group
health insurance issuer is permitted to re-
quest, but not require, that a participant or
beneficiary undergo a genetic test
11
if all
of the following conditions of the research
exception are satisfied:
•The request must be made pursuant to
research that complies with 45 CFR
Part 46 (or equivalent Federal regula-
tions) and any applicable State or local
law or regulations for the protection of
human subjects in research. Moreover,
to comply with the informed consent
requirements of 45 CFR 46.116(a)(8),
an investigator seeking the informed
consent of a human subject must pro-
vide the subject with a statement that
participation in the research is volun-
tary, refusal to participate will involve
no penalty or loss of benefits to which
the subject is otherwise entitled, and
the subject may discontinue participa-
tion at anytime without penalty or loss
of benefits to which the subject is enti-
tled, except in limited circumstances in
which an institutional review board has
approved a waiver or alteration of this
requirement under the requirements of
45 CFR 46.116(c) or (d). For research
in which the investigator provides sub-
jects with the statement required un-
der 45 CFR 46.116(a)(8) when seeking
their informed consent, no additional
disclosures are required for purposes
of the GINA research exception.
•The plan or issuer must make the re-
quest in writing and must clearly indi-
cate to each participant or beneficiary
(or in the case of a minor child, to the
legal guardian of such beneficiary) to
whom the request is made that compli-
ance with the request is voluntary and
noncompliance will have no effect on
eligibility for benefits or premium or
contribution amounts.
•None of the genetic information col-
lected or acquired as a result of the re-
search may be used for underwriting
purposes.
•The plan or issuer must complete
a copy of the “Notice of Research
Exception under the Genetic Infor-
mation Nondiscrimination Act” (the
Notice) and provide it to the address
specified in its instructions. The No-
tice and instructions are available on
the Department of Labor’s website
(http://www.dol.gov/ebsa).
5. Prohibition on Collection of Genetic
Information
Paragraph (d) of these interim final
regulations describes the statutory prohi-
bitions against plans or issuers collecting
genetic information, either for underwrit-
ing purposes or prior to or in connection
with enrollment; sets forth the statutory
definition of underwriting purposes; and
clarifies that, if an individual seeks a ben-
efit under a plan or coverage, the plan
or coverage may limit or exclude the
benefit based on whether the benefit is
medically appropriate (and a determina-
tion of whether the benefit is medically
appropriate is not within the meaning of
underwriting purposes).
Underwriting purposes is defined under
GINA and in these interim final regula-
tions as including, with respect to group
health plan coverage, rules for and deter-
minations of eligibility (including enroll-
ment and continued eligibility), computa-
tion of premium or contribution amounts,
and application of preexisting condition
exclusions. Under GINA, the definition of
underwriting is broader than merely activ-
ities relating to rating and pricing a group
policy. These interim final regulations
clarify that underwriting purposes includes
changing deductibles or other cost-sharing
mechanisms, or providing discounts, re-
bates, payments in kind, or other premium
differential mechanisms in return for activ-
ities such as completing a health risk as-
sessment (HRA) or participating in a well-
ness program.
GINA and paragraph (d) of the interim
final regulations provide that plans and is-
suers are only prohibited from collecting
genetic information for underwriting pur-
poses or prior to or in connection with en-
rollment. Where an individual seeks a ben-
efit under the plan, requesting family med-
ical history or other genetic information to
make a determination whether the bene-
fit is medically appropriate for purposes of
payment is neither for underwriting pur-
poses nor prior to or in connection with en-
rollment. Therefore, although the statutory
payment exception only applies to requests
for individuals to undergo genetic tests,
these interim final regulations provide it is
permissible for a plan or issuer to request
the minimum amount of genetic informa-
11
Comments indicated that at least one issuer is engaging in a long-term research study involving genetic testing. Others may be planning similar research.
November 30, 20096962009–48 I.R.B.

tion necessary to make determinations re-
garding payment. Specifically, these in-
terim final regulations provide that, if an
individual seeks a benefit under a plan or
coverage, the plan or coverage may limit
or exclude the benefit based on whether
the benefit is medically appropriate, and
the determination of whether the benefit
is medically appropriate is not within the
meaning of underwriting purposes. How-
ever, a plan or issuer is permitted to request
only the minimum amount of information
necessary to determine medical appropri-
ateness.
These interim final regulations provide
clarifications of the statutory prohibition
against a plan or issuer collecting genetic
information prior to or in connection with
enrollment. Under the interim final regu-
lations, a collection of genetic information
with respect to an individual is considered
prior to enrollment if it is before the indi-
vidual’s effective date of coverage under
the plan or health insurance coverage. The
determination of whether a plan or issuer is
collecting information before the individ-
ual’s effective date of coverage is made at
the time of collection. Providing that the
determination is made at the time of col-
lection means that if a plan or issuer col-
lects genetic information with respect to an
individual in circumstances that otherwise
would not render the collection impermis-
sible and at that time it is not being col-
lected in connection with a future enroll-
ment, the fact that a future enrollment may
occur does not mean, for purposes of this
rule, that the genetic information was col-
lected before the enrollment. Thus, for ex-
ample, if a plan collected genetic informa-
tion with respect to an individual after ini-
tial enrollment (and not for underwriting
purposes), and the individual later dropped
coverage but then still later reenrolled in
the plan, the collection of genetic informa-
tion after the initial enrollment would not
be considered prior to the reenrollment.
Similarly, if a plan affirmatively re-
quires individuals to reenroll on an annual
basis or allows individuals to change their
enrollment, a collection of genetic infor-
mation made after a current enrollment
will not be considered made prior to a sub-
sequent enrollment unless the collection
of information is or will be used to affect
that subsequent enrollment. Moreover, if
genetic information is collected permis-
sibly under one plan, the information is
transferred to a second plan in connection
with a merger or acquisition after this col-
lection, and individuals covered under the
first plan are enrolling for the first time in
the second plan, the transfer of information
to the second plan will not be considered
a collection prior to the effective date of
coverage under the second plan if the col-
lection of information does not affect the
enrollment status of individuals enrolling
in the second plan.
These interim final regulations include
the statutory exception (to the prohibition
against collections of genetic information
prior to or in connection with enrollment)
for genetic information that is collected in-
cidental to the collection of other infor-
mation and is not used for underwriting
purposes. Some commenters suggested
that some questions that are typically in-
cluded in some HRAs and similar docu-
ments could easily result in an individual
providing genetic information, even if the
question does not mention genetic tests or
family medical history explicitly. An ex-
ample given was, “Have you had any lab-
oratory tests in the past 2 years?” These
commenters suggested plans and issuers
should be required to inform individuals
that they should not reveal genetic infor-
mation.
The interim final regulations clarify that
if it is reasonable to anticipate that health
information will be received as part of the
collection of information, the incidental
collection exception does not apply unless
the collection explicitly states that genetic
information should not be provided. If,
in connection with a collection of infor-
mation, it is reasonable to anticipate that
health information will be received and the
collection explicitly states that genetic in-
formation should not be provided, any ge-
netic information provided will be con-
sidered within the incidental exception, as
long as it is not used for underwriting pur-
poses.
In response to the RFI, a number of
comments were received concerning the
application of the prohibition on request-
ing genetic information for underwriting
purposes to plans and issuers that reward
individuals for completing HRAs. Of
particular concern are wellness programs
including HRAs that request information
about an individual’s family medical his-
tory. Another concern is the application
of the prohibition on requesting genetic
information for underwriting purposes to
screening processes for disease manage-
ment programs that use genetic tests or
family medical histories to identify indi-
viduals that can benefit from the program.
GINA prohibits collecting genetic in-
formation for underwriting purposes. As
described earlier, underwriting purposes
is defined broadly to include rules for el-
igibility for benefits and the computation
of premium or contributions amounts, and
not merely activities relating to rating and
pricing a group policy. Moreover, GINA
defines genetic information as including
family medical history. Consequently,
wellness programs that provide rewards
for completing HRAs that request genetic
information, including family medical
history, violate the prohibition against
requesting genetic information for un-
derwriting purposes. This is the result
even if rewards are not based on the out-
come of the assessment, which otherwise
would not violate the 2006 final HIPAA
nondiscrimination rules regarding well-
ness programs.
Some comments received in response to
the RFI urged strongly that a regulatory ex-
ception should allow wellness programs to
provide rewards for completing HRAs that
request such information, notwithstanding
the statutory prohibition on collecting ge-
netic information.
12
Other comments sug-
gested equally strongly that the regulations
clarify that wellness programs may not
collect such information as a condition for
rewards. These interim final regulations
do not provide an exception from under-
writingforrewardsprovidedbywellness
programs, regardless of the amount of the
reward. Examples generally illustrate that
any reward given for the completion of an
HRA that solicits information about the in-
dividual’s family medical history violates
the requirements of paragraph (d).
However, plans and issuers can collect
genetic information through HRAs under
GINA in certain circumstances. A plan
or issuer can collect genetic information
12
Earlier bills (for example, S.358, 110
th
Cong. (as reported by S. Comm. on Health, Education, Labor, and Pensions) March 29, 2007; H.R. 493, 110
th
Cong. (as reported by H. Comm. on
Energy and Commerce) March 29, 2007) included exceptions for wellness programs in both the Title I health coverage provisions and the Title II employment provisions. As enacted, GINA
only includes an exception for wellness programs in the Title II employment provisions.
2009–48 I.R.B.697November 30, 2009

through an HRA as long as no rewards are
provided (and if the request is not made
priortoorinconnectionwithenrollment).
A plan or issuer can also provide rewards
for completing an HRA as long as the HRA
does not collect genetic information. Sev-
eral examples are provided in these interim
final regulations to illustrate these points.
In one example, a plan administers two dis-
tinct HRAs, one that does not request ge-
netic information and one that does. A re-
ward is provided for completing the HRA
that does not solicit genetic information;
the instructions for the other HRA make
clear that completion of the HRA is wholly
voluntary and will not affect the reward
given for completion of the first HRA. The
example concludes that neither HRA vio-
lates the rules against collecting informa-
tion for underwriting purposes or prior to
or in connection with enrollment. Finally,
another example illustrates the application
of the exception for information obtained
incidentally in the context of the acquisi-
tion of one issuer by another. The Depart-
ments invite comment on ways in which
participation in HRAs can be encouraged
while complying with the statutory prohi-
bition on using genetic information for un-
derwriting purposes.
6. Medical Appropriateness
Paragraph (e) of these interim final
regulations provides examples illustrating
how medical appropriateness is deter-
mined, in connection with both the pay-
ment exception under paragraph (c) and
the prohibition against collecting genetic
information for underwriting purposes
under paragraph (d). Examples illustrate
the minimum amount of genetic informa-
tion necessary to determine payment, the
restriction of benefits to medically appro-
priate treatment, and the application of the
medical appropriateness rules to the use of
genetic information to determine eligibil-
ity for a disease management program.
7. Special Rules Related to Very Small
Group Health Plans
Generally, the provisions of HIPAA ti-
tles I and IV, as amended, do not apply to a
group health plan for a plan year if the plan
is a very small group health plan; that is,
on the first day of the plan year, the group
health plan has fewer than 2 participants
who are current employees. GINA and
these interim final regulations provide that
this exception for very small group health
plans is not available for the genetic in-
formation provisions in Subtitle K of the
Code, Part 7 of Subtitle B of Title I of
ERISA, and Title XXVII of the PHS Act.
8. Treatment of Non-Federal
Governmental Plans
Section 2721(b)(2) of the PHS Act
permits the sponsor of a self-funded
non-Federal governmental plan as defined
in 45 CFR 144.103 to elect to exempt the
plan from most of the requirements of Title
XXVII of the PHS Act. This is referred to
herein as the “opt-out election.” However,
section 2721(b)(2)(C)(ii) states that no
opt-out election is available with respect
to the requirements for certification and
disclosure of creditable coverage. The
PHS Act regulations at 45 CFR 146.180
implement the foregoing opt-out rules
under section 2721.
Section 102(c) of GINA added a sec-
ond limitation on the opt-out rights of
a self-funded non-Federal governmental
plan sponsor. Section 2721(b)(2)(D) of
the PHS Act precludes any exemption
election by a self-funded non-Federal
governmental plan sponsor from GINA’s
requirements. The Centers for Medicare
& Medicaid Services (CMS) amended
45 CFR 146.180(h) accordingly.
CMS made certain additional conform-
ing changes to other provisions of 45 CFR
146.180. In particular, CMS deleted the
reference in 45 CFR 146.180(h) to CMS
enforcement under 45 CFR 146.180(k)
because paragraph (k) makes clear that
CMS enforces all requirements of part 146
that apply to non-Federal governmental
plans. CMS also revised the last sentence
of 45 CFR 146.180(k), which refers to the
imposition of a civil money penalty, by
replacing “under § 150.305” with “under
subpart C of part 150” because subpart
C includes multiple sections that govern
imposition of a civil money penalty,
while 45 CFR 150.305 only applies to a
determination of which entity is liable for
a civil money penalty.
B. Individual Market
The regulations at 45 CFR Part 148
implement the individual market require-
ments of Title XXVII of the PHS Act. Sec-
tion 102(b) of GINA added a new sec-
tion 2753 (42 U.S.C. 300gg–53) to Title
XXVII to prohibit discrimination on the
basis of genetic information in the indi-
vidual health insurance market. Section
2753 of the PHS Act generally parallels
the group market genetic nondiscrimina-
tion provisions GINA added to the Code,
ERISA and the PHS Act. Section 2753
and the interim final regulations prohibit
issuers in the individual market from col-
lecting genetic information prior to or in
connection with such enrollment, and at
any time for underwriting purposes. Sec-
tion 2753 and the interim final regulations
also prohibit issuers from requesting or re-
quiring genetic tests. The exceptions and
rules of construction that apply to the fore-
going requirements in the group market
(for example, the rule for incidental col-
lections of genetic information and the re-
search exception to the rule against requir-
ing genetic tests) also apply in the individ-
ual market.
Since individual market issuers were
not subject to the federal HIPAA nondis-
crimination requirements applicable to is-
suers in the group market, it was necessary
for GINA to amend the PHS Act in order
to have similar protections against genetic
discrimination applicable in both markets.
Thus, new section 2753 of the PHS Act
prohibits issuers of individual health in-
surance policies from using genetic infor-
mation as a basis for making eligibility or
premium determinations, or for imposing
preexisting condition exclusions. Issuers
in the individual market may continue to
establish rules for eligibility, increase pre-
miums, and impose preexisting condition
exclusions based on the manifestation of a
disease or disorder in an individual, or in
a family member covered under the policy
that covers the individual. However, they
cannot use a manifestation of a disease or
disorder in one individual as genetic infor-
mation about family members covered un-
der the same policy or another policy in or-
der to further increase premiums.
These interim final regulations add a
new § 148.180 to subpart C of part 148 to
implement section 2753 of the PHS Act.
To the extent that the provisions of section
2753 parallel the GINA amendments to
section 2702 of the PHS Act which govern
the group market, § 148.180 restates the
corresponding group market provisions
(with conforming changes and technical
November 30, 20096982009–48 I.R.B.

corrections appropriate to the individ-
ual market) rather than incorporating the
group market provisions by reference.
As discussed above, GINA amended
the Social Security Act to include genetic
nondiscrimination provisions that apply to
issuers of Medigap policies. The PHS
Act regulations at 45 CFR 148.220 state
that Medigap policies are excepted bene-
fits. Nevertheless,because Medigap poli-
cies are subject to GINA under the So-
cial Security Act and NAIC model regu-
lation, CMS made clarifying changes to
§ 148.220 to emphasize the foregoing.
III. Interim Final Regulations and
Request for Comments
Section 9833 of the Code, section 734
of ERISA, and section 2792 of the PHS
Act authorize the Secretaries of the Trea-
sury, Labor, and HHS to promulgate any
interim final rules that they determine are
appropriate to carry out the provisions of
Chapter 100 of Subtitle K of the Code, Part
7 of Subtitle B of Title I of ERISA, and Part
A of Title XXVII of the PHS Act, which
include the provisions of GINA.
Under Section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. 551et
seq.) a general notice of proposed rule-
making is not required when an agency,
for good cause, finds that notice and pub-
lic comment thereon are impracticable, un-
necessary, or contrary to the public inter-
est.
These rules are being adopted on an in-
terim final basis because the Secretaries
have determined that without prompt guid-
ance some members of the regulated com-
munity may not know what steps to take
to comply with the requirements of GINA,
which may result in an adverse impact
on participants and beneficiaries with re-
gard to their health benefits under group
health plans and the protections provided
under GINA. Moreover, GINA’s require-
ments will affect the regulated community
in the immediate future.
The requirements of sections 101
through 103 of GINA are effective for all
group health plans and for health insurance
issuers offering coverage in connection
with such plans for plan years beginning
after May 21, 2009. Plan administrators
and sponsors, issuers, and participants and
beneficiaries will need guidance on how
to comply with the new statutory provi-
sions. As noted earlier, these interim rules
take into account comments received by
the Departments in response to the request
for information on GINA published in the
Federal Registeron October 10, 2008
(73 FR 60208). For the foregoing reasons,
the Departments find that the publication
of a proposed regulation, for the purpose
of notice and public comment thereon,
would be impracticable, unnecessary, and
contrary to the public interest.
IV. Economic Impact and Paperwork
Burden
A. Summary—Department of Labor
and Department of Health and Human
Services
As discussed above, Title I of GINA
generally prohibits group health plans and
health insurance issuers in both the group
and individual markets from discriminat-
ing based on genetic information, request-
ing or requiring an individual to undergo
a genetic test, and collecting genetic in-
formation prior to or in connection with
enrollment or for underwriting purposes.
The Departments have crafted these in-
terim final regulations to secure the pro-
tections from discrimination intended by
Congress in as economically efficient a
manner as possible. Although the Depart-
ments are unable to quantify the regula-
tions’ economic benefits, they have quan-
tified their costs and have provided a qual-
itative discussion of some of the benefits
thatmaystemfromthisrule.
One potential benefit associated with
GINA and these interim final regulations
is that genetic testing and research may
expand when discrimination based on ge-
netic information and the collection of
such information is prohibited, if these
protections allay individuals’ fears of
adverse health coverage-related conse-
quences from undergoing genetic testing
and participating in research studies exam-
ining genetic information. An increase in
genetic testing and research, in turn, could
provide greater knowledge regarding the
genetic basis of disease, which could fa-
cilitate the early diagnosis and treatment
of individuals with a genetic predisposi-
tion toward developing certain diseases
and disorders and may allow scientists to
develop new medicines, treatments, and
therapies that could enhance the health
and welfare of Americans.
B. Statement of Need for Regulatory
Action
Congress directed the Departments to
issue regulations implementing the GINA
provisions not later than 12 months af-
ter the date of enactment. In response to
this Congressional directive, these interim
final regulations clarify and interpret the
GINA nondiscrimination provisions under
section 702 of ERISA, sections 2702 and
2753 of the PHS Act, and section 9802 of
the Code. These regulations are needed
to secure and implement GINA’s nondis-
crimination provisions and ensure that the
rights provided to participants, beneficia-
ries, and other individuals under GINA are
fully realized. The Departments’ assess-
ment of the expected economic effects of
these interim final regulations is discussed
in detail below.
C. Executive Order 12866—Department
of Labor and Department of Health and
Human Services
Under Executive Order 12866 (58 FR
51735, Oct. 4, 1993), the Departments
must determine whether a regulatory ac-
tion is “significant” and therefore subject
to the requirements of the Executive Or-
der and review by the Office of Manage-
ment and Budget (OMB). Under section
3(f), the order defines a “significant reg-
ulatory action” as an action that is likely to
result in a rule: (1) having an annual effect
on the economy of $100 million or more,
or adversely and materially affecting a sec-
tor of the economy, productivity, competi-
tion, jobs, the environment, public health
or safety, or state, local or tribal govern-
ments or communities (also referred to as
“economically significant”); (2) creating
serious inconsistency or otherwise inter-
fering with an action taken or planned by
another agency; (3) materially altering the
budgetary impacts of entitlement grants,
user fees, or loan programs or the rights
and obligations of recipients thereof; or (4)
raising novel legal or policy issues arising
out of legal mandates, the President’s pri-
orities, or the principles set forth in the Ex-
ecutive Order.
Pursuant to the terms of the Executive
Order, the Departments have determined
that this action raises novel policy issues
2009–48 I.R.B.699November 30, 2009

arising out of legal mandates. Therefore,
the interim final regulations are “signifi-
cant” and subject to OMB review under
Section 3(f)(4) of the Executive Order.
Accordingly, the Departments have under-
taken, as described below, an assessment
of the costs and benefits of the regulation.
Over the 10-year period of 2010 to 2019,
the present value of the costs, using a
discount rate of 7 percent, is estimated to
be $294.8 million in 2009 Dollars, as is
showninTable1.
All other numbers included in the text
are not discounted.
TABLE 1.—Total Discounted Costs of Rule (in millions of 2009 Dollars)
Year
Wellness Plan
Review
(B)
Individual Market
Review
(C)
Medical Record
Review
(D)
Research
Disclosure
(E)
Total Costs —
Discounted at
7%
B+C+D+E
2010
$2.0$5.3$38.3$0$45.5
2011
$35.8$35.8
2012
$33.4$33.4
2013
$31.2$31.2
2014
$29.2$29.2
2015
$27.3$27.3
2016
$25.5$25.5
2017
$23.8$23.8
2018
$22.3$22.3
2019
$20.8$20.8
Total with 7% Discounting
$294.8
Total with 3% Discounting
$356.8
Note: The displayed numbers are rounded and therefore may not add up to the totals. They are discounted using a 7 percent
discount rate unless otherwise noted.
The Departments performed a compre-
hensive, unified analysis to estimate the
costs and, to the extent feasible, provide a
qualitative assessment of benefits attribut-
able to the statute and regulations for pur-
poses of compliance with Executive Or-
der 12866, the Regulatory Flexibility Act,
and the Paperwork Reduction Act. The
Departments’ assessment and underlying
analysis is set forth below.
1. Affected Entities and Other
Assumptions
The Departments estimate that 137.1
million participants and beneficiaries
13
arecoveredbynearly2.5millionpri-
vate sector group health plans and 31.7
million individuals are covered by indi-
vidual health insurance policies.
14
The
Departments also estimate that approxi-
mately 630 insurers will be are affected by
GINA, consisting of approximately 460
insurers offering coverage in connection
with insured group health plans and ap-
proximately 490 health insurance issuers
offering policies in the individual health
insurance market.
15
2. Benefits
One potential benefit associated with
GINA and these interim final regulations
is that genetic testing and research may
increase if the protections provided un-
der GINA allay the public’s concerns that
health plans and insurers will use genetic
information to discriminate based on the
collection and disclosure of such informa-
tion. Comments received in response to
the RFI indicate that genetic testing and
research currently arebeing underutilized.
A major reason cited for the lack of ge-
netic testing is the public’s fear of ad-
verse employment-related or health cover-
age-related consequences associated with
having genetic testing or participating in
research studies that examine genetic in-
formation. Removing barriers that im-
pede the growth of genetic testing and re-
search has the potential to improve health
and save lives by providing patients and
physicians with critical knowledge to fa-
cilitate early intervention often before dis-
ease symptoms are manifested. It also
could expand the development of scientific
research, which could result in the devel-
opment of new medicines, therapies, and
treatments for diseases and disorders.
Additional economic benefits may de-
rive directly from the improved clarity
provided by the interim final regulations,
which will reduce uncertainty and help
group health plan sponsors and health in-
surers comply with GINA’s requirements
in a cost effective manner. Moreover, the
prohibitions enacted in GINA and these
interim final regulations should provide a
benefit to individuals with genetic predis-
positions for diseases by decreasing the
number of individuals that are denied cov-
erage under a group health plan or priced
out of the individual health insurance mar-
ket.
16
13
Departments’ estimates based on the March 2007 Current Population Survey.
14
Departments’ estimates based on the March 2008 Current Population Survey.
15
Estimates are from 2007 NAIC financial statements data and the California Department of Managed Healthcare (http://wpso.dmhc.ca.gov/hpsearch/viewall.aspx)
16
When scoring the GINA bill the Congressional BudgetOffice estimated that the bill would increase health insurance coverage by about 600 people a yearwith most being in the individual
market. Congressional Budget Office Cost Estimate, H.R. 493 Genetic Information Nondiscrimination Act of 2007, April 12, 2007.
November 30, 20097002009–48 I.R.B.

Currently, the Departments are unable
to quantify these benefits, because rela-
tively few genetic tests and research stud-
ies are performed in the private sector
17
and a limited number of genetic tests are
available. As stated above, the Depart-
ments expect the number of genetic tests
and research studies to increase in the near
future. The Departments, however, lack
sufficient information to project the trajec-
tory of this increase.
a. Health Risk Assessments
As discussed above, GINA and these
interim final regulations prohibit group
health plans and health insurance issuers
offering coverage in the group and indi-
vidual health insurance markets from col-
lecting genetic information in connection
with or prior to enrollment and for under-
writing purposes. Comments received in
response to the RFI indicate that the im-
mediate impact of GINA and these interim
final regulations on group health plans
and health insurance issuers providing
group health coverage should be minimal.
Plans and issuers commented that they do
not collect or use genetic information for
underwriting purposes because pre-GINA
laws and regulations prohibit them from
discriminating against individuals based
on any health status-related factors, in-
cluding genetic information.
18
Currently, many group health plans re-
quest family medical history information
to be provided in response to questions on
HRAs that are completed by new employ-
ees before enrollment in the plan and as
part of open enrollment for current em-
ployees. HRAs are used in connection
with wellness and disease management
programs to identify individuals at risk
for certain conditions and provide an op-
portunity for preventive treatment service
referrals, disease management, and other
behavioral change initiatives that are fo-
cused on creating higher quality medical
outcomes. Some group health plans pro-
vide rewards and incentives to employees
who complete HRAs, such as premium
reductions, lower deductibles, and cash
bonus payments.
The Departments expect that most of
the cost of complying with GINA and
these interim final regulations will be
concentrated among the approximately
30,000 group health plans
19
that are as-
sociated with wellness and disease man-
agement programs that provide rewards
and incentives to employees that complete
HRAs. These plans will have to conduct
a compliance review to ensure that their
HRAs and any associated policies and
procedures comply with GINA’s prohibi-
tion on using genetic information prior to
or in connection with enrollment or for
underwriting purposes and to make any
necessary changes to their HRAs and poli-
cies and procedures.
The Departments assume that insured
plans will rely on the health insurance
issuer providing coverage to ensure com-
pliance and that self-insured plans will
rely on wellness vendors and other service
providers to ensure compliance. These
interim final regulations provide several
examples illustrating the application of
the regulations to HRAs, which are in-
tended to reduce the compliance burden.
Moreover, the per plan compliance cost is
expected to be low, because vendors and
insurers will be able to spread these costs
across multiple client plans.
20
The Departments assume that the aver-
age burden per plan will be one-half hour
of a legal professional’s time at an hourly
labor rate of $116,
21
and one-half hour of a
clerical staff’s time at an hourly labor rate
of $26 to conduct the compliance review
and make the needed changes to the HRAs.
This results in a total cost of $2.1 mil-
lion ($1.7 for legal services, and $0.4 mil-
lion for clerical services) in the first year.
The Departments invite public comments
on this estimate.
To the extent that GINA and these
interim final regulations prohibit group
health plans and issuers from incentivizing
employees to complete HRAs request-
ing genetic information, including family
medical history, and response rates for
HRAs drop as a consequence, a cost may
be incurred that is associated with the
forgone benefits of identifying disease
risks early and preventing their onset. The
Departments do not have adequate data to
determine whether these forgone benefits
would materialize, and, if so, what their
extent may be. However, the Departments
invite public comments on this issue, in-
cluding evidence-based estimates of what
the extent of these forgone benefits may
be, if any, and ways in which these pub-
lic health benefits may be realized while
complyingwiththestatutoryprohibition
on using genetic information for under-
writing purposes.
b. GINA’s Impact on the Individual
Health Insurance Market
The Department of Health and Hu-
man Services expects that the individual
health insurance market will incur higher
costs of complying with these interim fi-
nal regulations than group health plans.
The Departments assume that health in-
surance issuers in the individual market
will have to review their applications and
underwriting policies and procedures to
ensure that genetic information is not col-
lected or used for underwriting purposes.
Issuers also will need to train underwrit-
ers to avoid using genetic information in
underwriting. The Departments estimate
that the approximately 490 issuers in the
individual health insurance market will
spend approximately 100 hours in-house
each conducting a compliance review,
modifying their applications and policies
and procedures, and drafting training ma-
terials and providing training sessions for
underwriters to ensure compliance with
GINA and these interim final regulations
at a labor rate of $116. This results in a
total cost of about $5.6 million. The De-
partments invite public comments on this
estimate.
17
Pollitz, Karen,et.al.“Genetic Discrimination in Health Insurance: Current Legal Protections and Industry Practices.”Inquiry44:350–368 (Fall 2007).
18
See e.g., Comments from BlueCross BlueShield Association, pg. 3 (http://www.dol.gov/ebsa/pdf/cmt–12190808.pdf) and Society for Human Resource Management,
pg. 2 (http://www.dol.gov/ebsa/pdf/cmt–12190813.pdf).
19
This estimate is based on the Kaiser Family Foundation Survey, Employer Health Benefits 2008 Annual Survey: Wellness Programs and Employer Opinions,section12,whichestimates
that 10% of plans have health risk assessment and 12% of those offer a financial incentive to employees that complete HRAs (2.5 million group health plans x 10% of plans have health risk
assessments x 12 % of those plans that offer financial rewards and incentives = 30,000 plans).
20
There are about 30,000 plans with health risk assessments and about 460 insurers in the group market; this is an average of 65 plans per insurer.
21
EBSA estimates based on the National OccupationalEmployment Survey (May 2007, Bureau of Labor Statistics) and the Employment Cost Index June 2008, Bureau of Labor Statistics).
2009–48 I.R.B.701November 30, 2009

One comment received in response to
the RFI indicated that underwriters in the
individual health insurance market request
medical records from medical service
providers for approximately 20 percent
of applicants.
22
It is likely that most of
these medical records contain information
relating to family medical history. In a
survey, 16 of 23 senior medical under-
writers reported that while investigating
an applicant’s medical history they had
encountered genetic information about
an applicant at least once in the appli-
cant’s history.
23
As explained earlier, these
interim final regulations would require
health insurance issuers in the individ-
ual market to explicitly state that genetic
information — including family medical
history — should not be provided when
an issuer requests medical records from
medical services providers for underwrit-
ing purposes. In turn, issuers may request
that medical services providers redact any
family medical history information re-
garding an applicant that is contained in
medical records requested by an issuer to
ensure that the provisions of GINA and
these interim final regulations are not vio-
lated. However, as explained earlier under
the discussion of the incidental collection
exception, if medical services providers
do not comply with the issuers’ requests to
redact such information, the collection of
genetic information would count as an “in-
cidental collection” of genetic information
on the part of issuers, and these interim
final regulations would not be violated so
long as the issuers do not use the genetic
information for underwriting purposes.
The Departments assume that medical
service providers will be responsible for
redacting genetic information from medi-
cal records before submitting the records
to insurers, and that trained medical staff
will be used for this purpose. The De-
partments estimate that, on average, health
insurance issuers will request 3 million
medical records per year, and that medi-
cal records staff willspend one-half hour
per request redacting genetic information
from requested medical records, at a labor
rate of $26 per hour. This results in a total
annual cost of nearly $41 million. The De-
partments invite public comments on this
estimate.
c. Research Exception
As discussed above, GINA and these
interim final regulations provide an ex-
ception to the limitations on requesting or
requiring genetic testing, which allows a
group health plan or group health insur-
ance issuer to request, but not require, a
participant or beneficiary to undergo a ge-
netic test
24
if all of the following condi-
tions of the research exception are satis-
fied:
•The request must be made pursuant to
research that complies with 45 CFR
Part 46 (or equivalent Federal regu-
lations) and any applicable State or
local law or regulations for the pro-
tection of human subjects in research.
To comply with the informed consent
requirements of 45 CFR 46.116(a)(8),
participants in the research must re-
ceive a disclosure that participation
in the research is voluntary, refusal to
participate cannot involve any penalty
or loss of benefits to which the subject
is otherwise entitled, and participa-
tion may be discontinued at anytime
without penalty or loss of benefits
to which the subject is entitled when
the participant’s informed consent is
sought (the participant disclosure).
25
These interim final regulations pro-
vide that when participants receive
the participant disclosure required
under 45 CFR 46.116(a)(8) when
their informed consent is sought, no
additional disclosures are required
for purposes of the GINA research
exception.
•The plan or issuer must make the re-
quest in writing andmust clearly indi-
cate to each participant or beneficiary
(or in the case of a minor child, to the
legal guardian of such beneficiary) to
whom the request is made that compli-
ance with the request is voluntary and
noncompliance will have no effect on
eligibility for benefits or premium or
contribution amounts.
•None of the genetic information col-
lected or acquired as a result of the re-
search may be used for underwriting
purposes.
•The plan or issuer must complete
a copy of the “Notice of Research
Exception under the Genetic Infor-
mation Nondiscrimination Act” (the
Notice) and provide it to the address
specified in its instructions. The No-
tice and instructions are available on
the Department of Labor’s website
(http://www.dol.gov/ebsa).
The Departments estimate that up to
five entities (consisting of group health
plans and health insurance issuers in the
group and individual markets) will use
the genetic research exception and assume
that the requirements of 45 CFR Part 46
will be satisfied. Based on the foregoing,
the Departments assume that all group
health plans and group health insurance
issuers using the exemption will not have
to send a disclosure to participants in the
genetic research, because they will com-
ply with the requirements of 45 CFR Part
46.116(a)(8). Therefore, the only incre-
mental cost imposed by these interim final
regulations will be for the group health
plans and group health issuers to send the
Notice to the appropriate Department.
26
Because this cost isde minimis,ithasnot
been included in this Regulatory Impact
Analysis.
22
This comment may be accessed at the following URL:http://www.dol.gov/ebsa/regs/cmt-geneticinfoND.html
23
Pollitz Karen,et.al.“Genetic Discrimination in Health Insurance: Current Legal Protections and Industry Practices.” Inquiry, 44: 350–368 (Fall 2007)
24
Comments indicated that at least one issuer is engaging in a long-term research study involving genetic testing. Others may be planning similar research.
25
The regulations at 45 CFR 46.116(c) and (d) provide for the waiver or alteration of the requirements for obtaininginformed consent in certain cases. However, given the second condition
established for this research exception under GINA, it is unlikely that a waiver of informed consent could be granted under 45 CFR 46.116(c) or (d). According to 45 CFR 46.116 (c) and (d),
one of the conditions that must be met in order for a waiver to be granted is that the research could not practicably be carried out without the waiver. Thesecond condition of this research
exception under GINA states that a plan or issuer may request, but not require, that a participant or beneficiary undergo genetic testing for researchpurposes only if the plan or issuer makes
the request in writing and clearly indicates that compliance with the request is voluntary. Since it is difficult to envision a circumstance where it would be the case that research could not be
practicably carried out without a waiver of informed consent under 45 CFR 46.116(c) or (d), and yet be able to satisfy the second condition of this research exception under GINA, we expect
that for research studies conducted under the research exception under GINA, it is unlikely that informed consent could be waived under 45 CFR 46.116(c) or (d).
26
The instructions to the notice will specify the appropriate Department to which the notice should be submitted.
November 30, 20097022009–48 I.R.B.

4. Uncertainty
a. Adverse Selection
GINA’s prohibition on the use and
collection of genetic information could
increase the potential for adverse selection
in the individual health insurance market.
Adverse selection arises when individ-
uals seeking coverage have information
about their health risks that issuers do not
know.
27
Such information asymmetry can pre-
vent the insurer from assessing the individ-
ual’s risk accurately enough to determine
the appropriate premium to charge. On av-
erage, if issuers do not accurately assess
the risks they assume, they will pay more
in claims than they receive in premiums.
To eliminate this shortfall, issuers may be
forced to raise premiums for all insureds.
If issuers raise premiums for all insureds,
those with a perceived low risk of needing
medical care might drop their coverage.
This outcome in serious cases may lead to
a continued cycle of across-the-board pre-
mium increases.
The Departments are not able to mea-
sure the extent to which GINA might lead
to adverse selection and thereby raise pre-
miums in the individual health insurance
market, or whether GINA protections of
genetic information will increase the total
number of persons insured under individ-
ual health insurance policies relative to the
number that might leave the market due to
increased premiums. Currently, with few
tests being performed,the Departments ex-
pect the impact to be minimal; however, as
the number of tests increases, the effects of
adverse selection on the individual health
insurance market also could increase and
the impact of adverse selection could grow.
b. Impact of GINA on Health Care
Expenditures
Another uncertainty associated with
GINA and these interim final regulations
is whether total health care expenditures
will increase or decrease. Whether ex-
penditures will increase or decrease is
dependent on a number of factors such
as the following: the cost and predictive
power of tests, how widely the tests are
performed among the population, whether
detected gene abnormalities are based on
a single gene or also involve environmen-
tal and other confounding factors which
lower the predictive value of the test and
treatment, and whether treatments for de-
tected gene abnormalities are less costly
than treatments for the manifested disease.
Genetic testing typically is not covered
under individual health insurance policies;
group health plans are far more likely to
cover both the tests and associated treat-
ments.
28
As the number of genetic tests
performed increases, the Departments ex-
pect group health care premiums will rise
to offset the increased costs to insurers, and
any increase or decrease in overall expen-
ditures is expected to result in increased or
decreased premiums for the group market.
D. Regulatory Flexibility
Act—Department of Labor and
Department of Health and Human
Services
The Regulatory Flexibility Act
(5 U.S.C. 601et seq.) (RFA) imposes
certain requirements with respect to
federal rules that are subject to the notice
and comment requirements of section
553(b) of the Administrative Procedure
Act (5 U.S.C. 551et seq.) and that are
likely to have a significant economic
impact on a substantial number of small
entities. Because these rules are being
issued as interim final regulations, the
RFA does not apply and the Departments
are not required to either certify that the
rule would not have a significant economic
impact on a substantial number of small
entities or conduct a regulatory flexibility
analysis.
Nevertheless, the Departments care-
fully considered the likely impact of the
rule on small entities in connection with
their assessment under Executive Order
12866. The Departments expect the rules
to reduce the compliance burden imposed
on plans and insurers by clarifying defini-
tions and terms contained in the statute and
providing examples of acceptable methods
to comply with specific provisions. Based
on the foregoing, and as further discussed
below, the Departments hereby certify that
the rule will not have a significant eco-
nomic impact on a substantial number of
small entities.
29
The Departments expect most of the
cost of complying with GINA and the rules
to be concentrated among group health
plans associated with wellness and disease
management programs providing rewards
and incentives to employees who complete
Health Risk Assessments (HRAs). The
Departments estimate that approximately
15,000 (out of 2.4 million) small plans
(or 0.00625 of all group health plans) will
need to review their HRAs to ensure that
genetic information is not used prior to or
in connection with enrollment or for un-
derwriting purposes and to make any nec-
essary changes to forms and policies and
procedures. This process is estimated to
require one-half hour of a legal profes-
sional’s time at an hourly labor rate of $116
and one-half hour of a clerical staff mem-
ber’s time at an hourly labor rate of $26
resulting in an average cost to the plans of
$71 ($58 + $13).
Health insurers in both the group and
individual health insurance markets will
have to ensure compliance with the GINA
and the rules. For this purpose, using
the Small Business Administration’s def-
inition of a small business as a business
with less than $7 million in revenues, pre-
miums earned as a measure of revenue, and
data obtained from the National Associa-
tion of Insurance Commissioners, the De-
partments estimate that approximately 75
out of 630 insurers had revenues of less
that $7 million, and, of these, about 25 had
revenues of less than $1 million.
The Departments estimate that each in-
surer on average would spend 100 hours
of professional time at an hourly labor rate
of $116 to revise policies and procedures
and train underwriters about GINA. This
would result in an estimated one time aver-
age cost of $11,600 per insurer. For the ap-
27
For example, individuals who obtain results from genetic tests indicating the risk of contracting a serious medical condition could benefit financially by “choosing the timing of purchases,
and the type and level of benefits purchased. This biased selection would have a direct impact on premium rates, ultimately raising the cost of insurance to everyone.” American Academy of
Actuaries, “Genetic Information andMedical Expense Insurance,” June 2000.
28
American Academy of Actuaries,Genetic Information and Medical Expense Insurance. June 2000
29
For purposes of this certification, the Departments continue to consider a small entity to be an employee benefit plan with fewer than 100 participants. The basis of this definition is found in
section 104(a)(2) of ERISA, which permits the Secretary of Labor to prescribe simplified annual reports for pension plans which cover fewer than 100 participants. The Departments consulted
with The Department consulted with the Small Business Administration inmaking this determination as required by 5 U.S.C. 601(3) and 13 CFR 121.903(c).
2009–48 I.R.B.703November 30, 2009

proximately 25 insurers with revenues of
less than $1 million, this burden could be
more than one percent of premiums. How-
ever, the estimated costs are an average
cost for plans of all sizes, and the Depart-
ments expect small insurers to have lower
implementation costs, because they have
fewer underwriters and other staff mem-
bers to train.
The Departments invite public com-
ments on this certification.
E. Special Analyses—Department of the
Treasury
Notwithstanding the determinations of
the Department of Labor and Department
of Health and Human Services, for pur-
poses of the Department of the Treasury, it
has been determined that this Treasury de-
cision is not a significant regulatory action
for purposes of Executive Order 12866.
Therefore, a regulatory assessment is not
required. It has alsobeen determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations. For the appli-
cability of the RFA, refer to the Special
Analyses section in the preamble to the
cross-referencing notice of proposed rule-
making published elsewhere in this issue
of the Bulletin. Pursuant to section 7805(f)
of the Code, these interim final regulations
will be submitted to the Chief Counsel for
Advocacy of the Small Business Admin-
istration for comment on their impact on
small businesses.
F. Paperwork Reduction Act
1. Department of Labor and Department
of the Treasury
As part of their continuing efforts to
reduce paperwork and respondent burden,
the Departments conduct a preclearance
consultation program to provide the gen-
eral public and federal agencies with an
opportunity to comment on proposed
and continuing collections of information
in accordance with the Paperwork Re-
duction Act of 1995 (PRA) (44 U.S.C.
3506(c)(2)(A)). This helps to ensure that
requested data can be provided in the de-
sired format, reporting burden (time and
financial resources) is minimized, collec-
tion instruments are clearly understood,
and the impact of collection requirements
on respondents can be properly assessed.
As discussed above, GINA and these
interim final regulations provide an excep-
tion to the limitations on requesting or re-
quiring genetic testing that allow a group
health plan or group health insurance is-
suer to request, but not require, a partic-
ipant or beneficiary to undergo a genetic
test
30
if all of the following conditions of
the research exception set forth in 29 CFR
2590.702A(c)(5) are satisfied:
•The request must be made pursuant to
research that complies with 45 CFR
Part 46 (or equivalent Federal regu-
lations) and any applicable State or
local law or regulations for the pro-
tection of human subjects in research.
To comply with the informed consent
requirements of 45 CFR 46.116(a)(8),
a participant must receive a disclosure
that participation in the research is
voluntary, refusal to participate can-
not involve any penalty or loss of
benefits to which the subject is oth-
erwise entitled, and the subject may
discontinue participation at anytime
without penalty or loss of benefits to
which the subject is entitled (the par-
ticipant disclosure).
31
These interim
final regulations provide that when
the participant disclosure is received
by participants when their informed
consent is sought, no additional dis-
closures are required for purposes of
the GINA research exception.
•The plan or issuer must make the re-
quest in writing and must clearly indi-
cate to each participant or beneficiary
(or in the case of a minor child, to the
legal guardian of such beneficiary) to
whom the request is made that compli-
ance with the request is voluntary and
noncompliance will have no effect on
eligibility for benefits or premium or
contribution amounts.
•None of the genetic information col-
lected or acquired as a result of the re-
search may be used for underwriting
purposes.
•The plan or issuer must complete
a copy of the “Notice of Research
Exception under the Genetic Infor-
mation Nondiscrimination Act” (the
Notice) and provide it to the address
specified in its instructions. The No-
tice and instructions are available on
the Department of Labor’s website
(http://www.dol.gov/ebsa).
Two information collection requests
(ICRs) are associated with the genetic
research exception — the participant dis-
closure and the notice. The Departments
estimate that up to three entities will take
advantage of the research exception, and
that all of the entities will comply with the
requirements of 45 CFR Part 46, including
providing the participant disclosure.
The Departments are not soliciting
comments concerning an ICR pertain-
ing to the participant disclosure, because
these interim final regulations provide that
group health plans and group health in-
surance issuers meeting the requirements
of 45 CFR Part 46 are not required to
provide additional disclosures, and the
Departments have assumed that all entities
using the research exemption will meet
these requirements. The costs and bur-
dens associated with complying with the
participant disclosure requirement already
are accounted for in the information col-
lection request for the informed consent
requirements contained in 45 CFR Part 46
approved under the Department of Health
and Human Services’ OMB Control Num-
ber (0990–0260).
Currently, the Departments are solicit-
ing comments concerning the notice. The
Departments have submitted a copy of
these interim final regulations to OMB in
accordance with 44 U.S.C. 3507(d) for
review of its information collections. The
Departments and OMB are particularly
interested in comments that:
•Evaluate whether the collection of in-
formation is necessary for the proper
performance of the functions of the
agency, including whether the infor-
mation will have practical utility;
•Evaluate the accuracy of the agency’s
estimate of the burden of the collection
of information, including the validity
of the methodology and assumptions
used;
30
Comments indicated that at least one issuer is engaging in a long-term research study involving genetic testing. Others may be planning similar research.
31
While 45 CFR 46.116(c) and (d) permit a waiver of the disclosure otherwise required under 45 CFR 46.116(a)(8), it is unlikely that such a waiver could begranted for research studies
conducted under the research exception under GINA. See footnote 25.
November 30, 20097042009–48 I.R.B.

•Enhance the quality, utility, and clarity
of the information to be collected; and
•Minimize the burden of the collection
ofinformationonthosewhoaretore-
spond, including through the use of
appropriate automated, electronic, me-
chanical, or othertechnological collec-
tion techniques or other forms of in-
formation technology, for example, by
permitting electronic submission of re-
sponses.
Comments should be sent to the Office
of Information and Regulatory Affairs,
Attention: Desk Officer for the Employee
Benefits Security Administration either
by fax to (202) 395–7285 or by email to
oira_submission@omb.eop.gov.Although
comments may be submitted through
December 7, 2009, OMB requests that
comments be received within 30 days of
publication of these interim final regula-
tions to ensure their consideration. A copy
of the ICR may be obtained by contact-
ing the PRA addressee: G. Christopher
Cosby, Office of Policy and Research,
U.S. Department of Labor, Employee
Benefits Security Administration, 200
Constitution Avenue, NW, Room N–5718,
Washington, DC 20210. Telephone:
(202) 693–8410; Fax: (202) 219–4745.
These are not toll-freenumbers. E-mail:
ebsa.opr@dol.gov. ICRs submitted to
OMB also are available at reginfo.gov
(http://www.reginfo.gov/public/do/
PRAMain).
The Departments estimate that com-
pleting and mailing the notice will require
15 minutes of clerical time at an hourly
rate of $26 per hour. Therefore, the total
hour burden associated with completing
the notice is estimated to be 0.75 hours
of clerical time. Thecost burden consists
of material and mailing cost to mail the
two-page notice and is estimated to total
$20. Although the Departments share
the burden for this ICR, the Departments
have agreed to allocate the hour and cost
burden associated with the rule entirely
to the Department of Labor, because it is
so minimal. The Departments note that
persons are not required to respond to, and
generally are not subject to any penalty for
failing to comply with, an ICR unless the
ICR has a valid OMB control number.
32
These paperwork burden estimates are
summarized as follows:
Type of Review: New collection.
Agencies: Employee Benefits Security
Administration, Department of Labor; In-
ternal Revenue Service, Department of the
Treasury
Title: Notice of Research Exception un-
der the Genetic Information Nondiscrimi-
nation Act
OMB Number: 1210–NEW.
Affected Public: Business or other for-
profit; not-for-profit institutions.
Respondents:3.
Responses:3.
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
0.75 hours
Estimated Total Annual Burden Cost:
$20
2. Department of Health and Human
Services
Under the Paperwork Reduction Act of
1995, we are required to provide 60-day
notice in theFederal Registerand solicit
public comment before a collection of in-
formation requirement is submitted to the
Office of Management and Budget (OMB)
for review and approval. In order to fairly
evaluate whether an information collec-
tion should be approved by OMB, section
3506(c)(2)(A) of the Paperwork Reduction
Act of 1995 requires that we solicit com-
ment on the following issues:
•The need for the information collection
and its usefulness in carrying out the
proper functions of our agency.
•The accuracy of our estimate of the
information collection burden.
•The quality, utility, and clarity of the
information to be collected.
•Recommendations to minimize the in-
formation collection burden on the af-
fected public, including automated col-
lection techniques.
We are soliciting public comment on
each of these issues for the following sec-
tions of this document that contain infor-
mation collection requirements (ICRs):
a. ICRs Regarding Additional
Requirements Prohibiting Discrimination
Based on Genetic Information (§146.122)
As stated in the interim final regu-
lations at 45 CFR 146.122(c), there are
limitations on requesting or requiring
genetic testing. The interim final reg-
ulations at 45 CFR 146.122(c)(1) state
that a group health plan, and a health
insurance issuer offering health insur-
ance coverage in connection with a group
health plan, must not request or require
an individual or a family member of the
individual to undergo a genetic test. Sec-
tion 146.122(c)(5) explains the research
exception with respect to the limitations
on requesting or requiring genetic test-
ing as defined in 45 CFR 146.122(c)(1).
Specifically, 45 CFR 146.122(c)(5) states
that a plan or issuer may request, but not
require, that a participant or beneficiary
undergo a genetic test if all of the following
conditions are met:
•The request must be made pursuant to
research that complies with 45 CFR
Part 46 (or equivalent Federal regu-
lations) and any applicable State or
local law or regulations for the pro-
tection of human subjects in research.
To comply with the informed consent
requirements of 45 CFR 46.116(a)(8),
a participant must receive a disclosure
that participation in the research is
voluntary, refusal to participate can-
not involve any penalty or loss of
benefits to which the subject is oth-
erwise entitled, and the subject may
discontinue participation at anytime
without penalty or loss of benefits to
which the subject is entitled (the par-
ticipant disclosure).
33
These interim
final regulations provide that when
the participant disclosure is received
by participants when their informed
consent is sought, no additional dis-
closures are required for purposes of
the GINA research exception.
•The plan or issuer must make the re-
quest in writing andmust clearly indi-
cate to each participant or beneficiary
(or in the case of a minor child, to the
legal guardian of such beneficiary) to
whom the request is made that compli-
32
5 CFR 1320.1 through 1320.18
33
While 45 CFR 46.116(c) and (d) permit a waiver of the disclosure otherwise required under 45 CFR 46.116(a)(8), it is unlikely that such a waiver could begranted for research studies
conducted under the research exception under GINA. See footnote 25.
2009–48 I.R.B.705November 30, 2009

ance with the request is voluntary and
noncompliance will have no effect on
eligibility for benefits or premium or
contribution amounts.
•None of the genetic information col-
lected or acquired as a result of the re-
search may be used for underwriting
purposes.
•The plan or issuer must complete
a copy of the “Notice of Research
Exception under the Genetic Infor-
mation Nondiscrimination Act” (the
Notice) and provide it to the address
specified in its instructions. The no-
tice and instructions are available on
the Department of Labor’s website
(http://www.dol.gov/ebsa).
There are two information collection
requirements associated with obtaining a
GINA research exception. The first is
the informed consent requirement as de-
scribed above. To comply with the in-
formed consent requirements of 45 CFR
46.116(a)(8), a participant must receive a
disclosure that participation in the research
is voluntary, refusal to participate cannot
involve any penalty or loss of benefits to
which the subject is otherwise entitled, and
the subject may discontinue participation
at anytime without penalty or loss of bene-
fits to which the subject is entitled (the par-
ticipant disclosure).
34
These interim final
regulations provide that when the partici-
pant disclosure is received by participants
when their informed consent is sought, no
additional disclosures are required for pur-
poses of the GINA research exception.
The burden associated with this require-
ment is the time and effort necessary to de-
velop, draft, and disseminate the informa-
tion consent notice to patients. While this
requirement is subject to the PRA, the as-
sociated burden is already approved under
OMB control number 0990–0260. We are
not soliciting comments on this require-
ment at this time.
The second information collection re-
quirement associated with obtaining a
GINA research exception is the Notice
of Research Exception under the Genetic
Information Nondiscrimination Act (the
Notice). The burden associated with this
requirement is the time and effort nec-
essary for a plan or issuer to complete a
copy of the notice and submit it to CMS.
CMS also estimates that completing and
mailing the notice will require 15 minutes
of clerical time at an hourly rate of $26
per hour. Therefore, the total hour burden
associated with completing the notice is
estimated to be 0.5 hours of clerical time.
The cost burden consists of material and
mailing cost to mail the two-page notice
and is estimated to total $13.
b. ICRs Regarding Prohibition of
Discrimination Based on Genetic
Information (§148.180)
The information collection require-
ments affecting the individual health insur-
ance market as stated in 45 CFR 148.180
mirror the information collection require-
ments affecting the group health insurance
market as stated in 45 CFR 146.122. The
burden is discussed in detail in section
IV.F.2.A. of this preamble. As stated in
section IV.F.2.A. we expect no more than
a combined total of 2 entities between
the group health insurance market and the
individual health insurance market to be
subject to the information collection re-
quirements contained in this interim final
rule.
Estimated Annual Reporting and Recordkeeping Burden
OMB
Control No.
Regulation
Section(s)
RespondentsResponsesBurden per
Response (hours)
Total Annual
Burden (hours)
0938–New
45 CFR 146.122
22
.25.50
45 CFR 148.180
We have submitted a copy of this in-
terim final rule to OMB for its review and
approval of the aforementioned informa-
tion collection requirements. These re-
quirements are not effective until approved
by OMB. Although comments may be sub-
mitted through December 7, 2009, OMB
requests that comments be received within
30 days of publication of these interim fi-
nal regulations to ensure their considera-
tion.
If you comment on these information
collection and recordkeeping require-
ments, please do either of the following:
1. Submit your comments electroni-
cally as specified in the ADDRESSES sec-
tion of this proposed rule; or
2. Submit your comments to the Office
of Information and Regulatory Affairs, Of-
fice of Management and Budget,
Attention:CMS Desk Officer,
CMS–4137–IFC
Fax: (202) 395–7285; or
Email:
OIRA_submission@omb.eop.gov
Please reference “ICRs Regarding Pro-
hibition of Discrimination Based on Ge-
netic Information (§148.180)” when sub-
mitting your comments.
G. Congressional Review Act
These interim final regulations are
subject to the Congressional Review Act
provisions of the Small Business Reg-
ulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801et seq.) and have
been transmitted to Congress and the
Comptroller General for review.
H. Unfunded Mandates Reform Act
For purposes of the Unfunded Man-
dates Reform Act of 1995 (Public Law
104–4), as well as Executive Order 12875,
these interim final regulations do not in-
clude any federal mandate that may result
in expenditures by state, local, or tribal
governments, nor do they include man-
dates which may impose an annual burden
of $100 million or more (as adjusted for in-
flation) on the private sector.
34
While 45 CFR 46.116(c) and (d) permit a waiver of the disclosure otherwise required under 45 CFR 46.116(a)(8), it is unlikely that such a waiver could begranted for research studies
conducted under the research exception under GINA. See footnote 25.
November 30, 20097062009–48 I.R.B.

I. Federalism Statement—Department of
Labor and Department of Health and
Human Services
Executive Order 13132 outlines fun-
damental principles of federalism, and
requires the adherence to specific criteria
by federal agencies in the process of their
formulation and implementation of poli-
cies that have “substantial direct effects”
on the States, the relationship between the
national government and States, or on the
distribution of power and responsibilities
among the various levels of government.
Federal agencies promulgating regulations
that have these federalism implications
must consult with State and local officials,
and describe the extent of their consulta-
tion and the nature of the concerns of State
and local officials in the preamble to the
regulation.
In the Departments’ view, these interim
final regulations have federalism impli-
cations, because they have direct effects
on the States, the relationship between
the national government and States, or on
the distribution of power and responsibili-
ties among various levels of government.
However, in the Departments’ view, the
federalism implications of these regula-
tions are substantially mitigated because,
with respect to health insurance issuers,
the Departments expect that the majority
of States will enact laws or take other ap-
propriate action resulting in their meeting
or exceeding the federal GINA standards
prohibiting discrimination based on ge-
netic information.
In general, through section 514, ERISA
supersedes State laws to the extent that
they relate to any covered employee ben-
efit plan, and preserves State laws that
regulate insurance, banking, or securities.
While ERISA prohibits States from regu-
lating a plan as an insurance or investment
company or bank, HIPAA added a new
preemption provision to ERISA (as well
as to the PHS Act) narrowly preempting
State requirements for group health insur-
ance coverage. This amendment applies
to the GINA nondiscrimination provi-
sions. With respect to these provisions,
States may continue to apply State law
requirements except to the extent that such
requirements prevent the application of
the portability, access, and renewability
requirements of HIPAA, which include
GINA’s nondiscrimination requirements
that are the subject of this rulemaking.
State insurance laws that are more strin-
gent than the federal requirements are
unlikely to “prevent the application of”
GINA, and be preempted. Accordingly,
States have significant latitude to impose
requirements on health insurance issuers
that are more restrictive than the federal
law.
GINA provides the Secretary of La-
bor with the express authority to impose
a penalty against any health insurance is-
suer offering health insurance to a group
health plan covered by ERISA for any fail-
ure by the issuer to meet the GINA re-
quirements. The States may enforce the
provisions of GINA as they pertain to is-
suers, but the Secretary of HHS is required
to enforce any provisions that a State fails
to substantially enforce. This relates to
HHS’ responsibility to enforce the HIPAA
nondiscrimination provisions. In exercis-
ing its responsibility, HHS works cooper-
atively with the State for the purpose of
addressing the State’s concerns and avoid-
ing conflicts with the exercise of State au-
thority. HHS has developed procedures
to implement its enforcement responsibili-
ties, and to afford the States the maximum
opportunity to enforce HIPAA’s require-
ments in the first instance. HHS’ proce-
dures address the handling of reports that
States may not be enforcing HIPAA’s re-
quirements, and the mechanism for allo-
cating enforcement responsibility between
the States and HHS. In compliance with
the requirement of Executive Order 13132
that agencies examine closely any policies
that may have federalism implications or
limit the policy making discretion of the
States, the Department of Labor and HHS
have engaged in numerous efforts to con-
sultwithandworkcooperativelywithaf-
fected State and local officials. It is ex-
pected that the Departments will act in a
similar fashion in enforcing the GINA re-
quirements.
In addition, the Departments specifi-
cally consulted with the National Associa-
tion of Insurance Commissioners (NAIC)
in developing these interim final regula-
tions. Through the NAIC, the Depart-
ments sought and received the input of
State insurance departments regarding cer-
tain insurance rating practices. The De-
partments have also cooperated with the
States in several ongoing outreach initia-
tives, through which information on GINA
is shared among federal regulators, State
regulators, and the regulated community.
Throughout the process of developing
these interim final regulations, to the ex-
tent feasible within the specific preemp-
tion provisions of HIPAA as it applies to
GINA, the Departments have attempted to
balance the States’ interests in regulating
health insurance issuers, and Congress’s
intent to provide uniform minimum pro-
tections to consumers in every State. By
doing so, it is the Departments’ view that
they have complied with the requirements
of Executive Order 13132.
Pursuant to the requirements set forth
in section 8(a) of Executive Order 13132,
and by the signatures affixed to these reg-
ulations, the Departments certify that the
Employee Benefits Security Administra-
tion and the Centers for Medicare & Med-
icaid Services have complied with the re-
quirements of Executive Order 13132 for
the attached interim final regulations in a
meaningful and timely manner.
V. Statutory Authority
The Department of the Treasury tempo-
rary and final regulations are adopted pur-
suant to the authority contained in sections
7805 and 9833 of the Code.
The Department of Labor interim fi-
nal regulations are adopted pursuant to
the authority contained in 29 USC 1027,
1059, 1135, 1161–1168, 1169, 1181–1183,
1181 note, 1185, 1185a, 1185b, 1191,
1191a, 1191b, and 1191c; sec.101(g), Pub-
lic Law 104–191, 110 Stat. 1936; sec.
401(b), Public Law 105–200, 112 Stat.
645 (42 USC 651 note); sec. 101(f), Public
Law 110–233, 122 Stat. 881; Secretary of
Labor’s Order 1–2003, 68 FR 5374 (Feb.
3, 2003).
The Department of Health and Hu-
man Services interim final regulations are
adopted pursuant to the authority con-
tained in sections 2701 through 2763,
2791, and 2792 of the PHS Act (42 USC
300gg through 300gg–63, 300gg–91,
and 300gg–92), as added by Public Law
104–191, and amended by Public Law
104–204, Public Law 105–277, and Public
Law 110–233.
*****
2009–48 I.R.B.707November 30, 2009

Amendments to the Regulations
Internal Revenue Service
26 CFR Chapter 1
Accordingly, 26 CFR Part 54 is
amended as follows:
PART 54 — PENSION EXCISE TAXES
Paragraph 1. The authority citation for
part 54 is amended by adding an entry for
§54.9802–3T in numerical order to read in
part as follows:
Authority: 26 U.S.C. 7805. * * *
Section 54.9802–3T also issued under
26 U.S.C. 9833. * * *
Par. 2. Section 54.9801–1 is amended
by revising paragraph (a) and adding para-
graph (b)(6) to read as follows:
§54.9801–1 Basis and scope.
(a)Statutory basis. This section and
sections 54.9801–2 through 54.9801–6,
54.9802–1, 54.9802–2, 54.9802–3T,
54.9811–1, 54.9812–1T, 54.9831–1, and
54.9833–1 (portability sections) imple-
ment Chapter 100 of Subtitle K of the
Internal Revenue Code of 1986.
(b) * * *
(6) Additional requirements prohibiting
discrimination based on genetic informa-
tion.
*****
Par 3. Section 54.9801–2 is amended
by revising the text in the first sentence and
revising the entry for Genetic information
to read as follows:
§54.9801–2 Definitions.
Unless otherwise provided, the defi-
nitions in this section govern in applying
the provisions of §54.9801–1, this sec-
tion, §§54.9801–3 through 54.9801–6,
54.9802–1, 54.9802–2, 54.9802–3T,
54.9811–1, 54.9812–1T, 54.9831–1, and
54.9833–1.
*****
Genetic informationhas the meaning
given the term in §54.9802–3T(a)(3).
*****
Par 4. Section 54.9802–1 is amended
by revising paragraphs (a)(1)(vi), (c)(2)(i),
(c)(2)(iii), and the introductory text and
paragraph (c)(2)(iii)Example 1to read as
follows:
§54.9802–1 Prohibiting discrimination
against participants and beneficiaries
based on a health factor.
(a)***(1)***
(vi) Genetic information, as defined in
§54.9802–3T.
*****
(c) * * *
(2)Rules relating to premium rates—(i)
Group rating based on health factors not
restricted under this section. Nothing in
this section restricts the aggregate amount
that an employer may be charged for cov-
erage under a group health plan. But see
§54.9802–3T(b), which prohibits adjust-
ments in group premium or contribution
rates based on genetic information.
*****
(iii)Examples. The rules of this para-
graph (c)(2) are illustrated by the follow-
ing examples:
Example 1.(i)Facts. An employer sponsors
a group health plan and purchases coverage from a
health insurance issuer. In order to determine the pre-
mium rate for the upcoming plan year, the issuer re-
views the claims experience of individuals covered
under the plan. The issuer finds that Individual F had
significantly higher claims experience than similarly
situated individuals in the plan. The issuer quotes
the plan a higher per-participant rate because of F’s
claims experience.
(ii)Conclusion.SeeExample 1in 29 CFR
2590.702(c)(2) and 45 CFR 146.121(c)(2) for a con-
clusion that the issuer does not violate the provisions
of 29 CFR 2590.702(c)(2) and 45 CFR 146.121(c)(2)
similar to the provisions of this paragraph (c)(2) be-
cause the issuer blends the rate so that the employer
is not quoted a higher rate for F than for a similarly
situated individual based on F’s claims experience.
(However, those examplesconclude that if the issuer
used genetic information in computing the group
rate, it would violate 29 CFR 2590.702–1(b) or 45
CFR 146.122(b).)
*****
Par. 5. Section 54.9831–1 is amended
by revising paragraph (b) to read as fol-
lows:
§54.9831–1 Special rules relating to
group health plans.
*****
(b)General exception for certain small
grouphealthplans. (1) Subject to para-
graph (b)(2) of this section, the require-
ments of §§54.9801–1 through 54.9801–6,
54.9802–1, 54.9802–2, 54.9811–1,
54.9812–1T, and 54.9833–1 do not apply
to any group health plan for any plan year
if, on the first day of the plan year, the
plan has fewer than two participants who
are current employees.
(2) The exception of paragraph (b)(1) of
this section does not apply with respect to
the following requirements:
(i) Section 54.9801–3(b)(6).
(ii) Section 54.9802–1(b), as such para-
graph applies with respect to genetic infor-
mation as a health factor.
(iii) Section 54.9802–1(c), as such
paragraph applies with respect to genetic
information as a health factor.
(iv) Section 54.9802–1(e), as such para-
graph applies with respect to genetic infor-
mation as a health factor.
(v) Section 54.9802–3T(b).
(vi) Section 54.9802–3T(c).
(vii) Section 54.9802–3T(d).
(viii) Section 54.9802–3T(e).
*****
Par. 6. Section 54.9802–3T is added to
read as follows:
§54.9802–3T Ad
ditional requirements
prohibiting di
scrimination based on
genetic infor
mation (temporary).
(a)Definitions. Unless otherwise pro-
vided, the definitions in this paragraph (a)
govern in applying the provisions of this
section.
(1)Collectmeans, with respect to in-
formation, to request, require, or purchase
such information.
(2)Family membermeans, with respect
to an individual —
(i) A dependent (as defined for purposes
of §54.9801–2) of the individual; or
(ii)Anyotherpersonwhoisafirst-de-
gree, second-degree, third-degree, or
fourth-degree relative of the individual or
of a dependent of the individual. Rela-
tives by affinity (such as by marriage or
adoption) are treated the same as relatives
by consanguinity (that is, relatives who
share a common biological ancestor). In
determining the degree of the relationship,
relatives by less than full consanguinity
(such as half-siblings, who share only one
parent) are treated the same as relatives by
full consanguinity (such as siblings who
share both parents).
(A) First-degree relatives include par-
ents, spouses, siblings, and children.
November 30, 20097082009–48 I.R.B.

(B) Second-degree relatives include
grandparents, grandchildren, aunts, un-
cles, nephews, and nieces.
(C) Third-degree relatives include
great-grandparents, great-grandchildren,
great aunts, great uncles, and first cousins.
(D) Fourth-degree relatives include
great-great grandparents, great-great
grandchildren, and children of first
cousins.
(3)Genetic informationmeans—
(i) Subject to paragraphs (a)(3)(ii) and
(a)(3)(iii) of this section, with respect to an
individual, information about—
(A) The individual’s genetic tests (as
defined in paragraph (a)(5) of this section);
(B) The genetic tests of family members
of the individual;
(C) The manifestation (as defined in
paragraph (a)(6) of this section) of a dis-
ease or disorder in family members of the
individual; or
(D) Any request for, or receipt of, ge-
netic services (as defined in paragraph
(a)(4) of this section), or participation in
clinical research which includes genetic
services, by the individual or any family
member of the individual.
(ii) The termgenetic informationdoes
not include information about the sex or
age of any individual.
(iii) The termgenetic informationin-
cludes—
(A) With respect to a pregnant woman
(or a family member of the pregnant
woman), genetic information of any fetus
carried by the pregnant woman; and
(B) With respect to an individual (or a
family member of the individual) who is
utilizing an assisted reproductive technol-
ogy, genetic information of any embryo
legally held by the individual or family
member.
(4)Genetic servicesmeans—
(i) A genetic test, as defined in para-
graph (a)(5) of this section;
(ii) Genetic counseling (including ob-
taining, interpreting, or assessing genetic
information); or
(iii) Genetic education.
(5)(i)Genetic testmeans an analysis of
human DNA, RNA, chromosomes, pro-
teins, or metabolites, if the analysis detects
genotypes, mutations, or chromosomal
changes. However, a genetic test does not
include an analysis of proteins or metabo-
lites that is directly related to a manifested
disease, disorder, or pathological condi-
tion. Accordingly, a test to determine
whether an individual has a BRCA1 or
BRCA2 variant is a genetic test. Similarly,
a test to determine whether an individ-
ual has a genetic variant associated with
hereditary nonpolyposis colorectal cancer
is a genetic test. However, an HIV test,
complete blood count, cholesterol test,
liver function test, or test for the presence
of alcohol or drugs is not a genetic test.
(ii) The rules of this paragraph (a)(5) are
illustrated by the following example:
Example.(i)Facts. Individual A is a newborn
covered under a group health plan. A undergoes a
phenylketonuria (PKU) screening, which measures
the concentration of a metabolite, phenylalanine, in
A’s blood. In PKU, a mutation occurs in the pheny-
lalanine hydroxylase (PAH) gene which contains in-
structions for making the enzyme needed to break
down the amino acid phenylalanine. Individuals with
the mutation, who have a deficiency in the enzyme to
break down phenylalanine, have high concentrations
of phenylalanine.
(ii)Conclusion.InthisExample, the PKU screen-
ing is a genetic test with respect to A because the
screening is an analysis of metabolites that detects a
genetic mutation.
(6)(i)Manifestationormanifested
means, with respect to a disease, disorder,
or pathological condition, that an indi-
vidual has been or could reasonably be
diagnosed with the disease, disorder, or
pathological condition by a health care
professional with appropriate training and
expertise in the field of medicine involved.
For purposes of this section, a disease,
disorder, or pathological condition is not
manifested if a diagnosis is based princi-
pally on genetic information.
(ii) The rules of this paragraph (a)(6) are
illustrated by the following examples:
Example 1.(i)Facts. Individual A has a family
medical history of diabetes. A begins to experience
excessive sweating, thirst, and fatigue. A’s physician
examines A and orders blood glucose testing (which
is not a genetic test). Based on the physician’s ex-
amination, A’s symptoms, and test results that show
elevated levels of blood glucose, A’s physician diag-
noses A as having adult onset diabetes mellitus (Type
2 diabetes).
(ii)Conclusion.InthisExample 1, A has been
diagnosed by a health care professional with appro-
priate training and expertise in the field of medicine
involved. The diagnosis is not based principally on
genetic information. Thus, Type 2 diabetes is mani-
fested with respect to A.
Example 2.(i)Facts. Individual B has several
family members with colon cancer. One of them un-
derwent genetic testing which detected a mutation in
the MSH2 gene associated with hereditary nonpoly-
posis colorectal cancer (HNPCC). B’s physician, a
health care professional with appropriate training and
expertise in the field of medicine involved, recom-
mends that B undergo a targeted genetic test to look
for the specific mutation found in B’s relative to deter-
mine if B has an elevated risk for cancer. The genetic
test with respect to B showed that B also carries the
mutation and is at increased risk to develop colorec-
tal and other cancers associated with HNPCC. B has a
colonoscopy which indicates no signs of disease, and
B has no symptoms.
(ii)Conclusion.InthisExample 2, because B
has no signs or symptoms of colorectal cancer, B
has not been and could not reasonably be diagnosed
with HNPCC. Thus, HNPCC is not manifested with
respect to B.
Example 3.(i)Facts. Same facts asExample
2, except that B’s colonoscopy and subsequent tests
indicate the presence of HNPCC. Based on the
colonoscopy and subsequent test results, B’s physi-
cian makes a diagnosis of HNPCC.
(ii) Conclusion. In thisExample 3, HNPCC is
manifested with respect to B because a health care
professional with appropriate training and expertise
in the field of medicine involved has made a diagnosis
that is not based principally on genetic information.
Example 4.(i)Facts. Individual C has a fam-
ily member that has been diagnosed with Hunting-
ton’s Disease. A genetic test indicates that C has the
Huntington’s Disease gene variant. At age 42, C be-
gins suffering from occasional moodiness and disori-
entation, symptoms which are associated with Hunt-
ington’s Disease. C is examined by a neurologist (a
physician with appropriate training and expertise for
diagnosing Huntington’s Disease). The examination
includes a clinical neurological exam. The results of
the examination do not support a diagnosis of Hunt-
ington’s Disease.
(ii)Conclusion. In thisExample 4,Cisnotand
could not reasonably be diagnosed with Huntington’s
Disease by a health care professional with appropri-
ate training and expertise. Therefore, Huntington’s
Disease is not manifested with respect to C.
Example 5.(i)Facts. Same facts asExample 4,
except that C exhibits additional neurological and be-
havioral symptoms, and the results of the examina-
tion support a diagnosis of Huntington’s Disease with
respect to C.
(ii)Conclusion. In thisExample 5,Ccouldrea-
sonably be diagnosed with Huntington’s Disease by a
health care professional with appropriate training and
expertise. Therefore, Huntington’s Disease is mani-
fested with respect to C.
(7)Underwriting purposeshas the
meaning given in paragraph (d)(1) of this
section.
(b)No group-based discrimination
based on genetic information—(1)In gen-
eral. For purposes of this section, a group
health plan must not adjust premium or
contribution amounts for any employer, or
any group of similarly situated individuals
under the plan, on the basis of genetic
information. For this purpose, “similarly
situated individuals”are those described
in §54.9802–1(d).
(2)Rule of construction. Nothing in
paragraph (b)(1) of this section (or in para-
graph (d)(1) or (d)(2) of this section) lim-
its the ability of a group health plan to
2009–48 I.R.B.709November 30, 2009

increase the premium for an employer or
for a group of similarly situated individu-
als under the plan based on the manifesta-
tion of a disease or disorder of an individ-
ual who is enrolled in the plan. In such a
case, however, the manifestation of a dis-
ease or disorder in one individual cannot
also be used as genetic information about
other group members to further increase
thepremiumforanemployeroragroup
of similarly situated individuals under the
plan.
(3)Examples. Therulesofthispara-
graph (b) are illustrated by the following
examples:
Example 1.(i)Facts. An employer sponsors a
group health plan that provides coverage through a
health insurance issuer. In order to determine the pre-
mium rate for the upcoming plan year, the issuer re-
views the claims experience of individuals covered
under the plan and other health status information of
the individuals, including genetic information. The
issuer finds that three individuals covered under the
plan had unusually high claims experience. In addi-
tion, the issuer finds that the genetic information of
two other individuals indicates the individuals have a
higher probability of developing certain illnesses al-
though the illnesses are not manifested at this time.
The issuer quotes the plan a higher per-participant
rate because of both the genetic information and the
higher claims experience.
(ii)Conclusion.SeeExample 1in 29 CFR
2590.702–1(b)(3) or 45 CFR 146.122(b)(3) for a
conclusion that the issuer violates the provisions of
29 CFR 2590.702–1(b) or 45 CFR 146.122(b) similar
to the requirements of this paragraph (b) because the
issuer adjusts the premium based on genetic infor-
mation. However, if the adjustment related solely to
claims experience, the adjustment would not violate
the requirements of 29 CFR 2590.702–1 or 45 CFR
146.122 similar to the requirements of this section
(nor would it violate the requirements of paragraph
(c) of 29 CFR 2590.702 or 45 CFR 146.121 similar
to the requirements of paragraph (c) of §54.9802–1,
which prohibits discrimination in individual premi-
ums or contributions based on a health factor but
permits increases in the group rate based on a health
factor).
Example 2.(i)Facts. An employer sponsors a
group health plan that provides coverage through a
health insurance issuer. In order to determine the pre-
mium rate for the upcoming plan year, the issuer re-
views the claims experience of individuals covered
under the plan and other health status information of
the individuals, including genetic information. The
issuer finds that Employee A has made claims for
treatment of polycystic kidney disease. A also has
two dependent children covered under the plan. The
issuer quotes the plan a higher per-participant rate be-
cause of both A’s claims experience and the family
medical history of A’s children (that is, the fact that
A has the disease).
(ii)Conclusion.SeeExample 2in 29 CFR
2590.702–1(b)(3) or 45 CFR 146.122(b)(3) for a
conclusion that the issuer violates the provisions
of 29 CFR 2590.702–1(b) or 45 CFR 146.122(b)
similar to the requirements of this paragraph (b)
because, by taking the likelihood that A’s children
may develop polycystic kidney disease into account
in computing the rate for the plan, the issuer adjusts
the premium based on genetic information relating
to a condition that has not been manifested in A’s
children. However, the issuer does not violate the
requirements of 29 CFR 2590.702–1(b) or 45 CFR
146.122(b) similar to the requirements of this para-
graph (b) by increasing the premium based on A’s
claims experience.
(c)Limitation on requesting or requir-
ing genetic testing—(1)General rule.Ex-
cept as otherwise provided in this para-
graph (c), a group health plan must not re-
quest or require an individual or a family
member of the individual to undergo a ge-
netic test.
(2)Health care professional may rec-
ommend a genetic test. Nothing in para-
graph (c)(1) of this section limits the au-
thority of a health care professional who
is providing health care services to an in-
dividual to request that the individual un-
dergo a genetic test.
(3)Examples. The rules of paragraphs
(c)(1) and (c)(2) of this section are illus-
trated by the following examples:
Example 1.(i)Facts. Individual A goes to a
physician for a routine physical examination. The
physician reviews A’s family medical history and A
informs the physician that A’s mother has been diag-
nosed with Huntington’s Disease. The physician ad-
vises A that Huntington’sDisease is hereditary and
recommends that A undergo a genetic test.
(ii)Conclusion.InthisExample 1, the physician
is a health care professional who is providing health
care services to A. Therefore, the physician’s recom-
mendation that A undergo the genetic test does not
violate this paragraph (c).
Example 2.(i)Facts. Individual B is covered by a
health maintenance organization (HMO).Bis a child
being treated for leukemia. B’s physician, who is em-
ployed by the HMO, is considering a treatment plan
that includes six-mercaptopurine, a drug for treating
leukemia in most children. However, the drug could
be fatal if taken by a small percentage of children with
a particular gene variant. B’s physician recommends
that B undergo a genetic test to detect this variant be-
fore proceeding with this course of treatment.
(ii)Conclusion.InthisExample 2, even though
the physician is employed by the HMO, the physi-
cian is nonetheless a health care professional who is
providing health care services to B. Therefore, the
physician’s recommendation that B undergo the ge-
netic test does not violate this paragraph (c).
(4)Determination regarding pay-
ment—(i)In general. As provided in this
paragraph (c)(4), nothing in paragraph
(c)(1) of this section precludes a plan from
obtaining and using the results of a genetic
test in making a determination regarding
payment. For this purpose, “payment” has
the meaning given such term in 45 CFR
164.501 of the privacy regulations issued
under the Health Insurance Portability
and Accountability Act. Thus, if a plan
conditions payment for an item or service
based on its medical appropriateness and
the medical appropriateness of the item
or service depends on the genetic makeup
of a patient, then the plan is permitted to
condition payment for the item or service
on the outcome of a genetic test. The plan
may also refuse payment if the patient
does not undergo the genetic test.
(ii)Limitation. A plan is permitted to
request only the minimum amount of infor-
mation necessary to make a determination
regarding payment. The minimum amount
of information necessary is determined in
accordance with the minimum necessary
standard in 45 CFR 164.502(b) of the pri-
vacy regulations issued under the Health
Insurance Portability and Accountability
Act.
(iii)Examples. See paragraph (e) of this
section for examples illustrating the rules
of this paragraph (c)(4), as well as other
provisions of this section.
(5)Research exception. Notwithstand-
ing paragraph (c)(1) of this section, a plan
may request, but not require, that a partic-
ipant or beneficiary undergo a genetic test
if all of the conditions of this paragraph
(c)(5) are met:
(i)Research in accordance with Fed-
eral regulations and applicable State or lo-
cal law or regulations. The plan makes
the request pursuant to research, as de-
fined in 45 CFR 46.102(d), that complies
with 45 CFR Part 46 or equivalent Federal
regulations, and any applicable State or
local law or regulations for the protection
of human subjects in research.
(ii)Written request for participation in
research. The plan makes the request in
writing, and the request clearly indicates to
each participant or beneficiary (or, in the
case of a minor child, to the legal guardian
of the beneficiary) that—
(A) Compliance with the request is vol-
untary; and
(B) Noncompliance will have no effect
on eligibility for benefits (as described in
§54.9802–1(b)(1)) or premium or contri-
bution amounts.
(iii)Prohibition on underwriting.No
genetic information collected or acquired
under this paragraph (c)(5) can be used
for underwriting purposes (as described in
paragraph (d)(1) of this section).
November 30, 20097102009–48 I.R.B.

(iv)Notice to Federal agencies.The
plan completes a copy of the “Notice of
Research Exception under the Genetic In-
formation Nondiscrimination Act” autho-
rized by the Secretary and provides the no-
tice to the address specified in the instruc-
tions thereto.
(d)Prohibitions on collection of ge-
netic information—(1)For underwriting
purposes—(i)General rule. A group
health plan must not collect (as defined in
paragraph (a)(1) of this section) genetic
information for underwriting purposes.
See paragraph (e) of this section for exam-
ples illustrating the rules of this paragraph
(d)(1), as well as other provisions of this
section.
(ii)Underwriting purposes defined.
Subject to paragraph (d)(1)(iii) of this sec-
tion,underwriting purposesmeans, with
respect to any group health plan, or health
insurance coverage offered in connection
with a group health plan—
(A) Rules for, or determination of,
eligibility (including enrollment and
continued eligibility) for benefits un-
der the plan or coverage as described in
§54.9802–1(b)(1)(ii) (including changes
in deductibles or other cost-sharing mech-
anisms in return for activities such as
completing a health risk assessment or
participating in a wellness program);
(B) The computation of premium or
contribution amounts under the plan or
coverage (including discounts, rebates,
payments in kind, or other premium dif-
ferential mechanisms in return for ac-
tivities such as completing a health risk
assessment or participating in a wellness
program);
(C) The application of any preexisting
condition exclusion under the plan or cov-
erage; and
(D) Other activities related to the cre-
ation, renewal, or replacement of a con-
tract of health insurance or health benefits.
(iii)Medical appropriateness.Ifan
individual seeks a benefit under a group
health plan, the plan may limit or exclude
the benefit based on whether the benefit is
medically appropriate, and the determina-
tion of whether the benefit is medically ap-
propriate is not within the meaning of un-
derwriting purposes. Accordingly, if an in-
dividual seeks a benefit under the plan and
the plan conditions the benefit based on
its medical appropriateness and the med-
ical appropriateness of the benefit depends
on genetic information of the individual,
then the plan is permitted to condition the
benefit on the genetic information. A plan
is permitted to request only the minimum
amount of genetic information necessary
to determine medical appropriateness. The
plan may deny the benefit if the patient
does not provide the genetic information
required to determine medical appropriate-
ness. If an individual is not seeking a ben-
efit, the medical appropriateness excep-
tion of this paragraph (d)(1)(iii) to the def-
inition of underwriting purposes does not
apply. See paragraph (e) of this section
for examples illustrating the medical ap-
propriateness provisions of this paragraph
(d)(1)(iii), as well as other provisions of
this section.
(2)Prior to or in connection with en-
rollment—(i)In general.A group health
plan must not collect genetic informa-
tion with respect to any individual prior
to that individual’s effective date of cov-
erage under that plan, nor in connection
with the rules for eligibility (as defined
in §54.9802–1(b)(1)(ii)) that apply to that
individual. Whether or not an individ-
ual’s information is collected prior to that
individual’s effective date of coverage is
determined at the time of collection.
(ii)Incidental collection excep-
tion—(A)In general. If a group health
plan obtains genetic information inciden-
tal to the collection of other information
concerning any individual, the collection
is not a violation of this paragraph (d)(2),
as long as the collection is not for under-
writing purposes in violation of paragraph
(d)(1) of this section.
(B)Limitation. The incidental collec-
tion exception of this paragraph (d)(2)(ii)
does not apply in connection with any col-
lection where it is reasonable to anticipate
that health information will be received,
unless the collection explicitly states that
genetic information should not be pro-
vided.
(3)Examples. Therulesofthispara-
graph (d) are illustrated by the following
examples:
Example 1.(i)Facts. A group health plan pro-
vides a premium reduction to enrollees who com-
plete a health risk assessment. The health risk assess-
ment is requested to be completed after enrollment.
Whether or not it is completed or what responses are
given on it has no effect on an individual’s enrollment
status, or on the enrollment status of members of the
individual’s family. The health risk assessment in-
cludes questions about the individual’s family medi-
cal history.
(ii)Conclusion.InthisExample 1, the health risk
assessment includes a request for genetic information
(that is, the individual’s family medical history). Be-
cause completing the health risk assessment results
in a premium reduction, the request for genetic infor-
mation is for underwriting purposes. Consequently,
the request violates the prohibition on the collection
of genetic information in paragraph (d)(1) of this sec-
tion.
Example 2.(i)Facts.ThesamefactsasExample
1, except there is no premium reduction or any other
reward for completing the health risk assessment.
(ii)Conclusion.InthisExample 2, the request is
not for underwriting purposes, nor is it prior to or in
connection with enrollment. Therefore, it does not
violate the prohibition on the collection of genetic
information in this paragraph (d).
Example 3.(i)Facts. A group health plan
requests that enrollees complete a health risk as-
sessment prior to enrollment, and includes questions
about the individual’s family medical history. There
is no reward or penalty for completing the health risk
assessment.
(ii)Conclusion.InthisExample 3, because the
health risk assessment includes a request for genetic
information (that is, the individual’s family medical
history), and requests the information prior to enroll-
ment, the request violates the prohibition on the col-
lection of genetic information in paragraph (d)(2) of
this section. Moreover, because it is a request for ge-
netic information, it is not an incidental collection un-
der paragraph (d)(2)(ii) of this section.
Example 4.(i)Facts. The facts are the same as in
Example 1,except there is no premium reduction or
any other reward given for completion of the health
risk assessment. However, certain people complet-
ing the health risk assessment may become eligible
for additional benefits under the plan by being en-
rolled in a disease management program based on
their answers to questions about family medical his-
tory. Other people may become eligible for the dis-
ease management program based solely on their an-
swers to questions about their individual medical his-
tory.
(ii)Conclusion.InthisExample 4, the request
for information about an individual’s family medi-
cal history could result in the individual being eligi-
ble for benefits for which the individual would not
otherwise be eligible. Therefore, the questions about
family medical history on the health risk assessment
are a request for genetic information for underwriting
purposes and are prohibited under this paragraph (d).
Although the plan conditions eligibility for the dis-
ease management program based on determinations
of medical appropriateness, the exception for deter-
minations of medical appropriateness does not apply
because the individual is not seeking benefits.
Example 5.(i)Facts. A group health plan re-
quests enrollees to complete two distinct health risk
assessments (HRAs) after and unrelated to enroll-
ment. The first HRA instructs the individual to an-
swer only for the individual and not for the individ-
ual’s family. The first HRA does not ask about any
genetic tests the individual has undergone or any ge-
netic services the individual has received. The plan
offers a reward for completing the first HRA. The sec-
ond HRA asks about family medical history and the
2009–48 I.R.B.711November 30, 2009

results of genetic tests the individual has undergone.
Theplanoffersnorewardforcompletingthesecond
HRA and the instructions make clear that comple-
tion of the second HRA is wholly voluntary and will
not affect the reward given for completion of the first
HRA.
(ii)Conclusion. In thisExample 5, no genetic
information is collected in connection with the first
HRA, which offers a reward, and no benefits or other
rewards are conditioned on the request for genetic
information in the second HRA. Consequently, the
request for genetic information in the second HRA is
not for underwriting purposes, and the two HRAs do
not violate the prohibition on the collection of genetic
information in this paragraph (d).
Example 6.(i)Facts. A group health plan waives
its annual deductible for enrollees who complete an
HRA. The HRA is requested to be completed after
enrollment. Whether or not the HRA is completed or
what responses are given on it has no effect on an in-
dividual’s enrollment status, or on the enrollment sta-
tus of members of the individual’s family. The HRA
does not include any direct questions about the indi-
vidual’s genetic information (including family med-
ical history). However, the last question reads, “Is
there anything else relevant to your health that you
would like us to know or discuss with you?”
(ii)Conclusion.InthisExample 6,theplan’s
request for medical information does not explicitly
state that genetic information should not be provided.
Therefore, any genetic information collected in re-
sponse to the question is not within the incidental col-
lection exception and is prohibited under this para-
graph (d).
Example 7.(i)Facts. Same facts asExample 6,
except that the last question goes on to state, “In an-
swering this question, you should not include any ge-
netic information. That is, please do not include any
family medical history or any information related to
genetic testing, genetic services, genetic counseling,
or genetic diseases for which you believe you may be
at risk.”
(ii)Conclusion. In thisExample 7, the plan’s re-
quest for medical information explicitly states that
genetic information should not be provided. There-
fore, any genetic information collected in response to
the question is within the incidental collection excep-
tion. However, the plan may not use any genetic in-
formation it obtains incidentally for underwriting pur-
poses.
Example 8.(i)Facts. Issuer M acquires Issuer
N. M requests N’s records, stating that N should not
provide genetic information and should review the
records to excise any genetic information. N assem-
bles the data requested by M and, although N reviews
it to delete genetic information, the data from a spe-
cific region included some individuals’ family med-
ical history. Consequently, M receives genetic infor-
mation about some of N’s covered individuals.
(ii)Conclusion. In thisExample 8,M’sre-
quest for health information explicitly stated that
genetic information should not be provided. See
Example 8in 29 CFR 2590.702–1(d)(3) or 45 CFR
146.122(d)(3) for a conclusion that the collection
of genetic information was within the incidental
collection exception of 29 CFR 2590.702–1(d)(2)(ii)
or 45 CFR 146.122(d)(ii) similar to the incidental
exception of paragraph (d)(2)(ii) of this section. See
Example 8in 29 CFR 2590.702–1(d)(3) or 45 CFR
146.122(d)(3) also for a caveat that M may not use
the genetic information it obtained incidentally for
underwriting purposes.
(e)Examples regarding determinations
of medical appropriateness. The applica-
tion of the rules of paragraphs (c) and (d)
of this section to plan determinations of
medical appropriateness is illustrated by
the following examples:
Example 1.(i)Facts. Individual A’s group health
plan covers genetic testing for celiac disease for in-
dividuals who have family members with this condi-
tion. After A’s son is diagnosed with celiac disease, A
undergoes a genetic test and promptly submits a claim
for the test to A’s issuer for reimbursement. The is-
suer asks A to provide the results of the genetic test
before the claim is paid.
(ii)Conclusion.SeeExample 1in 29 CFR
2590.702–1(e) or 45 CFR 146.122(e) for a conclu-
sion under the rules of paragraph (c)(4) of 29 CFR
2590.702–1 or 45 CFR 146.122 similar to the rules
of paragraph (c)(4) of this section that the issuer is
permitted to request only the minimum amount of
information necessary to make a decision regarding
payment. Because the results of the test are not
necessary for the issuer to make a decision regarding
the payment of A’s claim, the conclusion inExample
1in 29 CFR 2590.702–1(e) or 45 CFR 146.122(e)
concludes that the issuer’s request for the results of
the genetic test violates paragraph (c) of 29 CFR
2590.702–1 or 45 CFR 146.122 similar to paragraph
(c)ofthissection.
Example 2.(i)Facts. Individual B’s group health
plan covers a yearly mammogram for participants and
beneficiaries starting at age 40, or at age 30 for those
with increased risk for breast cancer, including in-
dividuals with BRCA1 or BRCA2 gene mutations.
B is 33 years old and has the BRCA2 mutation. B
undergoes a mammogram and promptly submits a
claim to B’s plan for reimbursement. Following an
established policy, the plan asks B for evidence of in-
creased risk of breast cancer, such as the results of a
genetic test or a family history of breast cancer, before
the claim for the mammogram is paid. This policy is
applied uniformly to all similarly situated individuals
and is not directed at individuals based on any genetic
information.
(ii)Conclusion.InthisExample 2, the plan does
not violate paragraphs (c) or (d) of this section. Un-
der paragraph (c), the plan is permitted to request and
use the results of a genetic test to make a determi-
nation regarding payment, provided the plan requests
only the minimum amount of information necessary.
Because the medical appropriateness of the mammo-
gram depends on the genetic makeup of the patient,
the minimum amount of information necessary in-
cludes the results of the genetic test. Similarly, the
plan does not violate paragraph (d) of this section be-
cause the plan is permitted to request genetic infor-
mation in making a determination regarding the med-
ical appropriateness of a claim if the genetic informa-
tion is necessary to make the determination (and if the
genetic information is not used for underwriting pur-
poses).
Example 3.(i)Facts. Individual C was previ-
ously diagnosed with and treated for breast cancer,
which is currently in remission. In accordance with
the recommendation of C’s physician, C has been tak-
ing a regular dose of tamoxifen to help prevent a re-
currence. C’s group health plan adopts a new policy
requiring patients taking tamoxifen to undergo a ge-
netic test to ensure that tamoxifen is medically appro-
priate for their genetic makeup. In accordance with,
at the time, the latest scientific research, tamoxifen is
not helpful in up to 7 percent of breast cancer patients,
those with certain variations of the gene for making
the CYP
2
D6 enzyme. If a patient has a gene variant
making tamoxifen not medically appropriate, the plan
does not pay for the tamoxifen prescription.
(ii)Conclusion.InthisExample 3, the plan does
not violate paragraph (c) of this section if it conditions
future payments for the tamoxifen prescription on C’s
undergoing a genetic test to determine what genetic
markers C has for making the CYP
2
D6 enzyme. Nor
does the plan violate paragraph (c) of this section if
the plan refuses future payment if the results of the
genetic test indicate that tamoxifen is not medically
appropriate for C.
Example 4.(i)Facts. A group health plan offers a
diabetes disease management program to all similarly
situated individuals for whom it is medically appro-
priate based on whether the individuals have or are
at risk for diabetes. The program provides enhanced
benefits related only to diabetes for individuals who
qualify for the program. The plan sends out a notice
to all participants that describes the diabetes disease
management program and explains the terms for eli-
gibility. Individuals interested in enrolling in the pro-
gram are advised to contact the plan to demonstrate
that they have diabetes or that they are at risk for dia-
betes. For individuals who do not currently have di-
abetes, genetic information may be used to demon-
strate that an individual is at risk.
(ii)Conclusion.InthisExample 4, the plan may
condition benefits under the disease management
program upon a showing by an individual that the
individual is at risk for diabetes, even if such show-
ing may involve genetic information, provided that
the plan requests genetic information only when
necessary to make a determination regarding whether
the disease management program is medically ap-
propriate for the individual and only requests the
minimum amount of information necessary to make
that determination.
Example 5.(i)Facts. Same facts asExample 4,
except that the plan includes a questionnaire that asks
about the occurrence of diabetes in members of the
individual’s family as part of the notice describing the
disease management program.
(ii)Conclusion.InthisExample 5, the plan vio-
lates the requirements of paragraph (d)(1) of this sec-
tion because the requests for genetic information are
not limited to those situations in which it is necessary
to make a determination regarding whether the dis-
ease management program is medically appropriate
for the individuals.
Example 6.(i)Facts. Same facts asExample 4,
except the disease management program provides
an enhanced benefit in the form of a lower annual
deductible to individuals under the program; the
lower deductible applies with respect to all medical
expenses incurred by the individual. Thus, whether
or not a claim relates to diabetes, the individual is
provided with a lower deductible based on the indi-
vidual providing the plan with genetic information.
(ii)Conclusion.InthisExample 6, because the
enhanced benefits include benefits not related to the
November 30, 20097122009–48 I.R.B.

determination of medical appropriateness, making
available the enhanced benefits is within the meaning
of underwriting purposes. Accordingly, the plan may
not request or require genetic information (including
family history information) in determining eligibility
for enhanced benefits under the program because
such a request would be for underwriting purposes
and would violate paragraph (d)(1) of this section.
(f)Effective/applicability date.This
section applies for plan years beginning on
or after December 7, 2009.
(g)Expiration date. This section ex-
pires on or before October 1, 2012.
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
Approved September 11, 2009.
Michael Mundaca,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on October 1,
2009, 11:15 a.m., and published in the issue of the Federal
Register for October 7, 2009, 74 F.R. 51663)
2009–48 I.R.B.713November 30, 2009

Part III. Administrative, Procedural, and Miscellaneous
New Qualified Plug-in Electric
Drive Motor Vehicle Credit
Notice 2009–89
Section 1. PURPOSE
This notice sets forth interim guid-
ance, pending the issuance of regulations,
relating to the new qualified plug-in
electric drive motor vehicle credit un-
der § 30D of the Internal Revenue Code,
as in effect for vehicles acquired af-
ter December 31, 2009. Specifically,
this notice provides procedures for a
vehicle manufacturer (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor) to certify to the Internal
Revenue Service (“Service”) both:
(1) That a motor vehicle of a particu-
lar make, model, and model year meets
certain requirements that must be satisfied
to claim the new qualified plug-in electric
drive motor vehicle credit under § 30D;
and
(2) The amount of the credit allowable
with respect to that motor vehicle.
This notice also provides guidance to
taxpayers who purchase motor vehicles re-
garding the conditions under which they
may rely on the vehicle manufacturer’s (or,
in the case of a foreign vehicle manufac-
turer, its domestic distributor’s) certifica-
tion in determining whether a credit is al-
lowable with respect to the vehicle and the
amount of the credit. The Service and the
Treasury Department expect that the regu-
lations will incorporate the rules set forth
in this notice.
Section 30D originally was enacted in
the Energy Improvement and Extension
Act of 2008, Pub. L. 110–343, 122 Stat.
3765. The American Recovery and Rein-
vestment Act of 2009, Pub. L. 111–5, 123
Stat. 115 (“the Act”), amended § 30D in
certain material respects, effective for ve-
hicles acquired after December 31, 2009.
This notice provides guidance regarding
the credit under § 30D for qualified plug-in
electric drive motor vehicles acquired af-
ter December 31, 2009. All references to
§ 30D in subsequent sections of this no-
tice are to the provision as amended by
the Act. Guidance regarding the credit
under § 30D for qualified plug-in elec-
tric drive motor vehicles acquired before
January 1, 2010, is provided in Notice
2009–54, 2009–26 I.R.B. 1124. This no-
tice also amplifies Notice 2009–54 and
Notice 2009–58, 2009–30 I.R.B. 163 (re-
lating to the plug-in electric vehicle credit
under § 30) to provide that a vehicle is con-
sidered “acquired” when title to that vehi-
cle passes under state law.
Section 2. BACKGROUND
Section 30D provides for a credit for
certain new qualified plug-in electric drive
motor vehicles. The credit is equal to the
sum of: (1) $2,500, plus (2) for a vehi-
cle which draws propulsion energy from
a battery with at least 5 kilowatt hours
of capacity, $417, plus an additional $417
for each kilowatt hour of battery capac-
ity in excess of 5 kilowatt hours. Under
§ 30D(b)(3), that portion of the credit de-
termined by battery capacity cannot ex-
ceed $5,000. Therefore, the total amount
of the credit allowed for a vehicle is lim-
ited to $7,500. The new qualified plug-in
electric drive motor vehicle credit phases
out for a manufacturer’s vehicles over the
one-year period beginning with the second
calendar quarter after the calendar quarter
in which at least 200,000 qualifying ve-
hicles manufactured by that manufacturer
have been sold for use in the United States
(determined on a cumulative basis for sales
after December 31, 2009) (“phase-out pe-
riod”). Qualifying vehicles manufactured
by that manufacturer are eligible for 50
percent of the credit if acquired in the first
two quarters of the phase-out period and
25 percent of the credit if acquired in the
third or fourth quarter of the phase-out pe-
riod. Vehicles manufactured by that man-
ufacturer are not eligible for a credit if ac-
quired after the phase-out period. After
December 31, 2009, a vehicle that quali-
fies for a credit under § 30 does not qualify
for the credit under § 30D.
Section 3. SCOPE OF NOTICE
The new qualified plug-in electric drive
motor vehicle credit determined under this
notice applies to plug-in electric drive mo-
tor vehicles that—
(1) Are placed in service by the tax-
payer in a taxable year beginning after De-
cember 31, 2009;
(2) Are acquired by the taxpayer after
December 31, 2009; and
(3) Otherwise meet the requirements of
§30D.
Section 4. MEANING OF TERMS
The following definitions apply for pur-
poses of this notice:
.01In General. Terms used in this no-
tice and not defined in this section 4 have
thesamemeaningaswhenusedin§30D.
.02Clean Air Act Regulations.The
Clean Air Act regulations are the regula-
tions prescribed by the Administrator of
the Environmental Protection Agency for
purposes of the administration of Title II
of the Clean Air Act (42 U.S.C. §§ 7521,
et. seq.).
.03Battery Capacity. Battery capacity
is the quantity of electricity that a battery
is capable of storing, expressed in kilo-
watt hours, as measured from a 100 per-
cent state of charge to a zero percent state
of charge.
.04Motor Vehicle. The term “motor ve-
hicle” means any vehicle that is manufac-
tured primarily for use on public streets,
roads, and highways (not including a vehi-
cle operated exclusively on a rail or rails)
and which has at least 4 wheels. For pur-
poses of this notice, the term “motor vehi-
cle” does not include a low-speed vehicle
within the meaning of section 571.3 of Ti-
tle 49 of the Code of Federal Regulations,
or a vehicle that is manufactured primarily
for off-road use, such as primarily for use
on a golf course.
.05Manufacturer. The term “manufac-
turer” has the meaning given that term in
the Clean Air Act regulations.
.06Model Year. The term “model year”
means the model year determined under
the Clean Air Act regulations (see 40 CFR
§ 86–082–2).
.07Acquired. A vehicle is not “ac-
quired” before the date on which title to
that vehicle passes under state law.
Section 5. MANUFACTURER’S
CERTIFICATION AND QUARTERLY
REPORTS
.01When Certification Permitted.A
vehicle manufacturer (or, in the case of a
foreign vehicle manufacturer, its domes-
November 30, 20097142009–48 I.R.B.

tic distributor) may certify to purchasers
that a motor vehicle of a particular make,
model, and model year meets all require-
ments (other than those listed in section
5.02 of this notice) that must be satisfied
to claim the new qualified plug-in electric
drive motor vehicle credit allowable under
§ 30D with respect to the vehicle, if the fol-
lowing requirements are met:
(1) The manufacturer (or, in the case of
a foreign vehicle manufacturer, its domes-
tic distributor) has submitted to the Ser-
vice, in accordance with this section 5, a
certification with respect to the vehicle and
the certification satisfies the requirements
of section 5.03 of this notice; and
(2) The manufacturer (or, in the case of
a foreign vehicle manufacturer, its domes-
tic distributor) hasreceived an acknowl-
edgment of the certification from the Ser-
vice and the acknowledgment states that
purchasers may rely on the certification.
.02Purchaser’s Reliance. Except as
provided in section 5.07 of this notice, a
purchaserofamotorvehiclemayrelyon
the manufacturer’s (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor’s) certification concerning the
vehicle and the amount of the credit allow-
able with respect to the vehicle (including
in cases in which the certification is re-
ceived after the purchase of the vehicle).
The purchaser may claim a credit in the
certified amount with respect to the vehi-
cle if the following requirements are satis-
fied:
(1) The vehicle is placed in service by
the taxpayer in a taxable year beginning
after December 31, 2009, and is acquired
by the taxpayer after December 31, 2009;
(2) The original use of the vehicle com-
mences with the taxpayer;
(3) The vehicle is acquired for use or
lease by the taxpayer, and not for resale;
and
(4) The vehicle is used predominantly
in the United States.
.03Content of Certification. The certi-
fication must contain the following:
(1) The name, address, and taxpayer
identification number of the certifying en-
tity.
(2) The make, model, model year, and
any other appropriate identifiers of the mo-
tor vehicle.
(3) A statement that the vehicle is made
by a manufacturer.
(4) A statement that the vehicle is
treated as a motor vehicle for purposes of
Title II of the Clean Air Act.
(5) The amount of the credit for the ve-
hicle (showing computations).
(6) The gross vehicle weight rating of
the vehicle.
(7) A statement that the motor vehicle
is propelled to a significant extent by an
electric motor that draws electricity from a
battery that has a capacity of not less than
4 kilowatt hours.
(8) The number of kilowatt hours if any,
in excess of 4 kilowatt hours.
(9) A statement that the battery is ca-
pable of being recharged from an external
source of electricity.
(10) A statement that the vehicle has at
least four wheels.
(11) A statement that the vehicle is not
a low-speed vehicle within the meaning of
section571.3ofTitle49oftheCodeof
Federal Regulations.
(12) A statement that the vehicle is
manufactured primarily for use on public
streets, roads and highways.
(13) A statement that the vehicle is not
manufactured primarily for off-road use,
such as primarily for use on a golf course.
(14) A statement that the vehicle com-
plies with the applicable provisions of the
Clean Air Act.
(15) A statement that the vehicle com-
plies with the applicable air quality pro-
visions of state law of each state that has
adopted the provisions under a waiver un-
der§209(b)oftheCleanAirActoralist
identifying each state that has adopted ap-
plicable air quality provisions with which
the vehicle does not comply.
(16) A description of the motor vehicle
safety provisions of 49 U.S.C. §§ 30101
through 30169 applicable to the vehicle
and a statement that the vehicle complies
with those provisions.
(17) A declaration, applicable to the
certification, statements, and any accom-
panying documents, signed by a person
currently authorized to bind the manufac-
turer (or, in the case of a foreign vehicle
manufacturer, its domestic distributor) in
these matters, in the following form: “Un-
der penalties of perjury, I declare that I
have examined this certification, including
accompanying documents, and to the best
of my knowledge and belief, the facts pre-
sented in support of this certification are
true, correct, and complete.”
.04Acknowledgement of Certification.
The Service will review the original signed
certification and issue an acknowledgment
letter to the vehicle manufacturer (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor) within 30 days of
receipt of the request for certification. This
acknowledgment letter will state whether
purchasers may rely on the certification.
.05Quarterly Reporting of Sales of
Qualified Vehicles. A manufacturer (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor) that has received
an acknowledgment ofits certification
from the Service must submit to the Ser-
vice, in accordance with section 6 of this
notice, a report of the number of qualified
plug-in electric drive motor vehicles sold
by the manufacturer (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor) to consumers or retail dealers
during the calendar quarter. The quarterly
report must contain the following:
(1) The name, address, and taxpayer
identification number of the reporting en-
tity.
(2) The number of qualified vehicles
sold by the reporting entity to consumers
or retail dealers during the calendar quar-
ter.
(3) The make, model, model year, and
any other appropriate identifiers of the
qualified vehicles sold during the calendar
quarter.
(4) A declaration,applicable to the
quarterly report and any accompanying
documents, signed by a person currently
authorized to bind the manufacturer (or, in
the case of a foreign vehicle manufacturer,
its domestic distributor) in these matters,
in the following form: “Under penalties
of perjury, I declare that I have examined
this report, including accompanying doc-
uments, and to the best of my knowledge
and belief, the facts presented in support
of this report are true, correct, and com-
plete.”
.06Acknowledgment of Quarterly Re-
port. The Service will review the orig-
inal signed quarterly report and issue
an acknowledgment letter to the vehicle
manufacturer (or, in the case of a foreign
vehicle manufacturer, its domestic dis-
tributor) within 30 days of receipt of the
report. This acknowledgment letter will
state whether purchasers may continue to
rely on the certification.
2009–48 I.R.B.715November 30, 2009

.07Effect of Erroneous Certification,
Erroneous Quarterly Reports, or Failure
to Make Timely Quarterly Reports.
(1)Erroneous Certification or Quar-
terly Report. The acknowledgment that
the Service provides for a certification is
not a determination that a vehicle quali-
fies for the credit, or that the amount of
the credit is correct. The Service may,
upon examination (and after any appro-
priate consultation with the Department of
Transportation or the Environmental Pro-
tection Agency), determine that the vehi-
cleisnotanewqualified plug-in electric
drive motor vehicle or that the amount of
the credit determined by the manufacturer
(or, in the case of a foreign vehicle manu-
facturer, its domestic distributor) to be al-
lowable with respect to the vehicle is in-
correct. In either event, or in the event
that the manufacturer (or, in the case of a
foreign vehicle manufacturer, its domestic
distributor) makes an erroneous quarterly
report, the manufacturer’s (or, in the case
of a foreign vehicle manufacturer, its do-
mestic distributor’s) right to provide a cer-
tification to future purchasers of the new
qualified plug-in electric drive motor ve-
hicles will be withdrawn, and purchasers
who acquire a vehicle after the date on
which the Service publishes an announce-
ment of the withdrawal may not rely on the
certification. Purchasers may continue to
rely on the certification for vehicles they
acquired on or before the date on which the
announcement of the withdrawal is pub-
lished (including in cases in which the ve-
hicle is not placed in service and the credit
is not claimed until after that date), and
the Service will not attempt to collect any
understatement of tax liability attributable
to such reliance. Manufacturers (or, in
the case of foreign vehicle manufacturers,
their domestic distributors) are reminded
that an erroneous certification or an erro-
neous quarterly report may result in the
imposition of penalties, including, but not
limited to, the penalties:
(a) Under § 7206 for fraud and making
false statements; and
(b) Under § 6701 for aiding and abetting
an understatement of tax liability in the
amount of $1,000 ($10,000 in the case of
understatements by corporations) per re-
turn on which a credit is claimed in re-
liance on the certification.
(2)FailuretoMakeTimelyQuarterly
Report. If a manufacturer (or, in the case
of a foreign vehicle manufacturer, its do-
mestic distributor) fails to make a quar-
terly report in accordance with section 5.05
of this notice and at the time specified in
section 6.02 of this notice, the acknowl-
edgment letter issued under section 5.04
of this notice may be withdrawn, and pur-
chasers will not be entitled to rely on the
related certification for quarters beginning
after the date on which the Service pub-
lishes an announcement of the withdrawal
(generally, quarters beginning after the due
date of the report). If the quarterly report
is filed subsequently, the Service may reis-
sue the acknowledgment letter and retract
the withdrawal announcement.
Section 6. TIME AND ADDRESS
FOR FILING CERTIFICATION AND
QUARTERLY REPORTS
.01Time for Filing Certification.Inor-
der for a certification under section 5 of
this notice to be effective for new quali-
fied plug-in electric drive motor vehicles
placed in service during a calendar year,
the certification must be received by the
Service not later than December 31 of that
calendar year.
.02Time for Filing Quarterly Reports.
A report of sales of qualified vehicles dur-
ing a quarter must be filed with the Service
at the address specified in section 6.03 of
this notice not later than the last day of the
first calendar month following the quarter
to which the report relates.
.03Address for Filing. Certifications
and quarterly reports under section 5 of
this notice must be sent to:
Internal Revenue Service
Industry Director, LMSB, Heavy Manu-
facturing & Transportation
MetroParkOfficeComplex—LMSB
111WoodAvenue,South
Iselin, New Jersey 08830
Section 7. PAPERWORK REDUCTION
ACT
The collection of information contained
in this notice has been reviewed and ap-
proved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under
control number 1545–2137.
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 collections of information in this
notice are in sections 5 and 6. This infor-
mation is collected and retained in order
to ensure that vehicles meet the require-
ments for the new qualified plug-in elec-
tric drive motor vehicle credit under § 30D.
This information will be used to determine
whether the vehicle for which the credit
is claimed by a taxpayer is property that
qualifies for the credit. The collection of
information is voluntary to obtain a ben-
efit. The likely respondents are corpora-
tions and partnerships.
The estimated total annual reporting
burden is 280 hours.
The estimated annual burden per re-
spondent varies from 20 hours to 35 hours,
depending on individual circumstances,
with an estimated average burden of 24
hours to complete the certification re-
quired under this notice. The estimated
number of respondents is 12.
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 tax return
information are confidential, as required
by 26 U.S.C. 6103.
Section 8. DATE OF APPLICABILITY
This notice is applicable to plug-in elec-
tric drive motor vehicles acquired (within
the meaning of section 4.07 of this notice)
after December 31, 2009.
Section 9. EFFECT ON OTHER
DOCUMENTS
Notice 2009–54, 2009–26 I.R.B. 1124,
is amplified by adding the following sen-
tence to section 4:
.09Acquired. A vehicle is not “ac-
quired” before the date on which title to
that vehicle passes under state law.
Notice 2009–58, 2009–30 I.R.B. 163,
is amplified by adding the following sen-
tence to section 4:
.06Acquired. A vehicle is not “ac-
quired” before the date on which title to
that vehicle passes under state law.
Notice 2009–54 is superseded, effec-
tive for plug-in electric drive motor vehi-
cles acquired after December 31, 2009.
November 30, 20097162009–48 I.R.B.

Section 10. DRAFTING INFORMATION
The principal author of this notice is
Patrick S. Kirwan of the Office of Asso-
ciate Chief Counsel (Passthroughs & Spe-
cial Industries). For further information
regarding this notice, contact Mr. Kirwan
at (202) 622–3110 (not a toll-free call).
Withholding on Wages of
Nonresident Alien Employees
Performing Services Within
the United States
Notice 2009–91
I. PURPOSE
This notice modifies the rules in Notice
2005–76, 2005–2 C.B. 947, for determin-
ing the amount of income tax employers
must withhold under section 3402 of the
Internal Revenue Code (Code) from wages
paid for services performed by nonresident
alien employees within the United States.
The modification is effective with respect
to wages paid on or after January 1, 2010.
Notice 2005–76 provides rules for de-
termining the amount of withholding on
wages paid to nonresident alien employ-
ees. These rules need to be modified to re-
flect changes made in the withholding ta-
bles as a result of the enactment of sec-
tion 36A of the Code (the “Making Work
Pay Tax Credit”) in the American Recov-
ery and Reinvestment Act of 2009 (Pub-
lic Law No. 111–5) (ARRA). Nonresident
alien individuals are not eligible for the
Making Work Pay Tax Credit under sec-
tion 36A. The modified rules provide for
withholding on the wages of nonresident
alien employees that more closely approx-
imates their income tax liability.
II. BACKGROUND
A. Income Tax Withholding on Wages of
Nonresident Alien Employees
Generally, employers are liable for the
withholding of income tax on remuner-
ation for services performed within the
United States by a nonresident alien em-
ployee. Section 3402(a)(1) of the Code
provides that, except as otherwise pro-
vided in section 3402, every employer
making a payment of wages shall deduct
and withhold from such wages a tax de-
termined in accordance with tables or
computational procedures prescribed by
the Secretary. Section 3402(a)(1) further
provides that any tables or procedures
prescribed under section 3402(a)(1) shall
be in such form, and provide for such
amounts to be deducted and withheld, as
the Secretary determines to be appropri-
ate to carry out the purposes of chapter 1
(imposition of individual income tax).
Income tax withholding tables in Pub-
lication 15,(Circular E) Employer’s Tax
Guide, for use with the percentage and
wage bracket methods of withholding, are
based on the assumption that the employee
receiving the wages is entitled to a stan-
dard deduction in determining his or her
income tax liability. However, in the case
of a nonresident alien individual, section
63(c)(6)(B) provides that the standard de-
duction shall be zero. Notice 2005–76 ad-
dresses this difference in treatment by di-
recting an employer to add an amount to
the wages of a nonresident alien employee
solely for purposes of calculating the in-
come tax withholding for each payroll pe-
riod.
B. Making Work Pay Tax Credit
Section 36A, which was added to the
Code by the ARRA, provides a credit
against income tax to an eligible indi-
vidual in an amount equal to the lesser
of (1) 6.2 percent of earned income, or
(2) $400 ($800 in the case of a joint re-
turn). The credit is reduced or completely
eliminated for individuals with modified
adjusted gross income exceeding thresh-
old amounts. Section 36A(d)(1)(A)(i)
provides that an eligible individual for
purposes of section 36A does not include a
nonresident alien individual. As currently
enacted, the Making Work Pay Tax Credit
does not apply to taxable years beginning
after December 31, 2010.Seesection
36A(e). Under the ARRA, taxpayers’
reduced tax liability under the provision
is expeditiously implemented through re-
vised income tax withholding.SeeH.R.
Conf. Rep. 111–16, 111
th
Cong., 1
st
Sess.
(2009) at 517. Accordingly, the income
tax withholding tables have been revised
to take the Making Work Pay Tax Credit
into account in determining the amount of
income tax to be withheld.
C. Reason for Change to Withholding
Procedures for Nonresident Alien
Employees
The income tax withholding tables re-
flect two tax benefits for which nonresi-
dent alien employees are not eligible: (1)
the standard deduction; and (2) the Mak-
ingWorkPayTaxCredit. Ifadjustments
from the generally applicable procedures
for using the income tax withholding ta-
bles are not made in determining income
tax withholding for nonresident alien em-
ployees, the withholding on the wages of
such employees will generally be less than
their tax liability. This notice modifies the
rules for employers to use in calculating in-
come tax withholding on nonresident alien
employees to offset the effects of both the
standard deduction and Making Work Pay
Tax Credit as assumed under the withhold-
ing tables.
The modification applies only to the
procedure used by employers in calculat-
ing income tax withholding on wages paid
to nonresident alien employees as set forth
in part III.B. of Notice 2005–76. The re-
quirements in Notice 2005–76 (part III.A.)
relating to the completion of Form W–4,
Employee’s Withholding Allowance Cer-
tificate, by nonresident alien employees,
continue in effect.
III. WITHHOLDING RULES
THAT WILL BE IN EFFECT FOR
NONRESIDENT ALIEN EMPLOYEES
ON OR AFTER JANUARY 1, 2010
Beginning with wages paid on or after
January 1, 2010, employers are required
to calculate income tax withholding un-
der section 3402 of the Code on wages
of nonresident alien employees by mak-
ing two modifications rather than the one
modification described in Notice 2005–76
(part III.B). First, employers need to add an
amount to wages before determining with-
holding under the wage bracket or percent-
age method in order to offset the standard
deduction built into the withholding tables.
Second, employers need to determine an
additional amount of withholding from a
separate table applicable only to nonresi-
dent alien employees to offset the effect of
2009–48 I.R.B.717November 30, 2009

the Making Work Pay Tax Credit built into
the withholding tables. The specific steps
to be followed for each of these two modi-
fications will be set forth in Publication 15
and other IRS forms or publications.
IV. EFFECT ON OTHER DOCUMENTS
Notice 2005–76 is modified for wages
paid after December 31, 2009, during any
period when the Making Work Pay Tax
Credit provided under section 36A is in
effect.
V. DRAFTING INFORMATION
The principal author of this notice is
Alfred G. Kelley of the Office of As-
sociate Chief Counsel (Tax Exempt &
Government Entities). For further in-
formation regarding this notice, contact
Alfred G. Kelley at (202) 622–6040 (not a
toll-free call).
November 30, 20097182009–48 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Genetic Info
rmation
Nondiscrimi
nation Act
REG–123829–
08
AGENCY: Inte
rnal Revenue Service
(IRS), Treas
ury.
ACTION: Noti
ce of proposed rulemaking
by cross-re
ference to temporary regula-
tions.
SUMMARY: El
sewhereinthisissueof
the Bulleti
n, the IRS is issuing temporary
and final re
gulations governing the provi-
sions of the
Genetic Information Nondis-
criminati
on Act (GINA) prohibiting dis-
criminati
on based on genetic information
for group h
ealth plans. The IRS is issuing
the tempor
ary and final regulations at the
same time t
hat the Employee Benefits Se-
curity Ad
ministration of the U.S. Depart-
ment of La
borandtheCentersforMedi-
care & Med
icaid Services of the U.S. De-
partment
of Health and Human Services
are issui
ng substantially similar interim fi-
nal regu
lations with respect to GINA for
group he
alth plans and issuers of health
insuran
ce coverage offered in connection
with a gr
oup health plan under the Em-
ployee R
etirement Income Security Act of
1974 an
d the Public Health Service Act.
The tem
porary regulations provide guid-
ance to
employers and group health plans
relati
ng to the group health plan genetic
nondis
crimination requirements. The text
of tho
se temporary regulations (T.D. 9464)
also s
erves as the text of these proposed
regul
ations.
DATES
: Written or electronic com-
ments
and requests for a public hear-
ing mu
st be received by January 5,
2010.
ADDRESSES: Send submissions
to: C
C:PA:LPD:PR (REG–123829–08),
room
5205, Internal Revenue Service,
P.O.
Box 7604, Ben Franklin Sta-
tion
, Washington, DC 20044. Sub-
miss
ions may be hand-delivered to:
CC:P
A:LPD:PR(REG–123829–08),
Courier’s Des
k, Internal Revenue Ser-
vice, 1111 Con
stitution Avenue, NW,
Washington DC
20224. Alternatively,
taxpayers may
submit comments elec-
tronically vi
a the Federal eRulemaking
Portal athtt
p://www.regulations.gov(IRS
REG–123829–
08).
FOR FURTHER I
NFORMATION
CONTACT: Con
cerning the regulations,
Russ Weinhei
mer at 202–622–6080;
concerning
submissions of comments,
Oluwafumil
ayo Taylor at (202) 622–7180
(not toll-f
ree numbers).
SUPPLEMENT
ARY INFORMATION:
Paperwork R
eduction Act
The collect
ion of information refer-
enced in thi
s notice of proposed rulemak-
ing has bee
nsubmittedtotheOfficeof
Managemen
t and Budget for review in
accordanc
e with the Paperwork Reduc-
tion Act of
1995 (44 U.S.C. 3507(d)).
Comments o
n the collection of infor-
mation sh
ould be sent to theOffice of
Manageme
nt and Budget,Attn: Desk
Officer f
or the Department of the Trea-
sury, Off
ice of Information and Regulatory
Affairs
, Washington, DC 20503, with
copies t
otheInternal Revenue Service,
Attn: IR
S Reports Clearance Officer,
SE:W:CA
R:MP:T:T:SP, Washington, DC
20224. C
omments on the collection of
inform
ation should be received by Decem-
ber 7, 2
010. Comments are specifically
reques
ted concerning:
•Whethe
r the proposed collection of
inform
ation is necessary for the proper
perfor
mance of the functions of the
Intern
al Revenue Service, including
wheth
er the information will have
pract
ical utility;
•The ac
curacy of the estimated burden
assoc
iated with the proposed collec-
tion o
f information (see the preamble
to the
temporary regulations published
elsew
here in this issue of the Bulletin);
•How to
enhance the quality, utility, and
clari
ty of the information to be col-
lect
ed;
•How t
o minimize the burden of com-
plyi
ng with the proposed collection of
info
rmation, including the application
of au
tomated collection techniques or
other forms of
information technology;
and
•Estimates of c
apital or start-up costs
and costs of op
eration, maintenance,
and purchase o
f services to provide in-
formation.
The collectio
n of information is in
§54.9802–3 (s
ee the temporary regulations
published el
sewhere in this issue of the
Bulletin). T
he collection of information is
required so t
hat the IRS can be apprised
when a group h
ealth plan is conducting
research wi
th respect to genetic informa-
tion of plan
participants or beneficiaries
to ensure th
at all the requirements of the
research ex
ception to GINA are being
complied wi
th. The likely respondents are
business or
other for-profit institutions,
and nonpro
fit institutions. Responses
to this col
lection of information are re-
quired if a
plan wishes to conduct genetic
research w
ith respect to participants or
benefici
aries of the plan.
An agency m
ay 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 Ma
nagement and Budget.
Books or r
ecords relating to a collection
of inform
ation 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.
Backgro
und
The temp
orary regulations published
elsewhe
re in this issue of the Bulletin add
anew§54
.9802–3T to the Miscellaneous
Excise T
ax Regulations. In the same docu-
ment, ce
rtain conforming changes are also
being m
ade to the final regulations under
§§54.9
801–1, 54.9801–2, 54.9802–1, and
54.983
1–1. The proposed, temporary, and
final r
egulations are being published as
part of
a joint rulemaking with the De-
partm
ent of Labor and the Department
of Hea
lth and Human Services (the joint
rulem
aking). The text of those temporary
regul
ations also serves as the text of these
propo
sed regulations. The preamble to the
tempo
rary regulations explains the tempo-
rary
regulations.
2009–48 I.R.B.719November 30, 2009

Special Analyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866. Therefore, a regulatory as-
sessment is not required. It has also been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to this proposed reg-
ulation. It is hereby certified that the col-
lection of information contained in this no-
tice of proposed rulemaking will not have
a significant impact on a substantial num-
ber of small entities. Accordingly, a reg-
ulatory flexibility analysis is not required.
GINA requires group health plans claim-
ing the research exception to GINA to no-
tify the Secretary of the Treasury when
the exception is being claimed. This no-
tice of proposed rulemaking does not add
to the reporting requirement imposed by
the statute. Moreover, it is anticipated that
very few and only the largest group health
plans are likely to claim the research ex-
ception to GINA and thus be subject to the
reporting requirement. For this reason, the
burden imposed by the reporting require-
ment of the statute and this notice of pro-
posed rulemaking on small entities is ex-
pected to be near zero.For further infor-
mation and for analyses relating to the joint
rulemaking, see the preamble to the joint
rulemaking. Pursuant to section 7805(f)
of the Internal Revenue Code, this notice
of proposed rulemaking will be submitted
to the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments
(a signed original and eight (8) copies)
or electronic comments that are submitted
timely to the IRS. Comments are specifi-
cally requested on the clarity of the pro-
posed regulations and how they may be
made easier to understand. All comments
will be available for public inspection and
copying. A public hearing may be sched-
uled if requested in writing by a person
that timely submits written comments. If
a public hearing is scheduled, notice of the
date, time, and place for the hearing will
be published in theFederal Register.
Drafting Information
The principal author of these proposed
regulations is Russ Weinheimer, Office
of the Division Counsel/Associate Chief
Counsel (Tax Exempt and Government
Entities), IRS. The proposed regulations,
as well as the temporary and final regula-
tions, have been developed in coordination
with personnel from the U.S. Department
of Labor and the U.S. Department of
Health and Human Services.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 54 is pro-
posed to be amended as follows:
PART 54—PENSION EXCISE TAXES
Paragraph 1. The authority citation for
part 54 is amended by adding an entry in
numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 54.9802–3 also issued under
26 U.S.C. 9833. * * *
Par. 2. Section 54.9802–3 is added to
read as follows:
§54.9802–3 Additional requirements
prohibiting discrimination based on
genetic information.
[The text of proposed §54.9802–3 is the
same as the text of §54.9802–3T published
elsewhere in this issue of the Bulletin].
Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on October 1,
2009, 11:15 a.m., and published in the issue of the Federal
Register for October 7, 2009, 74 F.R. 51710)
EffectiveDateofRegulations
Under § 411(b)(5)(B)(i); Relief
Under § 411(d)(6); and Notice
toPensionPlanParticipants
Announcement 2009–82
The Treasury Department and the Inter-
nal Revenue Service are announcing relief
for sponsors of statutory hybrid plans that
must amend the interest crediting rate in
those plans. Plan sponsors may rely on this
announcement pending publication of the
anticipated additional guidance described
below.
Treasury and the Service expect to is-
sue in the near future final regulations and
proposed regulations relating to statutory
hybrid plans. The regulations will in-
clude rules interpreting the requirement in
§ 411(b)(5)(B)(i) of the Internal Revenue
Code that such plans not have an interest
crediting rate in excess of a market rate of
return. The rules in the regulations spec-
ifying permissible market rates of return
are not expected to go into effect before
the first plan year that begins on or after
January 1, 2011.
In addition, it is anticipated that Trea-
sury and the Service will exercise the au-
thority under § 1.411(d)–4, A–2(b)(2)(i) of
the Treasury regulations to provide that,
once final regulations regarding the mar-
ket rate of return requirements are issued,
an amendment to a statutory hybrid plan
with an interest crediting rate that is in ex-
cess of a market rate of return under those
final regulations that is adopted prior to
the effective date of those final regulations
will not violate § 411(d)(6) merely because
it reduces the future interest crediting rate
on participants’ account balances to the
extent necessary to constitute a permissi-
ble rate under those final regulations. Un-
der this anticipated guidance, § 411(d)(6)
will not operate to bar such an amendment,
even if the amendment is adopted after the
last day of the first plan year that begins
on or after January 1, 2009, and therefore
is not an amendment described in section
1107 of the Pension Protection Act of 2006
(PPA ’06), Pub. L. 109–280. Section 1107
of PPA ’06 provides, in general, that a plan
will not fail to satisfy § 411(d)(6) as a result
of amendments that are adopted pursuant
to PPA ’06 or regulations thereunder by the
last day of the first plan year that begins on
or after January 1, 2009.
Finally, it is anticipated that future
guidance will include a special timing
rule for providing section 204(h) notice,
as defined in § 54.4980F–1, Q&A–4, to
participants and other applicable individ-
uals with respect to an amendment that
changes a statutory hybrid plan’s interest
crediting rate that is adopted by the last
day of the first plan year that begins on
or after January 1, 2009 (that is, by the
November 30, 20097202009–48 I.R.B.

end of the period described in section
1107 of PPA ’06) and after November 10,
2009. Under this special timing rule, any
required section 204(h) notice relating to
such an amendment will be permitted to be
provided as late as 30 days after the effec-
tive date of the amendment. It is expected
that this relief will apply to an amendment
only if the amendment is effective not later
than the first day of the first plan year that
begins on or after January 1, 2010.
For further information regard-
ing this announcement, please email
RetirementPlanQuestions@irs.gov.
2009–48 I.R.B.721November 30, 2009

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.
November 30, 2009i2009–48 I.R.B.

Numerical Finding List
1
Bulletins 2009–27 through 2009–48
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
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
2009-72, 2009-37 I.R.B.325
2009-73, 2009-38 I.R.B.369
2009-74, 2009-38 I.R.B.370
Notices— Continued:
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
2009-81, 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
2009-91, 2009-48 I.R.B.717
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
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
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
2009-50, 2009-45 I.R.B.617
2009-51, 2009-45 I.R.B.625
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
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
9468, 2009-44 I.R.B.570
9469, 2009-48 I.R.B.687
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.
2009–48 I.R.B.iiNovember 30, 2009

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2009–27 through 2009–48
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
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
2008-38
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
2008-65
Modified by
Rev. Proc. 2009-33, 2009-29 I.R.B.150
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.
November 30, 2009iii2009–48 I.R.B.

INDEX
Internal Revenue Bulletin 2009–27 through
2009–48
The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parenthesis refers to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Determination letters, staggered remedial amendment periods
(RP 36) 35,304
Employee retirement income security act of 1974 (ERISA), per-
formance of actuarial services (REG–159704–03) 46,632
Full funding limitations, weighted average interest rates, seg-
ment rates for:
July 2009 (Notice 57) 29,147
August 2009 (Notice 63) 34,252
September 2009 (Notice 77) 40,449
October 2009 (Notice 76) 43,554
November 2009 (Notice 88) 47,654
Group health plans, nondiscrimination requirements based on ge-
netic information (TD 9464) 48,692; (REG–123829–08) 48,
719
Multiemployer plans, funding, WRERA (RP 43) 40,460
Normal retirement age (NRA) governmental plans (Notice 86)
46,629
Proposed Regulations:
20 CFR 901.0, .1, .10, .11, .12, .20, .31, .32, .47, amended;
901.12, removed; 901.13, redesignated as 901.12; 901.72,
added; performance of actuarial services under the Employ-
ment Retirement Income Security Act of 1974 (ERISA)
(REG–159704–03) 46,632
26 CFR 54.9802–3, added; Genetic Information Nondiscrim-
ination Act (GINA) (REG–123829–08) 48,719
Qualified plans:
Accumulated and unused paid time off (RR 31) 39,395
Automatic increases (RR 30) 39,391
Sample amendments for section 401(k) plan (Notice 65) 39,
413
Sample amendments for SIMPLE IRA plans (Notice 67) 39,
420
EMPLOYEE PLANS—Cont.
Under SIMPLE IRA plans (Notice 66) 39,418
Eligible combined plans (Notice 71) 35,262
Eligible rollover distributions, safe harbor explanations
(Notice 68) 39,423
Post serverance contributions (RR 32) 39,398
Reasonable good faith interpretation of required minimum
distribution rules by governmental plans (TD 9459) 41,480
Required minimum distributions for 2009, waiver (Notice 82)
41,491
Regulations:
26 CFR 1.401(a)(9)–1, –6, amended; 1.403(b)–6, amended;
reasonable good faith interpretation of required minimum
distribution rules by governmental plans (TD 9459) 41,480
26 CFR 54.9801–1, –2, amended; 54.9802–1, amended;
54.9802–3T, added; 54.9831–1, amended; Genetic Infor-
mation Nondiscrimination Act (GINA) (TD 9464) 48,692
Roth IRA, eligible rollover distributions (Notice 75) 39,436
Statutory hybrid plans, interest crediting rates (Ann 82) 48,720
Tax sheltered annuity contracts (RR 18) 27,1
EMPLOYMENT TAX
Form 944 opt-in and opt-out procedures (RP 51) 45,625
Income tax withholding on nonresident alien employees
(Notice 91) 48,717
Intangible property, allocation of income and deductions
(TD 9456) 33,188
Regulations:
26 CFR 1.482–0, –0T, –1, –1T, –2, –2T, –4, –4T, –6, –8,
–8T, –9T, amended; 1.482–6T, removed; 1.482–9, added;
1.861–8, –8T, –9T, –10T, –11T, –12T, –14T, amended;
1.6038A–1, –3, amended; 1.6038A–3T, removed;
1.6662–6, amended; 1.6662–6T, removed; 31.3121(s)–1,
amended; 31.3121(s)–1T, removed; 602.101, amended;
treatment of services under section 482, allocation of
income and deductions from intangible property, appor-
tionment of stewardship expenses (REG–146893–02,
REG–115037–00, REG–138603–03) (TD 9456) 33,188
Section 482, controlled servicestransactions (TD 9456) 33,188
Stewardship expenses, apportionment under section 861
(TD 9456) 33,188
ESTATE TAX
Cost-of-living adjustments for inflation for 2010 (RP 50) 45,617
Due date for filing return and paying tax under Chapter 15 (Gifts
and Bequests From Expatriates) (Ann 57) 29,158
Generation-skipping transfers (GST) section 6011 regula-
tions and amendments to the section 6112 regulations
(REG–136563–07) 41,497
Guidance under section 2053 regarding post-death events
(TD 9468) 44,570
Interest rates for 2009, farm real property, special use value
(RR 21) 30,162
2009–48 I.R.B.ivNovember 30, 2009

ESTATE TAX—Cont.
Limited reexamination of the estate tax return applicable to cer-
tain section 2053 claims for refund (Notice 84) 44,592
Proposed Regulations:
26 CFR 26.6011–4, added; 301.6111–3, amended;
301.6112–1, amended; generation-skipping transfers
(GST) section 6011 regulations and amendments to the
section 6112 regulations (REG–136563–07) 41,497
Regulations:
26 CFR 20.2051–1, revised; 20.2053–1, –3, –5, –6, –9, –10,
amended; 20.2053–4, revised; guidance under section 2053
regarding post-death events (TD 9468) 44,570
EXCISE TAX
Cost-of-living adjustments for inflation for 2010 (RP 50) 45,617
Disregarded entities and excise taxes (TD 9462) 42,504;
(REG–116614–08) 42,536
Employer comparable contributions to Health Savings Accounts
under section 4980G and requirement of return for filing of
the excise tax under section 4980B, 4980D, 4980E, or 4980G
(TD 9457) 41,482
Exempt aircraft supplies, reciprocating countries (RR 34) 42,502
Group health plans, nondiscrimination requirements based on ge-
netic information (TD 9464) 48,692; (REG–123829–08) 48,
719
Payout requirements for Type III supporting organizations that
are not functionally integrated (REG–155929–06) 47,665
Proposed Regulations:
26 CFR 1.509(a)–4, amended; 53.4943–11, amended; payout
requirements for Type III supporting organizations that are
not functionally integrated (REG–155929–06) 47,665
26 CFR 54.9802–3, added; Genetic Information Nondiscrim-
ination Act (GINA) (REG–123829–08) 48,719
26 CFR 301.7701–2, amended; disregarded entities and ex-
cise taxes (REG–116614–08) 42,536
Regulations:
26 CFR 54.4980B–0, –2, amended; 54.4980D–1, added;
54.4980E–1, added; 54.4980G–1, –3, –4, amended;
54.4980G–6, –7, added; 54.6011–2, added; 54.6061–1,
added; 54.6071–1, added; 54.6091–1, added; 54.6151–1,
added; employer comparablecontributions to Health Sav-
ings Accounts under section 4980G and requirement of
return for filing of the excise tax under section 4980B,
4980D, 4980E, or 4980G (TD 9457) 41,482
26 CFR 54.9801–1, –2, amended; 54.9802–1, amended;
54.9802–3T, added; 54.9831–1, amended; Genetic Infor-
mation Nondiscrimination Act (GINA) (TD 9464) 48,692
26 CFR 301.7701–2, amended; 301.7701–2T, added; disre-
garded entities and excise taxes (TD 9462) 42,504
EXEMPT ORGANIZATIONS
Annual electronic notification (e-Postcard) required by section
6033(i)(1) (TD 9454) 32,178
EXEMPT ORGANIZATIONS—Cont.
List of organizations classifiedas private foundations (Ann 58)
29,158;(Ann76)45,627
Payout requirements for Type IIIsupporting organizations that
are not functionally integrated (REG–155929–06) 47,665
Proposed Regulations:
26 CFR 1.509(a)–4, amended; 53.4943–11, amended; payout
requirements for Type III supporting organizations that are
not functionally integrated (REG–155929–06) 47,665
Regulations:
26 CFR 1.6033–6, added; 1.6033–6T, removed; notification
requirement for tax-exempt entities not currently required
to file (TD 9454) 32,178
Reliance criteria for supporting organizations and donor advised
funds making grants (RP 32) 28,142
Revocations (Ann 60) 30,166;(Ann61)33,246; (Ann 64) 36,
319;(Ann66)37,364; (Ann 72) 41,500; (Ann 78) 44,594;
(Ann 80) 46,646
Section 509(a)(3) supporting organizations, procedures to
change public charity classification (Ann 62) 33,247
GIFT TAX
Cost-of-living adjustments for inflation for 2010 (RP 50) 45,617
Declaratory judgments for gift tax valuation (TD 9460) 44,584
Due date for filing return and paying tax under Chapter 15 (Gifts
and Bequests From Expatriates) (Ann 57) 29,158
Regulations:
26 CFR 301.7477–1, revised; declaratory judgments for gift
tax valuations (TD 9460) 44,584
INCOME TAX
Annual electronic notification (e-Postcard) required by section
6033(i)(1) (TD 9454) 32,178
Appeals mediation procedure (RP 44) 40,462
Base period T-Bill rate, 2009 (RR 36) 47,650
Bonds, tribal economic development bonds (Notice 51) 28,128
Cancellation of indebtness income (RP 37) 36,309
Clarification of controlledgroup qualification rules
(REG–135005–07) 47,681
Contingent fees under Circular 230 (REG–113289–08) 33,244
Corporations:
Private placements and public offerings relating to expatria-
tions of domestic entities (Notice 78) 40,452
Transfers by domestic corporations or partnerships to a for-
eign corporation (TD 9453) 28,114; (REG–112994–06) 28,
144
Cost-of-living adjustments for inflation for 2010 (RP 50) 45,617
Cost-sharing payments received from the Forest Health Protec-
tion Program (FHPP) (RR 23) 32,177
Credits:
Carbon dioxide sequestration (Notice 83) 44,588
Election of reduced research credit under section 280C(c)(3)
(REG–130200–08) 31,174; hearing cancelled (Ann 81) 46,
647
November 30, 2009v2009–48 I.R.B.

INCOME TAX—Cont.
Enhanced oil recovery credit, 2009 inflation adjustment (No-
tice 73) 38,369
Low-income housing credit, carryovers to qualified states,
2009 National Pool (RP 40) 39,438
New qualified plug-in electric vehicle credit (Notice 89) 48,
714
Qualified plug-in electric vehicle under section 30 (Notice 58)
30,163
Section 48C tax credit for qualifying advanced energy project
credit program (Notice 72) 37,325
Work opportunity credit, disconnected youth, targeted groups
(Notice 69) 35,261
Declaratory judgments for gift tax valuation (TD 9460) 44,584
Definition of omission from gross income (TD 9466) 43,551;
(REG–108045–08) 43,557
Depreciation:
Asset class, ethanol plants (Notice 64) 36,307
Depreciation, election to forgoadditional first year deprecia-
tion deduction (RP 33) 29,150
Determination of interest expense deduction of foreign corpora-
tions (TD 9465) 43,542
Disciplinary actions involvingattorneys, certified public ac-
countants, enrolled agents, and enrolled actuaries (Ann 59)
29,158;(Ann63)33,248; (Ann 65) 36,319;(Ann68)38,
388; (Ann 71) 40,475;(Ann75)42,537;(Ann83)46,647;
(Ann 84) 47,683
Earnings and profits, insurancecontract payments (RR 25) 38,
365
Entities created in connection with the Public-Private Investment
Program (PPIP)/taxable mortgage pools (TMPs) (RP 38) 37,
362
Entity classification elections, extensions of time (RP 41) 39,439
Exclusion from income of damages for personal physical injury
or physical sickness (REG–127270–06) 42,534
Extension of replacement period for livestock sold on account of
drought (Notice 81) 40,455
FBAR filing requirements, Form TD F 90–22.1, request for com-
ments (Notice 62) 35,260
Foreign tax credit, application of section 904 to dividends paid
by a foreign corporation that is a noncontrolled section 902
corporation, rules under section 964 for a foreign corporation
(TD 9452) 27,1
Forms:
1042-S, Foreign Person’s U.S. Source Income Subject to
Withholding, specifications for filing electronically (RP 35)
35,265
1098, 1099, 3921, 3922, 5498, 8935, and W-2G, requirements
for filing electronically,2009revision(RP30)27,27;cor-
rections (Ann 70) 41,499
8027, Employer’s Annual Information Return of Tip Income
and Allocated Tips, specifications for filling electronically
(RP 46) 42,507
Generation-skipping transfers (GST) section 6011 regula-
tions and amendments to the section 6112 regulations
(REG–136563–07) 41,497
Gross income, general welfare exclusion (RR 19) 28,111
INCOME TAX—Cont.
Information reporting for discharges of indebtedness (TD 9461)
41,488
Institute on Current Issues in International Taxation (Ann 77) 43,
567
Insurance, effectively connected income (RP 34) 34,258
Intangible property, allocation of income and deductions
(TD 9456) 33,188; corrections (Ann 73) 41,500
Interest:
Investment:
Federal short-term, mid-term, and long-term rates for:
July 2009 (RR 20) 28,112
August 2009 (RR 22) 31,167;correction(Ann74)42,
537
September 2009 (RR 29) 37,322; correction (Ann 74)
42,537
October 2009 (RR 33) 40,447
November 2009 (RR 35) 44,568
Rates:
Underpayments and overpayments, quarter beginning:
October 1, 2009 (RR 27) 39,404
Investment trust, commercial mortgage loan modifications
(Notice 79) 40,454
Long-term residents or citizens who relinquish their long-term
resident status or citizenship after June 16, 2008 (Notice 85)
45,598
Marginal production rates, 2009 (Notice 74) 38,370
Method of accounting:
Automatic and non-automatic changes in method of account-
ing (RP 39) 38,371
Corrections, automatic and non-automatic changes in method
of accounting (Ann 67) 38,388
Section 1.1502–13(e)(3) consent letter rulings (RP 31) 27,107
Modifications of commercial mortgage loans held by certain se-
curitization vehicles (RP 45) 40,471
Modification to consolidated return regulation permitting an
election to treat a liquidation of a target, followed by a re-
contribution to a new target, as across-chain reorganization
(TD 9458) 43,547; (REG–139068–08) 43,558
Obligations of state and local governments solid waste disposal
facilities (REG–140492–02) 43,558
Partnerships:
Public-private investment partnerships (RP 42) 40,459
Section 704(c) layers relating to partnership mergers, di-
visions, and tiered partnerships, request for comments
(Notice 70) 34,255
Wind energy partnerships (Ann 69) 40,475
Per diem allowances, 2009-2010 (RP 47) 42,524
Performance of actuarial services under the employee retirement
income security act of 1974 (REG–159704–03) 46,632
Period of limitations on assessment for listed transactions not
disclosed under section 6011 (REG–160871–04) 47,657
Period of limitations on assessment when a case is brought with
respect to a designated or related summons (TD 9455) 33,239
Private foundations, organizations now classified as (Ann 58) 29,
158; (Ann 76) 45,627
2009–48 I.R.B.viNovember 30, 2009

INCOME TAX—Cont.
Proposed Regulations:
26 CFR 1.103–8, amended; 1.142(a)(6)–1, added; 17.1, re-
moved; obligations of state and local governments solid
waste disposal facilities (REG–140492–02) 43,558
26 CFR 1.104–1, revised; damages received on ac-
count of personal physical injuries or physical sickness
(REG–127270–06) 42,534
26 CFR 1.280C–4, revised; election of reduced research credit
(REG–130200–08) 31,174; hearing cancelled (Ann 81) 46,
647
26 CFR 1.1502–13, amended; modification to consolidated
return regulation permitting an election to treat a liquidation
of a target, followed by a recontribution to a new target, as
a cross-chain reorganization (REG–139068–08) 43,558
26 CFR 1.1563–1, amended; clarification of controlled group
qualification rules (REG–135005–07) 47,681
26 CFR 1.7874–1, amended; 1.7874–2, added; guidance un-
der section 7874 regarding surrogate foreign corporations
(REG–112994–06) 28,144
26 CFR 26.6011–4, added; 301.6111–3, amended;
301.6112–1, amended; generation-skipping transfers
(GST) section 6011 regulations and amendments to the
section 6112 regulations (REG–136563–07) 41,497
26 CFR 301.6229(c)(2)–1, added; 301.6501(e)–1, added; def-
inition of omission from gross income (REG–108045–08)
43,557
26 CFR 301.6501(c)–1, amended;period of limitations on as-
sessment for listed transactions not disclosed under section
6011 (REG–160871–04) 47,657
26 CFR 301.7811–1, amended, Taxpayer Assistance Orders,
proposed regulations revised (REG–152166–05 ) 32,183
31 CFR 10.27, amended; contingent fees under circular 230
(REG–113289–08) 33,244
Proposed security, privacy, and business standards for authorized
IRS e-file providers participating in online filing of individual
income tax returns (Ann 56) 28,145
Publications:
1187, Specifications for Filing Form 1042-S, Foreign Per-
son’s U.S. Source Income Subject to Withholding, Elec-
tronically, revised (RP 35) 35,265
1220, Specifications for Filing Forms 1098, 1099, 3921,
3922, 5498, 8935, and W-2G Electronically, 2009 revision
(RP 30) 27,27; corrections (Ann 70) 41,499
1239, Specifications for Filing Form 8027, Employer’s An-
nual Information Return of Tip Income and Allocated Tips,
Electronically, revised (RP 46) 42,507
Real estate mortgage investment conduit (REMIC), commercial
mortgage loan modification (TD 9463) 40,442
Reasonable good faith interpretation of required minimum dis-
tribution rules by governmental plans (TD 9459) 41,480
Reduction of tax attributes for S corporations (TD 9469) 48,687
INCOME TAX—Cont.
Regulations:
26 CFR 1.108–7, amended; 602.101, amended; reduction of
tax attributes for S corporations (TD 9469) 48,687
26 CFR 1.401(a)(9)–1, –6, amended; 1.403(b)–6, amended;
reasonable good faith interpretation of required minimum
distribution rules by governmental plans (TD 9459) 41,480
26 CFR 1.482–0, –0T, –1, –1T, –2, –2T, –4, –4T, –6, –8,
–8T, –9T, amended; 1.482–6T, removed; 1.482–9, added;
1.861–8, –8T, –9T, –10T, –11T, –12T, –14T, amended;
1.6038A–1, –3, amended; 1.6038A–3T, removed;
1.6662–6, amended; 1.6662–6T, removed; 31.3121(s)–1,
amended; 31.3121(s)–1T, removed; 602.101, amended;
treatment of services under section 482, allocation of
income and deductions from intangible property, appor-
tionment of stewardship expenses (REG–146893–02,
REG–115037–00, REG–138603–03) (TD 9456) 33,188;
corrections (Ann 73) 41,500
26 CFR 1.860A–0, –1, amended; 1.860G–2, amended;
602.101, revised; modifications of commercial mortgage
loans held by a real estate mortgage investment conduit
(REMIC) (TD 9463) 40,442
26 CFR 1.861–9, –9T, –12T, revised; 1.861–12, added;
1.902–1, revised;1.902–1T, removed; 1.904–0, –2, –2T,
–4, –4T, –5, –5T, –7, –7T, revised; 1.904(f)–0, –12, –12T,
revised; 1.964–1, revised; 1.964–1T, removed; 1.989(b)–1,
revised; 602.101, revised; application of section 904 to
dividends paid by a foreign corporation that is a noncon-
trolled section 902 corporation (TD 9452) 27,1
26 CFR 1.882–0, –5,amended; 1.882–5T, removed; 1.884–1,
amended; 1.884–1T, removed; 602.101, amended; determi-
nation of interest expense deduction of foreign corporations
(TD 9465) 43,542
26 CFR1.1502–13, –13T, amended; 602.101, amended;
modification to consolidated return regulation permitting
an election to treat a liquidation of a target, followed by a
recontribution to a new target,as a cross-chain reorganiza-
tion (TD 9458) 43,547
26 CFR 1.6033–6, added; 1.6033–6T, removed; notification
requirement for tax-exempt entities not currently required
to file (TD 9454) 32,178
26 CFR 1.6050P–0, –1, amended; 1.6050P–1T, removed;
information reporting for discharges of indebtedness
(TD 9461) 41,488
26 CFR 1.7874–1(e), revised; 1.7874–1T, added; 1.7874–2T,
revised; quidance under section 7874 regarding surrogate
foreign corporations (TD 9453) 28,114
26 CFR 301.6229(c)(2)–1T, added; 301.6501(e)–1, removed;
301.6501(e)–1T, added; definition of omission from gross
income (TD 9466) 43,551
26 CFR 301.6503(j)–1, added; suspension of running of pe-
riod of limitations during a proceeding to enforce or quash
a designated or related summons (TD 9455) 33,239
26 CFR 301.7477–1, revised; declaratory judgments for gift
tax valuation (TD 9460) 44,584
November 30, 2009vii2009–48 I.R.B.

INCOME TAX—Cont.
Revocations, exempt organizations (Ann 60) 30,166;(Ann61)
33,246;(Ann64)36,319; (Ann 66) 37,364;(Ann72)41,
500; (Ann 78) 44,594; (Ann 80) 46,646
Section 482, controlled services transactions (TD 9456) 33,188
Single-insured – reinsurance (RR 26) 38,366
Soliciting comments regarding a proposed amendment to Rev.
Proc. 80–59 (Notice 87) 46,630
Standards of conduct for the taxreturn preparer community, re-
quest for comments (Notice 60) 32,181
Standard Industry Fare Level (SIFL) fornula (RR 28) 39,391
Stewardship expenses, apportionment under section 861
(TD 9456) 33,188
Tax convention, mutual agreement on share attribution under
Belgium Treaty (Ann 79) 46,628
Tax shelters:
Listed transactions (Notice 59) 31,170
Transactions of interest (Notice 55) 31,170
Taxpayer Assistance Orders, proposed regulations revised
(REG–152166–05) 32,183
Treatment of Fails Charges for purposes of sections 871, 881,
1441, and 1442 (Notice 61) 32,181
2009–48 I.R.B.viiiNovember 30, 2009

November 30, 20092009–48 I.R.B.

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