Internal Revenue Bulletin 2007-33 (PDF rendition): IRS Revenue Procedures

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

Bulletin No. 200
7-33
August 13, 2007
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. 9333, page 350.
REG–149036–04, page 365.
Temporary and proposed regulations under section 6404 of the
Code provide guidance on the suspension of interest, penalty,
addition to tax, or additional amounts with respect to listed
transactions or undisclosed reportable transactions. A public
hearing on the proposed regulations is scheduled for October
11, 2007.
REG–12827
4–03, page 356.
Proposed r
egulations under section 42 of the Code, which con-
cern the lo
w-income housing credit, would amend the utility al-
lowances
regulations under section 1.42–10. A public hearing
is schedu
led for October 9, 2007.
REG–163195–05, page 366.
Proposed regulations under section 3406(g) of the Code
provide amendments to the existing regulations for backup
withholding for reportable payments made through a Qualified
Payment Card Agent (QPCA). See related Notice 2007–59,
2007–30 I.R.B. 135, containing a proposed revenue proce-
dure for guidance on QPCA determinations. A public hearing
is scheduled for November 7, 2007.
Notice 2007–63, page 353.
Repayment of Commodity Credit Corporation (CCC)
loans.This notice provides guidance regarding the tax treat-
ment and information reporting of “market gain” associated
with the repayment of nonrecourse marketing assistance
loans made by the CCC under the Farm Security and Rural
Investment Act of 2002.
EXEMPT ORGANIZATIONS
Announcement 2007–69, page 371.
The IRS has revoked its determination that The Brewer Family
Foundation of Orem, UT; Keystone Grants, Inc., of Mesa, AZ;
Jeffrey and Lisa Bowen Charitable Supporting Organization of
Greenville, DE; 55 Whipple Street Housing Development Fund
Corporation of Brooklyn, NY; The Champions Association, Inc.,
of Pittsburgh, PA; and The Horsestone Foundation of Sandy,
UT, qualify as organizations described in sections 501(c)(3) and
170(c)(2) of the Code.
Announce
ment 2007–70, page 371.
This anno
uncement is public notice of the suspension of a
particul
ar organization’s federal tax exemption under section
501(p) of
the Code. The organization has been designated as
supporti
ng or engaging in terrorist activity or supporting terror-
ism. Con
tributions made to this organization are not deductible
for fede
ral tax purposes for the period that the organization’s
tax-exe
mpt status is suspended.
ADMINISTRATIVE
T.D. 9333, page 350.
REG–149036–04, page 365.
Temporary and proposed regulations under section 6404 of the
Code provide guidance on the suspension of interest, penalty,
addition to tax, or additional amounts with respect to listed
transactions or undisclosed reportable transactions. A public
hearing on the proposed regulations is scheduled for October
11, 2007.
(Continued on the next page)
Announcements of Disbarments and Suspensions begin on page 373.
Fi
nding Lists begin on page ii.

REG–114084–04, page 359.
Proposed regulations under section 42 of the Code provide
guidance concerning taxpayers’ requests to housing credit
agencies to obtain a qualified contract, as defined in section
42(h)(6)(F), for the acquisition of a low-income housing credit
building. A public hearing is scheduled for October 15, 2007.
Rev. Proc. 2007–55, page 354.
This procedure publishes the amounts of unused housing
credit carryovers allocated to qualified states under section
42(h)(3)(D) of the Code for calendar year 2007.
Announcement 2007–71, page 372.
This document contains corrections to proposed regulations
(REG–143601–06, 2007–24 I.R.B. 1398) that provide mortal-
ity tables to be used in determining present value or making any
computation for purposes of applying certain pension funding
requirements.
August 13, 20072007–33 I.R.B.

The IRS Mission
Provide America’s taxpayers top quality service by helping
them understand and meet their tax responsibilities and by
applying the tax law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2007–33 I.R.B.August 13, 2007

August 13, 20072007–33 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 42.—Low-Income
Housing Credit
26 CFR 1.42–14: Allocation rules for post-1989
State housing credit ceiling amounts.
Guidance is provided to state housing credit agen-
cies of qualified states that request an allocation
of unused housing credit carryover under section
42(h)(3)(D) of the Internal Revenue Code. See Rev.
Proc. 2007-55, page 354.
Section 6404.—Abate-
ments
26 CFR 301.6404–4T: Listed transactions and undis-
closed reportable transactions (temporary).
T.D. 9333
DEPARTMENT OF
THE TREASURY
Internal Revenue Service
26 CFR Part 301
Application of Section 6404(g)
of the Internal Revenue Code
Suspension Provisions
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Temporary regulations.
SUMMARY: This document contains
temporary regulations under section
6404(g)(2)(E) of the Internal Revenue
Code on the suspension of any interest,
penalty, addition to tax, or additional
amount with respect to listed transactions
or undisclosed reportable transactions.
The temporary regulations reflect changes
to the law made by the Internal Rev-
enue Service Restructuring and Reform
Act of 1998, the American Jobs Creation
Act of 2004, the Gulf Opportunity Zone
Act of 2005, the Tax Relief and Health
Care Act of 2006, and the Small Business
and Work Opportunity Tax Act of 2007.
The temporary regulations provide guid-
ance to individual taxpayers who have
participated in listed transactions or undis-
closed reportable transactions. The text
of the temporary regulations also serves
as the text of the proposed regulations
(REG–149036–04) set forth in the notice
of proposed rulemaking on this subject in
this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on June 21, 2007.
Applicability Date:These regulations
apply to interest relating to listed transac-
tions and undisclosed reportable transac-
tions accruing before, on, or after October
3, 2004.
FOR FURTHER INFORMATION
CONTACT: Stuart Spielman, (202)
622–7950 (not a toll-free call).
SUPPLEMENTARY INFORMATION:
Background
This document amends the Procedure
and Administration Regulations (26 CFR
part 301) by adding rules under section
6404(g) relating to the suspension of
interest, penalties, additions to tax, or
additional amounts with respect to listed
transactions or undisclosed reportable
transactions. Section 3305 of the Internal
Revenue Service Restructuring and Re-
form Act of 1998, Public Law 105–206
(112 Stat. 685, 743) (RRA 98), added
section 6404(g) to the Code, effective for
taxable years ending after July 22, 1998.
Section 6404(g) generally suspends inter-
est and certain penalties if the IRS does
not contact a taxpayer regarding possi-
ble adjustments to the taxpayer’s liability
within a specified period of time. Sec-
tion 903(c) of the American Jobs Creation
Act of 2004, Public Law 108–357 (118
Stat. 1418, 1652) (AJCA), excepted from
the general interest suspension rules any
interest, penalty, addition to tax, or ad-
ditional amount with respect to a listed
transaction or an undisclosed reportable
transaction, effective for interest accruing
after October 3, 2004. Section 303 of
the Gulf Opportunity Zone Act of 2005,
Public Law 109–135 (119 Stat. 2577,
2608–09) (GOZA), modified the effective
date of the exception from the suspen-
sion rules for certain listed and reportable
transactions. Section 426(b) of the Tax
Relief and Health Care Act of 2006, Pub-
lic Law 109–432 (120 Stat. 2922, 2975),
provided a technical correction regarding
the authority to exercise the “reasonably
and in good faith” exception to the ef-
fective date rules. Section 8242 of the
Small Business and Work Opportunity
Tax Act of 2007, Public Law 110–28
(121 Stat. 190, 200), extended the cur-
rent eighteen-month period within which
the IRS can, without suspension of inter-
est, contact a taxpayer regarding possible
adjustments to the taxpayer’s liability to
thirty-six months, effective for notices
provided after November 25, 2007.
Explanation of Provisions
If an individual taxpayer files a Federal
income tax return on or before the due date
for that return (including extensions), and
if the IRS does not timely provide a no-
tice to that taxpayer specifically stating the
taxpayer’s liability and the basis for that
liability, then the IRS must suspend any
interest, penalty, addition to tax, or addi-
tional amount with respect to any failure
relating to the return that is computed by
reference to the period of time the failure
continues and that is properly allocable to
the suspension period. A notice is timely
if provided before the close of the eigh-
teen-month period (thirty-six month pe-
riod, in the case of notices provided after
November 25, 2007) beginning on the later
of the date on which the return is filed or
the due date of the return without regard
to extensions. The suspension period be-
gins on the day after the close of the eigh-
teen-month period (or thirty-six month pe-
riod) and ends twenty-one days after the
IRS provides the notice. This suspension
rule applies separately with respect to each
item or adjustment. If, on or after De-
cember 21, 2005, a taxpayer provides to
the IRS an amended return or other signed
written document showing an additional
tax liability, then the eighteen-month pe-
riod (or thirty-six month period) does not
begin to run with respect to the items that
gave rise to the additional tax liability un-
til that return or other signed written docu-
ment is provided to the IRS.
The general rule for suspension does
not apply to any interest, penalty, addi-
tion to tax, or additional amount relating
2007–33 I.R.B.350August 13, 2007

to any reportable transaction with re-
spect to which the requirement of section
6664(d)(2)(A) is not met or a listed trans-
action as defined in section 6707A(c).
This exception applies to interest accruing
after October 3, 2004. With respect to
interest relating to listed transactions or
undisclosed reportable transactions accru-
ing on or before October 3, 2004, the gen-
eral rule for suspension applies only to (1)
a participant in a settlement initiative, (2)
a taxpayer acting reasonably and in good
faith, or (3) a closed transaction. Apartic-
ipant in a settlement initiativeis a taxpayer
who, as of January 23, 2006, was partici-
pating in a settlement initiative described
in IRS Announcement 2005–80, 2005–2
C.B. 967 (see §601.601(d)(2)(ii)(b)); or
had entered into a settlement agreement
under Announcement 2005–80 or any
other prior or contemporaneous settlement
initiative either formally published or di-
rectly communicated to taxpayers known
to have participated in a tax shelter promo-
tion. Ataxpayer acting reasonably and in
good faithis a taxpayer who the IRS de-
termines has acted reasonably and in good
faith, taking into account all the facts and
circumstances surrounding a transaction.
Atransactionis a “closed transaction”
if, as of December 14, 2005, the assess-
ment of all federal income taxes for the
taxable year in which the tax liability to
which the interest relates is prevented by
the operation of any law or rule of law. A
transaction is also a closed transaction if
a closing agreement under section 7121
has been entered into with respect to the
tax liability arising in connection with the
transaction.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. A regulatory assessment is there-
fore not required. It has also been de-
termined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to these regulations.
For applicability of the Regulatory Flexi-
bility Act (5 U.S.C. chapter 6), please re-
fer to the cross-reference notice of pro-
posed rulemaking published elsewhere in
this issue of the Bulletin. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
these regulations will be submitted 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 Stuart Spielman of the Office of
Associate Chief Counsel (Procedure and
Administration).
*****
Amendments to the Regulations
Accordingly, 26 CFR Part 301 is
amended as follows:
PART 301 PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6404–0T is added
to read as follows:
§301.6404–0T Table of contents
(temporary).
This section lists the paragraphs con-
tained in §301.6404–4T.
§301.6404–4T Listed transactions and
undisclosed reportable transactions
(temporary).
(a) [Reserved].
(b)(1) through (b)(4) [Reserved].
(5) Listed transactions and undisclosed
reportable transactions.
(i) In general.
(ii) Effective dates.
(iii) Special rule for certain listed or
undisclosed reportable transactions.
(A) Participant in a settlement initia-
tive.
(1) Participant in a settlement initia-
tive who as of January 23, 2006, had not
reached agreement with the IRS.
(2) Participant in a settlement initiative
who, as of January 23, 2006, had reached
agreement with the IRS.
(B)Taxpayeractingingoodfaith.
(1) In general.
(2) Presumption.
(3)Examples.
(C) Closed transactions.
Par. 3. Section 301.6404–4T is added
to read as follows:
§301.6404–4T Listed transactions and
undisclosed reportable transactions
(temporary).
(a) [Reserved].
(b)(1) through (4) [Reserved].
(5)Listed transactions and undis-
closed reportable transactions—(i)In
general. The general rule of suspension
under section 6404(g)(1) does not apply
to any interest, penalty, addition to tax,
or additional amountwith respect to any
listed transaction as defined in section
6707A(c) or any undisclosed reportable
transaction. For purposes of this section,
anundisclosed reportable transaction
is a reportable transaction described in
the regulations under section 6011 that
is not adequately disclosed under those
regulations and that is not a listed trans-
action. Whether a transaction is a listed
transaction or an undisclosed reportable
transaction is determined as of the date
the IRS provides notice to the taxpayer
regarding that transaction that specifically
states the taxpayer’s liability and the basis
for that liability.
(ii)Effective/applicability dates.(A)
These regulations apply to interest relating
to listed transactions and undisclosed re-
portable transactions accruing before, on,
or after October 3, 2004.
(B) The applicability of these regula-
tions expires on or before June 18, 2010.
(iii)Special rule for certain listed or
undisclosed reportable transactions.With
respect to interest relating to listed trans-
actions and undisclosed reportable trans-
actions accruing on or before October 3,
2004, the exception to the general rule of
interest suspension will not apply to a tax-
payer who is a participant in a settlement
initiative with respect to that transaction,
to any transaction in which the taxpayer
has acted reasonably and in good faith, or
to a closed transaction. For purposes of
this special rule, a “participant in a settle-
ment initiative,” a “taxpayer acting in good
faith,” and a “closed transaction” have the
following meanings:
(A)Participant in a settlement initia-
tive—(1)Participant in a settlement initia-
tive who, as of January 23, 2006, had not
reached agreement with the IRS.Apartic-
ipant in a settlement initiativeincludes a
August 13, 20073512007–33 I.R.B.

taxpayer who, as of January 23, 2006, was
participating in a settlement initiative de-
scribed in Internal Revenue Service An-
nouncement 2005–80, 2005–2 C.B. 967.
See §601.601(d)(2)(ii)(b) of this chapter.
A taxpayer participates in the initiative by
complying with Section 5 of the announce-
ment. A taxpayer is not a participant in
a settlement initiative if, after January 23,
2006, the taxpayer withdraws from or ter-
minates participation in the initiative, or
the IRS determines that a settlement agree-
ment will not be reached under the initia-
tive within a reasonable period of time.
(2)Participant in a settlement initiative
who, as of January 23, 2006, had reached
agreement with the IRS.Aparticipant in a
settlement initiativeis a taxpayer who, as
of January 23, 2006, had entered into a set-
tlement agreement under Announcement
2005–80 or any other prior or contempo-
raneous settlement initiative either offered
through published guidance or, if the ini-
tiative was not formally published, direct
contact with taxpayers known to have par-
ticipated in a tax shelter promotion.
(B)Taxpayer acting in good faith—(1)
In general. The IRS may suspend inter-
est relating to a listed transaction or an
undisclosed reportable transaction accru-
ing on or before October 3, 2004, if the
taxpayer has acted reasonably and in good
faith. The IRS’ determination of whether a
taxpayer has acted reasonably and in good
faith will take into account all the facts
and circumstances surrounding the trans-
action. The facts and circumstances in-
clude, but are not limited to, whether the
taxpayer disclosed the transaction and the
taxpayer’s course of conduct after being
identified as participating in the transac-
tion, including the taxpayer’s response to
opportunities afforded to the taxpayer to
settle the transaction, and whether the tax-
payer engaged in unreasonable delay at
any stage of the matter.
(2)Presumption. If a taxpayer and
the IRS promptly enter into a settlement
agreement with respect to a transaction on
terms proposed by the IRS or, in the event
of atypical facts andcircumstances, on
terms more favorable to the taxpayer, and
the taxpayer has complied with the terms
of that agreement without unreasonable
delay, the taxpayer will be presumed to
have acted reasonably and in good faith
except in rare and unusual circumstances.
Rare and unusual circumstances must in-
volve specific actions involving harm to
tax administration. Even if a taxpayer
does not qualify for the presumption de-
scribed in this paragraph (b)(5)(iii)(B)(2),
the taxpayer may still be granted interest
suspension under the general facts and
circumstances test set forth in paragraph
(b)(5)(iii)(B)(1)ofthissection.
(3)Examples. The following examples
illustrate the rules the IRS uses in deter-
mining whether a taxpayer has acted rea-
sonably and in good faith.
Example 1. The taxpayer participated in a listed
transaction. The IRS, in a letter sent directly to the
taxpayer in July 2005, proposed a settlement of the
transaction. The taxpayer informed the IRS of his
interest in the settlement within the prescribed time
period. The revenue agent assigned to the taxpayer’s
case was not able to calculate the taxpayer’s liability
under the settlement or tender a closing agreement
to the taxpayer until March 2006. The taxpayer
promptly executed the closing agreement and re-
turned it to the IRS with a proposal for arrangements
to pay the agreed-upon liability. The IRS agreed with
the proposed arrangements for full payment. For pur-
poses of the application of section 6404(g)(2)(E), the
taxpayer has acted reasonably and in good faith. In-
terest accruing on or before October 3, 2004, relating
to the transaction in which the taxpayer participated
will be suspended.
Example 2. The facts are the same as inExample
1, except that the letter was sent by the IRS in Febru-
ary 2006, and the closing agreement was tendered to
the taxpayer in April 2006. For purposes of the ap-
plication of section 6404(g)(2)(E), the taxpayer has
acted reasonably and in good faith. Interest accruing
on or before October 3, 2004, relating to the trans-
action in which the taxpayer participated will be sus-
pended.
Example 3. The taxpayer participated in a listed
transaction. In response to an offer of settlement ex-
tended by the IRS in August 2005, the taxpayer in-
formed the IRS of her interest in entering into a clos-
ingagreementonthetermsproposedbytheIRS.The
revenue agent assigned to the transaction calculated
the taxpayer’s liability under the settlement and ten-
dered a closing agreement to the taxpayer in Novem-
ber 2005. The taxpayer executed the closing agree-
ment but failed to make any arrangement for pay-
ment of the agreed-upon liability stated in the closing
agreement. Taking into account all the facts and cir-
cumstances surrounding the transaction, the taxpayer
did not act reasonably and in good faith. Interest ac-
cruing on or before October 3, 2004, relating to the
transaction in which the taxpayer participated will not
be suspended.
Example 4. The taxpayer participated in a listed
transaction. In a letter sent by the IRS directly to the
taxpayer in July 2005, the IRS extended an offer of
settlement. The July 2005 letter informed the tax-
payer that, absent atypical facts and circumstances,
the taxpayer should not expect resolution of the tax
issues on more favorable terms than proposed in the
letter. The taxpayer declined the proposed settle-
ment terms of the letter and proceeded to Appeals
to present what the taxpayer claimed were atypical
facts and circumstances. The administrative file did
not contain sufficient information bearing on atypi-
cal facts and circumstances, and the taxpayer failed
to provide additional information when requested by
Appeals to explain how the transaction originally pro-
posed to the taxpayer differed in structure or types of
tax benefits claimed, from the transaction as imple-
mented by the taxpayer. Appeals determined that the
taxpayer’s facts and circumstances were not signif-
icantly different from those of other taxpayers who
participated in that listed transaction and thus, were
not atypical. In September 2006, the taxpayer and
Appeals entered into a closing agreement on terms
consistent with those originally proposed in the July
2005 letter. The taxpayer has complied with the terms
of that closing agreement. For purposes of the appli-
cation of section 6404(g)(2)(E), this taxpayer is not
presumed to have acted reasonably and in good faith;
instead, the IRS will applythe general rule to deter-
mine whether to suspend interest accruing on or be-
fore October 3, 2004, relating to the transaction in
which the taxpayer participated.
Example 5. ThefactsarethesameasinExam-
ple 4, except that Appeals agrees that atypical facts
were present that warrant additional concessions by
the government. A settlement is reached on terms
more favorable to the taxpayer than those proposed in
the July 2005 letter. For purposes of the application
of section 6404(g)(2)(E), this taxpayer is presumed to
have acted reasonably and in good faith, and absent
evidence of rare or unusualcircumstances harmful to
tax administration, is eligible for suspension of inter-
est accruing on or before October 3, 2004, relating to
the transaction in which the taxpayer participated.
(C)Closed transactions. A transaction
is considered closed for purposes of this
clause if, as of December 14, 2005, the
assessment of all federal income taxes for
the taxable year in which the tax liability
to which the interest relates is prevented
by the operation of any law or rule of law,
or a closing agreement under section 7121
has been entered into with respect to the
tax liability arising in connection with the
transaction.
(c) [Reserved].
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
Approved June 15, 2007.
Eric Solomon,
Assistant Secretary of
theTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on June 20, 2007,
8:53 a.m., and published in the issue of the Federal Register
for June 21, 2007, 72 F.R. 34176)
2007–33 I.R.B.352August 13, 2007

Part III. Administrative, Procedural, and Miscellaneous
Repayment of Commodity
Credit Corporation Loans
Notice 2007–63
PURPOSE
This notice provides answers to fre-
quently asked questions regarding the
tax treatment of “market gain” associ-
ated with the repayment of Commodity
Credit Corporation (CCC) loans under
the nonrecourse marketing assistance loan
program authorized under the Farm Se-
curity and Rural Investment Act of 2002,
Pub. L. No. 107–171, 116 Stat. 134
(2002). Under §§ 1201–1204 of that Act,
7 U.S.C. §§ 7931–7934, as amended by
§ 763(b)–(c) of Division A of the Consol-
idated Appropriations Resolution, 2003,
Pub. L. No. 108–7 (2003), the CCC pro-
vides nonrecourse marketing assistance
loans for the 2002–2007 crops of certain
commodities (the 2002 Act nonrecourse
marketing assistance loan program). This
notice provides answers for taxpayers that
elect, and those that do not elect, to include
the proceeds of CCC loans in income un-
der § 77 of the Internal Revenue Code.
BACKGROUND
Under § 77, a taxpayer receiving
amounts as loans from the CCC may
elect to include those amounts in gross
income for the taxable year in which re-
ceived. Most individual taxpayers report
the loan proceeds as a Commodity Credit
Corporation loan on line 7a of Schedule F,
Profit or Loss From Farming. A taxpayer
that makes the election under § 77 for any
taxable year must compute income using
that method for all subsequent years until
the taxpayer receives the permission of
the Internal Revenue Service to change
to a different method of accounting. Rev.
Proc. 2002–9, 2002–1 C.B. 327, provides
procedures under which a taxpayer may
obtain automatic consent of the Service to
change the taxpayer’s method of account-
ing for CCC loans from including the loan
amount in gross income to treating the
loan amount as a loan.
Under the 2002 Act nonrecourse mar-
keting assistance loan program, CCC loans
for each eligible commodity are made at a
specified rate per unit of commodity (the
original loan rate). The repayment amount
for a loan secured by the pledge of an el-
igible commodity generally is based on
the lower of the original loan rate or the
alternative repayment rate, as determined
by the CCC, for the commodity as of the
date of repayment. The alternative re-
payment rate may be adjusted to reflect
quality and location for each type of com-
modity. A taxpayer can use cash to re-
pay a CCC loan, purchase CCC certifi-
cates for use in repayment of the loan, or
deliver the pledged collateral as full pay-
ment for the loan at maturity. CCC certifi-
cates are available for purchase by produc-
ers that have outstanding commodity loans
for which a crop is pledged as collateral.
If a taxpayer uses cash or CCC certifi-
cates to repay a CCC loan, and the loan is
repaid when the alternative repayment rate
is less than the original loan rate, the dif-
ference between the original loan amount
and the lesser repayment amount is market
gain. Regardless of whether a taxpayer re-
pays a CCC loan in cash or uses CCC cer-
tificates in repayment of the loan, the mar-
ket gain is taken into account either as in-
come (if the taxpayer has not made an elec-
tion under § 77) or as an adjustment to the
basis of the commodity (if the taxpayer has
made an election under § 77).
QUESTIONS AND ANSWERS
The answers to the following questions
apply whether a taxpayer repays a CCC
loan with cash or uses CCC certificates in
repayment of the loan.
Q–1. How does a taxpayer that has
elected under § 77 to include the amount of
CCC loans in gross income report market
gain associated with the repayment of a
CCC loan?
A–1. A taxpayer that has made an elec-
tion under § 77 accounts for market gain
for the year in which a CCC loan is re-
paid by making an adjustment to the ba-
sis of the commodity that secures the loan.
The taxpayer’s basis in the commodity be-
fore the repayment of the loan is equal to
the amount of the loan previously reported
as income. That basis is reduced by the
amount of any market gain associated with
the repayment of the loan. An individ-
ual taxpayer that has made a § 77 elec-
tion should report the market gain as an
Agricultural Program Payment on line 6a
of Schedule F, but not as a taxable amount
on line 6b, for the year in which the loan is
repaid.
Q–2. How does a taxpayer that has not
elected under § 77 to include the amount of
CCC loans in gross income report market
gain associated with the repayment of a
CCC loan?
A–2. A taxpayer that has not made an
election under § 77 reports market gain as
income for the year in which a CCC loan
is repaid. An individual taxpayer that has
not made an election under § 77 should
report the market gain as an Agricultural
Program Payment on line 6a and as a tax-
able amount on line 6b of Schedule F for
the year in which the loan is repaid.
Q–3. Will the market gain associated
with the repayment of a CCC loan be re-
ported to a taxpayer whether the taxpayer
repays a CCC loan with cash or uses CCC
certificates in repayment of the loan?
A–3. Yes. For loans repaid on or after
January 1, 2007, the CCC reports market
gain associated with the repayment of a
CCC loan whether the taxpayer repays the
loan with cash or uses CCC certificates in
repayment of the loan. The CCC reports
the market gain on Form 1099–G,Certain
Government Payments.
DRAFTING INFORMATION
The principal author of this notice is
Marnette M. Myers of the Office of As-
sociate Chief Counsel (Income Tax and
Accounting). For further information re-
garding this notice (except Q&A–3), con-
tact Ms. Myers at (202) 662–4920. For
further information regarding Q&A–3 of
this notice, contact Stephen J. Coleman
of the Office of Associate Chief Counsel
(Procedure and Administration) at (202)
622–4910 (not toll-free calls).
August 13, 20073532007–33 I.R.B.

26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part I, § 42; 1.42–14.)
Rev. Proc. 2007–55
SECTION 1. PURPOSE
This revenue procedure publishes the
amounts of unused housing credit carry-
overs allocated to qualified states under
§ 42(h)(3)(D) of the Internal Revenue
Code for calendar year 2007.
SECTION 2. BACKGROUND
Rev. Proc. 92–31, 1992–1 C.B. 775,
provides guidance tostate housing credit
agencies of qualified states on the pro-
cedure for requesting an allocation of
unused housing credit carryovers under
§ 42(h)(3)(D). Section 4.06 of Rev. Proc.
92–31 provides that the Internal Rev-
enue Service will publish in the Internal
Revenue Bulletin the amount of unused
housing credit carryovers allocated to
qualified states for a calendar year from
a national pool of unused credit authority
(the National Pool). This revenue proce-
dure publishes these amounts for calendar
year 2007.
SECTION 3. PROCEDURE
The unused housing credit carryover
amount allocated from the National Pool
by the Secretary to each qualified state for
calendar year 2007 is as follows:
Qualified StateAmount Allocated
Alabama
$ 107,371
Alaska15,643
Arizona143,961
California851,151
Connecticut81,825
Delaware19,926
Florida422,333
Georgia218,614
Illinois299,580
Indiana147,398
Kansas64,531
Kentucky98,197
Maine30,854
Maryland131,107
Massachusetts150,285
Michigan235,697
Minnesota120,633
Missouri136,406
Nebraska41,284
New Hampshire30,698
New Jersey203,687
New Mexico45,633
New York450,729
North Carolina206,767
North Dakota14,845
Ohio267,970
Oklahoma83,562
Oregon86,399
Pennsylvania290,443
Rhode Island24,925
South Carolina100,885
South Dakota18,255
Tennessee140,984
Texas548,821
Utah59,535
Vermont14,566
Virginia178,434
Washington149,319
Wisconsin129,724
Wyoming12,023
EFFECTIVE DATE
This revenue procedure is effective
for allocations of housing credit dollar
amounts attributable to the National Pool
component of a qualified state’s housing
credit ceiling for calendar year 2007.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Christopher J. Wilson of
2007–33 I.R.B.354August 13, 2007

the Office of Associate Chief Counsel
(Passthroughs and Special Industries). For
further information regarding this revenue procedure, contact Mr. Wilson at (202)
622–3040 (not a toll-free call).
August 13, 20073552007–33 I.R.B.

Part IV. Items of General Interest
Notice of Proposed
Rulemaking and Notice of
Public Hearing
Section 42 Utility Allowance
Regulations Update
REG–128274–03
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains
proposed regulations that amend the util-
ity allowances regulations concerning
the low-income housing tax credit. The
proposed regulations update the utility
allowances regulations to provide new
options for estimating tenant utility costs.
The proposed regulations affect owners of
low-income housingprojects who claim
the credit, the tenants in those low-income
housing projects, and the state and local
housing credit agencies who administer
the credit. This document also provides
notice of a public hearing on these pro-
posed regulations.
DATES: Written or electronic comments
must be received by September 17, 2007.
Outlines of topics to be discussed at the
public hearing scheduled for October 9,
2007, must be received by September 18,
2007.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR(REG–128274–03),
room 5203, Internal Revenue Ser-
vice, PO Box 7604, Ben Franklin Sta-
tion, Washington, DC 20044. Submis-
sions may be hand-delivered Monday
through Friday between the hours of
8a.m. and4p.m.toCC:PA:LPD:PR
(REG–128274–03), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC, or sent
electronically, via the Federal eRulemak-
ing Portal atwww.regulations.gov(IRS
REG–128274–03). The public hearing
will be held in the auditorium, Internal
Revenue Building, 1111 Constitution Av-
enue, NW, Washington, DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, David Selig, at (202)
622–3040; concerning submissions
of comments, the hearing, or to be
placed on the building access list to
attend the hearing, Richard Hurst, at
Richard.A.Hurst@irscounsel.treas.govor
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information con-
tained in this notice of proposed rulemak-
ing in §1.42–10(b)(4)(ii) have previously
been reviewed and approved by the Office
of Management and Budget in accor-
dance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1102.
Background
This document contains proposed
amendments to the Income Tax Regu-
lations (26 CFR Part 1) relating to the
low-income housing credit under section
42 of the Internal Revenue Code. Sec-
tion 42(a) provides that, for purposes of
section 38, the amount of the low-income
housing credit determined under section
42 for any taxable year in the credit pe-
riod is an amount equal to the applicable
percentage of the qualified basis of each
qualified low-income building. A qual-
ified low-income building is defined in
section 42(c)(2) as any building that is
part of a qualified low-income housing
project.
A qualified low-income housing project
is defined in section 42(g)(1) as any project
for residential rental housing if the project
meets one of the following tests elected by
the taxpayer: (1) At least 20 percent of the
residential units in the project are rent-re-
stricted and occupied by individuals whose
income is 50 percent or less of area me-
dian gross income; or (2) at least 40 per-
cent of the residential units in the project
are rent-restricted and occupied by indi-
viduals whose income is 60 percent or less
of area median gross income. If a taxpayer
does not meet the elected test, the project
is not eligible for the section 42 credit.
In order to qualify as a rent-restricted
unit within the meaning of section 42(g),
the gross rent for the unit must not exceed
30 percent of the applicable income limi-
tation. If any utilities are paid directly by
the tenant, section 42(g)(2)(B)(ii) requires
the inclusion in gross rent of a utility al-
lowance determined by the Secretary, af-
ter taking into account the procedures un-
der section 8 of the United States Housing
Act of 1937.
Section 1.42–10(b) provides rules
for calculating the appropriate utility al-
lowance based upon whether (1) the build-
ing receives rental assistance from the
Farmers Home Administration (FmHA),
now known as the Rural Housing Ser-
vice; (2) the building has any tenant that
receives FmHA rental assistance; (3) the
building’s rents and utility allowances are
reviewed by the Department of Housing
and Urban Renewal (HUD) on an annual
basis; or (4) the building is not described
in (1), (2), or (3) above (other buildings).
Under §1.42–10(b)(4), other buildings
generally use the applicable Public Hous-
ing Authority (PHA) utility allowance es-
tablished for the Section 8 Existing Hous-
ing Program or use a local utility company
estimate. The local utility company esti-
mate may be obtained by any interested
party (including a low-income tenant, a
building owner, or a State or local housing
credit agency (Agency)).
Explanation of Provisions
The IRS and Treasury Department have
received comments from organizations
representing tenants, non-profit housing
organizations, housing credit agencies,
building owners, building management
companies, developers, and others noting
that the existing methods in §1.42–10 that
provide rules for calculating utility ex-
penses often result in flawed information
being used for calculating rent adjustments
and need updating. These organizations
assert that PHA utility schedules refer-
enced by the existing regulations do not
represent the proper usage of utilities for
low-income housing tax credit units. This
is primarily because PHA utility sched-
ules are designed for Section 8 properties,
which generally are older buildings with
higher utility costs, whereas low-income
2007–33 I.R.B.356August 13, 2007

housing projects require measurements
that are appropriate for new construction.
Further, a number of project developers,
owners, and building managers have indi-
cated that they are unable to obtain local
utility estimates due to a lack of data or an
unwillingness on the part of utility com-
panies to provide the information. Even
if a utility company is willing to provide
an initial estimate, annual updates are of-
ten difficult to obtain. Therefore, these
commentators have recommended that
§1.42–10 be amended to provide more
viable and accurate options for estimating
tenant utility costs.
In response to these concerns,
§1.42–10(b)(4)(ii) is amended by these
proposed regulations to provide additional
options for accurately calculating utility
allowances. Section 1.42–10(b)(4)(ii)(B),
which permits any interested party to ob-
tain a local utility company estimate for
a unit, is revised toaccommodate multi-
ple utility services to a property. When
charges for electricity transmission and
distribution are paid to more than one
company, cost estimates must be obtained
from each of the utilities when computing
the utility allowance.
Section 1.42–10(b)(4)(ii) is amended
to permit a building owner to obtain a
utility estimate for each unit in a building
from the Agency that has jurisdiction over
the building. The Agency’s estimate must
take into account the local utility rate data,
property type, climate variables by re-
gion in the State, taxes and fees on utility
charges, and property building materials
and mechanical systems. An Agency may
also use actual utility company usage data
and rates for the building.
Further, the regulations are proposed
to be amended to permit a building
owner to calculate utility allowances us-
ing the “HUD Utility Schedule Model”
that can be found on the Low-In-
come Housing Tax Credits page at
www.huduser.org/datasets/lihtc.html.The
HUD Utility Schedule Model is based on
data from the Residential Energy Con-
sumption Survey (RECS) conducted by
the Department of Energy. RECS data
provides energy consumption by structure
for heating, air conditioning, cooking, wa-
ter heating, and other electric (lighting and
refrigeration). The HUD Utility Schedule
Model incorporates building location and
climate. A building owner who chooses
to use the HUD Utility Schedule Model
must furnish a copy of the calculations
using the HUD Utility Schedule Model
to the Agency that has jurisdiction over
the building. A building owner also must
make available copies of the calculations
to the tenants in the building.
Section 1.42–10(c) provides that if
the applicable utility allowance for a
unit in a building changes, the new util-
ityallowancemustbeusedtocompute
gross rent of rent-restricted units due 90
days after the change. Commentators re-
quested that this rule be modified to restrict
changes to the building’s utility allowance
until after the building has achieved 90
percent occupancy for a period of 90 con-
secutive days, or by the end of the first
year of the credit period, whichever is
earlier. The proposed regulations adopt
this comment. Section 1.42–10(c) also is
modified to require that a building owner
must review at least annually the basis on
which utility allowances have been es-
tablished and must update the applicable
utility allowance. The review must take
into account any changes to the building
such as any energy conservation mea-
sures that affect energy consumption and
changes in utility rates.
The IRS and Treasury Department re-
quest comments on whether other meth-
ods should be used for calculating utility
allowances such as energy or water and
sewer services using a software model run
by a State-certified engineer who is ap-
proved by the Agency that has jurisdiction
over the building.
Proposed Effective Date
The regulations are proposed to apply
to taxable years beginning on or after the
date of publication of the Treasury deci-
sion adopting these rules as final regula-
tions in theFederal Register.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Exec-
utive Order 12866. Therefore, a regula-
tory assessment is not required. It also has
been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these reg-
ulations, and because the regulations do
not impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Inter-
nal Revenue Code, this regulation has been
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administration
for comment on their impact on small busi-
ness.
Comments and 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 submit-
ted timely to the IRS. Comments are re-
quested on all aspects of the proposed reg-
ulations. In addition, the IRS and Trea-
sury Department specifically request com-
ments on the clarity of the proposed rules
and how they can be made easier to under-
stand. All comments will be available for
public inspection and copying.
A public hearing has been scheduled
for October 9, 2007, at 10 a.m. in the audi-
torium of the Internal Revenue Building,
1111 Constitution Avenue, NW, Washing-
ton, DC. Because of access restrictions,
visitors will not be admitted beyond the
Internal Revenue Building lobby more
than 30 minutes before the hearing starts.
Due to building security procedures, visi-
tors must enter at the Constitution Avenue
entrance. In addition, all visitors must
present photo identification to enter the
building. For information about having
your name placed on the building access
list to attend the hearing, see the “FOR
FURTHER INFORMATION CONTACT”
section of this preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing must
submit electronic or written comments by
September 17, 2007 and submit an out-
line of the topics to be discussed and the
time to be devoted to each topic (signed
original and eight (8) copies) by Septem-
ber 18, 2007. A period of 10 minutes will
be allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receivingoutlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
August 13, 20073572007–33 I.R.B.

Drafting Information
The principal author of these regula-
tions is David Selig, Office of the Asso-
ciate Chief Counsel (Passthroughs and
Special Industries), IRS. However, other
personnel from the IRS and Treasury
Department participated in their develop-
ment.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.42–10 is amended by:
1. Revising the firstsentence of para-
graph (a).
2. Revising paragraphs (b)(1), (b)(2),
(b)(3), (b)(4) introductory text and (c).
3. Removing the language “HUD rental
assistance” from the first place that it ap-
pears in paragraph (b)(4)(i) and adding the
language “rental assistance from the De-
partment of Housing and Urban Develop-
ment” in its place.
4. Adding two sentences at the end of
paragraph (b)(4)(ii)(A).
5. Revising the second sentence in
paragraph (b)(4)(ii)(B).
6. Adding new paragraphs (b)(4)(ii)(C)
and (b)(4)(ii)(D).
The additions and revisions read as fol-
lows:
§1.42–10 Utility allowances.
(a) * * * If the cost of any utility (other
than telephone or cable television) for a
residential rental unit is paid directly by
the tenant(s), the gross rent for that unit
includes the applicable utility allowance
determined under this section. * * *
(b)Applicable utility allowances—(1)
Buildings assisted by the Rural Housing
Service. If a building receives assistance
from the Rural Housing Service (RHS-as-
sisted building) the applicable utility al-
lowance for all rent-restricted units in the
building is the utility allowance deter-
mined under the method prescribed by
the Rural Housing Service (RHS) for the
building.
(2)Buildings with Rural Housing Ser-
vice assisted tenants. If any tenant in
a building receives RHS rental assistance
payments (RHS tenant assistance), the ap-
plicable utility allowance for all rent-re-
stricted units in the building (including
any units occupied by tenants receiving
rental assistance payments from the De-
partment of Housing and Urban Develop-
ment (HUD)) is the applicable RHS utility
allowance.
(3)Buildings regulated by the Depart-
ment of Housing and Urban Development.
If neither a building nor any tenant in the
building receives RHS housing assistance,
and the rents and utility allowances of the
building are reviewed by HUD on an an-
nual basis (HUD-regulated building), the
applicable utility allowance for all rent-re-
stricted units in the building is the applica-
ble HUD utility allowance.
(4)Other buildings. If a building is nei-
ther an RHS-assisted nor a HUD-regulated
building, and no tenant in the building re-
ceives RHS tenant assistance, the appli-
cable utility allowance for rent-restricted
units in the building is determined under
the following methods.
(i) * * *
(ii)***(A)***However,ifalo-
cal utility company estimate is obtained
for any unit in the building under para-
graph (b)(4)(ii)(B) of this section, a State
or local housing credit agency (Agency)
provides a building owner with an esti-
mate for any unit in a building under para-
graph (b)(4)(ii)(C) of this section, or a
cost estimate is calculated using the HUD
Utility Schedule Model under paragraph
(b)(4)(ii)(D) of this section, then the es-
timate under paragraph (b)(4)(ii)(B), (C),
or (D) of this section becomes the applica-
ble utility allowance for all rent-restricted
units of similar size and construction in
the building. Paragraphs (b)(4)(ii)(B), (C),
and(D)ofthissectiondonotapplytounits
to which the rules of paragraphs (b)(1), (2),
(3), or (4)(i) of this section apply.
(B) * * * The estimate is obtained when
the interested party receives, in writing, in-
formation from a localutility company (in-
cluding combined ratecharges from mul-
tiple utility companies) providing the esti-
mated cost of the utilities provided by that
company for a unit of similar size and con-
struction for the geographic area in which
the building containing the unit is located.
(C)Agency estimate. A building owner
may obtain a utility estimate for each
unit in the building from the Agency that
has jurisdiction over the building pro-
vided the Agency agrees to provide the
estimate. The estimate is obtained when
the building ownerreceives, in writing,
information from the Agency providing
the estimated per-unit cost of the utilities
for units of similar size and construc-
tion for the geographic area in which the
building containing the units is located.
The Agency estimate may be obtained by
a building owner at any time during the
building’s extended use period (see section
42(h)(6)(D)). Costs incurred in obtaining
the estimate are borne by the building
owner. In establishing an accurate util-
ity allowance estimate for a particular
building, an Agency (or an agent or other
private contractor of the Agency) must
take into account, among other things, lo-
cal utility rate data, property type, climate
and degree-day variables by region in the
state, taxes and fees on utility charges,
building materials, and mechanical sys-
tems. An Agency may also use actual
utility company usage data and rates for
the building.
(D)HUD Utility Schedule Model.A
building owner may calculate a utility
estimate using the “HUD Utility Sched-
ule Model” that can be found on the
Low-Income Housing Tax Credits page
atwww.huduser.org/datasets/lihtc.html.A
building owner who chooses this method
must furnish a copy of the calculations
using the HUD Utility Schedule Model
to the Agency that has jurisdiction over
the building. A building owner also must
make available copies of the calculations
to the tenants in the building.
(c)Changes in applicable utility al-
lowance—(1)In general. If at any time
during the building’s extended use period,
the applicable utility allowance for a unit
changes, the new utility allowance must
be used to compute gross rents of rent-re-
stricted units due 90 days after the change.
For example, if rent must be lowered be-
cause a local utility company estimate is
obtained that shows a higher utility cost
than the otherwise applicable PHA utility
allowance, the lower rent must be in effect
for rent due more than 90 days after the
date of the local utility company estimate.
2007–33 I.R.B.358August 13, 2007

This paragraph (c)(1) does not apply until
the building has achieved 90 percent occu-
pancy for a period of 90 consecutive days
or by the end of the first year of the credit
period, whichever is earlier.
(2)Annual review. A building owner
must review at least annually the basis
on which utility allowances have been es-
tablished and must update the applicable
utility allowance in accordance with para-
graph (c)(1) of this section. The review
must take into account any changes to the
building such as any energy conservation
measures that affect energy consumption
and changes in utility rates.
Par. 3. Section 1.42–12 is amended by
adding paragraph (a)(4) to read as follows:
§1.42–12 Effective/applicability dates and
transitional rules.
(a) * * *
(4)Utility allowances. Section 1.42–10
is applicable to taxable years beginning on
or after the date of publication of the Trea-
sury decision adopting these rules as final
regulations in theFederal Register.
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 18, 2007,
8:45 a.m., and published in the issue of the Federal Register
for June 19, 2007, 72 F.R. 33703)
Notice of Proposed
Rulemaking and Notice of
Public Hearing
Section 42 Qualified Contract
Provisions
REG–114084–04
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: Section 42(h)(6)(F) requires
the Secretary to prescribe such regula-
tions as may be necessary or appropriate
to carry out the provisions of section
42(h)(6)(F), including regulations to pre-
vent the manipulation of the qualified
contract amount. This document con-
tains proposed regulations that provide
guidance concerning taxpayers’ requests
to housing credit agencies to obtain a
qualified contract (as defined in section
42(h)(6)(F) of the Internal Revenue Code)
for the acquisition of a low-income hous-
ing credit building. The regulations will
affect taxpayers requesting a qualified
contract, potential buyers, and low-in-
come housing credit agencies responsible
for the administration of the low-income
housing credit program. This document
also provides notice of a public hearing on
these proposed regulations.
DATES: Written or electronic comments
must be received by September 17, 2007.
Outlines of topics to be discussed at the
public hearing scheduled for October 15,
2007, must be received by September 13,
2007.
ADDRESSES: Send submissions to: In-
ternal Revenue Service, CC:PA:LPD:PR
(REG–114084–04), room 5203, PO Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
betweenthehoursof8a.m. and4p.m.
to CC:PA:LPD:PR (REG–114084–04),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC, or may be sent elec-
tronically via the Federal eRulemaking
Portal at:www.regulations.gov(IRS
REG–114084–04). The public hearing
will be held in the auditorium, Internal
Revenue Building, 1111 Constitution Av-
enue, NW, Washington, DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed reg-
ulations, Jack Malgeri (202) 622–3040;
concerning submissions of comments,
the hearing, and/or to be placed on the
building access list to attend the hearing,
Kelly Banks, (202) 622–7180 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information con-
tained in this notice of proposed rulemak-
ing have been submitted to the Office of
Management and Budget for review in
accordance with the Paperwork Reduc-
tion Act of 1995 (44 U.S.C. 3507(d)).
Comments on the collections of infor-
mation should be sent to the Office of
Management and Budget, Attn: Desk Of-
ficer for the Department of the Treasury,
Office of Information and Regulatory
Affairs, Washington, DC 20503, with
copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by August
20, 2007.
Comments are specifically requested
concerning:
Whether the proposed collection of in-
formation is necessary for the proper per-
formance of the functions of the Internal
Revenue Service, including whether the
information will have practical utility;
The accuracy of the estimated burden
associated with the proposed collection of
information (see below);
How the quality, utility, and clarity of
the information to be collected may be en-
hanced;
How the burden of complying with the
proposed collections of information may
be minimized, including through the appli-
cation of automated collection techniques
or other forms of information technology;
and
Estimates of capital or start-up costs
and costs of operation, maintenance, and
purchase of service to provide information.
The collection of information
in this proposed regulation is in
§1.42–18(a)(1)(ii)(B). This information
is required in order for a taxpayer to pro-
vide a written request to a housing credit
agency to obtain a qualified contract (as
defined in section 42(h)(6)(F) of the In-
ternal Revenue Code) for the acquisition
of a low-income housing credit building.
The collection of information is voluntary
to obtain a benefit. The likely respondents
are business or other for-profit institutions.
Estimated total annual reporting bur-
den:20,000 hours.
Estimated average annual burden
hours per respondent:1 hour.
Estimated number of respondents:
20,000.
Estimated annual frequency of re-
sponses:one time.
An agency may not conduct or sponsor,
and a person is not required to respond to, a
August 13, 20073592007–33 I.R.B.

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 tax return
information are confidential, as required
by 26 U.S.C. 6103.
Background
This document contains amendments to
26 CFR part 1 under section 42 of the Inter-
nal Revenue Code (Code). Section 42 was
amended by section 7108(c)(1) of the Om-
nibus Budget Reconciliation Act of 1989
(Public Law 101–239, 103 Stat. 2106) to
add paragraph (h)(6). In general, section
42(h)(6)(A) provides that no credit will be
allowed with respect to any building for
the taxable year unless an extended low-in-
come housing commitment (commitment)
(as defined in section 42(h)(6)(B)) is in ef-
fect as of the end of the taxable year.
Section 42(h)(6)(B) provides in part
that the term commitment means any
agreement between the taxpayer and
the low-income housing credit agency
(Agency) that requires that the applicable
fraction (as defined in section 42(c)(1))
for the building for each taxable year in
the extended use period will not be less
than the applicable fraction specified in
the commitment, and that prohibits the
eviction or termination of tenancy (other
than for good cause) of an existing tenant
of any low-income unit and any increase
in the gross rent with respect to the unit
not otherwise permitted under section 42.
Section 42(h)(6)(D) defines the term
extended use period as the period begin-
ning on the first day in the compliance pe-
riod under section 42(i)(1) on which the
building is part of a qualified low-income
housing project and ending on the later of:
(1) the date specified by the Agency in the
commitment, or (2) the date which is 15
years after the close of the compliance pe-
riod.
Section 42(h)(6)(E)(i)(II) provides for
the termination of the extended use period
if the Agency is unable to present within
a specified period of time a qualified con-
tract for the acquisition of the low-income
portion of the building by any person who
will continue to operate such portion as a
low-income building.
Section 42(h)(6)(F) defines the term
qualified contract as abona fidecontract
to acquire (within a reasonable period of
time after the contract is entered into) the
non low-income portion of the building
for fair market value and the low-income
portion of the building for an amount not
less than the applicable fraction (specified
in the commitment) of the sum of: (I)
the outstanding indebtedness secured by,
or with respect to the building, (II) the
adjusted investor equity in the building,
plus (III) other capital contributions not
reflected in these amounts, reduced by
cash distributions from (or available for
distribution from) the project.
Section 42(h)(6)(F) also provides that
the Secretary shall prescribe regulations as
may be necessary or appropriate to carry
out that paragraph, including regulations
to prevent the manipulation of the amount
determined under section 42(h)(6)(F).
Section 42(h)(6)(I) provides that the
Agency must present the qualified con-
tract within the 1-year period beginning
onthedate(afterthe14
th
year of the
compliance period) the taxpayer submits
a written request to the Agency to find a
person to acquire the taxpayer’s interest in
the low-income portion of the building.
These proposed regulations provide
guidance with respect to the application of
the qualified contract provisions of section
42.
Explanation of Provisions
Qualified Contract Formula
Section 1.42–18(c)(1) of the proposed
regulations defines the qualified contract
formula used to compute the purchase
price amount of the low-income housing
building as: (1) the fair market value of
the non low-income portion of the build-
ing, plus (2) the low-income portion of
the building. Section 1.42–18(c)(2) of the
proposed regulations defines the low-in-
come portion of the building as an amount
not less than the applicable fraction (as
specified in the commitment) of the total
of: (a) outstanding indebtedness on the
building, plus (b) the adjusted investor eq-
uity in the building, plus (c) other capital
contributions not reflected in the amounts
described in (a) and (b), minus (d) cash
distributions from (or available for distri-
bution from) the project.
Under §1.42–18(b)(3) of the proposed
regulations, the fair market value of the
non low-income portion of the building
is its fair market value at the time of the
Agency’s offer of sale. Because the intent
of the extended-long term commitment is
the continued use of the low-income por-
tion of the building as low-income hous-
ing, the Treasury Department and IRS be-
lieve that fair market value must reflect
the restrictions on the use of the low-in-
come portion of the building. Therefore,
the proposed regulations provide that the
valuation must take into account the exist-
ing and continuing requirements under the
commitment for the building.
Section 42(h)(6) does not discuss the
appropriate treatment of land in the cal-
culation of qualified contracts. Qualified
contracts are defined by reference to the
building, which for other purposes of sec-
tion 42 generally does not include the
underlying land. However, because the
Treasury Department and the IRS antici-
pate that the sales of the building without
the underlying land would be infrequent,
the Treasury Department and the IRS be-
lieve that it is necessary to include the
underlying land in the computation of the
qualified contract formula. Therefore, the
proposed regulations provide that the non
low-income portion also includes the fair
market value of the land underlying the
entire building, both the non low-income
portion and the low-income portion, re-
gardless of whether the building is entirely
low-income. Comments are requested
on whether low-income buildings are ever
sold without the underlying land, and if so,
the appropriate treatment in those cases. In
addition, comments are requested on the
appropriate treatment of leased land and
the prevalence of leased land in low-in-
come housing credit transactions.
Forpurposesofdeterminingthe
low-income portion of the building,
§1.42–18(c)(3) defines the term outstand-
ing indebtedness as the outstanding princi-
pal balance, at the time of the sale, of any
indebtedness or loan that is secured by,
or with respect to, the building, and that
does not exceed the amount of qualifying
building costs. Qualifying building costs
are generally defined in §1.42–18(b)(4)
of the proposed regulations as those costs
that would have been includible in eligible
2007–33 I.R.B.360August 13, 2007

basis of a low-income housing build-
ing under section 42(d)(1), provided the
amounts were expended for depreciable
property that conveys under the contract
with the building. Thus, for example, the
outstanding mortgage on the building will
generally be outstanding indebtedness for
purposes of section 42(h)(6)(F), even if
the indebtedness is incurred after the first
year of the credit period, but only up to
the amount of costs included in original
eligible basis established at the end of the
first year of the credit period under section
42(f)(1), plus indebtedness for qualifying
building costs incurred after the first year
of the credit period of a type that could
be includible in eligible basis under sec-
tion 42(d)(1). Thus, any proceeds from
refinancing indebtedness or additional
mortgages in excess of such qualifying
building costs are not outstanding indebt-
edness for purposes of section 42(h)(6)(F).
Outstanding indebtedness with an inter-
est rate below the applicable Federal rate
(as determined under section 1274(d)) at
the time of issuance must be discounted us-
ing a present-value calculation to obtain an
imputed principal amount. This imputed
principal amount constitutes the amount of
indebtedness that mustbe utilized in calcu-
lating the amount of outstanding indebted-
ness under the qualified contract formula.
Section 1.42–18(c)(4) of the proposed
regulations provides that adjusted investor
equity includes only those cash invest-
ments by owners of the low-income build-
ing used for qualifying building costs.
Investor equity is adjusted by a cost of
living adjustment not to exceed five per-
cent. The cost-of-living adjustment is
determined under section 1(f)(3), substi-
tuting the language in section 1(f)(3)(B)
with “the CPI for the base calendar year.”
The base calendar year is the calendar
year with or within which the first taxable
year of the credit period ends. Thus, the
cost-of-living adjustment is the percent
by which the Consumer Price Index (CPI)
for the year preceding the written request
to find a person to acquire the project ex-
ceeds the CPI for the base calendar year.
Under §1.42–18(c)(5) of the proposed
regulations, other capital contributions
are defined as contributions for quali-
fying building costs other than amounts
included in the calculation of outstanding
indebtedness or adjusted investor equity
as defined in this section. An example
of other capital contributions includes an
amount expended to replace a furnace
after the first year of the credit period,
provided any loan taken to finance the
furnace was not secured by the furnace
or the building. In this example, the loan
would be outstanding indebtedness on the
building.
Qualifying building costs are de-
fined under §1.42–18(b)(4)(i) and (ii)
of the proposed regulations. Under
§1.42–18(b)(4)(i) of the proposed reg-
ulations, a qualifying building is a cost
included in eligible basis under section
42(d)(1). A cost is included in eligible
basis under section 42(d)(1) only if the
cost is (1) included in the adjusted basis
of depreciable property subject to section
168 and the property qualifies as residen-
tial rental property under section 142(d)
and §1.103–8(b)(4)(iii), or (2) included in
the adjusted basis of depreciable property
subject to section 168 that is used in a
common area or provided as a comparable
amenity to all residential rental units in
the building, but only if the property con-
veys under the contract with the building.
A qualifying building cost also includes
costs incurred after the first year of the
credit period (as defined in section 42(f))
of the type included in eligible basis under
section 42(d)(1). See §1.42–18(b)(4)(ii)
of the proposed regulations.
Under the qualified contract formula,
the sum of the outstanding indebtedness,
adjusted investor equity, and other capi-
tal contributions is reduced by cash distri-
butions from or available for distribution
from the project. Section 1.42–18(c)(6) of
the proposed regulations defines cash dis-
tributions as including all distributions to
owners or related parties within the mean-
ing of section 267(b) or 707(b) (for exam-
ple, cash distributions to owners from the
proceeds of refinancings and second mort-
gages in excess of existing mortgages), and
all cash and cash equivalents including re-
serve funds (for example, replacement and
operating reserves) generated by cash flow
from the project. To the extent an owner
contributed his or her own funds to a re-
serve fund for replacement and improve-
ments, such amounts are evaluated as ei-
ther adjusted investor equity or other cap-
ital contributions. The Treasury Depart-
ment and the IRS request comments and
examples of forms of cash distributions
from or available for distribution from the
project that should or should not be in-
cluded in the regulatory definition. Addi-
tionally, comments are requested whether
low-income housing is owned by other
than a corporation or partnership, for ex-
ample, a sole proprietor, estate, or trust,
and if so, what rules should apply for de-
termining the amount of cash distributions
from the project.
Administrative Discretion and
Responsibilities of Agency
Under §1.42–18(d)(1) of the proposed
regulations, the Agency may exercise ad-
ministrative discretion in evaluating and
acting upon an owner’s request to find a
buyer to acquire the building. For exam-
ple, the Agency may determine that an
owner’s request to find a buyer for the
project lacks essential information and it
may suspend the one-year period for find-
ing a buyer until essential information is
submitted.
Actual Offer of Sale
Section 1.42–18(d)(2) of the proposed
regulations provides that in order to satisfy
the qualified contractrequirements under
section 42(h)(6), the Agency must offer the
building for sale to the general public at the
determined qualified contract price upon
receipt of a written request by the owner
to find a buyer to acquire the building.
Fair Market Value Cap
Commentators suggested the inclusion
of a fair market value cap on the low-in-
come portion of the qualified contract
amount as defined in section 42(h)(6)(F)
noting that the qualified contract price
may exceed the fair market value of a
project. Commentators noted one reason
for the qualified contract price exceeding
fair market value is the formula for ad-
justed investor equity, which includes the
CPI-based cost of living adjustments. The
statute defines a qualified contract, in part,
as a contract to acquire the low-income
portion of the building for an amount “not
less than” the applicable fraction of the
statutorily provided formula. Therefore,
the proposed regulations do not adopt this
comment. However, the flush language of
section 42(h)(6)(E) provides that the qual-
ified contract exception to the termination
August 13, 20073612007–33 I.R.B.

of the extended use period of a commit-
ment shall not apply to the extent more
stringent requirements are provided in the
commitment or in state law. The Treasury
Department and the IRS request comments
on the extent of Agency and state authority
in providing more stringent requirements
than the provisions contained in section
42(h)(6)(F), and specifically, the authority
of Agency or state regulators to require in
agreements a fair market value cap that
would restrict any qualified contract price
to fair market value.
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 also has been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to these regulations.
It is hereby certified that the collection of
information in these regulations will not
have a significant economic impact on a
substantial number of small entities. This
certification is based on the fact that the
collection of information described under
the heading “Paperwork Reduction Act”
imposes virtually no incremental burden in
time or expense and is voluntary for the
taxpayer to obtain a benefit. Therefore,
a regulatory flexibility analysis under the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) is not required. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
this regulation has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies) or electronic com-
ments that are submitted timely to the IRS.
The IRS and Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier to
understand. All comments will be avail-
able for public inspection and copying.
A public hearing has been scheduled for
October 15, 2007, beginning at 10 a.m.
in the auditorium of the Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC. Due to building security
procedures, visitors must enter at the Con-
stitution Avenue entrance. In addition, all
visitors must presentphoto identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER IN-
FORMATION CONTACT” section of this
preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish
to present oral comments at the hearing
must submit electronic or written com-
ments on September 17, 2007 and an out-
line of the topics to be discussed and the
time to be devoted to each topic (signed
original and eight (8) copies) by Septem-
ber 13, 2007. A period of 10 minutes will
be allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receiving outlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of these proposed
regulations is Jack Malgeri, Office of As-
sociate Chief Counsel (Passthroughs and
Special Industries). However, other per-
sonnel from the IRS and Treasury Depart-
ment participated in their development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR Part 1 is proposed
to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.42–18 also issued under
26 U.S.C. 42(h)(6)(F) and 42(h)(6)(K);
***
Par. 2. Section 1.42–18 is added to read
as follows:
§1.42–18 Qualified contracts.
(a)Extended low-income housing com-
mitment—(1)In general. No credit un-
der section 42(a) is allowed by reason of
section 42 and this section with respect to
any building for the taxable year unless
an extended low-income housing commit-
ment (commitment) (as defined in section
42(h)(6)(B)) is in effect as of the end of
such taxable year. A commitment must be
in effect for the extended use period (as de-
fined in paragraph (a)(1)(i) of this section).
(i)Extended use period.Thetermex-
tended use periodmeans the period be-
ginning on the first day in the compliance
period (as defined in section 42(i)(1)) on
which the building is part of a qualified
low-income housing project (as defined in
section 42(g)(1)) and ending on the later
of—
(A) The date specified by the low-in-
come housing credit agency (Agency) in
the commitment; or
(B) The date that is 15 years after the
close of the compliance period.
(ii)Termination of extended use period.
The extended use period under paragraph
(a)(1)(i) of this section for any building
will terminate—
(A) On the date the building is acquired
by foreclosure (or instrument in lieu of
foreclosure) unless the Secretary deter-
mines that such acquisition is part of an
arrangement with the taxpayer a purpose
of which is to terminate such period; or
(B) On the last day of the one-year
period beginning on the date (after the
14
th
year of the compliance period) the
owner submits a written request to the
Agency to find a person to acquire the
owner’s interest in the low-income por-
tion of the building and the Agency is
unable to present during such period a
qualified contract for the acquisition of the
low-income portion of the building by any
person who will continue to operate such
portion as a qualified low-income build-
ing (as defined in section 42(c)(2)). This
paragraph (a)(1)(ii)(B) shall not apply to
the extent more stringent requirements are
provided in the commitment or under state
law. If the Agency provides a qualified
contract within the one-year period and
the owner rejects or fails to act upon the
contract, the building remains subject to
the existing commitment.
2007–33 I.R.B.362August 13, 2007

(iii)Eviction, gross-rent increase con-
cerning existing low-income tenants not
permitted. During the three year period
following the termination of a commit-
ment, no owner shall be permitted to evict
or terminate the tenancy (other than for
good cause) of an existing tenant of any
low-income unit, or increase the gross rent
for such unit in a manner or amount not
otherwise permitted by section 42.
(2) [Reserved].
(b)Special rules. For purposes of this
section, the following terms are defined:
(1)Base calendar yearmeans the cal-
endar year with or within which the first
taxable year of the credit period ends.
(2)The low-income portionof a build-
ing is the portion of the building equal to
the applicable fraction (as defined in sec-
tion 42(c)(1)) specified in the commitment
for the building.
(3)The fair market valueof the non
low-income portion of the building is de-
termined at the time of the Agency’s offer
of sale of the project to the general public.
This valuation must take into account the
existing and continuing requirements con-
tained in the commitment for the building.
The non low-income portion also includes
the fair market value of the land underlying
the entire building, both the non low-in-
come portion and the low-income portion
regardless of whether the project is entirely
low-income. The non low-income portion
also includes the fair market value of items
of personal property not included in eligi-
ble basis under section 42(d)(1) that con-
vey under the contract with the building.
(4)A qualifying building costis—
(i) A cost that is included in eligible ba-
sis of a low-income housing building un-
der section 42(d)(1) which is—
(A) Included in the adjusted basis of de-
preciable property subject to section 168
and the property qualifies as residential
rental property under section 142(d) and
§1.103–8(b)(4)(iii); or
(B) Included in the adjusted basis of
depreciable property subject to section 168
that is used in a common area or provided
as a comparable amenity to all residential
rental units in the building; and
(ii) Of the type described in paragraph
(b)(4)(i) of this section incurred after the
first year of the low-income building’s
credit period under section 42(f).
(c)Qualified contract purchase price
formula—(1)In general. For purposes of
this section, the termqualified contract
means abona fidecontract to acquire
(within a reasonable period after the con-
tract is entered into) the non low-income
portion of the building for fair market
value (as defined in paragraph (b)(3) of
this section) and the low-income portion
of the building (as defined in paragraph
(b)(2) of this section) for the low-income
portion amount as calculated in paragraph
(c)(2) of this section. The qualified con-
tract amount is determined at the time of
the Agency’s offer of sale of the project to
the general public. An Agency must, how-
ever, adjust the amount of the low-income
portion of the qualified contract formula
to reflect changes in the components of
the qualified contract formula such as
mortgage payments which reduce out-
standing indebtedness between the time
of the seller’s request to the Agency to
obtain a buyer and the project’s actual sale
closing date. In addition, the Agency may
adjust the fair market value of the building
if, after a reasonable period of time within
the one-year offer of sale period, no buyer
has made an offer or market values have
adjusted downward.
(2)Low-income portion amount.The
low-income portion amount is an amount
not less than the applicable fraction speci-
fied in the commitment, as defined in sec-
tion 42(h)(6)(B)(i), multiplied by the total
of—
(i) The outstanding indebtedness for the
building (as defined in paragraph (c)(3) of
this section); plus
(ii) The adjusted investor equity in the
building (as defined in paragraph (c)(4) of
this section); plus
(iii) Other capital contributions (as de-
fined in paragraph (c)(5) of this section),
not including any amounts described in
paragraphs (c)(2)(i) and (ii) of this section;
minus
(iv) Cash distributions from (or avail-
able for distribution from) the building (as
defined in paragraph (c)(6) of this section).
(3)Outstanding indebtedness.(i)For
purposes of paragraph (c)(2)(i) of this
section, except as provided in paragraph
(c)(3)(ii) of this section, the termoutstand-
ing indebtednessfor the building means
the remaining statedprincipal balance, at
thetimeoftheAgency’sofferofsaleof
the project to the general public, of any
indebtedness secured by, or with respect
to, the building that does not exceed the
amount of qualifying building costs de-
scribed in paragraph (b)(4) of this section.
Examples of such indebtedness include
certain mortgages and developer fee notes
(excluding developer service costs not
included in eligiblebasis). Outstanding
indebtedness does not include debt used
to finance nondepreciable land costs, syn-
dication costs, legal and accounting costs,
and operating deficit payments. The term
outstanding indebtedness for the building
only includes obligations that are indebt-
edness under general principles of Federal
income tax law.
(ii) For purposes of paragraph (c)(2)(i)
of this section, if the indebtedness had
a yield to maturity below the applicable
Federal rate (as determined under section
1274(d)) at the time of issuance, the term
outstanding indebtedness for the building
is the imputed principal amount of the in-
debtedness, secured by, or with respect to,
the building, at the time of the Agency’s
offer of sale of the project to the general
public, that does not exceed the amount
of qualifying building costs described in
paragraph (b)(4) of this section. The im-
puted principal amount of the indebtedness
is the sum of the present values, as of the
Agency’s offer of sale of the project to the
general public, of all the remaining pay-
ments of principal and interest payable on
the indebtedness after the Agency’s offer
of sale of the project to the general public.
The present value of each payment is de-
termined by using a discount rate equal to
the applicable Federal rate (as determined
under section 1274(d)) at the time of is-
suance of the indebtedness. In the case of
a variable rate debt instrument, rules simi-
lar to those in §1.1274–2(f) are used to de-
termine the instrument’s imputed principal
amount.
(4)Adjusted investor equity.(i)For
purposes of paragraph (c)(2)(ii) of this
section, the termadjusted investor equity
for any calendar year means the aggre-
gate amount of cash invested by owners
for qualifying building costs described in
paragraph (b)(4)(i) of this section. Thus,
equity paid for land,credit adjuster pay-
ments, Agency low-income housing credit
application and allocation fees, operating
deficit contributions, and legal, syndica-
tion, and accounting costs all are examples
of cost payments that do not qualify as ad-
justed investor equity under this section.
August 13, 20073632007–33 I.R.B.

(ii) The adjusted investor equity as de-
termined under paragraph (c)(4)(i) of this
section is increased by an amount equal
to the adjusted investor equity multiplied
by the cost-of-living adjustment for such
calendar year, determined under section
1(f)(3) by substituting for the language in
section 1(f)(3)(B), the Consumer Price In-
dex for all urban consumers (CPI) (not sea-
sonally adjusted, U.S. City Average) as
specified in paragraph (c)(4)(v) of this sec-
tion for the base calendar year (as defined
in paragraph (b)(1) of this section).
(iii) Adjusted investor equity is taken
into account under this section only to the
extent there existed an obligation to invest
the amount as of the beginning of the low-
income building’s credit period (as defined
in section 42(f)(1)).
(iv) Adjusted investor equity does not
include amounts included in the calcula-
tion of outstanding indebtedness as de-
fined in paragraph (c)(3) of this section.
(v)The cost-of-living adjustmentis
based on the CPI as of the close of the
12-month period ending on August 31 of
the calendar year. Thecost-of-living ad-
justmentis the percent by which the CPI
for the year preceding the written request
to find a person to acquire the taxpayer’s
project (CPI
p
) exceeds the CPI for the base
calendar year (CPI
b
). If the CPI for any
calendar year during this period (after the
base calendar year) exceeds the CPI for the
preceding calendar year by more than 5
percent, the CPI for the base calendar year
shall be increased such that such excess
shall never be taken into account under
paragraph (c)(4) of this section. The ad-
justed investor equity equals the aggregate
amount of cash invested by the taxpayer
in the building multiplied by the ratio of
CPI
p
to CPI
b
.
(vi)Example. The following example
illustrates the CPI calculation:
Example. Owner contributed $600,000 in equity
to a building in 1991, which was the first year of the
credit period for the project. In year 2005, owner re-
quests Agency to find a buyer to purchase the build-
ing. The CPI
b
(at the close of the 12-month period
ending on August 31, 1991) is 136.6. The CPI
p
for the
close of the 12-month period ending August 31, 2004,
is 189.5. At no time during this period (after the base
calendar year) did the CPI for any calendar year ex-
ceed the CPI for the preceding calendar year by more
than 5 percent. The owner’sadjusted investor equity
is $600,000 multiplied by 189.5/136.6, or $832,357.
(5)Other capital contributions.For
purposes of paragraph (c)(2)(iii) of this
section, other capital contributions to a
low-income building are qualifying build-
ing costs described in paragraph (b)(4)(ii)
ofthissectionpaidorincurredbythe
owner of the low-income building other
than amounts included in the calculation
of outstanding indebtedness or adjusted
investor equity as defined in this section.
For example, other capital contributions
may include amounts incurred to replace a
furnace after the first year of a low-income
housing credit building’s credit period un-
der section 42(f), provided any loan used
to finance the replacement of the furnace
is not secured by the furnace or the build-
ing. Other capital contributions do not
include expenditures for land costs, op-
erating deficit payments, credit adjuster
payments, and payments for legal, syndi-
cation, and accounting costs.
(6)Cash distribution—(i)In general.
For purposes of paragraph (c)(2)(iv) of
this section, the termcash distributions
from (or available for distribution from)
the project include—
(A) All distributions from the project
to the owners or to related parties within
the meaning of section 267(b) or section
707(b)), including distributions under sec-
tion 301 (relating to distributions by a cor-
poration), section 731 (relating to distribu-
tions by a partnership), or section 1368 (re-
lating to distributions by a S corporation);
and
(B) All cash and cash equivalents
available for distribution at the time of
sale, including for example, reserve funds
whether operating or replacement re-
serves.
(ii)Anti-abuse rule. The Commissioner
will interpret and apply the rules in this
paragraph (c)(6) as necessary and appro-
priate to prevent manipulation of the qual-
ified contract amount. For example, cash
distributions include payments to owners
or related parties within the meaning of
section 267(b) or section 707(b) for any
operating expenses in excess of amounts
reasonable under the circumstances.
(d)Administrative responsibilities of
the Agency—(1)In general.AnAgency
may exercise administrative discretion in
evaluating and acting upon an owner’s
request to find a buyer to acquire the
building. Examples of administrative dis-
cretion may include but are not limited to
the following:
(i) Concluding that the owner’s request
lacks essential information and denying
the request until such information is pro-
vided.
(ii) Refusing to consider an owner’s
representations without substantiating
documentation verified with the Agency’s
records.
(iii) Suspending the one-year period for
finding a buyer until the owner provides
requested information.
(iv) Determining how many subsequent
requests to find a buyer, if any, may be sub-
mitted if the owner has previously submit-
ted a request for a qualified contract and
then rejects or fails to act upon the quali-
fied contract furnished by the Agency.
(v) Assessing and charging the seller
certain administrative fees for the perfor-
mance of services in obtaining a qualified
contract (for example, real estate appraiser
costs).
(vi) Requiring other conditions applica-
ble to the qualified contract consistent with
this section.
(2)Actual offer. Upon receipt of a writ-
ten request from the owner to find a person
to acquire the building, the Agency must
offer the building for sale at the determined
qualified contract amount to the general
public in order for the qualified contract
to satisfy the requirements of this section
unless the Agency has already identified a
willing buyer who submitted a contract to
purchase the building.
(e)Effective/Applicability date.This
section is applicable on the date the final
regulations are published in theFederal
Register.
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 18, 2007,
8:45 a.m., and published in the issue of the Federal Register
for June 19, 2007, 72 F.R. 33706)
2007–33 I.R.B.364August 13, 2007

Notice of Proposed
Rulemaking by
Cross-Reference to
Temporary Regulations
and Notice of Public Hearing
Application of Section 6404(g)
of the Internal Revenue Code
Suspension Provisions
REG–149036–04
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary regula-
tions and notice of public hearing.
SUMMARY: In this issue of the Bulletin,
the IRS is issuing temporary regulations
(T.D. 9333) relating to the application of
section 6404(g) of the Internal Revenue
Code (Code) suspension provisions. The
regulations reflect changes to the law made
by the Internal Revenue Service Restruc-
turing and Reform Act of 1998, the Amer-
ican Jobs Creation Act of 2004, the Gulf
Opportunity Zone Act of 2005, the Tax
Relief and Health Care Act of 2006, and
the Small Business and Work Opportunity
Tax Act of 2007. The regulations provide
guidance to individual taxpayers who have
participated in listed transactions or undis-
closed reportable transactions. The text
of those regulations also serve as the text
of these proposed regulations. This docu-
ment also provides notice of a public hear-
ing on these proposed regulations.
DATES: Written or electronic comments
must be received by September 19, 2007.
Outlines of topics to be discussed at the
public hearing scheduled for October 11,
2007, at 10 a.m. must be received by
September 20, 2007.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–149036–04), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–149036–04),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC. or sent electroni-
cally via the Federal eRulemaking Por-
tal athttp://www.regulations.gov.(IRS
REG–149036–04). The public hearing
will be held in the IRS Auditorium, Inter-
nal Revenue Building, 1111 Constitution
Avenue, NW, Washington, DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Stuart Spielman, (202)
622–7950; concerning submissions
of comments, the hearing, and to be
placed on the building access list to at-
tend the hearing, Richard Hurst, (202)
622–7180 (not toll-free numbers) or
Richard.A.Hurst@irscounsel.treas.gov.
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Temporary regulations in this issue of
the Bulletin amend the Regulations on Pro-
cedure and Administration (26 CFR part
301) relating to section 6404(g). The tem-
porary regulations add rules relating to the
suspension of interest, penalties, additions
to tax, or additional amounts with respect
to listed or other reportable transactions.
The text of those regulations also serves as
the text of these proposed regulations. The
preamble to the temporary regulations ex-
plains the amendments.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Exec-
utive Order 12866.A regulatory assess-
ment is therefore not required. It has also
been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regu-
lations, and because these regulations do
not impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Code,
this regulation has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies)orelectroniccom-
ments that are timely submitted to the IRS.
The IRS and Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier to
understand. All comments will be made
available for public inspection and copy-
ing.
A public hearing has been scheduled for
October 11, 2007, beginning at 10 a.m.
in the Auditorium of the Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC. Due to building security
procedures, visitors must enter at the Con-
stitution Avenue entrance. In addition, all
visitors must present photo identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediateentrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER IN-
FORMATION CONTACT” section of this
preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments at the hearing must
submit written or electronic comments by
September 19, 2007, and an outline of
the topics to be discussed and the time
to be devoted to each topic (signed orig-
inal and eight (8) copies) by September
20, 2007. A period of ten minutes will be
allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receivingoutlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting information
The principal author of these regula-
tions is Stuart Spielman of the Office of
Associate Chief Counsel (Procedure and
Administration).
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR Part 301 is pro-
posed to be amended as follows:
August 13, 20073652007–33 I.R.B.

PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6404–0 is amended
as follows:
1. The introductory text is revised.
2. Entries are added for §301.6404–4.
The additions read as follows:
§301.6404–0 Table of contents.
This section lists the paragraphs
contained in §§301.6404–1 through
301.6404–4.
*****
§301.6404–4 Listed transactions and
undisclosed reportable transactions.
[Reserved]. The text of the entries or
this section is the same as the text of the
entries in §301.6404T published elsewhere
in this issue of the Bulletin.
Par. 3. Section 301.6404–4 is added to
read as follows:
§301.6404–4 Listed transactions and
undisclosed reportable transactions.
(a) through (b)(4) [Reserved].
(b)(5) [The text of proposed
§301.6404–4(b)(5) is the same as the
text of §301.6404–4T(b)(5) published
elsewhere in this issue of the Bulletin].
(c) and (d) [Reserved].
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 20, 2007,
8:53 a.m., and published in the issue of the Federal Register
for June 21, 2007, 72 F.R. 34204)
Notice of Proposed
Rulemaking and Notice of
Public Hearing
Information Reporting and
Backup Withholding for
Payment Card Transactions
REG–163195–05
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains pro-
posed regulations relating to the informa-
tion reporting requirements, information
reporting penalties, and backup with-
holding requirements for payment card
transactions. The proposed regulations
in this document affect payors (and their
authorized agents) and payees of certain
reportable payments and provide guid-
ance necessary to comply with the law.
The proposed regulations are necessary
to address implementation and notice fur-
nishing issues that arose after publication
of final regulations under section 3406(g)
that were published in theFederal Regis-
teron July 13, 2004 in Treasury decision
9136, 2004–2 C.B. 112 [69 FR 41928]).
This document also provides notice of a
public hearing on these proposed regula-
tions.
DATES: Written or electronic comments
must be received by October 9, 2007. Out-
lines of topics to be discussed at the public
hearing scheduled for November 7, 2007,
must be received by October 9, 2007.
Applicability dates:Seetheproposed
effective date’s section of the supplemen-
tary information.
ADDRESSES: Send submissions to
CC:PA:LPD:PR(REG–163195–05),
Room 5203, Internal Revenue Ser-
vice, POB 7604, Ben Franklin Sta-
tion, Washington, DC 20044. Submis-
sions may be hand delivered Monday
through Friday between the hours of
8 a.m. and 4 p.m. to: CC:PA:LPD:PR
(REG–163195–05), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitu-
tion Avenue, NW, Washington, DC, or
sent electronically via the Federal eRule-
making Portal atwww.regulations.gov
(IRS-REG–163195–05).
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Michael Hara (202) 622–4910; concern-
ing submission of comments, Kelly Banks
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained
in these proposed regulations has been pre-
viously reviewed and approved by the Of-
fice of Management and Budget in accor-
dance with the Paperwork Reduction Act
of 1995 (44 U.S.C. 3507(d)) under control
number 1545–1819. Comments on the
collection of information should be sent to
theOffice of Management and Budget,
Attn: Desk Officer for the Department
of the Treasury, Office of Information
and Regulatory Affairs, Washington, DC
20503, with copies to theInternal Rev-
enue Service, Attn: IRS Reports Clear-
ance Officer, SE:W:CAR:MP:T:T:SP,
Washington, DC 20224. Comments on
the collection of information should be re-
ceived by September 11, 2007. Comments
are specifically requested concerning the
accuracy of the estimated burden asso-
ciated with the collection of information
and suggestions on how the burden may
be minimized.
The collection of information is in
§31.3406(g)–1(f)(3). This information
is necessary to notify a cardholder/payor
that a merchant/payee is not a qualified
payee for purposes of the regulations, and
for cardholders/payors and merchant/pay-
ees to consent to receive notices elec-
tronically. This information will alert a
cardholder/payor that backup withholding
under section 3406 may apply for future
reportable payments. The collection of
information is voluntary to obtain a bene-
fit. The likely respondents are business or
other for-profit institutions.
Estimated total annual reporting bur-
den: 37,239,570 hours.
Estimated average annual burden per
respondent: 1.19 hours.
Estimated number of respondents:
31,256,000.
Estimated frequency of responses:
monthly.
2007–33 I.R.B.366August 13, 2007

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.
Background
This document contains proposed
amendments to 26 CFR part 31 relating
to backup withholding under section 3406
of the Internal Revenue Code (Code) and
proposed amendments to 26 CFR part 301
relating to waivers under Code section
6724 of information reporting penalties
under Code sections 6721 and 6722.
Section 6041(a) of the Code requires
persons engaged in a trade or business
and making payment in the course of such
trade or business to another person of
rent, salaries, wages, premiums, annuities,
compensations, remunerations, emolu-
ments, or other fixed or determinable
gains, profits, and income of $600 or more
in any one taxable year to file informa-
tion returns with the IRS. Section 6041(d)
requires the payor to furnish information
statements to payees. Among other items,
the payor must include the payee’s name
and taxpayer identification number (TIN)
on the information return and the informa-
tion statement. Section 6041A of the Code
imposes similar requirements with respect
to payments of remuneration for services
and direct sales.
In general, section 6721(a)(1) imposes
a $50 penalty for each failure to file an in-
formation return on or before the required
filing date, for any failure to include all of
theinformationrequiredtobeshownon
the return, or for the inclusion of incorrect
information. Section 6722(a)(1) imposes
similar penalties with respect to the infor-
mation statements required to be furnished
to payees. Section 6724(a) provides that
no penalty will be imposed under section
6721 or section 6722 if it is shown that the
failure is due to reasonable cause and not
to willful neglect.
Section 3406(a)(1) requires a payor to
withhold on any reportable payment (as
defined in section 3406(b)(1)) if (1) the
payee fails to furnish the payee’s TIN to
the payor as required or (2) the Secretary
notifies the payor that the TIN furnished by
the payee is incorrect. Section 3406(a)(1)
also requires withholding in certain other
situations that are not addressed in these
regulations. Section 3406(i) provides that
the Secretary shall prescribe the regula-
tions necessary or appropriate to carry out
the purposes of section 3406.
A payment card transaction is a trans-
action in which a cardholder/payor uses
a payment card to purchase goods or ser-
vices and a merchant agrees to accept a
payment card as a means of obtaining pay-
ment. A payment card is a card (or an ac-
count) that (1) is issued by a payment card
organization or one of its members, affil-
iates, or licensees to a cardholder/payor
and (2) represents, upon presentation to a
merchant/payee, an agreement of the card-
holder to pay the merchant through the
payment card organization. A payment
card organization is an entity that sets the
standards and provides the mechanism,
acting directly or indirectly through its
members, affiliates, or licensees, for ef-
fectuating payment between a purchaser
and a merchant in a payment card transac-
tion.
Information reporting compliance is
difficult in payment card transactions
because an invoice may not be issued,
and the employee representing the card-
holder/payor in the transaction might not
request and obtain the name/TIN combi-
nation of the merchant/payee at the time
of the transaction. In addition, backup
withholding may be difficult because a
merchant receives payment from the pay-
ment card organization within a few days
after the transaction, but the cardholder
does not pay the payment card organiza-
tion until after it receives a payment card
monthly billing statement.
2004 Regulations
On July 13, 2004, final regulations
relating to the information reporting re-
quirements, information reporting penal-
ties, and backup withholding requirements
for payment card transactions effectu-
ated through a Qualified Payment Card
Agent (QPCA) were published in theFed-
eral Register(T.D. 9136; 69 FR 41938).
These regulations (the 2004 QPCA reg-
ulations) provide limited exceptions to
the backup withholding requirements for
payment card transactions. The principal
exception in §31.3406(g)–1(f)(1)(i) of the
regulations applies if the payment is made
through a QPCA and the payee is a quali-
fied payee.
Section 31.3406(g)–1(f)(2)(vi) of the
regulations provides that a payee is a
qualified payee if, at the time of the pay-
ment, the QPCA has validated the payee’s
TIN through the IRS TIN Matching Pro-
gram or if the payment is made during the
six-month period following the date on
which the QPCA first makes a payment to
the payee (six-month grace period). Un-
der the regulations, a QPCA must notify a
cardholder/payor ofany merchant/payees
that are not qualified payees.
Section 31.3406(g)–1(f)(1)(ii) of the
regulations provides a second exception
for payments to persons other than qual-
ified payees. Under this exception, re-
portable payments made through a QPCA
are exempt from backup withholding if
the purchase to which the payment relates
is made no later than two months after the
date by which the QPCA is required to
provide notification to the payor that the
payee is not a qualified payee.
In addition, the regulations provide
in §301.6724–1(e) and (f) that card-
holder/payors may establish, based on
good faith reliance on a QPCA, that a
failure subject to penalty under section
6721or 6722 is due to reasonable cause.
Other Guidance
On July 14, 2004, the IRS issued Rev.
Proc. 2004–42, 2004–2 C.B. 121, which
establishes procedures to implement the
rules contained in the 2004 QPCA regu-
lations. The revenue procedure provides
that a QPCA may act on behalf of a card-
holder/payor for purposes of soliciting,
collecting, and validating the names/TINs
of the merchant/payees and on behalf of a
merchant/payee for purposes of furnishing
the payee’s name and TIN to the card-
holder/payor. The revenue procedure also
sets forth the requirements that a payment
card organization must satisfy to obtain
an IRS determination that it is a QPCA.
These requirements include requirements
that the payment card organization provide
certain notifications to cardholder/payors
and merchant/payees and obtain the au-
thorization of cardholder/payors and mer-
chant/payees to act on their behalf for cer-
tain purposes. See §601.601(d)(2)(ii)(b).
Requests for Changes
Some taxpayers subject to the 2004
QPCA regulations and related procedures
August 13, 20073672007–33 I.R.B.

have requested that the regulations in
§31.3406(g)–1(f) be amended, and the
procedures in Rev. Proc. 2004–42 be
modified, to allow a merchant to accept
a QPCA’s payment card even if the mer-
chant opts out of the QPCA program.
Taxpayers subject to the 2004 QPCA reg-
ulations and relatedprocedures have also
requested that the regulations be amended,
and the procedures in Rev. Proc. 2004–42
be modified, to reflect the current elec-
tronic business operations of the payment
card industry. Specifically, payment card
organizations have asked that they be per-
mitted to furnish required notifications
electronically, including by posting on a
secure website.
Explanation of Provisions
The IRS and the Treasury Department
agree that a merchant/payee should be
allowed to accept a QPCA’s payment card
even if the merchant/payee opts out of
the QPCA program. The IRS is issuing
a proposed revenue procedure providing
that a merchant/payee may opt out of the
QPCA program by completing and return-
ing a written statement to the payment
card organization and that a nonpartici-
pating merchant/payee may continue to
accept the organization’s payment card. If
a merchant/payee opts out of the QPCA
program, payments to the merchant/payee
made after the six-month grace period are
treated under §31.3406(g)–1(f)(2)(vi) of
the proposed regulations as payments to
a person other than a qualified payee. In
addition, the proposed regulations mod-
ify the rule permitting cardholders to
rely on a QPCA to solicit, validate, and
furnish a payee’s TIN. Under proposed
§301.6724–1(e)(1)(vi)(H), such reliance
generally would not be permitted after the
cardholder is notified that the merchant is
not a participating payee.
These proposed regulations also
modify the notification requirements in
§31.3406(g)–1(f)(3) by adding notifica-
tion requirements relating to payments
to nonparticipating merchant/payees. Al-
though QPCAs do not act on behalf of
nonparticipating payees in furnishing
payee data to cardholders, the proposed
regulations provide that a QPCA is re-
quired to furnish certain information to
cardholders that use the QPCA’s card to
make reportable payments to nonpartic-
ipating payees. Specifically, the QPCA
would be required to inform the card-
holder that the payee is not a participant
in the QPCA program and is not a quali-
fied payee. In addition, the QPCA must
advise the cardholder/payor of the card-
holder/payor’s obligation to solicit the
TIN of a nonparticipating merchant/payee
to which it makes a reportable payment.
In the preamble to the 2004 QPCA reg-
ulations, the IRS and the Treasury De-
partment indicated they were considering
whether a QPCA should be allowed to
furnish information regarding payee status
electronically on a secure website. The
IRS and the Treasury Department have
concluded that it is appropriate to pro-
pose modifications to the QPCA regula-
tions and related procedures to reflect the
current electronic business operations of
the payment card industry.
This is consistent with the precedent
set in the electronic statement regulations
issued under Code sections 6041, 6050S,
and 6051 on February 18, 2004 (T.D. 9114,
2004–1 C.B. 589). In the electronic state-
ment regulations, the IRS and Treasury
Department allowed electronic furnishing
of statements on Form W–2, “Wage and
Tax Statement,” Form 1098–T, “Tuition
Statement,” and Form 1098–E, “Student
Loan Interest Statement,” to individuals
who consent to receive the statements
electronically. The preamble to the elec-
tronic statement regulations explains that
the regulations are consistent with the
general goals of (1) section 2001 of the
Internal Revenue Service Restructuring
and Reform Act of 1998 (Public Law
105–206) to eliminate barriers, provide
incentives, and use competitive forces to
increase electronic filings and (2) the Elec-
tronic Signatures in Global and National
Commerce Act (Public Law 106–229)
to facilitate voluntary use of electronic
records. The electronic statement regula-
tions aimed at striking a balance between
furnishers’ desires to reduce costs and
modernize business processes by furnish-
ing statements electronically and the tax
administration concern that individuals
have secure access to the information they
need to fulfill their Federal tax obligations.
The IRS and the Treasury Department
have concluded that a similar balance is
appropriate in this context and that pay-
ment card organizations should be allowed
to furnish notifications of payee status and
participation electronically, including by
posting on a secure website, if certain re-
quirements are met to assure consistency
with the Electronic Signatures in Global
and National Commerce Act. These pro-
posed regulations provide that the notifi-
cations of payee status and participation
may be furnished electronically if, among
other things, the payment card organi-
zation (1) obtains certain consents from
cardholder/payors and merchant/payees
and (2) provides certain disclosures to
cardholder/payors andmerchant/payees.
Proposed Effective Date
Section 31.3406(g)–1(f)(3)(ii) (relating
to electronic furnishing of notifications)
is proposed to be effective on the date it
is published as a final regulation, and the
other amendments to §31.3406(g)–1 are
proposed to be applicable to payments
made after December 31, 2007. The
amendments to §301.6724–1 are proposed
to be applicable to information returns and
information statements relating to pay-
ments made after December 31, 2007.
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 these regulations.
When an Agency issues a rulemaking
proposal, the Regulatory Flexibility Act
(RFA) (5 U.S.C. chapter 6), requires the
agency to “prepare and make available for
public comment an initial regulatory flex-
ibility analysis” which will “describe the
impact of the proposed rule on small enti-
ties.” (5 U.S.C. §603(a)). Section 605 of
the RFA provides an exception to this re-
quirement if the agency certifies that the
proposed rulemaking will not have a sig-
nificant economic impact on a substantial
number of small entities.
The proposed rule affects mer-
chant/payees and card/holderpayors. The
IRS estimates there are 5,200,000 mer-
chant/payees and 26,054,000 cardhold-
ers/payors that qualify as small entities.
Therefore, the IRS has determined that
this proposed rule will have an impact on
a substantial number of small entities.
2007–33 I.R.B.368August 13, 2007

The IRS has determined, however,
that the impact on entities affected by
the proposed rule will not be significant.
The burden on a merchant/payee that opts
out of the QPCA program by complet-
ing and returning a written statement to
the payment card organization is mini-
mal. The burden on cardholders/payees
and merchant/payors that consent to elec-
tronic furnishing of notices by returning a
consent form and confirming the consent
electronically is also insignificant.
Although QPCAs have a reporting bur-
den under the proposed rule to furnish cer-
tain notices to cardholder/payors, QPCAs
are large businesses and do not fall under
the definition of small entities.
Based on these facts, the IRS hereby
certifies that the collection of informa-
tion contained in these regulations will
not have a significant economic impact
on a substantial number of small enti-
ties. Accordingly, a Regulatory Flexibility
Analysis is not required.
Pursuant to section 7805(f) of the Code,
this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administration
for comment on its impact on small busi-
nesses. The IRS invites comments from
members of the public from members of
the public who believe there will be a sig-
nificant impact either on cardholder/pay-
ors or merchant/payees.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies) or electronic com-
ments that are submitted timely to the IRS.
The IRS and Treasury Department request
comments on the clarity of the proposed
rules and how they may be made easier to
understand. All comments will be avail-
able for public inspection and copying.
A public hearing has been scheduled for
November 7, 2007 at 10:00 a.m. in the au-
ditorium, Internal Revenue Service Build-
ing, 1111 Constitution Avenue, NW, Wash-
ington, DC. Due to building security pro-
cedures, visitors must enter at the Consti-
tution Avenue entrance. In addition, all
visitors must presentphoto identification
to enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER IN-
FORMATION CONTACT” section of this
preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments must submit elec-
tronic or written comments and an out-
line of the topics to be discussed and the
time to be devoted to each topic (a signed
original and eight (8) copies) by October
9, 2007. A period of 10 minutes will be
allotted to each person for making com-
ments. An agenda showing the scheduling
of the speakers will be prepared after the
deadline for receiving outlines has passed.
Copies of the agenda will be available free
of charge at the hearing.
Drafting Information
The principal author of these regula-
tions is Michael Hara, Office of Associate
Chief Counsel (Procedure and Administra-
tion).
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 31 and 301
are proposed to be amended as follows:
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME TAX
AT THE SOURCE
Paragraph 1. The authority citation for
part 31 continues to read, in part, as fol-
lows:
Authority: 26 U.S.C. 7805. * * *
Par. 2. Section 31.3406(g)–1(f) is
amended by:
1. Revising paragraphs (f)(2)(vi)(A)
and (f)(3).
2. Adding paragraph (f)(2)(vii).
The revisions and addition read as fol-
lows:
§31.3406(g)–1 Exceptions for payments
to certain payees and certain other
payments.
*****
(f) * * *
(2) * * *
(vi) * * *
(A) The payee is a participating payee
with respect to the payment and, at the time
the QPCA makes the payment, the QPCA
has obtained the payee’s TIN and the
payee’s TIN has been validated through
the IRS TIN Matching Program; or
*****
(vii)Participating payee. For purposes
of this section, a payee is aparticipating
payeewith respect to a reportable payment
if—
(A) At the time the QPCA makes the
payment, the payee has authorized the pay-
ment card organization to act on its behalf
in furnishing its name, taxpayer identifica-
tion number, and corporate status to card-
holder/payors under applicable procedures
issued under §601.601 of this chapter; or
(B) The payment is made before Jan-
uary 1, 2008.
(3)Notifications of payee status and
participation—(i)In general—(A)Non-
qualified payees. In the case of a payment
to a payee other than a qualified payee
(as defined in paragraph (f)(2)(vi) of this
section) with respect to the payment, the
QPCA acting directly or indirectly through
its members, affiliates, or licensees must
notify the payor that the payee is not a
qualified payee. If the notification relates
to a payment made after December 31,
2007, the notification must also inform the
payor that IRS rules and regulations may
require the payor to backup withhold on re-
portable payments that relate to purchases
the payor makes from the payee after a
specified date. The specified date to be
provided in the notification is the last day
of the two-month period described in para-
graph (f)(1)(ii) of this section. A notifi-
cation by the QPCA that a payee is not a
qualified payee does not constitute notice
by the IRS that the payee’s TIN is incor-
rect for purposes of section 3406(a)(1)(B)
and §31.3406(d)–5.
(B)Nonparticipating payees.Inthe
case of a payment made after December
31, 2007, to a payee other than a par-
ticipating payee (as defined in paragraph
(f)(2)(vii) of this section), the QPCA act-
ing directly or indirectly through its mem-
bers, affiliates, or licensees must notify the
payor that the payee is not a participating
payee. A notification that the payee of a
payment is not a participating payee must
also inform the payor that IRS rules and
regulations require the payor to solicit the
August 13, 20073692007–33 I.R.B.

payee’s TIN if the payor has made a re-
portable payment to the payee.
(C)Due date and format. The no-
tifications must be furnished during the
four-month period beginning on the date
on which the QPCA makes the payment.
Notifications may be provided in a quar-
terly or other regular report of payee data
to the cardholder/payor and may consist of
an asterisk, footnote, or other mark next to
the payee’s name, with the text of the noti-
fications at the bottom of the page or at the
end of the list of payee data.
(ii)Electronic furnishing of notifi-
cations of payee status and participa-
tion—(A)In general. The notifications
required under paragraph (f)(3)(i) of this
section may be furnished in an electronic
format if the requirements of this para-
graph (f)(3)(ii) are satisfied.
(B)Consents—(1)Card-
holder/Payor—(i)In general.The
cardholder/payor consent requirement
must be satisfied. The cardholder/payor
consent requirement is satisfied only if
the QPCA has provided the disclosure
statement required under paragraph
(f)(3)((ii)(C) of this section to the card-
holder/payor and,after receiving the
disclosure statement,the cardholder/payor
has affirmatively consented to receive the
notifications in an electronic format. The
consent may be provided electronically in
any manner that reasonably demonstrates
that the cardholder/payor can access the
notifications in the electronic format in
which they will be furnished. Alter-
natively, the consent may be provided
in a paper document if it is confirmed
electronically in a manner that reasonably
demonstrates that the cardholder/payor
can access the notifications in the elec-
tronic format in which they will be
furnished.
(ii)Withdrawal of consent. The card-
holder/payor consent requirement is not
satisfied with respect to a notification if
the cardholder/payor withdraws the con-
sent and the withdrawal takes effect before
the notification is furnished. Only paper
notifications may be furnished to the card-
holder/payor after the withdrawal takes ef-
fect. The QPCA may provide that a with-
drawal of consent takes effect at any time
up to 30 days after receipt by the QPCA.
The QPCA may also provide that a request
for paper notifications will be treated as a
withdrawal of consent.
(iii)Change in hardware or software re-
quirements. If a change in the hardware
or software required to access the notifica-
tions creates a material risk that the card-
holder/payor will not be able to access the
notifications, the cardholder/payor consent
requirement is not satisfied with respect
to notifications furnished after the change
unless the cardholder/payor has provided
a new consent to receive the notifications
in an electronic format. The new consent,
whether electronic or by paper document,
must be provided or confirmed in a manner
that reasonably demonstrates that the card-
holder/payor can access the notifications
in the revised electronic format in which
they will be furnished.
(2)Merchant/payee—(i)In general.
The merchant/payee consent requirement
must be satisfied. The merchant/payee
consent requirement is satisfied with re-
spect to notifications regarding a mer-
chant/payee only if the merchant/payee
has affirmatively consented to the elec-
tronic furnishing of the notifications.
(ii)Withdrawal of consent.Themer-
chant/payee consent requirement is not
satisfied with respect to a notification
regarding a merchant/payee if the mer-
chant/payee withdraws its consent and
the withdrawal takes effect before the no-
tification is furnished. The QPCA may
provide that a withdrawal of consent takes
effect at any time up to 30 days after re-
ceipt by the QPCA.
(C)Required disclosures—(1)In
general. A QPCA requesting a card-
holder/payor’s consent to receive notifi-
cations in electronic format must provide
to the cardholder/payor a clear and con-
spicuous disclosure statement containing
each of the disclosures described in this
paragraph (f)(3)(ii)(C).
(2)Paper statement.The card-
holder/payor must be informed that the
notifications will be furnished on paper if
the cardholder/payor does not consent to
receive them electronically.
(3)Scope and duration of consent.The
cardholder/payor must be informed of the
scope and duration of the consent. For ex-
ample, the cardholder/payor must be in-
formed whether the consent is for a spec-
ified term or will remain in effect until
it is withdrawn in the manner described
in paragraph (f)(3)(ii)(B)(1)(ii)ofthissec-
tion.
(4)Post-consent request for paper no-
tifications. The cardholder/payor must
be informed of any procedure for ob-
taining a paper copy of the notifications
after giving the consent described in para-
graph (f)(3)(ii)(B)(1)(i)ofthissectionand
whether a request for paper notifications
will be treated as a withdrawal of consent.
(5)Withdrawal of consent
. The card-
holder/payor mustbe informed that—
(i) The cardholder/payor may withdraw
a consent by writing (electronically or on
paper) to the person or department whose
name, mailing address, telephone number,
and e-mail address is provided in the dis-
closure statement;
(ii) The QPCA will confirm the with-
drawal and the date on which it takes ef-
fect in writing (either electronically or on
paper); and
(iii) A withdrawal of consent will not
apply to a notification that was furnished
electronically before the date on which the
withdrawal of consent takes effect.
(6)Notice of termination. The card-
holder/payor must be informed of the con-
ditions under which the QPCA will cease
furnishing notifications electronically.
(7)Updating information. The card-
holder/payor must be informed of the
procedures for updating the information
needed by the QPCA to contact the card-
holder/payor. The QPCA must inform
the cardholder/payor of any change in the
QPCA’s contact information.
(8)Hardware and software require-
ments. The cardholder/payor must be
provided with a description of the hard-
ware and software required to access,
print, and retain the notifications.
(D)Notice of availability—(1)In
general. If the notifications to a card-
holder/payor are furnished on a website,
the QPCA must also furnish a notice of
availability to the cardholder/payor within
30 days after posting the notifications.
The notice of availability must inform the
cardholder/payor that the notifications are
available on the website and must spec-
ify the date on which the notifications
will no longer be available on the web-
site. The notice of availability may be
delivered by mail, electronic mail, or in
person. The notice of availability must
provide instructions on how to access and
print the notifications and must include
the following statement in capital let-
ters, “IMPORTANT TAX DOCUMENT
2007–33 I.R.B.370August 13, 2007

AVAILABLE.” If the notice of availability
is provided by electronic mail, the forego-
ing statement must be on the subject line
of the electronic mail.
(2)Undeliverable electronic address.If
an electronic notice of availability is re-
turned as undeliverable, and the correct
electronic address cannot be obtained from
the furnisher’s records or from the card-
holder/payor, then the furnisher must fur-
nish the notice by mail within 30 days after
the electronic notice is returned.
*****
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 3. The authority citation for part
301 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805. * * *
Par. 4. Section 301.6724–1 is amended
by revising paragraph (e)(1)(vi)(H) to read
as follows:
§301.6724–1 Reasonable cause.
*****
(e) * * *
(1) * * *
(vi) * * *
(H) In the case of information returns
required to be filed, and information re-
turns required to be furnished, after De-
cember 31, 2005, the filer—
(1) Satisfies the solicitation require-
ment of paragraph (e)(1)(i) of this section
with respect to a payment made through a
QPCA if the filer relies in good faith on
the QPCA to solicit, record, validate, and
furnish the payee’s TIN;
(2) Satisfies the solicitation require-
ment of paragraph (e)(1)(ii) of this section
with respect to a payment made through
a QPCA if the filer relies in good faith
on the QPCA to solicit, record, validate,
and furnish the payee’s TIN and does not
receive notification that the payee is not a
participating payee more than 30 days be-
fore the last day of the annual solicitation
period; and
(3) Satisfies the solicitation require-
ment of paragraph (e)(1)(iii) of this section
with respect to a payment made through
a QPCA if, on or before December 31 of
the year immediately succeeding the year
in which the payment is made, the filer
undertakes a solicitation of the payee’s
TIN or receives from the QPCA a TIN
that the filer believes in good faith to be
the payee’s correct TIN.
*****
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on July 12, 2007,
8:45 a.m., and published in the issue of the Federal Register
for July 13, 2007, 72 F.R. 38534)
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2007–69
The names of organizations that no
longer qualify as organizations described
in section 170(c)(2) of the Internal Rev-
enue Code of 1986 are listed below.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on August 13, 2007,
andwouldendonthedatethecourtfirst
determines that the organization is not de-
scribed in section 170(c)(2) as more partic-
ularly set forth in section 7428(c)(1). For
individual contributors, the maximum de-
duction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were the
basis for revocation.
The Brewer Family Foundation
Orem, UT
Keystone Grants, Inc.
Mesa, AZ
Jeffrey and Lisa Bowen Charitable
Supporting Organization
Greenville, DE
55 Whipple Street Housing
Development Fund Corporation
Brooklyn, NY
The Champions Association, Inc.
Pittsburgh, PA
The Horsestone Foundation
Sandy, UT
Suspension of Tax-Exempt
Status of an Organization
Identified With Terrorism
Announcement 2007–70
I. Purpose
This announcement is a public notice of
the suspension under section 501(p) of the
Internal Revenue Code of the federal tax
exemption of a certain organization that
has been designated as supporting or en-
gaging in terrorist activity or supporting
terrorism. Contributions made to an organ-
ization during the period that the organiza-
tion’s tax-exempt status is suspended are
not deductible for federal tax purposes.
II. Background
The federal government has designated
a number of organizations as supporting or
engaging in terrorist activity or supporting
terrorism under the Immigration and Na-
tionality Act, the International Emergency
Economic Powers Act, and the United Na-
tions Participation Act of 1945. Federal
law prohibits most contributions to orga-
nizations that have been so designated.
Section 501(p) of the Code was enacted
as part of the Military Family Tax Relief
Act of 2003 (P.L. 108–121), effective
November 11, 2003. Section 501(p)(1)
suspends the exemption from tax un-
der section 501(a) of any organization
described in section 501(p)(2). An organ-
ization is described in section 501(p)(2)
August 13, 20073712007–33 I.R.B.

if the organization is designated or oth-
erwise individuallyidentified (1) under
certain provisions of the Immigration and
Nationality Act as a terrorist organization
or foreign terrorist organization; (2) in or
pursuant to an Executive Order which is
relatedtoterrorismandissuedunderthe
authority of the International Emergency
Economic Powers Act or section 5 of the
United Nations Participation Act of 1945
for the purpose of imposing on such or-
ganization an economic or other sanction;
or (3) in or pursuant to an Executive Order
issued under the authority of any federal
law, if the organization is designated or
otherwise individually identified in or pur-
suant to the Executive Order as supporting
or engaging in terrorist activity (as de-
fined in the Immigration and Nationality
Act) or supporting terrorism (as defined in
the Foreign Relations Authorization Act)
and the Executive Order refers to section
501(p)(2).
Under section 501(p)(3) of the Code,
suspension of an organization’s tax ex-
emption begins on the date of the first pub-
lication of a designation or identification
with respect to the organization, as de-
scribed above, or the date on which section
501(p) was enacted, whichever is later.
This suspension continues until all desig-
nations and identifications of the organiza-
tion are rescinded under the law or Exec-
utive Order under which such designation
or identification was made.
Under section 501(p)(4) of the Code,
no deduction is allowed under any pro-
vision of the Internal Revenue Code for
any contribution to an organization during
any period in which the organization’s
tax exemption is suspended under section
501(p). Thus, for example, no charitable
contribution deduction is allowed under
section 170 (relating to the income tax),
section 545(b)(2) (relating to undistributed
personal holding company income), sec-
tion 556(b)(2) (relating to undistributed
foreign personal holding company in-
come),section642(c)(relatingtochari-
table set asides), section 2055 (relating to
the estate tax), section 2106(a)(2) (relating
to the estate tax for nonresident aliens)
and section 2522 (relating to the gift tax)
for contributions made to the organization
during the suspension period.
On July 24, 2007, the organization
listed below was designated under Ex-
ecutive Order 13224, entitled “Blocking
Property and Prohibiting Transactions
With Persons Who Commit, Threaten To
Commit, or Support Terrorism.”
III. Notice of Suspension and
Non-deductibility of Contributions
The organization whose tax exemption
has been suspended under section 501(p)
and the effective date of such suspension
are listed below. Contributions made to
this organization during the period of sus-
pension are not deductible for federal tax
purposes.
Goodwill Charitable Organization Inc
f/k/a Al-Shahid Social Association
f/k/a Educational Development
Association
Dearborn, MI
Effective date: 7–24–07
IV. Federal Tax Filings
An organization whose exempt status
has been suspended under section 501(p)
does not file Form 990 and is required to
file the appropriate Federal income tax re-
turns for the taxable periods beginning on
the date of the suspension. The organi-
zation must continue to file all other ap-
propriate federal tax returns, including em-
ployment tax returns, and may also have to
file federal unemployment tax returns.
V. Contact Information
For additional information regarding
the designation or identification of an or-
ganization described insection 501(p)(2),
contact the Compliance Division at the Of-
fice of Foreign Assets Control of the U.S.
Treasury Department at 202–622–2490.
Additional information is also avail-
able for download from the Office’s
Internet Home Page atwww.treas.gov/
offices/eotffc/ofac/index.html
For additional information regarding
the suspension of the federal tax ex-
emptionofanorganization under section
501(p), contact Robert Fontenrose at (202)
283–9484 at the Internal Revenue Service.
Mortality Tables for
Determining Present Value;
Correction
Announcement 2007–71
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to notice of pro-
posed rulemaking.
SUMMARY: This document contains cor-
rections to notice of proposed rulemaking
(REG–143601–06, 2007–24 I.R.B. 1398)
that was published in the Federal Register
on Tuesday, May 29, 2007 (72 FR 29456)
providing mortality tables to be used in
determining present value or making any
computation for purposes of applying cer-
tain pension funding requirements.
FOR FURTHER INFORMATION
CONTACT:BrucePerlin,
Lauson C. Green, or Linda S. F. Marshall
at (202) 622–6090.
SUPPLEMENTARY INFORMATION:
Background
The notice of proposed rulemaking
(REG–143601–06) that is the subject of
these corrections is under sections 412,
430, and 431 of the Internal Revenue
Code.
Need for Correction
As published, the notice of proposed
rulemaking (REG–143601–06) contains
errors that may prove to be misleading and
are in need of clarification.
Correction of Publication
Accordingly, the notice of proposed
rulemaking (REG–143601–06) that was
the subject of FR. Doc. 07–2631 is cor-
rected as follows:
1. On page 29457, column 3, in the
preamble, line 4 of footnote number 2, the
language “XLVII (1995), p. 819. The
RP–2000 Mortality Table” is corrected to
read “XLVII (1995), p. 819. The RP–2000
Mortality Tables”.
2. On page 29460, column 3, in the pre-
amble, second full paragraph of the col-
umn, line 7 from the bottom of the para-
graph, the language “improvement factor
2007–33 I.R.B.372August 13, 2007

is equal to (1— ” is corrected to read “im-
provement factor is equal to (1- ” .
§ 1.430(h)(3)–2 [Corrected]
3. On page 29471, § 1.430(h)(3)–
2(d)(4)(i)(E), column 3, last line
of the paragraph, the language
“§ 1.430(h)–1(a)(3)).” is corrected to
read “§ 1.430(h)(3)–1(a)(3)).”
LaNita Van Dyke,
Branch Chief
Publications and Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).
(Filed by the Office of the Federal Register on July 19, 2007,
8:45 a.m., and published in the issue of the Federal Register
for July 20, 2007, 72 F.R. 39770)
Announcement of Disciplinary Actions Involving
Attorneys, Certified Public Accountants, Enrolled Agents,
and Enrolled Actuaries — Reinstatements, Suspensions,
Censures, Disbarments, and Resignations
Announcement 2007-72
Under Title 31, Code of Federal Regu-
lations, Part 10, attorneys, certified public
accountants, enrolled agents, and enrolled
actuaries may not accept assistance from,
or assist, any person who is under disbar-
ment or suspension from practice before
the Internal Revenue Service if the assis-
tance relates to a matter constituting prac-
tice before the Internal Revenue Service
and may not knowingly aid or abet another
person to practice before the Internal Rev-
enue Service during a period of suspen-
sion, disbarment, or ineligibility of such
other person.
To enable attorneys, certified public
accountants, enrolled agents, and enrolled
actuaries to identify persons to whom
these restrictions apply, the Director, Of-
fice of Professional Responsibility, will
announce in the Internal Revenue Bulletin
their names, their city and state, their pro-
fessional designation, the effective date
of disciplinary action, and the period of
suspension. This announcement will ap-
pear in the weekly Bulletin at the earliest
practicable date after such action and will
continue to appear in the weekly Bulletins
for five successive weeks.
Reinstatement To Practice Before the Internal Revenue
Service
Under Title 31, Code of Federal Reg-
ulations, Part 10, The Director, Office of
Professional Responsibility, may entertain
a petition for reinstatement for any attor-
ney, certified public accountant, enrolled
agent, or enrolled actuary censured, sus-
pended, or disbarred, from practice before
the Internal Revenue Service.
The following individuals’ eligibility to
practice before the Internal Revenue Ser-
vice has been restored:
NameAddressDesignationDate of Reinstatement
Mollo, Charles W.Anaheim, CAEADecember 1, 2004
Price, Richard A.Novato, CACPAApril 29, 2005
Reyes, Ruperto D.Placentia, CACPADecember 8, 2005
Schwartz, Kenneth J.West Hills, CAAttorneyFebruary 28, 2006
McCarthy III, William P.Sacramento, CAEAMarch 10, 2006
Deen, Mae T.Salinas, CAEAApril 16, 2006
Banks, Jean R.Van Nuys, CAEADecember 6, 2006
Eckstein, MatthewWoodbury, NYCPAMarch 14, 2007
Cunningham, WilliamPhiladelphia, PACPAMarch 31, 2007
August 13, 20073732007–33 I.R.B.

NameAddressDesignationDate of Reinstatement
Ganz, Sheldon M.Great Neck, NYCPAApril 19, 2007
Smith, Sean M.Kensington, MDEnrolled AgentApril 27, 2007
Frascella, Russell B.Pound Ridge, NYCPAApril 27, 2007
Lamont, AliceAtlanta, GACPAMay 4, 2007
Carroccio, Ronald P.Staten Island, NYCPAMay 15, 2007
Cohen, Ronald J.Cornwall, NYAttorneyJune 21, 2007
Troese, Jr., Henry A.Clarion, PAEnrolled AgentJune 25, 2007
Jacob, Robert T.Tucson, AZEnrolled AgentJune 27, 2007
Simontacchi, Joseph F.Rockaway, NJCPAJuly 3, 2007
Kimes, Larry W.Irving, TXCPAJuly 6, 2007
Consent Suspensions From Practice Before the Internal
Revenue Service
Under Title 31, Code of Federal Regu-
lations, Part 10, an attorney, certified pub-
lic accountant, enrolled agent, or enrolled
actuary, in order to avoid the institution
or conclusion of a proceeding for his or
her disbarment or suspension from prac-
tice before the Internal Revenue Service,
may offer his or her consent to suspension
from such practice. The Director, Office
of Professional Responsibility, in his dis-
cretion, may suspend an attorney, certified
public accountant, enrolled agent, or en-
rolled actuary in accordance with the con-
sent offered.
The following individuals have been
placed under consent suspension from
practice before the Internal Revenue Ser-
vice:
NameAddressDesignationDate of Suspension
Caplan, Howard A.Ocean, NJCPAIndefinite
from
April 1, 2007
Tow, Marc R.Newport Beach, CAAttorneyIndefinite
from
April 1, 2007
Pyburn, Richard E.Downers Grove, ILCPAIndefinite
from
April 9, 2007
Cook, Jack D.South Haven, MICPAIndefinite
from
April 17, 2007
Serban, Daniel E.Roanoke, INAttorneyIndefinite
from
April 19, 2007
Wentz, Debora B.Newton, NCCPAIndefinite
from
April 19, 2007
Ferguson, Duane F.Upland, CACPAIndefinite
from
May 1, 2007
2007–33 I.R.B.374August 13, 2007

NameAddressDesignationDate of Suspension
Mulrey, Robert M.Milton, MACPAIndefinite
from
May 1, 2007
Colasuonno, Philip V.New Rochelle, NYCPAIndefinite
from
May 23, 2007
Bankston, David A.Land O Lakes, FLCPAIndefinite
from
June 1, 2007
Nagy, Robert J.Charleston, SCCPAIndefinite
from
June 1, 2007
Wallen, David G.Beckley, WVCPAIndefinite
from
June 15, 2007
Rudick, Josephine M.Bear Creek, PAEnrolled AgentIndefinite
from
June 25, 2007
Iglesias, Jorge E.Roswell, GACPAIndefinite
from
July 1, 2007
Raimer, Russell B.Brecksville, OHCPAIndefinite
from
July 1, 2007
Stancukas, Stanley J.Forth Worth, TXCPAIndefinite
from
July 1, 2007
Expedited Suspensions From Practice Before the Internal
Revenue Service
Under Title 31, Code of Federal Regu-
lations, Part 10, the Director, Office of Pro-
fessional Responsibility, is authorized to
immediately suspend from practice before
the Internal RevenueService any practi-
tioner who, within five years from the date
the expedited proceeding is instituted (1)
has had a license to practice as an attor-
ney, certified public accountant, or actuary
suspended or revoked for cause or (2) has
been convicted of certain crimes.
The following individuals have been
placed under suspension from practice be-
fore the Internal Revenue Service by virtue
of the expedited proceeding provisions:
NameAddressDesignationDate of Suspension
Barach, Malcolm J.Brookline, MAAttorneyIndefinite
from
March 9, 2007
Cox, Marlisa R.Oklahoma City, OKCPAIndefinite
from
April 2, 2007
August 13, 20073752007–33 I.R.B.

NameAddressDesignationDate of Suspension
Artis, Paris A.Newberry, FLAttorneyIndefinite
from
April 13, 2007
Blackadar, Christine M.CenterHarbor, NHAttorneyIndefinite
from
April 13, 2007
Brelje, Brian J.Laguna Beach, CACPAIndefinite
from
April 13, 2007
Decker, Craig A.Mesa, AZAttorneyIndefinite
from
April 13, 2007
House, Stephen M.Nevada City, CACPAIndefinite
from
April 13, 2007
Laird, James J.San Ramon, CACPAIndefinite
from
April 13, 2007
Milner, Dennis V.Dublin, CAAttorneyIndefinite
from
April 13, 2007
Nutt, Jeremy C.Forth Worth, TXAttorneyIndefinite
from
April 13, 2007
Picl, Frank M.Peoria, ILAttorneyIndefinite
from
April 13, 2007
Britt, Jerry U.Mount Olive, NCCPAIndefinite
from
April 19, 2007
Lee, Janell M.Oakland, CACPAIndefinite
from
April 19, 2007
Baker, Sean W.Elkridge, MDAttorneyIndefinite
from
April 30, 2007
Brett, Stephen M.York Beach, MEAttorneyIndefinite
from
April 30, 2007
Donahue, Richard K.Lowell, MACPAIndefinite
from
April 30, 2007
Frank, Mack I.Eunice, LAAttorneyIndefinite
from
April 30, 2007
2007–33 I.R.B.376August 13, 2007

NameAddressDesignationDate of Suspension
Leung, Elsie Y.Pasadena, CACPAIndefinite
from
April 30, 2007
Pearlman, Stephen E.Dix Hills, NYAttorneyIndefinite
from
April 30, 2007
Peer, JameelahWaimanalo,HIAttorneyIndefinite
from
April 30, 2007
Riskowski, Patrick T.Omaha, NEAttorneyIndefinite
from
April 30, 2007
Schumacher, Mary M.Dubuque, IAAttorneyIndefinite
from
April 30, 2007
DeVaughn, Donald L.Plainview, MNAttorneyIndefinite
from
May 1, 2007
Waggle, Stephen L.Los Banos, CACPAIndefinite
from
May 24, 2007
Nefsky, Melvyn I.Los Angeles, CACPAIndefinite
from
June 11, 2007
Neuendorf, Louis E.Sandwich, ILAttorneyIndefinite
from
June 11, 2007
Thomas, Scott C.Parker, COAttorneyIndefinite
from
June 11, 2007
Todd, Donald J.South Holland, ILCPAIndefinite
from
June 11, 2007
Winrow, WayneEmeryville, CAAttorneyIndefinite
from
June 11, 2007
Cannon, Todd R.Florence,COAttorneyIndefinite
from
June 12, 2007
Hester, Karen H.Overland Park, KSAttorneyIndefinite
from
June 25, 2007
Denman, Dwight E.Dallas, TXAttorneyIndefinite
from
June 25, 2007
Korcan, BarryLoretto, PACPAIndefinite
from
June 25, 2007
August 13, 20073772007–33 I.R.B.

NameAddressDesignationDate of Suspension
Lloyd, Max C.South Jordan, UTCPAIndefinite
from
June 25, 2007
White, Lanny R.Lindon, UTCPAIndefinite
from
June 25, 2007
Bjorklund, Dennis A.Coralville, IAAttorneyIndefinite
from
June 28, 2007
Noel, RobertFairfield, CAAttorneyIndefinite
from
June 28, 2007
Sanger, Susan L.Greenwood Village, COAttorneyIndefinite
from
June 28, 2007
Shatzen, Robert S.Beaverton, ORAttorneyIndefinite
from
June 28, 2007
Stevenson, Albert D.Olive Branch, MSCPAIndefinite
from
June 28, 2007
Van Beek, AndreaOrange City, IAAttorneyIndefinite
from
June 28, 2007
Sojcher, Stuart H.Winchester, MAAttorneyIndefinite
from
July 3, 2007
Estrada, Severo C.San Jose, CACPAIndefinite
from
July 3, 2007
Ferguson, Robert E.Salt Point, NYAttorneyIndefinite
from
July 3, 2007
Wickenkamp, Mary C.Denison, TXAttorneyIndefinite
from
July 3, 2007
2007–33 I.R.B.378August 13, 2007

Suspensions From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Reg-
ulations, Part 10, after notice and an op-
portunity for a proceeding before an ad-
ministrative law judge, the following indi-
viduals have been placed under suspension
from practice before the Internal Revenue
Service:
NameAddressDesignationEffective Date
Cettomai, Joseph W.Rootstown, OHCPAIndefinite
from
April 19, 2007
Disbarments From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Regu-
lations, Part 10, after notice and an oppor-
tunity for a proceeding before an adminis-
trative law judge, the following individu-
als have been disbarred from practice be-
fore the Internal Revenue Service:
NameAddressDesignationEffective Date
Haynes, Scott Y.Valdosta, GACPAMarch 19, 2007
Censure Issued by Consent
Under Title 31, Code of Federal Reg-
ulations, Part 10, in lieu of a proceeding
being instituted or continued, an attorney,
certified public accountant, enrolled agent,
or enrolled actuary, may offer his or her
consent to the issuance of a censure. Cen-
sure is a public reprimand.
The following individuals have con-
sented to the issuance of a Censure:
NameAddressDesignationDate of Censure
Lyons, John K.Dingmans Ferry, PAAttorneyApril 4, 2007
Bowman, T. HardieCorpus Christi, TXCPAMay 23, 2007
Kofford, Brian T.Provo, UTCPAJune 12, 2007
Resignations of Enrolled Agents
Under Title 31, Code of Federal Regu-
lations, Part 10, an enrolled agent, in or-
der to avoid the institution or conclusion
of a proceeding for his or her disbarment
or suspension from practice before the In-
ternal Revenue Service, may offer his or
her resignation as an enrolled agent. The
Director, Office of Professional Responsi-
bility, in his discretion, may accept the of-
fered resignation.
The Director, Office of Professional
Responsibility, has accepted offers of res-
ignation as an enrolled agent from the
following individuals:
NameAddressDate of Resignation
Hancock, William H.Plant City, FLApril 10, 2007
August 13, 20073792007–33 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations
to show that the previous published rul-
ings 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.
2007–33 I.R.B.iAugust 13, 2007

Numerical Finding List
1
Bulletins 2007–27 through 2007–33
Announcements:
2007-61, 2007-28 I.R.B.84
2007-62, 2007-29 I.R.B.115
2007-63, 2007-30 I.R.B.236
2007-64, 2007-29 I.R.B.125
2007-65, 2007-30 I.R.B.236
2007-66, 2007-31 I.R.B.296
2007-67, 2007-32 I.R.B.345
2007-68, 2007-32 I.R.B.348
2007-69, 2007-33 I.R.B.371
2007-70, 2007-33 I.R.B.371
2007-71, 2007-33 I.R.B.372
2007-72, 2007-33 I.R.B.373
Notices:
2007-54, 2007-27 I.R.B.12
2007-55, 2007-27 I.R.B.13
2007-56, 2007-27 I.R.B.15
2007-57, 2007-29 I.R.B.87
2007-58, 2007-29 I.R.B.88
2007-59, 2007-30 I.R.B.135
2007-61, 2007-30 I.R.B.140
2007-62, 2007-32 I.R.B.331
2007-63, 2007-33 I.R.B.353
Proposed Regulations:
REG-128274-03, 2007-33 I.R.B.356
REG-114084-04, 2007-33 I.R.B.359
REG-149036-04, 2007-33 I.R.B.365
REG-119097-05, 2007-28 I.R.B.74
REG-147171-05, 2007-32 I.R.B.334
REG-163195-05, 2007-33 I.R.B.366
REG-138707-06, 2007-32 I.R.B.342
REG-144540-06, 2007-31 I.R.B.296
REG-103842-07, 2007-28 I.R.B.79
Revenue Procedures:
2007-42, 2007-27 I.R.B.15
2007-43, 2007-27 I.R.B.26
2007-44, 2007-28 I.R.B.54
2007-45, 2007-29 I.R.B.89
2007-46, 2007-29 I.R.B.102
2007-47, 2007-29 I.R.B.108
2007-48, 2007-29 I.R.B.110
2007-49, 2007-30 I.R.B.141
2007-50, 2007-31 I.R.B.244
2007-51, 2007-30 I.R.B.143
2007-52, 2007-30 I.R.B.222
2007-53, 2007-30 I.R.B.233
2007-54, 2007-31 I.R.B.293
2007-55, 2007-33 I.R.B.354
Revenue Rulings:
2007-42, 2007-28 I.R.B.44
2007-43, 2007-28 I.R.B.45
2007-44, 2007-28 I.R.B.47
2007-45, 2007-28 I.R.B.49
2007-46, 2007-30 I.R.B.126
2007-47, 2007-30 I.R.B.127
2007-48, 2007-30 I.R.B.129
2007-49, 2007-31 I.R.B.237
2007-50, 2007-32 I.R.B.311
Treasury Decisions:
9326, 2007-31 I.R.B.242
9327, 2007-28 I.R.B.50
9328, 2007-27 I.R.B.1
9329, 2007-32 I.R.B.312
9330, 2007-31 I.R.B.239
9331, 2007-32 I.R.B.298
9332, 2007-32 I.R.B.300
9333, 2007-33 I.R.B.350
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2007–1 through 2007–26 is in Internal Revenue Bulletin
2007–26, dated June 25, 2007.
August 13, 2007ii2007–33 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2007–27 through 2007–33
Notices:
2006-43
Modified by
T.D. 9332, 2007-32 I.R.B.300
2007-26
Modified by
Notice 2007-56, 2007-27 I.R.B.15
Proposed Regulations:
REG-109367-06
Hearing scheduled by
Ann. 2007-66, 2007-31 I.R.B.296
REG-143601-06
Corrected by
Ann. 2007-71, 2007-33 I.R.B.372
Revenue Procedures:
90-27
Superseded by
Rev. Proc. 2007-52, 2007-30 I.R.B.222
95-28
Superseded by
Rev. Proc. 2007-54, 2007-31 I.R.B.293
97-14
Modified and superseded by
Rev. Proc. 2007-47, 2007-29 I.R.B.108
2002-9
Modified and amplified by
Rev. Proc. 2007-48, 2007-29 I.R.B.110
Rev. Proc. 2007-53, 2007-30 I.R.B.233
2004-42
Superseded by
Notice 2007-59, 2007-30 I.R.B.135
2005-16
Modified by
Rev. Proc. 2007-44, 2007-28 I.R.B.54
2005-66
Clarified, modified, and superseded by
Rev. Proc. 2007-44, 2007-28 I.R.B.54
2006-25
Superseded by
Rev. Proc. 2007-42, 2007-27 I.R.B.15
2006-27
Modified by
Rev. Proc. 2007-49, 2007-30 I.R.B.141
2006-33
Superseded by
Rev. Proc. 2007-51, 2007-30 I.R.B.143
Revenue Procedures— Continued:
2006-55
Superseded by
Rev. Proc. 2007-43, 2007-27 I.R.B.26
2007-15
Superseded by
Rev. Proc. 2007-50, 2007-31 I.R.B.244
Revenue Rulings:
74-299
Amplified by
Rev. Rul. 2007-48, 2007-30 I.R.B.129
89-96
Amplified by
Rev. Rul. 2007-47, 2007-30 I.R.B.127
92-17
Modified by
Rev. Rul. 2007-42, 2007-28 I.R.B.44
2001-48
Modified by
T.D. 9332, 2007-32 I.R.B.300
Treasury Decisions:
9321
Corrected by
Ann. 2007-68, 2007-32 I.R.B.348
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–1 through 2007–26 is in Internal Revenue Bulletin 2007–26, dated June 25, 2007.
2007–33 I.R.B.iiiAugust 13, 2007

August 13, 20072007–33 I.R.B.

INTERNAL REVENUE BULLETIN
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Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin-
tendent of Documents when their subscriptions must be renewed.
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