Internal Revenue Bulletin 2010-49 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 201
0-49
December 6, 2010
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.
SPECIAL ANNOUNCEMENT
Notice 2010–79, page 809.
This notice alerts taxpayers to an amendment made to section
833 of the Code by the Patient Protection and Affordable Care
Act (H.R. 3590, P.L. 111–148). In addition, this notice provides
transitional relief and interim guidance on the interpretation and
application of the amendment and requests comments on what
further guidance, if any, is needed.
INCOME TAX
Rev. Rul. 2010–28, page 804.
2010 base period T-bill rate.The “base period T-bill rate”
for the period ending September 30, 2010, is published as
required by section 995(f) of the Code.
Notice 2010–79, page 809.
This notice alerts taxpayers to an amendment made to section
833 of the Code by the Patient Protection and Affordable Care
Act (H.R. 3590, P.L. 111–148). In addition, this notice provides
transitional relief and interim guidance on the interpretation and
application of the amendment and requests comments on what
further guidance, if any, is needed.
Rev. Proc. 2010–44, page 811.
This procedure provides two safe harbor methods of account-
ing for certain motor vehicle dealerships to (1) treat certain
sales facilities as retail sales facilities for purposes of section
263A of the Code, and (2) be treated as resellers without pro-
duction activities for purposes of section 263A. This procedure
also provides procedures for obtaining automatic consent to
change to the safe harbor methods. Rev. Proc. 2008–52
modified.
EMPLOYEE PLANS
Notice 2010–78, page 808.
2011 cost-of-living adjustments; retirements plans, etc.
This notice sets forth certain cost-of-living adjustments effec-
tive January 1, 2011, applicable to the dollar limitations on ben-
efits and contributions under qualified retirement plans. The
limitations that are adjusted by reference to § 415(d) generally
will remain unchanged for 2011. Other limitations applicable
to deferred compensation plans are also unchanged for 2011.
This notice also contains cost-of-living adjustments for several
pension-related amounts in restating the data in IR–2010–108
issued October 28, 2010.
EXEMPT ORGANIZATIONS
Announcement 2010–90, page 816.
A list is provided of organizations now classified as private foun-
dations.
(Continued on the next page)
Actions Relating to Court Decisions is on the page following the Introduction.
Finding Lists begin on page ii.

ADMINISTRATIVE
Notice 2010–79, page 809.
This notice alerts taxpayers to an amendment made to section
833 of the Code by the Patient Protection and Affordable Care
Act (H.R. 3590, P.L. 111–148). In addition, this notice provides
transitional relief and interim guidance on the interpretation and
application of the amendment and requests comments on what
further guidance, if any, is needed.
Rev. Proc. 2010–45, page 813.
Nonshareholder contribution to capital under section
118(a).This procedure provides a safe harbor under section
118(a) of the Code for the treatment of certain grants to
corporations from the National Energy Technology Laboratory
of the Department of Energy under the Electric Drive Vehicle
Battery and Component Manufacturing Initiative as authorized
by the American Recovery and Reinvestment Act of 2009
(ARRA).
Rev. Proc. 2010–46, page 814.
Nonshareholder contribution to capital under section
118(a).This procedure provides a safe harbor under section
118(a) of the Code for certain amounts received by corpo-
rate taxpayers under certain Department of Transportation
programs.
December 6, 20102010–49 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2010–49 I.R.B.December 6, 2010

Actions Relati
ng to Decisions of the Tax Court
It is the policy
of the Internal Rev-
enue Service t
o announce at an early date
whether it wil
l follow the holdings in cer-
tain cases. An
Action on Decision is the
document maki
ng such an announcement.
An Action on De
cision will be issued at
the discreti
on of the Service only on unap-
pealed issue
s decided adverse to the gov-
ernment. Gen
erally, an Action on Decision
is issued whe
re its guidance would be help-
ful to Servi
ce personnel working with the
same or simi
lar issues. Unlike a Treasury
Regulation
or a Revenue Ruling, an Action
on Decision
is not an affirmative statement
of Service
position. It is not intended to
serve as pu
blic guidance and may not be
cited as pr
ecedent.
Actions on
Decisions shall be relied
upon withi
n the Service only as conclu-
sions appl
ying the law to the facts in the
particul
ar case at the time the Action on
Decision
was issued. Caution should be
exercise
d in extending the recommenda-
tion of th
e Action on Decision to similar
cases whe
re the facts are different. More-
over, th
e recommendation in the Action on
Decisio
n may be superseded by new legis-
lation,
regulations, rulings, cases, or Ac-
tions on
Decisions.
Prior to
1991, the Service published
acquies
cence or nonacquiescence only in
certain regula
r Tax Court opinions. The
Service has ex
panded its acquiescence
program to inc
lude other civil tax cases
where guidanc
e is determined to be help-
ful. Accordin
gly, the Service now may
acquiesce or n
onacquiesce in the holdings
of memorandu
m Tax Court opinions, as
well as those
of the United States District
Courts, Clai
ms Court, and Circuit Courts
of Appeal. Re
gardless of the court decid-
ing the case
, the recommendation of any
ActiononDe
cision will be published in
the Interna
l Revenue Bulletin.
The recomme
ndation in every Action
on Decision
will be summarized as ac-
quiescence
, acquiescence in result only,
or nonacqu
iescence. Both “acquiescence”
and “acqui
escence in result only” mean
that the Se
rvice accepts the holding of
the court i
n a case and that the Service
will foll
ow it in disposing of cases with
thesamec
ontrolling facts. However, “ac-
quiescen
ce” indicates neither approval
nor disap
proval of the reasons assigned
by the cou
rt for its conclusions; whereas,
“acquie
scence in result only” indicates
disagre
ement or concern with some or all
of those
reasons. “Nonacquiescence” sig-
nifies t
hat, although no further review was
sought,
the Service does not agree with
the hol
ding of the court and, generally,
will not follow
the decision in disposing
of cases invol
ving other taxpayers. In
reference to a
n opinion of a circuit court
of appeals, a “
nonacquiescence” indicates
that the Servi
ce will not follow the hold-
ingonanation
wide basis. However, the
Service will
recognize the precedential
impact of the
opinion on cases arising
within the ve
nue of the deciding circuit.
The Actions o
n Decisions published in
the weekly In
ternal Revenue Bulletin are
consolidate
d semiannually and appear in
the first Bu
lletin for July and the Cumula-
tive Bullet
in for the first half of the year. A
semiannual
consolidation also appears in
the first Bu
lletin for the following January
andintheC
umulative Bulletin for the last
half of the
year.
The Commis
sioner does not acquiesce
in result o
r the reasoning in the following
decision:
VERITAS So
ftware Corp.
v. Commis
sioner
1
133 T.C. No
. 14 (December 10, 2009).
1
The Service believes the Court’s factual findings and legal assertions are erroneous. Therefore, it does not acquiesce in the result or the reasoningof the decision.
December 6, 20102010–49 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 995.—Taxation
of DISC Income to
Shareholders
2010 base period T-bill rate.The
“base period T-bill rate” for the period
ending September 30, 2010, is published
as required by section 995(f) of the Code.
Rev. Rul. 2010–28
Section 995(f)(1) of the Internal Rev-
enue Code provides that a shareholder of a
DISC shall pay interest each taxable year
in an amount equal to the product of the
shareholder’s DISC-related deferred tax li-
ability for the year and the “base period
T-bill rate.” Under section 995(f)(4), the
base period T-bill rate is the annual rate
of interest determined by the Secretary to
be equivalent to the average of the 1-year
constant maturity Treasury yields, as pub-
lished by the Board of Governors of the
Federal Reserve System, for the 1-year pe-
riod ending on September 30 of the calen-
dar year ending with (or of the most recent
calendar year ending before) the close of
the taxable year of the shareholder. The
base period T-bill rate for the period end-
ing September 30, 2010, is 0.34 percent.
Pursuant to section 6222 of the Code,
interest must be compounded daily. The
table below provides factors for com-
pounding the base period T-bill rate daily
for any number of days in the share-
holder’s taxable year (including a 52–53
week accounting period) for the 2010 base
period T-bill rate. To compute the amount
of the interest charge for the shareholder’s
taxable year, multiply the amount of the
shareholder’s DISC-related deferred tax
liability (as defined in section 995(f)(2))
for that year by the base period T-bill rate
factor corresponding to the number of
days in the shareholder’s taxable year for
which the interest charge is being com-
puted. Generally, one would use the factor
for 365 days. One would use a different
factor only if the shareholder’s taxable
year for which the interest charge being
determined is a short taxable year, if the
shareholder uses the 52–53 week taxable
year, or if the shareholder’s taxable year is
a leap year.
For the base period T-bill rates for the
periods ending in prior years, see Rev. Rul.
2009–36, 2009–47 I.R.B. 650; Rev. Rul.
2008–51, 2008–2 C.B. 1171; Rev. Rul.
2007–64, 2007–2 C.B. 953; Rev. Rul.
2006–54, 2006–2 C.B. 834; Rev. Rul.
2005–70, 2005–2 C.B. 919; Rev. Rul.
2004–99, 2004–2 C.B. 720; Rev. Rul.
2003–2, 2003–1 C.B. 251; and Rev. Rul.
2002–68, 2002–2 C.B. 808.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Teresa Burridge Hughes of the Of-
fice of Associate Chief Counsel (Interna-
tional). For further information regarding
this revenue ruling, contact Ms. Hughes at
(202) 622–3850 (not a toll-free call).
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
1
.000009315
2.00001863
0
3
.000027945
4.000037261
5.000046576
6
.000055892
7
.000065207
8
.000074523
9.000083839
10
.000093155
11.000102471
12.000
111787
13.000121103
14.000130419
15.000139735
16
.000149052
17
.000158368
18
.000167685
19.000177001
20.000186318
21
.000195635
22
.000204952
23.000214269
24
.000223586
25
.000232903
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
26.000242220
27
.000251537
28
.000260855
29.000270172
30.000279490
31.000288807
32
.000298125
33.000307443
34.000316761
35
.000326079
36
.000335397
37
.000344715
38
.000354034
39
.000363352
40.000372670
41.000381989
42.000
391308
43.000400626
44
.000409945
45
.000419264
46
.000428583
47.0
00437902
48.000447221
49
.000456540
50.000465860
51.000475179
52
.000484499
53
.000493818
54.000503138
55.000512458
56.000521777
57.000531097
58.000540417
59.000549738
60
.000559058
61
.000568378
62
.000577698
63
.000587019
64
.000596339
65.000605660
2010–49 I.R.B.804December 6, 2010

2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
66.000614981
67.000624301
68.000633622
69.000642943
70
.000652264
71
.000661586
72.000670907
73.000680228
74
.000689549
75
.000698871
76.000708193
77
.000717514
78.000726836
79
.0007361
58
80
.000745480
81
.000754802
82.000764124
83.000773446
84.000782768
85
.000792091
86.000801413
87.000810736
88
.000820058
89.000829381
90.000838704
91.000848027
92
.000857350
93.000866673
94
.
000875996
95.000885319
96.000894642
97.000903966
98.000913289
99.000922613
100.000931936
101.000941260
102
.000950584
103
.000959908
104.000969232
105.000978556
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
106.000987880
107
.000997205
108
.001006529
109
.001015853
110
.001025178
111
.001034503
112.001043827
113
.001053152
114.001062477
115
.001071802
116.001081127
117
.001090452
118.001099777
119.001109103
120.001118428
121
.001127753
122.001137079
123
.001146405
124
.00115
5730
125.001165056
126.001174382
127.001183708
128.001193034
129.001202360
130.001211687
131.001221013
132.001230340
133.001239666
134.001248993
135.001258319
136.001267646
137.001276973
138.001286300
139
.001295627
140
.001304954
141.001314281
142.001323609
143.001332936
144.001342264
145.001351591
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
146.001360919
147.001370247
148
.001379574
149.001388902
150
.001398230
151.001407558
152
.001416887
153.001426215
154.001435543
155
.001444872
156.001454200
157.001463529
158.001472858
159
.001482186
160
.001491515
161
.001500844
162
.001510173
163
.001519502
164
.00152
8832
165.001538161
166
.001547490
167
.001556820
168
.001566149
169
.00
1575479
170
.001584809
171
.001594139
172.001603469
173.001612799
174.001622129
175.001631459
176.001640789
177
.001650119
178
.001659450
179.001668780
180.001678111
181.001687442
182.001696772
183.001706103
184
.001715434
185.001724765
December 6, 20108052010–49 I.R.B.

2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
186.001734096
187.001743428
188
.001752759
189.001762090
190.001771422
191
.001780753
192
.001790085
193.001799417
194.001808749
195
.001818081
196.001827413
197
.001836745
198.001846077
199
.0018554
09
200.001864741
201.001874074
202.001883406
203.001892739
204.001902072
205.001911405
206.001920737
207.001930070
208.001939403
209.001948737
210
.001958070
211.001967403
212.001976736
213.001986070
214
.
001995404
215
.002004737
216.002014071
217
.002023405
218.002032739
219.002042073
220
.002051407
221.002060741
222
.002070075
223.002079410
224.002088744
225
.002098079
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
226.002107413
227.002116748
228.002126083
229
.002135418
230
.002144752
231
.002154088
232.002163423
233
.002172758
234.002182093
235
.002191429
236.002200764
237.002210100
238
.002219435
239.002228771
240.002238107
241.002247443
242
.002256779
243
.002266115
244
.00227
5451
245
.002284787
246.002294124
247.002303460
248.002312797
249.002322133
250
.002331470
251
.002340807
252.002350144
253.002359481
2
54
.002368818
255.002378155
256
.002387492
257
.002396829
258
.002406167
259.002415504
260.002424842
261.002434179
262
.002443517
263
.002452855
264.002462193
265.002471531
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
266.002480869
267.002490207
268
.002499545
269
.002508884
270
.002518222
271
.002527561
272
.002536899
273
.002546238
274
.002555577
275.002564916
276
.002574255
277
.002583594
278
.002592933
279.002602272
280.002611611
281
.002620951
282.002630290
283.002639630
284.002648969
285.002658309
286.002667649
287.002676989
288.002686329
289
.00
2695669
290
.002705009
291
.002714350
292.002723690
293.002733030
294.002742371
295.002751711
296
.002761052
297.002770393
298.002779734
299
.002789075
300.002798416
301
.002807757
302.002817098
303.002826439
304
.002835781
305.002845122
2010–49 I.R.B.806December 6, 2010

2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
306
.002854464
307.002863806
308.002873147
309.002882489
310.002891831
311.002901173
312
.002910515
313
.002919857
314.002929200
315.002938542
316.002947884
317
.002957227
318
.002966570
319
.0029759
12
320
.002985255
321
.002994598
322.003003941
323.003013284
324.003022627
325
.003031970
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
326.003041314
327
.003050657
328.003060001
329.003069344
330.003078688
331.003088031
332
.003097375
333.003106719
334.003116063
335.003125407
336
.003134752
337.003144096
338
.003153440
339
.0031627
85
340.003172129
341.003181474
342.003190818
343.003200163
344
.00320
9508
345.003218853
2010 ANNUAL RATE,
COMPOUNDED DAILY
0.34 PERCENT
DAYSFACTOR
346.003228198
347
.003237543
348.003246888
349
.003256234
350.003265579
351.003274925
352
.003284270
353
.003293616
354
.003302962
355
.003312308
356.003321653
357
.003330999
358
.003340346
359
.003349692
360
.003359038
361.003368384
362.003377731
363.003387077
364.003396424
365.003405771
366
.003415117
367.003424464
368.003433811
369
.00
3443158
370
.003452506
371
.003461853
December 6, 20108072010–49 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
2011 Limitations Adjusted As
Provided in Section 415(d),
etc.
1
Notice 2010–78
Section 415 of the Internal Revenue
Code (the Code) provides for dollar lim-
itations on benefits and contributions un-
der qualified retirement plans. Section
415(d) requires that the Commissioner an-
nually adjust these limits for cost-of-living
increases. Other limitations applicable to
deferred compensation plans are also af-
fected by these adjustments under § 415.
Under § 415(d), the adjustments are to be
made pursuant to adjustment procedures
whicharesimilartothoseusedtoadjust
benefit amounts under § 215(i)(2)(A) of
the Social Security Act.
The limitations that are adjusted by ref-
erence to § 415(d) generally will remain
unchanged for 2011. This is because the
cost-of-living index for the quarter ended
September 30, 2010, while greater than
the cost-of-living index for the quarter
ended September 30, 2009, is less than the
cost-of-living index for the quarter ended
September 30, 2008, and, following the
procedures under the Social Security Act
for adjusting benefit amounts, any decline
in the applicable index cannot result in
a reduced limitation. For example, the
limitation under § 402(g)(1) on the ex-
clusion for elective deferrals described
in § 402(g)(3) will be $16,500 for 2011,
which is the same amount as for 2009
and 2010. This limitation affects elective
deferrals to § 401(k) plans, § 403(b) plans,
and to the Federal Government’s Thrift
Savings Plan, among other plans.
Cost-of-Living Adjusted Limits for
2011
Effective January 1, 2011, the limita-
tion on the annual benefit under a defined
benefit plan under § 415(b)(1)(A) re-
mains unchanged at $195,000. Pursuant
to § 1.415(d)–1(a)(2)(ii) of the Income
Tax Regulations, the adjustment to the
limitation under a defined benefit plan
under § 415(b)(1)(B) is determined using
a special rule that takes into account that
the cost-of-living indexes for the quar-
ter ended Sept. 30, 2009, and for the
quarter ended Sept. 30, 2010, were both
less than the cost-of-living index for the
quarter ended Sept. 30, 2008, and that
the cost-of-living index for the quarter
ended Sept. 30, 2010, is greater than
the cost-of-living index for the quarter
ended Sept. 30, 2009. For a participant
who separated from service before Jan. 1,
2010, the participant’s limitation under a
defined benefit plan under § 415(b)(1)(B)
is unchanged (i.e., the adjustment factor is
1.0000). For a participant who separated
from service during 2010, the limita-
tion under a defined benefit plan under
§ 415(b)(1)(B) for 2011 is computed by
multiplying the participant’s 2010 com-
pensation limitation by 1.0118 in order to
reflect changes in the cost-of-living index
from the quarter ended Sept. 30, 2009, to
the quarter ended Sept. 30, 2010.
The limitation for defined contribution
plans under § 415(c)(1)(A) remains un-
changed for 2011 at $49,000.
The Code provides that various other
dollar amounts are to be adjusted at the
same time and in the same manner as the
dollar limitation of § 415(b)(1)(A). After
taking into account the applicable round-
ing rules, the amounts for 2011 are as fol-
lows:
The limitation under § 402(g)(1) on
the exclusion for elective deferrals de-
scribed in § 402(g)(3) remains unchanged
at $16,500.
The annual compensation limit under
§§ 401(a)(17), 404(l), 408(k)(3)(C), and
408(k)(6)(D)(ii) remains unchanged at
$245,000.
The dollar limitation under
§ 416(i)(1)(A)(i) concerning the definition
of key employee in a top-heavy plan
remains unchanged at $160,000.
Thedollaramountunder
§ 409(o)(1)(C)(ii) for determining the
maximum account balance in an employee
stock ownership plan subject to a 5-year
distribution period remains unchanged at
$985,000, while the dollar amount used to
determine the lengthening of the 5-year
distribution period remains unchanged at
$195,000.
Thelimitationusedinthedefinition
of highly compensated employee under
§ 414(q)(1)(B) remains unchanged at
$110,000.
The dollar limitation under
§ 414(v)(2)(B)(i) for catch-up contribu-
tions to an applicable employer plan other
than a plan described in § 401(k)(11) or
408(p) for individuals aged 50 or over
remains unchanged at $5,500. The dollar
limitation under § 414(v)(2)(B)(ii) for
catch-up contributions to an applicable
employer plan described in § 401(k)(11)
or 408(p) for individuals aged 50 or over
remains unchanged at $2,500.
The annual compensation limitation
under § 401(a)(17) for eligible partici-
pants in certain governmental plans that,
under the plan as in effect on July 1, 1993,
allowed cost-of-living adjustments to the
compensation limitation under the plan
under § 401(a)(17) to be taken into ac-
count, remains unchanged at $360,000.
The compensation amount under
§ 408(k)(2)(C) regarding simplified em-
ployee pensions (SEPs) remains un-
changed at $550.
The limitation under § 408(p)(2)(E) re-
garding SIMPLE retirement accounts re-
mains unchanged at $11,500.
The limitation on deferrals under
§ 457(e)(15) concerning deferred compen-
sation plans of state and local governments
and tax-exempt organizations remains un-
changed at $16,500.
The compensation amounts under
§ 1.61–21(f)(5)(i) of the Income Tax
Regulations concerning the definition of
“control employee” for fringe benefit val-
uation purposes remains unchanged at
$95,000. The compensation amount under
§ 1.61–21(f)(5)(iii) remains unchanged at
$195,000.
The Code also provides that several
pension-related amounts are to be adjusted
using the cost-of-living adjustment un-
der § 1(f)(3). After taking the applicable
rounding rules into account, the amounts
for 2011 are as follows:
The adjusted gross income limitation
under § 25B(b)(1)(A) for determining the
retirement savings contribution credit for
taxpayers filing a joint return is increased
from $33,500 to $34,000; the limitation
1
Based on News Release IR–2010–108 dated October 28, 2010.
2010–49 I.R.B.808December 6, 2010

under § 25B(b)(1)(B) is increased from
$36,000 to $36, 500; and the limitation un-
der § 25B(b)(1)(C) and (D) is increased
from $55,500 to $56,500.
The adjusted gross income limitation
under § 25B(b)(1)(A) for determining the
retirement savings contribution credit for
taxpayers filing as head of household is in-
creased from $25,125 to $25,500; the lim-
itation under § 25B(b)(1)(B) is increased
from $27,000 to $27,375; and the limita-
tion under § 25B(b)(1)(C) and (D) is in-
creased from $41,625 to $42,375.
The adjusted gross income limitation
under § 25B(b)(1)(A) for determining
the retirement savings contribution credit
for all other taxpayers is increased from
$16,750 to $17,000; the limitation un-
der § 25B(b)(1)(B)is increased from
$18,000 to $18,250; and the limitation
under § 25B(b)(1)(C) and (D) is increased
from $27,750 to $28,250.
The deductible amount under
§ 219(b)(5)(A) for an individual making
qualified retirement contributions remains
unchanged at $5,000.
The applicable dollar amount under
§ 219(g)(3)(B)(i) for determining the de-
ductible amount of an IRA contribution
for taxpayers who are active participants
filing a joint return or as a qualifying
widow(er) is increased from $89,000 to
$90,000. The applicable dollar amount
under § 219(g)(3)(B)(ii) for all other tax-
payers (other than married taxpayers filing
separate returns) remains unchanged at
$56,000. The applicable dollar amount
under § 219(g)(7)(A) for a taxpayer who is
not an active participant but whose spouse
is an active participant is increased from
$167,000 to $169,000.
The adjusted gross income limita-
tion under § 408A(c)(3)(C)(ii)(I) for
determining the maximum Roth IRA
contribution for taxpayers filing a joint
return or as a qualifying widow(er) is
increased from $167,000 to $169,000.
The adjusted gross income limitation un-
der § 408A(c)(3)(C)(ii)(II) for all other
taxpayers (other than married taxpayers
filing separate returns) is increased from
$105,000 to $107,000.
The dollar amount under Section
430(c)(7)(D)(i)(II) used to determine ex-
cess employee compensation with respect
to a single-employer defined benefit pen-
sion plan for which the special election un-
der section 430(c)(2)(D) has been made is
increased from $1,000,000 to $1,014,000.
Drafting Information
The principal author of this notice is
John Heil of the Employee Plans, Tax Ex-
empt and Government Entities Division.
For further information regarding the data
in this notice, please contact the Employee
Plans’ taxpayer assistance telephone ser-
vice at 1–877–829–5500 (a toll-free call)
between the hours of 8:30 a.m. and
4:30 p.m. Eastern time Monday through
Friday. For information regarding the
methodology used in arriving at the data
in this notice, please e-mail Mr. Heil at
RetirementPlanQuestions@irs.gov.
Modification of Section 833
Treatment of Certain Health
Organizations
Notice 2010–79
SECTION 1. PURPOSE
.01 This notice alerts taxpayers to an
amendment made to § 833 of the Inter-
nal Revenue Code (Code) by the Patient
Protection and Affordable Care Act (H.R.
3590, P.L. 111–148) (the “Affordable Care
Act”). Section 833 provides special rules
for certain Blue Cross and Blue Shield
organizations, and certain other organiza-
tions. Effective for taxable years begin-
ning after December 31, 2009, the amend-
ment adds new § 833(c)(5), which limits
the application of § 833 to otherwise-qual-
ifying taxpayers with a medical loss ratio
that is not less than 85 percent.
.02 This notice also provides interim
guidance to taxpayers on the interpre-
tation and application of § 833(c)(5).
The Affordable Care Act was enacted
on March 23, 2010, adding § 833(c)(5)
with retroactive effect for taxable years
beginning after December 31, 2009. The
Treasury Department and the Internal
Revenue Service (Service) are engaged
in developing detailed guidance for this
provision. That guidance must also take
into account other closely related guidance
that the Department of Health and Hu-
man Services (HHS) has just published.
To allow affected taxpayers to comply
with the mid-year change in law while
detailed guidance is under development,
the Treasury Department and the Service
are providing interim guidance on the op-
eration of § 833(c)(5) for the first taxable
year beginning after December 1, 2009.
SECTION 2. BACKGROUND
.01 An insurance company other than
a life insurance company is subject to tax
under § 831.
.02 Section 831(c) provides that for
purposes of § 831, the term “insurance
company” has the meaning given to such
term by § 816(a). Section 816(a) provides
the term “insurance company” means any
company more than half of the business
of which during the taxable year is the
issuing of insurance or annuity contracts
or the reinsuring of risks underwritten by
insurance companies.
.03 Section 832(a) provides that, for an
insurance company subject to the tax im-
posed by § 831, the term “taxable income”
means the company’s gross income as
defined in § 832(b)(1) less the deductions
authorized in § 832(c). Under § 832(b)(1),
gross income includes underwriting in-
come.
.04 Section 832(b)(3) defines under-
writing income as the premiums earned on
insurance contracts during the taxable year
less losses incurred and expenses incurred.
.05 Section 832(b)(4) defines the term
“premiums earned on insurance contracts
during the taxable year” as the gross pre-
miums written on insurance contracts dur-
ing the taxable year, less return premiums
and premiums paid for reinsurance. The
result so obtained is further adjusted by
adding 80 percent of the unearned premi-
ums on outstanding business at the end of
the preceding taxable year and deducting
80 percent of the unearned premiums on
outstanding business at the end of the tax-
able year.
.06 Section 833 provides special rules
for existing Blue Cross or Blue Shield or-
ganizations and other organizations that
meet the requirements of § 833(c)(3)—
(a) Section 833(a)(1) states that such an
organization is subject to tax in the same
manner as if it were a stock insurance com-
pany;
(b) Section 833(a)(2) allows a special
deduction for such an organization, deter-
mined under § 833(b), which is the excess
(ifany)of(i)25percentofthesumofthe
December 6, 20108092010–49 I.R.B.

claims incurred during the taxable year, li-
abilities incurred during the taxable year
under cost-plus contracts, and expenses in-
curred during the taxable year in connec-
tion with the administration, adjustment,
or settlement of claims or in connection
with the administration of cost-plus con-
tracts, over (ii) the adjusted surplus as of
the beginning of the taxable year; and
(c) Section 833(a)(3) provides that the
20 percent reduction of unearned premi-
ums set forth in § 832(b)(4) does not apply
to such an organization.
.07 Section 9016 of the Affordable Care
Act added § 833(c)(5) to the Code, effec-
tive for taxable years beginning after De-
cember 31, 2009. Section 833(c)(5) pro-
vides that § 833 does not apply to an oth-
erwise-eligible organization unless the or-
ganization’s medical loss ratio, as defined,
during the taxable year is not less than
85 percent. For this purpose, an organi-
zation’s medical loss ratio is equal to the
amount expended on reimbursement for
clinical services provided to enrollees un-
der its policies during the taxable year (as
reported under § 2718 of the Public Health
Service Act) (“Section 833 MLR Numer-
ator”) divided by the organization’s total
premium revenue (“Section 833 MLR De-
nominator”).
.08 Section 2718 of the Public Health
Service Act (the “PHS Act”) was added by
§ 1001 and amended by § 10101 of the Af-
fordable Care Act, and was incorporated
into the Code by § 9815(a)(1). Section
2718(a) of the PHS Act requires a health
insurance issuer to submit an annual re-
port to the Secretary of HHS concerning
the ratio of the incurred loss (or incurred
claims) plus the loss adjustment expenses
(or change in contract reserves) to earned
premiums. The report must include the
percentage of total premium revenue, af-
ter accounting for collections or receipts
for risk adjustment and risk corridors and
payments of reinsurance, that the issuer
expends (a) on reimbursement for clinical
services provided to enrollees; (b) for ac-
tivities that improve health care quality;
and (c) on all other non-claims costs.
.09 Section 2718(b) of the PHS Act re-
quires that a health insurance issuer, begin-
ning not later than January 1, 2011, pro-
vide a rebate to each enrollee, on apro
ratabasis, if the ratio of (a) the amount of
premium revenue expended on reimburse-
ment for clinical services and for activities
that improve health care quality to (b) the
total amount of premium revenue (exclud-
ing Federal and State taxes and licensing
or regulatory fees and after accounting for
payments or receipts for risk adjustment,
risk corridors and reinsurance) is less than
a prescribed percentage.
.10 Section 2718(c) of the PHS Act
directs the National Association of Insur-
ance Commissioners (NAIC) to establish
uniform definitions of the activities re-
quired to be reported to the Department
of HHS under § 2718(a), and standard-
ized methodologies for calculating mea-
sures of these activities, not later than
December 31, 2010, and subject to the
certification of the Secretary of HHS. On
November 22, 2010, the Department of
HHS filed with the Federal Register, for
publication December 1, 2010, interim
final regulations implementing § 2718.
See http://www.ofr.gov/OFRUpload/OFR-
Data/2010–29596_PI.pdf.
SECTION 3. INTERIM GUIDANCE
FOR 2010
.01 The Treasury Department and the
Service are aware that because § 833(c)(5)
applies to taxable years beginning af-
ter December 31, 2009 (including the
period in 2010 before enactment of the
Affordable Care Act), the implementa-
tion of § 833(c)(5) presents issues for
the first taxable year beginning after
December 31, 2009. Moreover, because
§ 833(c)(5) references § 2718 of the
PHS Act, the Treasury Department and
the Service, and taxpayers, will need
to consider the effect, if any, of the
recently-published guidance under § 2718
on issues that arise under § 833(c)(5).
Finally, the Treasury Department and the
Service anticipate issuing further guidance
on § 833(c)(5). Accordingly, this Section
3 provides interim guidance that taxpayers
may rely on solely for the first taxable year
beginning after December 31, 2009.
Computation of MLR Numerator for
Purposes of § 833(c)(5)
.02 For purposes of determining
whether a taxpayer’s percentage of total
premium revenue expended on reimburse-
ment for clinical services provided to en-
rollees is not less than 85 percent (and thus
satisfies the requirement of § 833(c)(5)),
taxpayers must use the definition of “reim-
bursement for clinical services provided to
enrollees” that is set forth in HHS interim
final regulations.
.03 For purposes of determining
whether the 85-percent requirement of
§ 833(c)(5) is satisfied, the Service will
not challenge the inclusion of “amounts
expended for activities that improve health
care quality” as defined in HHS interim
final regulations.
Consequences of Nonapplication of § 833
by Reason of § 833(c)(5)
.04 Section 833(c)(5) provides that
§ 833 does not apply to an organization
unless the organization’s percentage of
total premium revenue expended on reim-
bursement for clinical services provided
to enrollees is not less than 85 percent.
Accordingly, the consequences for an or-
ganization for which this amount is less
than 85 percent are as follows:
(a) The organization is not taxable as
a stock insurance company by reason of
§ 833(a)(1) (but may be taxable as an in-
surance company if it otherwise meets the
requirements of § 831(c));
(b) The organization is not allowed the
special deduction set forth in § 833(b); and
(c) The organization takes into account
80 percent, rather than 100 percent, of
its unearned premiums for purposes of
computing premiums earned on insurance
contracts during the taxable year under
§ 832(b)(4).
.05 NotwithstandingSection 3.04(a) of
this notice and solely for the first taxable
year beginning after December 31, 2009,
the Service will not treat a taxpayer as los-
ing its status as a stock insurance company
by reason of § 833(c)(5) provided the fol-
lowing conditions are met—
(a) the taxpayer was described in
§ 833(c) in the immediately preceding
taxable year;
(b) the taxpayer would have been taxed
as a stock insurance company for the cur-
rent taxable year but for the enactment of
§ 833(c)(5); and
(c) the taxpayer would have met the
requirements of § 831(c) to be taxed as
an insurance company for the current tax-
able year but for its activities in the ad-
ministration, adjustment or settlement of
claims under cost-plus or administrative
services-only contracts.
2010–49 I.R.B.810December 6, 2010

Changes in Accounting Method
.06 Section 446(e) of the Code states
that, except as otherwise provided, a tax-
payer that changes a method of accounting
on the basis of which it regularly com-
putes income in keeping its books must
secure consent before computing taxable
income under a new method. Section
1.446–1(e)(3)(i) of the Income Tax Reg-
ulations requires that, except as provided
under the authority of § 1.446–1(e)(3)(ii),
to secure the Commissioner’s consent to
change its method of accounting, a tax-
payer must file a Form 3115,Application
for Change in Accounting Method,during
the taxable year in which the taxpayer
desires to make the proposed change.
.07 Rev. Proc. 97–27, 1997–1 C.B.
680,as amplified and modified byRev.
Proc. 2002–19, 2002–1 C.B. 696,as
amplified and clarified byRev. Proc.
2002–54, 2002–2 C.B. 432,as modified by
Rev. Proc. 2007–67, 2007–2 C.B. 1072,
andasclarifiedandmodifiedbyRev.
Proc. 2009–39, 2009–2 C.B. 371, pro-
vides the general procedures for obtaining
the advance consent of the Commissioner
to change a method of accounting.See
alsoRev. Proc. 2010–1, 2010–1 I.R.B. 1
(or any successor).
.08 The application of § 833 in a tax-
able year followed by nonapplication of
that provision in the subsequent taxable
year (orvice versa) may result in one or
more changes in accounting method. For
example, accounting for 100 percent of un-
earned premiums under § 833(a)(3) in one
year, but only 80 percent of unearned pre-
miums under § 832(b)(4) in the next year,
is a change in method of accounting. Like-
wise, the loss (or recovery) of insurance
company status may implicate a number of
changes in methods of accounting because
some methods of accounting are available
only to insurance companies under Sub-
chapter L. The special deduction allowed
under § 833(a)(2) and § 833(b) is not, how-
ever, a method of accounting.
.09 A taxpayer that is required to
change one or more methods of accounting
by reason of the application or nonappli-
cation of § 833 must secure consent for
these changes under the advance consent
procedures of Rev. Proc. 97–27. These
accounting method changes are not within
the scope of Rev. Proc. 2008–52, 2008–2
C.B. 587,as amplified, clarified, and mod-
ified byRev. Proc. 2009–39.
SECTION 4. PROCEDURAL
INFORMATION AND RELIANCE ON
INTERIM GUIDANCE
This notice serves as an “administra-
tive pronouncement” as that term is used
in § 1.6662–4(d)(3)(iii) of the Income Tax
Regulationsandmaybereliedupontothe
same extent as a revenue ruling or revenue
procedure. If, and to the extent, future pub-
lished guidance differs from the interim
guidance in this notice, the different pro-
visions of that future guidance will be ap-
plied without adverse retroactive effect.
SECTION 5. REQUEST FOR
COMMENTS
.01 The Treasury Department and the
Service request comments on the follow-
ing:
(a) What guidance, if any, will taxpay-
ers need under § 833(c)(5) for years after
the transition year that is addressed in Sec-
tion 3 of this notice?
(b) Is more specific guidance needed on
accounting method issues that arise when
a taxpayer loses its status as an insurance
company?
(c) Will guidance be needed in the fu-
ture on the appropriate Subchapter L treat-
ment of rebates that are paid under § 2718
of the PHS Act?
(d) The Treasury Department and the
Service recognize thatmedical loss ratios
are computed under § 2718 of the PHS Act,
as well as under § 833(c)(5). Comments
are requested on how guidance could co-
ordinate the medical loss ratio computa-
tion under § 2718 of the PHS Act with
the medical loss ratio computation under
§ 833(c)(5).
.02 Comments should be submitted in
writing on or before March 7, 2011 and
should contain reference to this Notice
2010–79. Comments may be submitted to
CC:PA:LPD:PR (Notice 2010–79), Room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Alternatively, taxpayers
may submit comments electronically to
Notice.Comments@irscounsel.treas.gov.
Please include “Notice 2010–79” in
the subject line of any electronic
communications.
.03 Submissions may be hand-delivered
Monday through Friday between the hours
of 8 a.m. and 4 p.m. to CC:PA:LPD:PR
(Notice 2010–79), Courier’s Desk, Inter-
nal Revenue Service, 1111 Constitution
Ave., NW, Washington, DC 20224. All
comments will be available for public in-
spection and copying.
DRAFTING INFORMATION
The principal author of this notice is
Rebecca L. Baxter of the Office of As-
sociate Chief Counsel (Financial Institu-
tions & Products (CC:FIP:B04)). For fur-
ther information regarding this notice, con-
tact Ms. Baxter at (202) 622–7117 (not a
toll-free call).
26 CFR 1.263–1: Uniform capitalization of costs.
(Also: §§ 446; 1.263A–2, 1.263A–3, 1.446–1.)
Rev. Proc. 2010–44
SECTION 1. PURPOSE
This revenue procedure provides that
certain motor vehicle dealerships may use
either or both of the safe harbor meth-
ods of accounting provided by this revenue
procedure to (1) treat certain sales facil-
ities as retail sales facilities for purposes
of § 263A of the Internal Revenue Code,
and (2) be treated as resellers without pro-
duction activities for purposes of § 263A.
This revenue procedure also provides pro-
cedures for obtaining automatic consent to
make accounting method changes to use
the safe harbor methods.
SECTION 2. BACKGROUND
.01Sections263A(a)and
1.263A–1(a)(3)(i) of the Income Tax
Regulations require a taxpayer subject to
§ 263A to include in inventory costs direct
costs and indirect costs properly allocable
to the taxpayer’s produced and acquired
inventory property.
.02 Section 1.263A–3(c)(1) requires a
taxpayer that acquires property for resale
(reseller) to capitalize the acquisition cost
of, and the indirect costs that are prop-
erly allocable to, property acquired for re-
sale. The indirect costs most often in-
curred by resellers are purchasing, han-
dling, and storage costs. However, a re-
seller is not required to capitalize handling
December 6, 20108112010–49 I.R.B.

and storage costs incurred at a retail sales
facility. §§ 1.263A–3(c)(4)(i) and (c)(5).
.03 Handling costs include the costs
of processing, assembling, repackaging,
transporting, and other similar activi-
ties that do not come within the mean-
ing of the term produce as defined in
§ 1.263A–2(a)(1). § 1.263A–3(c)(4).
.04 Section 1.263A–3(c)(5)(ii)(B) de-
fines a retail sales facility as a facility
where a taxpayer sells merchandise exclu-
sively to retail customers in on-site sales.
For purposes of § 1.263A–3(c)(5)(ii)(B), a
retail sales facility includes those portions
of any specific retail site (i) that are cus-
tomarily associated with and are an inte-
gral part of the operations of that retail site;
(ii) that are generally open each business
day exclusively to retail customers; (iii)
on or in which retail customers normally
and routinely shop to select specific items
of merchandise; and (iv) that are adjacent
to or in immediate proximity to other por-
tions of the specific retail site.
.05 As explained in the example in
§ 1.263A–3(c)(5)(ii)(B)(2), two lots of
an automobile dealership physically sep-
arated by an alley or an access road are
generally considered one retail sales fa-
cility, provided customers routinely shop
on both of the lots to select the specific
automobiles that they wish to acquire.
.06 Section 1.263A–3(c)(5)(ii)(E) de-
fines a retail customer as the final pur-
chaser of the merchandise.
.07 Section 263A(i) provides that the
Treasury Department will prescribe regu-
lations as may be necessary or appropriate
to carry out the purposes of § 263A, includ-
ing providing for simplified procedures for
the application of § 263A to property ac-
quired for resale.
.08 Section 1.263A–3(d) provides a
simplified resale method for determining
the additional § 263A costs (within the
meaning of § 1.263A–1(d)(3)) properly
allocable to property acquired for resale
and other eligible property on hand at the
end of the taxable year.
.09 In the Conference Report accompa-
nying the Tax Reform Act of 1986, Public
Law No. 99–514 (100 Stat. 2085 (1986)),
the conferees directed the Treasury De-
partment to create a simplified method for
applying the uniform capitalization rules
of § 263A to resellers (resulting in the sim-
plified resale method in § 1.263A–3(d))
and authorized the Treasury Department
to modify the simplified method or permit
the use of other methods by rules or reg-
ulations for property acquired for resale.
H.R. Rep. No. 99–841 (Conf. Rep.), 99th
Cong., 2d Sess. II–308 (1986).
.10 Sections 446(e) and 1.446–1(e)(2)
state that, except as otherwise provided,
a taxpayer must secure the consent of the
Commissioner before changing a method
of accounting for federal income tax pur-
poses.
.11 Rev. Proc. 2008–52, 2008–2 C.B.
587 (as amplified, clarified, and modified
by Rev. Proc. 2009–39, 2009–2 C.B.
371), provides procedures for a taxpayer to
obtain automatic consent of the Commis-
sioner to change to a method of account-
ing described in the APPENDIX of Rev.
Proc. 2008–52. Rev. Proc. 97–27, 1997–1
C.B. 680 (as modified and amplified by
Rev. Proc. 2002–19, 2002–1 C.B. 696,
as amplified and clarified by Rev. Proc.
2002–54, 2002–2 C.B. 432, as modified by
Rev. Proc. 2007–67, 2007–2 C.B. 1072,
and as clarified and modified by Rev. Proc.
2009–39), provides procedures for a tax-
payer to request non-automatic consent to
change a method of accounting.
SECTION 3. SCOPE
.01 Except as provided in section 3.02,
any motor vehicle dealership, as defined in
section 4 of this revenue procedure, may
use either or both of the safe harbor meth-
ods described in section 5 of this revenue
procedure.
.02 A motor vehicle dealership that re-
moves § 471 costs from ending inventory
by treating them as negative amounts in
the numerator of either the simplified re-
sale method formula or the simplified pro-
duction method formula, may not use ei-
ther safe harbor method of accounting de-
scribed in section 5 of this revenue proce-
dure. If a motor vehicle dealership cur-
rently removes § 471 costs from ending
inventory in that manner, it must change
from that method of accounting in accor-
dance with section 7 of this revenue proce-
dure in order to use the safe harbor meth-
ods.
SECTION 4. MOTOR VEHICLE
DEALERSHIP
.01 For purposes of this revenue proce-
dure, a motor vehicle dealership is a deal-
ership that primarily purchases and resells
to retail customers, one or more of the fol-
lowing categories of new or used motor ve-
hicles:
(a) automobiles;
(b) light-duty trucks;
(c) medium-duty trucks;
(d) heavy-duty trucks;
(e) recreational vehicles;
(f) motorcycles;
(g) boats;
(h) farm machinery and equipment; or
(i) construction machinery and equip-
ment.
SECTION 5. SAFE HARBOR
METHODS
.01Retail sales facility safe harbor
method. A motor vehicle dealership may
treat its entire sales facility from which it
normally and routinely conducts on-site
sales to retail customers, including any
vehicle lot that is an integral part of its
sales facility and that is routinely visited
by retail customers, as a retail sales facility
under § 1.263A–3(c)(5)(ii)(B). A motor
vehicle dealership using this retail sales
facility safe harbor method is not required
to capitalize handling and storage costs
incurred at its retail sales facility.
.02Reseller without production activi-
ties safe harbor method. A motor vehicle
dealership may treat itself as a reseller
without production activities for purposes
of § 1.263A–3. For purposes of this rev-
enue procedure, activities that a motor ve-
hicle dealership, or acontractor, perform
on dealership-owned vehicles and cus-
tomer-owned vehicles are handling activ-
ities under §1.263A–3(c)(4), but the costs
of these handling activities, other than the
cost of vehicle parts, are not required to
be capitalized to the extent incurred at
the motor vehicle dealership’s retail sales
facility. A motor vehicle dealership must
capitalize the cost of vehicle parts used
on dealership-owned vehicles as an ac-
quisition cost of its vehicles, whether the
vehicle parts are acquired directly by the
dealership or indirectly through a contrac-
tor. See §§ 1.471–3 and 1.263A–3(c)(1).
A motor vehicle dealership using the re-
seller without production activities safe
harbor method may use the simplified re-
sale method under § 1.263A–3(d) for its
vehicles and other eligible property.
2010–49 I.R.B.812December 6, 2010

SECTION 6. CHANGE IN METHOD
OF ACCOUNTING
A motor vehicle dealership that wants
to change its method of accounting under
§ 263A to either or both of the safe har-
bor methods described in section 5 of this
revenue procedure must use the automatic
change in method ofaccounting provisions
in Rev. Proc. 2008–52, as further modified
by this revenue procedure, if the dealership
is within the scope of Rev. Proc. 2008–52.
Otherwise, a motor vehicle dealership may
request to change its method of accounting
using the non-automatic provisions of Rev.
Proc. 97–27, if the dealership is within the
scope of Rev. Proc. 97–27.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2008–52 is modified to add
new section 11.07 to the APPENDIX, to
read as follows:
.07Safe harbor methods under § 263A
for certain dealerships of motor vehicles.
(1)Description of change. This change
applies to a motor vehicle dealership, as
defined in section 4 of Rev. Proc. 2010–44
that is within the scope of section 3 of
Rev. Proc. 2010–44 and wants to change
its method of accounting to (1) treat its
sales facility as a retail sales facility or (2)
be treated as a reseller without production
activities, as described in section 5 of Rev.
Proc. 2010–44. A motor vehicle deal-
ership that wants to make an automatic
change in method of accounting to use
one or both safe harbor methods described
in section 5 of Rev. Proc. 2010–44 may
make any corresponding changes in the
identification of costs subject to § 263A
that will be accounted for using the new
method (for example, to remove inter-
nal profit from inventory costs) or to no
longer include negative amounts as ad-
ditional § 263A costs in the numerator
of the simplified resale method formula
or the simplified production method for-
mula. However, except as provided in the
preceding sentence, a change under this
section does not include a change for pur-
poses of recharacterizing “§ 471 costs” as
“additional § 263A costs” (orvice versa)
under the simplified resale method or the
simplified production method.
(2)Certain scope limitations temporar-
ily inapplicable. The scope limitations in
sections 4.02(1) through (4) and (7) of Rev.
Proc. 2008–52, as modified and clarified
by Rev. Proc. 2009–39, do not apply to
a motor vehicle dealership that changes to
one or both of the safe harbor methods in
section 5 of Rev. Proc. 2010–44 for its
first or second taxable year ending after
November 9, 2010.
(3)Concurrent automatic changes.A
motor vehicle dealership making an auto-
matic change in method of accounting to
one or both safe harbor methods described
in section 5 of Rev. Proc. 2010–44 and
another automatic change in method of ac-
counting under § 263A for the same tax-
able year may file one Form 3115 to make
both changes, provided the dealership en-
ters the designated automatic change num-
bers for all such changes in Part I on that
Form 3115, and complies with the order-
ing rules of § 1.263A–7(b)(2).
(4)Multiple adjustments. In the event
that a motor vehicle dealership is tak-
ing into account a § 481(a) adjustment
from another accounting method change
in addition to the § 481(a) adjustment
required by a change to a safe harbor
method described in section 5 of Rev.
Proc. 2010–44, the § 481(a) adjustments
must be taken into account separately.
For example, a motor vehicle dealership
that changed to comply with § 263A in
2009 and was required to take its § 481(a)
adjustment into account over four years
must continue to take into account that
adjustment over the remainder of that
four year § 481(a) adjustment period even
though the dealership changed to a safe
harbor method described in section 5 of
Rev. Proc. 2010–44 in 2010 and has an
additional § 481(a) adjustment required
by that change.
(5)Designated automatic accounting
method change numbers. The designated
automatic accounting method change
number for a change to treat certain sales
facilities as retail sales facilities as de-
scribed in section 5.01 of Rev. Proc.
2010–44 is “150.” The designated auto-
matic accounting method change number
for a change to be treated as a reseller
without production activities as described
in section 5.02 of Rev. Proc. 2010–44 is
“151.”
(6)Contact information. For further
information regarding a change under
this section, contact Kari Fisher at (202)
622–4970 (not a toll-free call).
SECTION 8. EXPANDED AUDIT
PROTECTION
A motor vehicle dealership that changes
its method of accounting under either
the automatic provisions of Rev. Proc.
2008–52 or the non-automatic provisions
of Rev. Proc. 97–27 to use a method
of accounting consistent with the safe
harbor methods described in section 5 of
this revenue procedure receives the audit
protection describedin section 7 of Rev.
Proc. 2008–52 or section 9 of Rev. Proc.
97–27, as applicable.
Alternatively, if a motor vehicle deal-
ership uses a method of accounting con-
sistent with the safe harbor methods de-
scribed in section 5 of this revenue proce-
dure on a federal income tax return filed
before November 10, 2010, the Service
will not assert that these methods are not
proper methods of accounting for such tax-
able year(s).
SECTION 9. EFFECTIVE DATE
This revenue procedure is effective
November 9, 2010.
SECTION 10. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Kari Fisher of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, con-
tact Kari Fisher at (202) 622–4970 (not a
toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(AlsoPartI,§§118,362.)
Rev. Proc. 2010–45
SECTION 1. PURPOSE
This revenue procedure provides a safe
harbor under section 118(a) of the Internal
Revenue Code for the treatment of certain
grants to corporations from the National
Energy Technology Laboratory of the De-
partment of Energy (DOE) under the Elec-
tric Drive Vehicle Battery and Component
Manufacturing Initiative (the Initiative) as
authorized by Division A, Title IV of the
December 6, 20108132010–49 I.R.B.

American Recovery and Reinvestment Act
of 2009 (Pub. L. 111–5) (ARRA).
SECTION 2. BACKGROUND
Section 118(a) of the Code provides
that in the case of a corporation, gross in-
come does not include a contribution to the
capital of the taxpayer.
Section 1.118–1 of the Income Tax
Regulations provides that section 118 ap-
plies to contributions to capital made by a
person other than a shareholder, for exam-
ple, property contributed to a corporation
by a governmental unit for the purpose
of enabling the corporation to expand its
operating facilities.
Section 362(c)(2) of the Code requires a
basis reduction in a corporation’s property
when the corporation receives money from
a nonshareholder as a contribution to its
capital.
Division A, Title IV of ARRA requires
the Secretary of Energy to provide facil-
ity funding awards to manufacturers of ad-
vanced battery systems and vehicle batter-
ies that are produced in the United States,
including advanced lithium ion batteries,
hybrid electrical systems, component man-
ufacturers, and software designers. $2 bil-
lion was made available for grants for the
manufacturing of advanced batteries and
components.
The Initiative provides grants for seven
Areas of Interest: (1) Cell and Battery
Manufacturing Facilities; (2) Advanced
Battery Supplier Manufacturing Facili-
ties; (3) Combined Applications for Ar-
eas of Interest 1 and 2; (4) Advanced
Lithium ion Battery Recycling Facilities;
(5) Electric Drive Component Manu-
facturing Facilities; (6) Electric Drive
Subcomponent Manufacturing Facilities;
and (7) Combined Applications for Ar-
eas of Interest 5 and 6. See Funding
Opportunity Number DE-FOA–0000026
(March 19, 2009).This guidance
may be accessed electronically at:
http://www.netl.doe.gov/business/solicita-
tions/archive/main-FY09.html#00026
SECTION 3. SCOPE
This revenue procedure applies to cor-
porate taxpayers that receive a grant from
DOE under the Initiative for Areas of In-
terest 1 through 7. This revenue proce-
dure does not apply to the portion of any
grant paid or incurred for travel or training
expenses or paid to reimburse pre-applica-
tion expenses. For this purpose, pre-appli-
cation expenses only include those costs
incurred in preparing and submitting an
application to receive a grant. This rev-
enue procedure does not apply to noncor-
porate taxpayers.
SECTION 4. PROCEDURE
The Internal Revenue Service will not
challenge a corporation’s treatment of a
grant to the corporation from DOE un-
der the Initiative for Areas of Interest 1
through 7 within the scope of section 3
of this revenue procedure as a nonshare-
holder contribution to the capital of the
corporation under section 118(a) of the
Code if the corporation properly reduces
the basis of its property under section
362(c)(2) and the regulations thereunder.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective
November 12, 2010.
SECTION 6. DRAFTING
INFORMATION
The principal author of this rev-
enue procedure is David McDonnell
of
the Office of Associate Chief Coun
sel
(Passthroughs &Special Industri
es). For
further information regarding t
his revenue
procedure, contact Mr. McDonnel
lat
(202) 622–3040 (not a toll-free c
all).
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part I, §§ 118, 362.)
Rev. Proc. 2010–46
SECTION 1. PURPOSE
This revenue procedure provides a safe
harbor under section 118(a) of the Internal
Revenue Code for certain grant amounts
received by corporate taxpayers engaged
in a transportation trade or business for
capital projects under 49 U.S.C. 24105,
24401et seq., and 26106, as enacted by
sections 301, 302, and 501, Division B
of the Passenger Rail Investment and Im-
provement Act of 2008 (Pub. L. 110–432),
and as amended by Title XII, Division A of
the American Recovery and Reinvestment
Act of 2009 (Pub. L. 111–5) (ARRA).
Also, this revenue procedure provides
a safe harbor under section 118(a) of the
Code for certain grant amounts received
by corporate taxpayers engaged in a trans-
portation trade or business for capital
investments in surface transportation in-
frastructure under (1) the Supplemental
Discretionary Grants for Capital Invest-
ments in Surface Transportation Infra-
structure (TIGER Discretionary Grants)
program as authorized by Title XII, Di-
vision A of ARRA; or (2) the National
Infrastructure Investments (TIGER II Dis-
cretionary Grants) program as authorized
by the Transportation, Housing and Urban
Development, and Related Agencies Ap-
propriations Act for 2010 (Title I, Division
A of the Consolidated Appropriations Act,
2010 (Pub. L. 111–117)).
SECTION 2. BACKGROUND
Section 118(a) of the Code provides
that in the case of a corporation, gross in-
come does not include a contribution to the
capital of the taxpayer.
Section 1.118–1 of the Income Tax
Regulations provides that section 118 ap-
plies to contributions to capital made by a
person other than a shareholder, for exam-
ple, property contributed to a corporation
by a governmental unit for the purpose
of enabling the corporation to expand its
operating facilities.
Section 362(c)(2) of the Code requires a
basis reduction in a corporation’s property
when the corporation receives money from
a nonshareholder as a contribution to its
capital.
The Congestion Grant program under
49 U.S.C. 24105(a) provides that the Sec-
retary of Transportation (the Secretary)
may make grants for financing the capi-
tal costs of facilities, infrastructure, and
equipment for high priority rail corridor
projects necessary to reduce congestion or
facilitate ridership growth in intercity rail
passenger transportation.
The Intercity Passenger Rail Service
Corridor Capital Assistance program un-
der 49 U.S.C. 24402(a)(1) provides that
the Secretary may make grants to assist
in financing the capital costs of facilities,
2010–49 I.R.B.814December 6, 2010

infrastructure, and equipment necessary
to provide or improve intercity passenger
rail transportation.
The High-Speed Rail Corridor Devel-
opment program under 49 U.S.C. 26106(a)
provides that the Secretary shall establish
and implement a high-speed rail corri-
dor development program. 49 U.S.C.
26106(c) provides that the Secretary may
make grants to finance capital projects in
high-speed rail corridors.
The Federal Rairoad Administration of
the Department of Transportation (DOT)
issued a Notice of Funding Availability
(NOFA), 74 FR 29900, that provides guid-
ance on the High-Speed Intercity Passen-
ger Rail Program, which includes the Con-
gestion Grant program, the Intercity Pas-
senger Rail Service Corridor Capital As-
sistance program, and the High-Speed Rail
Corridor Development program. If Con-
gress makes additional appropriations for
theseprograms,theDOTmayissuefuture
NOFAs.
The Office of the Secretary of the DOT
issued a NOFA, 74 FR 28755, that pro-
vides guidance on TIGER Discretionary
Grants. The grants must be for capital in-
vestments in surface transportation infra-
structure. If Congress makes additional
appropriations for this program, the DOT
may issue future NOFAs.
The Office of the Secretary of the DOT
issued a NOFA, 75 FR 30460, that pro-
vides guidance on TIGER II Discretionary
Grants. The grants must be for capital
investments in surface transportation in-
frastructure. The NOFA contemplates
that some funds may be used to fund
the planning, preparation, or design of
projects (Tiger II Planning Grants). If
Congress makes additional appropriations
for this program, the DOT may issue fu-
ture NOFAs.
SECTION 3. SCOPE
This revenue procedure applies to
corporate taxpayers engaged in a trans-
portation trade or business that receive
grant amounts for capital projects un-
der 49 U.S.C. 24105, 24401et seq.,
and 26106. However, in no case
will this revenue procedure apply to
amounts received for the following:
(1) the cost of National Environmental
Policy Act Documentation, Preliminary
Engineering costs that are not capitalized
for tax purposes, or the cost of a
Service Development Plan as described
in 74 FR 29906, section 2.2; (2) the
cost of developing a State Rail Plan
under 49 U.S.C. 24402(b)(1); or (3) the
first-dollar liability cost for insurance
related to the provision of intercity
passenger rail service under 49 U.S.C.
24404.
Also, this revenue procedure applies
to corporate taxpayers engaged in a trans-
portation trade or business that receive
grant amounts for the costs of capital
investments in surface transportation in-
frastructure under TIGER Discretionary
Grants or under TIGER II Discretionary
Grants. In no case will this revenue pro-
cedure apply to amounts received to pay
the subsidy and administrative costs of
the Transportation Infrastructure Finance
and Innovation Act of 1998 or to amounts
received for TIGER II Planning Grants.
Further, this revenue procedure does
not apply to noncorporate taxpayers.
SECTION 4. PROCEDURE
The Internal Revenue Service will not
challenge a corporate taxpayer’s treatment
of grant amounts received by the corpora-
tion for capital projects under 49 U.S.C.
24105, 24401et seq., or 26106 as a non-
shareholder contribution to the capital of
the corporation under section 118(a) of
the Code if the corporation properly re-
duces the basis of its property under sec-
tion 362(c)(2) and the regulations thereun-
der.
Also, the Service will not challenge a
corporate taxpayer’s treatment of grant
amounts received by the corporation under
TIGER Discretionary Grants for capi-
tal investments in surface transportation
infrastructure or under TIGER II Discre-
tionary Grants for capital investments in
surface transportation infrastructure as a
nonshareholder contribution to the capital
of the corporation under section 118(a)
of the Code if the corporation properly
reduces the basis of its property under
section 362(c)(2) and the regulations
thereunder.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective
November 12, 2010.
SECTION 6. DRAFTING
INFORMATION
The principal author of this rev-
enue procedure is David McDonnell of
the Office of Associate Chief Counsel
(Passthroughs & Special Industries). For
further information regarding this revenue
procedure, contact Mr. McDonnell at
(202) 622–3040 (not a toll-free call).
December 6, 20108152010–49 I.R.B.

Part IV. Items o
fGeneralInterest
Foundations S
tatus of Certain
Organization
s
Announcement
2010–90
The following
organizations have failed
to establish o
r have been unable to main-
tain their st
atus as public charities or as op-
erating foun
dations. Accordingly, grantors
and contribu
tors may not, after this date,
rely on previ
ous rulings or designations
in the Cumul
ative List of Organizations
(Publicati
on 78), or on the presumption
arising fro
m the filing of notices under sec-
tion 508(b)
of the Code. This listing does
notindica
te that the organizations have lost
their stat
us as organizations described in
section 50
1(c)(3), eligible to receive de-
ductible c
ontributions.
Former Pub
lic Charities. The follow-
ing organi
zations (which have been treated
as organi
zations that are not private foun-
dations d
escribed in section 509(a) of the
Code) are
now classified as private foun-
dations:
AARDMORE
Center, Inc., Evansville, IN
Accent Ce
nter for Training,
Baton Rou
ge, LA
Affordab
le California, Los Angeles, CA
African A
merican Foundation of Greater
Miami, In
c., Miami, FL
Albert Je
nkins Sr. Ministries, Inc.,
Greenvil
le, MS
AM Enviro
training, Inc., San Antonio, TX
Angelic T
ouch Medical Mission
Internat
ional, Inc., El Paso, TX
Archeolo
gic Alchemy, Pie Town, NM
Art in the
City, Inc., Markleysburg, PA
Atlanta D
oo-Wopp Association, Inc.,
Fayettev
ille, GA
Atlantic
Outreach and Resource Center,
Los Angel
es, CA
Baby Boom
ers and Beyond, Inc.,
Denham Sp
rings, LA
Balance Y
our Game, Orange Park, FL
Baptist D
ude Ranch for the Elderly,
Victorvi
lle, CA
Battle Pl
an Promotions, Columbus, OH
Ben Terry
Youth Foundation,
Santa Ros
a, CA
Bertrand
Neighborhood Association,
Dallas, T
X
Bishop Mi
nistries, Inc., Pearland, TX
Blessing
4 U Incorporated,
Little Ro
ck, AR
Bridge of Hope
, Inc. (B.O.H., Inc.),
Garden City, G
A
Bridges of Hop
e Community
Development C
enter, Inglewood, CA
Caribbean Sou
rce, McDonough, GA
Century Club, S
cottsdale, AZ
Chapel of Truth
Maranatha,
Philadelphia
,PA
Childrens Dev
elopment Initiative,
Racine, WI
Christian Ren
ewal Ministries,
Spokane, WA
Christians at
the Roundtable of our Lord
and Savior Jes
us Christ, Bishopville, SC
Community Enh
ancement Corp.,
Detroit, MI
Community H E L
P, Inc., Detroit, MI
Community Int
ervention and Assistance
Foundation, S
anger, CA
Computer Care
er Center Scholarship
Fund, Inc., Ga
rden City, NY
Covenant Hous
ing, Inc., Minneapolis, MN
C R Y Outreach,
Florissant, MO
Dads are Doing
Something Foundation,
Ann Arbor, MI
David G. Burne
t Museum, Inc.,
Houston, TX
Division One K
iwanis Foundation, Inc.,
Mitchellvill
e, MD
DM Steps, Los A
ngeles, CA
Doin Us Proud,
Oakland, CA
DonnaP.Jackso
n Ministries, Inc.,
Tulsa, OK
Ebauche Found
ation of the Arts,
New York, NY
Eucalyptus Vi
ew, Inc., Escondido, CA
Family Promis
e, Southgate, MI
Federal City As
sociates, Inc.,
Washington, D
C
Forever Minis
tries, West Covina, CA
Foundation for
Efficient Living,
Los Angeles, C
A
Fraternidad Sa
lvadorena Pro Guasapa,
Fontana, CA
Free Indeed, In
c., Wheat Ridge, CO
Fresh Start of
Monroe, Inc., Azle, TX
Ganesh Balakri
shnan Foundation,
Chanhassen, M
N
Genrecord Onli
ne, Inc., Kansas City, MO
GG&KVentures,
Inc., Prairie View, TX
Good Neighbor P
rogram, Inc.,
Van Nuys, CA
Granbury Educa
tional Access Channel,
Inc., Granbury
,TX
Grand Housing
and Finance, Inc.,
Arlington, TX
Grassroots Ag
ro-Protection Corporation,
Beltsville, M
D
Greater Quinn
Community Development
Corporation,
Detroit, MI
His Ministrie
s, Gladstone, MO
Historic Capi
tol Theatre Restoration
Project, Brow
nsville, TX
Historic Poin
dexter Park Community of
Shalom Zone, J
ackson, MS
Hodari Hope, H
inesville, GA
Homeless Aged
and Youth Awareness of
Texas, Duncan
ville, TX
Honey Bears, I
nc., Los Angeles, CA
I Have Crossed
theRedSeaMinistry,
Houston, TX
Inca Imports,
Inc., Warrenton, VA
Incentive Ranc
h, Inc., Wallis, TX
In the Mighty Na
me of Jesus Christ
Ministry, Can
al Winchester, OH
Jenn Lioy Educ
ation Foundation,
Petaluma, CA
Joshuas House
,Troutdale,OR
Lakeside Optim
ist Youth Foundation,
Lakeside, CA
Lillie Bell Co
rporation, Inc., Atlanta, GA
LincolnPrepBo
ys Basketball Foundation,
San Diego, CA
Living Word of G
od Community Center,
Inc., Fort Way
ne, IN
Loving Care Ass
isted Living Center,
Missouri City
,TX
Mercy Group, C
hesterfield, MO
Metro Sportsm
ens Club, Coleman, MI
Ministries of M
ercy, Baltimore, MD
Mississippi Ri
ver Citizens Commission,
Dakota, MN
MS Delta Housin
g Program, Inc.,
Jackson, MS
Musicians and A
rtists of Collin County,
Inc., Plano, T
X
New Horizon Com
munity Services,
Jesup, GA
New Start Outre
ach Ministries, Inc.,
Long Beach, CA
Ozone Busines
s Gallery, Youngstown, OH
Panhandle Aqu
atics, Inc., Amarillo, TX
Papillon Indus
tries Incorporated,
Springfield,
VA
Peace Center, I
nc., Bowie, MD
People With a Vi
sion, Harrisburg, PA
Priestley Chap
el Outreach Ministries,
Inc., Canton, M
S
2010–49 I.R.B.816December 6, 2010

Reach One Teach One Academy, Inc.,
Charlotte, NC
REC Club, Wareham, MA
Rewards Network, Pittsburgh, PA
Rhea’s Educational Arts Foundation,
Pikesville, MD
San Jeronimo Foundation,
San Geronimo, CA
Second Chance Ministry, Silver City, NC
Shelem Corporation, Troutdale, OR
Sigma Oklahoma Foundation,
Oklahoma City, OK
Sisters Housing, Elk Grove, CA
Spanish Mustang Foundation,
Estancia, NM
Spirit of Life Foundation, Inc.,
Rockville, MD
Strategic Partnership of Michigan, Inc.,
Southfield, MI
Swift Track Club, Inc.,
Farmington Hills, MI
Take the Reins, Inc., Fairfield, CA
Teddy Bear Club Daycare, Inc.,
Brooklyn, NY
Time Out for Christ Christian Missionary,
Stone Mtn, GA
Training Authority Group, Inc.,
Charleston, WV
Tree of Life Aftercare Program,
Louisville, KY
T.W.C. Residential Facility, Inc.,
Pine Bluff, AR
Ujima Mission to Africa, Montclair, NJ
Umueze Visions, Inc., Philadelphia, PA
United Vietnamese Americans,
San Jose, CA
Valley CAN, Fresno, CA
Vision of Fire Ministries, Lodi, CA
Westchester Childrens Museum,
White Plains, NY
Westside International Ministries,
Dover, DE
Whaz-Up Productions, Inc.,
Clarkesville, GA
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as
a private operating foundation, the Inter-
nalRevenueServicewillissuearulingor
determinationletterwiththerevisedclas-
sification as to foundation status. Grantors
and contributors may thereafter rely upon
such ruling or determination letter as pro-
videdinsection1.509(a)–7oftheIncome
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
December 6, 20108172010–49 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2010–49 I.R.B.iDecember 6, 2010

Numerical Finding List
1
Bulletins 2010–27 through 2010–49
Announcements:
2010-43, 2010-27 I.R.B.42
2010-44, 2010-28 I.R.B.54
2010-45, 2010-29 I.R.B.87
2010-46, 2010-29 I.R.B.87
2010-47, 2010-30 I.R.B.173
2010-48, 2010-32 I.R.B.234
2010-49, 2010-34 I.R.B.272
2010-50, 2010-33 I.R.B.260
2010-51, 2010-33 I.R.B.261
2010-52, 2010-36 I.R.B.315
2010-53, 2010-36 I.R.B.323
2010-54, 2010-38 I.R.B.386
2010-55, 2010-37 I.R.B.346
2010-56, 2010-39 I.R.B.398
2010-57, 2010-38 I.R.B.386
2010-58, 2010-38 I.R.B.387
2010-59, 2010-39 I.R.B.399
2010-60, 2010-40 I.R.B.417
2010-61, 2010-40 I.R.B.417
2010-62, 2010-40 I.R.B.417
2010-63, 2010-40 I.R.B.417
2010-64, 2010-40 I.R.B.418
2010-65, 2010-40 I.R.B.418
2010-66, 2010-40 I.R.B.418
2010-67, 2010-40 I.R.B.418
2010-68, 2010-40 I.R.B.418
2010-69, 2010-40 I.R.B.418
2010-70, 2010-40 I.R.B.418
2010-71, 2010-40 I.R.B.418
2010-72, 2010-40 I.R.B.419
2010-73, 2010-40 I.R.B.419
2010-74, 2010-40 I.R.B.419
2010-75, 2010-41 I.R.B.428
2010-76, 2010-41 I.R.B.432
2010-77, 2010-41 I.R.B.433
2010-78, 2010-41 I.R.B.433
2010-79, 2010-42 I.R.B.475
2010-80, 2010-45 I.R.B.638
2010-81, 2010-45 I.R.B.638
2010-82, 2010-42 I.R.B.476
2010-84, 2010-44 I.R.B.603
2010-85, 2010-44 I.R.B.604
2010-86, 2010-44 I.R.B.604
2010-87, 2010-43 I.R.B.557
2010-88, 2010-47 I.R.B.753
2010-89, 2010-46 I.R.B.669
2010-90, 2010-50 I.R.B.816
Notices:
2010-48, 2010-27 I.R.B.9
2010-49, 2010-27 I.R.B.10
Notices— Continued:
2010-50, 2010-27 I.R.B.12
2010-51, 2010-29 I.R.B.83
2010-52, 2010-30 I.R.B.88
2010-53, 2010-31 I.R.B.182
2010-54, 2010-40 I.R.B.403
2010-55, 2010-33 I.R.B.253
2010-56, 2010-33 I.R.B.254
2010-57, 2010-34 I.R.B.267
2010-58, 2010-37 I.R.B.326
2010-59, 2010-39 I.R.B.396
2010-60, 2010-37 I.R.B.329
2010-61, 2010-40 I.R.B.408
2010-62, 2010-40 I.R.B.411
2010-63, 2010-41 I.R.B.420
2010-64, 2010-41 I.R.B.421
2010-65, 2010-41 I.R.B.424
2010-66, 2010-42 I.R.B.437
2010-67, 2010-43 I.R.B.529
2010-68, 2010-44 I.R.B.576
2010-69, 2010-44 I.R.B.576
2010-70, 2010-44 I.R.B.576
2010-72, 2010-46 I.R.B.661
2010-73, 2010-46 I.R.B.662
2010-74, 2010-46 I.R.B.663
2010-75, 2010-48 I.R.B.781
2010-76, 2010-47 I.R.B.712
2010-78, 2010-49 I.R.B.808
2010-79, 2010-49 I.R.B.809
Proposed Regulations:
REG-138637-07, 2010-44 I.R.B.581
REG-132554-08, 2010-48 I.R.B.783
REG-139343-08, 2010-33 I.R.B.256
REG-119921-09, 2010-45 I.R.B.626
REG-137486-09, 2010-46 I.R.B.668
REG-142800-09, 2010-44 I.R.B.580
REG-144762-09, 2010-45 I.R.B.637
REG-151605-09, 2010-31 I.R.B.184
REG-153340-09, 2010-42 I.R.B.469
REG-112841-10, 2010-27 I.R.B.41
REG-118412-10, 2010-29 I.R.B.85
REG-119046-10, 2010-40 I.R.B.415
REG-120391-10, 2010-35 I.R.B.310
REG-120399-10, 2010-32 I.R.B.239
REG-125592-10, 2010-43 I.R.B.556
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
2010-27, 2010-31 I.R.B.183
2010-28, 2010-34 I.R.B.270
2010-29, 2010-35 I.R.B.309
2010-30, 2010-36 I.R.B.316
2010-31, 2010-40 I.R.B.413
2010-32, 2010-36 I.R.B.320
Revenue Procedures— Continued:
2010-33, 2010-38 I.R.B.347
2010-34, 2010-41 I.R.B.426
2010-35, 2010-42 I.R.B.438
2010-36, 2010-42 I.R.B.439
2010-37, 2010-42 I.R.B.440
2010-38, 2010-43 I.R.B.530
2010-39, 2010-42 I.R.B.459
2010-40, 2010-46 I.R.B.663
2010-41, 2010-48 I.R.B.781
2010-42, 2010-47 I.R.B.715
2010-43, 2010-47 I.R.B.738
2010-44, 2010-49 I.R.B.811
2010-45, 2010-49 I.R.B.813
2010-46, 2010-49 I.R.B.814
Revenue Rulings:
2010-18, 2010-27 I.R.B.1
2010-19, 2010-31 I.R.B.174
2010-20, 2010-36 I.R.B.312
2010-21, 2010-39 I.R.B.388
2010-22, 2010-39 I.R.B.388
2010-23, 2010-39 I.R.B.388
2010-24, 2010-40 I.R.B.400
2010-25, 2010-44 I.R.B.571
2010-26, 2010-44 I.R.B.573
2010-27, 2010-45 I.R.B.620
2010-28, 2010-49 I.R.B.804
Tax Conventions:
2010-48, 2010-32 I.R.B.234
2010-52, 2010-36 I.R.B.315
Treasury Decisions:
9486, 2010-27 I.R.B.3
9487, 2010-28 I.R.B.48
9488, 2010-28 I.R.B.51
9489, 2010-29 I.R.B.55
9490, 2010-31 I.R.B.176
9491, 2010-32 I.R.B.186
9492, 2010-33 I.R.B.242
9493, 2010-35 I.R.B.273
9494, 2010-43 I.R.B.500
9495, 2010-43 I.R.B.477
9496, 2010-43 I.R.B.484
9497, 2010-44 I.R.B.558
9498, 2010-45 I.R.B.605
9499, 2010-45 I.R.B.622
9500, 2010-46 I.R.B.649
9501, 2010-46 I.R.B.651
9502, 2010-46 I.R.B.641
9503, 2010-47 I.R.B.706
9504, 2010-47 I.R.B.670
9505, 2010-48 I.R.B.755
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin
2010–26, dated June 28, 2010.
December 6, 2010ii2010–49 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–49
Notices:
96-53
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2003-19
Revoked by
Notice 2010-53, 2010-31 I.R.B.182
2004-2
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2004-50
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2005-90
Supplemented by
Notice 2010-65, 2010-41 I.R.B.424
2006-69
Amplified by
Notice 2010-59, 2010-39 I.R.B.396
2008-51
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2008-52
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2009-47
Obsoleted by
Rev. Proc. 2010-28, 2010-34 I.R.B.270
2009-80
Corrected by
Ann. 2010-59, 2010-39 I.R.B.399
2009-90
Superseded by
Notice 2010-54, 2010-40 I.R.B.403
Proposed Regulations:
REG-115037-00
Withdrawn by
Ann. 2010-60, 2010-40 I.R.B.417
REG-146893-02
Withdrawn by
Ann. 2010-60, 2010-40 I.R.B.417
Revenue Procedures:
81-18
Obsoleted by
Rev. Proc. 2010-27, 2010-31 I.R.B.183
Revenue Procedures— Continued:
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
2008-33
Superseded by
Rev. Proc. 2010-42, 2010-47 I.R.B.715
2008-49
Superseded by
Rev. Proc. 2010-38, 2010-43 I.R.B.530
2008-52
Modified by
Rev. Proc. 2010-44, 2010-49 I.R.B.811
T.D. 9504, 2010-47 I.R.B.670
2009-18
Obsoleted in part by
Rev. Proc. 2010-25, 2010-27 I.R.B.16
2009-30
Superseded by
Rev. Proc. 2010-26, 2010-30 I.R.B.91
2009-35
Superseded by
Rev. Proc. 2010-33, 2010-38 I.R.B.347
2009-46
Superseded by
Rev. Proc. 2010-37, 2010-42 I.R.B.440
2009-47
Superseded by
Rev. Proc. 2010-39, 2010-42 I.R.B.459
2009-48
Superseded by
Rev. Proc. 2010-43, 2010-47 I.R.B.738
2009-50
Modified by
Rev. Proc. 2010-35, 2010-42 I.R.B.438
2010-3
Modified by
Notice 2010-62, 2010-40 I.R.B.411
Revenue Rulings:
67-436
Obsoleted by
T.D. 9504, 2010-47 I.R.B.670
2003-102
Obsoleted by
Rev. Rul. 2010-23, 2010-39 I.R.B.388
Treasury Decisions:
9487
Corrected by
Ann. 2010-50, 2010-33 I.R.B.260
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
2010–49 I.R.B.iiiDecember 6, 2010

December 6, 20102010–49 I.R.B.

INTERNAL REVENUE BULLETIN
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