Internal Revenue Bulletin 2006-14 (PDF rendition): IRS Revenue Rulings

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
6-14
April 3, 2006
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
Ct. D. 2082, page 697.
Sale of seized real property by IRS; federal tax delin-
quency.The Supreme Court holds that the national interest in
providing a federal forum for federal tax litigation is sufficiently
substantial to support the exercise of federal-question jurisdic-
tion over the disputed issue on removal.Grable & Sons Metal
Products, Inc.v.Darue Engineering & Manufacturing.
Rev. Rul.
2006–16, page 694.
Joint and s
everal liability; relief under section 6015.This
ruling di
scusses the issue of whether a taxpayer is precluded
from rais
ing a request for relief from joint and several liability
under sec
tion 6015 by virtue of a previous Chapter 7 bank-
ruptcy ca
se in which the Service filed a proof of claim, but the
bankrupt
cy court did not make an actual determination of tax
liabili
ty.
Rev. Rul. 2006–22, page 687.
Federal rates; adjusted federal rates; adjusted federal
long-termrateandthelong-termexemptrate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for April 2006.
T.D. 9245, page 696.
Final regulations under section 6103(j) of the Code incorporate
andclarifythephrase“returninformation reflected on returns”
in conformance with the terms of section 6103(j)(5), which pro-
vides for limited disclosures of returns and return information
in connection with the census of agriculture.
T.D. 9253, page 689.
The Treasury Department and the IRS issued comprehen-
sive withholding and reporting regulations (T.D. 8734 and
T.D. 8881) that became effective on January 1, 2001. In
Notice 2001–4, 2001–1 C.B. 267; Notice 2001–11, 2001–1
C.B. 464; and Notice 2001–43, 2001–2 C.B. 72; the Treasury
Department and the IRS announced the intention to amend
the final regulations. These final regulations implement certain
changes announced in those notices and other changes. In
addition, these final regulations provide guidance under sec-
tion 411 of the American Jobs Act of 2004. Notice 2001–11
and certain sections of Notices 2001–4 and 2001–43 super-
seded.
Notice 2006–34, page 705.
The Treasury Department and the Service request information
that will be considered in formulating guidance on the income
tax treatment of cross licensing arrangements.
Notice 2006–35, page 708.
This notice modifies Announcement 2000–48, 2000–1 C.B.
1243, and Notice 2001–43, 2001–2 C.B. 72, by providing
that, generally, a branch of a financial institution may not act
as a qualified intermediary (QI) after December 31, 2006, in
a country that does not have approved know-your-customer
(KYC) rules. Announcement 2000–48 and Notice 2001–43
modified.
(Continued on the next page)
Announcements of Disbarments and Suspensions begin on page 729.
Fi
nding Lists begin on page ii.

TAX CONVENTIONS
Announcement 2006–21, page 703.
This announcement sets forth a copy of the mutual agreement
entered into on February 15, 2006, by the Competent Author-
ities of the United States and Spain, regarding the treatment
of limited liability companies (LLCs), S corporations, and other
business entities treated as partnerships or disregarded en-
tities for U.S. tax purposes under the U.S.-Spain income tax
treaty and protocol.
ADMINISTRATIVE
Rev. Rul. 2006–16, page 694.
Joint and several liability; relief under section 6015.This
ruling discusses the issue of whether a taxpayer is precluded
from raising a request for relief from joint and several liability
under section 6015 by virtue of a previous Chapter 7 bank-
ruptcy case in which the Service filed a proof of claim, but the
bankruptcy court did not make an actual determination of tax
liability.
Rev. Proc. 2006–17, page 709.
This procedure provides issuers of qualified mortgage bonds
(QMBs) and qualified mortgage credit certificates (MCCs) with
average area purchase price safe-harbors for statistical areas
in the United States and with a nationwide average purchase
price for residences in the United States for purposes of the
QMB rules under section 143 of the Code and the MCC rules
under section 25. Rev. Proc. 2005–15 obsoleted in part.
April 3, 20062006–14 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.
2006–14 I.R.B.April 3, 2006

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 42.—Low-Income
Housing Credit
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of April 2006. See Rev.
Rul. 2006-22, page 687.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of April 2006. See Rev. Rul.
2006-22, page 687.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 4
67.—Certain
Payments
for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
Federal short-term, mid-term, and long-term rates
are set forth for the month of April 2006. See Rev.
Rul. 2006-22, page 687.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of April 2006. See Rev.
Rul. 2006-22, page 687.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Sectio
n846.—Discounted
Unpaid
Losses Defined
The adj
usted applicable federal short-term, mid-
term, a
nd long-term rates are set forth for the month
of Apri
l 2006. See Rev. Rul. 2006-22, page 687.
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382, 642, 1274, 1288, and other
sections of the Code, tables set forth the
rates for April 2006.
Rev. Rul. 2006–22
This revenue ruling provides vari-
ous prescribed rates for federal income
tax purposes for April 2006 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
for purposes of section 1274(d) of the
Internal Revenue Code. Table 2 contains
the short-term, mid-term, and long-term
adjusted applicable federal rates (adjusted
AFR) for the current month for purposes
of section 1288(b). Table 3 sets forth the
adjusted federal long-term rate and the
long-term tax-exempt rate described in
section 382(f). Table 4 contains the ap-
propriate percentages for determining the
low-income housing credit described in
section 42(b)(2) for buildings placed in
service during the current month. Finally,
Table 5 contains the federal rate for deter-
mining the present value of an annuity, an
interest for life or for a term of years, or
a remainder or a reversionary interest for
purposes of section 7520.
2006–14 I.R.B.687April 3, 2006

REV. RUL. 2006–
22 TABLE 1
Applicable Federal Rates (AFR) for April 2006
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR4.77%4.71%4.68%4.66%
110% AFR5.25%5.18%5.15%5.12%
120% AFR5.73%5.65%5.61%5.58%
130% AFR6.21%6.12%6.07%6.04%
Mid-term
AFR4.72%4.67%4.64%4.63%
110% AFR5.21%5.14%5.11%5.09%
120% AFR5.68%5.60%5.56%5.54%
130% AFR6.16%6.07%6.02%5.99%
150% AFR7.13%7.01%6.95%6.91%
175% AFR8.34%8.17%8.09%8.03%
Long-te
rm
AFR4.79%4.73%4.70%4.68%
110% AFR5.27%5.20%5.17%5.14%
120% AFR5.76%5.68%5.64%5.61%
130% AFR6.24%6.15%6.10%6.07%
REV. RUL. 2006–22 TABLE 2
Adjusted AFR for April 2006
Perio
d for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted
AFR
3.33%3.30%3.29%3.28%
Mid-term adjusted AFR3.58%3.55%3.53%3.52%
Long-term adjusted
AFR
4.25%4.21%4.19%4.17%
RE
V. RUL. 2006–22 TABLE 3
Rates Under Section 382 for April 2006
Adjusted federal long-term rate for the current month4.25%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)4.26%
REV. RUL. 2006–22 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for April 2006
Appropriate percentage for the 70% present value low-income housing credit8.11%
Appropriate percentage for the 30% present value low-income housing credit3.47%
April 3, 20066882006–14 I.R.B.

REV. RUL. 2006–
22 TABLE 5
Rate Under Section 7520 for April 2006
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest5.6%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 1441.—Withholding
of Tax on Nonresident Aliens
26 CFR 1.1441–1: Requirement for the deduction
and withholding of tax on payments to foreign per-
sons.
T.D. 9253
DEPARTMENT OF
THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
Revisions to Regulations
Relating to Withholding of Tax
on Certain U.S. Source Income
Paid to Foreign Persons and
Revisions of Information
Reporting Regulations
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains fi-
nal regulations relating to the withholding
of tax under sections 1441 and 1442 on
certain U.S. source income paid to foreign
persons and related requirements govern-
ing collection, deposit, refunds, and credits
of withheld amounts under sections 1461
through 1463. Additionally, this document
contains final regulations under sections
6049 and 6114. These regulations affect
persons making payments of U.S. source
income to foreign persons and foreign per-
sons claiming benefits under a U.S. in-
come tax treaty.
DATES:Effective Date:These regulations
are effective March 14, 2006. The removal
of §1.1441–1(e)(4)(vii)(G) is effective as
of January 1, 2001.
FOR FURTHER INFORMATION
CONTACT: Ethan Atticks, (202)
622–3840 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information con-
tained in this final rule have been previ-
ously reviewed and approved by the Office
of Management and Budget in accordance
with the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)) under control number
1545–1484.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
control number assigned by the Office 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
In Treasury Decision 8734, 1997–2
C.B. 109 [62 FR 53387], the Treasury De-
partment and the IRS issued comprehen-
sive regulations under chapter 3 (sections
1441–1464) and subpart B of Part III of
Subchapter A of chapter 61 (sections 6041
through 6050T) of the Internal Revenue
Code (Code). Those regulations were
amended by T.D. 8804, 1999–1 C.B. 793
[63 FR 72183], T.D. 8856, 2000–1 C.B.
298 [64 FR 73408], T.D. 8881, 2000–1
C.B. 1158 [65 FR 32152], and T.D. 9023,
2002–2 C.B. 955 [67 FR 70310] (collec-
tively the current regulations). The current
regulations are generally effective as of
January 1, 2001.
In Notice 2001–4, 2001–1 C.B. 267,
Notice 2001–11, 2001–1 C.B. 464, and
Notice 2001–43, 2001–2 C.B. 72, the
Treasury Department and the IRS an-
nounced the intention to amend the current
regulations under sections 1441, 6049 and
6114 to address the matters discussed in
those notices.
On March 30, 2005, the IRS and
Treasury published a notice of proposed
rulemaking (REG–125443–01, 2005–16
I.R.B. 912) in theFederal Register(70
FR 16189) (hereinafter the proposed reg-
ulations). The proposed regulations con-
tained provisions to implement certain
changes announced in those notices and
other changes.
No public hearing regarding the pro-
posed regulations was requested or held.
However, certain written comments were
received. After consideration of the
comments, the proposed regulations are
adopted as revised by this Treasury deci-
sion.
Summary of Comments
These final regulations finalize the
provisions of the proposed regulations
with only two areas of modification. The
comments received andthe modifications
made in response to those comments are
described below.
A.Taxpayer Identification Number (TIN)
Requirement for Certain Foreign Grantor
Trusts
Section 1.1441–1(e)(4)(vii)(G) pro-
vides that a TIN must be stated on a
withholding certificate from a person rep-
resenting to be a foreign grantor trust
with 5 or fewer grantors. Generally,
if no TIN is provided, the withholding
certificate is considered invalid. See
§1.1441–1(e)(2)(ii).
The proposed regulations eliminated
this TIN requirement for withholding
certificates provided by such persons to
qualified intermediaries (QIs), but retained
it for withholding certificates provided by
2006–14 I.R.B.689April 3, 2006

such persons to other withholding agents
if the certificate wasexecuted on or before
December 31, 2003.
Commentators requested that these fi-
nal regulations adopt the provisions of the
proposed regulations that remove the TIN
requirement but with an effective date that
applies to certificates executed and pro-
vided to all withholding agents, not just
QIs, on or after January 1, 2001, the effec-
tive date of the current regulations. The
commentators state that the retroactive
effective date for withholding certificates
provided to the other withholding agents
is consistent with the IRS and Treasury’s
recognition that the TIN requirement in
the current regulations is not serving to
enhance enforcement objectives. Further,
the commentators state that for adminis-
trative reasons the effective dates should
be consistent whether or not the withhold-
ing certificate is provided to a QI or other
withholding agent. The IRS and Treasury
agree with this comment. Accordingly,
under these final regulations, a withhold-
ing certificate executed on or after January
1, 2001, and provided to a QI or other
withholding agent by a person represent-
ing to be a foreign grantor trust with five
or fewer grantors does not need to state a
TIN for such certificate to be valid.
B.Reporting of Treaty-based Return
Positions
Section 301.6114–1(a) provides that,
if a taxpayer takes a return position that
a tax treaty overrules or modifies any
provision of the Code and thereby effects
a reduction of any tax at any time, the
taxpayer must disclose that return posi-
tion, either on a statement attached to the
return or on a return filed for the pur-
pose of making such disclosure. When
applicable, §301.6114–1(d) generally re-
quires a taxpayer to attach Form 8833,
Treaty-Based Return Position Disclosure
Under Section 6114 or 7701(b), to its
U.S. Federal income tax return. Section
301.6114–1(b) states that reporting is re-
quired unless it is expressly waived and
provides a nonexclusive list of particular
positions for which reporting is required.
Section 301.6114–1(c) then provides a list
of specific exceptions from the general
reporting requirements of §301.6114–1(a)
and (b).
The proposed regulations provided that
reporting under §301.6114–1(b)(4)(ii) is
required only for the positions specifically
described in paragraphs (b)(4)(ii)(A) and
(B), or (C) or (D) of that section. Further,
the proposed regulations provided that
reporting under §301.6114–1(b)(4)(ii)(D)
is waived for taxpayers that are not indi-
viduals or States and that receive amounts
of income subject to withholding that
do not exceed $10,000 in the aggregate
for the taxable year. See Prop. Reg.
§301.6114–1(c)(1)(i), and (7).
Commentators suggested that the
$10,000 threshold applicable to tax-
payers that are not individuals or States
should be increased to $500,000, the
threshold amount for reporting under
§301.6114–1(b)(4)(ii)(C) (addressing pay-
ments to a related foreign person where
benefits are claimed under a treaty that
contains a limitation on benefits article).
The commentators noted that entities typ-
ically have substantially higher levels of
investment as compared to individuals and
therefore a higher threshold is warranted.
The commentators concluded that the
administrative burden placed on these en-
tities by the regulations is not appropriate
when considering the benefit to the gov-
ernment by the disclosure. As a result, the
commentators believed that the exception
should be modified.
In addition, the commentators sug-
gested that reporting be waived for pension
funds and certain other persons required
to report under §301.6114–1(b)(4)(ii)(D),
which requires reporting whenever a treaty
imposes “any condition” in addition to a
person’s residence in the treaty country
for entitlement to treaty benefits. The
commentators stated that because, for ex-
ample, an income tax treaty may condition
a pension fund’s entitlement to a reduced
rate of taxation on dividends on the pen-
sion fund not being engaged in a trade
or business, and because a pension fund
rarely will violate such a condition, from
a practical standpoint the sole requirement
for entitlement to treaty benefits is the
residence of the pension fund. Therefore,
the commentators suggested that requiring
the pension fund to file an income tax
return and make a treaty based disclosure
of its position imposes an unnecessary
administrative burden. Accordingly, the
commentators believed that it was ap-
propriate to interpret the regulations such
that the trade or business requirement
described above with respect to pension
funds is not “any condition” described in
§301.6114–1(b)(4)(ii)(D). To clarify this
point, the commentators requested that
the final regulations waive reporting for
pension funds.
Commentators also requested that
§301.6114–1(c)(6), which waives report-
ing for amounts required to be reported
under section 6038A on a Form 5472, “In-
formation Return of a 25% Foreign-Owned
U.S. Corporation or a Foreign Corpora-
tion Engaged in a U.S. Trade or Business
(under sections 6038A and 6038(c) of the
Internal Revenue Code),” to the extent
permitted under the form or accompany-
ing instructions, be activated by including
such permission in the form or instruc-
tions.
The IRS and Treasury considered the
comments discussed above, as well as the
general bases for requiring reporting under
section 6114. The IRS and Treasury agree
that reporting under section 6114 should
not be required in certain circumstances
where the payment is properly reported
on Form 1042–S, “Foreign Person’s U.S.
Source Income Subject to Withholding,”
and the withholding agent is a U.S. per-
son, or a foreign person that has entered
into an agreement that provides for IRS
audit. Thus, in response to the comments
described above, the following amend-
ments are made to the waiver provisions
of §301.6114–1(c).
First, rather than activating the excep-
tion for amounts required to be reported
under section 6038A on Form 5472, para-
graph (c)(6) of the regulations is revised
to replace this provision regarding Form
5472 with a provision waiving reporting
for amounts properly reported on Form
1042–S by a withholding agent that is a
reporting corporation within the meaning
of section 6038A(a). Second, a new para-
graph (c)(7) is added to provide that re-
porting is waived for amounts properly re-
ported on Form 1042–S by a withholding
agent that is a U.S. financial institution, a
QI, or a withholding foreign partnership
(WP) or withholding foreign trust (WT)
if the beneficial owner is a direct account
holder of the U.S. financial institution or
QI or a direct beneficiary or owner of the
WP or WT. Third, a new paragraph (c)(8)
is added which replaces the provision in
the proposed regulations (see Prop. Reg.
April 3, 20066902006–14 I.R.B.

§301.6114–1(c)(7)) waiving reporting for
taxpayers that are not individuals or States
and that receive amounts of income sub-
ject to withholding that do not exceed the
$10,000 threshold. New paragraph (c)(8)
contains a waiver for taxpayers that are not
individuals or States that receive amounts
that have been properly reported on Form
1042–S, do not exceed$500,000, and are
not received through an intermediary or
flow-through entity.
Notwithstanding the discussion above,
the final regulations provide that the
waivers from reportingin paragraph (c)(6),
(7) and (8) do not apply to the extent that
reporting is specifically required under the
instructions to Form 8833.
Finally, these final regulations
clarify that reporting under section
301.6114–1(b)(4)(ii) is required only for
the positions specifically described in
paragraphs (b)(4)(ii)(A) and (B), or (C) or
(D).
Effect on Other Documents
Sections (V)(C), (D), and (E) of No-
tice 2001–4, 2001–1 C.B. 267, Notice
2001–11, 2001–1 C.B. 464, and Sections
2 and 3 of Notice 2001–43, 2001–2 C.B.
72, are superseded as of March 14, 2006.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations, and, be-
cause the regulations do not impose a new
collection of information on small entities,
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to sec-
tion 7805(f) of the Code, the proposed reg-
ulations preceding these regulations were
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administration
for comment on their impact on small busi-
ness.
Drafting Information
The principal author of these proposed
regulations is Ethan Atticks, Office of
Associate Chief Counsel (International).
However, other personnel from the IRS
and Treasury Department participated in
their development.
*****
Adoption of Am
endments to the
Regulations
Accordingly, 26 CFR parts 1 and 301
are amended as follows:
PART 1 — INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1441–1 is amended as
follows:
1. Paragraph (b)(2)(iv)(A) is revised.
2. Paragraph (b)(3)(iii)(E) is added.
3. Paragraph (c)(30) is added.
4. Paragraph (e)(4)(vii)(G) is removed
and paragraph (e)(4)(vii)(H) and (I) are re-
designated as paragraph (e)(4)(vii)(G) and
(H) respectively.
The revisions and additions read as fol-
lows:
§1.1441–1 Requirement for the deduction
and withholding of tax on payments to
foreign persons.
*****
(b) * * *
(2) * * *
(iv)Payments to a U.S. branch of cer-
tain foreign banks or foreign insurance
companies—(A)U.S. branch treated as a
U.S. person in certain cases.Apayment
toaU.S.branchofaforeignpersonisa
payment to a foreign person. However,
a U.S. branch described in this para-
graph (b)(2)(iv)(A) and a withholding
agent (including another U.S. branch de-
scribed in this paragraph (b)(2)(iv)(A))
may agree to treat the branch as a U.S.
person for purposes of withholding on
specified payments to the U.S. branch.
Notwithstanding the preceding sentence,
a withholding agent making a payment
to a U.S. branch treated as a U.S. person
under this paragraph (b)(2)(iv)(A) shall
not treat the branch as a U.S. person for
purposes of reporting the payment made to
the branch. Therefore, a payment to such
U.S. branch shall be reported on Form
1042–S under §1.1461–1(c). Further, a
U.S. branch that is treated as a U.S. person
under this paragraph (b)(2)(iv)(A) shall
not be treated as a U.S. person for pur-
poses of the withholding certificate it may
provide to a withholding agent. There-
fore, the U.S. branch must furnish a U.S.
branch withholding certificate on Form
W–8 as provided in paragraph (e)(3)(v)
of this section and not a Form W–9. An
agreement to treat a U.S. branch as a U.S.
person must be evidenced by a U.S. branch
withholding certificate described in para-
graph (e)(3)(v) of this section furnished
by the U.S. branch to the withholding
agent. A U.S. branch described in this
paragraph (b)(2)(iv)(A) is any U.S. branch
of a foreign bank subject to regulatory
supervision by the Federal Reserve Board
or a U.S. branch of a foreign insurance
company required to file an annual state-
ment on a form approved by the National
Association of Insurance Commissioners
with the Insurance Department of a State,
aTerritory,ortheDistrictofColumbia.In
addition, a financial institution organized
in a possession of the United States will
be treated as a U.S. branch for purposes of
this paragraph (b)(2)(iv)(A). The Internal
Revenue Service (IRS) may approve a
list of U.S. branches that may qualify for
treatment as a U.S. person under this para-
graph (b)(2)(iv)(A) (see §601.601(d)(2)
of this chapter). See §1.6049–5(c)(5)(vi)
for the treatment of U.S. branches as
U.S. payors if they make a payment that
is subject to reporting under chapter 61
of the Internal Revenue Code. Also see
§1.6049–5(d)(1)(ii) for the treatment of
U.S. branches as foreign payees under
chapter 61 of the Internal Revenue Code.
*****
(3) * * *
(iii) * * *
(E)Certain payments for services.A
payment for services is presumed to be
made to a foreign person if —
(1) The payee is an individual;
(2) The withholding agent does not
know, or have reason to know, that the
payee is a U.S. citizen or resident;
(3) The withholding agent does not
know, or have reason to know, that the in-
come is (or may be) effectively connected
with the conduct of a trade or business
within the United States; and
(4) All of the services for which the
payment is made were performed by the
payee outside of the United States.
*****
2006–14 I.R.B.691April 3, 2006

(c) * * *
(30)Possessions of the United States.
For purposes of the regulations under
chapters 3 and 61 of the Internal Rev-
enue Code,possessions of the United
Statesmeans Guam, American Samoa, the
Northern Mariana Islands, Puerto Rico,
and the Virgin Islands.
*****
Par. 3. Section 1.1441–3 is amended
by revising paragraphs (c)(3) and (e)(2) to
read as follows:
§1.1441–3 Determination of amounts to
be withheld.
*****
(c) * * *
(3)Special rules in the case of dis-
tributions from a regulated investment
company—(i)General rule. If the amount
of any distributions designated as being
subject to section 852(b)(3)(C) or 5(A),
or 871(k)(1)(C) or(2)(C), exceeds the
amount that may be designated under
those sections for the taxable year, then no
penalties will be asserted for any resulting
underwithholding if the designations were
based on a reasonable estimate (made
pursuant to the same procedures as de-
scribed in paragraph (c)(2)(ii)(A) of this
section) and the adjustments to the amount
withheld are made within the time period
described in paragraph (c)(2)(ii)(B) of this
section. Any adjustment to the amount
oftaxdueandpaidtotheIRSbythe
withholding agent as a result of under-
withholding shall not be treated as a distri-
bution for purposes of section 562(c) and
the regulations thereunder. Any amount
of U.S. tax that a foreign shareholder is
treated as having paid on the undistributed
capital gain of a regulated investment
company under section 852(b)(3)(D) may
be claimed by the foreign shareholder as a
credit or refund under §1.1464–1.
(ii)Reliance by intermediary on rea-
sonable estimate. For purposes of de-
termining whether a payment is a distri-
bution designated as subject to section
852(b)(3)(C) or (5)(A), or 871(k)(1)(C)
or (2)(C), a withholding agent that is not
the distributing regulated investment com-
pany may, absent actual knowledge or
reason to know otherwise, rely on the des-
ignations that the distributing company
represents have been made in accordance
with paragraph (c)(3)(i) of this section.
Failure by the withholding agent to with-
hold the required amount due to a failure
by the regulated investment company to
reasonably estimate the required amounts
or to properly communicate the relevant
information to the withholding agent shall
be imputed to the distributing company.
In such a case, the IRS may collect from
the distributing company any underwith-
held amount and subject the company to
applicable interest and penalties as a with-
holding agent.
*****
(e) * * *
(2)Payments in foreign currency.Ifthe
amount subject to withholding tax is paid
in a currency other than the U.S. dollar,
the amount of withholding under section
1441 shall be determined by applying the
applicable rate of withholding to the for-
eign currency amountand converting the
amount withheld into U.S. dollars on the
date of payment at the spot rate (as defined
in §1.988–1(d)(1)) in effect on that date. A
withholding agent making regular or fre-
quent payments in foreign currency may
use a month-end spot rate or a monthly av-
erage spot rate. In addition, such a with-
holding agent may use the spot rate on the
date the amount of tax is deposited (within
the meaning of §1.6302–2(a)), provided
that such deposit is made within seven
days of the date of the payment giving rise
to the obligation to withhold. A spot rate
convention must be used consistently for
all non-dollar amounts withheld and from
year to year. Such convention cannot be
changed without the consent of the Com-
missioner. The U.S. dollar amount so de-
termined shall be treated by the beneficial
owner as the amount of tax paid on the in-
come for purposes of determining the final
U.S. tax liability and, if applicable, claim-
ing a refund or credit of tax.
*****
Par. 4. In §1.1441–6, paragraph (b)(1)
is revised to read as follows:
§1.1441–6 Claim of reduced withholding
under an income tax treaty.
*****
(b)Reliance on claim of reduced with-
holding under an income tax treaty—(1)
In general. The withholding imposed un-
der section 1441, 1442, or 1443 on any
paymenttoaforeignpersoniseligiblefor
reduction under the terms of an income
tax treaty only to the extent that such pay-
ment is treated as derived by a resident
of an applicable treaty jurisdiction, such
resident is a beneficial owner, and all other
requirements for benefits under the treaty
are satisfied. See section 894 and the reg-
ulations thereunder to determine whether
a resident of a treaty country derives the
income. Absent actual knowledge or rea-
son to know otherwise, a withholding
agent may rely on a claim that a beneficial
owner is entitled to a reduced rate of with-
holding based upon an income tax treaty
if, prior to the payment, the withholding
agent can reliably associate the payment
with a beneficial owner withholding cer-
tificate, as described in §1.1441–1(e)(2),
that contains the information necessary
to support the claim, or, in the case of
a payment of income described in para-
graph (c)(2) of this section made outside
the United States with respect to an off-
shore account, documentary evidence
described in paragraphs (c)(3), (4), and (5)
of this section. See §1.6049–5(e) for the
definition of payments made outside the
United States and §1.6049–5(c)(1) for the
definition of offshore account. For pur-
poses of this paragraph (b)(1), a beneficial
owner withholding certificate described in
§1.1441–1(e)(2)(i) contains information
necessary to support the claim for a treaty
benefit only if it includes the beneficial
owner’s taxpayer identifying number (ex-
cept as otherwise provided in paragraph
(c)(1) of this section and §1.1441–6(g))
and the representations that the beneficial
owner derives the income under section
894 and the regulations thereunder, if
required, and meets the limitation on ben-
efits provisions of the treaty, if any. The
withholding certificate must also contain
any other representations required by this
section and any other information, certifi-
cations, or statements as may be required
by the form or accompanying instruc-
tions in addition to, or in place of, the
information and certifications described
in this section. Absent actual knowledge
or reason to know that the claims are
incorrect (and subject to the standards
of knowledge in §1.1441–7(b)), a with-
holdingagentmayrelyontheclaims
made on a withholding certificate or on
documentary evidence. A withholding
agent may also rely on the information
contained in a withholding statement pro-
vided under §§1.1441–1(e)(3)(iv) and
April 3, 20066922006–14 I.R.B.

1.1441–5(c)(3)(iv) and (e)(5)(iv) to deter-
mine whether the appropriate statements
regarding section 894 and limitation on
benefits have been provided in connection
with documentary evidence. The Inter-
nal Revenue Service (IRS) may apply the
provisions of §1.1441–1(e)(1)(ii)(B) to
notify the withholding agent that the cer-
tificate cannot be relied upon to grant
benefits under an income tax treaty.
See §1.1441–1(e)(4)(viii) regarding re-
liance on a withholding certificate by a
withholding agent. The provisions of
§1.1441–1(b)(3)(iv) dealing with a 90-day
grace period shall apply for purposes of
this section.
*****
Par. 5. Section 1.6049–5 is amended as
follows:
1. Paragraph (c)(1) is revised.
2. Paragraphs (c)(5)(i), (ii), (iii), (iv),
(v) and (vi) are redesignated as paragraphs
(c)(5)(i)(A), (B), (C), (D), (E), and (F), re-
spectively.
3. A new heading is added to paragraph
(c)(5)(i).
4. New paragraph (c)(5)(ii) is added.
The revisions and additions read as fol-
lows:
§1.6049–5 Interest and original issue
discount subject to reporting after
December 31, 1982.
*****
(c)Applicable rules—(1)Documentary
evidence for offshore accounts and for
possessions accounts. A payor may rely
on documentary evidence described in this
paragraph (c)(1) instead of a beneficial
owner withholding certificate described
in §1.1441–1(e)(2)(i) in the case of a
payment made outside the United States
to an offshore account, in the case of a
payment made to a U.S. possessions ac-
count or, in the case of broker proceeds
described in §1.6045–1(c)(2), in the case
of a sale effected outside the United States
(as defined in §1.6045–1(g)(3)(iii)(A)).
For purposes of this paragraph (c)(1), an
offshore accountmeans an account main-
tained at an office or branch of a U.S. or
foreign bank or other financial institution
at any location outside the United States
(i.e., other than in any of the fifty States
or the District of Columbia) and outside
of possessions of the United States. Thus,
for example, an account maintained in a
foreign country at a branch of a U.S. bank
or of a foreign subsidiary of a U.S. bank is
an offshore account. For purposes of this
paragraph (c)(1), aU.S. possessions ac-
countmeans an account maintained at an
office or branch of a U.S. or foreign bank
or other financial institution located within
a possession of the United States. For the
definition of a payment made outside the
United States, see paragraph (e) of this
section. A payor may rely on documen-
tary evidence if the payor has established
procedures to obtain, review, and maintain
documentary evidence sufficient to estab-
lish the identity of the payee and the status
of that person as a foreign person (in-
cluding, but not limited to, documentary
evidence described in §1.1441–6(c)(3)
or (4)); and the payor obtains, reviews,
and maintains such documentary evidence
in accordance with those procedures. A
payor maintains the documents reviewed
by retaining the original, certified copy,
or a photocopy (or microfiche or sim-
ilar means of record retention) of the
documents reviewed and noting in its
records the date on which and by whom
the document was received and reviewed.
Documentary evidence furnished for the
payment of an amount subject to with-
holding under chapter 3 of the Internal
Revenue Code must contain all of the in-
formation that is necessary to complete a
Form 1042–S for that payment. A payor
may also rely on documentary evidence
associated with a flow-through withhold-
ing certificate forpayments treated as
made to foreign partners of a nonwith-
holding foreign partnership, as defined in
§1.1441–1(c)(28), the foreign beneficia-
ries of a foreign simple trust, as defined
in §1.1441–1(c)(24), or foreign owners
of a foreign grantor trust, as defined in
§1.1441–1(c)(26), even though the part-
nership or trust account is maintained in
the United States.
*****
(5) * * * (i)Definition.***
(ii)Reporting by U.S. payors in U.S.
possessions. U.S. payors are not required
to report on Form 1099 income that is
from sources within a possession of the
United States and that is exempt from tax-
ation under section 931, 932, or 933, each
of which sections exempts certain income
from sources within a possession of the
United States paid to abona fideresident of
that possession. For purposes of this para-
graph (c)(5)(ii), a U.S. payor may treat the
beneficial owner as abona fideresident of
the possession of the United States from
which the income is sourced if, prior to
payment of the income, the U.S. payor can
reliably associate the payment with valid
documentation that supports the claim of
residence in the possession of the United
States from which the income is sourced.
This paragraph (c)(5)(ii) shall not apply if
the U.S. payor has actual knowledge or
reason to know that the documentation is
unreliable or incorrect or that the income
does not satisfy the requirements for ex-
emption under section 931, 932, or 933.
For the rules determining whether income
is from sources within a possession of the
United States, see section 937(b) and the
regulations thereunder.
*****
PART 301 —
PROCEDURE AND
ADMINIST
RATION
Par. 6. The authority citation for part
301 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 7. Section 301.6114–1 is amended
as follows:
1.Paragraphs (c)(1)(i) through
(c)(1)(vii) are redesignated as paragraphs
(c)(1)(ii) through (c)(1)(viii), respectively.
2. New paragraph (c)(1)(i) is added.
3. Paragraph (c)(6) is revised.
4. Paragraphs (c)(7) and (8) are added.
The additions and revision read as fol-
lows:
§301.6114–1 Treaty-based return
positions.
*****
(c)***(1)***
(i) For amounts received on or after
January 1, 2001, reporting under para-
graph (b)(4)(ii) is waived, unless reporting
is specifically required under paragraphs
(b)(4)(ii)(A) and (B) of this section, para-
graph (b)(4)(ii)(C) of this section, or
paragraph (b)(4)(ii)(D) of this section;
*****
(6)(i) For taxable years ending after
December 31, 2004, except as provided
in paragraph (c)(6)(ii) of this section, re-
porting under paragraph (b)(4)(ii) of this
section is waived for amounts received
by a related party, within the meaning of
2006–14 I.R.B.693April 3, 2006

section 6038A(c)(2), from a withhold-
ing agent that is a reporting corporation,
within the meaning of section 6038A(a),
and that are properly reported on Form
1042–S.
(ii) Paragraph (c)(6)(i) of this section
does not apply to any amounts for which
reporting is specifically required under the
instructions to Form 8833.
(7)(i) For taxable years ending after De-
cember 31, 2004, except as provided in
paragraph (c)(7)(iv) of this section, report-
ing under paragraph (b)(4)(ii) of this sec-
tion is waived for amounts properly re-
ported on Form 1042–S (on either a spe-
cific payee or pooled basis) by a withhold-
ing agent described in paragraph (c)(7)(ii)
of this section if the beneficial owner is de-
scribed in paragraph (c)(7)(iii) of this sec-
tion.
(ii) A withholding agent described in
this paragraph (c)(7)(ii) is a U.S. financial
institution, as defined in §1.1441–1(c)(5)
of this chapter, a qualified intermediary, as
defined in §1.1441–1(e)(5)(ii) of this chap-
ter, a withholding foreign partnership, as
defined in §1.1441–5(c)(2)(i) of this chap-
ter, or a withholding foreign trust, as de-
fined in §1.1441–5(e)(5)(v) of this chapter.
(iii) A beneficial owner described in
this paragraph (c)(7)(iii) of this section
is a direct account holder of a U.S. fi-
nancial institution or qualified intermedi-
ary, a direct partner of a withholding for-
eign partnership, or a direct beneficiary
or owner of a simple or grantor trust that
is a withholding foreign trust. A bene-
ficial owner described in this paragraph
(c)(7)(iii) also includes an account holder
to which a qualified intermediary has ap-
plied section 4A.01 or 4A.02 of the quali-
fied intermediary agreement, contained in
Revenue Procedure 2000–12, 2000–1 C.B.
387 (as amended by Revenue Procedure
2003–64, 2003–2 C.B. 306; Revenue Pro-
cedure 2004–21, 2004–1 C.B. 702; Rev-
enue Procedure 2005–77, 2005–51 I.R.B.
1176 (see § 601.601(b)(2) of this chapter)
a partner to which a withholding foreign
partnership has applied section 10.01 or
10.02 of the withholding foreign partner-
ship agreement, and abeneficiary or owner
to which a withholding foreign trust has
applied section 10.01 or 10.02 of the with-
holding foreign trust agreement, contained
in Revenue Procedure 2003–64, 2003–2
C.B. 306 (as amended by Revenue Proce-
dure 2004–21, 2004–1 C.B. 702; Revenue
Procedure 2005–77, 2005–51 I.R.B. 1176
(see § 601.601(b)(2) of this chapter).
(iv) Paragraph (c)(7)(i) of this section
does not apply to any amounts for which
reporting is specifically required under the
instructions to Form 8833.
(8)(i) For taxable years ending after
December 31, 2004, except as provided
in paragraph (c)(8)(ii)ofthissection,re-
porting under paragraph (b)(4)(ii) of this
section is waived for taxpayers that are
not individuals or States and that receive
amounts of income that have been prop-
erly reported on Form 1042–S, that do
not exceed $500,000 inthe aggregate for
the taxable year and that are not received
through an account with an intermediary,
as defined in §1.1441–1(c)(13), or with
respect to interest in a flow-through entity,
as defined in §1.1441–1(c)(23).
(ii) The exception contained in para-
graph (c)(8)(i) of this section does not ap-
ply to any amounts for which reporting is
specifically required under the instructions
to Form 8833.
*****
Mark E. Matthews,
Deputy Commissioner for
Services and Enforcement.
Approved February 27, 2006.
Eric Solomon,
Acting Deputy Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on March 13,
2006, 8:45 a.m., and published in the issue of the Federal
Register for March 14, 2006, 71 F.R. 13003)
Section 6015.—Relief From
Joint and Several Liability
on Joint Return
26 CFR 1.6015–1: Relief from joint and several lia-
bility on a joint return.
Joint and several liability; relief un-
der section 6015.This ruling discusses
theissueofwhetherataxpayerispre-
cluded from raising a request for relief
from joint and several liability under sec-
tion 6015 by virtue of a previous Chapter 7
bankruptcy case in which the Service filed
a proof of claim, but the bankruptcy court
did not make an actual determination of tax
liability.
Rev. Rul. 2006–16
ISSUE
Whether the taxpayer is precluded from
raising a request for relief from joint and
several liability under section 6015 by
virtue of a previous Chapter 7 bankruptcy
case in which the Internal Revenue Service
(Service) filed a proof of claim, but the
bankruptcy court did not make an actual
determination of tax liability.
FACTS
Marriedtaxpayers,HandW,signand
timely file a joint return for Year 1. Dur-
ing an audit, the Service determines that
the joint return substantially understates
the income attributable to taxpayer W. The
Service issues a notice of deficiency, on
which taxpayers default. In January of
Year 3, the Service assesses against tax-
payers income tax deficiencies, for which
they are jointly and severally liable. Nei-
ther taxpayer pays the deficiency assess-
ment. In October of Year 3, taxpayers
file a voluntary joint petition for bank-
ruptcy under Chapter 7 of Title 11 of the
United States Code (Bankruptcy Code). In
November of Year 3, the Service files a
proof of claim asserting an unsecured pri-
ority claim for the deficiency. Neither tax-
payer, nor any other party in interest, ob-
jects to the proof of claim, which is not dis-
charged and is deemed allowed under sec-
tion 502(a) of the Bankruptcy Code. Nei-
ther taxpayer requests relief from joint and
several liability under section 6015 during
the bankruptcy case. Neither taxpayer re-
quests the bankruptcy court to adjudicate
the merits of the tax liability under section
505 of the Bankruptcy Code.
After the bankruptcy case is closed, tax-
payers H and W separate. Thereafter, H
(requesting spouse) files a request for re-
lief from joint and several liability under
section 6015. No party in interest files a
dischargeability proceeding.
LAW
The Bankruptcy Code provides rules
for debtors to consolidate and resolve their
debts to various creditors, including the
Service, in various ways. Section 301
of the Bankruptcy Code allows debtors
to commence a bankruptcy case by filing
a voluntary petition with the bankruptcy
April 3, 20066942006–14 I.R.B.

court. Once a petition is filed, creditors
have an opportunity to file proofs of claim.
11 U.S.C. § 501. A proof of claim asserts
the right of a creditor to payment and can
include rights that are fixed, contingent,
liquidated, or unliquidated.See11 U.S.C.
§ 101(5). A properly filed proof of claim
isprima facieevidence of the validity and
amount of the claim. Fed. R. Bankr. P.
3001(f). The proof of claim is deemed al-
lowed, unless a party in interest objects.
11 U.S.C. § 502(a). If a party in interest
objects, the bankruptcy court, after notice
and a hearing, determines the validity and
amount of the claim as of the date of the
petition and allows the claim in the proper
amount. 11 U.S.C. § 502(b).
Generally, the bankruptcy court may
determine the amount or legality of any
tax, any fine or penalty relating to a tax,
or any addition to tax, whether or not pre-
viously assessed and whether or not paid.
11 U.S.C. § 505(a)(1). This includes the
determination of the eligibility of a debtor
for relief from joint and several liability
under section 6015 in appropriate cases.
SeeInreFrench, 242 B.R. 369 (Bankr.
N.D. Ohio 1999). The determination of
the bankruptcy court on the merits of a
claim is a final judgment and, unless ap-
pealed, is binding on the parties to a con-
tested matter.See Freytag v. Commis-
sioner, 110 T.C. 35 (1998). The determi-
nation also precludes subsequent litigation
by a debtor over the merits of the liabil-
ity under principles ofres judicata.See
id.at 40. The Supreme Court inCommis-
sioner v. Sunnenexplained the rule ofres
judicata:
[W]hen a court of competent jurisdic-
tion has entered a final judgment on the
merits of a cause of action, the parties
to the suit and their privies are there-
after bound “not only as to every matter
which was offered and received to sus-
tain or defeat the claim or demand, but
as to any other admissible matter which
might have been offered for that pur-
pose.”
333 U.S. 591, 597 (1948) (quoting
Cromwell v. County of Sac, 94 U.S. 351,
352 (1876)).
Although filing a bankruptcy petition
commences a case, “a bankruptcy case is
simply an aggregation of controversies.”
See In re Martin Bros. Toolmakers, Inc.,
796 F.2d 1435, 1437 (11th Cir. 1986).
In order to bring a controversy before the
bankruptcy court, a party generally moves
for relief in a contested matter under Fed-
eral Rule of Bankruptcy Procedure 9014
or initiates an adversary proceeding un-
der Rule 7001. The merits of a tax lia-
bility are generally raised in one of two
ways. Either the debtor or the Service can
seek a determination of a tax liability un-
der section 505 of the Bankruptcy Code,
or a party in interest can object to a proof
of claim listing tax liabilities under section
502(a).See In re Taylor, 132 F.3d 256, 262
(5th Cir. 1998). Unless a party in interest
moves for relief or initiates a proceeding,
the merits of a tax liability are not before
the bankruptcy court, and the bankruptcy
court does not inquire into the merits of the
tax liability or enter a final judgment fixing
the tax liability.
Certain taxes are excepted from dis-
charge in a Chapter 7 bankruptcy case.
See11 U.S.C. § 523(a)(1), 727(b). For ex-
ample, income tax liabilities for tax years
ending within three years of the bank-
ruptcy petition are entitled to priority sta-
tus and are excepted from the bankruptcy
discharge under sections 523(a)(1)(A) and
507(a)(8)(A)(i). These tax liabilities are
excepted from discharge under section
523(a)(1)(A) whether or not a claim was
filed or allowed, and the principles ofres
judicatado not apply unless the merits
of the tax liabilities were actually deter-
mined.Hambrick v. Commissioner,118
T.C. 348 (2002).
Adebtororcreditormayrequestthe
bankruptcy court to determine the dis-
chargeability of a debt by initiating an
adversary proceeding under Federal Rule
of Bankruptcy Procedure 7001. A dis-
chargeability proceeding is a proceeding
to determine whether a bankruptcy dis-
charge includes the discharge of liability
for certain debts. A determination of the
bankruptcy court in a discharge proceed-
ing that is a final judgment on the merits
bars relitigation of dischargeability.See
Florida Peach Corp. v. Commissioner,
90 T.C. 678, 682 (1988). However, a dis-
charge determination generally does not
include consideration of the merits of the
debt.In re Doerge, 181 B.R. 358, 364
(Bankr. S.D. Ill. 1995). There are cases
in which bankruptcy courts consider the
merits of a tax liability, including relief
from joint and several liability, during
the course of determining whether the
tax liability is dischargeable.See, e.g.,In
re Brackin, 148 B.R. 953 (Bankr. N.D.
Ala. 1992). If the bankruptcy court were
to make a determination on the merits
of the tax liability, that determination
generally would preclude the requesting
spouse from later raising a request for
relief under section 6015 if the requesting
spouse was a debtor in the bankruptcy
case and meaningfully participated in the
dischargeability proceeding.Seesection
6015(g)(2).
ANALYSIS
Under the facts of this revenue ruling,
the Service filed a proof of claim in the
bankruptcy case and neither taxpayer, and
no other party in interest, filed an objec-
tion to the proof of claim under 11 U.S.C
§ 502(a) or moved for the bankruptcy court
to determine the liability under 11 U.S.C.
§ 505(a). Thus, the merits of the tax liabil-
ity were not determined by the bankruptcy
court and the requesting spouse is not pre-
cluded from raising a request for relief un-
der section 6015 after the bankruptcy case
is closed.
HOLDING
The taxpayer, H, is not precluded from
raising a subsequent request for relief from
joint and several liability under section
6015 by virtue of the prior bankruptcy case
filedbyHandWinwhichtheServicefiled
a proof of claim, but the bankruptcy court
did not make an actual determination of the
liability.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is G. William Beard of the Office of the
Associate Chief Counsel (Procedure and
Administration), Collection, Bankruptcy
& Summonses Division. For further in-
formation regarding this revenue ruling,
contact Branch 2 of Collection, Bank-
ruptcy & Summonses at (202) 622–3620
(not a toll-free call).
2006–14 I.R.B.695April 3, 2006

Section 6103.—Confi-
dentiality and Disclosure
of Returns and Return
Information
26 CFR 301.6103(j)(5)–1: Disclosures of return in-
formation reflected on returns to officers and employ-
ees of the Department of Agriculture for conducting
the census of agriculture.
T.D. 9245
DEPARTMENT OF
THE TREASURY
Internal Revenue Service
26 CFR Part 301
Disclosure of Return
Information to the Department
of Agriculture
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains fi-
nal regulations that incorporate and clar-
ify the phrase “return information reflected
on returns” in conformance with the terms
of section 6103(j)(5) of the Internal Rev-
enue Code (Code), which provides for lim-
ited disclosures of returns and return infor-
mation in connection with the census of
agriculture. These final regulations also
remove certain items of return informa-
tion that the Department of Agriculture no
longer needs for conducting the census of
agriculture.
DATES:Effective Date:These regulations
are effective on February 22, 2006.
FOR FURTHER INFORMATION
CONTACT: Deborah Lambert-Dean at
(202) 622–4570 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to
26 CFR part 301 under section 6103(j)
of the Code. On June 6, 2003, theFed-
eral Registerpublished a temporary regu-
lation (T.D. 9060, 2003–1 C.B. 1116) re-
garding disclosure of return information
to the Department of Agriculture (68 FR
33857) and a notice of proposed rulemak-
ing (NPRM) (REG–103809–03, 2003–1
C.B. 1132) cross-referencing the tempo-
rary regulations (68 FR 33887). There
were no comments submitted in response
totheNPRM.Therewasnorequestfora
public hearing, andnone took place. The
proposed regulations are adopted and the
corresponding temporary regulations are
removed.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been deter-
mined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations, 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 sec-
tion 7805(f) of the Code, the IRS submit-
ted the NPRM preceding this Treasury de-
cision 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 Deborah Lambert-Dean, Office of
the Associate Chief Counsel, Procedure
& Administration (Disclosure & Privacy
Law Division).
*****
Adoption of 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 is amended by removing the
entry for “Section 301.6103(j)(5)–1T and
adding an entry in numerical order to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section301.6103(j)(5)–1alsoissued
under 26 U.S.C. 6103(j)(5). * * *
§301.6103(j)(5)–1T [Removed]
Par. 2. Section 301.6103(j)(5)–1T is
removed.
Par. 3. Section 301.6103(j)(5)–1 is
added to read as follows:
§ 301.6103(j)(5)–1 Disclosures of return
information reflected on returns to officers
and employees of the Department of
Agriculture for conducting the census of
agriculture.
(a)General rule. Pursuant to the provi-
sions of section 6103(j)(5) of the Internal
Revenue Code and subject to the require-
ments of paragraph (c) of this section, offi-
cers or employees of the Internal Revenue
Service will disclose return information re-
flected on returns to officers and employ-
ees of the Department of Agriculture to the
extent, and for such purposes, as may be
provided by paragraph (b) of this section.
“Return information reflected on returns”
includes, but is not limited to, information
on returns, information derived from pro-
cessing such returns, and information de-
rived from other sources for the purposes
of establishing and maintaining taxpayer
information relating to returns.
(b)Disclosure of return information re-
flected on returns to officers and employ-
ees of the Department of Agriculture.(1)
Officers or employees of the Internal Rev-
enue Service will disclose the following
return information reflected on returns de-
scribed in this paragraph (b) for individ-
uals, partnerships and corporations with
agricultural activity, as determined gener-
ally by industry code classification or the
filing of returns for such activity, to offi-
cers and employees of the Department of
Agriculture for purposes of, but only to the
extent necessary in, structuring, preparing,
and conducting, as authorized by chapter
55 of title 7, United States Code, the cen-
sus of agriculture.
(2) From Form 1040 “U.S. Individual
Income Tax Return”, Form 1041 “U.S. In-
come Tax Return for Estates and Trusts”,
Form 1065 “U.S. Return of Partnership In-
come”, and Form 1065–B “U.S. Return of
Income for Electing Large Partnerships”
(Schedule F)—
(i) Taxpayer identity information (as
defined in section 6103(b)(6) of the Inter-
nal Revenue Code);
(ii) Spouse’s Social Security Number;
(iii) Annual accounting period;
(iv) Principal Business Activity (PBA)
code;
(v) Taxable cooperative distributions;
April 3, 20066962006–14 I.R.B.

(vi) Income from custom hire and ma-
chine work;
(vii) Gross income;
(viii) Master File Tax (MFT) code;
(ix) Document Locator Number (DLN);
(x) Cycle posted;
(xi) Final return indicator;
(xii) Part year return indicator; and
(xiii) Taxpayer telephone number.
(3) From Form 943, “Employer’s An-
nual Federal Tax Return for Agricultural
Employees”—
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) Total wages subject to Medicare
taxes;
(iv) MFT code;
(v) DLN;
(vi) Cycle posted;
(vii) Final return indicator; and
(viii) Part year return indicator.
(4)FromForm1120series,“U.S. Cor-
poration Income Tax Return”—
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) Gross receipts less returns and al-
lowances;
(iv) PBA code;
(v) MFT Code;
(vi) DLN;
(vii) Cycle posted;
(viii) Final return indicator;
(ix) Part year return indicator; and
(x) Consolidated return indicator.
(5) From Form 1065 series, “U.S. Re-
turn of Partnership Income”—
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) PBA code;
(iv) Gross receipts less returns and al-
lowances;
(v) Net farm profit (loss);
(vi) MFT code;
(vii) DLN;
(viii) Cycle posted;
(ix) Final return indicator; and
(x) Part year return indicator.
(c)Procedures and Restrictions.(1)
Disclosure of return information reflected
on returns by officers or employees of the
Internal Revenue Service as provided by
paragraph (b) of this section will be made
only upon written request designating, by
name and title, the officers and employees
of the Department of Agriculture to whom
such disclosure is authorized, to the Com-
missioner of Internal Revenue by the Sec-
retary of Agriculture and describing—
(i) The particular return information re-
flected on returns for disclosure;
(ii) The taxable period or date to which
such return information reflected on re-
turns relates; and
(iii) The particular purpose for the re-
quested return information reflected on re-
turns.
(2) (i) No such officer or employee to
whom the Internal Revenue Service dis-
closes return information reflected on re-
turns pursuant to the provisions of para-
graph (b) of this section shall disclose such
information to any person, other than the
taxpayer to whom such return information
reflected on returns relates or other offi-
cers or employees of the Department of
Agriculture whose duties or responsibili-
ties require such disclosure for a purpose
described in paragraph (b)(1) of this sec-
tion, except in a formthat cannot be asso-
ciated with, or otherwise identify, directly
or indirectly, a particular taxpayer.
(ii) If the Internal Revenue Service de-
termines that the Department of Agricul-
ture, or any officer or employee thereof,
has failed to, or does not, satisfy the re-
quirements of section 6103(p)(4) of the
Internal Revenue Code or regulations or
published procedures, the Internal Rev-
enue Service may take such actions as are
deemed necessary to ensure that such re-
quirements are or will be satisfied, includ-
ing suspension of disclosures of return in-
formation reflected on returns otherwise
authorized by section 6103(j)(5) and para-
graph (b) of this section, until the Internal
Revenue Service determines that such re-
quirements have been or will be satisfied.
(d)Effective date.Thissectionisappli-
cable on February 22, 2006.
Mark E. Matthews,
Deputy Commissioner for
Services and Enforcement.
Approved February 11, 2006.
Eric Solomon,
Acting Deputy Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on February 21,
2006, 8:45 a.m., and published in the issue of the Federal
Register for February 22, 2006, 71 F.R. 8945)
Section 6335.—Sale of
Seized Property
Ct. D. 2082
SUPREME COURT OF THE
UNITED STATES
No. 04-603
GRABLE & SONS METAL PRODUCTS,
INC.v.DARUE
ENGINEERING & MANUFACTURING
CERTIORARI TO THE
UNITED STATES COURT OF
APPEALS FOR
THE SIXTH CIRCUIT
June 13, 2005
Syllabus
The Internal Revenue Service seized
real property owned by petitioner (here-
inafter Grable) to satisfy a federal tax
delinquency, and gave Grable notice by
certified mail before selling the property
to respondent (hereinafter Darue). Grable
subsequently brought a quiet title action in
state court, claiming that Darue’s title was
invalid because 26 U. S. C. §6335 required
the IRS to give Grable notice of the sale by
personal service, not certified mail. Darue
removed the case to Federal District Court
as presenting a federal question because
the title claim depended on an interpreta-
tion of federal tax law. The District Court
declined to remand the case, finding that
it posed a significant federal-law question,
and it granted Darue summary judgment
onthemerits.TheSixthCircuitaffirmed,
and this Court granted certiorari on the
jurisdictional question.
Held:The national interest in providing
a federal forum for federal tax litigation is
sufficiently substantial to support the ex-
ercise of federal-question jurisdiction over
the disputed issue on removal. Pp. 3–11.
(a)Daruewasentitledtoremovethe
quiet title action if Grable could have
brought it in federal court originally, as a
civil action “arising under the . . . laws
. . . of the United States,” 28 U. S. C.
§1331. Federal-question jurisdiction is
usually invoked by plaintiffs pleading a
cause of action created by federal law,
but this Court has also long recognized
that such jurisdiction will lie over some
2006–14 I.R.B.697April 3, 2006

state-law claims that implicate significant
federal issues, see,e.g.,Smith v. Kansas
City Title & Trust Co., 255 U. S. 180.
Such federal jurisdiction demands not
only a contested federal issue, but a sub-
stantial one. And the jurisdiction must be
consistent with congressional judgment
about the sound division of labor between
state and federal courts governing §1331’s
application. These considerations have
kept the Court from adopting a single
test for jurisdiction over federal issues
embedded in state-law claims between
nondiverse parties. Instead, the question
is whether the state-law claim necessarily
stated a federal issue, actually disputed
and substantial, which a federal forum
may entertain without disturbing a con-
gressionally approved balance of federal
and state judicial responsibilities. Pp. 3–6.
(b) This case warrants federal jurisdic-
tion. Grable premised its superior title
claim on the IRS’s failure to give adequate
notice, as defined by federal law. Whether
Grable received notice is an essential ele-
ment of its quiet title claim, and the fed-
eral statute’s meaning is actually disputed.
The meaning of a federal tax provision
is an important federal-law issue that be-
longs in federal court. The Government
has a strong interest in promptly collecting
delinquent taxes, and the IRS’s ability to
satisfy its claims from delinquents’ prop-
erty requires clear terms of notice to assure
buyers like Darue that the IRS has good
title. Finally, because it will be the rare
state title case that raises a federal-law is-
sue, federal jurisdiction to resolve genuine
disagreement over federal tax title provi-
sions will portend only a microscopic ef-
fect on the federal-state division of labor.
This conclusion puts the Court in vener-
able company, quiet title actions having
been the subject of some of the earliest
exercises of federal-question jurisdiction
over state-law claims.E.g.,Hopkinsv.
Walker, 244 U. S. 486, 490–491. Pp. 6–7.
(c)Merrell Dow Pharmaceuticals Inc.
v.Thompson, 478 U. S. 804, is not to the
contrary. There, in finding federal juris-
diction unavailable for a state tort claim
resting in part on an allegation that the de-
fendant drug company had violated a fed-
eral branding law, the Court noted that
Congress had not provided a private fed-
eral cause of action for such violations.
Merrell Dowcannot be read to make a
federal cause of action a necessary con-
dition for federal-question jurisdiction. It
disclaimed the adoption of any bright-line
rule and expressly approved the exercise
of jurisdiction inSmith, where there was
no federal cause of action. Accordingly,
Merrell Dowshould be read in its entirety
as treating the absence of such cause as ev-
idence relevant to, but not dispositive of,
the “sensitive judgments about congres-
sional intent,” required by §1331.Id.,at
810. InMerrell Dow, the principal sig-
nificance of this absence was its bearing
on the consequences to the federal system.
If the federal labeling standard without a
cause of action could get a state claim into
federal court, so could any other federal
standards without causes of action. And
that would mean an enormous number of
cases. A comparable analysis yields a dif-
ferent jurisdictional conclusion here, be-
cause state quiet titleactions rarely involve
contested federal-law issues. Pp. 7–11.
377F.3d592,affirmed.
SOUTER, J., delivered the opinion for
a unanimous Court. THOMAS, J., filed a
concurring opinion.
SUPREME COURT OF THE
UNITED STATES
No. 04-603
GRABLE & SONS METAL PRODUCTS,
INC., PETITIONERv.DARUE
ENGINEERING & MANUFACTURING
ON WRIT OF CERTIORARI
TO THE UNITED STATES
COURT OF APPEALS
FOR THE SIXTH CIRCUIT
June 13, 2005
JUSTICE SOUTER delivered the opin-
ion of the Court.
The question is whether want of a fed-
eral cause of action to try claims of title
to land obtained at a federal tax sale pre-
cludes removal to federal court of a state
action with non-diverse parties raising a
disputed issue of federal title law. We an-
swer no, and hold that the national interest
in providing a federal forum for federal tax
litigation is sufficiently substantial to sup-
port the exercise of federal question juris-
diction over the disputed issue on removal,
which would not distort any division of la-
bor between the state and federal courts,
provided or assumed by Congress.
I
In 1994, the Internal Revenue Service
seized Michigan real property belonging
to petitioner Grable & Sons Metal Prod-
ucts, Inc., to satisfy Grable’s federal tax
delinquency. Title 26 U. S. C. §6335 re-
quired the IRS to give notice of the seizure,
and there is no dispute that Grable received
actual notice by certified mail before the
IRS sold the property to respondent Darue
Engineering & Manufacturing. Although
Grable also received notice of the sale it-
self, it did not exercise its statutory right
to redeem the property within 180 days of
the sale, §6337(b)(1), and after that period
had passed, the Government gave Darue a
quitclaim deed. §6339.
Five years later, Grable brought a quiet
title action in state court, claiming that
Darue’s record title was invalid because
the IRS had failed to notify Grable of its
seizure of the property in the exact manner
required by §6335(a), which provides that
written notice must be “given by the Sec-
retary to the owner of the property [or] left
at his usual place of abode or business.”
Grable said that the statute required per-
sonal service, not service by certified mail.
Darue removed the case to Federal Dis-
trict Court as presenting a federal ques-
tion, because the claim of title depended
on the interpretation of the notice statute
in the federal tax law. The District Court
declined to remand the case at Grable’s be-
hest after finding that the “claim does pose
a significant question of federal law,” Tr.
17 (Apr. 2, 2001), and ruling that Grable’s
lack of a federal right of action to enforce
its claim against Darue did not bar the ex-
ercise of federal jurisdiction. On the mer-
its, the court granted summary judgment
to Darue, holding that although §6335 by
its terms required personal service, sub-
stantial compliance with the statute was
enough. 207 F. Supp. 2d 694 (WD Mich.
2002).
The Court of Appeals for the Sixth
Circuit affirmed. 377 F. 3d 592 (2004).
On the jurisdictional question, the panel
thought it sufficed that the title claim
raised an issue of federal law that had to
be resolved, and implicated a substantial
federal interest (in construing federal tax
law). The court went on to affirm the
April 3, 20066982006–14 I.R.B.

District Court’s judgment on the merits.
We granted certiorari on the jurisdictional
question alone,
1
543 U. S.(2005) to re-
solve a split within the Courts of Appeals
on whetherMerrell Dow Pharmaceuticals
Inc.v.Thompson, 478 U. S. 804 (1986),
always requires a federal cause of action
as a condition for exercising federal-ques-
tion jurisdiction.
2
We now affirm.
II
Darue was entitled to remove the quiet
title action if Grable could have brought
it in federal district court originally, 28
U. S. C. §1441(a), as a civil action “aris-
ing under the Constitution, laws, or treaties
of the United States,” §1331. This pro-
vision for federal-question jurisdiction is
invoked by and large by plaintiffs plead-
ing a cause of action created by federal
law (e.g., claims under 42 U. S. C. §1983).
There is, however, another longstanding,
if less frequently encountered, variety of
federal “arising under” jurisdiction, this
Court having recognized for nearly 100
years that in certain cases federal question
jurisdiction will lie over state-law claims
that implicate significant federal issues.
E.g.,Hopkinsv.Walker, 244 U. S. 486,
490–491 (1917). The doctrine captures the
commonsense notion that a federal court
ought to be able to hear claims recognized
under state law that nonetheless turn on
substantial questions of federal law, and
thus justify resort to the experience, solici-
tude, and hope of uniformity that a federal
forum offers on federal issues, see ALI,
Study of the Division of Jurisdiction Be-
tween State and Federal Courts 164–166
(1968).
The classic example isSmithv.Kansas
City Title & Trust Co., 255 U. S. 180
(1921), a suit by a shareholder claiming
that the defendant corporation could not
lawfully buy certain bonds of the National
Government because their issuance was
unconstitutional. Although Missouri law
provided the cause of action, the Court rec-
ognized federal-question jurisdiction be-
cause the principal issue in the case was the
federal constitutionality of the bond issue.
Smiththus held, in a somewhat generous
statement of the scope of the doctrine, that
a state-law claim could give rise to fed-
eral-question jurisdiction so long as it “ap-
pears from the [complaint] that the right to
relief depends upon the construction or ap-
plication of [federal law].”Id., at 199.
TheSmithstatement has been subject
to some trimming to fit earlier and later
cases recognizing the vitality of the ba-
sic doctrine, but shying away from the ex-
pansive view that mere need to apply fed-
eral law in a state-law claim will suffice
to open the “arising under” door. As early
as 1912, this Court had confined federal-
question jurisdiction over state-law claims
to those that “really and substantially in-
volv[e] a dispute or controversy respect-
ing the validity, construction or effect of
[federal] law.”Shulthisv.McDougal,225
U. S. 561, 569 (1912). This limitation was
the ancestor of Justice Cardozo’s later ex-
planation that a request to exercise fed-
eral-question jurisdiction over a state ac-
tion calls for a “common-sense accommo-
dation of judgment to [the] kaleidoscopic
situations” that present a federal issue, in
“a selective process which picks the sub-
stantial causes out of the web and lays
the other ones aside.”Gullyv.First Nat.
Bank in Meridian, 299 U. S. 109, 117–118
(1936). It has in fact become a constant
refrain in such cases that federal jurisdic-
tion demands not only a contested federal
issue, but a substantial one, indicating a se-
rious federal interest in claiming the ad-
vantages thought to be inherent in a fed-
eral forum.E.g.,Chicagov.International
College of Surgeons,522U.S.156,164
(1997);Merrell Dow,supra,at814,and
n. 12;Franchise Tax Bd. of Cal.v.
Construction Laborers Vacation Trust for
Southern Cal., 463 U. S. 1, 28 (1983).
But even when the state action discloses
a contested and substantial federal ques-
tion, the exercise of federal jurisdiction is
subject to a possible veto. For the federal
issue will ultimately qualify for a federal
forum only if federal jurisdiction is consis-
tent with congressional judgment about the
sound division of labor between state and
federal courts governing the application of
§1331. Thus,Franchise Tax Bd.explained
that the appropriateness of a federal forum
to hear an embedded issue could be eval-
uated only after considering the “welter of
issues regarding the interrelation of federal
and state authority and the proper man-
agement of the federal judicial system.”
Id., at 8. Because arising-under jurisdic-
tion to hear a state-law claim always raises
the possibility of upsetting the state-fed-
eral line drawn (or at least assumed) by
Congress, the presence of a disputed fed-
eralissueandtheostensibleimportanceof
a federal forum are never necessarily dis-
positive; there must always be an assess-
ment of any disruptive portent in exercis-
ing federal jurisdiction. See alsoMerrell
Dow,supra, at 810.
These considerations have kept us from
stating a “single, precise, all-embracing”
test for jurisdiction over federal issues
embedded in state-law claims between
non-diverse parties.Christiansonv.Colt
Industries Operating Corp., 486 U. S.
800, 821 (1988) (STEVENS, J., concur-
ring). We have not kept them out simply
because they appeared in state raiment,
as Justice Holmes would have done, see
Smith,supra, at 214 (dissenting opinion),
but neither have we treated “federal is-
sue” as a password opening federal courts
to any state action embracing a point
of federal law. Instead, the question is,
does a state-law claim necessarily raise a
stated federal issue, actually disputed and
substantial, which a federal forum may
entertain without disturbing any congres-
sionally approved balance of federal and
state judicial responsibilities.
III
A
This case warrants federal jurisdiction.
Grable’s state complaint must specify “the
facts establishing the superiority of [its]
claim,” Mich. Ct. Rule 3.411(B)(2)(c)
(West 2005), and Grable has premised its
superior title claim on a failure by the IRS
to give it adequate notice, as defined by
federal law. Whether Grable was given
notice within the meaning of the federal
statute is thus an essential element of its
quiet title claim, and the meaning of the
federal statute is actually in dispute; it ap-
pears to be the only legal or factual is-
sue contested in the case. The meaning
of the federal tax provision is an impor-
tant issue of federal law that sensibly be-
1
Accordingly, we have no occasion to pass upon the proper interpretation of the federal tax provision at issue here.
2
CompareSeinfeldv.Austen, 39 F. 3d 761, 764 (CA7 1994) (finding that federal-question jurisdiction over a state-law claim requires a parallel federal private right of action),withOrmet
Corp.v.Ohio Power Co., 98 F. 3d 799, 806 (CA4 1996) (finding that a federal private action is not required).
2006–14 I.R.B.699April 3, 2006

longs in a federal court. The Government
has a strong interest in the “prompt and cer-
tain collection of delinquent taxes,”United
Statesv.Rodgers, 461 U. S. 677, 709
(1983), and the ability of the IRS to satisfy
its claims from the property of delinquents
requires clear terms of notice to allow buy-
ers like Darue to satisfy themselves that
the Service has touched the bases neces-
sary for good title. The Government thus
has a direct interest in the availability of a
federal forum to vindicate its own admin-
istrative action, and buyers (as well as tax
delinquents) may find it valuable to come
before judges used to federal tax matters.
Finally, because it will be the rare state ti-
tle case that raises a contested matter of
federal law, federal jurisdiction to resolve
genuine disagreement over federal tax title
provisions will portend only a microscopic
effect on the federal-state division of labor.
See n. 3,infra.
This conclusion puts us in venerable
company, quiet titleactions having been
the subject of some of the earliest exer-
cises of federal-question jurisdiction over
state-law claims. InHopkins,244U.S.,
490–491, the question was federal juris-
diction over a quiet title action based on
the plaintiffs’ allegation that federal min-
ing law gave them the superior claim. Just
as in this case, “the facts showing the plain-
tiffs’ title and the existence and invalidity
of the instrument or record sought to be
eliminated as a cloudupon the title are es-
sential parts of the plaintiffs’ cause of ac-
tion.”
3
Id., at 490. As in this case again,
“it is plain that a controversy respecting
the construction and effect of the [fed-
eral] laws is involved and is sufficiently
real and substantial.”Id.,at489. This
Court therefore upheld federal jurisdiction
inHopkins,aswellasinthesimilarquiet
title matters ofNorthern Pacific R. Co.v.
Soderberg, 188 U. S. 526, 528 (1903), and
Wilson Cypress Co.v.Del Pozo y Marcos,
236 U. S. 635, 643–644 (1915). Consistent
with those cases, the recognition of federal
jurisdiction is in order here.
B
Merrell Dow Pharmaceuticals Inc.v.
Thompson, 478 U. S. 804 (1986), on which
Grable rests its position, is not to the con-
trary.Merrell Dowconsidered a state tort
claim resting in part on the allegation that
the defendant drug company had violated
a federal misbranding prohibition, and was
thus presumptively negligent under Ohio
law.Id., at 806. The Court assumed that
federal law would have to be applied to re-
solve the claim, but after closely examin-
ing the strength of the federal interest at
stake and the implications of opening the
federal forum, held federal jurisdiction un-
available. Congress had not provided a
private federal cause of action for viola-
tion of the federal branding requirement,
and the Court found “it would . . . flout, or
at least undermine, congressional intent to
conclude that federal courts might never-
theless exercise federal-question jurisdic-
tion and provide remedies for violations of
that federal statute solely because the vio-
lation . . . is said to be a . . . ‘proximate
cause’understatelaw.”Id.,at812.
Because federal law provides for no
quiet title action that could be brought
against Darue,
4
Grable argues that there
can be no federal jurisdiction here, stress-
ing some broad language inMerrell Dow
(including the passage just quoted) that
on its face supports Grable’s position, see
Note, Mr.SmithGoes to Federal Court:
Federal Question Jurisdiction over State
Law Claims Post-Merrell Dow,115Harv.
L. Rev. 2272, 2280–2282 (2002) (dis-
cussing split in Circuit Courts over private
right of action requirement afterMerrell
Dow). But an opinion is to be read as a
whole, andMerrell Dowcannot be read
whole as overturning decades of prece-
dent, as it would have done by effectively
adopting the Holmes dissent inSmith,see
supra, at 5, and converting a federal cause
of action from a sufficient condition for
federal-question jurisdiction
5
into a neces-
sary one.
In the first place,Merrell Dowdis-
claimed the adoption of any bright-line
rule, as when the Court reiterated that
“in exploring the outer reaches of §1331,
determinations about federal jurisdiction
require sensitive judgments about con-
gressional intent, judicial power, and the
federal system.” 478 U. S., at 810. The
opinion included a lengthy footnote ex-
plaining that questions of jurisdiction over
state-law claims require “careful judg-
ments,”id., at 814, about the “nature of
the federal interest at stake,”id., at 814,
n. 12 (emphasis deleted). And as a final
indication that it did not mean to make
a federal right of action mandatory, it
expressly approved the exercise of ju-
risdiction sustained inSmith, despite the
want of any federal cause of action avail-
able toSmith’s shareholder plaintiff. 478
U. S., at 814, n. 12.Merrell Dowthen, did
not toss out, but specifically retained the
contextual enquiry that had beenSmith’s
hallmark for over 60 years. At the end
ofMerrell Dow, Justice Holmes was still
dissenting.
Accordingly,Merrell Dowshould be
read in its entirety as treating the absence
of a federal private right of action as ev-
idence relevant to, but not dispositive of,
the “sensitive judgments about congres-
sional intent” that §1331 requires. The ab-
sence of any federal cause of action af-
fectedMerrell Dow’s result two ways. The
Court saw the fact as worth some consid-
eration in the assessment of substantial-
ity. But its primary importance emerged
when the Court treated the combination
of no federal cause of action and no pre-
emption of state remedies for misbranding
as an important clue to Congress’s con-
ception of the scope of jurisdiction to be
exercised under §1331. The Court saw
the missing cause of action not as a miss-
ing federal door key, always required, but
as a missing welcome mat, required in
the circumstances, when exercising federal
jurisdiction over a state misbranding ac-
tion would have attracted a horde of origi-
nal filings and removal cases raising other
state claims with embedded federal issues.
For if the federal labeling standard without
3
The quiet title cases also show the limiting effect of the requirement that the federal issue in a state-law claim must actually be in dispute to justifyfederal-question jurisdiction. InShulthis
v.McDougal, 225 U. S. 561 (1912), this Court found that there was no federal question jurisdiction to hear a plaintiff’s quiet title claim in part because the federal statutes on which title
depended were not subject to “any controversy respecting their validity, construction, or effect.”Id., at 570. As the Court put it, the requirement of an actual dispute about federal law was
“especially” important in “suit[s] involving rights to land acquired undera law of the United States,” because otherwise “every suit to establish title to land in the central and western states
would so arise [under federal law], as all titles in those States are traceable back to those laws.”Id., at 569–570.
4
Federal law does provide a quiet title cause of action against the Federal Government. 28 U. S. C. §2410. That rightof action is not relevant here, however, because the federal government
no longer has any interest in the property, having transferred its interestto Darue through the quitclaim deed.
5
For an extremely rare exception to the sufficiency of a federal right of action, seeShoshone Mining Co.v.Rutter, 177 U. S. 505, 507 (1900).
April 3, 20067002006–14 I.R.B.

a federal cause of action could get a state
claim into federal court, so could any other
federal standard without a federal cause
of action. And that would have meant a
tremendous number of cases.
One only needed to consider the treat-
ment of federal violations generally in
garden variety state tort law. “The viola-
tion of federal statutes and regulations is
commonly given negligence per se effect
in state tort proceedings.”
6
Restatement
(Third) of Torts (proposed final draft)
§14, Commenta. See also W. Keeton, D.
Dobbs, R. Keeton, & D. Owen, Prosser
and Keeton on Torts, §36, p. 221, n. 9
(5th ed. 1984) (“[T]he breach of a federal
statute may support a negligence per se
claim as a matter of state law” (collecting
authority)). A general rule of exercising
federal jurisdiction over state claims rest-
ing on federal mislabeling and other statu-
tory violations would thus have heralded a
potentially enormous shift of traditionally
state cases into federal courts. Expressing
concern over the “increased volume of
federal litigation,” and noting the impor-
tance of adhering to “legislative intent,”
Merrell Dowthought it improbable that
the Congress, having made no provision
for a federal cause of action, would have
meant to welcome any state-law tort case
implicating federal law “solely because the
violation of the federal statute is said to
[create] a rebuttable presumption [of neg-
ligence] . . . under state law.” 478 U. S., at
811–812 (internal quotation marks omit-
ted). In this situation, no welcome mat
meant keep out.Merrell Dow’s analysis
thus fits within the framework of exam-
ining the importance of having a federal
forum for the issue, and the consistency
of such a forum with Congress’s intended
division of labor between state and federal
courts.
As already indicated, however, a com-
parable analysis yields a different jurisdic-
tional conclusion in this case. Although
Congress also indicated ambivalence in
this case by providing no private right
of action to Grable, it is the rare state
quiet title action that involves contested
issues of federal law, see n. 3supra.Con-
sequently, jurisdiction over actions like
Grable’s would not materially affect, or
threaten to affect, the normal currents of
litigation. Given the absence of threaten-
ing structural consequences and the clear
interest the Government, its buyers, and
its delinquents have in the availability of
a federal forum, there is no good reason
to shirk from federal jurisdiction over the
dispositive and contested federal issue at
the heart of the state-law title claim.
7
IV
The judgment of the Court of Ap-
peals, upholding federal jurisdiction over
Grable’s quiet title action, is affirmed.
It is so ordered.
SUPREME COURT OF THE
UNITED STATES
No. 04-603
GRABLE & SONS METAL PRODUCTS,
INC., PETITIONERv.DARUE
ENGINEERING & MANUFACTURING
ON WRIT OF CERTIORARI
TO THE UNITED STATES
COURT OF APPEALS
FOR THE SIXTH CIRCUIT
June 13, 2005
JUSTICE THOMAS, concurring.
The Court faithfully applies our prece-
dents interpreting 28 U. S. C. §1331 to
authorize federal-court jurisdiction over
some cases in which state law creates the
cause of action but requires determination
of an issue of federal law,e.g.,Smithv.
Kansas City Title & Trust Co.,255U.S.
180 (1921);Merrell Dow Pharmaceuti-
cals Inc.v.Thompson, 478 U. S. 804
(1986). In this case, no one has asked us
to overrule those precedents and adopt the
rule Justice Holmes set forth inAmerican
Well Works Co.v.Layne & Bowler Co.,
241 U. S. 257 (1916), limiting §1331 ju-
risdiction to cases in which federal law
creates the cause of action pleaded on the
face of the plaintiff’s complaint.Id.,at
260. In an appropriate case, and perhaps
with the benefit of better evidence as to the
original meaning of §1331’s text, I would
be willing to consider that course.
*
Jurisdictional rules should be clear.
Whatever the virtues of theSmithstan-
dard, it is anything but clear.Ante,at4
(the standard “calls for a ‘common-sense
accommodation of judgment to [the] kalei-
doscopic situations’ that present a federal
issue, in ‘a selective process which picks
the substantial causes out of the web and
lays the other ones aside’” (quotingGully
v.First Nat. Bank in Meridian, 299 U. S.
109, 117–118 (1936)));ante, at 5 (“[T]he
question is, does a state-law claim neces-
sarily raise a stated federal issue, actually
disputed and substantial, which a federal
forum may entertain without disturbing
any congressionally approved balance
of federal and state judicial responsibili-
ties”);ante, at 9 (“‘[D]eterminations about
federal jurisdiction require sensitive judg-
ments about congressional intent, judicial
power, and the federal system’”; “the ab-
sence of a federal private right of action
[is] evidence relevant to, but not dispos-
itive of, the ‘sensitive judgments about
congressional intent’ that §1331 requires”
(quotingMerrell Dow,supra,at810)).
Whatever the vices of theAmerican
Well Worksrule, it is clear. Moreover,
it accounts for the “‘vast majority’” of
cases that come within §1331 under our
current case law,Merrell Dow,supra,at
808 (quotingFranchise Tax Bd. of Cal.v.
Construction Laborers Vacation Trust for
Southern Cal., 463 U. S. 1, 9 (1983))—fur-
ther indication that trying to sort out which
6
Other jurisdictions treat a violation of a federal statute as evidence of negligence or, like Ohio itself inMerrell Dow Pharmaceuticals Inc.v.Thompson, 478 U. S. 804 (1986), as creating a
rebuttable presumption of negligence. Restatement (Third) of Torts (proposed final draft) §14, Commentc. Either approach could still implicate issues of federal law.
7
At oral argument Grable’s counsel espoused the position that afterMerrell Dow, federal-question jurisdiction over state-law claimsabsent a federal right of action, could be recognized only
where a constitutional issue was at stake. There is, however, no reason in text or otherwise to draw such a rough line. AsMerrell Dowitself suggested, constitutional questions may be the
more likely ones to reach the level of substantiality that can justify federal jurisdiction. 478 U. S., at 814, n. 12.But a flat ban on statutory questions would mechanically exclude significant
questions of federal law like the one this case presents.
*
This Court has long construed the scope of the statutory grant of federal-question jurisdiction more narrowly than the scope of the constitutional grant of such jurisdiction. SeeMerrell Dow
Pharmaceuticals Inc.v.Thompson, 478 U. S. 804, 807–808 (1986). I assume for presentpurposes that this distinction isproper—that is, that the language of 28 U. S. C. §1331, “[t]he district
courts shall have original jurisdiction of allcivil actions arising underthe Constitution, laws, or treaties of the United States” (emphasis added), is narrower than the language of Art. III, §2,
cl. 1, of the Constitution, “[t]he judicial Power shall extend to allCases,inLawandEquity,arising underthis Constitution, the Laws of the United States, and Treaties made, or which shall
be made, under their Authority . . . ” (emphases added).
2006–14 I.R.B.701April 3, 2006

cases fall within the smallerSmithcate-
gory may not be worth the effort it entails.
See R. Fallon, D. Meltzer, & D. Shapiro,
Hart and Wechsler’s The Federal Courts
and the Federal System 885–886 (5th ed.
2003). Accordingly, I would be willing
in appropriate circumstances to reconsider
our interpretation of §1331.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2006. See Rev. Rul. 2006-22, page 687.
April 3, 20067022006–14 I.R.B.

Part II. Treaties and Tax Legislation
Subpart A.—Tax Conventions and Other Related Items
U.S.-Spain LLC MAP
Announcement 2006–21
The following is a copy of the Mu-
tual Agreement entered into on February
15, 2006, by the Competent Authorities
of the United States and Spain, regarding
the treatment of limited liability compa-
nies (“LLCs”), S corporations, and other
business entities treated as partnerships or
disregarded entities for U.S. tax purposes
under the U.S.-Spain income tax treaty and
protocol.
The text of the agreement is as follows:
COMPETE
NT AUTHORITY MUTUAL AGREEMENT
The Competent Authorities of the United States of America and Spain hereby enter into the following agreement (“the
Agreement”) regarding the treatment of limited liability companies (“LLCs”), S corporations, and other business entities treated
as partnerships or disregarded entities for U.S. tax purposes, under the Convention Between the United States of America and the
Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,
Together with a Related Protocol, signedatMadridonFebruary22,1990(“theTreaty”). The Agreement is entered into under
paragraph 3 of Article 26 (Mutual Agreement Procedure).
1.)Definition of "any other body of persons” under Article 3(1)(d)
Under
paragraph 4 of the Protocol the term “any other body of persons”contained within Article 3(1)(d) (General Definitions)
is und
erstood to include an estate, a trust, or a partnership. TheCompetent Authorities agree that the term “any other body of
perso
ns,” is also understood to include an LLC or other entity, whether organized within or without the United States, that for U.S.
feder
al tax purposes is treated either as a partnership or isdisregarded as an entity separate from its owners.
Consistent with the agreement regarding paragraph 4 of the Protocol, the Competent Authorities agree that paragraph 5(b) of the
Protocol will be interpreted to reflect that income received by an LLC, or other entity, whether organized within or without the
United States, that is treated for U.S. federal tax purposes as a partnership or disregarded as an entity separate from its owner,
will be treated as income derived by a resident of the United States to the extent that income received by the LLC or other
entity is subject to U.S. tax as the income of a U.S. resident. Similarly, the Competent Authorities agree that income received
by an S corporation will be treated as derived by a resident ofthe United States to the extent that the income received by the
S corporation is subject to U.S. tax as the income of a U.S. resident.
For example, if a U.S. LLC that is treated for U.S. federal tax purposes as a partnership receives a royalty payment from Spain,
and the U.S. LLC has two members with equal interest in the LLC, one Spanish resident and one U.S. resident, the LLC may
claim treaty benefits as a U.S. resident with respect to 50% of theroyalty payment because 50% of the payment is subject to tax in
the United States in the hands of a U.S. resident member.
2.
)Appropriate procedure for claiming treaty benefits
a.) A U.S. LLC that is treated as a partnership for U.S. tax purposes may request a certificate of residence on Form 6166 in the
same manner as a partnership. The Form 6166 will confirm the filing of Form 1065, U.S. Return of Partnership Income, by
the LLC and include an attachment that lists the members of the LLC that are residents of the United States according to
Internal Revenue Service records. The LLC, in turn, is expected to provide information concerning the percentage ownership of
the LLC represented by the listed members from its internal records directly to the foreign withholding agent. For example, if
a U.S. resident owns a 50% interest in the LLC, and a Canadian resident owns the remainder, the attached list obtained from
the Internal Revenue Service will identify the U.S. resident, and the LLC will represent to the Spanish withholding agent that
such resident owns a 50% interest in the LLC.
b.) In the case of tiered U.S. LLCs treated as partnerships for U.S. tax purposes, treaty benefits and certification rules that are
similar to those for tiered partnerships will apply.
c.) In the case of a U.S. LLC disregarded as an entity separate from its owner for U.S. tax purposes, the LLC may request a Form
6166 that states that it is a branch, division, or business unit of its single member owner and that such single member owner
is a resident of the United States.
d.) In the case of an LLC or other entity organized outside the United States, similar rules apply, provided that the LLC or other
entity is treated as a partnership or is disregarded as an entity separate from its owner for U.S. tax purposes. The LLC may request
a Form 6166 that confirms it files Form 1065, U.S. Return of Partnership Income, and that the attached list of members of the
LLC are residents of the United States, or that the LLC is a branch, division or business unit of its single member owner and that
such single member owner is a resident of the United States.
2006–14 I.R.B.703April 3, 2006

e.) In the case of a U.S. corporation that has made an election to be treated as an S Corporation for U.S. tax purposes, such
S corporation may request a Form 6166 in a manner similar to that of a partnership. The Form 6166 will confirm that the
corporation has filed Form 1120S, U.S. Income Tax Return for an S Corporation, and will attach a list of all the shareholders who
are U.S. residents for purposes of the Treaty.
Under special circumstances when the facts warrant further inquiry and upon a specific request from Spain, the United States will
seek to verify the truthfulness of the LLC’s representation as to the allocation of income with respect to a particular payment.
3.)Effective date
Upon signature by both competent authorities, this Agreement is effective retroactive to January 1, 1998.
This Agreement will not be effective in relation to periods barred by statute of limitations.
Agreed to by the undersigned competent authorities:
Frank Y. Ng
U.S. competent authority
José Manuel de Bunes
Spain competent authority
DateDate
April 3, 20067042006–14 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Taxation of Cross Licensing
Arrangements
Notice 2006–34
PURPOSE
This notice requests information re-
garding certain transactions commonly
referred to as cross licenses in connection
with the consideration by the Treasury De-
partment and the Internal Revenue Service
(IRS) of requests for specific guidance on
the tax treatment of such transactions.
BACKGROUND
A cross license is a contract between
two parties that own intellectual property,
typically patents, under which each party
grants to the other a license with respect
to specified property. These rights in the
respective patents are often licensed on
a nonexclusive and nontransferable basis.
One party may make to the other party
one or more cash payments representing
the difference in value, in the parties’ es-
timation, between the parties’ respective
rights covered by the cross license. As
in one-way patent licenses, other intellec-
tual property related to the exploitation of
the patented invention such as know how,
trademarks, and copyrights, may also be li-
censed between the parties.
A company typically will have a num-
ber of options available to maximize its
patents’ contribution to its profitability,
including exploiting its own patents in
its own business, one-way licensing, and
cross licensing. The Treasury Department
and the IRS are aware that cross licenses
may arise in a range of commercial con-
texts. In some cases, each of the parties
mayintendtoexploitthecrosslicensed
patents by making, selling, or otherwise
using the patented inventions in its own
business. In other cases, the parties may
operate their businesses with their own
patents, but seek to avoid the risk of patent
infringement claims that each might make
against the other as a result of the exploita-
tion of their own patents. In between,
there may be cases of varying degrees of
interdependency on each other’s intellec-
tual property in which the parties may
seek both to gain access to each other’s
technology as well as to mutually avoid
infringement claims. In this notice, the
Treasury Department and IRS solicit in-
formation on the business circumstances
in which cross licenses arise, the relative
frequency of different circumstances, and
trends.
The Treasury Department and the IRS
recognize the importance of the rights in-
volved in cross licenses and the signifi-
cance of the issues raised by these trans-
actions. As a result, the Treasury Depart-
ment and the IRS believe that cross li-
censes deserve careful study so that appro-
priate guidance can be issued on the tax
treatment of such transactions.
CHARACTER OF CROSS LICENSING
AND TAX CONSEQUENCES
The Treasury Department and the IRS
have received requests for guidance on the
tax treatment of cross licenses. Among the
questions received is whether a U.S. per-
son’s grant to a foreign person of the right
to use specified intellectual property pur-
suant to a cross license gives rise to income
that may be subject to withholding tax. In
response to these requests for guidance, the
Treasury Department and the IRS are an-
alyzing, and expect to issue guidance re-
garding, certain tax issues related to cross
licenses.
The tax treatment of cross licenses de-
pends on the characterization of the cross
licensing transactions for tax purposes.
Different theories have been suggested
by taxpayers and their representatives
concerning the proper characterization of
cross licensing transactions and the associ-
ated tax consequences. To provide a con-
text for the request for information in the
next section, a brief summary is provided
below of three major theories that have
been considered. Other characterizations
may also be possible. The description
provided below is merely background and
is not intended either to be an exhaustive
analysis or to be an endorsement of any
particular theory or treatment.
The three theories would characterize a
cross license as, alternatively, (1) a two-
way license of intellectual property rights;
(2) a reciprocal agreement not to assert any
claims of infringement; or (3) a sale or
exchange of property. The Treasury De-
partment and the IRS are considering the
most appropriate characterization for cross
licensing (e.g., in light of intellectual prop-
erty law, business realities, or the partic-
ular facts of the cross licensing transac-
tion), and the income tax consequences of
each theory including the amount, source,
and timing of any income, expense, gain
or loss from the transaction. The Treasury
Department and the IRS are also consid-
ering the potential withholding tax conse-
quences if a foreign party is involved.
A.Two-Way License
Under this theory, a cross licensing
transaction would be characterized as a
two-way license of intellectual property
rights. The potential income tax conse-
quences asserted under this theory could
include:
•Gross royalty income is realized by the
foreignlicenseeinanamountequalto
the value of the license rights and any
cash payments received.
•Income is sourced under sections
861(a)(4) and 862(a)(4).
•Income is recognized currently, except
that any contingent payments would be
recognized in the period in which they
arise.
•The value of license rights conveyed
and any cash payments made may be
deductible or may be subject to capi-
talization.
•Withholding tax potentially applies to
the conveyance of license rights and
any cash payments to a foreign party to
the cross license to the extent amounts
are allocable to U.S. sources.
B.Reciprocal Agreement Not to Assert
Claims of Infringement
Under this theory, a cross license would
be characterized as a reciprocal agreement
not to assert claims of infringement. A
threshold issue would be whether a cross
license so characterized is in fact different
than a transaction characterized as a two-
way license discussed above (or than a sale
or exchange of property discussed below).
Under this theory, cross licenses might be
2006–14 I.R.B.705April 3, 2006

treated as services or as a covenant not to
compete. The potential income tax con-
sequences asserted under this theory could
include:
•It has been suggested that the amount
of income realized would be limited
to the amount of any cash payments.
It has also been suggested that the
amount of income realized under this
theory would be the value of the li-
cense rights and any cash payments
received.
•Income would be sourced based on
the characterization. For example,
if the transaction is analyzed like a
traditional two-waylicense, the in-
come would be sourced under section
861(a)(4) and 862(a)(4). Alternatively,
if the transaction is analyzed as ser-
vices or analogous to services, then the
income would be sourced to where the
services were performed.
•Income would be recognized currently,
except that any contingent payments
would be recognized in the period they
arise.
•Withholding tax consequences would
be based on the U.S. source conse-
quences of a particular characteriza-
tion. For example, no withholding tax
would apply to the extent of services
income allocable to foreign sources.
C.Sale or Exchange of Property
Under this theory, a cross license would
be characterized as a taxable or nontaxable
sale or exchange of property. The potential
income tax consequences asserted under
this theory could include:
•Gross income is realized in the amount
of the gain or loss on the exchange of
license rights and any cash payments
under the cross license. Nonrecogni-
tion treatment may be available if a
nonrecognition provision applies (e.g.,
section 1031). A determination would
be needed on how to allocate basis be-
tween the retained rights and the rights
transferred in the exchange.
•Gain or loss would generally be
sourced based on the residence of
the taxpayer, except that any contin-
gent payments would be treated in the
same manner as royalties for sourcing
purposes.
•Any gain or loss recognized would be
recognized currently, except that any
contingent payments would be recog-
nized in the period in which they arise.
•If the transferor is a foreign resident,
withholding tax would not apply to
gains, except that contingent payments
would be sourced in the same manner
as royalties and so would potentially be
subject to withholding tax to the extent
sourced in the United States.
REQUEST FOR COMMENTS,
INFORMATION, AND DOCUMENTS
The Treasury Department and the IRS
request comments, information, and docu-
ments (including samples of cross license
agreements as well as of technology trans-
fer policy documents relating to the negoti-
ation of cross licenses) for consideration in
providing specific guidance regarding the
appropriate tax treatment of cross licenses
between U.S. persons and foreign persons.
These submissions are critical to providing
the Treasury Department and the IRS with
the proper information from which to for-
mulate appropriate guidance dealing with
cross licensing agreements taking into ac-
count practical issuesof administrability.
In particular, submissions are requested
addressing some or all of the following ar-
eas:
A.Business Circumstances in Which
Cross Licensing Arises
Information is requested on the busi-
ness circumstances in which cross licenses
arise. For example:
1.Mutual Need and Avoiding Claims of
Infringement
•Please explain how companies de-
cide whether or not to engage in
licensing or cross licensing of in-
tellectual property. Are there cor-
porate departments or policies for
assessing and valuing transfers of
intellectual property? Please de-
scribe.
•What are the circumstances in
which parties engage in cross li-
censing out of a mutual need for
one another’s patents for purposes
of operating their own businesses?
•What are the circumstances in
which parties have no need for
each other’s know how, technol-
ogy, underlying patented inven-
tions, or similar rights, but still
seek protection against the risk of
infringement claims through en-
tering into a patent cross license?
What benefit does entering into
a cross license generate in such a
case?
•In cases where parties primarily
or only seek protection from in-
fringement claims, might parties
nevertheless style their agreement
as a cross license granting affir-
mative rights to make, sell, and
use technology rather than as a re-
ciprocal covenant not to sue one
another for infringement? If so,
why?
•Do parties enter into one-way li-
censes where the licensee has no
need for the know how, technol-
ogy, underlying patented inven-
tions, or similar rights, but still
seeks protection against the risk of
infringement claims? If so, under
what circumstances?
•Do licensors engaged in cross li-
censing also engage in licensing
of the same patent or groups of
patents to parties that have little or
no significant intellectual property
to cross license?
•What are the circumstances in
which parties engage in cross li-
censing where the parties are in
different industries or the parties’
respective products are not com-
peting?
•Are there circumstances in which
parties would agree that they did
not need each other’s patents, but
nonetheless enter into a cross li-
cense? If so, why?
April 3, 20067062006–14 I.R.B.

•Are there circumstances in which
parties engage in cross licensing in
the context of joint product devel-
opment?
•Are there circumstances where
patents are cross licensed on an
exclusive (rather than nonexclu-
sive) basis?
2.Industry, Interoperability, and Techni-
cal Standards
•In what industries and with what
product types are cross licensing
agreements most frequently used?
How do agreements vary from in-
dustry to industry and why?
•What role do industry, interop-
erability, and technical standards
play in cross licensing arrange-
ments? Do parties enter into cross
licenses in order to comply with
these standards?
•Do such standards ever include,
as essential properties, compet-
ing patents (or other intellectual
property) that constitute inde-
pendent means for the same or
similar business purposes? Please
provide examples, if any, of (i)
standards that require the use of
specific patents, and (ii) standards
that may be satisfied, alterna-
tively, via different patents that
are designed to achieve a specific
function covered by the standard.
3.Intellectual Property Other than
Patents
•Do parties to a cross license of
patents typically also license addi-
tional intellectual property rights
such as know how, trademarks,
trade secrets, etc., associated
with exploitation of their patents?
What are the circumstances under
which such additional rights are,
or are not, licensed along with
patent rights?
•Apart from patent cross licenses,
what other intellectual property
rights are typically cross licensed
andinwhatcontext?
•How should the analysis of patent
licenses and cross licenses be sim-
ilar to, or different from, the anal-
ysis of copyright , trademark , and
other intellectual property licenses
and cross licenses.
B.Distinguishing Among Different Cross
Licensing Arrangements
Information is requested on the rele-
vance for tax purposes of potential distinc-
tions between different types of cross li-
censes and means by which the IRS may
in a reliable and administrable manner dis-
tinguish between them. For example:
•Is there a basis in intellectual property
law for distinguishing different uses of
cross licensing arrangements? Does
intellectual property law distinguish an
agreement not to assert claims of in-
fringement from a license of a patent?
Does intellectual property law distin-
guish between cross licenses based on
the necessity of access to each of the
parties’ intellectual property?
•Are there other grounds on which
a “two-way license” can be distin-
guished from a “reciprocal agreement
not to assert claims of infringement”?
•To the extent distinctions in intellec-
tual property and tax law exist, how
may the IRS reliably determine that a
particular cross license is of one type
or another? For example, how may
the IRS identify situations in which the
parties need one another’s patents in
conducting their respective businesses
as opposed to situations in which the
parties’ patents are not used in each
other’s businesses? Are there typically
contemporaneous documents or other
circumstances attendant to the execu-
tion of a cross license that would sup-
port or assist in making any such dis-
tinctions?
C.Sourcing the Income from Cross
Licensing
Information is requested on the means
available to the IRS to determine the
source of the income from cross licenses
covering intellectual property rights en-
forceable in more than one country. For
example:
•In what respects are the issues different
than issues with respect to sourcing the
income from a one-way license?
D.Valuation of Cross Licensed Rights
Information is requested on how the
parties to a cross license value the licensed
rights and determine the amount of any
cash payments payable by one party to the
other. For example:
•Are there reliable methods for valuing
rights transferred under cross licenses?
What economic models do parties (or
the consultants they may hire) use to
determine the value of the intellectual
property exchanged in a cross license?
How do parties determine the amount
of any cash payments in a cross li-
cense?
•How do parties determine the amount
of the royalty in a one-way license of
patents?
•Where licensors engage both in cross
licensing and one-way licensing of the
same patent or group of patents, would
the one-way licenses assist the IRS in
valuing the same patent rights recipro-
cally licensed in a cross license? If not,
why not?
•Would the amount of monetary dam-
ages that would be sought by a patent
holder in a patent infringement suit re-
lating to a particular patent or group
of patents assist in valuing the rights
transferred in a cross license? If not,
why not?
•Where a cross license agreement is en-
tered into following litigation between
parties, would the resulting monetary
settlement or award help in valuing the
rights that are cross licensed going for-
ward? If not, why not?
•Please provide any other information
that would assist the IRS in under-
standing valuation of rights cross li-
censed.
E.Financial Accounting Treatment of
Cross Licensing
Information is requested on the finan-
cial accounting and reporting treatment of
cross licenses.
2006–14 I.R.B.707April 3, 2006

F.Foreign Tax Treatment of Cross
Licensing
Information is requested on the tax con-
sequences of cross licenses under foreign
income tax laws.
SUBMISSION OF COMMENTS
Written comments, information, and
documents may be submitted to the Of-
fice of Associate Chief Counsel (Inter-
national), Attention: John E. Hinding
(Notice 2006–34), CC:INTL:6, Inter-
nal Revenue Service, 1111 Constitu-
tion Avenue, NW, Washington, DC
20224. Alternatively, taxpayers may
submit commentselectronically to
notice.comments@irscounsel.treas.gov.
Comments will be available for public
inspection and copying. Please include:
Notice 2006–34 in the subject line of any
electronic communications.
The deadline for submission of com-
ments is May 31, 2006.
DRAFTING INFORMATION
The principal author of this notice is
John E. Hinding of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
John E. Hinding at 202–435–5156 (not a
toll-free call).
Revocation of Qualified
Intermediary Branch Rule
Notice 2006–35
SECTION 1. PURPOSE
This notice modifies Announcement
2000–48, 2000–1 C.B.1243, and Notice
2001–43, 2001–2 C.B. 72, by providing
that, generally, a branch of a financial
institution may not act as a qualified in-
termediary (QI) after December 31, 2006,
in a country that does not have approved
know-your-customer (KYC) rules.
SECTION 2. BACKGROUND
Treasury regulation §1.1441–1(e)(5)
permits a QI, as defined therein, to furnish
a withholding certificate to a withhold-
ing agent on behalf of other persons for
purposes of claiming and verifying re-
duced rates of withholding under section
1441 or 1442. To qualify as a QI, the
intermediary must enter into a withhold-
ing agreement with the IRS, pursuant to
§1.1441–1(e)(5)(iii), the terms of which
are contained in Rev. Proc. 2000–12,
2000–1 C.B. 387 (QI Agreement). Rev.
Proc. 2000–12 states that the IRS will not
enter into a QI agreement that provides for
the use of documentary evidence obtained
under a country’s KYC rules unless it has
received certain information that allows it
to determine whether those KYC rules are
acceptable. Once the IRS determines that
a country’s KYC rules are acceptable, it
lists such country as an approved jurisdic-
tion on the IRS website. KYC rules relate
to the capacity of a financial institution
to determine whether their customers are
U.S. persons and, if their customers are
non-U.S. persons claiming the benefits
of an income tax treaty, whether those
customers are residents of the applica-
ble treaty country. See Notice 2001–4,
2001–1 C.B. 267.
Announcement 2000–48 limits eligibil-
ity for QI status to financial entities orga-
nized in jurisdictions with approved KYC
rules. However, Announcement 2000–48
(as modified by Notice 2001–43) permits a
branch of a financial institution (but not a
separate juridical entity affiliated with the
financial institution) to act as a QI in a ju-
risdiction that does not have KYC rules,
has unacceptable KYC rules, or has KYC
rules awaiting IRS approval, if the branch
is part of an entity organized in a country
that does have acceptable KYC rules and
the entity agrees to apply its home country
KYC rules to the branch.
When the QI system was implemented,
only a small number of jurisdictions had
KYC rules that had been reviewed and ap-
proved by the IRS. In an effort to imple-
ment the QI system as quickly and broadly
as possible, branches of financial entities
were allowed to participate in the QI sys-
tem under the standards of Announcement
2000–48 and Notice 2001–43.
Now that Treasury and the IRS have re-
viewed the KYC rules for all of the coun-
tries that submitted their KYC rules for re-
view, and have approved the KYC rules
of 57 countries, Treasury and the IRS be-
lieve that it is no longer prudent to permit
branches of financial entities to operate as
QIs in countries that do not have approved
KYC rules. KYC rules are most effective
when applied to the countries for which
they were drafted. Further, because the QI
system is largely self-regulated, it is appro-
priate to limit participation in the system to
circumstances in which Treasury and the
IRS have the greatest confidence that such
self-regulation will be effective. A coun-
try’s continuing lack of an acceptable set
of KYC rules raises concerns about the ef-
fectiveness of self-regulation in that coun-
try.
SECTION 3. BRANCHES LOCATED
OUTSIDE OF APPROVED KYC
COUNTRIES
Branches of financial institutions will
not be permitted to operate as QIs after
December 31, 2006, if they are located
outside of countries listed as having ap-
proved KYC rules on the IRS website at
www.irs.ustreas.gov. However, branches
of a financial institution that are operat-
ing as QIs under Announcement 2000–48
(as modified by Notice 2001–43) on April
3, 2006, may continue to operate as QIs
through December 31,2007, provided that
(1) the financial institution mails a written
request for an extension, on or before June
30, 2006, to: KYC Coordinator, Inter-
nal Revenue Service, 290 Broadway, 12
th
Floor, New York, New York 10007; (2) the
request identifies the jurisdictions in which
such branches are located and briefly de-
scribes what steps those jurisdictions have
takentoimplementKYCrules;and(3)
the request is approved, in writing, by the
KYC Coordinator.
Branches of financial institutions that
operate in non-KYC approved jurisdic-
tions will be required to act as non-qual-
ified intermediaries after December 31,
2006, or after December 31, 2007, as ap-
plicable.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
This notice modifies Announcement
2000–48 and Notice 2001–43.
SECTION 5. CONTACT
INFORMATION
The principle authors of this notice
are Jason Kleinman and Ethan Atticks
oftheOfficeoftheAssociateChief
Counsel (International). For further in-
formation regarding this notice, contact
April 3, 20067082006–14 I.R.B.

Jason Kleinman or Ethan Atticks at (202)
622–3840 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also: Part I, §§ 25, 103, 143.)
Rev. Proc 2006–17
SECTION 1. PURPOSE
This revenue procedure provides is-
suers of qualified mortgage bonds, as
defined in section 143(a) of the Internal
Revenue Code, and issuers of mortgage
credit certificates, as defined in section
25(c), with (1) the nationwide average
purchase price for residences located in
the United States, and (2) average area
purchase price safe harbors for residences
located in statistical areas in each state,
the District of Columbia, Puerto Rico,
the Northern Mariana Islands, American
Samoa, the Virgin Islands, and Guam.
SECTION 2. BACKGROUND
.01 Section 103(a) provides that, except
as provided in section 103(b), gross in-
come does not include interest on any state
or local bond. Section 103(b)(1) provides
that section 103(a) shall not apply to any
private activity bond that is not a “qualified
bond” within the meaning of section 141.
Section 141(e) provides, in part, that the
term “qualified bond” means any private
activity bond if such bond (1) is a quali-
fied mortgage bond under section 143, (2)
meets the volume cap requirements under
section 146, and (3) meets the applicable
requirements under section 147.
.02 Section 143(a)(1) provides that the
term “qualified mortgage bond” means a
bond that is issued as part of a qualified
mortgage issue. Section 143(a)(2)(A) pro-
vides that the term “qualified mortgage is-
sue” means an issue of one or more bonds
by a state or political subdivision thereof,
but only if: (i) all proceeds of the issue (ex-
clusive of issuance costs and a reasonably
required reserve) are to be used to finance
owner-occupied residences; (ii) the issue
meets the requirements of subsections (c),
(d), (e), (f), (g), (h), (i), and (m)(7) of sec-
tion 143; (iii) the issue does not meet the
private business tests of paragraphs (1) and
(2) of section 141(b); and (iv) with respect
to amounts received more than 10 years
after the date of issuance, repayments of
$250,000 or more of principal on mortgage
financing provided by the issue are used by
the close of the first semiannual period be-
ginning after the date the prepayment (or
complete repayment) is received to redeem
bonds that are part of the issue.
Average Area Purchase Price
.03 Section 143(e)(1) provides that an
issue of bonds meets the purchase price
requirements of section 143(e) if the ac-
quisition cost of each residence financed
by the issue does not exceed 90 percent of
the average area purchase price applicable
to such residence. Section 143(e)(5) pro-
vides that, in the case of a targeted area res-
idence (as defined in section 143(j)), sec-
tion 143(e)(1) shall be applied by substi-
tuting 110 percent for 90 percent.
.04 Section 143(e)(2) provides that the
term “average area purchase price” means,
with respect to any residence, the average
purchase price of single-family residences
(in the statistical area in which the resi-
dence is located) that were purchased dur-
ing the most recent 12-month period for
which sufficient statistical information is
available. Under sections 143(e)(3) and
(4), respectively, separate determinations
are to be made for new and existing resi-
dences, and for two-, three-, and four-fam-
ily residences.
.05 Section 143(e)(2) provides that the
determination of the average area purchase
price for a statistical area shall be made as
of the date on which the commitment to
provide the financing is made or, if earlier,
the date of the purchase of the residence.
.06 Section 143(k)(2)(A) provides that
the term “statistical area” means (i) a
metropolitan statistical area (MSA), and
(ii) any county (or the portion thereof)
that is not within an MSA. Section
143(k)(2)(C) further provides that if suf-
ficient recent statistical information with
respect to a county (or portion thereof)
is unavailable, the Secretary may sub-
stitute another area for which there is
sufficient recent statistical information for
such county (or portion thereof). In the
case of any portion of a State which is
not within a county, section 143(k)(2)(D)
provides that the Secretary may designate
as a county any area that is the equivalent
of a county. Section 6a.103A–1(b)(4)(i)
of the Temporary Income Tax Regulations
(issued under section 103A of the Internal
Revenue Code of 1954, the predecessor of
section 143) provides that the term “State”
includes a possession of the United States
and the District of Columbia.
.07 Section 6a.103A–2(f)(5)(i) pro-
vides that an issuer may rely upon the av-
erage area purchase price safe harbors pub-
lished by the Department of the Treasury
for the statistical area in which a residence
is located. Section 6a.103A–2(f)(5)(i)
further provides that an issuer may use
an average area purchase price limitation
different from the published safe harbor if
the issuer has more accurate and compre-
hensive data for the statistical area.
Qualified Mortgage Credit Certificate
Program
.08 Section 25(c) permits a state or
political subdivision to establish a quali-
fied mortgage credit certificate program.
In general, a qualified mortgage credit
certificate program is a program under
which the issuing authority elects not to
issue an amount of private activity bonds
that it may otherwise issue during the
calendar year under section 146, and in
their place, issues mortgage credit certifi-
cates to taxpayers in connection with the
acquisition of their principal residences.
Section 25(a)(1) provides, in general, that
the holder of a mortgage credit certificate
may claim a federal income tax credit
equal to the product of the credit rate
specified in the certificate and the interest
paid or accrued during the tax year on the
remaining principal of the indebtedness
incurred to acquire the residence. Section
25(c)(2)(A)(iii)(III) generally provides
that residences acquired in connection
with the issuance of mortgage credit cer-
tificates must meet the purchase price
requirements of section 143(e).
Income Limitations for Qualified
Mortgage Bonds and Mortgage Credit
Certificates
.09 Section 143(f) imposes limitations
on the income of mortgagors for whom
financing may be provided by qualified
mortgage bonds. In addition, section
25(c)(2)(A)(iii)(IV) provides that holders
of mortgage credit certificates must meet
the income requirement of section 143(f).
Generally, under sections 143(f)(1) and
2006–14 I.R.B.709April 3, 2006

25(c)(2)(A)(iii)(IV), the income require-
ment is met only if all owner-financing
under a qualified mortgage bond and all
mortgage credit certificates issued under a
qualified mortgage credit certificate pro-
gram are provided to mortgagors whose
family income is 115 percent or less of the
applicable median family income. Section
143(f)(5), however, generally provides
for an upward adjustment to the percent-
age limitation in high housing cost areas.
High housing cost areas are defined in
section 143(f)(5)(C) as any statistical area
for which the housing cost/income ratio is
greater than 1.2.
.10 Under section 143(f)(5)(D), the
housing cost/income ratio with respect to
any statistical area is determined by divid-
ing (a) the applicable housing price ratio
for such area by (b) the ratio that the area
median gross income for such area bears
to the median gross income for the United
States. The applicable housing price ratio
is the new housing price ratio (new hous-
ing average area purchase price divided by
the new housing average purchase price
for the United States) or the existing hous-
ing price ratio (existing housing average
area purchase price divided by the existing
housing average purchase price for the
United States), whichever results in the
housing cost/income ratio being closer to
1.
Average Area and Nationwide Purchase
Price Limitations
.11 Average area purchase price safe
harbors for each state, the District of Co-
lumbia, Puerto Rico, the Northern Mari-
ana Islands, American Samoa, the Virgin
Islands, and Guam were last published in
Rev. Proc. 2005–15, 2005–9 I.R.B. 638.
.12 The nationwideaverage purchase
price limitation was last published in
section 4.02 of Rev. Proc. 2005–15.
Guidance with respect to the United States
and area median grossincome figures that
aretobeusedincomputingthehousing
cost/income ratio described in section
143(f)(5) was last published in Rev. Proc.
2005–22, 2005–15 I.R.B. 886.
.13 This revenue procedure uses FHA
loan limits for a given statistical area to
calculate the average area purchase price
safe harbor for that area. FHA sets lim-
its on the dollar value of loans it will in-
sure based on median home prices and
conforming loan limits established by the
Federal Home Loan Mortgage Corpora-
tion. In particular, FHA sets an area’s loan
limit at 95 percent of the median home
sales price for the area, subject to certain
floors and caps measured against conform-
ingloanlimits.
.14 To calculate the average area pur-
chase price safe harbors in this revenue
procedure, the FHA loan limits are ad-
justed to take into account the differences
between average and median purchase
prices. Because FHA loan limits do not
differentiate between new and existing
residences, this revenue procedure con-
tains a single average area purchase price
safe harbor for both new and existing
residences in a statistical area. The Trea-
sury Department and the Internal Revenue
Service have determined that FHA loan
limits provide a reasonable basis for de-
termining average area purchase price
safe harbors. If the Treasury Department
and the Internal Revenue Service become
aware of other sources of average purchase
price data, including data that differentiate
between new and existing residences, con-
sideration will be given as to whether such
data provide a more accurate method for
calculating average area purchase price
safe harbors.
.15 The average area purchase price
safeharborslistedinsection4.01ofthis
revenue procedure are based on FHA loan
limits released January 3, 2006. FHA loan
limits are available for statistical areas in
each state, the District of Columbia, Puerto
Rico, the Northern Mariana Islands, Amer-
ican Samoa, the Virgin Islands, and Guam.
See section 3.03 of this revenue procedure
with respect to FHA loan limits revised af-
ter January 3, 2006.
.16 OMB Bulletin No. 03–04, dated
and effective June 6, 2003, revised the def-
initions of the nation’s metropolitan areas
and recognized 49 new metropolitan sta-
tistical areas. The OMB bulletin no longer
includes primary metropolitan statistical
areas.
SECTION 3. APPLICATION
Average Area Purchase Price Safe
Harbors
.01 Average area purchase price safe
harbors for statistical areas in each state,
the District of Columbia, Puerto Rico,
the Northern Mariana Islands, American
Samoa, the Virgin Islands, and Guam are
set forth in section 4.01 of this revenue
procedure. Average area purchase price
safe harbors are provided for single-fam-
ily and two to four-family residences. For
each type of residence, section 4.01 of this
revenue procedure contains a single safe
harbor that may be used for both new and
existing residences. Issuers of qualified
mortgage bonds and issuers of mortgage
credit certificates may rely on these safe
harbors to satisfy the requirements of sec-
tions 143(e) and (f). Section 4.01 of this
revenue procedure provides safe harbors
for MSAs and for certain counties and
county equivalents. If no purchase price
safe harbor is available for a statistical
area, the safe harbor for “ALL OTHER
AREAS” may be used for that statistical
area (except for Alaska, for which a sepa-
rate safe harbor is provided for statistical
areas not listed).
.02IfaresidenceisinanMSA,thesafe
harbor applicable to it is the limitation of
that MSA. If an MSA falls in more than
one state, the MSA is listed in section 4.01
of this revenue procedure under each state.
.03 If the FHA revises the FHA loan
limit for any statistical area after January
3, 2006, an issuer of qualified mortgage
bonds or mortgage credit certificates may
use the revised FHA loan limit for that
statistical area to compute (as provided in
the next sentence) a revised average area
purchase price safe harbor for the statisti-
cal area provided that the issuer maintains
records evidencing the revised FHA loan
limit. The revised average area purchase
price safe harbor for that statistical area
is computed by dividing the revised FHA
loan limit by .76.
.04 If, pursuant to section 6a.103A–
2(f)(5)(i), an issuer uses more accurate and
comprehensive data to determine the av-
erage area purchase price for a statistical
area, the issuer must make separate aver-
age area purchase pricedeterminations for
new and existing residences. Moreover,
when computing the average area purchase
price for a statistical area that is an MSA,
as defined in OMB Bulletin No. 03–04,
the issuer must make the computation for
the entire applicableMSA. When comput-
ing the average area purchase price for a
statistical area that is not an MSA, the is-
suer must make the computation for the en-
tire statistical area and may not combine
April 3, 20067102006–14 I.R.B.

statistical areas. Thus, for example, the is-
suer may not combine two or more coun-
ties.
.05 If an issuer receives a ruling permit-
ting it to rely on an average area purchase
price limitation that is higher than the
applicable safe harbor in this revenue
procedure, the issuer may rely on that
higher limitation for the purpose of satis-
fying the requirements of section 143(e)
and (f) for bonds sold, and mortgage
credit certificates issued, not more than 30
months following the termination date of
the12-monthperiodusedbytheissuerto
compute the limitation.
Nationwide Average Purchase Price
.06 Section 4.02 of this revenue proce-
dure sets forth a single nationwide average
purchase price for purposes of computing
the housing cost/income ratio under sec-
tion 143(f)(5).
.07 Issuers must use the nationwide av-
erage purchase price set forth in section
4.02 of this revenue procedure when com-
puting the housing cost/income ratio un-
der section 143(f)(5) regardless of whether
they are relying on the average area pur-
chase price safe harbors contained in this
revenue procedure or using more accurate
and comprehensive data to determine av-
erage area purchase prices for new and ex-
isting residences for a statistical area that
are different from the published safe har-
bors in this revenue procedure.
.08 If, pursuant to section 6.02 of this
revenue procedure, an issuer relies on the
average area purchase price safe harbors
contained in Rev. Proc. 2005–15, the is-
suer must use the nationwide average pur-
chase price set forth in section 4.02 of Rev.
Proc. 2005–15 in computing the housing
cost/income ratio under section 143(f)(5).
Likewise, if, pursuant to section 6.05 of
this revenue procedure, an issuer relies
on the nationwide average purchase price
published in Rev. Proc. 2005–15, the is-
suer may not rely on the average area pur-
chase price safe harbors published in this
revenue procedure.
SECTION 4. AVERAGE AREA AND
NATIONWIDE AVERAGE PURCHASE
PRICES
.01 Average area purchase prices for
single-family and two to four-family res-
idences in MSAs, and for certain counties
and county equivalents are set forth below.
The safe harbor for “ALL OTHER AR-
EAS” (found at the end of the table below)
may be used for a statistical area that is not
listed below.
MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
ALASKA
ANCHORAGE, AK (MSA)ANCHORAGE$335,592$377,961$459,276$529,934
ANCHORAGE, AK (MSA)MATANUSKA-SUSIT$335,592$377,961$459,276$529,934
JUNEAU, AK (MICRO)JUNEAU$386,842$435,724$529,408$610,855
NON-METRODENALI$316,137$404,668$489,126$607,879
NON-METROSITKA$431,250$485,724$590,132$680,921
NON-METROYAKUTAT CITY$316,137$404,668$489,126$607,879
ARIZONA
FLAGSTAFF, AZ (MSA)COCONINO$386,250$435,039$528,553$609,868
LAKE HAVASU CITY-KINGMAN, AZ
(MICRO)MOHAVE$321,842$362,500$440,461$508,224
PHOENIX-MESA-SCOTTSDALE, AZ
(MSA)MARICOPA$335,000$377,316$458,421$528,947
PHOENIX-MESA-SCOTTSDALE, AZ
(MSA)PINAL$335,000$377,316$458,421$528,947
PR
ESCOTT, AZ (MSA)
YA
VAPAI
$3
33,750
$3
75,855
$4
56,711
$5
26,974
TUCSON, AZ (MSA)PIMA$302,895$341,154$414,487$506,495
C
ALIFORNIA
BAKERSFIELD, CA (MSA)KERN$321,250$361,776$439,605$507,237
BISHOP, CA (MICRO)INYO$411,704$488,487$593,553$684,868
CHICO, CA (MSA)BUTTE$362,500$408,289$496,053$572,368
CLEARLAKE, CA (MICRO)LAKE$293,750$337,168$407,558$506,495
CRESCENT CITY, CA (MICRO)DEL NORTE$311,250$350,526$425,921$506,495
EL CENTRO, CA (MSA)IMPERIAL$274,934$337,168$407,558$506,495
EUREKA-ARCATA-FORTUNA, CA
(MICRO)HUMBOLDT$375,000$422,368$513,158$592,105
FRESNO, CA (MSA)FRESNO$346,250$389,934$473,816$546,711
HANFORD-CORCORAN, CA (MSA)KINGS$312,316$351,766$427,379$506,495
LOS ANGELES-LONG BEACH-
GLENDALE, CALOS ANGELES$477,355$611,117$738,699$918,021
2006–14 I.R.B.711April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
MADERA, CA (MSA)MADERA$368,750$415,329$504,605$582,237
MERCED, CA (MSA)MERCED$411,704$478,684$581,579$671,053
MODESTO, CA (MSA)STANISLAUS$440,625$496,283$602,961$695,724
NAPA, CA (MSA)NAPA$477,355$611,117$738,699$918,021
NON-METROALPINE$411,704$527,037$637,046$747,039
NON-METROAMADOR$411,704$506,842$615,789$710,526
NON-METROCALAVERAS$411,704$527,037$637,046$774,671
NON-METROCOLUSA$343,750$387,171$470,395$542,763
NON-METROGLENN$281,250$337,168$407,558$506,495
NON-METROMARIPOSA$411,704$464,605$564,474$651,316
NON-METROMONO$411,704$527,037$637,046$791,700
NON-METROPLUMAS$337,500$380,132$461,842$532,895
NON-METROSISKIYOU$293,750$337,168$407,558$506,495
OAKLAND-FREMONT-HAYWARD, CA
METROPOLITANALAMEDA$477,355$611,117$738,699$918,021
OAKLAND-FREMONT-HAYWARD, CA
METROPOLITANCONTRA COSTA$477,355$611,117$738,699$918,021
OXNARD-THOUSAND OAKS-
VENTURA, CA (MSA)VENTURA$477,355$611,117$738,699$918,021
PHOENIX LAKE-CEDAR RIDGE, CA
(MICRO)TUOLUMNE$411,704$478,684$581,579$671,053
RED BLUFF, CA (MICRO)TEHAMA$293,750$337,168$407,558$506,495
REDDING, CA (MSA)SHASTA$363,750$409,697$497,763$574,342
RIVERSIDE-SAN BERNARDINO-
ONTARIO, CARIVERSIDE$477,355$545,225$662,424$764,334
RIVERSIDE-SAN BERNARDINO-
ONTARIO, CASAN BERNARDINO $477,355$545,225$662,424$764,334
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CAEL DORADO$477,355$587,092$713,289$823,026
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CAPLACER$477,355$587,092$713,289$823,026
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CASACRAMENTO$477,355$587,092$713,289$823,026
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CAYOLO$477,355$587,092$713,289$823,026
SALINAS, CA (MSA)MONTEREY$477,355$611,117$738,699$918,021
SAN DIEGO-CARLSBAD-SAN MARCOS,
CA (MSA)SAN DIEGO$477,355$611,117$738,699$918,021
SAN FRANCISCO-SAN MATEO-
REDWOOD CITY, CAMARIN$477,355$611,117$738,699$918,021
SAN FRANCISCO-SAN MATEO-
REDWOOD CITY, CASAN FRANCISCO$477,355$611,117$738,699$918,021
SAN FRANCISCO-SAN MATEO-
REDWOOD CITY, CASAN MATEO$477,355$611,117$738,699$918,021
SAN JOSE-SUNNYVALE-SANTA
CLARA, CA (MSA)SAN BENITO$477,355$611,117$738,699$918,021
SAN JOSE-SUNNYVALE-SANTA
CLARA, CA (MSA)SANTA CLARA$477,355$611,117$738,699$918,021
SAN LUIS OBISPO-PASO ROBLES, CA
(MSA)SAN LUIS OBISPO$477,355$611,117$738,699$918,021
SANTA ANA-ANAHEIM-IRVINE, CA
METROPOLITANORANGE$477,355$611,117$738,699$918,021
SANTA BARBARA-SANTA
MARIA-GOLETA, CASANTA BARBARA$477,355$611,117$738,699$918,021
SANTA CRUZ-WATSONVILLE, CA
(MSA)SANTA CRUZ$477,355$611,117$738,699$918,021
April 3, 20067122006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
SANTA ROSA-PETALUMA, CA (MSA)SONOMA$477,355$611,117$738,699$918,021
STOCKTON, CA (MSA)SAN JOAQUIN$477,355$549,079$667,105$769,737
TRUCKEE-GRASS VALLEY, CA (MICRO) NEVADA$411,704$527,037$637,046$789,474
UKIAH, CA (MICRO)MENDOCINO$411,704$487,105$591,842$682,895
VALLEJO-FAIRFIELD, CA (MSA)SOLANO$477,355$611,117$738,699$907,895
VISALIA-PORTERVILLE, CA (MSA)TULARE$285,592$337,168$407,558$506,495
YUBA CITY, CA (MSA)SUTTER$396,250$446,250$542,237$625,658
YUBA CITY, CA (MSA)YUBA$396,250$446,250$542,237$625,658
COLORADO
BOULDER, CO (MSA)BOULDER$446,842$503,284$611,467$705,539
COLORADO SPRINGS, CO (MSA)EL PASO$312,500$351,974$427,632$506,495
COLORADO SPRINGS, CO (MSA)TELLER$312,500$351,974$427,632$506,495
DENVER-AURORA, CO (MSA)ADAMS$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)ARAPAHOE$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)BROOMFIELD$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)CLEAR CREEK$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)DENVER$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)DOUGLAS$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)ELBERT$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)GILPIN$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)JEFFERSON$344,222$440,609$532,532$631,579
DENVER-AURORA, CO (MSA)PARK$344,222$440,609$532,532$631,579
DURANGO, CO (MICRO)LA PLATA$303,750$342,118$415,658$506,495
EDWARDS, CO (MICRO)EAGLE$411,704$513,882$624,342$720,395
EDWARDS, CO (MICRO)LAKE$411,704$513,882$624,342$720,395
FORT COLLINS-LOVELAND, CO (MSA) LARIMER$292,125$337,168$407,558$506,495
GREELEY, CO (MSA)WELD$312,375$351,833$427,461$506,495
NON-METROARCHULETA$263,487$337,168$407,558$506,495
NON-METROGARFIELD$292,293$337,168$407,558$506,495
NON-METROGRAND$293,750$337,168$407,558$506,495
NON-METROPITKIN$381,999$488,975$591,028$734,521
NON-METROROUTT$398,026$448,301$544,666$628,461
NON-METROSAN MIGUEL$344,222$401,250$487,500$562,500
SILVERTHORNE, CO (MICRO)SUMMIT$380,000$428,000$520,000$600,000
CONNECTICUT
BRIDGEPORT-STAMFORD-NORWALK,
CT (MSA)FAIRFIELD$477,355$611,117$738,699$918,021
HARTFORD-WEST HARTFORD-EAST
HARTFORD, CTHARTFORD$335,000$377,316$458,421$528,947
HARTFORD-WEST HARTFORD-EAST
HARTFORD, CTMIDDLESEX$335,000$377,316$458,421$528,947
HARTFORD-WEST HARTFORD-EAST
HARTFORD, CTTOLLAND$335,000$377,316$458,421$528,947
NEW HAVEN-MILFORD, CT (MSA)NEW HAVEN$385,625$435,039$528,553$609,868
NORWICH-NEW LONDON, CT (MSA)NEW LONDON$368,625$415,188$504,434$582,039
TORRINGTON, CT (MICRO)LITCHFIELD$375,000$422,368$513,158$592,105
DISTRICT OF COLUMBIA
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VADISTRICT OF COL$477,355$611,117$738,699$888,158
DELAWARE
DOVER, DE (MSA)KENT$294,457$337,168$407,558$506,495
SEAFORD, DE (MICRO)SUSSEX$325,000$366,053$444,737$513,158
WILMINGTON, DE-MD-NJ
METROPOLITANNEW CASTLE$356,250$401,250$487,500$562,500
2006–14 I.R.B.713April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
FLORIDA
CAPE CORAL-FORT MYERS, FL (MSA) LEE$346,974$390,801$474,805$547,853
FORT LAUDERDALE-POMPANO
BEACH-DEERFIELDBROWARD$477,355$544,336$661,343$763,088
FORT WALTON BEACH-CRESTVIEW-
DESTIN, FLOKALOOSA$287,375$337,168$407,558$506,495
JACKSONVILLE, FL (MSA)BAKER$275,000$337,168$407,558$506,495
JACKSONVILLE, FL (MSA)CLAY$275,000$337,168$407,558$506,495
JACKSONVILLE, FL (MSA)DUVAL$275,000$337,168$407,558$506,495
JACKSONVILLE, FL (MSA)NASSAU$275,000$337,168$407,558$506,495
JACKSONVILLE, FL (MSA)ST. JOHNS$275,000$337,168$407,558$506,495
KEY WEST-MARATHON, FL (MICRO)MONROE$411,704$527,037$637,046$791,700
MIAMI-MIAMI BEACH-KENDALL, FL
METROPOLITANDADE$477,355$544,336$661,343$763,088
NAPLES-MARCO ISLAND, FL (MSA)COLLIER$460,957$519,182$630,782$727,825
NON-METR
O
WALTON$411,704$527,037$637,046$791,700
ORLANDO, FL (MSA)LAKE$326,579$367,830$446,897$515,650
ORLANDO, FL (MSA)ORANGE$326,579$367,830$446,897$515,650
ORLANDO
,FL(MSA)
OSCEOLA$326,57
9
$367,83
0
$446,89
7
$515,65
0
ORLANDO, FL (MSA)SEMINOLE$326,579$367,830$446,897$515,650
PALM BAY-MELBOURNE-TITUSVILLE,
FL (MSA)BREVARD$273,370$337,168$407,558$506,495
PALM COAST, FL (MICRO)FLAGLER$268,750$337,168$407,558$506,495
PANAMA CITY-LYNN HAVEN, FL (MSA) BAY$296,125$337,168$407,558$506,495
PORT ST
. LUCIE-FORT PIERCE, FL
(MSA)MARTIN$311,8
42
$351,2
50
$426,7
76
$506,4
95
PORT ST. LUCIE-FORT PIERCE, FL
(MSA)ST. LUCIE$311,842$351,250$426,776$506,495
PUNTA GORDA, FL (MSA)CHARLOTTE$295,012$337,168$407,558$506,495
SARASOTA-BRADENTON-VENICE, FL
(MSA)MANATEE$442,237$498,097$605,166$698,268
SARASOTA-BRADENTON-VENICE, FL
(MSA)SARASOTA$442,237$498,097$605,166$698,268
SEBASTIAN-VERO BEACH, FL (MSA)INDIAN RIVER$281,250$337,168$407,558$506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FLHERNANDO$266,842$337,168$407,558$506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FLHILLSBOROUGH$266,842$337,168$407,558$506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FLPASCO$266,842$337,168$407,558$506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FLPINELLAS$266,842$337,168$407,558$506,495
WEST PALM BEACH-BOCA
RATON-BOYNTON BEACH, FLPALM BEACH$477,355$544,336$661,343$763,088
GEORGIA
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)BARROW$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)BARTOW$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)BUTTS$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)CARROLL$299,875$337,754$410,355$506,495
April 3, 20067142006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)CHEROKEE$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)CLAYTON$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)COBB$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)COWETA$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)DAWSON$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)DE KALB$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)DOUGLAS$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)FAYETTE$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)FORSYTH$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)FULTON$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)GWINNETT$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)HARALSON$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)HEARD$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)HENRY$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)JASPER$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)LAMAR$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)MERIWETHER$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)NEWTON$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)PAULDING$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)PICKENS$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)PIKE$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)ROCKDALE$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)SPALDING$299,875$337,754$410,355$506,495
ATLANTA-SANDY SPRINGS-
MARIETTA, GA (MSA)WALTON$299,875$337,754$410,355$506,495
BRUNSWICK, GA (MSA)BRANTLEY$275,258$337,168$407,558$506,495
BRUNSWICK, GA (MSA)GLYNN$275,258$337,168$407,558$506,495
BRUNSWICK, GA (MSA)MCINTOSH$275,258$337,168$407,558$506,495
2006–14 I.R.B.715April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
HAWAII
HILO, HI (MICRO)HAWAII$515,592$580,724$705,592$814,145
HONOLULU, HI (MSA)HONOLULU$716,033$865,929$1,052,063 $1,213,918
KAHULUI-WAILUKU, HI (MICRO)MAUI$617,555$757,434$920,263$1,061,842
KAPAA, HI (MICRO)KAUAI$617,555$718,026$872,368$1,006,579
IDAHO
JACKSON, WY-ID (MICRO)TETON$411,704$527,037$637,046$791,700
NON-METROBLAINE$411,704$527,037$637,046$750,000
ILLINOIS
CHICAGO-N
APERVILLE-JOLIET, IL
METROPOLI
TAN
COOK$362,105$407,845$495,512$571,745
CHICAGO-NAPERVILLE-JOLIET, IL
METROPOLITANDEKALB$362,105$407,845$495,512$571,745
CHICAGO-N
APERVILLE-JOLIET, IL
METROPOL
ITAN
DUPAGE$362,105$407,845$495,512$571,745
CHICAGO-NAPERVILLE-JOLIET, IL
METROPOLITANGRUNDY$362,105$407,845$495,512$571,745
CHICAGO-
NAPERVILLE-JOLIET, IL
METROPOL
ITAN
KANE$362,105$407,845$495,512$571,745
CHICAGO-NAPERVILLE-JOLIET, IL
METROPOLITANKENDALL$362,105$407,845$495,512$571,745
CHICAGO
-NAPERVILLE-JOLIET, IL
METROPO
LITAN
MCHENRY$362,10
5
$407,84
5
$495,51
2
$571,74
5
CHICAGO-NAPERVILLE-JOLIET, IL
METROPOLITANWILL$362,105$407,845$495,512$571,745
LAKE COU
NTY-KENOSHA COUNTY,
IL-WI M
ETROPOLITAN
LAKE$362,1
05
$407,8
45
$495,5
12
$571,7
45
ST. LOUIS, MO-IL (MSA)BOND$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)CALHOUN$281,250$337,168$407,558$506,495
ST. LOU
IS, MO-IL (MSA)
CLINTO
N
$281,2
50
$337,1
68
$407,5
58
$506,4
95
ST.LOUIS,MO-IL(MSA)JERSEY$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)MACOUPIN$281,250$337,168$407,558$506,495
ST. LO
UIS, MO-IL (MSA)
MADIS
ON
$281,
250
$337,
168
$407,
558
$506,
495
ST. LOUIS, MO-IL (MSA)MONROE$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)ST. CLAIR$281,250$337,168$407,558$506,495
INDIANA
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)DEARBORN$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)FRANKLIN$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)OHIO$300,000$337,895$410,526$506,495
GARY, IN METROPOLITAN DIVISIONJASPER$362,105$407,845$495,512$571,745
GARY, IN METROPOLITAN DIVISIONLAKE$362,105$407,845$495,512$571,745
GARY, IN METROPOLITAN DIVISIONNEWTON$362,105$407,845$495,512$571,745
GARY, IN METROPOLITAN DIVISIONPORTER$362,105$407,845$495,512$571,745
KANSAS
KANSAS CITY, MO-KS (MSA)FRANKLIN$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)JOHNSON$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)LEAVENWORTH$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)LINN$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)MIAMI$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)WYANDOTTE$265,313$337,168$407,558$506,495
April 3, 20067162006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
KENTUCKY
CINCINNATI-M
IDDLETOWN, OH-KY-IN
(MSA)BOONE$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)BRACKEN$300,000$337,895$410,526$506,495
CINCINNATI-
MIDDLETOWN, OH-KY-IN
(MSA)CAMPBELL$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)GALLATIN$300,000$337,895$410,526$506,495
CINCINNATI-
MIDDLETOWN, OH-KY-IN
(MSA)GRANT$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)KENTON$300,000$337,895$410,526$506,495
CINCINNATI
-MIDDLETOWN, OH-KY-IN
(MSA)PENDLETON$300,000$337,895$410,526$506,495
MAINE
PORTLAND-SOUTH PORTLAND-
BIDDEFORD, MECUMBERLAND$336,875$379,428$460,987$531,908
PORTLAND-SOUTH PORTLAND-
BIDDEFORD, MESAGADAHOC$336,875$379,428$460,987$531,908
PORTLAND-SOUTH PORTLAND-
BIDDEFORD, MEYORK$336,875$379,428$460,987$531,908
MARYLAND
BALTIMORE-TOWSON, MD (MSA)ANNE ARUNDEL$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)BALTIMORE$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)BALTIMORE CITY$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)CARROLL$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)HARFORD$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)HOWARD$406,250$457,566$555,921$641,447
BALTIMORE-TOWSON, MD (MSA)QUEEN ANNE’S$406,250$457,566$555,921$641,447
BETHESDA-FREDERICK-GAITHERS-
BURG, MDFREDERICK$477,355$611,117$738,699$888,158
BETHESDA-FREDERICK-GAITHERS-
BURG, MDMONTGOMERY$477,355$611,117$738,699$888,158
HAGERSTOWN-MARTINSBURG,
MD-WV (MSA)WASHINGTON$355,000$399,842$485,789$560,526
LEXIN
GTON PARK, MD (MICRO)
ST. MA
RY’S
$327,
500
$368,
868
$448,
158
$517,
105
SALISBURY, MD (MSA)SOMERSET$296,250$337,168$407,558$506,495
SALISBURY, MD (MSA)WICOMICO$296,250$337,168$407,558$506,495
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VACALVERT$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VACHARLES$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAPRINCE GEORGE’S$477,355$611,117$738,699$888,158
WILMINGTON, DE-MD-NJ
METROPOLITAN DIVISIONCECIL$356,250$401,250$487,500$562,500
MASSACHUSETTS
BARNSTABLE TOWN, MA (MSA)BARNSTABLE$477,355$577,237$701,316$809,211
BOSTON-QUINCY, MA METROPOLITAN
DIVISIONNORFOLK$477,355$606,728$737,146$850,554
2006–14 I.R.B.717April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
BOSTON-QUINCY, MA METROPOLITAN
DIVISIONPLYMOUTH$477,355$606,728$737,146$850,554
BOSTON-QUINCY, MA METROPOLITAN
DIVISIONSUFFOLK$477,355$606,728$737,146$850,554
CAMBRIDGE-NEWTON-FRAMING-
HAM, MA METROPOLITANMIDDLESEX$477,355$606,728$737,146$850,554
ESSEX COUNTY, MA METROPOLITAN
DIVISIONESSEX$477,355$606,728$737,146$850,554
NON-METRODUKES$344,222$440,609$532,532$661,829
NON-METRONANTUCKET$344,222$440,609$532,532$661,829
PROVIDENCE-
NEW BEDFORD-FALL
RIVER, RIBRISTOL$416,250$472,891$571,567$710,309
SPRINGFIELD, MA (MSA)FRANKLIN$271,974$337,168$407,558$506,495
SPRINGFIELD, MA (MSA)HAMPDEN$271,974$337,168$407,558$506,495
SPRINGFIE
LD, MA (MSA)
HAMPSHIRE$271,974$337,168$407,558$506,495
WORCESTER, MA (MSA)WORCESTER$385,000$488,975$591,028$734,521
MICHIGAN
ADRIAN, MI (MICRO)LENAWEE$297,500$337,168$407,558$506,495
ANN ARBOR, MI (MSA)WASHTENAW$344,875$388,438$471,934$544,539
DETROIT-LIVONIA-DEARBORN, MI
METROPOLITANWAYNE$297,500$337,168$407,558$506,495
MONROE, MI (MSA)MONROE$297,500$337,168$407,558$506,495
WARREN-
TROY-FARMINGTON HILLS,
MI METRO
POLITAN
LAPEER$297,50
0
$337,16
8
$407,55
8
$506,49
5
WARREN-TROY-FARMINGTON HILLS,
MI METROPOLITANLIVINGSTON$297,500$337,168$407,558$506,495
WARREN-
TROY-FARMINGTON HILLS,
MI METR
OPOLITAN
MACOMB$297,5
00
$337,1
68
$407,5
58
$506,4
95
WARREN-TROY-FARMINGTON HILLS,
MI METROPOLITANOAKLAND$297,500$337,168$407,558$506,495
WARREN
-TROY-FARMINGTON HILLS,
MI METR
OPOLITAN
ST. CLA
IR
$297,5
00
$337,1
68
$407,5
58
$506,4
95
MINNESOTA
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIANOKA$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WICARVER$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WICHISAGO$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIDAKOTA$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIHENNEPIN$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIISANTI$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIRAMSEY$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WISCOTT$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WISHERBURNE$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIWASHINGTON$321,875$362,533$440,461$508,224
April 3, 20067182006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIWRIGHT$321,875$362,533$440,461$508,224
MISSOURI
KANSAS CITY, MO-KS (MSA)BATES$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)CALDWELL$265,313$337,168$407,558$506,495
KANSAS CITY,
MO-KS (MSA)
CASS$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)CLAY$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)CLINTON$265,313$337,168$407,558$506,495
KANSAS CITY
, MO-KS (MSA)
JACKSON$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)LAFAYETTE$265,313$337,168$407,558$506,495
KANSAS CITY, MO-KS (MSA)PLATTE$265,313$337,168$407,558$506,495
KANSAS CIT
Y, MO-KS (MSA)
RAY$265,313$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)CRAWFORD$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)FRANKLIN$281,250$337,168$407,558$506,495
ST. LOUIS
,MO-IL(MSA)
JEFFERSO
N
$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)LINCOLN$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)ST. CHARLES$281,250$337,168$407,558$506,495
ST. LOUI
S, MO-IL (MSA)
ST. LOUI
S
$281,25
0
$337,16
8
$407,55
8
$506,49
5
ST. LOUIS, MO-IL (MSA)ST. LOUIS CITY$281,250$337,168$407,558$506,495
ST. LOUIS, MO-IL (MSA)WARREN$281,250$337,168$407,558$506,495
ST. LOU
IS, MO-IL (MSA)
WASHIN
GTON
$281,2
50
$337,1
68
$407,5
58
$506,4
95
MONTANA
MISSO
ULA, MT (MSA)
MISSO
ULA
$290,
625
$337,
168
$407,
558
$506,
495
NEVADA
CARSO
N CITY, NV (MSA)
CARSO
NCITY
$398,
750
$449,
118
$545,
658
$629,
605
FERNLEY, NV (MICRO)LYON$318,618$358,816$435,987$506,495
GARDNERVILLE RANCHOS, NV
(MICRO)DOUGLAS$411,704$527,037$637,046$748,026
LAS VEGAS-PARADISE, NV (MSA)CLARK$391,316$440,745$535,484$617,866
PAHRUMP, NV (MICRO)NYE$321,842$362,500$440,461$508,224
RENO-SPARKS, NV (MSA)STOREY$437,500$492,763$598,684$690,789
RENO-SPARKS, NV (MSA)WASHOE$437,500$492,763$598,684$690,789
NEW HAMPSHIRE
MANCHESTER-NASHUA, NH (MSA)HILLSBOROUGH$401,875$488,975$591,028$734,521
ROCKINGHAM COUNTY-STRAFFORD
COUNTY, NHROCKINGHAM$477,355$606,728$737,146$850,554
ROCKINGHAM COUNTY-STRAFFORD
COUNTY, NHSTRAFFORD$477,355$606,728$737,146$850,554
NEW JERSEY
ALLENTOWN-BETHLEHEM-EASTON,
PA-NJ (MSA)WARREN$369,407$459,255$557,974$643,816
ATLANTIC CITY, NJ (MSA)ATLANTIC$425,000$478,684$581,579$671,053
CAMDEN, NJ METROPOLITAN
DIVISIONBURLINGTON$356,250$401,250$487,500$562,500
CAMDEN, NJ METROPOLITAN
DIVISIONCAMDEN$356,250$401,250$487,500$562,500
CAMDEN, NJ METROPOLITAN
DIVISIONGLOUCESTER$356,250$401,250$487,500$562,500
EDISON, NJ METROPOLITAN DIVISION MIDDLESEX$477,355$611,117$738,699$918,021
EDISON, NJ METROPOLITAN DIVISION MONMOUTH$477,355$611,117$738,699$918,021
EDISON, NJ METROPOLITAN DIVISION OCEAN$477,355$611,117$738,699$918,021
EDISON, NJ METROPOLITAN DIVISION SOMERSET$477,355$611,117$738,699$918,021
2006–14 I.R.B.719April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANBERGEN$477,355$611,117$738,699$918,021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANHUDSON$477,355$611,117$738,699$918,021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANPASSAIC$477,355$611,117$738,699$918,021
NEWARK-UNION, NJ-PA METROPOLI-
TAN DIVISIONESSEX$477,355$611,117$738,699$918,021
NEWARK-UNION, NJ-PA METROPOLI-
TAN DIVISIONHUNTERDON$477,355$611,117$738,699$918,021
NEWARK-UNION, NJ-PA METROPOLI-
TAN DIVISIONMORRIS$477,355$611,117$738,699$918,021
NEWARK-UNION, NJ-PA METROPOLI-
TAN DIVISIONSUSSEX$477,355$611,117$738,699$918,021
NEWARK-UNION, NJ-PA METROPOLI-
TAN DIVISIONUNION$477,355$611,117$738,699$918,021
OCEAN CITY, NJ (MSA)CAPE MAY$477,355$558,934$679,079$783,553
TRENTON-EWING, NJ (MSA)MERCER$439,550$495,071$601,489$694,026
VINELAND-
MILLVILLE-BRIDGETON,
NJ (MSA)CUMBERLAN
D
$405,000$456,158$554,211$639,474
WILMINGTON, DE-MD-NJ
METROPOLITAN DIVISIONSALEM$356,250$401,250$487,500$562,500
NEW MEXICO
LOS ALAMOS, NM (MICRO)LOS ALAMOS$318,750$359,013$436,184$506,495
SANTA FE, NM (MSA)SANTA FE$381,999$449,471$546,086$630,099
NEW YORK
BUFFALO-NIAGARA FALLS, NY (MSA) ERIE$275,075$337,168$407,558$506,495
BUFFALO-NIAGARA FALLS, NY (MSA) NIAGARA$275,075$337,168$407,558$506,495
KINGSTON, NY (MSA)ULSTER$324,079$365,014$443,476$511,703
NASSAU
-SUFFOLK, NY METROPOLI-
TAN DIV
ISION
NASSAU$477,3
55
$611,1
17
$738,6
99
$918,0
21
NASSAU-SUFFOLK, NY METROPOLI-
TAN DIVISIONSUFFOLK$477,355$611,117$738,699$918,021
NEW YOR
K-WAYNE-WHITE PLAINS,
NY-NJ
METROPOLITAN
BRONX$477,
355
$611,
117
$738,
699
$918,
021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANKINGS$477,355$611,117$738,699$918,021
NEW YO
RK-WAYNE-WHITE PLAINS,
NY-NJ
METROPOLITAN
NEW YO
RK
$477,
355
$611,
117
$738,
699
$918,
021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANPUTNAM$477,355$611,117$738,699$918,021
NEW Y
ORK-WAYNE-WHITE PLAINS,
NY-N
J METROPOLITAN
QUEE
NS
$477
,355
$611
,117
$738
,699
$918
,021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANRICHMOND$477,355$611,117$738,699$918,021
NEW Y
ORK-WAYNE-WHITE PLAINS,
NY-N
J METROPOLITAN
ROCK
LAND
$477
,355
$611
,117
$738
,699
$918
,021
NEW YORK-WAYNE-WHITE PLAINS,
NY-NJ METROPOLITANWESTCHESTER$477,355$611,117$738,699$918,021
POU
GHKEEPSIE-NEWBURGH-
MID
DLETOWN, NY
DUT
CHESS
$40
6,250
$45
7,566
$55
5,921
$64
1,447
POUGHKEEPSIE-NEWBURGH-
MIDDLETOWN, NYORANGE$406,250$457,566$555,921$641,447
ROCHESTER, NY (MSA)LIVINGSTON$265,000$337,168$407,558$506,495
April 3, 20067202006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
ROCHESTER, NY (MSA)MONROE$265,000$337,168$407,558$506,495
ROCHESTER, NY (MSA)ONTARIO$265,000$337,168$407,558$506,495
ROCHESTER, NY (MSA)ORLEANS$265,000$337,168$407,558$506,495
ROCHESTER, NY (MSA)WAYNE$265,000$337,168$407,558$506,495
SYRACUSE, NY (MSA)MADISON$267,500$337,168$407,558$506,495
SYRACUSE, NY (MSA)ONONDAGA$267,500$337,168$407,558$506,495
SYRACUSE, NY (MSA)OSWEGO$267,500$337,168$407,558$506,495
NORTH CAROLINA
JACKSONVILLE, NC (MSA)ONSLOW$306,250$344,934$419,079$506,495
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VACURRITUCK$375,122$422,507$513,325$592,299
WILMINGTO
N, NC (MSA)
BRUNSWICK$274,934$337,168$407,558$506,495
WILMINGTON, NC (MSA)NEW HANOVER$274,934$337,168$407,558$506,495
WILMINGTON, NC (MSA)PENDER$274,934$337,168$407,558$506,495
OHIO
AKRON, OH (MSA)PORTAGE$318,750$359,013$436,184$506,495
AKRON, O
H(MSA)
SUMMIT$318,75
0
$359,01
3
$436,18
4
$506,49
5
ASHTABULA, OH (MICRO)ASHTABULA$290,797$337,168$407,558$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)BROWN$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)BUTLER$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)CLERMONT$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)HAMILTON$300,000$337,895$410,526$506,495
CINCINNATI-MIDDLETOWN, OH-KY-IN
(MSA)WARREN$300,000$337,895$410,526$506,495
CLEVELAND-ELYRIA-MENTOR, OH
(MSA)CUYAHOGA$290,797$337,168$407,558$506,495
CLEVELAND-ELYRIA-MENTOR, OH
(MSA)GEAUGA$290,797$337,168$407,558$506,495
CLEVELAND-ELYRIA-MENTOR, OH
(MSA)LAKE$290,797$337,168$407,558$506,495
CLEVELAND-ELYRIA-MENTOR, OH
(MSA)LORAIN$290,797$337,168$407,558$506,495
CLEVELAND-ELYRIA-MENTOR, OH
(MSA)MEDINA$290,797$337,168$407,558$506,495
COLUMBUS, OH (MSA)DELAWARE$307,500$346,342$420,789$506,495
COL
UMBUS, OH (MSA)
FAI
RFIELD
$30
7,500
$34
6,342
$42
0,789
$50
6,495
COLUMBUS, OH (MSA)FRANKLIN$307,500$346,342$420,789$506,495
COLUMBUS, OH (MSA)LICKING$307,500$346,342$420,789$506,495
COL
UMBUS, OH (MSA)
MAD
ISON
$30
7,500
$34
6,342
$42
0,789
$50
6,495
COLUMBUS, OH (MSA)MORROW$307,500$346,342$420,789$506,495
COLUMBUS, OH (MSA)PICKAWAY$307,500$346,342$420,789$506,495
CO
LUMBUS, OH (MSA)
UN
ION
$3
07,500
$3
46,342
$4
20,789
$5
06,495
DAYTON, OH (MSA)GREENE$271,250$337,168$407,558$506,495
DAYTON, OH (MSA)MIAMI$271,250$337,168$407,558$506,495
D
AYTON, OH (MSA)
M
ONTGOMERY
$
271,250
$
337,168
$
407,558
$
506,495
DAYTON, OH (MSA)PREBLE$271,250$337,168$407,558$506,495
OREGON
ASTORIA, OR (MICRO)CLATSOP$287,500$337,168$407,558$506,495
BEND, OR (MSA)DESCHUTES$334,375$376,612$457,566$527,961
CORVALLIS, OR (MSA)BENTON$307,500$346,342$420,789$506,495
2006–14 I.R.B.721April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
EUGENE-SPRINGFIELD, OR (MSA)LANE$270,000$337,168$407,558$506,495
GRANTS PASS, OR (MICRO)JOSEPHINE$306,250$344,934$419,079$506,495
MEDFORD, OR (MSA)JACKSON$343,092$386,447$469,539$541,776
PORTLAND-VANCOUVER-
BEAVERTON, OR-WACLACKAMAS$374,474$421,776$512,434$591,316
PORTLAND-VANCOUVER-
BEAVERTON, OR-WACOLUMBIA$374,474$421,776$512,434$591,316
PORTLAND-VANCOUVER-
BEAVERTON, OR-WAMULTNOMAH$374,474$421,776$512,434$591,316
PORTLAND-VANCOUVER-
BEAVERTON, OR-WAWASHINGTON$374,474$421,776$512,434$591,316
PORTLAND-VANCOUVER-
BEAVERTON, OR-WAYAMHILL$374,474$421,776$512,434$591,316
PENNSYLVA
NIA
ALLENTOWN-BETHLEHEM-EASTON,
PA-NJ (MSA)CARBON$369,407$459,255$557,974$643,816
ALLENTOWN
-BETHLEHEM-EASTON,
PA-NJ (MSA
)
LEHIGH$369,407$459,255$557,974$643,816
ALLENTOWN-BETHLEHEM-EASTON,
PA-NJ (MSA)NORTHAMPTON$369,407$459,255$557,974$643,816
NEWARK-U
NION, NJ-PA METROPOLI-
TAN DIVIS
ION
PIKE$477,355$611,117$738,699$918,021
PHILADELPHIA, PA METROPOLITAN
DIVISIONBUCKS$356,250$401,250$487,500$562,500
PHILADEL
PHIA, PA METROPOLITAN
DIVISIONCHESTER$356,250$401,250$487,500$562,500
PHILADELPHIA, PA METROPOLITAN
DIVISIONDELAWARE$356,250$401,250$487,500$562,500
PHILADE
LPHIA, PA METROPOLITAN
DIVISIO
N
MONTGOM
ERY
$356,25
0
$401,25
0
$487,50
0
$562,50
0
PHILADELPHIA, PA METROPOLITAN
DIVISIONPHILADELPHIA$356,250$401,250$487,500$562,500
PITTSBURGH, PA (MSA)ALLEGHENY$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)ARMSTRONG$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)BEAVER$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)BUTLER$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)FAYETTE$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)WASHINGTON$320,000$360,421$437,895$506,495
PITTSBURGH, PA (MSA)WESTMORELAND$320,000$360,421$437,895$506,495
READING, PA (MSA)BERKS$281,250$337,168$407,558$506,495
YORK-HANOVER, PA (MSA)YORK$375,000$422,368$513,158$592,105
PUERTO RICO
FAJARDO, PR (MSA)CEIBA$325,000$366,053$444,737$513,158
FAJARDO, PR (MSA)FAJARDO$325,000$366,053$444,737$513,158
FAJARDO, PR (MSA)LUQUILLO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)AGUAS BUENAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)AIBONITO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)ARECIBO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)BARCELONETA$325,000$366,053$444,737$513,158
April 3, 20067222006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)BARRANQUITAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)BAYAMON$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CAGUAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CAMUY$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CANOVANAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CAROLINA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CATANO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CAYEY$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CIALES$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)CIDRA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)COMERIO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)COROZAL$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)DORADO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)FLORIDA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)GUAYNABO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)GURABO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)HATILLO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)HUMACAO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)JUNCOS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)LAS PIEDRAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)LOIZA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)MANATI$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)MAUNABO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)MOROVIS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)NAGUABO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)NARANJITO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)OROCOVIS$325,000$366,053$444,737$513,158
2006–14 I.R.B.723April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)QUEBRADILLAS$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)RIO GRANDE$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)SAN JUAN$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)SAN LORENZO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)TOA ALTA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)TOA BAJA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)TRUJILLO ALTO$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)VEGA ALTA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)VEGA BAJA$325,000$366,053$444,737$513,158
SAN JUAN-CAGUAS-GUAYNABO, PR
(MSA)YABUCOA$325,000$366,053$444,737$513,158
RHODE ISLAND
PROVIDENC
E-NEW BEDFORD-FALL
RIVER, RIBRISTOL$416,250$472,891$571,567$710,309
PROVIDENCE-NEW BEDFORD-FALL
RIVER, RIKENT$416,250$472,891$571,567$710,309
PROVIDEN
CE-NEW BEDFORD-FALL
RIVER, RINEWPORT$416,250$472,891$571,567$710,309
PROVIDENCE-NEW BEDFORD-FALL
RIVER, RIPROVIDENCE$416,250$472,891$571,567$710,309
PROVIDEN
CE-NEW BEDFORD-FALL
RIVER, R
I
WASHING
TON
$416,25
0
$472,89
1
$571,56
7
$710,30
9
SOUTH CAROLINA
CHARLESTON-NORTH CHARLESTON,
SC (MSA)BERKELEY$331,250$373,092$453,289$523,026
CHARLESTON-NORTH CHARLESTON,
SC (MSA)CHARLESTON$331,250$373,092$453,289$523,026
CHARLESTON-NORTH CHARLESTON,
SC (MSA)DORCHESTER$331,250$373,092$453,289$523,026
TENNESSEE
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNCANNON$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNCHEATHAM$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNDAVIDSON$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNDICKSON$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNHICKMAN$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNMACON$297,500$337,168$407,558$506,495
April 3, 20067242006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNROBERTSON$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNRUTHERFORD$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNSMITH$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNSUMNER$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNTROUSDALE$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNWILLIAMSON$297,500$337,168$407,558$506,495
NASHVILLE-DAVIDSON—MURFREES-
BORO, TNWILSON$297,500$337,168$407,558$506,495
UTAH
NON-METROKANE$268,750$337,168$407,558$506,495
SALT LAKE CITY, UT (MSA)SALT LAKE$306,250$344,934$419,079$506,495
SALT LAKE C
ITY, UT (MSA)
SUMMIT$306,250$344,934$419,079$506,495
SALT LAKE CITY, UT (MSA)TOOELE$306,250$344,934$419,079$506,495
ST. GEORGE, UT (MSA)WASHINGTON$300,000$337,895$410,526$506,495
VERMONT
BURLINGTON-SOUTH BURLINGTON,
VT (MSA)CHITTENDEN$313,125$352,678$428,487$506,495
BURLINGTON-SOUTH BURLINGTON,
VT (MSA)FRANKLIN$313,125$352,678$428,487$506,495
BURLINGTON-SOUTH BURLINGTON,
VT (MSA)GRAND ISLE$313,125$352,678$428,487$506,495
VIRGIN ISLANDS
NON-METROST. CROIX$287,500$337,168$407,558$506,495
NON-METROST. THOMAS$318,750$359,013$436,184$506,495
VIRGINIA
CHARLOTTESVILLE, VA (MSA)ALBEMARLE$343,750$387,171$470,395$542,763
CHARLOTTESVILLE, VA (MSA)CHARLOTTESVILLE $343,750$387,171$470,395$542,763
CHARLOTTESVILLE, VA (MSA)FLUVANNA$343,750$387,171$470,395$542,763
CHARLOTTESVILLE, VA (MSA)GREENE$343,750$387,171$470,395$542,763
CHARLOTTESVILLE, VA (MSA)NELSON$343,750$387,171$470,395$542,763
NON-METROCULPEPER$381,999$448,442$544,837$628,658
NON-METROKING GEORGE$381,999$448,442$544,837$628,658
RICHMOND, VA (MSA)AMELIA$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)CAROLINE$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)CHARLES CITY$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)CHESTERFIELD$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)COLONIAL HEIGHT $311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)CUMBERLAND$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)DINWIDDIE$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)GOOCHLAND$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)HANOVER$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)HENRICO$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)HOPEWELL$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)KING AND QUEEN$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)KING WILLIAM$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)LOUISA$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)NEW KENT$311,875$351,270$426,776$506,495
2006–14 I.R.B.725April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
RICHMOND, VA (MSA)PETERSBURG$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)POWHATAN$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)PRINCE GEORGE$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)RICHMOND IND$311,875$351,270$426,776$506,495
RICHMOND, VA (MSA)SUSSEX$311,875$351,270$426,776$506,495
VIRGINIA BEA
CH-NORFOLK-
NEWPORT NEWS
,VA
CHESAPEAKE$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VAGLOUCESTER$375,122$422,507$513,325$592,299
VIRGINIA BE
ACH-NORFOLK-
NEWPORT NEW
S, VA
HAMPTON$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VAISLE OF WIGHT$375,122$422,507$513,325$592,299
VIRGINIA BE
ACH-NORFOLK-
NEWPORT NE
WS, VA
JAMES CITY$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VAMATHEWS$375,122$422,507$513,325$592,299
VIRGINIA B
EACH-NORFOLK-
NEWPORT NE
WS, VA
NEWPORT NE
WS
$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VANORFOLK$375,122$422,507$513,325$592,299
VIRGINIA
BEACH-NORFOLK-
NEWPORT N
EWS, VA
POQUOSON$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VAPORTSMOUTH$375,122$422,507$513,325$592,299
VIRGINIA
BEACH-NORFOLK-
NEWPORT N
EWS, VA
SUFFOLK$375,122$422,507$513,325$592,299
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VASURRY$375,122$422,507$513,325$592,299
VIRGINI
A BEACH-NORFOLK-
NEWPORT
NEWS, VA
VIRGINI
ABEACH
$375,12
2
$422,50
7
$513,32
5
$592,29
9
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VAWILLIAMSBURG$375,122$422,507$513,325$592,299
VIRGINI
A BEACH-NORFOLK-
NEWPOR
TNEWS,VA
YORK$375,1
22
$422,5
07
$513,3
25
$592,2
99
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAALEXANDRIA$477,355$611,117$738,699$888,158
WASHIN
GTON-ARLINGTON-
ALEXAN
DRIA, DC-VA
ARLING
TON
$477,3
55
$611,1
17
$738,6
99
$888,1
58
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VACLARKE$477,355$611,117$738,699$888,158
WASHIN
GTON-ARLINGTON-
ALEXA
NDRIA, DC-VA
FAIRF
AX
$477,
355
$611,
117
$738,
699
$888,
158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAFAIRFAX IND$477,355$611,117$738,699$888,158
WASHI
NGTON-ARLINGTON-
ALEXA
NDRIA, DC-VA
FALLS
CHURCH
$477,
355
$611,
117
$738,
699
$888,
158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAFAUQUIER$477,355$611,117$738,699$888,158
WASH
INGTON-ARLINGTON-
ALEX
ANDRIA, DC-VA
FRED
ERICKSBURG
$477
,355
$611
,117
$738
,699
$888
,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VALOUDOUN$477,355$611,117$738,699$888,158
WASH
INGTON-ARLINGTON-
ALEX
ANDRIA, DC-VA
MANA
SSAS
$477
,355
$611
,117
$738
,699
$888
,158
April 3, 20067262006–14 I.R.B.

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAMANASSAS PARK$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAPRINCE WILLIAM$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VASPOTSYLVANIA$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VASTAFFORD$477,355$611,117$738,699$888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAWARREN$477,355$611,117$738,699$888,158
WINCHESTER, VA-WV (MSA)FREDERICK$333,316$375,418$456,116$526,287
WINCHESTER
,VA-WV(MSA)
WINCHESTER$333,316$375,418$456,116$526,287
WASHINGTON
BELLINGHA
M, WA (MSA)
WHATCOM$323,158$364,013$442,237$510,263
BREMERTON-SILVERDALE, WA (MSA) KITSAP$343,750$387,171$470,395$542,763
MOUNT VERNON-ANACORTES, WA
(MSA)SKAGIT$320,000$360,421$437,895$506,495
NON-METROJEFFERSON$362,500$408,289$496,053$572,368
NON-METROSAN JUAN$411,704$520,263$632,105$729,408
OAK HARBOR, WA (MICRO)ISLAND$366,842$413,179$502,039$579,276
OLYMPIA, WA (MSA)THURSTON$283,750$337,168$407,558$506,495
PORTLAND-VANCOUVER-
BEAVERTON, OR-WACLARK$374,474$421,776$512,434$591,316
PORTLAND-VANCOUVER-
BEAVERTON, OR-WASKAMANIA$374,474$421,776$512,434$591,316
SEATTLE-BELLEVUE-EVERETT, WA
METROPOLITANKING$411,704$487,105$591,776$682,829
SEATTLE-BELLEVUE-EVERETT, WA
METROPOLITANSNOHOMISH$411,704$487,105$591,776$682,829
TACOMA, WA METROPOLITAN
DIVISIONPIERCE$411,704$487,105$591,776$682,829
WEST VIRGINIA
HAGERSTOWN-MARTINSBURG,
MD-WV (MSA)BERKELEY$355,000$399,842$485,789$560,526
HAGERSTOWN-MARTINSBURG,
MD-WV (MSA)MORGAN$355,000$399,842$485,789$560,526
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VAJEFFERSON$477,355$611,117$738,699$888,158
WINCHESTER, VA-WV (MSA)HAMPSHIRE$333,316$375,418$456,116$526,287
WISCONSIN
LAKE COUNTY-KENOSHA COUNTY,
IL-WI METROKENOSHA$362,105$407,845$495,512$571,745
MADISON, WI (MSA)COLUMBIA$278,553$337,168$407,558$506,495
MAD
ISON, WI (MSA)
DAN
E
$27
8,553
$33
7,168
$40
7,558
$50
6,495
MADISON, WI (MSA)IOWA$278,553$337,168$407,558$506,495
MILWAUKEE-WAUKESHA-WEST
ALLIS, WI (MSA)MILWAUKEE$274,605$337,168$407,558$506,495
MILWAUKEE-WAUKESHA-WEST
ALLIS, WI (MSA)OZAUKEE$274,605$337,168$407,558$506,495
MILWAUKEE-WAUKESHA-WEST
ALLIS, WI (MSA)WASHINGTON$274,605$337,168$407,558$506,495
MILWAUKEE-WAUKESHA-WEST
ALLIS, WI (MSA)WAUKESHA$274,605$337,168$407,558$506,495
2006–14 I.R.B.727April 3, 2006

MSA NAMECOUNTY NAMESAFE HARBOR AVERAGE PRICE
1 LIVING
UNIT
2LIVING
UNITS
3LIVING
UNITS
4 LIVING
UNITS
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIPIERCE$321,875$362,533$440,461$508,224
MINNEAPOLIS-ST. PAUL-
BLOOMINGTON, MN-WIST. CROIX$321,875$362,533$440,461$508,224
WYOMING
JACKSON, WY-ID (MICRO)TETON$411,704$527,037$637,046$791,700
ALL OTHER AREAS$263,368$337,168$407,558$506,495
.02 The nationwideaverage purchase
price (for use in the housing cost/income
ratio for new and existing residences) is
$258,700.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2005–15 is obsolete except
as provided in section 6 of this revenue
procedure.
SECTION 6. EFFECTIVE DATES
.01 Issuers may rely on this revenue
procedure to determine average area pur-
chase price safe harbors for commitments
to provide financing or issue mortgage
credit certificates that are made, or (if the
purchase precedes the commitment) for
residences that are purchased, in the period
that begins on March 17, 2006, and ends
on the date as of which the safe harbors
contained in section 4.01 of this revenue
procedure are rendered obsolete by a new
revenue procedure.
.02 Notwithstanding section 5 of this
revenue procedure, issuers may continue
to rely on the average area purchase price
safe harbors contained in Rev. Proc.
2005–15, with respect to bonds sold, or
for mortgage credit certificates issued with
respect to bond authority exchanged, be-
fore April 16, 2006, if the commitments to
provide financing or issue mortgage credit
certificates are made on or before May 16,
2006.
.03 Except as provided in section 6.04,
issuers must use the nationwide average
purchase price limitation contained in
this revenue procedure for commitments
to provide financing or issue mortgage
credit certificates that are made, or (if the
purchase precedes the commitment) for
residences that are purchased, in the pe-
riod that begins on March 17, 2006, and
ends on the date when the nationwide av-
erage purchase price limitation is rendered
obsolete by a new revenue procedure.
.04 Notwithstanding sections 5 and
6.03 of this revenue procedure, issuers
may continue to rely on the nationwide
average purchase price set forth in Rev.
Proc. 2005–15 with respect to bonds sold,
or for mortgage credit certificates issued
with respect to bond authority exchanged,
before April 16, 2006, if the commitments
to provide financing or issue mortgage
credit certificates are made on or before
May 16, 2006.
SECTION 7. PAPERWORK
REDUCTION ACT
The collection of information con-
tained in this revenue procedure has 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
1545–1877.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
This revenue procedure contains a col-
lection of information requirement in sec-
tion 3.03. The purpose of the collection
of information is to verify the applica-
ble FHA loan limit that issuers of quali-
fied mortgage bonds and qualified mort-
gage certificates have used to calculate the
average area purchase price for a given
metropolitan statistical area for purposes
of section 143(e) and 25(c). The collec-
tion of information is required to obtain
the benefit of using revisions to FHA loan
limits to determine average area purchase
prices. The likely respondents are state
and local governments.
The estimated total annual reporting
and/or recordkeeping burden is: 15 hours.
The estimated annual burden per re-
spondent and/or recordkeeper: 15 minutes.
The estimated number of respondents
and/or recordkeepers: 60.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 8. DRAFTING
INFORMATION
The principal authors of this rev-
enue procedure are David E. White and
Timothy L. Jones of the Office of Di-
vision Counsel/Associate Chief Counsel
(Tax Exempt & Government Entities).
For further information regarding this rev-
enue procedure, contact David E. White at
(202) 622–3980 (not a toll-free call).
April 3, 20067282006–14 I.R.B.

Part IV. Items of General Interest
Announcement of Disciplinary Actions Involving
Attorneys, Certified Public Accountants, Enrolled Agents,
and Enrolled Actuaries — Suspensions, Censures,
Disbarments, and Resignations
Announcement 2006-23
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.
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
Hoft, James D.Nutley, NJCPAIndefinite
from
August 10, 2005
Salver, IsaacBay Harber Islands, FLCPASeptember 19, 2005
to
June 18, 2007
Woods, Dalton C.Carrollton, TXEnrolled AgentIndefinite
from
October 15, 2005
Morrissette, Doris G.Lowell,MAEnrolled AgentIndefinite
from
November 1, 2005
Dale, Edward R.Stockton, CACPAIndefinite
from
November 1, 2005
2006–14 I.R.B.729April 3, 2006

NameAddressDesignationDate of Suspension
Grossman, Israel G.New York, NYAttorneyNovember 15, 2005
to
May 14, 2007
Edmonds, Joseph M.Charlotte, NCEnrolled ActuaryNovember 16, 2005
to
March 15, 2006
Rubin, Stuart L.Coral Springs, FLCPAIndefinite
from
December 7, 2005
Sanger, Brett D.Oklahoma City, OKAttorneyIndefinite
from
January 1, 2006
Berkowitz, Ira T.Simi Valley, CACPAIndefinite
from
January 9, 2006
Caylor, John D.Long Lake, MNCPAIndefinite
from
January 12, 2006
Saldana, Oscar M.Laredo, TXCPAIndefinite
from
January 15, 2006
Bruck, Lawrence S.Newton, PACPAIndefinite
from
January 16, 2006
Sneathen, Lowell D.Orange, CACPAIndefinite
from
January 18, 2006
Roberson, GeorgeLeesburg, VACPAIndefinite
from
January 17, 2006
Dugan, Lawrence E.Alta, IAAttorneyIndefinite
from
February 1, 2006
Frascella, RussellPound Ridge, NYCPAIndefinite
from
February 1, 2006
Smith, David B.Kettering, OHEnrolled AgentIndefinite
from
February 13, 2006
Whiteside, Thomas L.Atlanta, GAAttorneyIndefinite
from
February 13, 2006
Bednarz, Jr., MichaelFramingham, MAAttorneyIndefinite
from
February 13, 2006
April 3, 20067302006–14 I.R.B.

NameAddressDesignationDate of Suspension
Alexander, Herald J.A.Atlanta, GAAttorneyIndefinite
from
February 20, 2006
Bartels, KyleNorth Salem, NYEnrolled AgentIndefinite
from
February 21, 2006
Baker, Jibade A.Indianapolis, INCPAMarch 13, 2006
to
March 12, 2008
Morris, R. ScottCorpus Christi, TXCPAIndefinite
from
March 16, 2006
Kenny, Stan M.Wichita, KSAttorneyIndefinite
from
May 1, 2006
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
Haugabrook, EarlUpper Montclair, NJCPAIndefinite
from
September 27, 2005
Patterson, Kenneth R.Plano, TXCPAIndefinite
from
October 19, 2005
Blackburn, Randall D.Laurinburg, NCCPAIndefinite
from
October 19, 2005
Coe, Sean M.Sahuarita,AZAttorneyIndefinite
from
October 12, 2005
Lim, Ricarda L.Sacramento, CAAttorneyIndefinite
from
November 1, 2005
Bridges, Lynden P.Golden, COCPAIndefinite
from
November 14, 2005
2006–14 I.R.B.731April 3, 2006

NameAddressDesignationDate of Suspension
Curcio, Gregory J.New York, NYAttorneyIndefinite
from
November 14, 2005
Silverton, Ronald R.Pacific Palisades, CAAttorneyIndefinite
from
November 14, 2005
Hartigan, Seth P.Minneapolis, MNAttorneyIndefinite
from
November 14, 2005
Carlson, Richard E.Chappell, NEAttorneyIndefinite
from
November 14, 2005
Veres, Robert D.Phoenix, AZCPAIndefinite
from
November 14, 2005
Noble, Gregory P.Corvallis, ORAttorneyIndefinite
from
December 2, 2005
Parker, Oscie K.Thomasville, NCAttorneyIndefinite
from
December 15, 2005
Connor, Jr. William J.Kernersville, NCAttorneyIndefinite
from
December 15, 2005
Cassidy, Maureen E.Murphy, IDAttorneyIndefinite
from
December 15, 2005
Harrison, Rodney L.Urbana, ILAttorneyIndefinite
from
December 15, 2005
Cagle, Carol L.Alton, ILAttorneyIndefinite
from
December 15, 2005
Knaff, Philip J.Burr Ridge, ILAttorneyIndefinite
from
December 15, 2005
Pence, Thomas R.Cedar Rapids, IAAttorneyIndefinite
from
December 15, 2005
Tunney, John A.Freehold, NJAttorneyIndefinite
from
December 15, 2005
Dasent, CarltonMattapoisett, MAAttorneyIndefinite
from
December 15, 2005
April 3, 20067322006–14 I.R.B.

NameAddressDesignationDate of Suspension
Robeznieks, John O.Palatine, ILAttorneyIndefinite
from
December 15, 2005
Landman, Nathaniel M.St. Peters, MOAttorneyIndefinite
from
December 15, 2005
Levin, Herbert M.Bolingbrook, ILAttorneyIndefinite
from
December 15, 2005
Wade, Jeffrey L.Louisville, KYAttorneyIndefinite
from
December 15, 2005
Cozzarelli, Frank J.North Caldwell, NJAttorneyIndefinite
from
December 15, 2005
Brooks, Jane E.St. Paul, MNAttorneyIndefinite
from
December 15, 2005
Mulvahill, James P.Plymouth, MNAttorneyIndefinite
from
December 15, 2005
Bernstein, RalphChicago, ILAttorneyIndefinite
from
December 15, 2005
Tousey, Robert R.Ellicott City, MDAttorneyIndefinite
from
December 15, 2005
Schatz, Allen E.Shorewood, WIAttorneyIndefinite
from
December 16, 2005
Olson, David E.New Port Richey, FLAttorneyIndefinite
from
December 16, 2005
Shagory, Edward J.Boston, MAAttorneyIndefinite
from
December 20, 2005
Wintroub, Edward L.Omaha, NEAttorneyIndefinite
from
December 20, 2005
Johnson, Jr. Walter T.Greensboro, NCAttorneyIndefinite
from
December 27, 2005
Szaro, Stanley J.New York, NYAttorneyIndefinite
from
December 27, 2005
Recchione, LouisWoodcliff Lake, NJAttorneyIndefinite
from
December 27, 2005
2006–14 I.R.B.733April 3, 2006

NameAddressDesignationDate of Suspension
Pepper, LouisGreat Neck, NYAttorneyIndefinite
from
January 2, 2006
Fritzshall, Robert S.Skokie, ILAttorneyIndefinite
from
January 9, 2006
DiCaprio, Joseph A.Cherry Valley, ILAttorneyIndefinite
from
January 9, 2006
Rosenberg, Keith A.N. Bethesda, MDAttorneyIndefinite
from
January 9, 2006
Boudreau, Patricia L.Lexington, MAAttorneyIndefinite
from
January 9, 2006
Webb, Daniel F.Milwaukee, WIAttorneyIndefinite
from
January 9, 2006
Miranda, Jesse R.Phoenix, AZAttorneyIndefinite
from
January 9, 2006
Kuzel, GaryPlainfield, ILCPAIndefinite
from
January 9, 2006
Nomura, Edmund Y.Phoenix, AZAttorneyIndefinite
from
January 9, 2006
Mason, Robert J.Colorado Springs, COAttorneyIndefinite
from
January 9, 2006
Land, Janet P.Stedman, NCAttorneyIndefinite
from
January 9, 2006
Fitzgerald, MauriceLexington, MAAttorneyIndefinite
from
January 9, 2006
Valadez, Librado R.San Antonio, TXCPAIndefinite
from
January 9, 2006
Williams, Frank C.Houston, TXAttorneyIndefinite
from
January 9, 2006
LaGrand, TaraNaples, FLCPAIndefinite
from
January 9, 2006
Harris, Susan L.Houston, TXAttorneyIndefinite
from
January 9, 2006
April 3, 20067342006–14 I.R.B.

NameAddressDesignationDate of Suspension
Hobbs, James B.Amherst, NHAttorneyIndefinite
from
January 9, 2006
Momsen, JoelNapa, CAAttorneyIndefinite
from
January 10, 2006
Lambert, Brett J.Fort Collins, COAttorneyIndefinite
from
January 10, 2006
Lefevre, Keith H.Longwood, FLAttorneyIndefinite
from
January 13, 2006
Bronner, BernardGreat Neck, NYAttorneyIndefinite
from
January 18, 2006
Kuhnreich, Robert M.New York, NYAttorneyIndefinite
from
January 20, 2006
Walser, Vicki L.Valencia, CAAttorneyIndefinite
from
January 20, 2006
Menter, JeffreyCentennial, COAttorneyIndefinite
from
January 23, 2006
Catagnus, Patricia A.Richardson, TXCPAIndefinite
from
January 23, 2006
Matthews, Elizabeth B.Denver, COAttorneyIndefinite
from
January 23, 2006
Sisselman, Barry A.Temecula, CAAttorneyIndefinite
from
January 23, 2006
Armstrong, Thomas I.Irvine, CAAttorneyIndefinite
from
January 23, 2006
Chestnut, A. JohnsonFayetteville, NCCPAIndefinite
from
January 24, 2006
Kerby, John C.Desoto, TXCPAIndefinite
from
February 2, 2006
Phillips, John D.Albuquerque, NMAttorneyIndefinite
from
February 2, 2006
Broomas, JamesBaytown, TXAttorneyIndefinite
from
February 2, 2006
2006–14 I.R.B.735April 3, 2006

NameAddressDesignationDate of Suspension
Wilson, Joel M.Denver, NCCPAIndefinite
from
February 2, 2006
Olivieri Jr., Robert C.Bensalem, PACPAIndefinite
from
February 7, 2006
Scher, Robert A.Port Washington, NYAttorneyIndefinite
from
February 15, 2006
Mintz, David J.Evergreen, COAttorneyIndefinite
from
February 15, 2006
Abelson, Richard H.White Plains, NYAttorneyIndefinite
from
February 15, 2006
Drum, Joel A.Van Nuys, CAAttorneyIndefinite
from
February 17, 2006
Nissenbaum, SusanGrafton, MAAttorneyIndefinite
from
February 22, 2006
Mahon, Edward J.Warenville, ILAttorneyIndefinite
from
February 22, 2006
Nash, BruceChicago, ILAttorneyIndefinite
from
February 22, 2006
Duru, Ike E.Powder Springs, GAAttorneyIndefinite
from
February 22, 2006
Hirth, Gary E.Phoenix, AZAttorneyIndefinite
from
February 22, 2006
Madden, James G.Hudson, ILAttorneyIndefinite
from
February 22, 2006
Thomas, Robert C.Chicago,ILAttorneyIndefinite
from
February 22, 2006
Moore, Jr. William D.Libertyville, ILAttorneyIndefinite
from
February 22, 2006
Weit Jr., John V.Homewood, ILAttorneyIndefinite
from
February 22, 2006
Berlin, Marc D.Chicago, ILAttorneyIndefinite
from
February 22, 2006
April 3, 20067362006–14 I.R.B.

NameAddressDesignationDate of Suspension
Lebensbaum, HenryAndover, MDAttorneyIndefinite
from
February 22, 2006
Leonhart, Georgia L.Ocean View, DEAttorneyIndefinite
from
February 22, 2006
Wolf, Marvin H.Boynton Beach, FLAttorneyIndefinite
from
February 22, 2006
Dorsa, Lawrence R.Oceanside, CAAttorneyIndefinite
from
February 23, 2006
Battista Jr., Gerard F.Norwell, MAAttorneyIndefinite
from
February 27, 2006
Koehn, Charles R.Green Bay, WIAttorneyIndefinite
from
February 28, 2006
Phillips, Claudia L.Oak Park, CAAttorneyIndefinite
from
March 9, 2006
Zarate, Gustavo A.Pasadena, CAAttorneyIndefinite
from
March 9, 2006
Schorling, Douglas D.Fresno, CAAttorneyIndefinite
from
March 9, 2006
Bowman Jr., John J.Gibsonia, PAEnrolled AgentIndefinite
from
March 9, 2006
Jordan, Richard W.Austin, TXCPAIndefinite
from
March 9, 2006
Rothenberg, Steven G.Kingston, NYAttorneyIndefinite
from
March 24, 2006
Osterloh, Douglas D.Boring, ORAttorneyIndefinite
from
March 24, 2006
Benevenia, EugeneTucson, AZAttorneyIndefinite
from
March 24, 2006
Krombach, CharlesBrookfield, WIAttorneyIndefinite
from
March 24, 2006
Caldwell, David G.Austin, TXAttorneyIndefinite
from
March 24, 2006
2006–14 I.R.B.737April 3, 2006

NameAddressDesignationDate of Suspension
Zwibel, DavidLawrence, NYCPAIndefinite
from
March 31, 2006
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
Fitzpatrick, PamelaArroyo Grande, CACPANovember 14, 2005
to
November 13, 2009
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
Edgar, Richard A.Los Angeles, CACPAOctober 3, 2005
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
Porter, Donald E.Burleson, TXCPAFebruary 10, 2006
April 3, 20067382006–14 I.R.B.

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
Casagna, Ronald M.Tustin, CANovember 25, 2005
2006–14 I.R.B.739April 3, 2006

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.
April 3, 2006i2006–14 I.R.B.

Numerical Finding List
1
Bulletin 2006–1 through 2006–14
Announcements:
2006-1, 2006-1 I.R.B.260
2006-2, 2006-2 I.R.B.300
2006-3, 2006-3 I.R.B.327
2006-4, 2006-3 I.R.B.328
2006-5, 2006-4 I.R.B.378
2006-6, 2006-4 I.R.B.340
2006-7, 2006-4 I.R.B.342
2006-8, 2006-4 I.R.B.344
2006-9, 2006-5 I.R.B.392
2006-10, 2006-5 I.R.B.393
2006-11, 2006-6 I.R.B.420
2006-12, 2006-6 I.R.B.421
2006-13, 2006-7 I.R.B.462
2006-14, 2006-8 I.R.B.516
2006-15, 2006-11 I.R.B.632
2006-16, 2006-12 I.R.B.653
2006-17, 2006-12 I.R.B.653
2006-18, 2006-12 I.R.B.654
2006-19, 2006-13 I.R.B.674
2006-20, 2006-13 I.R.B.675
2006-21, 2006-14 I.R.B.703
2006-23, 2006-14 I.R.B.729
Court Decisions:
2081, 2006-13 I.R.B.656
2082, 2006-14 I.R.B.697
Notices:
2006-1, 2006-4 I.R.B.347
2006-2, 2006-2 I.R.B.278
2006-3, 2006-3 I.R.B.306
2006-4, 2006-3 I.R.B.307
2006-5, 2006-4 I.R.B.348
2006-6, 2006-5 I.R.B.385
2006-7, 2006-10 I.R.B.559
2006-8, 2006-5 I.R.B.386
2006-9, 2006-6 I.R.B.413
2006-10, 2006-5 I.R.B.386
2006-11, 2006-7 I.R.B.457
2006-12, 2006-7 I.R.B.458
2006-13, 2006-8 I.R.B.496
2006-14, 2006-8 I.R.B.498
2006-15, 2006-8 I.R.B.501
2006-16, 2006-9 I.R.B.538
2006-17, 2006-10 I.R.B.559
2006-18, 2006-8 I.R.B.502
2006-19, 2006-9 I.R.B.539
2006-20, 2006-10 I.R.B.560
2006-21, 2006-12 I.R.B.643
2006-22, 2006-11 I.R.B.593
2006-23, 2006-11 I.R.B.594
Notices— Continued:
2006-24, 2006-11 I.R.B.595
2006-25, 2006-11 I.R.B.609
2006-26, 2006-11 I.R.B.622
2006-27, 2006-11 I.R.B.626
2006-28, 2006-11 I.R.B.628
2006-29, 2006-12 I.R.B.644
2006-32, 2006-13 I.R.B.677
2006-34, 2006-14 I.R.B.705
2006-35, 2006-14 I.R.B.708
Proposed Regulations:
REG-107722-00, 2006-4 I.R.B.354
REG-104385-01, 2006-5 I.R.B.389
REG-122380-02, 2006-10 I.R.B.563
REG-137243-02, 2006-3 I.R.B.317
REG-133446-03, 2006-2 I.R.B.299
REG-113365-04, 2006-10 I.R.B.580
REG-148568-04, 2006-6 I.R.B.417
REG-106418-05, 2006-7 I.R.B.461
REG-138879-05, 2006-8 I.R.B.503
REG-143244-05, 2006-6 I.R.B.419
REG-146459-05, 2006-8 I.R.B.504
REG-157271-05, 2006-12 I.R.B.652
Revenue Procedures:
2006-1, 2006-1 I.R.B.1
2006-2, 2006-1 I.R.B.89
2006-3, 2006-1 I.R.B.122
2006-4, 2006-1 I.R.B.132
2006-5, 2006-1 I.R.B.174
2006-6, 2006-1 I.R.B.204
2006-7, 2006-1 I.R.B.242
2006-8, 2006-1 I.R.B.245
2006-9, 2006-2 I.R.B.278
2006-10, 2006-2 I.R.B.293
2006-11, 2006-3 I.R.B.309
2006-12, 2006-3 I.R.B.310
2006-13, 2006-3 I.R.B.315
2006-14, 2006-4 I.R.B.350
2006-15, 2006-5 I.R.B.387
2006-16, 2006-9 I.R.B.539
2006-17, 2006-14 I.R.B.709
2006-18, 2006-12 I.R.B.645
2006-19, 2006-13 I.R.B.677
Revenue Rulings:
2006-1, 2006-2 I.R.B.261
2006-2, 2006-2 I.R.B.261
2006-3, 2006-2 I.R.B.276
2006-4, 2006-2 I.R.B.264
2006-5, 2006-3 I.R.B.302
2006-6, 2006-5 I.R.B.381
2006-7, 2006-6 I.R.B.399
2006-8, 2006-9 I.R.B.520
2006-9, 2006-9 I.R.B.519
Revenue Rulings— Continued:
2006-10, 2006-10 I.R.B.557
2006-11, 2006-12 I.R.B.635
2006-12, 2006-12 I.R.B.637
2006-13, 2006-13 I.R.B.656
2006-15, 2006-13 I.R.B.661
2006-16, 2006-14 I.R.B.694
2006-22, 2006-14 I.R.B.687
Tax Conventions:
2006-6, 2006-4 I.R.B.340
2006-7, 2006-4 I.R.B.342
2006-8, 2006-4 I.R.B.344
2006-19, 2006-13 I.R.B.674
2006-20, 2006-13 I.R.B.675
2006-21, 2006-14 I.R.B.703
Treasury Decisions:
9231, 2006-2 I.R.B.272
9232, 2006-2 I.R.B.266
9233, 2006-3 I.R.B.303
9234, 2006-4 I.R.B.329
9235, 2006-4 I.R.B.338
9236, 2006-5 I.R.B.382
9237, 2006-6 I.R.B.394
9238, 2006-6 I.R.B.408
9239, 2006-6 I.R.B.401
9240, 2006-7 I.R.B.454
9241, 2006-7 I.R.B.427
9242, 2006-7 I.R.B.422
9243, 2006-8 I.R.B.475
9244, 2006-8 I.R.B.463
9245, 2006-14 I.R.B.696
9246, 2006-9 I.R.B.534
9247, 2006-9 I.R.B.521
9248, 2006-9 I.R.B.524
9249, 2006-10 I.R.B.546
9250, 2006-11 I.R.B.588
9251, 2006-11 I.R.B.590
9252, 2006-12 I.R.B.633
9253, 2006-14 I.R.B.689
9254, 2006-13 I.R.B.662
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2005–27 through 2005–52 is in Internal Revenue Bulletin
2005–52, dated December 27, 2005.
2006–14 I.R.B.iiApril 3, 2006

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2006–1 through 2006–14
Announcements:
2000-48
Modified by
Notice 2006-35, 2006-14 I.R.B.708
Notices:
2001-4
Sections (V)(C), (D), and (E) superseded by
T.D. 9253, 2006-14 I.R.B.689
2001-11
Superseded by
T.D. 9253, 2006-14 I.R.B.689
2001-43
Modified by
Notice 2006-35, 2006-14 I.R.B.708
Sections 2 and 3 superseded by
T.D. 9253, 2006-14 I.R.B.689
2002-35
Clarified and modified by
Notice 2006-16, 2006-9 I.R.B.538
2005-44
Supplemented by
Notice 2006-1, 2006-4 I.R.B.347
2005-66
Supplemented by
Notice 2006-20, 2006-10 I.R.B.560
2005-73
Supplemented by
Notice 2006-20, 2006-10 I.R.B.560
2005-81
Supplemented by
Notice 2006-20, 2006-10 I.R.B.560
2005-98
Supplemented by
Notice 2006-7, 2006-10 I.R.B.559
Proposed Regulations:
REG-103829-99
Withdrawn by
Ann. 2006-16, 2006-12 I.R.B.653
REG-131739-03
Corrected by
Ann. 2006-10, 2006-5 I.R.B.393
REG-138647-04
Corrected by
Ann. 2006-4, 2006-3 I.R.B.328
Proposed Regulations— Continued:
REG-158080-04
Corrected by
Ann. 2006-11, 2006-6 I.R.B.420
Revenue Procedures:
96-52
Superseded by
Rev. Proc. 2006-10, 2006-2 I.R.B.293
97-27
Modified by
Rev. Proc. 2006-11, 2006-3 I.R.B.309
Modified and amplified by
Rev. Proc. 2006-12, 2006-3 I.R.B.310
2002-9
Modified by
Rev. Proc. 2006-11, 2006-3 I.R.B.309
Modified and amplified by
Rev. Proc. 2006-12, 2006-3 I.R.B.310
Rev. Proc. 2006-14, 2006-4 I.R.B.350
Rev. Proc. 2006-16, 2006-9 I.R.B.539
2002-17
Modified by
Rev. Proc. 2006-14, 2006-4 I.R.B.350
2003-31
Superseded by
Rev. Proc. 2006-19, 2006-13 I.R.B.677
2003-38
Modified by
Rev. Proc. 2006-16, 2006-9 I.R.B.539
2004-23
Superseded for certain taxable years by
Rev. Proc. 2006-12, 2006-3 I.R.B.310
2004-40
Superseded by
Rev. Proc. 2006-9, 2006-2 I.R.B.278
2005-1
Superseded by
Rev. Proc. 2006-1, 2006-1 I.R.B.1
2005-2
Superseded by
Rev. Proc. 2006-2, 2006-1 I.R.B.89
2005-3
Superseded by
Rev. Proc. 2006-3, 2006-1 I.R.B.122
2005-4
Superseded by
Rev. Proc. 2006-4, 2006-1 I.R.B.132
2005-5
Superseded by
Rev. Proc. 2006-5, 2006-1 I.R.B.174
Revenue Procedures— Continued:
2005-6
Superseded by
Rev. Proc. 2006-6, 2006-1 I.R.B.204
2005-7
Superseded by
Rev. Proc. 2006-7, 2006-1 I.R.B.242
2005-8
Superseded by
Rev. Proc. 2006-8, 2006-1 I.R.B.245
2005-9
Superseded for certain taxable years by
Rev. Proc. 2006-12, 2006-3 I.R.B.310
2005-12
Section 10 modified and superseded by
Rev. Proc. 2006-1, 2006-1 I.R.B.1
2005-15
Obsoleted in part by
Rev. Proc. 2006-17, 2006-14 I.R.B.709
2005-24
Modified by
Notice 2006-15, 2006-8 I.R.B.501
2005-61
Superseded by
Rev. Proc. 2006-3, 2006-1 I.R.B.122
2005-68
Superseded by
Rev. Proc. 2006-1, 2006-1 I.R.B.1
Rev. Proc. 2006-3, 2006-1 I.R.B.122
Revenue Rulings:
55-355
Obsoleted by
T.D. 9244, 2006-8 I.R.B.463
74-503
Revoked by
Rev. Rul. 2006-2, 2006-2 I.R.B.261
77-230
Obsoleted by
T.D. 9249, 2006-10 I.R.B.546
91-5
Modified by
T.D. 9250, 2006-11 I.R.B.588
92-86
Modified by
T.D. 9250, 2006-11 I.R.B.588
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2005–27 through 2005–52 is in Internal Revenue Bulletin 2005–52, dated December 27,
2005.
April 3, 2006iii2006–14 I.R.B.

Treasury Decisions:
9192
Corrected by
Ann. 2006-15, 2006-11 I.R.B.632
9203
Corrected by
Ann. 2006-12, 2006-6 I.R.B.421
2006–14 I.R.B.ivApril 3, 2006
U.S. GPO: 2006—320–797/20051