Internal Revenue Bulletin 2010-50 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 201
0-50
December 13, 201
0
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2010–29, page 818.
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 December 2010.
Rev. Rul. 2010–30, page 820.
Section 1274A – inflation adjusted numbers for 2011.
This ruling provides the dollar amounts, increased by the 2011
inflation adjustment, for section 1274A of the Code. Rev. Rul.
2010–2 supplemented and superseded.
Notice 2010–81, page 825.
This notice provides guidance on the determination of when
state and local bonds (as defined in section 103(c)) are con-
sidered “issued” for purposes of deadlines on issuing bonds.
The notice provides guidance on the relevant distinction be-
tween the “issue date” of a “bond” versus the “issue date” of
an “issue” for purposes of this determination. One instance,
among others in which this notice applies, is in determining
when Build America Bonds, structured as “draw-down” bonds
or loans in which draws are funded at different times are con-
sidered issued for purposes of statutory deadlines on issuing
these bonds under section 54AA.
Rev. Proc. 2010–47, page 827.
Cost limitations for expensing section 179 property.This
procedure provides that for taxable years beginning in 2010,
the aggregate cost of any section 179 property a taxpayer
elects to treat as an expense cannot exceed $500,000. This
amount is reduced by the amount by which the cost of the prop-
erty placed in service during the year exceeds $2,000,000.
Rev. Proc. 2009–50 modified and superseded. Rev. Proc.
2010–24 superseded.
Rev. Proc. 2010–49, page 830.
Insurance companies; loss reserves; discounting unpaid
losses.This procedure sets forth the loss payment patterns
and discount factors for accident year 2010. Under section
846 of the Code, discount factors are determined by the Sec-
retary based on the interest rate determined annually under
section 846(c) and on loss payment patterns determined ev-
ery five years under section 846(d). Section 846(d) directs
the Secretary to use the most recent aggregate loss payment
data of property and casualty insurance companies to deter-
mine and publish a loss payment pattern for each line of busi-
ness every five years.
Rev. Proc. 2010–50, page 841.
Insurance companies; discounting estimated salvage re-
coverable.This procedure sets forth the salvage discount fac-
tors for accident year 2010 for purposes of section 832 of the
Code. Under section 832, discount factors are determined by
the Secretary based on the interest rate determined annually
under section 846(c) and on salvage recovery patterns deter-
mined every five years by the Secretary.
(Continued on the next page)
Finding Lists begin on page ii.

EMPLOYEE PLANS
Rev. Proc. 2010–48, page 828.
This procedure provides guidance to drafters and users of
pre-approved IRAs. Section 3 provides guidance to drafters
and users of prototype IRAs, including rules for when docu-
ments must be submitted to the Internal Revenue Service and
for new user fees for individual retirement annuities. Section
4 provides guidance to users of the Service’s model IRAs and
describes the availability of new model individual retirement an-
nuities. Rev. Procs. 87–50 and 98–59 modified.
EXEMPT ORGANIZATIONS
Announcement 2010–91, page 848.
The IRS has revokded its determination that Debt Management
Corporation of Orange Park, FL, qualifies as an organization
described in sections 501(c)(3) and 170(c)(2) of the Code.
EMPLOYMENT TAX
Notice 2010–86, page 827.
2011 social security contribution and benefit base; do-
mestic employee coverage threshold.The Commissioner
of the Social Security Administration has announced (1) the
OASDI contribution and benefit base for remuneration paid in
2011 and self-employment income earned in taxable years
beginning in 2011, and (2) the domestic employee coverage
threshold amount for 2011.
EXCISE TAX
Notice 2010–71, page 822.
This notice provides guidance on the annual fee imposed on
covered entities engaged in the business of manufacturing or
importing branded prescription drugs by section 9008 of the
Patient Protection and Affordable Care Act (ACA), as amended
by section 1404 of the Health Care and Education Reconcilia-
tion Act of 2010 (HCERA).
ADMINISTRATIVE
Announcement 2010–83, page 848.
This document contains corrections to final regulations
(T.D. 9340, 2007–2 C.B. 487) providing updated guidance
on section 403(b) contracts of public schools and tax-exempt
organizations described in section 501(c)(3). These
regulations will affect sponsors of section 403(b) contracts,
administrators, participants, and beneficiaries.
December 13, 20102010–50 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2010–50 I.R.B.December 13, 2010

December 13, 20102010–50 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of December 20
10. See Rev. Rul. 2010-29, page
818.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of December 2010. See
Rev. Rul. 2010-29, page 818.
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 December 2010. See Rev.
Rul. 2010-29, page 818.
Section 412.—Minimun
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2010. See Rev. Rul. 2010-29, page
818.
Section 467.—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 December 2010. See Rev. Rul. 2010-29, page
818.
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 December 2010. See Rev. Rul. 2010-29, page
818.
Section 482.—
Allocation
of Income and D
eductions
Among Taxpaye
rs
Federal short
-term, mid-term, and long-term rates
are set forth f
or the month of December 2010. See
Rev. Rul. 201
0-29, page 818.
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 December 2010. See Rev. Rul. 2010-29, page
818.
This ruling provides the dollar amounts, increased
by the 2011 inflation adjustment, for section 1274A
of the Code. Rev. Rul. 2010–2 supplemented and
superseded. See Rev. Rul. 2010-30, page 820.
Section 642
.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of December 2010. See
Rev. Rul. 2010-29, page 818.
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 December 2010. See Rev. Rul. 2010-29, page
818.
Section 83
2.—Insurance
Company Ta
xable Income
26 CFR 1.8
32-4: Gross income.
The salvag
e discount factors are set forth for 2010.
These fac
tors must be used to compute discounted
estimate
d salvage recoverable for purposes of section
832 of the
Code. See Rev. Proc. 2010-50, page 841.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2010. See Rev. Rul. 2010-29, page
818.
26 CFR 1.846-1
: Application of discount factors.
The salvage di
scount factors are set forth for the
1998 accident
year. These factors will be used for
computing est
imated salvage recoverable for pur-
poses of secti
on 832 of the Code. See Rev. Proc.
99–16.
The composite loss discount factor for Reinsur-
ance (Nonpropertional Assumed Property). See Rev.
Proc. 2010-49, page 830.
The salvage discount factors are set forth for 2010.
These factors must be used to compute discounted
estimated salvage recoverable for purposes of section
832 of the Code. See Rev. Proc. 2010-50, page 841.
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 December 2010.
Rev. Rul. 2010–29
This revenue ruling provides various
prescribed rates for federal income tax
purposes for December 2010 (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 (ad-
justed 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 de-
scribed in section 382(f). Table 4 contains
the appropriate percentages for deter-
mining the low-income housing credit
described in section 42(b)(1) for build-
ings placed in service during the current
2010–50 I.R.B.818December 13, 2010

month. However, under section 42(b)(2),
the applicable percentage for non-feder-
ally subsidized new buildings placed in
service after July 30, 2008, and before
December 31, 2013, shall not be less than
9%. Table 5 contains the federal rate
for determining 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.
Finally, Table 6 contains contains the 2011
interest rate for sections 846 and 807.
REV. RUL. 2010–29 TABLE 1
Applicable Federal Rates (AFR) for December 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.32%.32%.32%.32%
110% AFR
.35%.35%.35%.35%
120% AFR.38%.38%.38%.38%
130% AFR.42%.42%.42%.42%
Mid-term
AFR
1.53%1.52%1.52%1.52%
110% AFR1.68%1.67%1.67%1.66%
120% AFR1.83%1.82%1.82%1.81%
130% AFR1.99%1.98%1.98%1.97%
150% AFR
2.29%2.28%2.27%2.27%
175% AFR
2.68%2.66%
2.65%2.65%
Long-term
AFR
3.53%3.50%
3.48%3.47%
110% AFR3.89%
3.85%
3.83%3.82%
120% AFR4.24%4.20%4.18%4.16%
130% AFR4.60%
4.55%4.52%4.51%
REV. RUL. 2010–29 TABLE 2
Adjusted AFR for December 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-te
rm adjusted
AFR
.49%.49%.49%.49%
Mid-term adjusted AFR1.63%1.62%1.62%1.61%
Long-term adjusted
AFR
3.67%3.64%3.62%3.61%
REV. RUL
. 2010–29 TABLE 3
Rates Under Section 382 for December 2010
Adjusted federal long-term rate for the current month3.67%
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.)3.67%
December 13, 20108192010–50 I.R.B.

REV. RUL. 2010–29 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for December 2010
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit
7.58%
Appropriate pe
rcentage for the 30% present value low-income housing credit
3.25%
REV. RUL. 2010–29 TABLE 5
Rate Under Section 7520 for December 2010
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 interest1.8%
REV. RUL. 2010–29 TABLE 6
Rates Under Se
ctions 846 and 807
Applicable rate of interest for 2011 for purposes of sections 846 and 8073.46%
Section 1274A.—Special
Rules for Cer
tain
Transactio
ns Where Stated
Principal A
mount Does Not
Exceed $2,800,000
26 CFR 1.1274A–1: Special rules for certain trans-
actions where stated principal amount does not ex-
ceed $2,800,000.
(Also sections 483, 1274.)
Section 1274A – inflation adjusted
numbers for 2011.This ruling provides
the dollar amounts, increased by the 2011
inflation adjustment, for section 1274A
of the Code. Rev. Rul. 2010–2 supple-
mented and superseded.
Rev. Rul. 2010–30
BACKGROUND
In general, sections 483 and 1274 deter-
mine the principal amount of a debt instru-
ment given in consideration for the sale or
exchange of nonpublicly traded property.
In addition, any interest on a debt instru-
ment subject to section 1274 is taken into
account under the original issue discount
provisions of the Code. Section 1274A,
however, modifies the rules under sections
483 and 1274 for certain types of debt in-
struments.
In the case of a “qualified debt instru-
ment,” the discount rate used for purposes
of sections 483 and 1274 may not exceed
nine percent, compounded semiannually.
Section 1274A(b) defines a qualified debt
instrument as any debt instrument given in
consideration for the sale or exchange of
property (other thannewsection38prop-
erty within the meaning of section 48(b),
as in effect on the day before the date
of enactment of the Revenue Reconcilia-
tion Act of 1990) if the stated principal
amount of the instrument does not exceed
the amount specified in section 1274A(b).
For debt instruments arising out of sales
or exchanges before January 1, 1990, this
amount is $2,800,000.
In the case of a “cash method debt in-
strument,” as defined in section 1274A(c),
the borrower and lender may elect to
use the cash receipts and disbursements
method of accounting. In particular, for
any cash method debt instrument, section
1274 does not apply, and interest on the
instrument is accounted for by both the
borrower and the lender under the cash
method of accounting. A cash method
debt instrument is a qualified debt instru-
ment that meets the following additional
requirements: (A) In the case of instru-
ments arising out of sales or exchanges
before January 1, 1990, the stated princi-
pal amount does not exceed $2,000,000;
(B) the lender does not use an accrual
method of accounting and is not a dealer
with respect to the property sold or ex-
changed; (C) section 1274 would have
applied to the debt instrument but for
an election under section 1274A(c); and
(D) an election under section 1274A(c)
is jointly made with respect to the debt
instrument by the borrower and the lender.
Section 1.1274A–1(c)(1) of the Income
Tax Regulations provides rules concerning
the time for, and manner of, making this
election.
Section 1274A(d)(2) provides that, for
any debt instrument arising out of a sale
or exchange during any calendar year af-
ter 1989, the dollar amounts stated in sec-
tion 1274A(b) and section 1274A(c)(2)(A)
are increased by the inflation adjustment
for the calendar year. Any increase due to
the inflation adjustment is rounded to the
nearest multiple of $100 (or, if the increase
is a multiple of $50 and not of $100, the
increase is increased to the nearest multi-
ple of $100). The inflation adjustment for
any calendar year is the percentage (if any)
by which the CPI for the preceding cal-
endar year exceeds the CPI for calendar
year 1988. Section 1274A(d)(2)(B) de-
fines the CPI for any calendar year as the
average of the Consumer Price Index as of
the close of the 12-month period ending on
September 30 of that calendar year.
2010–50 I.R.B.820December 13, 2010

INFLATION-ADJUSTED AMOUNTS
UNDER Section 1274A
For debt instruments arising out of sales
or exchanges after December 31, 1989, the
inflation-adjusted amounts under section
1274A are shown in Table 1.
Rev. Rul. 2010–30 Table 1
Inflation-Adjusted Amounts Under Section 1274A
Calendar Year
of Sale
or Exchange
1274A(b) Amount
(qualified debt
instrument)
1274A(c)(2)(A) Amount
(cash method debt
instrument)
1990
$2,933,200$2,095,100
1991
$3,079,600$2,199,700
1992
$3,234,900$2,310,600
1993
$3,332,400$2,380,300
1994
$3,433,500$2,452,500
1995
$3,523,600$2,516,900
1996
$3,622,500$2,587,500
1997
$3,723,800$2,659,900
1998
$3,823,100$2,730,800
1999
$3,885,500$2,775,400
2000
$3,960,100$2,828,700
2001
$4,085,9
00
$2,918,5
00
2002
$4,217,500$3,012,500
2003
$4,280,800$3,057,700
2004
$4,381,300$3,129,500
2005
$4,483,000$3,202,100
2006
$4,630,300$3,307,400
2007
$4,800
,800
$3,429
,100
2008
$4,913,400$3,509,600
2009
$5,131,700$3,665,500
2010
$5,115,100$3,653,600
2011
$5,201,300$3,715,200
Note: These inflation adjustments were computed using the All-Urban, Consumer Price Index, 1982–1984 base, published
by the Bureau of Labor Statistics.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 2010–2, 2010–3 I.R.B. 272,
is supplemented and superseded.
DRAFTING INFORMATION
The author of this revenue ruling is An-
drea M. Hoffenson of the Office of the As-
sociate Chief Counsel (Financial Institu-
tions and Products). For further informa-
tion regarding this revenue ruling, please
contact Ms. Hoffenson at (202) 622–3920
(not a toll-free call).
Section 1288.—Treatment
of Original Issue Discount
on T
ax-Exempt Obligations
The
adjusted applicable federal short-term, mid-
ter
m, and long-term rates are set forth for the month
of D
ecember 2010. See Rev. Rul. 2010-29, page
818.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2010. See Rev. Rul. 2010-29, page
818.
Sect
ion 7872.—Treatment
of Lo
ans With Below-Market
Inte
rest Rates
The a
djusted applicable federal short-term, mid-
term
, and long-term rates are set forth for the month
of De
cember 2010. See Rev. Rul. 2010-29, page
818.
December 13, 20108212010–50 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Branded Prescription Drug
Sales
Notice 2010–71
This notice provides guidance on the
annual fee imposed on covered entities en-
gaged in the business of manufacturing
or importing branded prescription drugs
by section 9008 of the Patient Protection
and Affordable Care Act (ACA), Public
Law 111–148 (124 Stat. 119 (2010)), as
amended by section 1404 of the Health
Care and Education Reconciliation Act of
2010 (HCERA), Public Law 111–152 (124
Stat. 1029 (2010)). All references in this
notice to section 9008 are references to
section 9008 of the ACA, as amended by
section 1404 of HCERA.
Part I of this notice describes a pro-
posed methodology for calculating the sec-
tion 9008 fee. Part II of this notice de-
scribes how the Internal Revenue Service
(IRS) will use this proposed methodol-
ogy to provide each covered entity with
a preliminary 2011 fee calculation. The
IRS and Treasury Department intend that
a covered entity’s preliminary fee calcula-
tion for 2011 will serve as a basis for com-
ments by the covered entity on the pro-
posed methodology. Part III of this notice
solicits public comments on all aspects of
the notice.
Part I — Proposed Methodology for
Calculating the Fee
Section 9008(b)(4) sets an applicable
fee amount for each year, beginning with
2011, that will be allocated among covered
entities with aggregate branded prescrip-
tion drug sales of over $5 million to spec-
ified government programs or pursuant to
coverage under such programs. Section
9008(e)(2) provides that “branded pre-
scription drug” means (i) any prescription
drug the application for which was sub-
mitted under section 505(b) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C.
355(b)), or (ii) any biological product the
license for which was submitted under
section 351(a) of the Public Health Ser-
vice Act (42 U.S.C. 262(a)). The specified
government programs are the Medicare
Part B program, the Medicare Part D pro-
gram, the Medicaid program, any program
under which branded prescription drugs
are procured by the Department of Vet-
erans Affairs, any program under which
branded prescription drugs are procured
by the Department of Defense, and the
TRICARE retail pharmacy program (col-
lectively, the Programs). The applicable
fee amount is allocated among the cov-
ered entities using a formula specified in
section 9008(b) based on sales to the Pro-
grams, which sales data is to be provided
by the Centers for Medicare and Medicaid
Services of the Department of Health and
Human Services (CMS), the Department
of Veterans Affairs (VA), and the Depart-
ment of Defense (DOD) (collectively, the
Agencies).
There are two years relevant to the cal-
culation of the section 9008 fee — the cal-
endar year in which the fee must be paid
(herein referred to as the fee year) and the
calendar year of the branded prescription
drug sales, which will be used to deter-
mine the amount of the fee (herein referred
to as the sales year). As discussed more
fully below, the IRS and Treasury Depart-
ment are proposing to use the second cal-
endar year preceding the fee year as the
sales year for purposes of calculating the
section 9008 fee. An adjustment amount
will also be calculated as discussed below.
Definition of Covered Entity
Section 9008(a) imposes the fee on each
covered entity engaged in the business of
manufacturing or importing branded pre-
scription drugs. Section 9008(d)(1) de-
fines a covered entity as “any manufac-
turer or importer with gross receipts from
branded prescription drug sales.” For pur-
poses of section 9008(a), a manufacturer
or importer is the person identified in the
Labeler Code of the National Drug Code
(NDC) for a branded prescription drug.
The NDC is an identifier assigned by the
Food and Drug Administration (FDA) to a
branded prescription drug, as well as other
drugs. The Labeler Code is the first five
numeric characters of the NDC or the first
six numeric characters when the available
five-character code combinations are ex-
hausted.
Section 9008(d)(2) provides a con-
trolled group rule under which all persons
treated as a single employer under sec-
tion 52(a), 52(b), 414(m), or 414(o) of
the Internal Revenue Code (Code) shall
be treated as a single covered entity. For
this purpose, a foreign entity subject to
tax under section 881 is included within
a controlled group under section 52(a) or
52(b). This controlled group rule will be
appliedasoftheendofthedayonDe-
cember 31 of the sales year. All persons
treated as a single employer under section
9008(d)(2) are jointly and severally liable
for the fee. See section 9008(d)(3).
In the case of a controlled group that
is treated as a single covered entity under
section 9008(d)(2), the controlled group
must identify a single person as the “des-
ignated entity” that may act for the con-
trolled group with respect to the section
9008 fee. If the controlled group, without
regard to foreign corporations included un-
der section 9008(d)(2)(B), is also an affil-
iated group that filed a consolidated return
for federal income tax purposes, the des-
ignated entity is the common parent of the
affiliated group as identified on the tax re-
turn filed for the sales year. In all other
situations, the controlled group must se-
lect a person as the designated entity on
Form 8947,Report of Branded Prescrip-
tion Drug Information
1
(discussed further
below), which is signed by the designated
entity under penalties of perjury, stating
that all the manufacturers or importers of
branded prescription drugs who are mem-
bers of the covered entity have consented
to the selection of the designated entity.
Sales Taken Into Account
Section 9008(b) provides that the an-
nual fee for each covered entity is calcu-
lated by determining the ratio of (i) the
covered entity’s branded prescription drug
sales taken into account during the pre-
ceding calendar year to(ii) the aggregate
branded prescription drug sales taken into
account for all covered entities during the
same year, and applying this ratio to the ap-
plicable amount as specified in the statute.
1
The Office of Management and Budget approved Form 8947 under control number 1545–2192.
2010–50 I.R.B.822December 13, 2010

“Sales taken into account” means sales ex-
clusive of certain orphan drugs and af-
ter application of the percentage adjust-
ment table in section 9008(b)(2). Sec-
tion 9008(b)(1) provides that the calcula-
tion of the fee in any given year is based
on branded prescription drug sales in the
immediately preceding calendar year.
Section 9008(b)(3) provides that the
Secretary of the Treasury shall determine
the amount of each covered entity’s fee.
In determining that amount, the Secre-
tary may rely on reports submitted by the
Agencies and any other source of infor-
mation. Section 9008(i) also provides
the Secretary with regulatory authority to
carry out the purposes of the statute.
The IRS and Treasury Department have
determined that, although the DOD and
VA are expected to have complete data on
branded prescription drug sales for the cal-
endar year immediately preceding the fee
year within the time frame necessary to
administer the fee, CMS is not expected
to have comparable data because it can-
not complete its data processing within the
necessary time frame. Accordingly, the
IRS and Treasury Department will calcu-
latethefeebasedonthebrandedprescrip-
tion drug sales data provided by the Agen-
cies for the second calendar year preced-
ing the fee year. Because the use of the
second preceding year, rather than the im-
mediately preceding year, as the sales year
may affect the amount of the fee paid by
any particular covered entity, the fee due
in every year after 2011 will include an ad-
justment amount.
Adjustment Methodology
An adjustment amount will be calcu-
lated for each NDC and will be added or
subtracted, as appropriate, to the fee other-
wise payable by the covered entity respon-
siblefortheNDCinthefeeyearinwhich
the adjustment is calculated. The adjust-
ment amount added or subtracted to the
amount payable in a fee year will reflect
the difference between the fee determined
for the NDC in the immediately prior fee
year, using data from the second calen-
dar year preceding that fee year, and what
the fee for that NDC would have been for
the immediately prior fee year using data
from the calendar year immediately pre-
ceding that prior fee year. For example,
the amount due from a covered entity in
the 2012 fee year will include an adjust-
ment amount for each NDC for which the
covered entity is responsible in 2012 equal
to the difference between the 2011 fee as-
sociated with that NDC using 2009 data,
and what the 2011 fee for that NDC would
have been using 2010 data.
To calculate the adjustment amount for
an NDC, the IRS will first determine two
ratios: one based on data from the sec-
ond preceding calendar year; and the other
based on data from the third preceding cal-
endar year. In both cases, the numerator of
the ratio is the sales taken into account for
the particular NDC during the relevant cal-
endar year, and the denominator of the ra-
tio is aggregate branded prescription drug
sales taken into account for all NDCs dur-
ing the relevant calendar year. For each
NDC, the IRS will then take the difference
between the ratio using second preceding
year data and the ratio using third pre-
ceding year data and multiply that amount
by the applicable amount of the fee for
the relevant fee year, as set forth in sec-
tion 9008(b)(4), to determine an adjust-
ment for the NDC. The adjustment amount
for any particular NDC will then be added
to, or subtracted from, as appropriate, the
amount of the fee otherwise payable by the
covered entity associated with the NDC
for the fee year in which the adjustment
amount is calculated.
For example, in 2012 the fee payable
by each covered entity will consist of two
components. First, the applicable amount
for 2012 will be allocated to the covered
entities based on sales data for 2010 (i.e.,
the second preceding calendar year). Sec-
ond, an adjustment amount will be calcu-
lated in 2012 for each NDC with respect
to the 2011 fee year, by multiplying (i)
the difference between the sales ratio de-
termined using 2010 data and the sales ra-
tio determined using 2009 data by (ii) the
applicable amount of the fee for 2011. The
adjustment amountfor each NDC will then
be added to, or subtracted from, as appro-
priate, the fee otherwise payable in 2012
by the covered entity associated with the
NDC for the 2012 fee year.
The adjustment amount is applied only
with respect to the amount of the fee oth-
erwise payable by the relevant covered en-
tity in the year in which the adjustment is
calculated, and is not a refund, credit, or
recalculation of a fee payable by any cov-
ered entity in any preceding fee year. In
any given fee year, the amount assessed by
the IRS will be based on data provided to it
by the Agencies. The IRS does not intend
to recalculate eitherthe fee allocations or
the adjustment amounts based on data that
becomes available after those amounts are
assessed.
Information Requested from Covered
Entities
Annually, each covered entity should
submit a Form 8947 and provide the infor-
mation specified by the form and instruc-
tions. The designated entity for a covered
entity described in section 9008(d)(2) sub-
mits a single form for the covered entity. A
covered entity should submit a completed
Form 8947 by December 15 of each year
unless an alternative date is prescribed by
the form or instructions. The Form 8947
information is return information subject
to the confidentiality protections of sec-
tion 6103. Form 8947 will be available at
http://www.irs.gov.
Form 8947 solicits the following infor-
mation from each covered entity:
1. For a single-person covered en-
tity, the covered entity’s name, address,
and employer identification number. For
a covered entity described in section
9008(d)(2), the name, address, and em-
ployer identification number of the des-
ignated entity and each manufacturer or
importer with gross receipts from the sale
of branded prescription drugs that was in-
cluded in the covered entity as of the end
of the day on December 31 of the sales
year.
2. All of the NDCs for branded pre-
scription drugs in which the covered entity
is identified in the labeler code as of the
end of the day on December 31 of the sales
year. For a covered entity described in sec-
tion 9008(d)(2), this includes all NDCs in
which a member of the covered entity is
identified in the labeler code as of the end
of the day on December 31 of the sales
year.
3. The brand name and NDC for each
orphan drug for which the covered entity
was allowed a section 45C credit. For pur-
poses of section 9008(e)(3), the credit was
“allowed” for any particular drug if the
covered entity claimed the credit and there
has not been a final assessment or a court
order disallowing the full credit taken for
the drug. In addition, even if the credit
December 13, 20108232010–50 I.R.B.

has been allowed, a covered entity must
not report an NDC for an orphan drug for
any sales year following the calendar year
in which the FDA approved the drug for
marketing for any indication other than the
treatment of the rare disease or condition
for which the section 45C credit was al-
lowed.
4. The rebates for each NDC paid in the
sales year by the covered entity to Medi-
care Part D with respect to sales occurring
in that sales year. For this purpose, a re-
bate is considered paid in the sales year if
it is taken into account on the covered en-
tity’s tax return(s) for the sales year. This
information is needed for the 2009 sales
year because, at this time, CMS does not
have rebate data on branded prescription
drug sales by NDC. However, starting in
2011, CMS is planning to collect this re-
bate information by NDC for the 2010 and
subsequent sales years. It is therefore pos-
sible that covered entities will not report
this rebate information for years following
2009.
5. The state supplemental rebates for
each NDC paid in the sales year by the
covered entity with respect to sales under
Medicaid occurring in that sales year. For
this purpose, a rebate is considered paid
in the sales year if it is taken into account
on the covered entity’s tax return(s) for the
sales year. This information is needed be-
cause Medicaid data will not include state
supplemental rebates.
Information Provided by the Agencies
TheIRSwillcompilealistofbranded
prescription drugs by NDC using the data
submitted on Forms 8947. Appropriate
due diligence will be performed to check
for potential oversights. For example, the
IRS may use information published by the
FDA identifying drugs for which applica-
tions were submitted under section 505(b)
of the Federal Food, Drug, and Cosmetic
Act. The IRS will provide the Agencies
with the compiled list of branded prescrip-
tion drugs.
For each year in which the fee is due,
the Agencies will provide data to the IRS
on the branded prescription drug sales dur-
ing the sales year by Program and NDC.
The calculation methodology for each Pro-
gram, including any reasonable estimation
techniques and assumptions that the Agen-
cies expect to use, are described below.
1.Medicare Part D. Section 9008 re-
quires CMS to report the product of the
per-unit ingredient cost reported by Part
D sponsors (net of any per-unit rebate or
other price concessions) and the number of
units for each branded prescription drug.
CMS currently collects prescription level
encounter data from Part D sponsors on the
Prescription Drug Event (PDE) records.
On the PDE records, Part D sponsors re-
port the NDC, as well as the ingredient
cost, dispensing fee, sales tax, and units.
CMS will aggregate the ingredient cost re-
ported in the “Ingredient Cost Paid” field
and the units reported in the “Quantity Dis-
pensed” field of the PDE records for Part
D covered drugs. These amounts will be
aggregated at the NDC level for each sales
year. Only PDE data that Part D spon-
sors have submitted by the PDE submis-
sion deadline (within 6 months after the
end of the sales year) and have been ap-
proved for inclusion in the Part D payment
reconciliation will be included.
2.Medicare Part B. First, for Health-
care Common Procedure Coding System
(HCPCS) codes that consist solely and ex-
clusively of branded prescription drugs (as
identified by their respective NDCs) man-
ufactured by a single entity, CMS will pro-
vide the total Medicare-allowed charges
for the HCPCS code for the appropriate
sales year.
Second, for HCPCS codes consisting
of a mixture of branded prescription drugs
made by different manufacturers or a mix-
ture of branded prescription and generic
drugs, CMS will determine: (i) the total
Medicare-allowed charges for the HCPCS
code for the appropriate sales year; (ii) the
entities engaged in manufacturing each
NDC assigned to the HCPCS code; and
(iii) those entities (if any) that are man-
ufacturingbrandedprescriptiondrugs.
CMS will then: (i) estimate the amount
of Medicare-allowed charges for each
manufacturer by applying the utilization
percentage attributed to each manufacturer
as determined under the Medicare Part B
Program using manufacturer reported Av-
erage Sales Price sales data; (ii) multiply
that percentage by the Medicare-allowed
charge for that HCPCS code; and (iii) as-
sign the result to each manufacturer within
that HCPCS code.
Third, for the remainder of HCPCS
codes that consist of multiple branded pre-
scription drugs (as identified by their re-
spective NDCs) manufactured by multiple
entities that cannot be reliably calculated
using the two methods above, CMS will
determine: (i) the total Medicare-allowed
charges for the HCPCS code for the appro-
priate sales year; (ii) the entities engaged
in manufacturing each NDC assigned to
the HCPCS code; and (iii) those entities
(if any) that are manufacturing branded
prescription drugs. CMS will then: (i)
estimate the amount of Medicare-allowed
charges for each manufacturer by apply-
ing the utilization percentage attributed to
each manufacturer as determined under
the Medicare Part D Program; (ii) multiply
that percentage by the Medicare-allowed
charge for that HCPCS code; and (iii) as-
sign the result to eachmanufacturer within
that HCPCS code.
Thus, the amounts attributed to branded
prescription drugs within the HCPCS code
will be estimated. CMS will calculate the
sum of these components to arrive at an
estimate of Medicare Part B spending on
branded prescription drugs for each manu-
facturer.
3.Medicaid. The branded prescrip-
tion drug sales for Medicaid may be de-
termined as the per-unit Average Manufac-
turer Price less the Unit Rebate Amounts
(URA) that CMS calculates based on man-
ufacturer-reported pricing data multiplied
by the number of units reported billed by
states to manufacturers. This data would
be based on the data reported to Medicaid
by covered entities and the states. CMS
does not currently intend to reduce this cal-
culation for state supplemental rebates.
4.Department of Veterans Affairs.VA
will provide, by NDC, the total amount
paid for each branded prescription drug
procured by the VA for its beneficiaries.
The basis of this information will be na-
tional procurement data reported by VA’s
Pharmaceutical Prime Vendor to the VA
Pharmacy Benefits Management Service
and National Acquisition Center. This
information will not include procurement
data that resides exclusively at the indi-
vidual medical treatment facility level.
5.Department of Defense.TheDOD
will provide, by Labeler Code, the man-
ufacturer’s name, the NDC, brand name,
and the amount paid (net of rebates) for
each branded prescription drug procured
by DOD. TRICARE Management Activ-
ity will provide, by Labeler Code, the man-
ufacturer’s name, the NDC, brand name,
2010–50 I.R.B.824December 13, 2010

and the amount paid (net of refunds or re-
bates) for each branded prescription drug
procured by DOD through the TRICARE
Retail Pharmacy Program.
Fee calculation
After receiving data from the Agencies
and information from the covered entities,
the IRS will calculate each covered en-
tity’s branded prescription drug sales for
each Program by NDC. A covered entity’s
branded prescription drug sales for each
Program will equal (i) the sum of all the
covered entity’s branded prescription drug
sales reported by the Program, less (ii) the
sumofallbrandedprescriptiondrugsales
reported by the Program for each NDC for
which the covered entity has appropriately
claimed the orphan drug exclusion, less
(iii) the sum of rebates reported by the cov-
ered entity on Form 8947 for the sales year.
After calculating the branded prescrip-
tion drug sales for each Program, the
IRS will calculate each covered entity’s
brandedprescriptiondrugsalestaken
into account for purposes of the ratio set
forth in section 9008(b)(1). A covered
entity’s branded prescription drug sales
taken into account for purposes of sec-
tion 9008(b)(1)(A) will equal the sum of
the covered entity’s branded prescription
drug sales for all Programs reduced by
the appropriate percentages set forth in
section 9008(b)(2). The IRS will then
calculate the aggregate branded prescrip-
tion drug sales of all covered entities
taken into account for purposes of section
9008(b)(1)(B), which is the sum of all the
covered entities branded prescription drug
sales taken into account for purposes of
section 9008(b)(1)(A).
To determine each covered entity’s
fee, the IRS will divide each covered
entity’s branded prescription drug sales
taken into account for purposes of section
9008(b)(1)(A) by the aggregate branded
prescription drug sales of all covered en-
tities taken into account for purposes of
section 9008(b)(1)(B) and multiply that
fraction by the applicable amount for the
appropriate year as set forth in section
9008(b)(4).
Part II — Preliminary Fee Calculation
for 2011
The IRS will use the proposed method-
ology described in Part I to provide each
covered entity with a preliminary 2011 fee
calculation. The notification of the prelim-
inary fee calculation will include the fol-
lowing: (1) the covered entity’s fee; (2) the
covered entity’s branded prescription drug
sales, by NDC, for each Program; (3) the
covered entity’s branded prescription drug
sales taken into account after application
of section 9008(a)(2); and (4) the aggre-
gate branded prescription drug sales taken
into account for all covered entities.
To facilitate the preliminary 2011 fee
calculation, Form 8947 should be submit-
ted to the IRS by January 20, 2011. From
the data on the Forms 8947, the IRS will
compile a list of NDCs and provide that
list to the Agencies by March 1, 2011.
The IRS will use the data submitted on the
Forms 8947 and the sales data provided by
the Agencies to calculate the preliminary
fee and will send to each covered entity no-
tification of its preliminary fee calculation
by May 2, 2011.
If the IRS and Treasury Department
subsequently promulgate regulations that
modify the methodology for calculating
each covered entity’s fee, the modified
methodology will be adopted in determin-
ing the final fee amount for each covered
entity for 2011. Thus, if the methodology
changes, the amount of the final fee for
2011 may vary from the preliminary fee
calculation. The IRS will send the final
fee calculation to each covered entity by
August 15, 2011.
Part III — Request for comments
The IRS and Treasury Department
request comments on the procedures de-
scribed in this notice for consideration
when promulgating regulations setting
forth procedures for 2011 and the fol-
lowing years. The deadline for submis-
sion of comments is June 2, 2011. This
date will give covered entities the op-
portunity to consider the information
received in their preliminary fee calcu-
lation when providing comments. All
materials submitted will be available for
public inspection and copying. Written
comments should be submitted to: In-
ternal Revenue Service, CC:PA:LPD:PR
(Notice 2010–71), Room 5203, Internal
Revenue Service, PO Box 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand-delivered Mon-
day through Friday between the hours of
8a.m.and4p.m.toCC:PA:LPD:PR
(Notice 2010–71), Courier’s Desk, In-
ternal Revenue Service, 1111 Consti-
tution Avenue, NW, Washington, DC.
Comments may be transmitted electron-
ically via the following e-mail address:
Notice.Comments@irscounsel.treas.gov.
Please include “Notice 2010–71” in
the subject line of any electronic
communications.
Drafting Information
The principal author of this notice is
CeliaA.GabryshoftheOfficeofAs-
sociate Chief Counsel (Passthroughs &
Special Industries). For further infor-
mation regarding this notice, contact
Celia A. Gabrysh at (202) 622–3130 (not
a toll-free call). For further information
regarding Form 8947, contact Lou Milano
at (908) 301–2106 (not a toll-free call).
Build America Bonds and
Other State and Local Bonds:
Timing of Issuing Bonds
Notice 2010–81
SECTION 1. PURPOSE
This notice provides guidance on the
determination of when State and local
bonds (as defined in § 103(c)) of the Inter-
nal Revenue Code (the “Code”) are con-
sidered “issued” for purposes of deadlines
on issuing bonds. This notice provides
guidance on the relevant distinction be-
tween the “issue date” of a “bond” versus
the “issue date” of an “issue” for pur-
poses of this determination. One instance,
among others, in which this notice applies
is in determining when Build America
Bonds, structured as “draw-down” bonds
or loans in which draws are funded at
different times, are considered issued for
purposes of statutory deadlines on issuing
these bonds under § 54AA.
This notice does not apply for purposes
of applying the qualified small issuer and
de minimisexceptions to the tax-exempt
carrying cost disallowance provision un-
der § 265(b)(3) and § 265(b)(7) to draw-
down loans.
December 13, 20108252010–50 I.R.B.

SECTION 2. BACKGROUND
Section 1531 of Title I of Division B of
the American Recovery and Reinvestment
Act of 2009, Pub. L. No. 111–5, 123 Stat.
115 (2009) (“ARRA”) added § 54AA to
the Code, which authorizes State and lo-
cal governments, at their option, to issue
Build America Bonds as taxable govern-
mental bonds and receive Federal subsi-
dies for a portion of their borrowing costs.
Sections 54AA(d), 54AA(g), and 6431 re-
quire that Build America Bonds be issued
before January 1, 2011.
In a related provision, § 1401 of ARRA
added §§ 1400U–1 through 1400U–3 to
the Code, which authorizes two types
of “Recovery Zone Bonds,” including a
type of Build America Bond known as
“Recovery Zone Economic Development
Bonds” and a type of traditional tax-ex-
empt bond known as “Recovery Zone
Facility Bonds.” These Recovery Zone
Bonds have bond volume limitations and a
statutory deadline that requires the bonds
to be issued before January 1, 2011.
Section 1503(a) of ARRA amended
§ 57(a)(5)(C) to add new clause (vi),
which provides, in part, that for purposes
of the alternative minimum tax preference
for interest on certain tax-exempt private
activity bonds under § 57(a)(5)(C)(i), the
term “private activity bond” shall not in-
clude any bond issued after December 31,
2008, and before January 1, 2011. Section
1503(b) of ARRA amended § 56(g)(4)(B)
to add new clause (iv), which provides
that the adjusted current earnings (ACE)
adjustment under § 56(g)(4)(B)(i) for in-
terest on certain tax-exempt bonds shall
not include any interest on certain bonds
issued after December 31, 2008, and be-
fore January 1, 2011.
In addition, other statutory provisions
impose statutory time periods for issuing
State and local bonds in both targeted cir-
cumstances and in more general circum-
stances. Another selected example of a tar-
geted bond program that imposes a statu-
tory time period on issuing bonds is the
Gulf Opportunity Zone Bond program un-
der § 1400N. One general provision that
imposes statutory time periods on issuing
bonds is the annual State private activity
bond volume cap under § 146, which gen-
erally limits the amount of tax-exempt pri-
vate activity bonds that may be issued in a
State in a particular year. Similarly, certain
types of qualified tax credit bonds under
§ 54A have volume caps and statutory time
periods for issuing bonds. Another gen-
eral provision is § 265(b)(3), which gener-
ally provides an exception to the carrying
cost disallowance provision for financial
institutions that purchase tax-exempt obli-
gations from “qualified small issuers” that
reasonably expect to issue no more than
$10millionintax-exemptbondsinacal-
endar year. ARRA raises the amount of
this exception to $30 million for bonds is-
sued in 2009 and 2010. Thus, the determi-
nation of when bonds are issued is relevant
to the statutory limitations affecting Build
America Bonds and many other State and
local bond programs.
Recently, questions have arisen about
whichissuedateruleappliesforthestatu-
tory deadline on issuing Build America
Bonds with respect to a financing structure
known as “draw-down” loans in which
funds are advanced at different times. The
regulations provide issue date rules for
“bonds” and for “issues” of bonds (with
subsidiary special rules which treat bonds
issued under draw-down loans or commer-
cial paper programs as part of the same
issue). Section 1.150–1(b) of the Income
Tax Regulations includes a general def-
inition for the “issue date” of a “bond,”
that provides the issue date is the date
on which the issuer receives the purchase
price in exchange for that bond, provided
that in no event is the issue date of a bond
earlier than the first day on which interest
begins to accrue on such bond for Federal
income tax purposes. See alsoHarbor
Bancorp v. Commissioner, 105 T.C. 260
(1995), aff’d 115 F.3d 722 (9
th
Cir. 1997)
(citing regulatory predecessors to this
general definition in interpreting statutory
deadlines for issuing bonds under the Tax
Reform Act of 1986).
Section 1.150–1(b) defines a “bond” to
mean any “obligation” of a State or politi-
cal subdivision thereof under § 103(c)(1).
Section 1.150–1(b) also defines an “obli-
gation” to mean any valid evidence of in-
debtedness under general Federal income
tax principles.
By comparison, § 1.150–1(c) defines
the broader term bond “issue” under a gen-
eral definition and various special rules
that may include bonds as part of the same
issue even if they are issued at different
times under a common tax plan. Section
1.150–1(b) defines the “issue date” of an
“issue” to mean the first date on which
the issuer receives the purchase price in
exchange for delivery of the evidence of
indebtedness representing any bond in-
cluded in the issue, provided that in no
event is the issue date of an issue earlier
than the first day on which interest begins
to accrue on the first bond included in the
issue for Federal income tax purposes.
Section 1.150–1(c)(1) provides a general
rule which treats bonds as part of the same
issue if the bonds are sold (versus issued)
at substantially the same time (meaning
sold less than 15 days apart), the bonds are
part of the same plan of financing, and the
bonds are reasonably expected to be paid
from the same source of funds.
Section 1.150–1(c)(4)(i) treats bonds
issued pursuant to a “draw-down loan” as
part of the same bond issue. This special
rule further provides that the issue date
of the issue is the first date on which the
aggregate draws under the loan exceed
the lesser of $50,000 or five percent of
the issue price. Section 1.150–1(c)(4)(ii)
allows commercial paper issued pursuant
to the same commercial paper program to
be treated as part of the same issue. This
special rule further provides that the issue
date of the issue is the first date on which
the aggregate amount of commercial pa-
per issued under the program exceeds the
lesser of $50,000 or five percent of the
issue price. This special rule generally
allows commercial paper to be treated as
partofthesameissueifitisissuedtofi-
nance or refinance the same governmental
purposes pursuant to a single master legal
document during an 18-month period or
if it is issued to refinance such commer-
cial paper for up to 30 years if there is
no increase in the principal amount after
the initial 18-month period. These special
rules apply to the issue date of the issue.
The regulations do not provide special
issue date rules for the issue date of bonds
issued as draws under draw-down loans or
as commercial paper. In Rev. Rul. 89–70,
1989–1 C.B. 88, however, the IRS ruled
that the entire stated principal amount of a
draw-down loan was considered issued on
the date on which more than ade minimis
amount of the loan was first advanced.
SECTION 3. SCOPE
This notice applies for determining
compliance with deadlines for issuing
2010–50 I.R.B.826December 13, 2010

State and local bonds such as Build Amer-
ica Bonds under §§ 54AA(d), 54AA(g)
and 6431, and Recovery Zone Bonds un-
der §§ 1400U–1 through 1400U–3. The
analysis in this notice also applies for
other deadlines for issuing bonds, such
as, among others, the exceptions to the
alternative minimum tax preferences and
adjustments for interest on certain tax-ex-
empt bonds under §§ 56(g)(4)(B)(iv) and
57(a)(5)(C)(vi), Gulf Opportunity Zone
Bonds under § 1400N and various volume
cap limitations on State and local bonds
(as defined in § 103(c)).
This notice does not apply for purposes
of applying the qualified small issuer and
de minimisexceptions to the tax-exempt
carrying cost disallowance provision un-
der § 265(b)(3) and § 265(b)(7) to draw-
down loans. For this purpose, Rev. Rul.
89–70 will continue in effect until further
guidance is provided, which guidance will
be prospective.
SECTION 4. GUIDANCE
In general, for determining compliance
with deadlines on issuing bonds covered
by this notice, a bond is considered issued
on the “issue date” of the “bond” under
§ 1.150–1(b). Section 1.150–1(b) defines
the “issue date” of a “bond” to mean the
date on which the issuer receives the pur-
chase price in exchange for that bond, pro-
vided that in no event is the issue date of
a bond earlier than the first day on which
interest begins to accrue on such bond for
Federal income tax purposes.
By contrast, the issue date of an “is-
sue” under § 1.150–1(b) is the first date
on which the issuer receives the purchase
price in exchange for delivery of the ev-
idence of indebtedness representing any
bond included in the issue, provided that
in no event is the issue date of an issue
earlier than the first day on which inter-
est begins to accrue onthe first bond in-
cluded within the issue for Federal income
tax purposes. Bonds may be issued at dif-
ferent times and nonetheless be treated as
part of the same bond “issue” under the
various special provisions for single issues
under § 1.150–1(c). Thus, to ensure that
an entire issue of bonds meets a statutory
deadline on issuing bonds, all of the bonds
that are part of the issue should be issued
by the applicable statutory deadline.
In the particular case of a “draw-down”
loan under § 1.150–1(c)(4)(i) or a
commercial paper program under
§ 1.150–1(c)(4)(ii), in which a bond is
issued as a draw or as commercial pa-
per at different times and interest begins
to accrue on each draw or commercial
paper when it is funded, each draw or
commercial paper constitutes a separate
bond that is issued on the issue date of
that draw or commercial paper when the
issuer receives the purchase price, and
interest begins to accrue, on that draw or
commercial paper for Federal income tax
purposes. Thus, for Build America Bonds
structured as draw-down loans or commer-
cial paper programs, only those draws or
commercial paper that are funded before
January 1, 2011, and for which interest
begins to accrue for Federal income tax
purposes before January 1, 2011, may
qualify as Build America Bonds for
purposes of the statutory time deadlines
for issuing Build America Bonds.
SECTION 5. DRAFTING
INFORMATION
The principal authors of this notice are
Vicky Tsilas and Timothy L. Jones of the
Office of Associate Chief Counsel (Finan-
cial Institutions & Products). For further
information regarding this notice, contact
Vicky Tsilas at (202) 622–3980 (not a toll-
free call).
Social Security Contribution
and Benefit Base for 2011
Notice 2010–86
Under authority contained in the Social
Security Act (Act), the Commissioner,
Social Security Administration, has de-
termined and announced (75 F.R. 65696,
dated October 26, 2010) that the contri-
bution and benefit base for renumeration
paid in 2011, and self-employment income
earned in taxable years beginning in 2011
is $106,800.
“Old-Law” Contribution and Benefit
Base
General
The “old-law” contribution and bene-
fit base for 2011 is $79,200. This is the
base that would have been effective under
the Act without the enactment of the 1977
amendments.
Domestic Employee Coverage
Threshold
General
The minimum amount a domestic
worker must earn so that such earnings are
covered under Social Security or Medicare
is the domestic employee coverage thresh-
old. For 2011, this threshold is $1,700.
Section 3121(x) of the Internal Revenue
Code provides the formula for increasing
the threshold.
Computation
Under the formula, the domestic em-
ployee coverage threshold amount for
2011 shall be equal to the 1995 amount
of $1,000 multiplied by the ratio of the
national average wage index for 2009 to
that for 1993. If the resulting amount is
not a multiple of $100, it shall be rounded
to the next lower multiple of $100.
Domestic Employee Coverage Threshold
Amount
Multiplying the 1995 domestic e
m-
ployee coverage threshold amo
unt
($1,000) by the ratio of the nat
ional av-
erage wage index for 2009 ($40,
934.93)
to that for 1993 ($23,132.67)
produces
the amount of $1,769.57. We th
en round
this amount to $1,700. Accord
ingly, the
domestic employee coverage t
hreshold
amount is $1,700 for 2011.
(Filed by the Office of the Federal Register on October 25,
2010, 8:45 a.m., and published in the issue of the Federal
Register for October 26, 2010, 75 F.R. 65696)
26 CFR 601.602: Tax forms and instructions.
(Also: Part I, § 179.)
Rev. Proc. 2010–47
SECTION 1. PURPOSE
This revenue procedure modifies Rev.
Proc. 2009–50, 2009–2 C.B. 617, as mod-
ified by Rev. Proc. 2010–24, 2010–25
I.R.B. 764, setting out the cost limitations
for expensing property under § 179 of the
Internal Revenue Code for taxable years
December 13, 20108272010–50 I.R.B.

beginning in 2010. This modification re-
flects a statutory amendment enacted sub-
sequent to the publication of Rev. Proc.
2010–24.
SECTION 2. BACKGROUND
Prior to the enactment of the Small
Business Jobs Act of 2010, Pub. L. No.
111–240, 124 Stat. 2504 (2010) (the Small
Business Jobs Act) and the Hiring In-
centives to Restore Employment Act of
2010, Pub. L. No. 111–147, 124 Stat.
71 (2010) (the HIRE Act), § 179(b)(1)
prescribed a $125,000 limitation (the
$125,000 amount) on the aggregate cost of
§ 179 property that could be treated as an
expense for taxable years beginning after
2006 and before 2011. For those same tax-
able years, § 179(b)(2) provided that the
$125,000 amount is reduced by the amount
by which the cost of § 179 property placed
in service during the taxable years exceeds
$500,000 (the $500,000 amount). Both
the $125,000 amount and the $500,000
amount were adjusted for inflation annu-
ally under § 179(b)(5). For taxable years
beginning in 2010, section 3.20 of Rev.
Proc. 2009–50 provides that the $125,000
amount and the $500,000 amount, adjusted
for inflation, are $134,000 and $530,000,
respectively.
Section 102 of the Economic Stimulus
Act of 2008, Pub. L. No. 110–185, 122
Stat. 613 (2008), changed the $125,000
amount and the $500,000 amount to
$250,000 and $800,000, respectively, for
taxable years beginning in 2008. Section
1202 of the American Recovery and Rein-
vestment Tax Act of 2009, Pub. L. No.
111–5, 123 Stat. 115 (2009), extended
the $250,000 amount and the $800,000
amount to taxable years beginning in 2009.
Section 201 of the HIRE Act changed
the $125,000 amount and the $500,000
amount to $250,000 and $800,000, re-
spectively, for taxable years beginning in
2010. To reflect the HIRE Act changes,
Rev. Proc. 2010–24 modified section 3.20
of Rev. Proc. 2009–50 to provide that
the $125,000 amount and the $500,000
amount are $250,000 and $800,000, re-
spectively, for taxable years beginning in
2010.
Subsequently, § 2021 of the Small
Business Jobs Act extended and increased
the $250,000 amount and the $800,000
amount to $500,000 and $2,000,000, re-
spectively, for taxable years beginning in
2010 and 2011.
SECTION 3. APPLICATION
To reflect the statutory changes made to
§ 179 by § 2021 of the Small Business Jobs
Act, section 3.20 of Rev. Proc. 2009–50,
as modified by Rev. Proc. 2010–24, is
modified to read as follows:
.20Election to Expense Certain Depre-
ciable Assets.For taxable years beginning
in 2010, under § 179(b)(1)(B) the aggre-
gate cost of any § 179 property a taxpayer
may elect to treat as an expense cannot ex-
ceed $500,000. Under § 179(b)(2)(B), the
$500,000 limitation is reduced (but not be-
low zero) by the amount by which the cost
of § 179 property placed in service during
the 2010 taxable year exceeds $2,000,000.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Section 3.20 of Rev. Proc. 2009–50,
as modified and superseded by Rev. Proc.
2010–24, is modified and superseded.
Rev. Proc. 2010–24 is superseded.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
taxable years beginning in 2010.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Winston H. Douglas of the
Office of Associate Chief Counsel (In-
come Tax & Accounting). For further
information regarding this revenue proce-
dure, contact Winston H. Douglas at (202)
622–4930 (not a toll-free call).
26 CFR 601.201: Guidance on Pre-Approved Indi-
vidual Retirement Arrangements (IRAs).
(Also Part I, §§ 408, 408A.)
Rev. Proc. 2010–48
SECTION 1. PURPOSE
This revenue procedure provides guid-
ance to drafters and users of pre-approved
IRAs. Section 3 of this revenue procedure
provides guidance to drafters and users of
prototype IRAs, including rules for when
documents must be submitted to the Inter-
nal Revenue Service and new user fees for
individual retirement annuities. Section 4
provides guidance to users of the Service’s
model IRAs and describes the availability
of new model individual retirement annu-
ities.
SECTION 2. BACKGROUND AND
GENERAL INFORMATION
.01 Rev. Proc. 87–50, 1987–2 C.B.
647, as modified by Rev. Proc. 97–29,
1997–1 C.B. 698, and Rev. Proc. 98–59,
1998–2 C.B. 727, provides the proce-
dures for a sponsoring organization or
a mass submitter (a “prototype spon-
sor”) to apply to the Service for an opin-
ion letter on whether a prototype tradi-
tional, SIMPLE or Roth IRA meets the
requirements of Internal Revenue Code
§ 408(a) or (b), § 408(p) or § 408A,
respectively. Rev. Proc. 87–50 also
contains procedures for employers and
employee associationsto apply for a ruling
on a § 408(c) IRA.
.02 Rev. Proc. 2002–10, 2002–1 C.B.
401, provided guidance on updating IRAs
for new regulations on required minimum
distributions and for changes made by the
Economic Growth and Tax Relief Recon-
ciliation Act of 2001 (“EGTRRA”), Pub.
L. 107–16.
.03 Ann. 2007–55, 2007–1 C.B. 1384,
provided guidance to sponsors of proto-
type Roth IRAs who wished to amend their
documents to accept rollovers from desig-
nated Roth accounts described in § 402A.
.04 Notice 2009–82, 2009–41 I.R.B.
491, provides that IRAs do not have to be
amended for new § 401(a)(9)(H) pending
the issuance of further guidance.
.05 Model forms are available for tax-
payers who want to use a pre-approved
document to establish an IRA without us-
ing a prototype document. The model IRA
forms are: Form 5305,Traditional Indi-
vidual Retirement Trust Account;Form
5305–A,Traditional Individual Retire-
ment Custodial Account; Form 5305–R,
Roth Individual Retirement Trust Account;
Form 5305–RA,Roth Individual Retire-
ment Custodial Account; Form 5305–RB,
Roth Individual Retirement Annuity En-
dorsement; Form 5305–S,SIMPLE In-
dividual Retirement Trust Account;and
Form 5305–SA,SIMPLE Individual Re-
tirement Custodial Account. Also, two
2010–50 I.R.B.828December 13, 2010

new model forms will soon be available:
Form 5305–TB,Traditional Individual Re-
tirement Annuity Endorsement;andForm
5305–SB,SIMPLE Individual Retirement
Annuity Endorsement(see Section 4.02
below).
.06Statutory changes since 2002.The
following statutory changes relating to the
qualification of IRAs became effective
after mandatory amendments were an-
nounced in Rev. Proc. 2002–10 and Ann.
2007–55:
(1) Section 201 of the Gulf Opportu-
nity Zone Act of 2005 (“GOZA”), Pub.
L. 109–135, provided that certain distribu-
tions from retirement plans made on ac-
count of Hurricane Katrina, Rita or Wilma
may be repaid to an eligible retirement
plan (as defined in Code § 402(c)(8)(B)).
(2) Section 512 of the Tax Increase Pre-
vention and Reconciliation Act of 2005
(“TIPRA”), Pub. L. 109–222, eliminated
the $100,000 modified adjusted gross in-
come limit and the joint filing requirement
for individuals wanting to make qualified
rollover contributions (other than from a
designated Roth account or from a Roth
IRA) to Roth IRAs, effective for distribu-
tions after 2009.
(3) Section 2 of the Heroes Earned
Retirement Opportunities Act (“HERO
Act”), Pub. L. 109–227, provided that
compensation earned by members of the
armed forces for service in a combat
zone is taken into account for purposes of
making IRA contributions, effective for
taxable years beginning after 2003.
(4) Section 824 of the Pension Pro-
tection Act of 2006 (“PPA”), Pub. L.
109–280, as amended by WRERA (see
Section 2.06(15) of this revenue proce-
dure), provided that Roth IRAs can accept
rollovers from any eligible retirement plan
(as defined in Code § 402(c)(8)(B)), effec-
tive for distributions after 2007.
(5) Section 827 of PPA, as amended by
WRERA (see item (15) below), provided
that qualified reservist distributions (as de-
fined in Code § 72(t)(2)(G)) may be repaid
to an IRA, effective for individuals called
to active duty after September 11, 2001.
(6) Section 829 of PPA, as amended by
WRERA (see item (15) below), provided
that a nonspouse beneficiary of a deceased
participant’s accrued benefit in an eligible
retirement plan, other than an IRA, can roll
over any portion of the benefit in a direct
trustee-to-trustee transfer to an IRA estab-
lished to receive such rollover, effective
for distributions made after 2006.
(7) Section 831 of PPA provided that
certain individuals who were participants
in a § 401(k) plan maintained by certain
indicted employers could make special
catch-up contributions equal to three times
the otherwise applicable IRA contribution
limit, effective for taxable years beginning
after 2006 and before 2010.
(8) Section 833 of PPA provided that
the modified adjusted gross income limits
for regular contributions to Roth IRAs are
adjusted for inflation,effective for taxable
years beginning after 2006.
(9) Section 105 of the Heroes Earn-
ings Assistance and Relief Act of 2008
(“HEART Act”), Pub. L. 110–245, pro-
vides that compensation for purposes of
making IRA contributions includes differ-
ential wage payments (as defined in Code
§ 3401(h)(2)), effective for years begin-
ning after 2008.
(10) Section 107 of the HEART Act
extended the application of the rules on
qualified reservist distributions (see item
(5) above).
(11) Section 109 of the HEART Act
provided that certain military death gra-
tuities are treated as qualified rollover
contributions within the meaning of Code
§ 408A(e) and thus can be contributed to
Roth IRAs, effective for deaths occurring
after October 6, 2001.
(12) Section 15345 of the Food, Con-
servation, and Energy Act of 2008, Pub.
L. 110–246, provided that certain distribu-
tions from retirement plans made on ac-
count of the Kansas May 4, 2007, severe
storms and tornados may be repaid to an el-
igible retirement plan (as defined in Code
§ 402(c)(8)(B)).
(13) Section 504 of Division C of the
Emergency Economic Stabilization Act
of 2008 (“EESA”), Pub. L. 110–343,
provides that certain amounts received
in connection with the Exxon Valdez
litigation may be contributed to an eligi-
ble retirement plan (as defined in Code
§ 402(c)(8)(B)).
(14) Section 702 of Division C of
EESA provided that certain distributions
from retirement plans made on account
of severe storms, tornados and flooding
that occurred in certain parts of the Mid-
west during May and June of 2008 may
be repaid to an eligible retirement plan (as
defined in Code § 402(c)(8)(B)).
(15) Section 108(d), (e) and (f) of the
Worker, Retiree, and Employer Recov-
ery Act of 2008 (“WRERA”), Pub. L.
110–458, made technical corrections to
PPA §§ 824, 827 and 829, respectively.
Section 2.06(4), (5) and (6) of this revenue
procedure reflects these PPA sections as
amendedbyWRERA.
(16) Section 125 of WRERA provided
that certain bankruptcy payments made
in settlement of claims against airline
carriers are treated asqualified rollover
contributions within the meaning of Code
§ 408A(e) and thus can be contributed
to Roth IRAs, effective for contributions
made after December 23, 2008, with re-
spect to payments made any time.
(17) Section 201 of WRERA provided
that required minimum distributions from
IRAs are not required for 2009.
.07 Rev. Proc. 2010–8, 2010–1 I.R.B.
234, lists the user fees for opinion letters
on prototype IRAs.
SECTION 3. OPINION LETTERS FOR
IRAS
.01Amendment not required.Aproto-
type IRA may, but need not, be amended
to reflect a statutory change listed in Sec-
tion 2.06 of this revenue procedure in or-
der for a trustee, custodian or issuer (here-
inafter “trustee”) to take advantage of the
change. Thus, a trustee may accept the ad-
ditional IRA contributions listed in Section
2.06(1) through (16) of this revenue proce-
dure and suspend 2009 required minimum
distributions pursuant to Section 2.06(17)
of this revenue procedure without specific
authorizing language in the prototype IRA.
Similarly, a § 408(c) IRA need not be
amended.
.02Permissive amendment.Prototype
IRAs may be amended, solely to incor-
porate the statutory changes listed in Sec-
tion 2.06 of this revenue procedure, with-
out affecting reliance on a favorable opin-
ion letter. Similarly, a § 408(c) IRA may
be so amended without affecting reliance
on a favorable ruling. Sample language for
these changes is available on the Service’s
Web Site (see Section 3.04 of this revenue
procedure).
.03Application for new opinion letters.
A prototype sponsor may apply to the Ser-
vice any time for an IRA opinion letter,
including an opinion letter for an amend-
ment solely to incorporate the statutory
December 13, 20108292010–50 I.R.B.

changes listed in Section 2.06 of this rev-
enue procedure. The IRA document must
be submitted using the appropriate appli-
cation form and following the instructions
on that form. Form 5306,Application for
Approval of Prototype or Employer Spon-
sored Individual Retirement Arrangement
(IRA), is used for prototype IRA submis-
sions.
.04Sample language.A Listing of
Required Modifications, or LRMs, that
the Service finds acceptable for prototype
IRAs is available on the Service’s Web Site
atwww.irs.gov. (Search for “LRMs”.) In
order to receive a favorable opinion letter,
prototype documents must include lan-
guage that addresses every issue addressed
in the LRMs, unless clearly inapplicable.
Identical language is not necessary, but
issuesaddressedinanLRMmaynotbe
abbreviated by using references to Code
sections or such phrases as “in accordance
with the law.”
.05Revised procedures and user fees
for annuities.Beginning with applications
submitted after December 13, 2010, proto-
type sponsors of individual retirement an-
nuities described in § 408(b) that use one
IRA endorsement with one or more annu-
ity contracts may submit only the IRA en-
dorsement (and not the contracts) to the
Service for approval. Sponsors that take
advantage of this new procedure will be is-
sued an opinion letter referencing the IRA
endorsement, thereby reducing the number
of opinion letters issued and, correspond-
ingly, the applicable user fees. The Ser-
vice recently issued a revised Form 5306,
reflecting the new procedures. The IRA
endorsement must include all IRA qual-
ification rules and must provide that the
terms of the IRA endorsement supersede
any conflicting terms in the annuity con-
tracts to which the IRA endorsement ap-
plies. Sponsors that use different IRA en-
dorsements for each contract, that use no
endorsements or that simply want an opin-
ion letter for each contract may submit ap-
plications to the Service, including with
such applications the document or docu-
ments that constitute the IRA.
.06Dual-purpose IRAs.Rev. Proc.
98–59 required applicants for opinion let-
ters on prototype documents designed to
be used as either a traditional IRA or a
Roth IRA to write “Dual-purpose IRA”
on Form 5306. Form 5306 has been re-
vised to include a checkbox to identify a
dual-purpose IRA application, so writing
“Dual-purpose IRA” on the form will no
longer be required.
SECTION 4. MODEL IRAS
.01Amendment not required.Model
IRAs need not be amended in order for
trustees to operate in accordance with the
statutoryprovisionslistedinSection2.06
above. The Service expects to issue re-
vised model IRAs shortly, and although
use of the new models is not required, the
Service recommends adoption of the latest
model IRAs.
.02New model IRAs.The Service
will issue two model IRAs for use by
issuers and annuitants to establish a
traditional individual retirement annu-
ity or a SIMPLE individual retirement
annuity. The forms — Form 5305–TB,
Traditional Individual Retirement Annuity
Endorsement; and Form 5305–SB,
SIMPLE Individual Retirement Annuity
Endorsement— are expected to be
available shortly.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Procs. 87–50 and 98–59 are mod-
ified.
DRAFTING INFORMATION
The principal author of this rev-
enue procedure is Roger Kuehnle
oftheEmployeePlans,TaxExempt
and Government Entities Division.
Questions regarding this revenue pro-
cedure may be sent via e-mail to
RetirementPlanQuestions@irs.gov.
26 CFR 601.201: Rulings and determination letters.
(Also Part I, Sections 846; 1.846–1.)
Rev. Proc. 2010–49
SECTION 1. PURPOSE
This revenue procedure prescribes the
loss payment patterns and discount factors
for the 2010 accident year. These factors
will be used for computing discounted un-
paid losses under § 846 of the Internal Rev-
enue Code.SeeRev. Proc. 2008–10,
2008–1 C.B. 290, for background concern-
ing the loss payment patterns and applica-
tion of the discount factors.
SECTION 2. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount its un-
paid losses under § 846 for a line of busi-
ness using discount factors published by
the Secretary.
SECTION 3. TABLES OF DISCOUNT
FACTORS
.01 The following tables present sepa-
rately for each line of business the discount
factors under § 846 for accident year 2010.
All the discount factors presented in this
section were determined using the appli-
cable interest rate under § 846(c) for 2010,
which is 3.81 percent, and by assuming all
loss payments occur in the middle of the
calendar year.
.02 If the groupings of individual
lines of business on the annual state-
ment change, taxpayers must discount the
unpaid losses on the affected lines of busi-
ness in accordance with the discounting
patterns that would have applied to those
unpaid losses based on their classification
on the 2005 annual statement.SeeRev.
Proc. 2008–10, section 2, for additional
background on discounting under § 846
and the use of the Secretary’s tables.
.03 Section V of Notice 88–100,
1988–2 C.B. 439, sets forth a composite
method for computing discounted unpaid
losses for accident years that are not sep-
arately reported on the annual statement.
The tables separately provide discount
factors for taxpayers who elect to use the
composite method of section V of Notice
88–100.SeeRev. Proc. 2002–74, 2002–2
C.B. 980.
.04 Tables.
2010–50 I.R.B.830December 13, 2010

Tables of Factors to be Used to Discount
Unpaid Losses Incurred in
Accident Year 2010
(Interest rate: 3.81 percent)
L
inesofBusiness
Accident and Health (Other Than Disability Income or Credit Disability Insurance)
Taxpayers that do not use the composite method of Notice 88–100 should use 98.1478 percent to discount unpaid losses incurred
in this line of business in the 2010 accident year and that are outstanding at theend of the 2010 and later taxable years.
Taxpayers that use the composite method of Notice 88–100 should use 98.1478 percent to discount all unpaid losses in this line of
business that are outstanding at the end of the 2010 taxable year.
Auto Physical Damage
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201089.409689.4096
10.5904
10.377497.9889
201199.6848
10.27520.3152
0.303796.3467
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years
0.15760.15760.1547
98.1478
Taxpayers that u
se the composite method of Notice 88–100 should use 98.1478 percent to discount unpaid losses incurred in this
line of business
in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
Commercial Auto/Truck Liability/Medical
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201023.671823.671876.3282
70.5406
92.4174
2011
47.5425
23.8708
52.4575
48.906993.2316
201266.684719.1421
33.3153
31.2669
93.8514
2013
81.510514.825818.489517.352693.8509
2014
90.05488.54439.9452
9.3062
93.5944
2015
94.73114.6763
5.2689
4.8983
92.9653
201697.06022.32922.93982.711892.2448
201798.1174
1.0572
1.88261.737992.3179
201898.8692
0.7518
1.13081.0382
91.8115
201999.11600.24670.88400.826393.4738
December 13, 20108312010–50 I.R.B.

Commercial Auto/Truck Liability/Medical
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20200.24670.63730.6064
95.1568
20210.24670.39060.378296.8210
2022 and later years0.24670.14390.141298.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 95.9976 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Composite
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201034.700434.7004
65.299659.6104
91.2876
2011
58.6076
23.907241.3924
37.523290.6525
201271.7608
13.1532
28.2392
25.5514
90.4822
201381.49879.7379
18.5013
16.603389.7412
201487.8488
6.350112.1512
10.7660
88.5998
2015
91.4226
3.57398.57747.534887.8456
2016
93.4057
1.9831
6.59435.8014
87.9763
201794.22800.8222
5.77205.1847
89.8241
2018
95.48751.25954.5125
4.098990.8346
2019
96.35600.8685
3.64403.3702
92.4859
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020
0.86852.7754
2.613694.1702
2021
0.8685
1.90691.8283
95.8774
2022
0.8685
1.03831.0130
97.5588
2023 and later years
0.8685
0.16980.166698.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 96.2071 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Fidelity/Surety
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
25.232825.2328
74.767271.3063
95.3711
2011
61.102535.869838.8975
37.476496.3467
Taxpayers
that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred i
n this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and lat
er years
19.448719.4487
19.0885
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.1478 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
2010–50 I.R.B.832December 13, 2010

Financial Guaranty/Mortgage Guaranty
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20107.78247.782492.217688.4888
95.9565
201162.1390
54.3565
37.861036.477896.3467
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years
18.930518.930518.5799
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.1478 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
International (
Composite)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201034.700434.7004
65.299659.6104
91.2876
2011
58.6076
23.907241.3924
37.523290.6525
201271.7608
13.1532
28.2392
25.5514
90.4822
201381.49879.7379
18.5013
16.603389.7412
201487.8488
6.350112.1512
10.7660
88.5998
2015
91.4226
3.57398.57747.534887.8456
2016
93.4057
1.9831
6.59435.8014
87.9763
201794.22800.8222
5.77205.1847
89.8241
2018
95.48751.25954.5125
4.098990.8346
2019
96.35600.8685
3.64403.3702
92.4859
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020
0.86852.7754
2.613694.1702
2021
0.8685
1.90691.8283
95.8774
2022
0.8685
1.03831.0130
97.5588
2023 and later years
0.8685
0.16980.166698.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 96.2071 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
December 13, 20108332010–50 I.R.B.

Medical Malpractice — Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
4.94254.942595.057585.586090.0359
201119.936914.994480.0631
73.5694
91.8892
201244.348924.4120
55.651151.499692.5402
201364.8374
20.488535.162632.5867
92.6741
2014
80.253015.4156
19.747018.121791.7692
201585.79075.5377
14.209313.1699
92.6850
201691.2722
5.4815
8.72788.0867
92.6547
201793.3314
2.0593
6.66866.296794.4240
2018
96.1257
2.79423.87433.6897
95.2335
2019
97.65381.5281
2.34622.273396.8916
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years
1.5281
0.81820.803098.1478
Taxpayers th
at use the composite method of Notice 88–100 should use 98.1478 percent to discount unpaid losses incurred in this
line of busi
ness in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Medical Malpractice — Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
1.58781.5878
98.412283.041884.3816
20114.47202.8842
95.5280
82.2670
87.1650
201217.773813.301882.226272.886688.6416
2013
35.8814
18.107664.1186
57.2143
89.2320
2014
52.9447
17.0633
47.0553
42.0088
89.2755
2015
68.4348
15.490131.5652
27.8270
88.1571
2016
79.5616
11.126820.4384
17.550385.8696
2017
85.81986.2582
14.180211.8427
83.5160
201890.12674.30699.8733
7.9057
80.0721
201990.37010.24349.6299
7.9590
82.6486
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20200.2434
9.3865
8.0142
85.3803
20210.24349.14318.0716
88.2805
20220.24348.89988.131291.3639
20230.2434
8.6564
8.193094.6469
2024 and later years0.24348.4130
8.2572
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 89.4537 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
2010–50 I.R.B.834December 13, 2010

Miscellaneous Casualty
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201072.906472.906427.093626.249396.8838
2011
93.5836
20.67716.41646.182096.3467
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years3.20823.20823.148898.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.1478 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
Multiple Peril Lines
(Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
52.588052.5880
47.412044.429793.7097
201180.0449
27.457019.9551
18.147390.9409
2012
86.16256.117513.837512.6057
91.0982
2013
90.74524.58279.2548
8.4168
90.9453
201493.9006
3.1555
6.0994
5.522590.5422
201595.7613
1.86074.23873.8371
90.5259
2016
96.8755
1.1141
3.1245
2.8481
91.1536
2017
97.6715
0.7960
2.32852.145692.1445
201898.0329
0.3615
1.9671
1.859194.5101
201998.68100.64811.31901.2696
96.2555
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20200.64810.6709
0.657798.0252
2021 and later years0.64810.02280.022498.1478
Taxpayers th
at use the composite method of Notice 88–100 should use 98.0254 percent to discount unpaid losses incurred in this
line of busin
ess in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
December 13, 20108352010–50 I.R.B.

Other (Including Credit)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
67.952867.9528
32.047230.891196.3926
201189.4609
21.508110.539110.1541
96.3467
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years
5.26955.26955.1719
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.1478 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
Other Liability
—Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
5.87965.8796
94.120483.837089.0742
2011
18.8735
12.9938
81.1265
73.7921
90.9593
201241.6840
22.810558.316053.362691.5059
2013
62.5322
20.848337.4678
34.154091.1557
2014
73.520710.9885
26.4793
24.2594
91.6166
2015
82.00368.482917.9964
16.5408
91.9114
201688.62796.624411.372110.421691.6420
201790.71072.08289.2893
8.6965
93.6193
201894.84394.1332
5.1561
4.816793.4178
201996.26891.42493.7311
3.548495.1017
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20201.42492.30622.231796.7713
2021 and late
r years
1.42490.88120.864998.1478
Taxpayers th
at use the composite method of Notice 88–100 should use 97.1192 percent to discount unpaid losses incurred in this
line of busin
ess in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
2010–50 I.R.B.836December 13, 2010

Other Liability — Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
13.659413.6594
86.3406
75.1929
87.0887
201124.8389
11.179575.1611
66.667288.6992
201241.779216.9403
58.220851.9473
89.2247
2013
58.4995
16.7203
41.5005
36.890788.8921
2014
69.5197
11.020330.480327.068088.8049
201577.7513
8.231622.248719.712388.6000
201684.22436.4730
15.7757
13.868287.9089
2017
83.2275
-0.9968
16.772515.4122
91.8899
2018
88.85245.6249
11.147610.268492.1130
2019
91.38522.5328
8.61488.079093.7807
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020
2.5328
6.0820
5.806295.4658
2021
2.53283.5492
3.446897.1162
2022 and lat
er years
2.5328
1.01640.997698.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 96.9123 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Private Passenger Auto Liability/Medical
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201042.610842.6108
57.389254.242094.5161
2011
71.5827
28.971928.417326.7900
94.2735
201284.694713.1120
15.305314.4512
94.4197
2013
92.3556
7.66107.64447.196394.1386
201496.23693.88123.7631
3.5160
93.4328
201597.9275
1.6907
2.0725
1.927492.9997
201698.77190.84441.2281
1.1405
92.8686
201799.26920.49730.73080.677392.6773
2018
99.5053
0.23610.4947
0.4625
93.4984
201999.64400.1387
0.3560
0.3389
95.1810
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20200.13870.2174
0.2105
96.8431
2021 and later years0.13870.07870.077398.1478
Taxpaye
rs that use the composite method of Notice 88–100 should use 97.1586 percent to discount unpaid losses incurred in this
line of b
usiness in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
December 13, 20108372010–50 I.R.B.

Products Liability — Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
1.02591.0259
98.9741
84.573785.4504
201111.792710.766788.207376.826187.0971
201229.3642
17.571670.6358
61.8499
87.5618
2013
55.165525.801244.8345
37.9183
84.5738
201483.4171
28.251616.582910.5782
63.7897
2015
64.8933
-18.523835.106729.854685.0396
201682.334617.4414
17.6654
13.2216
74.8445
201786.39864.064013.6014
9.5846
70.4680
201876.3310-10.067623.669020.2074
85.3750
201978.79102.460021.209018.470987.0899
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20202.460018.749016.668288.9018
20212.460016.289014.7969
90.8395
20222.460013.8290
12.854292.9509
20232.460011.369110.8376
95.3250
2024 and la
ter years
2.46008.90918.744198.1478
Taxpayers t
hat use the composite method of Notice 88–100 should use 91.2831 percent to discount unpaid losses incurred in this
line of bus
iness in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Products Liability — Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
5.04665.046694.953480.954985.2575
2011
13.6935
8.6469
86.306575.229287.1651
2012
28.254114.560671.7459
63.260088.1723
201341.3083
13.054258.691752.3697
89.2284
2014
59.3693
18.061040.6307
35.963188.5121
2015
73.071713.702426.928323.372386.7946
201674.6612
1.589525.3388
22.643389.3621
201778.98334.322121.016719.102490.8912
201886.12317.139813.8769
12.5556
90.4784
201988.6931
2.5700
11.3069
10.4155
92.1160
2010–50 I.R.B.838December 13, 2010

Products Liability — Occurrence
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020
2.5700
8.73698.193893.7837
2021
2.5700
6.1669
5.887595.4689
2022
2.57003.5969
3.493397.1193
2023 and later y
ears
2.5700
1.02691.007998.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 96.2670 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — Nonproportional Assumed Property
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
12.945812.945887.0542
81.1839
93.2567
201160.179647.233839.8204
36.1518
90.7872
2012
80.8225
20.6429
19.1775
16.496786.0213
201384.9430
4.120515.0570
12.9270
85.8537
2014
85.66800.7250
14.332012.680888.4791
201580.0452-5.622919.9548
18.892994.6784
201686.7013
6.6561
13.298712.831096.4830
2017
97.253310.5520
2.7467
2.568893.5201
201897.67210.41882.32792.239996.2189
201998.8078
1.1357
1.19221.168097.9772
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years
1.13570.05640.0554
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.0716 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — Nonproportional Assumed Liability
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
32.591732.5917
67.4083
55.1981
81.8862
2011
33.3995
0.8078
66.600556.4781
84.8014
2012
35.49482.095364.505256.495187.5823
201344.0321
8.537355.9679
49.949289.2461
201464.829920.7979
35.1701
30.661987.1818
201566.43581.605933.5642
30.1939
89.9588
201677.809711.373822.1903
19.7558
89.0289
201782.44384.6341
17.556215.7869
89.9222
201884.1944
1.750715.8056
14.6047
92.4025
201987.92233.727912.077711.362994.0821
December 13, 20108392010–50 I.R.B.

Reinsurance — Nonproportional Assumed Liability
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20203.72798.34987.9976
95.7823
20213.72794.6219
4.504197.4510
2022 and later years3.72790.8940
0.8775
98.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 97.2504 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — Nonproportional Assumed Financial Lines
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20108.47838.4783
91.5217
83.123690.8239
2011
28.047519.569371.952566.352192.2165
2012
60.435132.387539.564935.8813
90.6897
201382.444822.0097
17.5552
14.823384.4382
201490.27207.82719.72807.413276.2044
201585.3168-4.9551
14.683112.7442
86.7951
201688.37773.060811.622310.111286.9983
201789.9934
1.6157
10.0066
8.8503
88.4442
201881.6664-8.326918.333617.671696.3891
201991.04919.3827
8.95098.7851
98.1478
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years———98.1478
Taxpayers t
hat use the composite method of Notice 88–100 should use 98.0675 percent to discount unpaid losses incurred in this
line of busi
ness in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Special Property
(Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2010
44.575644.575655.424453.6764
96.8407
201188.4263
41.850713.5737
13.077896.3467
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years6.78696.78696.661298.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.1478 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2012 taxable year.
2010–50 I.R.B.840December 13, 2010

Workers’ Compensation
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201019.041019.0410
80.9590
70.220886.7362
201140.244221.2032
59.755851.292885.8374
2012
57.149716.905542.850336.0225
84.0661
201367.860110.710432.1399
26.482582.3975
2014
75.5399
7.679724.460119.666880.4034
201580.11574.5758
19.8843
15.7539
79.2278
201682.18282.067217.817214.248079.9677
2017
84.4045
2.2217
15.595512.527280.3259
2018
85.51951.115014.480511.8685
81.9618
2019
86.2855
0.7661
13.714511.5402
84.1460
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2010 accident year and that are outstanding at the end of the tax year shown.
20200.766112.948411.199386.4920
20210.766112.1823
10.845589.0265
20220.766111.416310.478291.7830
20230.7661
10.6502
10.096994.8047
2024 and later years0.76619.88429.701198.1478
Taxpayers that use the composite method of Notice 88–100 shoulduse 89.9627 percent to discount unpaid losses incurred in this
line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
DRAFTING I
NFORMATION
The principal author of this revenue
procedure is Sarah E. Swan of the Office
of Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Ms. Swan at (202) 622–8443 (not
a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part I, Sections 832, 846; 1.832–4, 1.846–1.)
Rev. Proc. 2010–50
SECTION 1. PURPOSE
This reve
nue procedure prescribes the
salvage
discount factors for the 2010 acci-
dent yea
r. These factors must be used to
compute
discounted estimated salvage re-
coverab
le under § 832 of the Internal Rev-
enue Cod
e.
SECTION 2.
BACKGROUND
Section 832(b)(5)(A) requires that all
estimated salvage recoverable (including
that which cannot be treated as an asset
for state accounting purposes) be taken
into account in computing the deduction
for losses incurred. Under § 832(b)(5)(A),
paid losses are to be reduced by salvage
and reinsurance recovered during the tax-
able year. This amount is adjusted to
reflect changes in discounted unpaid losses
on nonlife insurance contracts and in un-
paid losses on life insurance contracts.
An adjustment is then made to reflect any
changes in discounted estimated salvage
recoverable and in reinsurance recover-
able.
Pursuant to § 832(b), the amount of es-
timated salvage is determined on a dis-
counted basis in accordance with proce-
dures established by the Secretary.
SECTION. 3. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount esti-
mated salvage recoverable under § 832.
SECTION 4.
APPLICATION
.01 The following tables present sepa-
rately for each line of business the discount
factors under § 832 for the 2010 accident
year. All the discount factors presented
in this section were determined using the
applicable interest rate under § 846(c) for
2010, which is 3.81 percent, and by as-
suming all estimated salvage is recovered
in the middle of each calendar year.See
Rev. Proc. 2008–11, 2008–1 C.B. 301, for
background regarding the tables.
.02 These tables must be used by tax-
payers irrespective of whether they elected
to discount unpaid losses using their own
historical experience under § 846.
.03 Section V of Notice 88–100,
1988–2 C.B. 439, provides a compos-
ite discount factor to be used in deter-
mining the discounted unpaid losses for
accident years that are not separately
reported on the annual statement ap-
proved by the National Association of
Insurance Commissioners. The tables
separately provide discount factors for
taxpayers who elect to use the com-
December 13, 20108412010–50 I.R.B.

posite method. Rev. Proc. 2002–74,
2002–2 C.B. 980, clarifies that for
certain insurance companies subject to
tax under § 831 the composite method
for discounting unpaid losses set forth in
Notice 88–100, section V, is permitted
but not required. This revenue procedure
further provides alternative methods for
computing discounted unpaid losses that
are permitted for insurance companies
not using the composite method, and
sets forth a procedure for insurance
companies to obtain automatic consent of
the Commissioner to change to one of the
methods described in Rev. Proc. 2002–74.
.04 Tables.
Tables of Factors to
be Used to Discount
Salvage Recoverable With Re-
spect to Losses Incurred in
Accident Year 2010
(Interest rate: 3.81 percent)
L
inesofBusiness
Accident and Health (Other Than
Disability Income or Credit Disability
Insurance)
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
98.1478 percent to discount salvage re-
coverable with respect to losses incurred
in this line of business in the 2010 acci-
dent year as of the end of the 2010 and
later taxable years.
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount all salvage
recoverableinthislineofbusinessasof
the end of the 2010 taxable year.
Auto Physical Damage
Tax Year
Discount
Factors
(%)
201097.3968
201196.3467
Auto Physical Damage
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2012 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2012
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Commercial Auto/Truck
Liability/Medical
Tax Year
Discount
Factors
(%)
201092.7837
201192.7323
2012
93.0580
2013
93.3885
2014
94.0857
2015
93.8868
201692.4123
201793.2791
201896.4600
201998.1478
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Commercial Auto/Truck
Liability/Medical
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Composite
Tax Year
Discount
Factors
(%)
201092.7966
2011
92.5582
201292.3906
2013
92.2259
201491.6392
2015
90.7679
2016
91.5729
2017
92.8475
201894.7606
201996.4814
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1394 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses
incurred in this line of business in 2010
and prior years.
2010–50 I.R.B.842December 13, 2010

Fidelity/Surety
Tax Year
Discount
Factors
(%)
201094.0623
201196.3467
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2012 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2012
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Financial Gu
aranty/Mortgage
Guaranty
Tax Year
Discount
Factors
(%)
2010
95.0489
201196.3467
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2012 and later
years
98.1478
Financial Guaranty/Mortgage
Guaranty
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2012
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
International (Composite)
Tax Year
Discount
Factors
(%)
201092.7966
2011
92.5582
201292.3906
2013
92.2259
201491.6392
2015
90.7679
2016
91.5729
2017
92.8475
201894.7606
201996.4814
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1394 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Medical Malpractice —
Claims-Made
Tax Year
Discount
Factors
(%)
201093.0786
2011
94.0952
2012
92.5904
201393.1817
2014
92.5233
2015
88.3749
2016
85.2082
2017
90.8503
2018
96.6547
201998.1478
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverabl
e as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2010 accident
year.
2020 and la
ter
years
98.1478
Taxpayers
that use the composite
method of
Notice 88–100 should use
98.1478 p
ercent to discount salvage
recovera
ble as of the end of the 2020
taxable y
ear with respect to losses in-
curred in
this line of business in 2010
and prio
r years.
Medical Malpractice — Occurrence
Tax Year
Discount
Factors
(%)
201086.3162
201190.4919
201292.7220
2013
85.1582
2014
95.0887
2015
91.9139
2016
93.4195
2017
96.1175
201897.2711
201998.1478
December 13, 20108432010–50 I.R.B.

Medical Malpractice — Occurrence
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Miscellaneous Casualty
Tax Year
Discount
Factors
(%)
201096.7847
201196.3467
Taxpayers th
at do not use the compos-
ite method of
Notice 88–100 should use
the followin
g factor to discount salvage
recoverabl
e as of the end of the tax year
shown with r
espect to losses incurred in
this line of
business in the 2010 accident
year.
2012 and la
ter
years
98.1478
Taxpayers
that use the composite
method of N
otice 88–100 should use
98.1478 pe
rcent to discount salvage
recoverab
le as of the end of the 2012
taxable y
ear with respect to losses in-
curred in
this line of business in 2010
and prior
years.
Multiple Peril Lines (Homeown-
ers/Farmowners, Commercial
Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils),
Boiler and Machinery))
Tax Year
Discount
Factors
(%)
201093.4004
2011
92.8257
2012
92.7508
201392.6906
2014
91.9254
2015
90.4434
2016
91.5362
201793.8270
2018
95.1497
2019
96.8145
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Other (Including Credit)
Tax Year
Discount
Factors
(%)
2010
95.8998
201196.3467
Other (Including Credit)
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2012 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2012
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Other Liability — Claims-Made
Tax Year
Discount
Factors
(%)
2010
89.0574
201190.1163
201288.3414
201391.3936
201492.7947
201594.5684
2016
93.5605
2017
92.2516
2018
97.5182
201998.1478
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
2010–50 I.R.B.844December 13, 2010

Other Liability — Claims-Made
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Other Liability — Occurrence
Tax Year
Discount
Factors
(%)
201087.8282
201188.8138
201291.0169
2013
91.7356
201491.2069
2015
91.3193
201690.8227
201793.4080
201896.0113
201997.7168
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Private Passenger Auto
Liability/Medical
Tax Year
Discount
Factors
(%)
201094.8467
2011
94.8695
2012
94.6345
201393.8178
201493.2668
201592.5396
201693.3887
201794.8601
201894.9293
201996.6211
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverab
le as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2010 accident
year.
2020 and la
ter
years
98.1478
Taxpayer
s that use the composite
method of
Notice 88–100 should use
98.1478 p
ercent to discount salvage
recovera
ble as of the end of the 2020
taxable y
ear with respect to losses in-
curred i
n this line of business in 2010
and prio
r years.
Products Liability — Claims-Made
Tax Year
Discount
Factors
(%)
2010
89.5111
2011
53.8777
2012
56.2338
201391.2109
201481.2016
2015
91.8947
201661.7067
201791.0293
201892.1071
201993.1849
Products Liability — Claims-Made
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factors to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
202094.8773
2021
96.5773
2022 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
95.8305 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Products Liability — Occurrence
Tax Year
Discount
Factors
(%)
201088.3200
2011
90.2935
201292.0747
201392.8492
201493.2720
201590.9592
2016
91.5621
2017
94.3528
201894.6093
201996.3618
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2020 and later
years
98.1478
December 13, 20108452010–50 I.R.B.

Products Liability — Occurrence
Taxpayers that use the composite
method of Notice 88–100 should use
98.1145 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Reinsurance — Nonproportional
Assumed Property
Tax Year
Discount
Factors
(%)
2010
91.5967
2011
93.1520
2012
95.9361
201381.1923
2014
90.4025
201582.5156
2016
54.0401
201793.2324
201874.7782
2019
88.7685
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factors to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
202090.4287
2021
92.1524
202293.9603
2023
95.9026
2024 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
92.3206 percent to discount salvage
recoverable as of the end of the 2020
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Reinsurance — Nonproportional
Assumed Liability
Tax Year
Discount
Factors
(%)
201087.4907
2011
90.5937
201291.9716
201389.2639
2014
91.2258
2015
92.0480
2016
91.9513
201793.6177
2018
95.4465
201997.0969
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverab
le as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2010 accident
year.
2020 and la
ter
years
98.1478
Taxpayer
s that use the composite
method of
Notice 88–100 should use
98.0840 p
ercent to discount salvage
recovera
ble as of the end of the 2020
taxable y
ear with respect to losses in-
curred i
n this line of business in 2010
and prio
r years.
Reinsurance — Nonproportional
Assumed Financial Lines
Tax Year
Discount
Factors
(%)
2010
87.8550
201186.6634
2012
90.4544
201379.6749
201490.7909
201581.3855
201690.9640
2017
91.3553
201897.6631
201998.1478
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverab
le as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2010 accident
year.
2020 and la
ter
years
98.1478
Taxpayer
s that use the composite
method of
Notice 88–100 should use
98.1478 p
ercent to discount salvage
recovera
ble as of the end of the 2020
taxable y
ear with respect to losses in-
curred i
n this line of business in 2010
and prio
r years.
Special Property (Fire, Allied
Lines, Inland Marine, Earthquake,
Burglary and Theft)
Tax Year
Discount
Factors
(%)
2010
95.1830
201196.3467
2010–50 I.R.B.846December 13, 2010

Special Property (Fire, Allied
Lines, Inland Marine, Earthquake,
Burglary and Theft)
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2010 accident
year.
2012 and later
years
98.1478
Taxpayers that use the composite
method of Notice 88–100 should use
98.1478 percent to discount salvage
recoverable as of the end of the 2012
taxable year with respect to losses in-
curred in this line of business in 2010
and prior years.
Workers’ Compensation
Tax Year
Discount
Factors
(%)
201089.0169
201190.9477
201291.7039
2013
91.6235
2014
90.2053
2015
88.8704
2016
89.4375
201789.1742
2018
91.2385
201992.9096
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factors to discount salvage
recoverabl
e as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2010 accident
year.
Workers’ Compensation
202094.6208
202196.3708
2022 and later
years
98.1478
Taxpayers tha
t use the composite
method of Noti
ce 88–100 should use
95.6888 perce
nt to discount salvage
recoverable a
s of the end of the 2020
taxable year w
ith respect to losses in-
curred in thi
s line of business in 2010
and prior yea
rs.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Sarah E. Swan of the Office
of the Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Ms. Swan at (202) 622–8443 (not
a toll-free call).
December 13, 20108472010–50 I.R.B.

Part IV. Items o
fGeneralInterest
Revised Regul
ations
Concerning Se
ction 403(b)
Tax-Sheltere
d Annuity
Contracts; C
orrection
Announcement 2010–83
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correcting amendment.
SUMMARY: This document contains
corrections to final regulations (T.D.
9340, 2007–2 C.B. 487) that were
published in theFederal Registeron
Thursday, July 26, 2007 (72 FR 41128)
providing updated guidance on section
403(b) contracts of public schools and
tax-exempt organizations described in
section 501(c)(3). These regulations
will affect sponsors of section 403(b)
contracts, administrators, participants, and
beneficiaries.
DATES: The correction is effective Octo-
ber 26, 2010, and is applicable on July 26,
2007.
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
John Tolleris at (202) 622–6060; con-
cerning the regulations as applied to
church-related entities, Sherri Edelman
or Jason Levine at (202) 283–9634 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The fi
nal regulations that are the subject
of thi
s correction are under section 403(b)
of the
Internal Revenue Code.
Need for Correction
As published, final regulations (T.D.
9340) contain errors that may prove to be
misleading and are in need of clarification.
*****
Correction of Publication
Accordingly, 26 CFR part 1 is cor-
rected by the making following correcting
amendments:
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 1.403(b)–4 is amended
by revising the third and fourth sentences
of paragraph (c)(5)Example 12.(i) to read
as follows:
§1.403(b)–4 Contribution limitations.
*****
(c) * * *
(5) * * *
Example 12. (i)***However,the$5,000age
50 catch-up amount deferred in 2006 is disregarded
for purposes of applying the limitation at paragraph
(c)(3)(i)(C) of this section to determine the special
section 403(b) catch-up amount. Thus, for 2007, only
$80,000 of section 403(b) elective deferrals are taken
into account in applying the limitation at paragraph
(c)(3)(i)(C) of this section. * * *
*****
Par. 3. Section 1.403(b)–6 is amended
by revising the last sentence of paragraph
(e)(5) to read as follows:
§1.403–6 Timing of distributions and
benefits.
*****
(e) * * *
(5) * * * See also §1.403(b)–9(a)(5)
for additional rules relating to annuities
payable from a retirement income account.
*****
Par. 4. Section 1.403(b)–7 is amended
by revising the fourth sentence of para-
graph (b)(1) to read as follows:
§1.403(b)–7 Taxation of distributions and
benefits.
*****
(b) * * *
(1) * * * Thus, to the extent that a por-
tion of a distribution (including a distri-
bution from a designated Roth account)
would be excluded from gross income if
it were not rolled over, if that portion of
the distribution is to be rolled over into an
eligible retirement plan that is not an IRA,
the rollover must be accomplished through
a direct rollover of the entire distribution
to a plan qualified under section 401(a) or
a section 403(b) plan and that plan must
agree to separ
ately account for the amount
not includibl
einincome(sothata60-day
rollover to a p
lan qualified under section
401(a) or anot
her section 403(b) plan is not
available for
this portion of the distribu-
tion). * * *
*****
Par. 5. Section 1.403(b)–10 is amended
by revising the heading of paragraph (b)(3)
andaddingaheadingtoparagraph (b)(3)(i)
to read as follows:
(b)(3)(i) to read as follows:
§1.403(b)–10 Miscellaneous provisions.
*****
(b) * * *
(3)Requirements for plan-to-plan
transfers—(i)In general.***
*****
LaNita Van Dyke,
Chief, Publications and
Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).
(Filed by the Office of the Federal Register on October 25,
2010, 8:45 a
.m., and published in the issue of the Federal
Register for October 26, 2010, 75 F.R. 65566)
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2010–91
The Internal Revenue Service has re-
voked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletinthatanorganizationnolonger
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
2010–50 I.R.B.848December 13, 2010

170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed,
contributions from individuals and orga-
nizations described in section 170(c)(2)
that are otherwise allowable will continue
to be deductible. Protection under section
7428(c) would begin on December 13,
2010, and would end on the date the court
first determines that the organization is
not described in section 170(c)(2) as more
particularly set forth in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.
Debt Management Corporation
Orange Park, FL
December 13, 20108492010–50 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2010–50 I.R.B.iDecember 13, 2010

Numerical Finding List
1
Bulletins 2010–27 through 2010–50
Announcements:
2010-43, 2010-27 I.R.B.42
2010-44, 2010-28 I.R.B.54
2010-45, 2010-29 I.R.B.87
2010-46, 2010-29 I.R.B.87
2010-47, 2010-30 I.R.B.173
2010-48, 2010-32 I.R.B.234
2010-49, 2010-34 I.R.B.272
2010-50, 2010-33 I.R.B.260
2010-51, 2010-33 I.R.B.261
2010-52, 2010-36 I.R.B.315
2010-53, 2010-36 I.R.B.323
2010-54, 2010-38 I.R.B.386
2010-55, 2010-37 I.R.B.346
2010-56, 2010-39 I.R.B.398
2010-57, 2010-38 I.R.B.386
2010-58, 2010-38 I.R.B.387
2010-59, 2010-39 I.R.B.399
2010-60, 2010-40 I.R.B.417
2010-61, 2010-40 I.R.B.417
2010-62, 2010-40 I.R.B.417
2010-63, 2010-40 I.R.B.417
2010-64, 2010-40 I.R.B.418
2010-65, 2010-40 I.R.B.418
2010-66, 2010-40 I.R.B.418
2010-67, 2010-40 I.R.B.418
2010-68, 2010-40 I.R.B.418
2010-69, 2010-40 I.R.B.418
2010-70, 2010-40 I.R.B.418
2010-71, 2010-40 I.R.B.418
2010-72, 2010-40 I.R.B.419
2010-73, 2010-40 I.R.B.419
2010-74, 2010-40 I.R.B.419
2010-75, 2010-41 I.R.B.428
2010-76, 2010-41 I.R.B.432
2010-77, 2010-41 I.R.B.433
2010-78, 2010-41 I.R.B.433
2010-79, 2010-42 I.R.B.475
2010-80, 2010-45 I.R.B.638
2010-81, 2010-45 I.R.B.638
2010-82, 2010-42 I.R.B.476
2010-83, 2010-50 I.R.B.848
2010-84, 2010-44 I.R.B.603
2010-85, 2010-44 I.R.B.604
2010-86, 2010-44 I.R.B.604
2010-87, 2010-43 I.R.B.557
2010-88, 2010-47 I.R.B.753
2010-89, 2010-46 I.R.B.669
2010-90, 2010-50 I.R.B.816
2010-91, 2010-50 I.R.B.848
Notices:
2010-48, 2010-27 I.R.B.9
2010-49, 2010-27 I.R.B.10
2010-50, 2010-27 I.R.B.12
2010-51, 2010-29 I.R.B.83
2010-52, 2010-30 I.R.B.88
2010-53, 2010-31 I.R.B.182
2010-54, 2010-40 I.R.B.403
2010-55, 2010-33 I.R.B.253
2010-56, 2010-33 I.R.B.254
2010-57, 2010-34 I.R.B.267
2010-58, 2010-37 I.R.B.326
2010-59, 2010-39 I.R.B.396
2010-60, 2010-37 I.R.B.329
2010-61, 2010-40 I.R.B.408
2010-62, 2010-40 I.R.B.411
2010-63, 2010-41 I.R.B.420
2010-64, 2010-41 I.R.B.421
2010-65, 2010-41 I.R.B.424
2010-66, 2010-42 I.R.B.437
2010-67, 2010-43 I.R.B.529
2010-68, 2010-44 I.R.B.576
2010-69, 2010-44 I.R.B.576
2010-70, 2010-44 I.R.B.576
2010-71, 2010-50 I.R.B.822
2010-72, 2010-46 I.R.B.661
2010-73, 2010-46 I.R.B.662
2010-74, 2010-46 I.R.B.663
2010-75, 2010-48 I.R.B.781
2010-76, 2010-47 I.R.B.712
2010-78, 2010-49 I.R.B.808
2010-79, 2010-49 I.R.B.809
2010-81, 2010-50 I.R.B.825
2010-86, 2010-50 I.R.B.827
Proposed Regulations:
REG-138637-07, 2010-44 I.R.B.581
REG-132554-08, 2010-48 I.R.B.783
REG-139343-08, 2010-33 I.R.B.256
REG-119921-09, 2010-45 I.R.B.626
REG-137486-09, 2010-46 I.R.B.668
REG-142800-09, 2010-44 I.R.B.580
REG-144762-09, 2010-45 I.R.B.637
REG-151605-09, 2010-31 I.R.B.184
REG-153340-09, 2010-42 I.R.B.469
REG-112841-10, 2010-27 I.R.B.41
REG-118412-10, 2010-29 I.R.B.85
REG-119046-10, 2010-40 I.R.B.415
REG-120391-10, 2010-35 I.R.B.310
REG-120399-10, 2010-32 I.R.B.239
REG-125592-10, 2010-43 I.R.B.556
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
Revenue Procedures— Continued:
2010-27, 2010-31 I.R.B.183
2010-28, 2010-34 I.R.B.270
2010-29, 2010-35 I.R.B.309
2010-30, 2010-36 I.R.B.316
2010-31, 2010-40 I.R.B.413
2010-32, 2010-36 I.R.B.320
2010-33, 2010-38 I.R.B.347
2010-34, 2010-41 I.R.B.426
2010-35, 2010-42 I.R.B.438
2010-36, 2010-42 I.R.B.439
2010-37, 2010-42 I.R.B.440
2010-38, 2010-43 I.R.B.530
2010-39, 2010-42 I.R.B.459
2010-40, 2010-46 I.R.B.663
2010-41, 2010-48 I.R.B.781
2010-42, 2010-47 I.R.B.715
2010-43, 2010-47 I.R.B.738
2010-44, 2010-49 I.R.B.811
2010-45, 2010-49 I.R.B.813
2010-46, 2010-49 I.R.B.814
2010-47, 2010-50 I.R.B.827
2010-48, 2010-50 I.R.B.828
2010-49, 2010-50 I.R.B.830
2010-50, 2010-50 I.R.B.841
Revenue Rulings:
2010-18, 2010-27 I.R.B.1
2010-19, 2010-31 I.R.B.174
2010-20, 2010-36 I.R.B.312
2010-21, 2010-39 I.R.B.388
2010-22, 2010-39 I.R.B.388
2010-23, 2010-39 I.R.B.388
2010-24, 2010-40 I.R.B.400
2010-25, 2010-44 I.R.B.571
2010-26, 2010-44 I.R.B.573
2010-27, 2010-45 I.R.B.620
2010-28, 2010-49 I.R.B.804
2010-29, 2010-50 I.R.B.818
2010-30, 2010-50 I.R.B.820
Tax Conventions:
2010-48, 2010-32 I.R.B.234
2010-52, 2010-36 I.R.B.315
Treasury Decisions:
9486, 2010-27 I.R.B.3
9487, 2010-28 I.R.B.48
9488, 2010-28 I.R.B.51
9489, 2010-29 I.R.B.55
9490, 2010-31 I.R.B.176
9491, 2010-32 I.R.B.186
9492, 2010-33 I.R.B.242
9493, 2010-35 I.R.B.273
9494, 2010-43 I.R.B.500
9495, 2010-43 I.R.B.477
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin
2010–26, dated June 28, 2010.
December 13, 2010ii2010–50 I.R.B.

Treasury Decisions— Continued:
9496, 2010-43 I.R.B.484
9497, 2010-44 I.R.B.558
9498, 2010-45 I.R.B.605
9499, 2010-45 I.R.B.622
9500, 2010-46 I.R.B.649
9501, 2010-46 I.R.B.651
9502, 2010-46 I.R.B.641
9503, 2010-47 I.R.B.706
9504, 2010-47 I.R.B.670
9505, 2010-48 I.R.B.755
2010–50 I.R.B.iiiDecember 13, 2010

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–50
Notices:
96-53
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2003-19
Revoked by
Notice 2010-53, 2010-31 I.R.B.182
2004-2
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2004-50
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2005-90
Supplemented by
Notice 2010-65, 2010-41 I.R.B.424
2006-69
Amplified by
Notice 2010-59, 2010-39 I.R.B.396
2008-51
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2008-52
Modified by
Notice 2010-59, 2010-39 I.R.B.396
2009-47
Obsoleted by
Rev. Proc. 2010-28, 2010-34 I.R.B.270
2009-80
Corrected by
Ann. 2010-59, 2010-39 I.R.B.399
2009-90
Superseded by
Notice 2010-54, 2010-40 I.R.B.403
Proposed Regulations:
REG-115037-00
Withdrawn by
Ann. 2010-60, 2010-40 I.R.B.417
REG-146893-02
Withdrawn by
Ann. 2010-60, 2010-40 I.R.B.417
Revenue Procedures:
81-18
Obsoleted by
Rev. Proc. 2010-27, 2010-31 I.R.B.183
Revenue Procedures— Continued:
87-50
Modified by
Rev. Proc. 2010-48, 2010-50 I.R.B.828
98-59
Modified by
Rev. Proc. 2010-48, 2010-50 I.R.B.828
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
2008-33
Superseded by
Rev. Proc. 2010-42, 2010-47 I.R.B.715
2008-49
Superseded by
Rev. Proc. 2010-38, 2010-43 I.R.B.530
2008-52
Modified by
Rev. Proc. 2010-44, 2010-49 I.R.B.811
T.D. 9504, 2010-47 I.R.B.670
2009-18
Obsoleted in part by
Rev. Proc. 2010-25, 2010-27 I.R.B.16
2009-30
Superseded by
Rev. Proc. 2010-26, 2010-30 I.R.B.91
2009-35
Superseded by
Rev. Proc. 2010-33, 2010-38 I.R.B.347
2009-46
Superseded by
Rev. Proc. 2010-37, 2010-42 I.R.B.440
2009-47
Superseded by
Rev. Proc. 2010-39, 2010-42 I.R.B.459
2009-48
Superseded by
Rev. Proc. 2010-43, 2010-47 I.R.B.738
2009-50
Modified by
Rev. Proc. 2010-35, 2010-42 I.R.B.438
Modified and superseded by
Rev. Proc. 2010-47, 2010-50 I.R.B.827
2010-3
Modified by
Notice 2010-62, 2010-40 I.R.B.411
2010-24
Superseded by
Rev. Proc. 2010-47, 2010-50 I.R.B.827
Revenue Rulings:
67-436
Obsoleted by
T.D. 9504, 2010-47 I.R.B.670
2003-102
Obsoleted by
Rev. Rul. 2010-23, 2010-39 I.R.B.388
2010-2
Supplemented and superseded by
Rev. Rul. 2010-30, 2010-50 I.R.B.820
Treasury Decisions:
9487
Corrected by
Ann. 2010-50, 2010-33 I.R.B.260
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
December 13, 2010iv2010–50 I.R.B.

2010–50 I.R.B.December 13, 2010

December 13, 20102010–50 I.R.B.

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