Internal Revenue Bulletin 2018-25 (PDF rendition): IRS Revenue Rulings

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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.
EMPLOYMENT TAX
REG–102951–16, page 755
The proposed regulations eliminate the no-aggregation rule in
determining the 250-return threshold for filing certain informa-
tion returns electronically. These proposed regulations also
require corrected returns be filed electronically if original re-
turns were required to be filed electronically, regardless of the
number of corrected returns being filed.
INCOME TAX
Rev. Rul. 2018–17, page 753
This Revenue Ruling clarifies that federal income tax withhold-
ing under § 3405 and Form 1099–R reporting under § 408(i)
generally apply for the year a payment is made, as required by
State law, from an individual retirement arrangement (IRA) to a
State unclaimed property fund.
REG–102951–16, page 755
The proposed regulations eliminate the no-aggregation rule in
determining the 250-return threshold for filing certain informa-
tion returns electronically. These proposed regulations also
require corrected returns be filed electronically if original re-
turns were required to be filed electronically, regardless of the
number of corrected returns being filed.
Finding Lists begin on page ii.
Index for July through June begins on page iv.
Bulletin No. 2018–25
June 18, 2018

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal 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, identify-
ing 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.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal 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, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and 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 contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
June 18, 2018Bulletin No. 2018–25

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 3405.— Special
Rules for Pensions,
Annuities, and Certain
Other Deferred Income
(Also, § 408)
Rev. Rul. 2018–17
Withholding and Reporting
With Respect to Payments
From IRAs to State Unclaimed
Property Funds
ISSUES
(1) Under the facts presented, is the
payment by Trustee Y of Individual C’s
interest in IRA O to the State J unclaimed
property fund, as required by State J law,
subject to federal income tax withholding
under § 3405 of the Internal Revenue
Code?
(2) Is the payment by Trustee Y subject
to reporting under § 408(i)?
FACTS
Individual C has an interest in IRA O,
a traditional IRA trusteed by Trustee
Y. Individual C, a U.S. person under
§ 7701(a)(30)(A) with a calendar year tax-
able year, has not made a withholding
election with respect to her interest in IRA
O. State J law requires Trustee Y to pay
Individual C’s interest in IRA O to the
State J unclaimed property fund under
which a claim for property may be made
by the owner.
1
In 2018, Trustee Y pays
Individual C’s interest in IRA O, which
has a value of $1,000, to the State J un-
claimed property fund.
For purposes of this revenue ruling, an
“IRA” is an individual retirement plan
under § 7701(a)(37) (that is, an individual
retirement account as defined in § 408(a)
or individual retirement annuity as defined
in § 408(b)), and a “traditional IRA” is an
IRA that is not a Roth IRA under § 408A,
a simplified employee pension under
§ 408(k), a SIMPLE IRA under § 408(p),
or a deemed IRA under § 408(q).
LAW AND ANALYSIS
(1) Withholding
Section 3405 provides federal income
tax withholding rules with respect to desig-
nated distributions. Under § 3405(e)(1)(A),
a designated distribution means, except as
provided in § 3405(e)(1)(B), any distribu-
tion or payment from or under an employer
deferred compensation plan, an IRA, or a
commercial annuity. As relevant here, under
§ 3405(e)(1)(B)(ii), a designated distribu-
tion does not include the portion of a distri-
bution or payment that it is reasonable to
believe is not includible in gross income.
2
For this purpose, the flush language under
§ 3405(e)(1)(B) provides that any distribu-
tion or payment from or under an IRA
(other than a Roth IRA as defined in
§ 408A) is treated as includible in gross
income.
Section 3405 requires federal income
tax to be withheld from two types of des-
ignated distributions from IRAs, each
with its own withholding rules: periodic
payments under § 3405(a), and nonperi-
odic distributions under § 3405(b). Under
§ 3405(e)(3), a nonperiodic distribution is
a designated distribution that is not an
annuity or similar periodic payment. In
the case of a nonperiodic distribution un-
der § 3405(e)(3), § 3405(b)(1) provides
that the payor shall withhold from such
distribution an amount equal to 10 percent
of the distribution. Section 3405(b)(2)
provides that an individual may elect not
to have § 3405(b)(1) withholding apply
with respect to any nonperiodic distribu-
tion.
Section 35.3405–1T provides rules re-
garding § 3405, including general rules on
withholding requirements and specific
rules addressing withholding on periodic
and nonperiodic distributions, notice and
election procedures, and reporting and re-
cordkeeping. Section 35.3405–1 provides
rules regarding the medium through
which notices required under § 3405 may
be provided.
The payment of Individual C’s inter-
est in IRA O, a traditional IRA, to the
State J unclaimed property fund, as re-
quired by State J law, is a payment from
an IRA that is treated as includible in
gross income (pursuant to the flush lan-
guage of § 3405(e)(1)(B)) for purposes
of § 3405(e)(1)(B)(ii). Thus, the pay-
ment is a designated distribution for
purposes of § 3405. The payment from
IRA O is not an annuity or similar pe-
riodic payment under § 3405(e)(2).
Thus, it is a nonperiodic distribution as
defined in § 3405(e)(3). Because Indi-
vidual C has not made a withholding
election with respect to the payment, a
10 percent withholding rate applies to
the payment pursuant to § 3405(b)(1),
and Trustee Y must withhold federal
income tax of $100 (10% of Individual
C’s $1,000 interest in IRA O).
(2) Reporting
Section 408(i) provides that the trustee
of an individual retirement account and
the issuer of an endowment contract de-
scribed in § 408(b) or an individual retire-
ment annuity must make such reports re-
garding such account, contract, or annuity
to the Secretary and to the individuals for
whom the account, contract, or annuity is,
or is to be, maintained with respect to
contributions (and the years to which they
relate), distributions aggregating $10 or
more in any calendar year, and such other
matters as the Secretary may require.
Section 1.408 –7(a) provides that the
trustee of an individual retirement account
or the issuer of an individual retirement
annuity who makes a distribution during
any calendar year shall make a report of
the distribution for such year. Form
1
This revenue ruling does not address whether the payment to the State unclaimed property fund otherwise complies with applicable law (for example, itdoes not address compliance with
any applicable search requirements under State law).
2
Under § 3405(e)(1)(B)(iii), a designated distribution also does not include a payment that is subject to withholding under the withholding rules applicable to payments to nonresident aliens
and foreign corporations. See § 1441 (Withholding of Tax on Nonresident Aliens), § 1442 (Withholding of Tax on Foreign Corporations), and § 1.1441– 4(b)(1)(ii) (Exemptions from
Withholding for Certain Effectively Connected Income and Other Amounts).
Bulletin No. 2018–25June 18, 2018
753

1099 –R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, etc.,
is used to satisfy this reporting obliga-
tion.
Pursuant to § 408(i), Trustee Y must
report the $1,000 distribution from IRA O
($900 of which is paid to the State J
unclaimed property fund and $100 of
which is remitted as federal income tax
withholding) on a 2018 Form 1099 –R
identifying Individual C as the recipient.
HOLDINGS
(1) Under the facts presented, the pay-
ment by Trustee Y of Individual C’s in-
terest in IRA O to the State J unclaimed
property fund, as required by State J law,
is subject to federal income tax withhold-
ing under § 3405.
(2) The payment by Trustee Y is sub-
ject to reporting under § 408(i).
TRANSITION RELIEF
A person will not be treated as failing
to comply with the withholding and re-
porting requirements described in this rev-
enue ruling with respect to payments
made before the earlier of January 1,
2019, or the date it becomes reasonably
practicable for the person to comply with
those requirements.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Cynthia Van Bogaert of the Of-
fice of Associate Chief Counsel (Tax Ex-
empt and Government Entities). Ms. Van
Bogaert may be reached at (202) 317-
4102 (not a toll-free number).
June 18, 2018Bulletin No. 2018–25
754

Part IV. Items of General Interest
Filing Requirements for
Information Returns
Required on Magnetic
Media (Electronically)
REG–102951–16
AGENCY:Internal Revenue Service
(IRS), Treasury.
ACTION:Notice of proposed rulemaking.
SUMMARY:This document contains
proposed regulations amending the rules
for determining whether information re-
turns must be filed using magnetic media
(electronically). The proposed regulations
would require that all information returns,
regardless of type, be taken into account
to determine whether a person meets the
250-return threshold and, therefore, must
file the information returns electronically.
The proposed regulations also would re-
quire any person required to file informa-
tion returns electronically to file corrected
information returns electronically, regard-
less of the number of corrected informa-
tion returns being filed. The proposed reg-
ulations will affect persons required to file
information returns.
DATES:Written or electronic comments
and requests for a public hearing must be
received by July 30, 2018.
ADDRESSES:Send submissions to: CC:
PA:LPD:PR (REG–102951–16), room 5205,
Internal Revenue Service, P.O. Box 7604,
Ben Franklin Station, Washington, DC
20044.Submissionsmaybehand-
delivered Monday through Friday be-
tween the hours of 8:00 a.m. and 4:00
p.m. to CC:PA:LPD:PR (REG–102951–
16), Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, NW.,
Washington, DC 20224. Alternatively,
persons may submit comments electroni-
cally via the Federal eRulemaking Por-
tal athttp://www.regulations.gov(IRS
REG–102951–16).
FOR FURTHER INFORMATION
CONTACT:Concerning the proposed
regulations, Michael Hara, (202) 317-
6845; concerning the submission of com-
ments and requests for a public hearing,
Regina L. Johnson, (202) 317-5177 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amend-
ments to theRegulations on Procedure and
Administration (26 CFR part 301) under
section 6011(e) relating to the filing of
information returns on magnetic media.
Section 6011(e) authorizes the Secretary
to prescribe regulations regarding the fil-
ing of returns on magnetic media. Section
6011(e)(2)(A) prohibits the Secretary
from requiring persons to file returns on
magnetic media unless the person is re-
quired to file at least 250 returns during
the calendar year. Section 6011(e)(2)(B)
provides that, in prescribing regulations,
the Secretary shall consider the taxpayer’s
ability to comply at reasonable cost with
the regulations’ requirements. Section
301.6011–2(a)(1) provides that magnetic
media includes any magnetic media per-
mitted under the applicable regulations,
revenue procedures, or publications, or, in
the case of returns filed with the Social
Security Administration, any magnetic
media permitted under Social Security
Administration publications, including
electronic filing.
Section 301.6011–2 provides rules for
when information returns described in
§ 301.6011–2(b), such as Form 1042–S,
“Foreign Person’s U.S. Source Income
Subject to Withholding;” forms in the
1099 series; and Form W–2, “Wage and
Tax Statement,” must be filed electroni-
cally. Under § 301.6011–2(c), a person is
not required to file a type of information
return covered by § 301.6011–2(b) elec-
tronically unless the person is required to
file 250 or more such returns during
the calendar year. Sections 301.6011–
2(c)(1)(i) and (iii) and the Examples in
§ 301.6011–2(c)(1)(iv) describe that the
250-return threshold applies separately to
each type of information return and each
type of corrected information return filed,
and, therefore, the forms are not aggre-
gated for purposes of determining whether
the 250-return threshold is satisfied. Sec-
tion 301.6011–2(c)(2) allows the Com-
missioner to waive the requirement to file
electronically if the request for waiver
demonstrates hardship and provides that
the principal factor in determining hard-
ship will be the extent, if any, to which the
cost of electronic filing exceeds the cost of
filing on other media.
When the rules for determining the
250-return threshold, including the rule
providing that each type of information
return is counted separately and not ag-
gregated, were originally published, elec-
tronic filing was in the early stages of
development and was not as commonly
used as it is today. The non-aggregation
rule helped to reduce cost and ease burden
on taxpayers, given the existing limits on
technology and accessibility to such tech-
nology. Since then, significant advances
in technology have made electronic filing
more prevalent and accessible. As a result,
electronic filing is less costly and most
often easier than paper filing. In fact, most
information returns are filed electroni-
cally. In tax year 2015, approximately 98
percent of information returns were filed
electronically. In tax year 2016, the per-
centage of information returns filed elec-
tronically rose to 98.5 percent. Advances
in tax return preparation software, as well
as the prevalence of tax return preparers
and third-party service providers who of-
fer information return preparation and
electronic filing, have also contributed to
the increase in electronic filing.
The concerns regarding taxpayer bur-
den and cost associated with elec-
tronic filing have been significantly miti-
gated since the non-aggregation rule in
§ 301.6011–2(c)(1)(i) and (iii) of the reg-
ulations was first published. Therefore,
determining the 250-return threshold on a
form-by-form basis without aggregation is
no longer necessary to relieve taxpayer
burden and cost. Accordingly, these reg-
ulations simplify the rules for determining
the 250-return threshold by requiring ag-
gregation of all information returns cov-
ered by § 301.6011–2(b) for purposes of
determining the 250-return threshold. In
addition, these regulations provide that
corrected information returns must be
filed electronically if the original informa-
tion returns were filed electronically.
These rule changes will help facilitate ef-
ficient and effective tax administration.
Bulletin No. 2018–25June 18, 2018
755

Explanation of Provisions
These proposed regulations remove
the non-aggregation rule in § 301.6011–
2(c)(1)(iii) that counts the number of in-
formation returns required to be filed on
a form-by-form basis. The proposed reg-
ulations add a new paragraph (4) to
§ 301.6011–2(b) to provide that if during
a calendar year a person is required to file
a total of 250 or more information returns
of any type covered by § 301.6011–2(b),
the person is required to file those infor-
mation returns electronically. For exam-
ple, under these proposed regulations, if a
person is required to file 200 Forms
1099 –INT, “Interest Income,” and 200
Forms 1099 –DIV, that person must file
all Forms 1099 –INT and Forms 1099 –
DIV electronically because that person is
required to file, in the aggregate, at
least 250 information returns covered by
§ 301.6011–2(b). Corrected information
returns are not taken into account in de-
termining whether the 250-return thresh-
old is met under proposed § 301.6011–
2(b)(4) for purposes of determining
whether information returns covered by
§ 301.6011–2(b) must be filed electroni-
cally. Examples in proposed § 301.6011–
2(c)(1)(iv) illustrate this rule.
The proposed regulations also provide
that corrected information returns covered
by § 301.6011–2(b) must be filed elec-
tronically if the information returns orig-
inally filed for the calendar year are re-
quired to be filed electronically. If fewer
than 250 returns covered by § 301.6011–
2(b) are required to be filed for the calen-
dar year, the original returns for the cal-
endar year, as well as the corrected returns
for the calendar year, are not required
to be filed electronically. See proposed
§ 301.6011–2(b)(4).
The proposed regulations also amend
§ 301.6721–1(a)(2)(ii) regarding the pen-
alty for failure to file correct information
returns to remove references to the prior
rule for determining the number of returns
on a form-by-form basis and the prior
corrected return rule.
The proposed regulations do not amend
the existing regulations allowing persons
who are required to file returnselectroni-
cally to request a waiver of the electronic-
filing requirement.See§ 301.6011–
2(c)(2). This waiver authority will be
exercised so as not to unduly burden tax-
payerslackingthenecessarydata-
processing capabilities or access to return
preparers and third-party service provid-
ers at a reasonable cost.
Proposed Effective/Applicability Date
These proposed regulations will be ef-
fective on the date of the publication of
the Treasury Decision adopting these
rules as final in theFederal Register.
However, to give information-return filers
sufficient time to comply with these reg-
ulations, these proposed regulations will
not apply to information returns required
to be filed before January 1, 2019. Ac-
cordingly, these proposed regulations pro-
vide that § § 301.6011–2(b)(4) and
301.6721–1(a)(2)(ii), as amended, will be
effective for information returns required
to be filed after December 31, 2018. Sec-
tion 301.6011–2(b)(5), as amended, will
be effective for corrected information re-
turns filed after December 31, 2018.
Special Analyses
This regulation is not subject to review
under section 6(b) of Executive Order
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) between the
Department of the Treasury and the Office
of Management and Budget regarding re-
view of tax regulations.
When the Internal Revenue Service is-
sues a proposed rulemaking imposing a
collection of information requirement on
small entities, the Regulatory Flexibility
Act (RFA) requires the agency to “prepare
and make available for public comment an
initial regulatory flexibility analysis,”
which will “describe the impact of the
proposed rule on small entities.” 5 U.S.C.
603(a). Section 605(b) of the RFA allows
an agency to certify a rule, in lieu of
preparing an analysis, if the proposed
rulemaking is not expected to have a sig-
nificant economic impact on a substantial
number of small entities.
This proposed rule directly affects
information-return filers that file more
than 250 returns of any type covered by
§ 301.6011–2(b), which includes a sub-
stantial number of small entities. How-
ever, the IRS has determined that the eco-
nomic impact on small entities affected by
the proposed rule would not be significant.
Under sections 6011(e) and § 301.6011–
2(c)(1), information-return filers already
must file information returns electroni-
cally if during a calendar year a person is
required to file a total of 250 or more
information returns of any type covered
by § 301.6011–2(b). The proposed rule
merely amends the method of counting
those 250 returns to determine if the 250-
return threshold is met. Information filers
may request a waiver of the electronic-
filing requirement if they lack the neces-
sary data-processing capabilities or access
to return preparers and third-party service
providers at a reasonable cost, and the
IRS routinely grants meritorious hardship
waiver requests. Accordingly, the burden
on the limited number of small entities
that are not currently filing electronically
will be slight, and small entities that
would experience a hardship because of
this proposed rule may seek a waiver. The
Commissioner of the IRS hereby certifies
that this rule will not have a significant
economic impact on a substantial number
of small entities. The IRS invites com-
ment from members of the public who
believe there will be a significant impact
on small information return filers. Pursu-
ant to section 7805(f) of the Code, this
notice of proposed rulemaking has been
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administra-
tion for comment on its impact on small
business.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any electronic and written
comments that are submitted timely to the
IRS as prescribed in this preamble under
the ADDRESSES heading. The Treasury
Department and the IRS request com-
ments on all aspects of the proposed rules.
All comments will be available atwww.
regulations.govor upon request. A public
hearing will be scheduled if requested in
writing by any person that timely submits
written comments. If a public hearing is
scheduled, then notice of the date, time,
and place for the public hearing will be
published in theFederal Register.
June 18, 2018Bulletin No. 2018–25
756

Drafting Information
The principal author of these proposed
regulations is Michael Hara of the Office
of the Associate Chief Counsel (Proce-
dure and Administration).
List of Subjects in 26 CFR Part 301
Income taxes, Penalties, Reporting and
recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 301 is pro-
posed to be amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 is amended by adding a sectional
authority for§301.6721–1 to read as fol-
lows:
Authority: 26 U.S.C. 7805***
*****
Section 301.6721–1 is also issued un-
der 26 U.S.C. 6011(e).
*****
Par. 2. Section 301.6011–2 is amended
as follows:
a. Paragraphs (b)(4) through (6) are
added.
b. Paragraphs (c)(1)(iii) and (iv) are
removed.
c. Paragraph (g)(2) is revised.
The additions and revisions read as fol-
lows:
§ 301.6011–2 Required use of
magnetic media.
*****
(b)***
(4)Aggregation of returns. For pur-
poses of determining whether the number
of returns a person is required to file meets
the 250-return threshold under paragraph
(c)(1)(i) of this section, all types of returns
covered by paragraphs (b)(1) and (2) of
this section required to be filed during the
calendar year are aggregated. Corrected
returns are not taken into account in de-
termining whether the 250-return thresh-
old is met.
(5)Corrected returns. Any person re-
quired to file returns covered by para-
graphs (b)(1) and (2) of this section on
magnetic media for a calendar year must
file corrected returns covered by para-
graphs (b)(1) and (2) of this section for
such calendar year on magnetic media.
(6)Examples. The provisions of para-
graphs (b)(4) and (5) of this section are
illustrated by the following examples:
Example 1. For the 2018 calendar year, Com-
pany W is required to file 200 Forms 1099 –INT,
“Interest Income,” and 200 Forms 1099 –DIV, “Div-
idends and Distributions,” for a total of 400 returns.
Because Company W is required to file 250 or more
returns covered by paragraphs (b)(1) and (2) of this
section for the calendar year, Company W must file
all Forms 1099 –INT and Forms 1099 –DIV electron-
ically.
Example 2. During the 2018 calendar year, Com-
pany X has 200 employees in Puerto Rico and 75
employees in American Samoa, for a total of 275
returns. Because Company X is required to file 250
or more returns covered by paragraphs (b)(1) and (2)
of this section for the calendar year, Company X
must file Forms 499R–2/W–2PR, “Commonwealth
of Puerto Rico Withholding Statement,” and Forms
W–2AS, “American Samoa Wage and Tax State-
ment,” electronically.
Example 3. For the 2018 calendar year, Com-
pany Y files 300 original Forms 1099 –MISC, “Mis-
cellaneous Income.” Later, Company Y files 70 cor-
rected Forms 1099 –MISC for the 2018 calendar
year. Because Company Y is required to file 250 or
more returns covered by paragraphs (b)(1) and (2) of
this section for the calendar year, Company Y must
file its original 300 Forms 1099 –MISC, as well as its
70 corrected Forms 1099 –MISC for the 2018 calen-
dar year, electronically.
*****
(g)***
(2) Paragraphs (a)(1), (b)(1) and (2),
(c)(1)(i), (c)(2), (d), (e), and (f) of this
section are effective for information re-
turns required to be filed after December
31, 1996. For information returns required
to be filed after December 31, 1989,
and before January 1, 1997, see section
6011(e) [26 USC 6011(e)]. Paragraph
(b)(4) of this section is effective for infor-
mation returns required to be filed after
December 31, 2018. Paragraph (b)(5) of
this section is effective for corrected in-
formation returns filed after December 31,
2018.
*****
Par. 3. Section 301.6721–1 is amended
as follows:
a. By removing the fifth through sev-
enth sentences in paragraph (a)(2)(ii).
b. Adding paragraph (h).
The revisions and addition reads as fol-
lows:
§ 301.6721–1 Failure to file correct
information returns.
*****
(h)Effective dates. Paragraph (a)(2)(ii)
of this section is effective for information
returns required to be filed after December
31, 2018.
Kirsten Wielobob
Deputy Commissioner for Services and
Enforcement.
(Filed by the Office of the Federal Register on May 30,
2018, 8:45 a.m. and published in the issue of the Federal
Register for May 31, 2018, 83 F.R. 24948)
Bulletin No. 2018–25June 18, 2018
757

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
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the 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 with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. 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
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes 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
published 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
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings 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 following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
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—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2018–25June 18, 2018
i

Numerical Finding List
1
Bulletin 2018 –1 through 2018 –25
Announcements:
2018-01, 2018-9 I.R.B.387
2018-02, 2018-9 I.R.B.387
2018-03, 2018-9 I.R.B.387
2018-04, 2018-10 I.R.B.401
2018-05, 2018-13 I.R.B.461
2018-07, 2018-16 I.R.B.503
2018-08, 2018-19 I.R.B.552
2018-09, 2018-24 I.R.B.752
Notices:
2018-01, 2018-3 I.R.B.285
2018-02, 2018-2 I.R.B.281
2018-03, 2018-2 I.R.B.285
2018-05, 2018-6 I.R.B.341
2018-06, 2018-3 I.R.B.300
2018-07, 2018-4 I.R.B.317
2018-08, 2018-7 I.R.B.352
2018-10, 2018-8 I.R.B.359
2018-11, 2018-11 I.R.B.425
2018-12, 2018-12 I.R.B.441
2018-13, 2018-6 I.R.B.341
2018-14, 2018-7 I.R.B.353
2018-15, 2018-9 I.R.B.376
2018-16, 2018-10 I.R.B.390
2018-17, 2018-9 I.R.B.376
2018-18, 2018-12 I.R.B.443
2018-19, 2018-12 I.R.B.443
2018-20, 2018-12 I.R.B.444
2018-21, 2018-15 I.R.B.472
2018-22, 2018-14 I.R.B.464
2018-23, 2018-15 I.R.B.474
2018-24, 2018-17 I.R.B.507
2018-25, 2018-15 I.R.B.476
2018-26, 2018-16 I.R.B.480
2018-27, 2018-20 I.R.B.580
2018-28, 2018-16 I.R.B.492
2018-29, 2018-16 I.R.B.495
2018-30, 2018-21 I.R.B.610
2018-31, 2018-16 I.R.B.501
2018-32, 2018-17 I.R.B.507
2018-33, 2018-17 I.R.B.508
2018-34, 2018-19 I.R.B.549
2018-35, 2018-18 I.R.B.520
2018-36, 2018-20 I.R.B.582
2018-37, 2018-18 I.R.B.521
2018-38, 2018-18 I.R.B.522
2018-39, 2018-20 I.R.B.582
2018-40, 2018-20 I.R.B.583
2018-41, 2018-20 I.R.B.584
2018-42, 2018-24 I.R.B.750
2018-43, 2018-20 I.R.B.590
2018-44, 2018-21 I.R.B.611
2018-45, 2018-21 I.R.B.620
Notices:—Continued
2018-46, 2018-21 I.R.B.621
2018-47, 2018-21 I.R.B.621
2018-49, 2018-22 I.R.B.624
2018-50, 2018-22 I.R.B.626
2018-51, 2018-22 I.R.B.628
2018-52, 2018-22 I.R.B.629
2018-53, 2018-22 I.R.B.631
2018-54, 2018-24 I.R.B.750
Proposed Regulations:
REG-119514-15, 2018-04 I.R.B.325
REG-102951-16, 2018-25 I.R.B.755
REG-129260-16, 2018-14 I.R.B.470
REG-118067-17, 2018-08 I.R.B.360
REG-132197-17, 2018-10 I.R.B.404
REG-132197-17, 2018-10 I.R.B.404
REG-132434-17, 2018-16 I.R.B.503
Revenue Procedures:
2018-1, 2018-1 I.R.B.1
2018-2, 2018-1 I.R.B.106
2018-3, 2018-1 I.R.B.130
2018-4, 2018-1 I.R.B.146
2018-5, 2018-1 I.R.B.244
2018-7, 2018-1 I.R.B.282
2018-8, 2018-2 I.R.B.286
2018-9, 2018-2 I.R.B.290
2018-10, 2018-7 I.R.B.355
2018-11, 2018-5 I.R.B.334
2018-12, 2018-6 I.R.B.349
2018-13, 2018-7 I.R.B.356
2018-14, 2018-9 I.R.B.378
2018-15, 2018-9 I.R.B.379
2018-16, 2018-9 I.R.B.383
2018-17, 2018-9 I.R.B.384
2018-18, 2018-10 I.R.B.392
2018-19, 2018-14 I.R.B.466
2018-20, 2018-11 I.R.B.427
2018-21, 2018-14 I.R.B.467
2018-22, 2018-18 I.R.B.524
2018-23, 2018-17 I.R.B.516
2018-24, 2018-18 I.R.B.525
2018-25, 2018-18 I.R.B.543
2018-26, 2018-18 I.R.B.546
2018-27, 2018-20 I.R.B.591
2018-28, 2018-20 I.R.B.592
2018-29, 2018-22 I.R.B.634
2018-30, 2018-21 I.R.B.622
2018-31, 2018-22 I.R.B.637
2018-32, 2018-23 I.R.B.739
2018-33, 2018-22 I.R.B.734
2018-34, 2018-23 I.R.B.748
Revenue Rulings:
2018-01, 2018-2 I.R.B.275
2018-02, 2018-2 I.R.B.277
Revenue Rulings:—Continued
2018-03, 2018-2 I.R.B.278
2018-04, 2018-4 I.R.B.304
2018-05, 2018-6 I.R.B.339
2018-06, 2018-10 I.R.B.388
2018-07, 2018-13 I.R.B.445
2018-09, 2018-14 I.R.B.462
2018-10, 2018-16 I.R.B.477
2018-11, 2018-18 I.R.B.518
2018-12, 2018-20 I.R.B.575
2018-13, 2018-20 I.R.B.576
2018-14, 2018-23 I.R.B.736
2018-15, 2018-23 I.R.B.736
2018-16, 2018-23 I.R.B.737
2018-17, 2018-25 I.R.B.753
Treasury Decisions:
9829, 2018-04 I.R.B.308
9830, 2018-11 I.R.B.423
9831, 2018-13 I.R.B.459
9832, 2018-16 I.R.B.477
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
June 18, 2018Bulletin No. 2018–25
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2018 –1 through 2018 –25
Notices:
2003-65
Modified by
Notice 2018-30, 2018-21 I.R.B.610
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017–27 through 2017–52 is in Internal Revenue Bulletin
2017–52, dated December 27, 2017.
Bulletin No. 2018–25June 18, 2018
iii

INTERNAL REVENUE BULLETIN
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