Internal Revenue Bulletin 2010-40 (PDF rendition): IRS Announcements

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Bulletin No. 201
0-40
October 4, 2010
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2010–24, page 400.
Federal rates; adjusted federal rates; adjusted federal
long-term rate and the long-term exempt rate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for October 2010.
REG–119046–10, page 415.
Proposed regulations under section 6012 of the Code allow
the IRS to require corporations to file a schedule disclosing
uncertain tax positions related to the tax return as required by
the IRS. A public hearing is scheduled for October 15, 2010.
Notice 2010–54, page 403.
This notice provides rules relating to the availability of the pro-
duction tax credit for refined coal. Notice 2009–90 super-
seded.
Notice 2010–62, page 411.
This notice provides interim guidance regarding the codification
of the economic substance doctrine under section 7701(o) of
theCodeandtherelatedamendmentstothepenaltiesunder
sections 6662, 6662A, 6664 and 6676 by the Health Care
Education Reconciliation Act of 2010. Rev. Proc. 2010–3
modified.
Rev. Proc. 2010–31, page 413.
This procedure provides safe harbors for determining the fi-
nality of foreign adoptions for purposes of the adoption credit
and the exclusion for employer-provided assistance for quali-
fied adoption expenses. The procedure applies to adoptions
governed by the Hague Convention on Protection of Children
and Co-operation in Respect of Intercountry Adoption.
Announcement 2010–60, page 417.
This announcement withdraws proposed regulations pub-
lished on September 10, 2003, in the Federal Register
(REG–146893–02 and REG–115037–00) relating to the treat-
ment of controlled services transactions under section 482
and the allocation of income from intangibles, in particular with
respect to contributions by a controlled party to the value of an
intangible that is owned by another controlled party. The IRS
and Treasury Department are withdrawing these regulations
because they have been superseded.
EMPLOYEE PLANS
Notice 2010–61, page 408.
Weighted average interest-rate update; corporate bond
indices; 30–year Treasury securities; segment rates.This
notice contains updates for the corporate bond weighted aver-
age interest rate for plan years beginning in September 2010;
the 24–month average segment rates; the funding transitional
segment rates applicable for September 2010; and the mini-
mum present value transitional rates for August 2010.
EMPLOYMENT TAX
Announcement 2010–60, page 417.
This announcement withdraws proposed regulations pub-
lished on September 10, 2003, in the Federal Register
(REG–146893–02 and REG–115037–00) relating to the treat-
ment of controlled services transactions under section 482
and the allocation of income from intangibles, in particular with
respect to contributions by a controlled party to the value of an
intangible that is owned by another controlled party. The IRS
and Treasury Department are withdrawing these regulations
because they have been superseded.
Announcement of Declaratory Judgment Proceedings Under Section 7428 begins on page 417.
Finding Lists begin on page ii.

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.
October 4, 20102010–40 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 23.—A
doption
Credit
Safe harbors are provided for determining the fi-
nality of foreign adoptions governed by the Hague
Convention on Protection of Children and Co-oper-
ation in Respect of Intercountry Adoption for pur-
poses of the credit for qualified adoption expenses.
See Rev. Proc. 2010-31, page 413.
Section 42.—Low-Income
Housing Credit
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2010. See Rev. Rul. 2010-24, page 400.
Section 137.—Adoption
Assistance Programs
Safe harbors are provided for determining the fi-
nality of foreign adoptions governed by the Hague
Convention on Protection of Children and Co-oper-
ation in Respect of Intercountry Adoption for pur-
poses of the exclusion for employer-provided assis-
tance for qualified adoption expenses. See Rev. Proc.
2010-31, page 413.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of October 2010. See Rev.
Rul. 2010-24, page 400.
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 October 2010. See Rev.
Rul. 2010-24, page 400.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2010. See Rev. Rul. 2010-24, page 400.
Section 467.—
Certain
Payments for t
he Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2010. See Rev. Rul. 2010-24, page 400.
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 October 2010. See Rev. Rul. 2010-24, page 400.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
Federal short-term, mid-term, and long-term rates
are set forth for the month of October 2010. See Rev.
Rul. 2010-24, page 400.
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 October 2010. See Rev. Rul. 2010-24, page 400.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of October 2010. See Rev.
Rul. 2010-24, page 400.
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 October 2010. See Rev. Rul. 2010-24, page 400.
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 October 2010. See Rev. Rul. 2010-24, page 400.
Section 1274.
—Determi-
nation of Issu
ePriceinthe
Case of Certai
n Debt Instru-
ments Issued
for Property
(Also Section
s 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807
, 846, 1288, 7520, 7872.)
Federal rates
; adjusted federal rates;
adjusted fed
eral long-term rate and the
long-term ex
empt rate.For purposes of
sections 382
, 642, 1274, 1288, and other
sections of t
he Code, tables set forth the
rates for Oc
tober 2010.
Rev. Rul. 20
10–24
This revenu
e ruling provides various
prescribed
rates for federal income tax
purposes fo
r October 2010 (the current
month). Ta
ble 1 contains the short-term,
mid-term,
and long-term applicable fed-
eral rates
(AFR) for the current month
for purpos
es of section 1274(d) of the
Internal R
evenue Code. Table 2 contains
the short
-term, mid-term, and long-term
adjusted
applicable federal rates (ad-
justed AF
R) for the current month for
purposes
of section 1288(b). Table 3 sets
forth the
adjusted federal long-term rate
and the l
ong-term tax-exempt rate de-
scribed
in section 382(f). Table 4 contains
the appr
opriate percentages for deter-
mining t
he low-income housing credit
describ
ed in section 42(b)(1) for build-
ings pl
aced in service during the current
month.
However, under section 42(b)(2),
the app
licable percentage for non-feder-
ally su
bsidized new buildings placed in
servic
e after July 30, 2008, and before
Decem
ber 31, 2013, shall not be less than
9%. Fi
nally, Table 5 contains the federal
rate f
or determining the present value of
an ann
uity, an interest for life or for a term
of yea
rs, or a remainder or a reversionary
inte
rest for purposes of section 7520.
2010–40 I.R.B.400October 4, 2010

REV. RUL. 2010–24 TABLE 1
Applicable Federal Rates (AFR) for October 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.41%.41%.41%.41%
110% AFR
.45%.45%.45%.45%
120% AFR.49%.49%.49%.49%
130% AFR
.53%.53%.53%.53%
Mid-term
AFR1.73%1.72%1.72%1.71%
110% AFR1.90%1.89%1.89%1.88%
120% AFR2.07%2.06%
2.05%2.05%
130% AFR
2.25%
2.24%2.23%2.23%
150% AFR
2.60%
2.58%2.57%2.57%
175% AFR
3.03%3.01%3.00%2.99%
Long-term
AFR3.32%3.29%3.28%3.27%
110% AFR
3.65%
3.62%3.60%
3.59%
120% AFR3.99%
3.95%
3.93%3.92%
130% AFR4.33%4.28%4.26%4.24%
REV. RUL. 20
10–24 TABLE 2
Adjusted AFR for October 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted
AFR
.44%.44%.44%.44%
Mid-term adjusted AFR1.30%1.30%1.30%1.30%
Long-ter
madjusted
AFR
3.45%
3.42%3.41%3.40%
REV. RUL. 2010–24 TABLE 3
Rates Under Section 382 for October 2010
Adjusted
federal long-term rate for the current month
3.45%
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.)3.98%
October 4, 20104012010–40 I.R.B.

REV. RUL. 2010–24 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for October 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. 2010–24 TABLE 5
Rate Under Section 7520 for October 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 interest2.0%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exemp
tObligations
The adjusted
applicable federal short-term, mid-
term, and lo
ng-term rates are set forth for the month
of October 2
010. See Rev. Rul. 2010-24, page 400.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2010. See Rev. Rul. 2010-24, page 400.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of October 2010. See Rev. Rul. 2010-24, page 400.
2010–40 I.R.B.402October 4, 2010

Part III. Administrative, Procedural, and Miscellaneous
Production Tax Credit for
Refined Coal
Notice 2010–54
SECTION 1. PURPOSE
This notice sets forth interim guidance
pending the issuance of regulations relat-
ingtothetaxcreditunder§45oftheInter-
nal Revenue Code (Code) for refined coal.
This notice supersedes Notice 2009–90,
2009–51 I.R.B. 859, which also sets forth
interim guidance regarding the tax credit
under § 45 of the Code for refined coal
by republishing the guidance contained in
that notice with the following modifica-
tions: (1) the definition of refined coal
is revised; (2) certain processing of util-
ity-grade coal is permitted to be taken into
account in determining whether a qualified
emission reduction has been achieved; and
(3) the testing protocols for determining
emissions reductions are revised. The Ser-
vice will continue its no rule policy con-
cerning the placed in service date for a fa-
cility.
SECTION 2. BACKGROUND
Sections 45(c)(7), (d)(8), and (e)(8) of
the Code provide definitions and rules re-
lating to the tax credit for refined coal (the
refined coal credit). Section 45(e)(8) pro-
vides that the refined coal credit increases
a taxpayer’s credit determined under the
other provisions of § 45. The credit is al-
lowed for qualified refined coal (1) pro-
duced by the taxpayer at a refined coal pro-
duction facility during the ten-year period
beginning on the date the facility is origi-
nally placed in service, and (2) sold by the
taxpayer to an unrelated person during that
ten-year period.
Sections 45(c)(7), (d)(8), and (e)(8)
were added to the Code by sections 710(a),
(b)(1), and (b)(2), respectively, of the
American Jobs Creation Act of 2004,
Pub. L. No. 108–357. These provisions
were amended by sections 403(t) and
412(j)(1) and (2) of the Gulf Opportunity
Zone Act of 2005, Pub. L. No. 109–135,
and by sections 101 and 108 of the Energy
Improvement and Extension Act of 2008,
Division B of Pub. L. No. 110–343.
SECTION 3. DEFINITIONS, ETC.
The following definitions apply for pur-
poses of this notice:
.01Refined Coal.
(1)In General. Except as otherwise
provided in this section 3.01, the term “re-
fined coal” means fuel that—
(a) is a liquid, gaseous, or solid fuel
(including feedstock coal mixed with an
additive or additives) produced from coal
(including lignite) or high carbon fly ash,
including (except to the extent inconsistent
with section 3.01(1)(b) of this notice) such
fuel used as a feedstock;
(b) is sold by the taxpayer (producer),
to an unrelated person, with the reasonable
expectation that it will be used for the pur-
pose of producing steam; and
(c) is certified by the taxpayer as result-
ing (when used in the production of steam)
in a qualified emission reduction.
(2)Steel Industry Fuel. Refined coal
includes steel industry fuel (as defined in
§ 45(c)(7)(C)) that is produced and sold
after September 30, 2008.
(3)Pre-2009 Facilities. Refined coal
does not include fuel (other than steel
industry fuel) that is produced and sold
from a facility placed in service before
January 1, 2009, unless such fuel is
produced in such a manner as to result in
an increase of at least 50 percent in the
market value of the fuel (excluding any
increase caused by materials combined or
added during the production process) as
compared to the feedstock coal.
.02Coal. The term “coal” means an-
thracite, bituminous coal, subbituminous
coal, and lignite. Coal includes waste coal
(that is, usable material that is a byproduct
of the previous processing of anthracite,
bituminous coal, subbituminous coal, or
lignite). Examples of waste coal include
fine coal of any of the listed ranks, coal
of any of the listed ranks obtained from a
refuse bank or slurry dam, anthracite culm,
bituminous gob, and lignite waste.
.03Comparable Coal. The term “com-
parable coal” means, with respect to any
feedstock coal, coal that is of the same rank
as the feedstock coal and that has an emis-
sions profile comparable to the emissions
profile of the feedstock coal.
.04Qualified Emissions Reduction.
The term “qualified emissions reduction”
means—
(1) in the case of refined coal produced
at a facility placed in service after Decem-
ber 31, 2008, a reduction of at least 20
percent of the emissions of nitrogen oxide
(NOx) and at least 40 percent of the emis-
sions of either sulfur dioxide (SO
2
)ormer-
cury (Hg) released when burning the re-
fined coal (excluding any dilution caused
by materials combined or added during the
production process), as compared to the
emissions released when burning the feed-
stock coal or comparable coal predomi-
nantly available in the marketplace as of
January 1, 2003; and
(2) in the case of production at a facility
placed in service before January 1, 2009, a
reduction of at least 20 percent of the emis-
sions of NOx and at least 20 percent of
the emissions of either SO
2
or Hg released
when burning the refined coal (excluding
any dilution caused by materials combined
or added during the production process), as
compared to the emissions released when
burning the feedstock coal or comparable
coal predominantly available in the mar-
ketplace as of January 1, 2003.
.05Refined Coal Production Facility.
The term “refined coal production facility”
means—
(a) for purposes of the refined coal
credit allowable with respect to steel
industry fuel, any facility (or any modi-
fication to a facility) which is placed in
service before January 1, 2010, and
(b) for purposes of the refined coal
credit allowable with respect to refined
coal other than steel industry fuel, any fa-
cility placed in service after the date of the
enactment of the American Jobs Creation
Act of 2004 and before January 1, 2010,
other than a facility producing fuel for
which a credit under § 45K (or under § 29,
as in effect on the day before the date of
enactment of the Energy Tax Incentives
Act of 2005) was allowed for the taxable
year or any prior taxable year.
.06Related Persons. Persons are
treated as related to each other if they
would be treated as a single employer
under the regulations prescribed under
§ 52(b). A corporation that is a member
of an affiliated group filing a consolidated
October 4, 20104032010–40 I.R.B.

return is treated as selling coal to an un-
related person if the coal is sold to an
unrelatedpersonbyanothermemberof
the affiliated group.
.07Placed in Service. The year in
which property is placed in service is deter-
mined under the principles of § 1.46–3(d).
SECTION 4. COMPUTATION OF
CREDIT
.01In General. The refined coal credit
for a taxable year is the tentative credit
for the year determined under this section
4.01, reduced to the extent provided in sec-
tions 4.02 and 4.04 of this notice. If the
taxable year is a calendar year, the tenta-
tive credit for the taxable year is the ten-
tative credit for the calendar year. If the
taxable year includes parts of two calen-
dar years, the tentative credit for the tax-
able year is the sum ofthe tentative cred-
its for each partial calendar year included
in the taxable year. The tentative credit
for any calendar year (or partial calendar
year) is the applicable amount per ton of
qualified refined coal (1) produced by the
taxpayer at a refined coal production facil-
ity during the ten-year period beginning on
the date the facility is originally placed in
service, and (2) sold by the taxpayer to an
unrelated person during that ten-year pe-
riod and during the calendar year (or par-
tial calendar year). The applicable amount
for sales of refined coal during a calendar
year is $4.375 multiplied by the inflation
adjustment factor for the calendar year to
adjust for inflation since 1992.
.02Limitation of the Credit.
(1)In General. The tentative credit
with respect to sales of refined coal during
a calendar year is reduced by an amount
that bears the same ratio to the tentative
credit as the excess reference price for the
calendar year bears to $8.75.
(2)Excess Reference Price.Theex-
cess reference price for a calendar year
is the amount by which (a) the reference
price for the calendar year of fuel used as a
feedstock exceeds (b) an amount equal to
1.7 multiplied by $31.90 and further multi-
plied by the inflation adjustment factor for
the calendar year.
.03Reference Price and Inflation Ad-
justment Factor. The reference price and
inflation adjustment factor for a calendar
year are provided by notice published in
the Internal Revenue Bulletin. See, for
example, Notice 2010–37, 2010–18 I.R.B.
654.
.04Reduction for Grants, Tax-Exempt
Bonds, Subsidized Energy Financing and
Other Credits.The tentative credit, after
the reduction, if any, under section 4.02 of
this notice, is reduced by a prescribed per-
centage if the projectreceived government
grants, subsidies, or other credits. The re-
duction percentage for a tax year is the
lesser of 50 percent or the percentage that
is determined by dividing the sum for the
taxable year and all earlier taxable years of
the four items listed below by the aggre-
gate additions to the capital account attrib-
utable to the project for the taxable year
and all earlier taxableyears. Those four
items are (1) governmental grants received
for the project; (2) proceeds from tax-ex-
empt state or local government bonds used
to finance the project; (3) directly and indi-
rectly provided subsidized energy financ-
ing under a federal, state or local program
in connection with the project and (4) any
other credit allowable with respect to any
property that is part of the project.
SECTION 5. RULES RELATING
TO THE AVAILABILITY OF THE
REFINED COAL CREDIT
.01Leased Refined Coal Production
Facility. The refined coal credit is al-
lowed for qualified refined coal produced
andsoldtoanunrelatedpersonbythe
taxpayer, without regard to whether the
taxpayer owns the refined coal production
facility in which the refined coal is pro-
duced. Accordingly, a taxpayer that leases
or operates a facility owned by another
person may claim the credit for refined
coal that the taxpayer produces in the fa-
cility.
.02Addition or Improvement to an Ex-
isting Facility. A refined coal production
facility will not be treated as placed in ser-
vice after October 22, 2004, if more than
20 percent of the facility’s total value (the
cost of the new property plus the value of
the used property) is attributable to prop-
erty placed in service on or before Octo-
ber 22, 2004. The Service will not is-
sue private letter rulings relating to when
a refined coal production facility has been
placed in service.
SECTION 6. RULES RELATING TO
EMISSION REDUCTION
.01Emission Reductions Attributable to
Mining Processes Disregarded.
(1)In General. A qualified emission
reduction does not include any reduction
attributable to mining processes or pro-
cesses that would be treated as mining if
performed by the mine owner or opera-
tor. Accordingly, the feedstock coal for
purposes of comparing the emissions re-
leased when burning the refined coal to the
emissions released when burning the feed-
stock coal is the product resulting from
processes that are treated as mining un-
der section 6.01(2) of this notice and are
actually applied by a taxpayer in any part
of the taxpayer’s process of producing re-
fined coal from coal.
(2)Processes Treated as Mining.Any
process described in § 613(c)(2), (3),
(4)(A), (4)(C), or (4)(I), or that would be
described in those provisions if performed
by the mine owner or operator, shall be
treated as a mining process for purposes
of this notice. Section 613(c)(2) provides
that the term ’mining’ includes not merely
the extraction of the ores or minerals from
the ground but also the treatment pro-
cesses considered as mining described in
§ 613(c)(4) (and the treatment processes
necessary or incidental thereto). Section
613(c)(3) provides that extraction of ores
or minerals from the ground includes the
extraction by mine owners or operators of
ores or minerals from the waste or residue
of prior mining. Section 613(c)(4)(A)
provides, in the case of coal, that cleaning,
breaking, sizing, dust allaying, treating to
prevent freezing and loading for shipment
by a mine owner or operator shall be con-
sidered as mining. Section 613(c)(4)(C)
provides, in the case of minerals that are
customarily sold in the form of a crude
mineral product, that sorting, concentrat-
ing, sintering, and substantially equivalent
processes to bring to shipping grade and
form (see § 1.613–4(f)(3)(i)) shall be con-
sidered as mining. Section 613(c)(4)(I)
provides that the Secretary may prescribe
certain treatment processes that will be
treated as mining; this authority has been
used, for example, to provide that dry-
ing to remove free water, provided that
such drying does not change the physi-
cal or chemical identity or composition
of the mineral, is treated as mining (see
2010–40 I.R.B.404October 4, 2010

§ 1.613–4(f)(5)). Section 613(c)(5) de-
scribes treatment processes that are not
considered as miningunless they are pro-
vided for in § 613(c)(4) or are necessary
or incidental to a process provided for in
§ 613(c)(4). Any cleaning process, such
as a process that uses ash separation, de-
watering, scrubbing through a centrifugal
pump, spiral concentration, gravity con-
centration, flotation, application of liquid
hydrocarbons or alcohol to the surface of
the fuel particles or to the feed slurry, pro-
vided such cleaning does not change the
physical or chemical structure of the coal,
and drying to remove free water, provided
such drying does not change the physical
or chemical identity of the coal, will be
considered as mining.
(3)Exception for Processing Waste
Coal.
(a)In General. A cleaning process
shall not be treated as a mining process
for purposes of applying this section 6.01
to refined coal produced from waste coal
at a facility placed in service before Jan-
uary 1, 2010, for the primary purpose of
producing refined coal from waste coal.
For purposes of this section 6.01(3), waste
coal means the waste materials that are
separated through ordinary mining pro-
cesses during the process of producing a
merchantable product from the coal ex-
tracted from a natural deposit. This section
6.01(3) does not apply with respect to the
refined coal produced at a facility dur-
ing a taxable year unless a verification of
waste coal supply, as described in section
6.01(3)(b), is available for such facility.
(b)Verification of Waste Coal Supply.
The verification of the waste coal supply
for a facility required under this section
6.01(3) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person provid-
ing the verification of the waste coal sup-
ply is a qualified individual.
(iii) A statement that the coal to be
processed by the facility is “waste coal”
within the meaning of section 6.01(3)(a).
(iv) A declaration, signed by the qual-
ified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and be-
lief, it is true, correct, and complete.”
(c)Qualified Individual. A qualified
individual for purposes of this section
6.01(3) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a profes-
sional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.01(3).
(4)Exception for Certain Processing of
Utility-Grade Coal.
(a)In General.Miningprocessesdonot
include a process that satisfies all of the
following requirements:
(i) The process modifies utility-grade
coal.
(ii) The process consists predominantly
of operations that are not ordinarily per-
formed on similar coal by a mine owner or
operator.
(iii) The process goes beyond those nec-
essary for the production of utility-grade
coal from similar coal.
(b)Utility-Grade Coal.Utility-grade
coal is coal that, without further process-
ing, satisfies commonly applicable utility
specifications for similar coal.
(c)Similar Coal. Coals are similar if
they are of the same rank, are extracted
in the same geographic area, and are cus-
tomarily sold in the same geographic area
(which may differ from the area where they
are extracted).
.02Basis for Determining Emission Re-
duction.
(1)In General. Emission reductions are
determined by comparing the emissions
that result when feedstock coal and refined
coal are used to produce the same amounts
of useful thermal energy.
(2)Emissions Resulting from Produc-
tion Process. Emissions that result from
the process of producing refined coal from
feedstock coal are treated for purposes of
this section 6.02 as emissions that result
when the refined coal is used to produce
useful thermal energy. In any case in
which waste heat from an activity other
than the production of refined coal is used
in the process of producing refined coal
from feedstock coal,the emissions associ-
ated with the waste heat are not treated as
emissions that result from such process.
The emissions that result when refined
coal is produced from feedstock coal must
be determined using a method that accu-
rately measures such emissions.
(3)Adjustment for Additives.Inany
case in which additives are used to pro-
duce the refined coal, appropriate adjust-
ment must be made in determining the use-
ful thermal energy produced by the refined
coal.
.03Emission Reduction Testing Meth-
ods.
(1)CEMS Field Testing.
(a)In General. The emissions reduc-
tion may be determined using continuous
emission monitoring system (CEMS) field
testing. CEMS field testing is testing that
meets all the following requirements:
(i) The boiler used to conduct the test is
coal-fired and steam-producing and is of a
sizeandtypecommonlyusedincommer-
cial operations.
(ii) Emissions are measured using a
CEMS.
(iii) If EPA has promulgated a perfor-
mance standard that applies at the time
of the test to the pollutant emission being
measured, the CEMS must conform to that
standard.
(iv) Emissions for both the feedstock
coal and the refined coal are measured at
the same operating conditions and over a
period of at least 3 hours during which the
boiler is operating at a steady state and at
least 90 percent of full load. Operating
changes to power plant components that
are directly attributable to changing from
the feedstock coal to refined coal, such as
adjustment to primary and secondary air
are not treated as a change in operating
conditions for this purpose.
(v)EmissionsofSO
2
are measured up-
stream of any SO
2
scrubber.
(vi) Emissions of Hg are measured up-
stream of any SO
2
scrubber or Hg control
device (such as activated carbon injection).
(vii) Emissions of NOx are measured
upstream of any NOx controls.
(viii) A qualified individual verifies the
test results in a manner that satisfies the
requirements of section 6.03(1)(b) of this
notice.
(b)Downstream CEMS Testing Per-
mitted.CEMS testing for emissions of
SO
2
downstream of an SO
2
scrubber, of
Hg downstream of an SO
2
scrubber or Hg
control device, or of NOx downstream of
any NOx controls is permitted if such test-
ing satisfies the requirements of section
6.03(1)(a)(i) through (iv) of this notice
October 4, 20104052010–40 I.R.B.

and emissions are measured in accordance
with section 6.03(1)(b)(i) or (if applicable)
(ii) of this notice.
(i) Except as provided in section
6.03(1)(b)(ii) of this notice, the emissions
must be measured in accordance with sec-
tion 6.03(1)(a)(iv) and the taxpayer must
provide verification that any scrubber or
control device was operated under the
same operating conditions during the test
period. Such verification should include,
depending on the nature and type of the
control device, important control device
operating parameters such as, for a scrub-
ber, continuous pressure drop, liquid flow
rate, and gas flow rate, and for an electro-
static precipitator, continuous secondary
voltage and current and number of fields
in operation.
(ii) If, during the 5-year period imme-
diately preceding the date that the plant
began burning the refined coal, the plant
burned, throughoutany 24-consecutive-
month period selected by the taxpayer
(the base period), feedstock coal from the
same source and of the same rank as the
feedstock coal used to produce the refined
coal, emissions of SO
2
or NOx may be
measured by treating the average emis-
sions at which the plant actually emitted
the pollutant during the base period as
the emissions for the feedstock coal and
the average emissions at which the plant
actually emitted the pollutant during a
6-month period in which the plant burned
the refined coal as emissions for the re-
fined coal. Emissions must be determined
for purposes of this section 6.03(1)(b)(ii)
without regard to any reduction attribut-
able to physical improvements or replace-
ments of pollution control devices or other
physical changes to the plant made after
the beginning of the base period.
(c)Verification of Test Results.Averi-
fication of test results for purposes of this
section 6.03(1) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person provid-
ing the verification of test results is a qual-
ified individual.
(iii) A statement that the testing satis-
fied all the requirements specified in either
section 6.03(1)(a)(i) through (vii) or (if ap-
plicable) section 6.03(1)(a)(i) through (iv)
and (b) of this notice.
(iv) In the case of any changes to op-
erating conditions permitted under section
6.03(1)(a)(iv) of this notice, a statement
that such operating changes are directly
attributable to the change in fuel and are
consistent with good air pollution control
practices.
(v) A statement that the amount of the
emissions reduction was determined in ac-
cordance with the provisions of section
6.01 and section 6.02 of this notice.
(vi) A declaration, signed by the qual-
ified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and be-
lief, it is true, correct, and complete.”
(d)Qualified Individual. A qualified
individual for purposes of this section
6.03(1) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a profes-
sional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.03(1).
(e)Reliance Permitted.IfCEMSfield
testing is used to determine the emissions
reduction, the Service will not, on exami-
nation, require any additional proof of the
emission reduction achieved. The Service
may, however, require the taxpayer to es-
tablish that the testing used qualifies as
CEMS field testing.
(2)Other Testing Methods.Methods
other than CEMS field testing may be used
to determine the emissions reduction. If a
method other than CEMS field testing is
used, the Service may require the taxpayer
to provide additional proof that the emis-
sion reduction has been achieved. Permis-
sible methods include the following:
(a)Demonstration Pilot-Scale Combus-
tion Furnace.A testing method using a
demonstration pilot-scale combustion fur-
nace if it is established that the method
accurately measures the emissions reduc-
tion that would be achieved in a boiler de-
scribed in section 6.03(1)(a)(i) of this no-
tice and a qualified individual verifies the
test results in a manner that satisfies the
requirements of section 6.03(1)(c)(i), (ii),
(v), and (vi) of this notice.
(b)Laboratory Analysis of the Feed-
stock Coal and the Refined Coal.A labora-
tory analysis that complies with a currently
applicable EPA or ASTM standard and is
permitted under section 6.03(2)(b)(i) or (ii)
of this notice.
(i) Laboratory analysis may be used to
establish that the requisite emissions re-
duction for SO
2
or Hg will be achieved if
the analysis shows that the sulfur(S) or Hg
content of the amount of refined coal nec-
essary to produce an amount of useful en-
ergy has been reduced by at least 20 per-
cent (40 percent, in the case of facilities
placed in service after December 31, 2008)
in comparison to the S or Hg content of
the amount of feedstock coal necessary to
produce the same amount of useful energy,
excluding any dilution caused by materials
combined or added during the production
process.
(ii) Laboratory analysis, including
proximate and ultimate analysis, if com-
bined with appropriate analytical methods,
including Computational Fluid Dynamics
(CFD) modeling, may be used to show
that the requisite reduction in NOx will be
achieved when the refined coal is burned.
Such analytical methods must be based
on sufficient combustion emission data to
permit a qualified individual, as defined in
section 6.03(1) of this notice, to reliably
conclude that the emission reduction will
be achieved.
(3)In General. A taxpayer may show
qualified emission reduction of any pollu-
tant by any of the testing methods that is
described as a permissible method of test-
ing the emission reduction of that pollutant
in this section 6.03.
.04Frequency of Testing.
(1)In General. A taxpayer may estab-
lish that a qualified emissions reduction
determined under section 6.03 of this no-
tice applies to production from a facility by
a determination or redetermination that is
valid at the time the production occurs. A
determination or redetermination is valid
for the period beginning on the date of the
determination or redetermination and end-
ing with the occurrence of the earliest of
the following events: (i) The lapse of six
months from the date of such determina-
tion or redetermination.
(ii) A change in the source or rank of
feedstock coal that occurs after the date of
such determination or redetermination.
(iii) A change in the process of produc-
ing refined coal from the feedstock coal
that occurs after the date of such determi-
nation or redetermination.
2010–40 I.R.B.406October 4, 2010

(2)Redetermination Methods.Inthe
case of a redetermination required because
of a change in the process of producing re-
fined coal from the feedstock coal, the re-
determination required under this section
6.04 must use a method that meets the re-
quirements of section 6.03 of this notice.
In any other case, the redetermination re-
quirement may be satisfied by laboratory
analysis establishing that—
(a) The S or Hg content of the amount
of refined coal necessary to produce an
amount of useful energy has been reduced
by at least 20 percent (40 percent, in the
case of facilities placed in service after De-
cember 31, 2008) in comparison to the S
or Hg content of the amount of feedstock
coal necessary to produce the same amount
of useful energy, excluding any dilution
caused by materials combined or added
during the production process; or
(b) The S and Hg content of both the
feedstock coal and the refined coal do not
vary by more than ten percent from the
S and Hg content of the feedstock coal
and refined coal used in the most recent
determination that meets the requirements
of section 6.03 of this notice.
.05Certification of Emissions Reduc-
tion. The certification requirement of sec-
tion 3.01(1)(c) of this notice is satisfied
with respect to fuel for which the refined
coal credit is claimed only if the taxpayer
attaches to its tax return on which the credit
is claimed a certification that contains the
following:
(1) A statement that the fuel will result
in a qualified emissions reduction when
used in the production of steam.
(2) A statement indicating whether
CEMS field testing was used to determine
the emissions reduction.
(3) If CEMS field testing was not used
to determine the emissions reduction, a de-
scription of the method used.
(4) A statement that the emissions re-
duction was determined or redetermined
within the six months preceding the pro-
duction of the fuel and that there have been
no changes in the source or rank of feed-
stock coal used or in the process of produc-
ing refined coal from the feedstock coal
since the emissions reduction was deter-
mined or was most recently redetermined.
(5) A declaration signed by the taxpayer
in the following form: “Under penalties of
perjury, I declare that I have examined this
certification and to the best of my knowl-
edge and belief, it is true, correct, and com-
plete.”
SECTION 7. RECORDKEEPING
Section 6001 provides that every per-
son liable for any tax imposed by the
Code, or for the collection thereof, must
keep such records, render such statements,
makesuchreturns,andcomplywithsuch
rules and regulations as the Secretary may
from time to time prescribe. The books
and records required by § 6001 must be
kept at all times available for inspection
by authorized internal revenue officers
or employees, and must be retained so
long as the contents thereof may become
material in the administration of any in-
ternal revenue law. In order to satisfy the
recordkeeping requirements of § 6001 and
the regulations thereunder, a taxpayer that
claims the refined coal credit must retain
adequate books and records so that, for
any taxable year, it can be verified from
those books and records that the property
with respect to which the credit is claimed
satisfies the applicable requirements of
§ 45 and this notice.
SECTION 8. REQUEST FOR
COMMENTS
The IRS and the Treasury Department
invite comments concerning section 6.03
of this notice relating to emission reduc-
tion testing methods. Comments should
refer to Notice 2010–54 and be submitted
to:
Internal Revenue Service
CC:PA:LPD:PR (Notice 2010–54)
Room 5203
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions may be hand delivered Mon-
day through Friday between the hours of 8
a.m. and 4 p.m. to:
Courier’s Desk
Internal Revenue Service
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR
(Notice 2010–54)
Alternatively,taxpayersmay
submit comments electronically to
notice.comments@irscounsel.treas.gov.
Please include “Notice 2010–54”
in the subject line of any electronic
communications.
All comments will be available for pub-
lic inspection and copying.
SECTION 9. EFFECTIVE DATE
Thisnoticeiseffectiveforrefinedcoal
produced after September 16, 2010. Tax-
payers may apply the provisions of this no-
tice with respect to refined coal produced
on or before September 16, 2010.
SECTION 10. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and ap-
proved by the Office of Management and
Budget (OMB) in accordance with the Pa-
perwork Reduction Act (44 U.S.C. § 3507)
under control number 1545–2158.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this no-
tice is in section 6 of this notice. This in-
formation will be used by the Service to
verify that the taxpayer is eligible for the
production tax credit for refined coal. The
collection of information is required to ob-
tain a benefit. The likely respondents are
businesses or other for-profit institutions.
The estimated total annual reporting
burden is 1500 hours.
The estimated annual burden per re-
spondent varies from 10 to 20 hours, de-
pending on individual circumstances, with
an estimated average of 15 hours. The es-
timated number of respondents is 100.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and return in-
formation are confidential, as required by
26 U.S.C. § 6103.
SECTION 11. DRAFTING AND
CONTACT INFORMATION
The principal author of this notice is
Philip Tiegerman of the Office of Asso-
ciate Chief Counsel (Passthroughs and
October 4, 20104072010–40 I.R.B.

Special Industries). However, other per-
sonnel from the IRS and Treasury par-
ticipated in its development. For further
information regarding this notice, contact
Mr. Tiegerman at (202) 622–3110.
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2010–61
This notice provides guidance as to the
corporate bond weighted average interest
rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code as in ef-
fect for plan years beginning before 2008.
It also provides guidance on the corpo-
rate bond monthly yield curve (and the
corresponding spot segment rates), the
24-month average segment rates, and
the funding transitional segment rates
under § 430(h)(2). In addition, this no-
tice provides guidance as to the interest
rate on 30-year Treasury securities un-
der § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008, the
30-year Treasury weighted average rate
under § 431(c)(6)(E)(ii)(I), and the min-
imum present value segment rates under
§ 417(e)(3)(D) as in effect for plan years
beginning after 2007.
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections 412(b)(5)(B)(ii) and 412(l)(7)
(C)(i), as amended by the Pension Funding
Equity Act of 2004 and by the Pension
Protection Act of 2006 (PPA), provide that
the interest rates used to calculate current
liability and to determine the required
contribution under § 412(l) for plan years
beginning in 2004 through 2007 must be
within a permissible range based on the
weighted average of the rates of interest on
amounts invested conservatively in long
term investment grade corporate bonds
during the 4-year period ending on the last
day before the beginning of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–2 C.B. 366.
The composite corporate bond rate for
August 2010 is 5.16 percent. Pursuant
to Notice 2004–34, the Service has de-
termined this rate as the average of the
monthly yields for the included corporate
bond indices for that month.
The following corporate bond weighted
average interest rate was determined for
plan years beginning in the month shown
below.
For Plan Years
Beginning inPermissible Range
MonthYear
Corporate
Bond Weighted
Average90%to100%
September20106.24
5.62
6.24
YIELD CURVE AND SEGMENT
RATES
Generally for plan years beginning
after 2007 (except for delayed effective
dates for certain plans under sections 104,
105, and 106 of PPA), § 430 of the Code
specifies the minimum funding require-
ments that apply to single employer plans
pursuant to § 412. Section 430(h)(2) spec-
ifies the interest rates that must be used
to determine a plan’s target normal cost
and funding target. Under this provision,
present value is generally determined us-
ing three 24-month average interest rates
(“segment rates”), each of which applies
to cash flows during specified periods.
However, an election may be made under
§ 430(h)(2)(D)(ii) to use the monthly yield
curve in place of the segment rates. For
plan years beginning in 2008 and 2009, a
transitional rule under § 430(h)(2)(G) pro-
vides that the segment rates are blended
with the corporate bond weighted average
as specified above. An election may be
made under § 430(h)(2)(G)(iv) to use the
segment rates without applying the transi-
tional rule.
Notice 2007–81, 2007–2 C.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, the
24-month average corporate bond seg-
ment rates, and the funding transitional
segment rates used to compute the tar-
get normal cost and the funding target.
Pursuant to Notice 2007–81, the monthly
corporate bond yield curve derived from
August 2010 data is in Table I at the end
of this notice. The spot first, second, and
third segment rates for the month of Au-
gust 2010 are, respectively, 1.81, 4.81,
and 5.88. The three 24-month average
corporate bond segment rates applicable
for September 2010 under the election of
§ 430(h)(2)(G)(iv) are as follows:
First
Segment
Second
Segment
Third
Segment
3.786.31
6.57
2010–40 I.R.B.408October 4, 2010

The transitional segment rates under
§ 430(h)(2)(G) applicable for September 2010,
taking into account the corporate bond
weighted average of 6.24 stated above, are
as follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20094.606.296.46
The transitional rule of § 430(h)(2)(G)
does not apply to plan years starting in
2010. Therefore, for a plan year starting in
2010 with a lookback month to September
2010, the funding segment rates are the
three 24-month average corporate bond
segment rates applicable for September
2010, listed above without blending for
the transitional period.
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 417(e)(3)(A)(ii)(II) (prior to
amendment by PPA) defines the appli-
cable interest rate, which must be used
for purposes of determining the minimum
present value of a participant’s benefit
under § 417(e)(1) and (2), as the annual
rate of interest on 30-year Treasury se-
curities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe.
Section 1.417(e)–1(d)(3) of the Income
Tax Regulations provides that the applica-
bleinterestrateforamonthistheannual
rate of interest on 30-year Treasury secu-
rities as specified by the Commissioner
for that month in revenue rulings, notices
or other guidance published in the Internal
Revenue Bulletin.
The rate of interest on 30-year Treasury
securities for August 2010 is 3.80 percent.
The Service has determined this rate as the
average of the yield on the 30-year Trea-
sury bond maturing in May 2040 deter-
mined each day through August 11, 2010,
and the yield on the 30-year Treasury bond
maturing in August 2040 determined each
day for the balance of the month.
Generally for plan years beginning
after 2007, § 431 specifies the mini-
mum funding requirements that apply to
multiemployer plans pursuant to § 412.
Section 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation
described in section 431(c)(6)(A), based
on the plan’s current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 percent
below the weighted average of the rates of
interest on 30-year Treasury securities dur-
ing the four-year period ending on the last
day before the beginning of the plan year.
Notice 88–73, 1988–2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The following rates
were determined for plan years beginning
in the month shown below.
For Plan Years
Beginning inPermissible Range
MonthYear
30-Year
Treasury
Weighted
Average
90%to
105%
September20104.303.87
4.52
MINIMUM PRESENT VALUE
SEGMENT RATES
Generally for plan years beginning
after December 31, 2007, the applicable
interest rates under § 417(e)(3)(D) are
segment rates computed without regard to
a 24-month average. For plan years begin-
ning in 2008 through 2011, the applicable
interest rates are the monthly spot seg-
ment rates blended with the applicable rate
under § 417(e)(3)(A)(ii)(II) as in effect
for plan years beginning in 2007. Notice
2007–81 provides guidelines for determin-
ing the minimum present value segment
rates. Pursuant to that notice, the mini-
mum present value transitional segment
rates determined for August 2010, tak-
ing into account the August 2010 30-year
Treasury rate of 3.80 stated above, are as
follows:
For Plan Years
Beginning in
First
Segment
Second
Segment
Third
Segment
20093.004.204.63
20102.614.41
5.05
20112.214.61
5.46
DRAFTING INFORMATION
The principal author of this notice is
Tony Montanaro of the Employee Plans,
Tax Exempt and Government Entities Di-
vision. Mr. Montanaro may be e-mailed at
RetirementPlanQuestions@irs.gov.
October 4, 20104092010–40 I.R.B.

Table I
Monthly Yield Curve for August 2010
Derived from August 2010 Data
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.5
0.82
20.55.5740.5
5.91
60.5
6.04
80.5
6.10
1.0
0.98
21.0
5.58
41.05.9261.06.0481.06.10
1.51.1621.55.6041.55.9261.56.0481.56.10
2.01.3822.0
5.61
42.05.9362.06.0482.06.10
2.5
1.62
22.55.6342.5
5.93
62.56.0582.5
6.10
3.0
1.89
23.0
5.64
43.05.9463.0
6.05
83.06.11
3.5
2.17
23.55.6543.5
5.94
63.56.0583.5
6.11
4.02.4424.0
5.66
44.05.9464.0
6.05
84.06.11
4.5
2.69
24.55.6844.55.9564.56.0584.56.11
5.0
2.94
25.0
5.69
45.0
5.95
65.0
6.06
85.0
6.11
5.5
3.17
25.55.7045.5
5.96
65.5
6.06
85.5
6.11
6.03.3826.0
5.71
46.05.9666.06.0686.06.11
6.53.5826.55.7246.5
5.96
66.5
6.06
86.5
6.11
7.03.7627.0
5.73
47.05.9767.06.0687.06.11
7.5
3.93
27.55.7447.55.9767.56.0687.56.11
8.04.0928.0
5.75
48.05.9768.06.0788.06.12
8.5
4.23
28.55.7648.5
5.98
68.5
6.07
88.5
6.12
9.0
4.36
29.0
5.77
49.0
5.98
69.0
6.07
89.0
6.12
9.5
4.49
29.5
5.78
49.55.9869.56.0789.56.12
10.04.6030.0
5.7850.0
5.9970.06.07
90.0
6.12
10.54.7030.55.7950.55.9970.56.0790.56.12
11.04.7931.0
5.8051.0
5.9971.06.0791.06.12
11.5
4.88
31.55.8151.5
5.99
71.5
6.0891.56.12
12.04.9532.0
5.8252.0
6.0072.06.08
92.0
6.12
12.55.0232.55.8252.5
6.00
72.5
6.0892.56.12
13.05.0933.0
5.8353.0
6.0073.06.08
93.0
6.13
13.55.1433.55.8453.56.0173.56.0893.56.13
14.05.1934.0
5.8454.0
6.0174.06.0894.06.13
14.55.2434.55.8554.5
6.01
74.5
6.0894.56.13
15.05.2835.05.8655.0
6.01
75.0
6.09
95.06.13
15.55.3235.55.8655.5
6.02
75.5
6.09
95.56.13
16.0
5.36
36.0
5.8756.0
6.0276.0
6.0996.0
6.13
16.55.3936.55.8756.56.0276.5
6.09
96.56.13
17.0
5.42
37.0
5.8857.0
6.0277.06.0997.06.13
17.55.4437.5
5.89
57.5
6.02
77.5
6.09
97.56.13
18.0
5.47
38.05.89
58.0
6.0378.0
6.0998.0
6.13
18.5
5.49
38.5
5.90
58.5
6.03
78.5
6.1098.56.13
19.0
5.51
39.0
5.9059.06.03
79.0
6.10
99.0
6.13
19.55.5339.55.9159.56.0379.56.1099.56.14
20.0
5.55
40.05.9160.06.0480.06.10100.06.14
2010–40 I.R.B.410October 4, 2010

Interim Guidance Under the
Codification of the Economic
Substance Doctrine and
Related Provisions in the
Health Care and Education
Reconciliation Act of 2010
Notice 2010–62
PURPOSE
This notice provides interim guidance
regarding the codification of the economic
substance doctrine under section 7701(o)
and the related amendments to the penal-
ties under sections 6662, 6662A, 6664, and
6676 by section 1409 of the Health Care
and Education Reconciliation Act of 2010
(Act), Pub. L. No. 111–152. The notice
applies with respect to transactions entered
into on or after March 31, 2010, which
istheeffectivedatefortheamendments
made by section 1409 of the Act.
BACKGROUND
Section 1409 of the Act added new
section 7701(o) to the Code. Section
7701(o)(1) provides that, in the case of any
transaction to which the economic sub-
stance doctrine is relevant, the transaction
shall be treated as having economic sub-
stance only if (i) the transaction changes
in a meaningful way (apart from Federal
income tax effects) the taxpayer’s eco-
nomic position, and (ii) the taxpayer has
a substantial purpose (apart from Federal
income tax effects) for entering into the
transaction. Section7701(o)(5)(A) states
that the term “economic substance doc-
trine” means the common law doctrine
under which tax benefits under subtitle
A with respect to a transaction are not
allowable if the transaction does not have
economic substance or lacks a business
purpose.
Section 7701(o)(5)(C) states that the
determination of whether the economic
substance doctrine is relevant to a trans-
action shall be made in the same manner
as if section 7701(o) had never been
enacted. With respect to individuals, how-
ever, section 7701(o)(5)(B) states that the
two-prong analysis in section 7701(o)(1)
shall apply only to a transaction entered
into in connection with a trade or busi-
ness or an activity engaged in for the
production of income. In addition, section
7701(o)(5)(D) states that the term “trans-
action” as used in section 7701(o) includes
a series of transactions.
Section 7701(o)(2)(A) provides that a
transaction’s potential for profit shall be
taken into account in determining whether
the requirements of section 7701(o)(1)
are met only if the present value of the
reasonably expected pre-tax profit is sub-
stantial in relation to the present value
of the claimed net tax benefits. For pur-
poses of computing pre-tax profit, section
7701(o)(2)(B) provides that the Secretary
shall issue regulations treating foreign
taxes as a pre-tax expense in appropriate
cases.
The Act also added section 6662(b)(6),
which provides that the accuracy-related
penalty imposed under section 6662(a) ap-
plies to any underpayment attributable to
any disallowance of a claimed tax benefit
because of a transaction lacking economic
substance (within the meaning of section
7701(o)) or failing to meet any similar rule
of law (collectively a section 6662(b)(6)
transaction). The Act also added section
6662(i), which increases the accuracy-re-
lated penalty from 20 to 40 percent for any
portion of an underpayment attributable to
one or more section 6662(b)(6) transac-
tions with respect to which the relevant
facts affecting the tax treatment are not
adequately disclosed in the return or in a
statement attached to the return. Further-
more, new section 6662(i)(3) provides that
certain amended returns or any supplement
to a return shall not be taken into consider-
ation for purposes of section 6662(i).
The Act amended section 6664(c) so
that the reasonable cause exception for un-
derpayments found in section 6664(c)(1)
shall not apply to any portion of any
underpayment attributable to a section
6662(b)(6) transaction. The Act simi-
larlyamendedsection6664(d)sothat
the reasonable cause exception found
in section 6664(d)(1) shall not apply to
any reportable transaction understatement
(within the meaning of section 6662A(b))
attributable to a section 6662(b)(6) trans-
action. The Act also amended section
6676 so that any excessive amount (within
the meaning of section 6676(b)) attribut-
able to any section 6662(b)(6) transaction
shall not be treated as having a reasonable
basis.
APPLICATION OF THE ECONOMIC
SUBSTANCE DOCTRINE WITH
RESPECT TO TRANSACTIONS
ENTERED INTO AFTER THE
EFFECTIVEDATEOFTHEACT
A. Application of the Conjunctive Test
For transactions entered into on or after
March 31, 2010, to which the economic
substance doctrine is relevant, section
7701(o)(1) mandates the use of a conjunc-
tive two-prong test to determine whether a
transaction shall be treated as having eco-
nomic substance. The first prong, found
in section 7701(o)(1)(A), requires that the
transaction change in a meaningful way
(apart from Federal income tax effects) the
taxpayer’s economic position. The second
prong, found in section 7701(o)(1)(B), re-
quires that the taxpayer have a substantial
purpose (apart from Federal income tax
effects) for entering into the transaction.
The IRS will continue to rely on rel-
evant case law under the common-law
economic substance doctrine in applying
the two-prong conjunctive test in section
7701(o)(1). Accordingly, in determining
whether a transaction sufficiently affects
the taxpayer’s economic position to satisfy
the requirements of section 7701(o)(1)(A),
the IRS will apply cases under the com-
mon-law economic substance doctrine (as
identified in section 7701(o)(5)(A)) per-
taining to whether the tax benefits of a
transaction are not allowable because the
transaction does not satisfy the economic
substance prong of the economic sub-
stance doctrine. Similarly, in determining
whether a transaction has a sufficient non-
tax purpose to satisfy the requirements of
section 7701(o)(1)(B), the IRS will apply
cases under the common-law economic
substance doctrine pertaining to whether
the tax benefits of a transaction are not
allowable because the transaction lacks a
business purpose.
The IRS will challenge taxpayers who
seek to rely on prior case law under the
common-law economic substance doctrine
for the proposition that a transaction will
be treated as having economic substance
merely because it satisfies either section
7701(o)(1)(A) (or its common-law corol-
lary) or section 7701(o)(1)(B) (or its com-
mon-law corollary). For all transactions
subject to section 1409 of the Act that oth-
erwise would have been subject to a com-
October 4, 20104112010–40 I.R.B.

mon-law economic substance analysis that
treated a transaction as having economic
substance merely because it satisfies either
section 7701(o)(1)(A) (or its common-law
corollary) or section 7701(o)(1)(B) (or its
common-law corollary) the IRS will ap-
ply a two-prong conjunctive test consistent
with section 7701(o).
B. Determination of Economic Substance
Transactions
Section 7701(o)(5)(C) provides that the
determination of whether a transaction is
subject to the economic substance doctrine
shall be made in the same manner as if sec-
tion 7701(o) had never been enacted. In
addition, section 7701(o)(1) only applies
in the case of any transaction to which
the economic substance doctrine is rele-
vant. Consistent with these provisions, the
IRS will continue to analyze when the eco-
nomic substance doctrine will apply in the
same fashion as it did prior to the enact-
ment of section 7701(o). If authorities,
prior to the enactment of section 7701(o),
provided that the economic substance doc-
trine was not relevant to whether certain
tax benefits are allowable, the IRS will
continue to take the position that the eco-
nomic substance doctrine is not relevant
to whether those tax benefits are allow-
able. The IRS anticipates that the case
law regarding the circumstances in which
the economic substance doctrine is rele-
vant will continue to develop. Consistent
with section 7701(o)(5)(C), codification of
the economic substance doctrine should
not affect the ongoing development of au-
thorities on this issue. The Treasury De-
partment and the IRS do not intend to issue
general administrative guidance regarding
the types of transactions to which the eco-
nomic substance doctrine either applies or
does not apply.
C. Calculating Net Present Value of the
Reasonably Expected Pre-tax Profit.
In determining whether the require-
ments of section 7701(o)(1)(A) and (B)
are met, the IRS will take into account
the taxpayer’s profit motive only if the
present value of the reasonably expected
pre-tax profit is substantial in relation to
the present value of the expected net tax
benefits that would be allowed if the trans-
action were respected for Federal income
tax purposes. In performing this calcula-
tion, the IRS will apply existing relevant
case law and other published guidance.
D. Treatment of Foreign Taxes as
Expenses in Appropriate Cases.
Section 7701(o)(2)(B) provides that the
Secretary shall issue regulations requiring
foreign taxes to be treated as expenses in
determining pre-tax profit in appropriate
cases. The Treasury Department and the
IRS intend to issue regulations pursuant
to section 7701(o)(2)(B). In the interim,
the enactment of the provision does not
restrict the ability of the courts to consider
the appropriate treatment of foreign taxes
in economic substance cases.
ACCURACY-RELATED PENALTIES
Unless the transaction is a reportable
transaction, as defined in Treas. Reg.
§ 1.6011–4(b), the adequate disclosure
requirements of section 6662(i) will be
satisfied if a taxpayer adequately dis-
closes on a timely filed original return
(determined with regard to extensions)
or a qualified amended return (as defined
under Treas. Reg. § 1.6664–2(c)(3)) the
relevant facts affecting the tax treatment
of the transaction. If a disclosure would
be considered adequate for purposes of
section 6662(d)(2)(B) (without regard to
section 6662(d)(2)(C)) prior to the enact-
ment of section 1409 of the Act, then it
will be deemed to be adequate for pur-
poses of section 6662(i). The disclosure
will be considered adequate only if it is
made on a Form 8275 or 8275-R, or as oth-
erwise prescribed in forms, publications,
or other guidance subsequently published
by the IRS consistent with the instructions
and other guidance associated with those
subsequent forms, publications, or other
guidance. Disclosures made consistent
with the terms of Rev. Proc. 94–69 also
will be taken into account for purposes
of section 6662(i). If a transaction lack-
ing economic substance is a reportable
transaction, as defined in Treas. Reg.
§ 1.6011–4(b), the adequate disclosure
requirement under section 6662(i)(2) will
be satisfied only if the taxpayer meets
the disclosure requirements described ear-
lier in this paragraphandthe disclosure
requirements under the section 6011 reg-
ulations. Similarly, a taxpayer will not
meet the disclosure requirements for a
reportable transaction under the section
6011 regulations by only attaching Form
8275 or 8275-R to an original or qualified
amended return.
EFFECT ON OTHER DOCUMENTS
The IRS will not issue a private letter
ruling or determination letter pursuant to
section 3.02 (1) of Rev. Proc. 2010–3,
2010–1 I.R.B. 110 (or subsequent guid-
ance), regarding whether the economic
substance doctrine is relevant to any trans-
action or whether any transaction complies
with the requirements of section 7701(o).
Accordingly, Rev. Proc. 2010–3 is mod-
ified.
REQUEST FOR COMMENTS
The IRS is interested in comments con-
cerning the disclosure requirements set
forth in this notice with regard to section
6662(i), especially with regard to the inter-
play between Rev. Proc. 94–69, proposed
Schedule UTP, and the LMSB compli-
ance assurance process (CAP) program.
Interested parties are invited to submit
comments on this notice by December 3,
2010. Comments should be submitted to:
Internal Revenue Service, CC:PA:LPD:PR
(Notice 2010–62), Room 5205, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20224. Alternatively, comments
may be hand-delivered Monday through
Friday between the hours of 8:00 a.m.
to 4:00 p.m. to: CC:PA:LPD:PR (No-
tice 2010–62), Courier’s Desk, Inter-
nal Revenue Service, 1111 Constitution
Avenue, N.W., Washington, DC. Com-
ments may also be submitted electron-
ically via the following e-mail address:
Notice.Comments@irscounsel.treas.gov.
Please include Notice 2010–62 in the
subject line of any electronic submissions.
EFFECTIVE DATE
This notice is effective with respect
to transactions entered into on or after
March 31, 2010.
CONTACT INFORMATION
The principal author of this notice
is James G. Hartford of the Office of
Associate Chief Counsel (Procedure
and Administration). For further infor-
mation regarding this notice, contact
James G. Hartford at (202) 622–7950
2010–40 I.R.B.412October 4, 2010

(not a toll-free call).For further
information with respect to the treatment
of foreign taxes as expenses, contact
Suzanne M. Walsh at (202) 622–3850 (not
a toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part 1, §§ 23, 36C, 137.)
Rev. Proc. 2010–31
SECTION 1. PURPOSE
This revenue procedure provides safe
harbors for determining the finality of for-
eign adoptions for purposes of the adop-
tion credit under § 23 of the Internal Rev-
enue Code, redesignated § 36C after 2009,
and the exclusion for employer reimburse-
ments under § 137. A taxpayer within the
scope of this revenue procedure who meets
the requirements of a safe harbor described
in section 4 may rely on that safe harbor to
determine when a foreign adoption of an
eligible child is final.
Rev. Proc. 2005–31, 2005–1 C.B.
1374, provides guidance to taxpayers
on the finality of foreign adoptions but
does not apply to adoptions governed by
the Hague Convention on Protection of
Children and Co-operation in Respect
of Intercountry Adoption (Convention)
and subject to the Intercountry Adoption
Act of 2000, Pub. L. 106–279, 114 Stat.
825 (IAA), 42 U.S.C. §§ 14901–14954
(Convention adoptions). The Convention
became effective in the United States on
April 1, 2008. This revenue procedure
provides taxpayers with safe harbors for
claiming the adoption credit and exclusion
for Convention adoptions, and guidance
on filing amended returns to claim the
credit or exclusion for Convention adop-
tions that became final in 2008 or 2009.
Rev. Proc. 2005–31 continues to apply
to foreign adoptions not governed by the
Convention (non-Convention adoptions).
SECTION 2. BACKGROUND
.01 Section 23 allows a taxpayer
to claim a credit for qualified adop-
tion expenses (QAE) for the adoption
of an eligible child. Section 10909 of
the Patient Protection and Affordable
Care Act, Pub. L. 111–148, 124 Stat.
119, redesignated § 23 as § 36C and
made the credit refundable for taxable
years beginning in 2010 and 2011. For
convenience, references to § 23 in this
revenue procedure, in general, also apply
to § 36C.
.02 Section 137 allows an employee
to exclude from gross income QAE reim-
bursed under an employer-provided adop-
tion assistance program.
.03 Section 23(d)(1) and Notice 97–9,
1997–1 C.B. 365, define QAE as reason-
able and necessary adoption fees, court
costs, attorney’s fees, traveling expenses
(including amounts expended for meals
and lodging) while away from home, and
other expenses directly related to, and for
the principal purpose of, the legal adoption
of an eligible child by the taxpayer.
.04 Section 23(d)(2) provides that an
eligible child is an individual who has not
attained age 18 or who is physically or
mentally incapable of caring for himself.
Under § 23(d)(1)(C), a stepchild is not an
eligible child.
.05 Section 23(a) provides the general
rule governing when the credit for QAE
is allowed. If the adoption is not final in
the taxable year a taxpayer pays or incurs
QAE, the credit is allowable for those ex-
penses in the next taxable year. Section
23(a)(2)(A). For QAE paid or incurred
during or after the taxable year in which
the adoption is final, the credit is allowable
in the taxable year in which the QAE are
paid or incurred. Section 23(a)(2)(B).
.06 Section 23(e) provides special rules
governing when the credit for foreign
adoptions is allowed: (1) the credit is
allowable only if the adoption becomes
final; and (2) QAE paid or incurred in
any taxable year before the taxable year
in which the adoption becomes final are
treated as paid or incurred in the taxable
year in which the adoption becomes fi-
nal. Rules similar to § 23(e) apply under
§ 137(e) for purposes of the exclusion for
employer-provided adoption assistance.
.07 For purposes of this revenue pro-
cedure, a Conventionadoption means the
adoption, on or after the Convention ef-
fective date, of an alien child habitually
resident in a Convention country by a
United States citizen habitually resident
in the United States, when in connection
with the adoption the child has moved, or
will move, from the Convention country to
the United States. See 8 C.F.R. § 204.301;
§ 3(10) of the IAA, 42 U.S.C. § 14902(10).
See also Rev. Proc. 2005–31, section 2.05.
An adoption may be a Convention adop-
tion only if a prospective adoptive parent
has filed an Application for Determina-
tion of Suitability to Adopt a Child from
a Convention Country (Form 1–800A or
successor) with the Department of State
on or after April 1, 2008. See 8 C.F.R.
§§ 204.300(a) and (b), and 301.
.08 A Convention country is a coun-
try that is party to the Convention and
for which the Convention is in force.
See § 3(12) of the IAA, 42 U.S.C.
§ 14902(3)(12); 8 C.F.R § 204.301; and
22 C.F.R. § 96.2.
.09 Section 301(a)(1) of the IAA,
42 U.S.C. § 14931(a)(1), requires the
Secretary of State to issue a certificate
for each Convention adoption by a U.S.
domiciled citizen of a child immigrating
to the United States. The Secretary of
State issues two types of certificates for
Convention adoptions, IHAC (Hague
Adoption Certificate) and IHCC (Hague
Custody Certificate). The Secretary of
State issues the certificates if the Secretary
(1) receives appropriate notification from
the central authority of the child’s country
of origin, and (2) has verified that the
requirements of the Convention and the
IAA have been met for the adoption.
.10 Section 301(a)(2) of the IAA,
42 U.S.C. § 14931(a)(2), provides that if a
certificate (IHAC or IHCC) is appended to
an original adoption decree, Federal and
state agencies, courts, and other public
and private persons and entities must treat
the certificate as conclusive evidence of
the facts certified.
.11 Section 301(b) of the IAA,
42 U.S.C. § 14931(b), provides that a final
adoption in another Convention country,
certified by the Secretary of State pursuant
to § 301(a) of the IAA (IHAC), must be
recognized as a final valid adoption for
purposes of all Federal, state, and local
laws of the United States.
.12 Section 301(c) of the IAA,
42 U.S.C. § 14931(c), provides that a
home-state jurisdiction may not declare an
adoption final for a child who has entered
the United States from another Convention
country unless the Secretary of State has
issued an IHCC.
.13 General information about foreign
adoptions and the Convention can be ac-
October 4, 20104132010–40 I.R.B.

cessed through the Department of State
website athttp://www.adoption.state.gov.
SECTION 3. SCOPE
This revenue procedure applies to tax-
payers who claim the adoption credit or
exclusion for QAE paid or incurred for a
Convention adoption of a child who is not
a citizen or resident of the United States at
the time the adoption process commences
and who is immigrating to the United
States. This revenue procedure does not
apply to non-Convention adoptions within
the scope of Rev. Proc. 2005–31 or to
the adoption of a child who is a citizen or
resident of the United States at the time
the adoption process commences.
SECTION4. FINALITYOF
CONVENTION ADOPTIONS
.01Adoption finalized in another Con-
vention country. If a taxpayer is within the
scope of this revenue procedure, the Inter-
nal Revenue Service will not challenge the
taxpayer’s treatment of an adoption that
is finalized in another Convention coun-
try (sending country) as final in the taxable
year that either:
(1) The sending country enters a final
decree of adoption, or
(2) The Secretary of State issues a cer-
tificate under § 301(a) of the IAA (IHAC).
.02Adoption finalized in the United
States. If a taxpayer is within the scope
of this revenue procedure, the Service will
not challenge the taxpayer’s treatment of
an adoption of a child who has entered the
United States for the purpose of adoption
subject to § 301(c) of the IAA (IHCC) as
final in the taxable year that a state court
enters a final decree of adoption.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective
September 29, 2010. A taxpayer may
file an amended return to claim the adop-
tion credit for QAE paid in taxable year
2008 or 2009, if the period of limita-
tion under § 6511 has not expired, for a
Convention adoption that became final
within the meaning of section 4 of this
revenue procedure during the period be-
ginning on April 1, 2008, and ending on
December 31, 2009.
DRAFTING AND OTHER
INFORMATION
The principal author of this revenue
procedure is Marilyn E. Brookens of the
Office of Associate Chief Counsel (In-
come Tax & Accounting). For further
information regarding this announcement,
contact Ms. Brookens at (202) 622–4920
(not a toll-free call).
2010–40 I.R.B.414October 4, 2010

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking an
dNoticeof
Public Hearin
g
Requirement o
f a Statement
Disclosing U
ncertain Tax
Positions
REG–119046–10
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains pro-
posed regulations allowing the IRS to re-
quire corporations to file a schedule dis-
closing uncertain tax positions related to
the tax return as required by the IRS. This
document also provides notice of a public
hearing on these proposed regulations.
DATES: Written or electronic comments
must be received by October 12, 2010.
Outlines of topics to be discussed at the
public hearing scheduled for October 15,
2010, at 10 a.m., must be received by Oc-
tober 12, 2010.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–119046–10), room
5205, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–119046–10),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW.,
Washington, DC, or sent electroni-
cally via the Federal eRulemaking Por-
tal athttp://www.regulations.gov(IRS
REG–119046–10). The public hearing
will be held in the IRS Auditorium,
Internal Revenue Building, 1111
Constitution Avenue, NW., Washington,
D.C.
FOR
FURTHER INFORMATION
CON
TACT: Concerning the proposed reg-
ula
tions, Kathryn Zuba at (202) 622–3400;
con
cerning submissions of comments, the
pub
lic hearing, and to be placed on the
bui
lding access list to attend the public
hearing, Oluw
afunmilayo Taylor of the
Publications
and Regulations Branch at
(202) 622–718
0 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document
contains proposed
amendments to
the Income Tax Regula-
tions (26 CFR
part 1) under section 6012
relating to t
he returns of income corpo-
rations are r
equired to file. Section 6011
provides tha
t persons liable for a tax im-
posedbyTit
le 26 shall make a return when
required by
regulations prescribed by the
Secretary o
f the Treasury according to the
forms and re
gulations prescribed by the
Secretary.
Treasury Regulation §1.6011–1
requires e
very person liable for income
taxtomake
such returns as are required by
regulatio
n. Section 6012 requires corpo-
rations su
bject to an income tax to make
areturnw
ith respect to that tax. Treasury
Regulati
on §1.6012–2 sets out the corpo-
rations t
hat are required to file returns and
the form t
hose returns must take.
In Announ
cement 2010–9, 2010–7
I.R.B. 40
8, and Announcement 2010–17,
2010–13 I
.R.B. 515, the IRS announced
it was de
veloping a schedule requiring
certain
taxpayers to report uncertain tax
positio
ns on their tax returns. The IRS
release
d the draft schedule, Schedule UTP,
accompa
nied by draft instructions that
provid
e a further explanation of the IRS’s
propos
al in conjunction with Announce-
ment 20
10–30, 2010–19 I.R.B. 668. That
announ
cement invited public comment by
June 1,
2010, on the draft schedule and
instr
uctions, which would be finalized
after
the IRS received and considered the
comme
nts regarding the overall proposal
and th
e draft schedule and instructions.
The dr
aft schedule and instructions
provi
de that, beginning with the 2010 tax
year,
certain corporations with both un-
cert
ain tax positions and assets equal to or
exce
eding $10 million will be required to
file
Schedule UTP if they or a related party
issu
ed audited financial statements. The
draf
t schedule and instructions stated that,
for
2010 tax years, the IRS will require
cor
porations filing the following returns to
fil
e Schedule UTP: Form 1120,U.S. Cor-
por
ation Income Tax Return; Form 1120L,
U.S. Life Insu
rance Company Income Tax
Return;Form1
120PC,U.S. Property and
Casualty Insu
rance Company Income Tax
Return;andFo
rm 1120F,U.S. Income Tax
Return of a For
eign Corporation.The
draft schedu
le and instructions do not
require a Sch
edule UTP from any other
Form 1120 ser
ies filers, pass-through
entities, or
tax-exempt organizations in
2010 tax yea
rs.
A substantia
l number of public com-
ments have b
een received regarding the
draft sched
ule. The IRS and Treasury
Department
are currently reviewing the
comments an
d anticipate publishing a final
Schedule U
TP in sufficient time to allow
taxpayers
to comply with the proposed
effective
date of these regulations.
Explanati
on of Provisions
These prop
osed regulations require cor-
porations
to file a Schedule UTP consis-
tent with
the forms, instructions, and other
appropri
ate guidance provided by the IRS.
As explai
ned in Announcement 2010–9,
the Unite
d States federal income tax sys-
tem relie
s on taxpayers to make a self-as-
sessmen
t of tax and to file returns that
show the
facts upon which tax liability
may be de
termined and assessed. Section
601.103
of the Procedure and Administra-
tion Reg
ulations. To discharge its obliga-
tion to
fairly and uniformly administer the
tax law
s, the IRS must be able to quickly
and eff
iciently identify those returns, and
the iss
ues underlying those returns, that
presen
t a significant risk of noncompliance
with t
he Internal Revenue Code.
Existi
ng corporate tax returns do not
curre
ntly require that taxpayers separately
ident
ify and explain the uncertain tax po-
sitio
ns that are identified in the process
of com
plying with generally accepted ac-
count
ing principles. Instead, to identify
unce
rtain tax positions the IRS must select
aret
urn for audit and expend a substantial
amou
nt of effort by revenue agents to de-
term
ine what uncertain tax positions might
rela
te to the return.
Corp
orations that prepare financial
stat
ements are required by generally ac-
cep
ted accounting principles to identify
and
quantify all uncertain tax positions as
des
cribed in Financial Accounting Stan-
dar
ds Board,Interpretation No. 48, Ac-
October 4, 20104152010–40 I.R.B.

counting for Uncertainty in Income Taxes
(June 2006) (FIN 48). FIN 48 is now cod-
ified in FASB ASC Topic 740–10 Income
Taxes. Income Taxes, Accounting Stan-
dards Codification Subtopic 740–10 (Fin.
Accounting Standards Bd. 2010). Other
corporations that file returns of income
in the United States may be subject to
other requirements regarding accounting
for uncertain tax positions. For example,
corporations may be subject to other gen-
erally accepted accounting standards, in-
cluding International Financial Reporting
Standards and country-specific generally
accepted accounting standards.
Congress, through the Internal Revenue
Code, has given the IRS broad authority
and discretion to specify the form and con-
tent of returns, so long as the IRS promul-
gates regulations requiring persons made
liable for a tax to file those returns. This
regulation will authorize the IRS to require
certain corporations, as set out in forms,
publications, instructions, or other guid-
ance, to provide information concerning
uncertain tax positions concurrent with the
filing of a return. This information will
aid the IRS in identifying those returns that
pose the most significant risks of noncom-
pliance and in selecting issues for exami-
nation. The IRS intends to implement the
authority provided in this regulation ini-
tially by issuing a schedule and explana-
tory publication that require those corpo-
rations that prepare audited financial state-
ments to file a schedule identifying and de-
scribing the uncertain tax positions, as de-
scribed in FIN 48 and other generally ac-
cepted accounting standards, that relate to
the tax liability reported on the return.
Proposed Effective/Applicability Date
When adopted as a final regulation, this
rulewillapplytoreturnsfiledfortaxyears
beginning after December 15, 2009, and
ending after the date of publication of these
rulesasfinalregulationsintheFederal
Register.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a significant
regulatory action as defined in Executive
Order 12866. Therefore, a regulatory as-
sessment is not required.
This regulation will only affect taxpay-
ers that prepare or are required to issue au-
dited financial statements. Small entities
rarely prepare or are required to issue au-
dited financial statements due to the ex-
pense involved. It is hereby certified that
this regulation will not have a significant
economic impact on a substantial number
of small entities pursuant to the Regulatory
Flexibility Act (5 U.S.C. chapter 6). Ac-
cordingly, a regulatory flexibility analysis
is not required.
Pursuant to section 7805(f) of the Inter-
nal Revenue Code, this notice of proposed
rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on their
impact on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, considera-
tion will be given to any written (a signed
original and eight (8) copies) or electronic
comments that are submitted timely to the
IRS. The IRS and the Treasury Depart-
ment request comments on the substance
of the proposed regulations, as well as on
the clarity of the proposed rules and how
they can be made easier to understand. All
comments submitted by the public will
be made available for public inspection
and copying. A public hearing has been
scheduled for October 15, 2010, begin-
ning at 10 a.m. in the IRS Auditorium,
of the Internal Revenue Building, 1111
Constitution Avenue, NW, Washington,
D.C. Due to building security procedures,
visitors must enter at the Constitution
Avenue entrance. In addition, all visitors
must present photo identifications to
enter the building. Because of access
restrictions, visitors will not be admitted
beyond the immediate entrance area more
than 30 minutes before the hearing starts.
For information about having your name
placed on the building access list to attend
the hearing, see the “FOR FURTHER
INFORMATION CONTACT” section of
this preamble.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
must submit electronic or written com-
ments and an outline of the topics to be
discussedandthetimetobedevotedto
each topic (signed original and eight (8)
copies) by October 12, 2010. A period
of 10 minutes will be allotted to each
person for making comments. An agenda
showing the scheduling of the speakers
will be prepared after the deadline for
receiving outlines has passed. Copies of
theagendawillbeavailablefreeofcharge
at the hearing.
Drafting Information
The principal author of these regula-
tions is Kathryn Zuba of the Office of the
Associate Chief Counsel (Procedure and
Administration).
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.6012–2 is also issued under
the authority of 26 U.S.C. 6011 and 6012.
Par. 2. Section 1.6012–2 is amended by
adding paragraphs (a)(4) and (a)(5) to read
as follows:
§1.6012–2 Corporations required to make
returns of income.
(a) * * *
(4)Disclosure of uncertain tax posi-
tions.A corporation required to make
a return under this section shall attach
Schedule UTP, Uncertain Tax Position
Statement, or any successor form, to such
return, in accordance with forms, in-
structions, or other appropriate guidance
provided by the IRS.
(5)Effective/applicability date. Para-
graph (a)(4) of this section applies to re-
turns filed for tax years beginning after
December 15, 2009, and ending after the
date of publication of the adoption of these
rules as final regulations in theFederal
Register.
*****
Steven T. Miller,
Deputy Commissioner
for Services and Enforcement.
2010–40 I.R.B.416October 4, 2010

(Filed by the Office of the Federal Register on September 7,
2010, 4:15 p.m., and published in the issue of the Federal
Register for September 9, 2010, 75 F.R. 54802)
Treatment of Services Under
Section 482; Allocation of
Income and Deductions from
Intangibles; Withdrawal
Announcement 2010–60
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Withdrawal of notice of pro-
posed rulemaking.
SUMMARY: This document withdraws
proposed regulations published in the
Federal Registeron September 10, 2003
(REG–146893–02, 2003–2 C.B. 967 [68
FR 53448]), related to the treatment of
controlled services transactions under sec-
tion 482 and the allocation of income from
intangibles, in particular with respect to
contributions by a controlled party to the
value of an intangible that is owned by
another controlled party. The IRS and
Treasury Department are withdrawing
those proposed regulations because they
have been superseded.
FOR FURTHER INFORMATION
CONTACT: Gregory A. Spring (202)
435–5265 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On September 10, 2003, the Trea-
sury Department and the IRS published
in theFederal Register(68 FR 53448,
REG–146893–02 and REG–115037–00,
2003–2 C.B. 967) proposed regulations
relating to the treatment of controlled
services transactions and the allocation
of income from intangible property, in
particular with respect to contributions
by a controlled party to the value of
intangible property owned by another
controlled party. On August 4, 2006,
the Treasury Department and the IRS
published in theFederal Register(71
FR 44466, T.D. 9278, 2006–2 C.B. 256;
REG–146893–02, REG–115037–00, and
REG–138603–03, 2006–2 C.B. 317) tem-
porary regulations relating to the treat-
ment of controlled services transactions,
the allocation of income from intangible
property, and stewardship expenses under
Treas. Reg. §1.861–8(e)(4). A notice of
proposed rulemaking cross-referencing
the temporary regulations was published
in theFederal Registeron the same
day (REG–146893–02; REG–115037–00;
REG–138603–03, 2006–2 C.B. 317
[71 FR 44247]). Written comments
responding to the notice of proposed
rulemaking were received, and a public
hearing was held on October 27, 2006.
That notice of proposed rulemaking
superseded the proposed regulations
published in theFederal Registeron
September 10, 2003.
On August 4, 2009, the Treasury
Department and the IRS published in
theFederal Register(74 FR 38830,
T.D. 9456, 2009–2 C.B. 188) final reg-
ulations that are generally consistent
with the proposed regulations that were
published on August 4, 2006, in the
Federal Register(REG–146893–02;
REG–115037–00;REG–138603–03,
2006–2 C.B. 317 [71 FR 44247]), and
removed the corresponding temporary
regulations.
Withdrawal of a Notice of Proposed
Rulemaking
Accordingly, under the authority
of 26 U.S.C. 7805, the notice of pro-
posed rulemaking (REG–146893–02 and
REG–115037–00) published in theFed-
eral Registeron September 10, 2003
(68 FR 53448) is withdrawn.
Steven T. Miller,
Deputy Commissioner
for Services and Enforcement.
(Filed by the Office of the Federal Register on September 7,
2010, 8:45 a.m., and published in the issue of the Federal
Register for September 8, 2010, 75 F.R. 53448)
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–61
This announcement serves notice
to donors that on February 9, 2009,
the United States Tax Court entered
a stipulated decision that, effective
January 1, 2002 through October 6, 2005,
the organization listed below is described
in I.R.C. § 501(c)(3) and is exempt
from taxation under I.R.C. § 501(a).
Further, effective October 7, 2005, the
organization listed below is not recognized
as an organization described in I.R.C.
§ 501(c)(3), and is not exempt from
taxation under I.R.C. § 501(a).
After Bankruptcy Foundation, Inc.
Fishers, IN
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–62
This announcement serves notice to
donors that on April 21, 2009, the United
States Tax Court dismissed the 7428 action
and determined that, effective January 1,
2003, the organization listed below is not
recognized as an organization described
in I.R.C. § 501(c)(3), is not exempt from
taxation under I.R.C. § 501(a), and is not
eligible to receive deductible charitable
contributions as an organization described
in I.R.C. § 170(c)(2).
America’s Faith Centered Education, Inc.
Sandy, UT
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–63
This announcement serves notice to
donors that on October 27, 2009, the
United States Tax Court entered a stipu-
lated decision that, effective January 1,
2001, the organization listed below is not
qualified as an organization described in
I.R.C. § 501(c)(3) and is not an organ-
ization described in I.R.C. § 170(c)(2).
Further, for the period January 1, 2001
through October 14, 2008, the IRS will
not disallow any claimed charitable con-
tributions deductions to petitioner on the
grounds that petitioner is not an organ-
ization described in I.R.C. § 170(c)(2).
October 4, 20104172010–40 I.R.B.

Further, effective January 1, 2001, peti-
tioner is exempt from taxation under I.R.C.
§ 501(a) as an organization described in
I.R.C. § 501(c)(4).
Airport Working Group of Orange County
Newport Beach, CA
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–64
This announcement serves notice to
donors that on January 6, 2009, the United
States Tax Court entered a stipulated de-
cision that, effective January 1, 2002,
the organization listed below is not rec-
ognized as an organization described in
I.R.C. § 501(c)(3) and is not exempt from
taxation under I.R.C. § 501(a).
Bear Soldier Industries
Bismarck, ND
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–65
This announcement serves notice to
donors that on March 20, 2009, the United
States Tax Court entered a stipulated de-
cision that, effective January 1, 2003,
the organization listed below is qualified
as an organization described in I.R.C.
§ 501(c)(3) and is exempt from taxation
under I.R.C. § 501(a).
Financial Policy Forum
Washington, DC
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–66
This announcement serves notice to
donors that on February 12, 2010, the
United States Tax Court entered a stipu-
lated decision that, effective September
1, 2001, the organization listed below is
not qualified as an organization described
in I.R.C. § 501(c)(3), is not exempt from
taxation under I.R.C. § 501(a), and is
not an organization described in I.R.C.
§ 170(c)(2).
Golden Age Benefits Society
Westlake Village, CA
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–67
This announcement serves notice to
donors that on March 24, 2010, the United
States Tax Court entered a stipulated de-
cision that, effective January 1, 2004, the
organization listed below is not qualified
as an organization described in I.R.C.
§ 501(c)(3), is not exempt from taxation
under I.R.C. § 501(a), and is not an organ-
ization described in I.R.C. § 170(c)(2).
Jordan Ministries, Inc.
Dover, FL
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–68
This announcement serves notice to
donors that on February 5, 2009, the
United States Tax Court entered a stipu-
lated decision that, effective December 20,
2000, the organization listed below is not
qualified as an organization described in
I.R.C. § 501(c)(3) and is not exempt from
taxation under I.R.C. § 501(a).
Douglas and Valerie Wood Charitable
Supporting Organization
Bonita Springs, FL
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–69
This announcement serves notice to
donors that on April 9, 2010, the United
States Tax Court entered a stipulated de-
cision that the organization listed below
is qualified as an organization described
in I.R.C. § 501(c)(3) and is exempt from
taxation under I.R.C. § 501(a).
Love Quest Children’s Foundation
Cincinnati, OH
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–70
This announcement serves notice to
donors that on November 6, 2009, the
United States Tax Court entered a stip-
ulated decision that, effective August 1,
1998, the organization listed below is not
qualified for exemption as an organiza-
tion described in I.R.C. § 501(c)(3) and
509(a)(3) and is not exempt from taxation
under I.R.C. § 501(a).
Newton Family Foundation
West Jordan, UT
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–71
This announcement serves notice to
donors that on April 22, 2010, the United
States Tax Court entered a stipulated de-
cision that, effective January 1, 2003,
the organization listed below is not rec-
ognized as an organization described in
I.R.C. § 501(c)(3) and is not exempt from
taxation under I.R.C. § 501(a).
2010–40 I.R.B.418October 4, 2010

United American Housing & Education
Foundation
Houston, TX
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–72
This announcement serves notice to
donors that on January 20, 2010, the
United States Tax Court entered a stipu-
lated decision that, effective January 1,
2002, the organization listed below is not
qualified as an organization described in
I.R.C. § 501(c)(3) and is not exempt from
taxation under I.R.C. § 501(a).
Wasatch Homes Charitable Foundation
Draper, UT
Notice of Disposition of
Declaratory Judgment
Proceedings Under Section
7428
Announcement 2010–73
This announcement serves notice to
donors that on November 21, 2008, the
United States Tax Court entered a stipu-
lated decision that, effective January 1,
2007, the organization listed below is not
recognized as an organization described
in I.R.C. § 501(c)(3), is not exempt from
taxation under I.R.C. § 501(a), and is not
eligible to receive deductible charitable
contributions as an organization described
in I.R.C. § 170(c)(2).
Texas Reinvestment Corporation II
San Antonio, TX
Section 7428(c) Validation
of Certain Contributions
Made During Pendency
of Declaratory Judgment
Proceedings
Announcement 2010–74
This announcement serves notice to po-
tential donors that the organization listed
below has recently filed a timely declara-
tory judgment suit under section 7428 of
the Code, challenging revocation of its
status as an eligible donee under section
170(c)(2).
Protection under section 7428(c) of the
Code begins on the date that the notice
of revocation is published in the Internal
Revenue Bulletin and ends on the date
on which a court first determines that an
organization is not described in section
170(c)(2), as more particularly set forth in
section 7428(c)(1).
In the case of individual contributors,
the maximum amount of contributions
protected during this period is limited to
$1,000.00, with a husband and wife being
treated as one contributor. This protection
is not extended to any individual who was
responsible, in whole or in part, for the
acts or omissions of the organizations that
were the basis for the revocation.
This protection also applies (but with-
out limitation as to amount) to organiza-
tions described in section 170(c)(2) which
are exempt from tax under section 501(a).
If the organization ultimately prevails in its
declaratory judgment suit, deductibility of
contributions would be subject to the nor-
mal limitations set forth under section 170.
Chadwell-Townsend Private Foundation
Bellbrook, OH
DPA Alliance Corporation
Provo, UT
Harbour Credit Counseling Services, Inc
Virginia Beach, VA
Nat Turner Legal Defense Fund
Garland, TX
October 4, 20104192010–40 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.
2010–40 I.R.B.iOctober 4, 2010

Numerical Finding List
1
Bulletins 2010–27 through 2010–40
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
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
Proposed Regulations:
REG-139343-08, 2010-33 I.R.B.256
REG-151605-09, 2010-31 I.R.B.184
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
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
2010-27, 2010-31 I.R.B.183
2010-28, 2010-34 I.R.B.270
2010-29, 2010-35 I.R.B.309
2010-30, 2010-36 I.R.B.316
2010-31, 2010-40 I.R.B.413
2010-32, 2010-36 I.R.B.320
2010-33, 2010-38 I.R.B.347
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
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
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.
October 4, 2010ii2010–40 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–40
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
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-146893-02
Withdrawn by
Ann. 2010-60, 2010-40 I.R.B.417
REG-115037-00
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
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
Revenue Procedures— Continued:
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
2010-3
Modified by
Notice 2010-62, 2010-40 I.R.B.411
Revenue Rulings:
2003-102
Obsoleted by
Rev. Rul. 2010-23, 2010-39 I.R.B.388
Treasury Decisions:
9487
Corrected by
Ann. 2010-50, 2010-33 I.R.B.260
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
2010–40 I.R.B.iiiOctober 4, 2010

October 4, 20102010–40 I.R.B.

INTERNAL REVENUE BULLETIN
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