Internal Revenue Bulletin 2011-47 (PDF rendition): IRS Announcements

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 201
1-47
November 21, 201
1
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
T.D. 9551, page 774.
Final regulations under section 181 of the Code provide rules
that relate to deductions for the costs of producing qualified
film and television productions. The regulations reflect changes
to the law made by the American Jobs Creation Act of 2004
and the Gulf Opportunity Zone Act of 2005, and affect persons
that produce film and television productions within the United
States.
T.D. 9552, page 783.
REG–146297–09, page 795.
Final, temporary, and proposed regulations under section 181
of the Code relate to deductions for the costs of producing
qualified film and television productions that are specific to pro-
ductions commending after December 31, 2007.
Rev. Proc. 2011–55, page 793.
This procedure announces where certain state housing finance
agencies and HUD should send to the IRS the information re-
quired by Notice 2011-14, 2011-11 I.R.B. 544. This procedure
also advises those agencies and HUD of Form 1098-MA,Mort-
gage Assistance Payments, which they may, at their option,
use to provide to homeowners and the IRS the information re-
quired by Notice 2011-14.
EMPLOYEE PLANS
Notice 2011–90, page 791.
2012 cost-of-living adjustments; retirements plans, etc.
This notice sets forth certain cost-of-living adjustments effec-
tive January 1, 2012, applicable to the dollar limitations on ben-
efits and contributions under qualified retirement plans. Other
limitations applicable to deferred compensation plans are also
affected by these adjustments under section 415. The limita-
tions that are adjusted by reference to section 415(d) generally
will change for 2012 because the increase in the cost-of-living
index met the statutory thresholds that trigger their adjustment.
This notice also contains cost-of-living adjustments for several
pension-related amounts in restating the data in IR-2011-103
issued October 20, 2011.
EXEMPT ORGANIZATIONS
Announcement 2011–72, page 796.
The IRS has revoked its determination that National Heritage
Foundation, Inc., of Falls Church, VA, qualifies as an organiza-
tion described in sections 501(c)(3) and 170(c)(2) of the Code.
ADMINISTRATIVE
T.D. 9550, page 785.
Final regulations under section 6707A of the Code provide guid-
ance with respect to the penalties applicable to the failure to
include with any return or statement any information required to
be disclosed under section 6011 with respect to a reportable
transaction.
Notice 2011–91, page 792.
This notice provides that enrolled retirement plan agents are
not required to obtain a preparer tax identification number
(PTIN).
(Continued on the next page)
A
ctions Relating to Court Decisions is on the page following the Introduction.
Announcements of Disbarments and Suspensions begin on page 796.
Finding Lists begin on page ii.

Rev. Proc. 2011–55, page 793.
This procedure announces where certain state housing finance
agencies and HUD should send to the IRS the information re-
quired by Notice 2011-14, 2011-11 I.R.B. 544. This procedure
also advises those agencies and HUD of Form 1098-MA,Mort-
gage Assistance Payments, which they may, at their option,
use to provide to homeowners and the IRS the information re-
quired by Notice 2011-14.
November 21, 20112011–47 I.R.B.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2011–47 I.R.B.November 21, 2011

Actions Relati
ng to Decisions of the Tax Court
It is the policy
of the Internal Rev-
enue Service t
o announce at an early date
whether it wil
l follow the holdings in cer-
tain cases. An
Action on Decision is the
document maki
ng such an announcement.
An Action on De
cision will be issued at
the discreti
on of the Service only on unap-
pealed issue
s decided adverse to the gov-
ernment. Gen
erally, an Action on Decision
is issued whe
re its guidance would be help-
ful to Servi
ce personnel working with the
same or simi
lar issues. Unlike a Treasury
Regulation
or a Revenue Ruling, an Action
on Decision
is not an affirmative statement
of Service
position. It is not intended to
serve as pu
blic guidance and may not be
cited as pr
ecedent.
Actions on
Decisions shall be relied
upon withi
n the Service only as conclu-
sions appl
ying the law to the facts in the
particul
ar case at the time the Action on
Decision
was issued. Caution should be
exercise
d in extending the recommenda-
tion of th
e Action on Decision to similar
cases whe
re the facts are different. More-
over, th
e recommendation in the Action on
Decisio
n may be superseded by new legis-
lation,
regulations, rulings, cases, or Ac-
tions on
Decisions.
Prior to
1991, the Service published
acquies
cence or nonacquiescence only in
certain
regular Tax Court opinions. The
Service has exp
anded its acquiescence
program to inc
lude other civil tax cases
where guidanc
e is determined to be help-
ful. Accordin
gly, the Service now may
acquiesce or n
onacquiesce in the holdings
of memorandum
Tax Court opinions, as
well as those
of the United States District
Courts, Clai
ms Court, and Circuit Courts
of Appeal. Re
gardless of the court decid-
ing the case,
the recommendation of any
ActiononDe
cision will be published in
the Interna
l Revenue Bulletin.
The recomme
ndation in every Action
on Decision
will be summarized as ac-
quiescence
, acquiescence in result only,
or nonacqui
escence. Both “acquiescence”
and “acqui
escence in result only” mean
that the Se
rvice accepts the holding of
the court i
n a case and that the Service
will follo
w it in disposing of cases with
thesamec
ontrolling facts. However, “ac-
quiescen
ce” indicates neither approval
nor disap
proval of the reasons assigned
by the cou
rt for its conclusions; whereas,
“acquies
cence in result only” indicates
disagre
ement or concern with some or all
of those
reasons. “Nonacquiescence” sig-
nifies t
hat, although no further review was
sought,
the Service does not agree with
the hold
ing of the court and, generally,
will no
t follow the decision in disposing
of case
s involving other taxpayers. In
reference to an
opinion of a circuit court
of appeals, a “
nonacquiescence” indicates
that the Servi
ce will not follow the hold-
ingonanation
wide basis. However, the
Service will r
ecognize the precedential
impact of the o
pinion on cases arising
within the ve
nue of the deciding circuit.
The Actions o
n Decisions published in
the weekly In
ternal Revenue Bulletin are
consolidate
d semiannually and appear in
the first Bul
letin for July and the Cumula-
tive Bulleti
n for the first half of the year. A
semiannual
consolidation also appears in
the first Bu
lletin for the following January
andintheCu
mulative Bulletin for the last
half of the y
ear.
The Commiss
ioner ACQUIESCES in
the follow
ing decision:
O’Donnabh
ain v. Commissioner,
1
134 T.C. 34
(2010)
T.C. Docke
t No. 6402–06
The Commis
sioner does NOT ACQUI-
ESCE in the
following decision:
Appleton v
. Commissioner,
2
No. 10–452
2 (3rd Cir. June 10, 2011)
(unpublis
hed opinion)
rev’g, 135
T.C. 461 (2010)
1
Acquiescence relating to whether the taxpayer’s expenses for gender reassignment surgery are deductible medical expenses under section 213 of the Code.
2
Nonacquiescence to the Third Circuit’s holding that the government of the United States Virgin Islands (USVI) should be permitted to intervene in theTax Court deficiency proceeding
pursuant to Fed. R. Civ. P. 24(b)(2).
November 21, 20112011–47 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 181.—
Treatment of
Certain Quali
fied Film and
Television Productions
26 CFR 1.181–1: Deduction for qualified film and
television production costs.
T.D. 9551
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
Deduction for Qualified Film
and Television Production
Costs
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains fi-
nal regulations relating to deductions for
the costs of producing qualified film and
television productions. These final reg-
ulations reflect changes to the law made
by the American Jobs Creation Act of
2004 and the Gulf Opportunity Zone Act
of 2005, and affect persons that produce
film and television productions within the
United States.
DATES:Effective Date:These regulations
are effective on September 29, 2011.
Applicability Dates:For dates of appli-
cability, see §1.181–6.
FOR FURTHER INFORMATION
CONTACT: Bernard P. Harvey, (202)
622–4930 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The
collection of information con-
tai
ned in these final regulations has been
rev
iewed and approved by the Office of
Man
agement and Budget in accordance
wit
h the Paperwork Reduction Act of 1995
(44 U.S.C. 350
7(d)) under control number
1545–2059. Th
e collection of information
in these final
regulations is in §§1.181–1,
1.181–2, and
1.181–3. This information is
requiredtoe
nable the IRS to verify that a
taxpayer is e
ntitled to the deduction.
An agency may
not conduct or sponsor,
and a person i
s not required to respond to, a
collection o
f information unless it displays
a valid cont
rol number.
Books and rec
ords relating to a collec-
tion of info
rmation must be retained as
long as thei
r contents might become ma-
terial in th
e administration of any internal
revenue law
. Generally, tax returns and tax
return inf
ormation are confidential, as re-
quired by 2
6 U.S.C. 6103.
Backgroun
d
This docum
ent contains amendments to
26 CFR part
1 to provide regulations under
section 18
1 of the Internal Revenue Code
of 1986 (Co
de). Section 181 permits the
deductio
n of certain production costs by
the produ
cer of a qualified film or televi-
sion prod
uction.
Section 1
81 was added to the Code by
section 2
44 of the American Jobs Creation
Act of 200
4, Public Law No. 108–357
(118 Sta
t. 1418) (October 22, 2004), and
was modi
fied by section 403(e) of the
Gulf Opp
ortunity Zone Act of 2005, Pub-
lic Law N
o. 109–135 (119 Stat. 2577)
(Decemb
er 21, 2005).
On Febru
ary 9, 2007, the IRS and the
Treasur
y Department published in the
Federa
lRegister(T.D. 9312, 2007–1
C.B. 73
6 [72 FR 6155]) temporary regula-
tions r
elating to deductions for the costs of
produc
ing film and television productions
under s
ection 181. On the same date, the
IRS pu
blished a notice of proposed rule-
makin
g related to this topic in theFederal
Regis
ter(REG–115403–05, 2007–1 C.B.
767 [7
2 FR 6190]). No public hearing
was re
quested or held. Several written
comm
ents were received. All comments
are a
vailable atwww.regulations.govor
upon
request. After consideration of all
the c
omments received, the proposed reg-
ulat
ions are adopted as amended by this
Trea
sury decision, and the corresponding
tem
porary regulations are removed. The
revisions to t
he proposed regulations are
discussed in t
his preamble. Unless other-
wise specific
ally stated, references to the
temporary re
gulations are to T.D. 9312.
Section 502 of
the Tax Extenders and
Alternative
Minimum Tax Relief Act of
2008, Public
Law No. 110–343 (122 Stat.
3765) (Octob
er 3, 2008) further modified
section 181 f
or film and television pro-
ductions co
mmencing after December 31,
2007, and ex
tended section 181 to film
and televis
ion productions commencing
before Janu
ary 1, 2010. Section 181 was
extended a
gain to film and television pro-
ductions c
ommencing before January 1,
2012, by se
ction 744 of the Tax Relief,
Unemploym
ent Insurance Reauthoriza-
tion, and J
ob Creation Act of 2010, Public
Law No. 11
1–312 (December 17, 2010).
The IRS an
d the Treasury Department
intend to
publish in theFederal Register
proposed
and temporary regulations per-
taining t
o film and television productions
commenc
ing after December 31, 2007.
Explanation and Summary of
Comments
General Overview
Congress
enacted section 181 to pro-
mote film
and television production in the
United St
ates. For a qualified film or
televisi
on production commenced before
January
1, 2008 (a “pre-amendment pro-
duction
”), section 181 permits an owner
to elect
to deduct production costs paid
or incur
red by that owner in the taxable
year the
costs are paid or incurred, in lieu
of capi
talizing the costs and recovering
them th
rough depreciation allowances, if
the agg
regate production costs do not ex-
ceed $1
5 million ($20 million if a signif-
icant a
mount of the aggregate production
costs
are paid or incurred in certain desig-
nated
areas) for each qualifying production
(the “
aggregate production costs limit”). A
film o
r television production (a “produc-
tion”
) is a qualified film or television pro-
ducti
on if 75 percent of the total compen-
sati
on for the production is compensation
for s
ervices performed in the United States
by ac
tors, directors, producers, and other
prod
uction personnel.
2011–47 I.R.B.774November 21, 2011

The final regulations use the term
“pre-amendment production” to distin-
guish productions that are subject to the
maximum aggregate production costs limit
in section 181 as added by the American
Jobs Creation Act of 2004 and modified
by the Gulf Opportunity Zone Act of
2005 from productions that are subject to
the maximum production costs deduction
limit in the Tax Extenders and Alternative
Minimum Tax Relief Act of 2008. Several
provisions of the final regulations are spe-
cific to pre-amendment productions and
are designated accordingly.
Deduction for qualified film and television
production costs
In response to a comment, the final
regulations use the term “aggregate pro-
duction costs” as the total production costs
paid or incurred by any person without
regard to whether that person deducted
(or was an owner entitled to deduct) those
costs under section 181. As suggested
by the same comment, the final regu-
lations clarify that costs paid on behalf
of an owner (for example, participations
and residuals paid by a distributor) are
included in aggregate production costs,
notwithstanding that such costs are not
deductible production costs for the owner.
Thus, the amount of an owner’s deductible
costs under section 181 may be less than
the aggregate production costs. Further,
costs are not deductible under section 181
for a pre-amendment production with ag-
gregate production costs in excess of the
aggregate production costs limit of $15
million (or, if applicable, $20 million),
even if the owner’s production costs are
less than the aggregate production costs
limit.
In response to a comment, the final reg-
ulations clarify that, for purposes of the
aggregate productioncosts limit, partici-
pations and residuals are calculated based
on amounts actually paid or incurred rather
than upon the amount the owner would in-
clude in basis under section 167(g)(7)(A)
based on the estimated income from the
production. This clarification is consis-
tent with the limitation that the owner may
claim as a deduction only participations
and residuals actually paid or incurred.
Several commentators suggested that
requiring owners to include participations
and residuals in aggregate production
costs in determining whether the aggre-
gate production costs limit is exceeded
creates uncertainty concerning whether
the election is available for the production
(and whether recapture may ultimately
apply), and that this uncertainty will dis-
courage persons interested in the benefits
of section 181 from investing in potential
qualified productions. This issue is ad-
dressed prospectivelybysection502of
the Tax Extenders and Alternative Min-
imum Tax Relief Act of 2008, which
replaces the aggregate production costs
limit with a deduction limit for produc-
tions commencing on or after January 1,
2008. However, absent a specific statutory
directive to the contrary, all costs required
to be capitalized to cost basis under sec-
tion 263A, including participations and
residuals, must be included in the aggre-
gate production costs of pre-amendment
productions for purposes of determining
if the aggregate production costs limit is
exceeded.
In response to a comment, the final reg-
ulations provide that, solely for purposes
of determining if the higher aggregate pro-
duction costs limit for productions in cer-
tain areas is available for a production, all
compensation costs for actors, directors,
producers, and other production personnel,
are allocated entirelyto first-unit principal
photography rather than allocating a por-
tion of these costs to rehearsal and other
preproduction activities.
The deduction under section 181 is sub-
ject to the passive loss limitations imposed
by section 469 and the at-risk rules im-
posedbysection465. Anownermay
claim the section 181 deduction against or-
dinary income under the rules of section
469 only if that owner materially partici-
pates in the production process; otherwise,
the deduction is available only against pas-
sive income. Furthermore, an owner may
only claim the section 181 deduction to
the extent that the owner is at-risk within
the meaning of section 465. Several com-
mentators suggested that the final regula-
tions exempt the deduction under section
181 from the passive loss and at-risk lim-
itations, or that the final regulations oth-
erwise determine that these limitations do
not apply for section 181. Because there
is no specific statutory direction specifying
that these limitations do not apply, the sec-
tion 181 deduction continues to be subject
to the passive loss and at-risk limitations.
Election
To ensure that multiple persons do not
claim aggregate deductions in excess of
the deduction limit, the final regulations
retain language from the temporary regu-
lations recognizing that some productions
are produced by multiple persons that have
not entered into a partnership agreement
and do not file as a partnership. However,
the IRS is not bound by the reporting posi-
tion of these persons; whether the activities
of these persons rise to the level of a part-
nership will be determined in accordance
with §301.7701–3 of this chapter.
Commentators asked whether there is a
time limit between when a production is
set for production and the time expected
for commencement of principal photogra-
phy and whether a minimum budget for
production costs is required. Neither sec-
tion 181 nor the final regulations impose
such a time limit or minimum budget re-
quirement.
Qualified film or television production
(definitions)
Generally, a motion picture film or
video tape (including digital video) for
which the production costs are subject
to capitalization under section 263A, or
would be subject to capitalization if sec-
tion 263A applied to the owner of the
production, is a production for purposes of
section 181. Thus, in response to a com-
ment, the final regulations provide that a
motion picture film or video tape (includ-
ing digital video) acquired after “initial
release or broadcast” is not a production.
The final regulations define “initial release
or broadcast” as the first commercial ex-
hibition or broadcast to an audience. The
object of this provision is to maximize the
availability of the election under section
181 to advance the goal of the statute (to
promote film and television production in
the United States) while preventing the
use of section 181 in cases that do not
advance the goal of the statute, such as
the purchase of an existing film library.
Under the final regulation, the term “ini-
tial release or broadcast” does not include
certain limited exhibitions primarily for
purposes of publicity, marketing to poten-
tial purchasers or distributors, determining
the need for further production activity, or
raising funds for the completion of pro-
November 21, 20117752011–47 I.R.B.

duction. This exception is added to permit
producers to exhibit productions at film
festivals to interested buyers without com-
promising the ability of those buyers to use
section 181, as well as to permit producers
to test audience reaction to the production
in order to determine if further production
activities are needed. A person acquiring
a completed motion picture film or video
tape (including digital video) prior to its
initial release or broadcast is considered
an owner for purposes of section 181 and
may treat the acquired asset as a produc-
tion, even if the acquiring person does
not pay or incur costs that are subject to
section 263A.
A commentator asked whether video
games or computer games are productions
for purposes of section 181. They are
not because they are not motion picture
films or video tapes. However, to the ex-
tent that a game producer produces or ac-
quires (prior to initial release or broadcast)
a motion picture film or video tape (in-
cluding digital video) the production costs
of which are subject to capitalization un-
der section 263A (or that would be subject
to capitalization if section 263A applied
to the owner of the production) for inclu-
sion in a game (for example, as a cinematic
within the game), then the cost of produc-
ing that motion picture film or video tape
may be eligible for section 181.
The IRS and the Treasury Department
rejected a suggestion that, rather than allo-
cating the cost of production services to the
place where the principal photography oc-
curs for purposes of determining whether
the production is a qualified production,
the final regulations should instead require
that the majority of principal photography
occur in the United States. The statute
defines the term “qualified film or televi-
sion production” with reference to “quali-
fied compensation,” defined as the amount
of compensation for services paid to cer-
tain persons. The final regulations use the
same definition, and require the owner to
allocate compensation for services to those
persons to the place where principal pho-
tography occurs in determining the amount
of qualified compensation for the produc-
tion. This approach is consistent with the
statute and simplifies the calculation for
the owner and prevents uncertainty that
would otherwise arise from allocations to
rehearsal and other preproduction activi-
ties.
Special Rules
The final regulations clarify that an
owner must recapture the entire amount of
any section 181 deduction when the owner
sells a production prior to the initial re-
lease or broadcast in order to preserve the
buyer’s ability to deduct the acquisition
cost of the production under section 181.
Effective/Applicability Date
These final regulations apply to
qualified film and television produc-
tions for which principal photography
or, for an animated production, in-be-
tween animation, commenced on or after
September 29, 2011. The owner of a
qualified film or television production
for which principal photography or, for
an animated production, in-between
animation, commenced on or after
October 22, 2004, and before February 9,
2007, or on or after January 1, 2009, and
before September 29, 2011, may apply
the proposed regulations published on
February 9, 2007, or, in the alternative,
may apply these final regulations.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been deter-
minedthatsection553(b)and(d)ofthe
Administrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these reg-
ulations. It is hereby certified that this
regulation will not have a significant eco-
nomic impact on a substantial number of
small entities. The final regulations im-
pose a collection of information on small
entities in order to demonstrate eligibil-
ity for tax benefits under the statute, and
this collection of information will require
recordkeeping. This collection of informa-
tion is discussed elsewhere in this pream-
ble. However, the recordkeeping required
by this collection of information does not
differ significantly from the recordkeeping
that a taxpayer must perform in order to de-
termine whether the taxpayer is eligible to
claim a deduction under the statute. Con-
sequently, the economic impact on small
entities resulting from the recordkeeping
required under this regulation isde min-
imis. Accordingly, a regulatory flexibility
analysis is not required. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
the notice of proposed rulemaking preced-
ing these final regulations was submitted
to the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business.
Drafting Information
The principal author of these regula-
tions is Bernard P. Harvey, Office of Asso-
ciate Chief Counsel (Income Tax and Ac-
counting). However, other personnel from
the IRS and the Treasury Department par-
ticipated in their development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 602
are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.181–0 is added to read
as follows:
§1.181–0 Table of contents.
This section lists the table of contents
for §§1.181–1 through 1.181–6.
§1.181–1 Deduction for qualified film and
television production costs.
(a) Deduction.
(1) In general.
(2) Owner.
(3) Production costs.
(4) Aggregate production costs.
(5) Pre-amendment production.
(6) [Reserved].
(7) Initial release or broadcast.
(8) Special rule.
(b) Limit on amount of aggregate pro-
duction costs and amount of deduction.
(1) In general.
(i) Pre-amendment production.
(ii) [Reserved].
(iii) Special rules.
(2) Higher limit for productions in cer-
tain areas.
(i) In general.
(ii) Significantly paid or incurred for
live action productions.
2011–47 I.R.B.776November 21, 2011

(iii) Significantly paid or incurred for
animated productions.
(iv) Significantly paid or incurred for
productions incorporating both live action
and animation.
(v) Establishing qualification.
(vi) Allocation.
(c) Effect on depreciation or amortiza-
tion of a qualified film or television pro-
duction.
(1) Pre-amendment production.
(2) [Reserved].
§1.181–2 Election to deduct production
costs.
(a) Election.
(1) In general.
(2) Exception.
(b) Time of making election.
(1) In general.
(2) Special rule.
(3) Six-month extension.
(c) Manner of making election.
(1) In general.
(2) Information required.
(i) Initial election.
(ii) Subsequent taxable years.
(3) Deductions by more than one per-
son.
(d) Revocation of election.
(1) In general.
(2) Consent granted.
§1.181–3 Qualified film or television
production.
(a) In general.
(b) Production.
(1) In general.
(2) Special rules for television produc-
tions.
(3) Exception for certain sexually ex-
plicit productions.
(c) Compensation.
(d) Qualified compensation.
(e) Special rule for acquired produc-
tions.
(f) Other definitions.
(1) Actors.
(2) Production personnel.
(3) United States.
§1.181–4 Special rules.
(a) Recapture.
(1) Applicability.
(i) In general.
(ii) Special rule.
(2) Principal photography not com-
mencing prior to the date of expiration of
section 181.
(3) Amount of recapture.
(b) Recapture under section 1245.
§1.181–5 Examples.
§1.181–6 Effective/applicability date.
(a) In general.
(b) Application of proposed regulations
to pre-effective date productions.
(c) Application of §§1.181–1 through
1.181–5 to certain pre-effective date pro-
ductions.
§1.181–0T [Removed]
Par. 3. Section 1.181–0T is removed.
Par. 4. Section 1.181–1 is added to read
as follows:
§1.181–1 Deduction for qualified film and
television production costs.
(a)Deduction—(1)In general.(i)An
owner (as defined in paragraph (a)(2)
of this section) of any film or televi-
sion production (production, as defined
in §1.181–3(b)) that the owner reason-
ably expects will be,upon completion, a
qualified film or television production (as
defined in §1.181–3(a)) may elect to treat
production costs paid or incurred by that
owner (subject to the limits imposed under
paragraph (b) of this section) as an expense
that is deductible for the taxable year in
which the costs are paid (for an owner who
uses the cash receipts and disbursements
method of accounting) or incurred (for
an owner who uses an accrual method of
accounting). The deduction under section
181 is subject to recapture if the owner’s
expectations are later determined to be
inaccurate.
(ii) This section provides rules for de-
termining the owner of a production, the
production costs (as defined in paragraph
(a)(3) of this section), and the maximum
amount of aggregate production costs (as
defined in paragraph (a)(4) of this sec-
tion) that may be paid or incurred for a
pre-amendment production (as defined
in paragraph (a)(5) of this section) for
which the owner makes an election under
section 181. Section 1.181–2 provides
rules for making the election under section
181. Section 1.181–3 provides definitions
and rules concerning qualified film and
television productions. Section 1.181–4
provides special rules, including rules
for recapture of the deduction. Section
1.181–5 provides examples of the applica-
tion of §§1.181–1 through 1.181–4, while
§1.181–6 provides the effective date of
§§1.181–1 through 1.181–5.
(2)Owner. (i) For purposes of this sec-
tion and §§1.181–2 through 1.181–6, an
owner of a production is any person that
is required under section 263A to capital-
ize the costs of producing the production
into the cost basis of the production, or that
wouldberequiredtodosoifsection263A
applied to that person.
(ii) Further, a person that acquires a
finished or partially-finished production is
treated as an owner of that production for
purposes of this section and §§1.181–2
through 1.181–6, but only if the produc-
tion is acquired prior to its initial release or
broadcast (as defined in paragraph (a)(7)
of this section). Moreover, a person that
acquires only a limited license or right to
exploit a production, or receives an interest
or profit participation in a production, as
compensation for services, is not an owner
of the production for purposes of this sec-
tion and §§1.181–2 through 1.181–6.
(3)Production costs. (i) For purposes
of this section and §§1.181–2 through
1.181–6, the termproduction costsmeans
all costs that are paid or incurred by an
owner in producing a production that are
required, absent the provisions of sec-
tion 181, to be capitalized under section
263A, or that would be required to be
capitalized if section 263A applied to the
owner, and, if applicable, all costs that are
paid or incurred by an owner in acquir-
ing a production prior to its initial release
or broadcast. Production costs include,
but are not limited to, participations and
residuals paid or incurred, compensation
paid or incurred for services, compensa-
tion paid or incurred for property rights,
non-compensation costs, and costs paid
or incurred in connection with obtaining
financing for the production (for example,
premiums paid or incurred to obtain a
completion bond for the production).
(ii) Production costs do not include
costs paid or incurred to distribute or ex-
ploit a production (including advertising
and print costs).
(iii) Production costs do not include
the costs to prepare a new release or new
November 21, 20117772011–47 I.R.B.

broadcast of an existing production after
the initial release or broadcast of the pro-
duction (for example, the preparation of
a DVD release of a theatrically-released
film, or the preparation of an edited ver-
sion of a theatrically-released film for
television broadcast). Costs paid or in-
curred to prepare a new release or a new
broadcast of a production after its initial
release or broadcast, therefore, are not
taken into account for purposes of para-
graph (b)(1) of this section, and may not
be deducted under this paragraph (a).
(iv) If a pre-amendment production is
acquired from any person prior to its initial
release or broadcast, the acquiring person
must use as its initial aggregate costs the
greater of —
(A) The cost of acquisition; or
(B) The seller’s aggregate production
costs.
(v) Production costs do not include
costs that the owner has deducted or begun
to amortize prior to the taxable year the
owner makes an election under §1.181–2
for the production (for example, costs de-
scribed in §1.181–2(a)(2)). These costs,
however, are included in aggregate pro-
duction costs to the extent they would
have been treated as production costs by
the owner notwithstanding this paragraph
(a)(3)(v).
(4)Aggregate production costs.The
termaggregate production costsmeans all
production costs described in paragraph
(a)(3) of this section paid or incurred by
any person, whether paid or incurred di-
rectly by an owner or indirectly on behalf
of an owner.
(5)Pre-amendment production.The
termpre-amendment productionmeans
a qualified film or television production
commencing after October 22, 2004, and
before January 1, 2008.
(6) [Reserved].
(7)Initial release or broadcast.Solely
for purposes of this section and §§1.181–2
through 1.181–6, the terminitial release or
broadcastmeans the first commercial ex-
hibition or broadcast of a production to an
audience. However, the term “initial re-
lease or broadcast” does not include lim-
ited exhibition prior to commercial exhibi-
tion to general audiences if the limited ex-
hibition is primarily for purposes of pub-
licity, marketing to potential purchasers or
distributors, determining the need for fur-
ther production activity, or raising funds
for the completion of production. For ex-
ample, the term initial release or broadcast
does not include exhibition to a test audi-
ence to determine the need for further pro-
duction activity, or exhibition at a film fes-
tival for promotional purposes, if the exhi-
bition precedes commercial exhibition to
general audiences.
(8)Special rule. The provisions of
this paragraph (a) apply notwithstanding
the treatment of participations and resid-
uals permitted under the income forecast
method in section 167(g)(7)(D).
(b)Limit on amount of aggregate
production costs and amount of deduc-
tion—(1)In general—(i)Pre-amendment
production. Except as provided under
paragraph (b)(2) of this section, no de-
duction is allowed under section 181 for
any pre-amendment production, the ag-
gregate production costs of which exceed
$15,000,000.See also paragraph (a)(3)(iv)
of this section. For a pre-amendment
production for which the aggregate pro-
duction costs do not exceed $15,000,000
(or, if applicable under paragraph (b)(2)
of this section, $20,000,000), an owner
may deduct under section 181 all of the
production costs paid or incurred by that
owner.
(ii) [Reserved].
(iii)Special rules. The owner’s deduc-
tion under section 181 is limited to the
owner’s acquisition costs of the production
plus any further production costs paid or
incurred by the owner. The deduction un-
der section 181 is not available for any por-
tion of the acquisition costs, and any sub-
sequent production costs, of a production
with an initial release or broadcast that is
prior to the date of acquisition.
(2)Higher limit for productions in cer-
tain areas—(i)In general. This section
is applied by substituting $20,000,000 for
$15,000,000 in paragraph (b)(1) of this
section for any production the aggregate
production costs of which are significantly
paid or incurred in an area eligible for des-
ignation as—
(A) A low income community under
section 45D; or
(B) A distressed county or isolated
area of distress by the Delta Regional Au-
thority establishedunder 7 U.S.C section
2009aa–1.
(ii)Significantly paid or incurred for
live action productions. The aggregate
production costs of a live action produc-
tion are significantly paid or incurred
within one or more areas specified in para-
graph (b)(2)(i) of this section if—
(A) At least 20 percent of the aggregate
production costs paid or incurred in con-
nection with first-unit principal photogra-
phy for the production are paid or incurred
in connection with first-unit principal pho-
tography that takes place in such areas; or
(B) At least 50 percent of the total num-
ber of days of first-unit principal photog-
raphy for the production consists of days
during which first-unit principal photogra-
phy takes place in such areas.
(iii)Significantly paid or incurred for
animated productions. For purposes of an
animated production, the aggregate pro-
duction costs of the production are sig-
nificantly paid or incurred within one or
more areas specified inparagraph (b)(2)(i)
of this section if—
(A) At least 20 percent of the aggregate
production costs paid or incurred in con-
nection with keyframe animation, in-be-
tween animation, animation photography,
and the recording of voice acting perfor-
mances for the production are paid or in-
curred in connection with such activities
that take place in such areas; or
(B) At least 50 percent of the total num-
ber of days of keyframe animation, in-be-
tween animation, animation photography,
and the recording of voice acting perfor-
mances for the production consists of days
during which such activities take place in
such areas.
(iv)Significantly paid or incurred for
productions incorporating both live action
and animation. For purposes of a produc-
tion incorporating both live action and an-
imation, the aggregate production costs of
the production are significantly paid or in-
curred within one or more areas specified
in paragraph (b)(2)(i) of this section if—
(A) At least 20 percent of the aggregate
production costs paid or incurred in con-
nection with first-unit principal photogra-
phy, keyframe animation, in-between an-
imation, animation photography, and the
recording of voice acting performances for
the production are paid or incurred in con-
nection with such activities that take place
in such areas; or
(B) At least 50 percent of the total
number of days of first-unit principal pho-
tography, keyframe animation, in-between
animation, animation photography, and
the recording of voiceacting performances
2011–47 I.R.B.778November 21, 2011

for the production consists of days during
which such activities take place in such
areas.
(v)Establishing qualification.An
owner intending to utilize the higher ag-
gregate production costs limit under this
paragraph (b)(2) must establish qualifica-
tion under this paragraph (b)(2).
(vi)Allocation. Solely for purposes of
determining whether a production quali-
fies for the higher aggregate production
costs limit provided under this para-
graph (b)(2), compensation (as defined
in §1.181–3(c)) to actors (as defined in
§1.181–3(f)(1)), directors, producers, and
other production personnel (as defined
in §1.181–3(f)(2)) isallocated entirely to
first-unit principal photography.
(c)Effect on depreciation or amortiza-
tion of a qualified film or television pro-
duction—(1)Pre-amendment production.
Except as provided in §§1.181–1(a)(3)(v)
and 1.181–2(a)(2), an owner that elects to
deduct production costs under section 181
for a pre-amendment production may not
deduct production costs for that production
under any provision of the Internal Rev-
enue Code other than section 181 unless
the recapture requirements of §1.181–4(a)
apply to the production.
(2) [Reserved].
§1.181–1T [Removed]
Par. 5. Section 1.181–1T is removed.
Par. 6. Section 1.181–2 is added to read
as follows:
§1.181–2 Election to deduct production
costs.
(a)Election—(1)In general. Except as
provided in paragraph (a)(2) of this sec-
tion,anownermaymakeanelectionun-
der section 181 to deduct production costs
of a production only if that owner has not
deducted in a previous taxable year any
production costs for that production un-
der any provision of the Internal Revenue
Code (Code) other than section 181.
(2)Exception.Anownermaymakean
election under section 181 despite prior de-
ductions under any other provision of the
Code for amortization of the costs of ac-
quiring or developing screenplays, scripts,
story outlines, motion picture production
rights to books and plays, and other simi-
lar properties for purposes of potential fu-
ture development or production of a pro-
duction, if such costs were paid or incurred
before the first taxable year for which an
election may be made under §1.181–2(b)
and are included in aggregate production
costs.
(b)Time of making election—(1)In
general. The election to deduct production
costs for a production under section 181
must be made by the due date (including
any extension) for filing the owner’s Fed-
eral income tax return for the first taxable
year in which:
(i) Any aggregate production costs have
been paid or incurred;
(ii) The owner reasonably expects
(based on all of the facts and circum-
stances) that the production will be set for
production and will, upon completion, be
a qualified film or television production;
and
(iii) For any pre-amendment produc-
tion, the owner reasonably expects (based
on all of the facts and circumstances) that
the aggregate production costs paid or in-
curred for the pre-amendment production
will, at no time, exceed the applicable ag-
gregate production costs limit set forth un-
der §1.181–1(b)(1)(i) or (b)(2).
(2)Special rule. If paragraph (b)(1)
of this section is not satisfied until a tax-
able year subsequent to the taxable year
in which any aggregate production costs
were first paid or incurred, the owner must
make the election for the taxable year in
which paragraph (b)(1) of this section is
first satisfied, and any production costs
paid or incurred prior to the taxable year
in which the owner makes the election and
not deducted in a prior taxable year are
treated as production costs (except costs
described in §1.181–2(a)(2)) that are de-
ductible under §1.181–1(a)(1)(i) for the
taxable year paragraph (b)(1) of this sec-
tion is first satisfied and the election is
made.
(3)Six-month extension.See
§301.9100–2 for a six-month extension
of time to make the election in certain
circumstances.
(c)Manner of making election—(1)In
general. An owner must make the elec-
tion under section 181 separately for each
production. For a production owned by an
entity, the election must be made by the
entity. For example, if the production is
owned by a partnership or S corporation,
the partnership or S corporation must make
the election.
(2)Information required—(i)Initial
election. For each production to which the
election applies, the owner must attach a
statement to the owner’s Federal income
tax return for the taxable year of the elec-
tion stating that the owner is making an
election under section 181 and provid-
ing—
(A) The name (or other unique identify-
ing designation) of the production;
(B) The date aggregate production costs
were first paid or incurred for the produc-
tion;
(C) The amount of aggregate produc-
tion costs paid or incurred for the pro-
duction during the taxable year (including
costs described in §§1.181–1(a)(3)(v) and
1.181–2(b)(2));
(D) The amount of qualified compen-
sation (as defined in §1.181–3(d)) paid
or incurred for the production during the
taxable year (including costs described in
§1.181–2(b)(2));
(E) The amount of compensation
(as defined in §1.181–3(c)) paid or in-
curred for the production during the tax-
able year (including costs described in
§1.181–2(b)(2));
(F) If the owner expects that the ag-
gregate production costs of the production
will be significantly paid or incurred in
(or, if applicable, if a significant portion
of the total number of days of first-unit
principal photography will occur in)
one or more of the areas specified in
§1.181–1(b)(2)(i), the identity of the area
or areas, the amount of aggregate pro-
duction costs paid or incurred (or the
number of days of first-unit principal pho-
tography engaged in) for the applicable
activities described in §1.181–1(b)(2)(ii),
(b)(2)(iii), or (b)(2)(iv), as applicable, that
took place within such areas (including
costs described in §§1.181–1(a)(3)(v) and
1.181–2(b)(2)), and the aggregate produc-
tion costs paid or incurred (or the total
number of days of first-unit principal pho-
tography engaged in) for such activities
(whether or not they took place in such
areas), for the taxable year (including
costs described in §§1.181–1(a)(3)(v) and
1.181–2(b)(2));
(G) A declaration that the owner rea-
sonably expects (based on all of the facts
and circumstances at the time the election
is made) both that the production will be
November 21, 20117792011–47 I.R.B.

set for production (or has been set for pro-
duction) and will be a qualified film or
television production; and
(H) For any pre-amendment produc-
tion, a declaration that the owner reason-
ably expects (based on all of the facts and
circumstances at the time the election is
made) that the aggregate production costs
paid or incurred for the pre-amendment
production will not, at any time, exceed
the applicable aggregate production costs
limit set forth under §1.181–1(b)(1)(i) or
(b)(2).
(ii)Subsequent taxable years.Ifthe
owner pays or incurs additional production
costs in any taxable year subsequent to the
taxable year for which production costs are
first deducted under section 181, the owner
must attach a statement to its Federal in-
come tax return for that subsequent taxable
year providing—
(A) The name (or other unique identify-
ing designation) of the production that was
used in the initial election, and any revised
name (or unique identifying designation)
subsequently used for the production;
(B) The date the aggregate production
costs were first paid or incurred for the
production;
(C) The amount of aggregate produc-
tion costs paid or incurred for the produc-
tion during the current taxable year;
(D) The amount of qualified compen-
sation paid or incurred for the production
during the current taxable year;
(E) The amount of compensation paid
or incurred for the production during the
current taxable year, and the aggregate
amount of compensation paid or incurred
for the production in all prior taxable
years;
(F) If the owner expects that the ag-
gregate production costs of the production
will be significantly paid or incurred in
(or, if applicable, if a significant portion
of the total number of days of first-unit
principal photography will occur in)
one or more of the areas specified in
§1.181–1(b)(2)(i), the identity of the area
or areas, the amount of aggregate produc-
tion costs paid or incurred (or the number
of days of first-unit principal photography
engaged in) for the applicable activities
described in §1.181–1(b)(2)(ii), (b)(2)(iii),
or (b)(2)(iv), as applicable, that took place
within such areas, and the aggregate pro-
duction costs paid or incurred (or the
number of days of first-unit principal pho-
tography engaged in) for such activities
(whether or not they took place in such
areas), for the current taxable year;
(G) A declaration that the owner contin-
ues to reasonably expect (based on all of
the facts and circumstances at the end of
the current taxable year) both that the pro-
duction will be set for production (or has
been set for production) and will be a qual-
ified film or television production; and
(H) For any pre-amendment produc-
tion, a declaration that the owner continues
to reasonably expect (based on all of the
facts and circumstances at the end of the
current taxable year) that the aggregate
production costs paid or incurred for the
pre-amendment production will not, at
any time, exceed the applicable aggre-
gate production costs limit set forth under
§1.181–1(b)(1)(i) or (b)(2).
(3)Deductions by more than one per-
son. If more than one person will claim
deductions under section 181 with respect
to the production for the taxable year, each
person claiming the deduction (but not the
members of an entity who are issued a
Schedule K–1 by the entity with respect
to their interest in the production) must
provide a list of the names and taxpayer
identification numbers of all such persons,
the dollar amount that each such person
will deduct under section 181, and the in-
formation required by paragraph (c)(2) of
this section for all such persons. Notwith-
standing the preceding sentence, whether
or not multiple persons form a partnership
with respect to the production will be de-
termined in accordance with §301.7701–3
of this chapter.
(d)Revocation of election—(1)In gen-
eral. An owner may revoke an election
made under this section only with the con-
sent of the Commissioner.Except as pro-
vided in paragraph (d)(2) of this section,
an owner seeking consent to revoke an
election made under this section must sub-
mit a letter ruling request, other than a
Form 3115,“Application for Change in
Accounting Method,”under the appropri-
ate revenue procedure. See, for example,
Rev. Proc. 2011–1, 2011–1 C.B. 1 (up-
dated annually) (see §601.601(d)(2)(ii)(b)
of this chapter).
(2)Consent granted.TheCommis-
sioner grants consent to an owner to revoke
an election under this section for a partic-
ular production if the owner—
(i) Complies with the recapture provi-
sions of §1.181–4(a)(3) on a timely filed
(including any extension) original Federal
income tax return for the taxable year of
the revocation; and
(ii) Attaches a statement to that Federal
income tax return that includes the name
of the production that was in the owner’s
original election statement, and any re-
vised name (or other unique identifying
designation) of the production, and a state-
ment that the owner revokes the election
under section 181 for that production, pur-
suant to §1.181–2(d)(2).
§1.181–2T [Removed]
Par. 7. Section 1.181–2T is removed.
Par. 8. Section 1.181–3 is added to read
as follows:
§1.181–3 Qualified film or television
production.
(a)In general.Thetermqualified film
or television productionmeans any pro-
duction (as defined in paragraph (b) of this
section) for which not less than 75 per-
cent of the aggregate amount of compen-
sation (as defined in paragraph (c) of this
section) paid or incurred for the produc-
tion is qualified compensation (as defined
in paragraph (d) of this section).
(b)Production—(1)In general. Except
as provided in paragraph (b)(3) of this
section, for purposes of this section and
§§1.181–1, 1.181–2, 1.181–4, 1.181–5,
and 1.181–6, the termproductionmeans
any motion picture film or video tape
(including digital video) production the
production costs of which are subject to
capitalization under section 263A, or that
would be subject to capitalization if sec-
tion 263A applied to the owner of the
production. If, prior to its initial release
or broadcast, a person acquires a com-
pleted motion picture film or video tape
(including digital video) that the seller
was entitled to treat as a production under
this paragraph (b)(1), then the new owner
may treat the acquired asset as a produc-
tion within the meaning of this paragraph
(b)(1).
(2)Special rules for television produc-
tions. Each episode of a television series
is a separate production to which the rules,
limits, and election requirements of this
section and §§1.181–1, 1.181–2, 1.181–4,
1.181–5, and 1.181–6 apply. An owner
2011–47 I.R.B.780November 21, 2011

may elect to deduct production costs under
section 181 only for the first 44 episodes
of a television series (including pilot
episodes).A television series may include
more than one season of programming.
(3)Exception for certain sexually ex-
plicit productions. A production does not
include property for which records are re-
quired to be maintained under 18 U.S.C.
2257.
(c)Compensation.Thetermcompen-
sationmeans, for purposes of this section
and §1.181–2(c)(2), all amounts paid or
incurred either directly by the owner or
indirectly on the owner’s behalf for ser-
vices performed by actors (as defined in
paragraph (f)(1) of this section), directors,
producers, and other production personnel
(as defined in paragraph (f)(2) of this sec-
tion) for the production. Examples of in-
direct payments paid or incurred on the
owner’s behalf are payments by a partner
on behalf of an owner that is a partner-
ship, payments by a shareholder on be-
half of an owner that is a corporation, and
payments by a contract producer on be-
half of the owner. Payments for services
are all elements of compensation as pro-
vided for in §§1.263A–1(e)(2)(i)(B) and
(e)(3)(ii)(D). Compensation is not limited
to wages reported on Form W–2,“Wage
and Tax Statement,”and includes compen-
sation paid or incurred to independent con-
tractors. However, solely for purposes
of paragraph (a) of this section, the term
“compensation” does not include partici-
pations and residuals (as defined in sec-
tion 167(g)(7)(B)). See §1.181–1(a)(3) for
additional rules concerning participations
and residuals.
(d)Qualified compensation.Theterm
qualified compensationmeans, for pur-
poses of this section and §1.181–2(c)(2),
all compensation (as defined in paragraph
(c) of this section) paid or incurred for
services performed in the United States
(as defined in paragraph (f)(3) of this sec-
tion) by actors, directors, producers, and
other production personnel for the pro-
duction. A service is performed in the
United States for purposes of this para-
graph (d) if the principal photography to
which the compensated service relates
occurs within the United States and the
person performing the service is physi-
cally present in the United States. For
purposes of an animated film or animated
television production, the location where
production activities such as keyframe
animation, in-between animation, anima-
tion photography, and the recording of
voice acting performances are performed
is considered in lieu of the location of
principal photography. For purposes of
a production incorporating both live ac-
tion and animation, the location where
production activities such as keyframe an-
imation, in-between animation, animation
photography, and the recording of voice
acting performances for the production is
considered in addition to the location of
principal photography.
(e)Special rule for acquired produc-
tions. A person who acquires a produc-
tion from a prior owner must take into ac-
count all compensation paid or incurred by
or on behalf of the seller and any previ-
ous owners in determining if the produc-
tion is a qualified film or television pro-
duction as defined in paragraph (a) of this
section. Any owner that elects to deduct
as production costs the costs of acquiring
a production and any subsequent produc-
tion costs must obtain from the seller de-
tailed records concerning the compensa-
tion paid or incurred for the production
and, for a pre-amendment production, con-
cerning aggregate production costs, in or-
der to demonstrate the eligibility of the
production under section 181.
(f)Other definitions. The following
definitions apply for purposes of this sec-
tion and §§1.181–1, 1.181–2, 1.181–4,
1.181–5, and 1.181–6:
(1)Actors.Thetermactorsmeans play-
ers, newscasters, or any other persons who
are compensated for their performance or
appearance in a production.
(2)Production personnel.Theterm
production personnelmeans persons who
are compensated for providing services
directly related to the production, such
as writers, choreographers, composers,
casting agents, camera operators, set de-
signers, lighting technicians, and make-up
artists.
(3)United States.ThetermUnited
Statesmeans the 50 states, the District
of Columbia, the territorial waters of the
continental United States, the airspace or
space over the continental United States
and its territorial waters, and the seabed
and subsoil of those submarine areas that
are adjacent to the territorial waters of the
continental United States and over which
the United States has exclusive rights, in
accordance with international law, for the
exploration and exploitation of natural re-
sources. The term “United States” does
not include possessions and territories of
the United States (or the airspace or space
over these areas).
§1.181–3T [Removed]
Par. 9. Section 1.181–3T is removed.
Par. 10. Section 1.181–4 is added to
read as follows:
§1.181–4 Special rules.
(a)Recapture—(1)Applicability—(i)
In general. The requirements of this para-
graph (a) apply notwithstanding whether
an owner has satisfied the revocation re-
quirements of §1.181–2(d). An owner that
claimed a deduction under section 181
for a production in any taxable year in
an amount in excess of the amount that
would be allowable as a deduction for that
year in the absence of section 181 must
recapture the excess amount as provided
for in paragraph (a)(3) of this section for
the production in the first taxable year for
which—
(A) For any pre-amendment produc-
tion, the aggregate production costs of
the production exceed the applicable
aggregate production costs limit under
§1.181–1(b)(1)(i) or (b)(2);
(B) For any pre-amendment produc-
tion, the owner no longer reasonably
expects (based on all of the facts and
circumstances at the end of the current
taxable year) that the aggregate produc-
tion costs of the production will not, at
any time, exceed the applicable aggre-
gate production costs limit set forth under
§1.181–1(b)(1)(i) or (b)(2);
(C) The owner no longer reasonably ex-
pects (based on all of the facts and circum-
stances at the end of the current taxable
year) either that the production will be set
for production or that the production will
be a qualified film or television produc-
tion; or
(D) The owner revokes the election pur-
suant to §1.181–2(d).
(ii)Special rule. An owner that claimed
a deduction under section 181 and disposes
of the production prior to its initial re-
lease or broadcast must recapture the entire
amount specified under paragraph (a)(3) of
this section in the year the owner disposes
November 21, 20117812011–47 I.R.B.

of the production before computing gain or
loss from the disposition.
(2)Principal photography not com-
mencing prior to the date of expiration of
section 181. If an owner claims a deduc-
tion under section 181 for a production
for which principal photography does not
commence prior to the date of expiration
of section 181, the owner must recapture
deductions as provided for in paragraph
(a)(3) of this section in the owner’s taxable
year that includes the date of expiration of
section 181.
(3)Amount of recapture.Anowner
subject to the recapture requirements un-
der this section must, for the taxable year
in which recapture is required, include in
the owner’s gross income as ordinary in-
come and add to the owner’s adjusted ba-
sis in the property—
(i) For a production that is placed in ser-
vice in a taxable year prior to the taxable
year for which recapture is required, the
difference between the aggregate amount
the owner claimed as a deduction un-
der section 181 for the production for all
such prior taxableyears and the aggre-
gate depreciation deductions that would
have been allowable for the production for
such prior taxable years (or that the owner
could have elected todeduct in the taxable
year that the production was placed in ser-
vice) for the production under the owner’s
method of accounting; or
(ii) For a production that has not been
placed in service, the aggregate amount
claimed as a deduction under section 181
for the production for all such prior taxable
years.
(b)Recapture under section 1245.For
purposes of recapture under section 1245,
any deduction allowed under section 181 is
treated as a deduction allowable for amor-
tization.
§1.181–4T [Removed]
Par. 11. Section 1.181–4T is removed.
Par. 12. Section 1.181–5 is added to
read as follows:
§1.181–5 Examples.
The following examples illustrate the
application of §§1.181–1 through 1.181–4:
Example 1. X, a corporation that uses an ac-
crual method of accounting and files Federal income
tax returns on a calendar-year basis, is a producer
of films. X is the owner (within the meaning of
§1.181–1(a)(2)) of film ABC. X incurs production
costs in year 1, but does not commence principal pho-
tography for film ABC until year 2. In year 1, X
reasonably expects, based on all of the facts and cir-
cumstances, that film ABC will be set for produc-
tion and will be a qualified film or television produc-
tion. Provided that X satisfies all other requirements
of §§1.181–1 through 1.181–4 and §1.181–6, X may
deduct in year 1 the production costs for film ABC
that X incurred in year 1.
Example 2. The facts are the same as inExample
1. In year 2, X begins, but does not complete, prin-
cipal photography for film ABC. Most of the scenes
that X films in year 2 are shot outside the United
States and, as of December 31, year 2, less than 75
percent of the total compensation paid for film ABC
is qualified compensation. Nevertheless, X still rea-
sonablyexpects,basedonallofthefactsandcir-
cumstances, that film ABC will be a qualified film
or television production. Provided that X satisfies
all other requirements of §§1.181–1 through 1.181–4
and §1.181–6, X may deduct in year 2 the production
costs for film ABC that X incurred in year 2.
Example 3. The facts are the same as inExam-
ple 2. In year 3, X continues, but does not complete,
production of film ABC. Due to changes in the ex-
pected production costs of film ABC, X no longer
expects film ABC to qualify under section 181. X
files a statement with its return for year 3 identifying
the film and stating that X revokes its election under
section 181. X includes in income in year 3 the de-
ductions claimed in year 1 and in year 2 as provided
for in §1.181–4(a)(3). X has successfully revoked its
election pursuant to §1.181–2(d).
§1.181–5T [Removed]
Par. 13. Section 1.181–5T is removed.
Par. 14. Section 1.181–6 is added to
read as follows:
§1.181–6 Effective/applicability date.
(a)In general. Sections 1.181–1
through 1.181–5 apply to produc-
tions, the first day of principal pho-
tography for which occurs on or after
September 29, 2011. For an animated
production, this paragraph (a) applies
by substituting “in-between animation”
in place of “principal photography”.
Productions involving both animation and
live-action photography may use either
standard.
(b)Application of proposed regulations
to pre-effective date productions. Except
as provided in paragraph (c) of this section,
an owner may apply 26 CFR 1.181.1T
through 1.181–5T (as contained in 26 CFR
part 1 revised April 1, 2008) to produc-
tions, the first day of principal photogra-
phy (or in-between animation) for which
occurs on or after October 22, 2004, and
before February 9, 2007, or on or after Jan-
uary 1, 2009, and before September 29,
2011,provided that the owner applies all
provisions of the proposed regulations to
the productions.
(c)Application of §§1.181–1 through
1.181–5 to certain pre-effective date pro-
ductions. An owner may apply §§1.181–1
through 1.181–5 to productions, the first
day of principal photography (or in-be-
tween animation) for which occurs on or
after February 9, 2007, and before Septem-
ber 29, 2011, provided that the owner ap-
plies all provisions of §§1.181–1 through
1.181–5 to the productions.
§1.181–6T [Removed]
Par. 15. Section 1.181–6T is removed.
PART 602—OMB CONTROL
NUMBERS UNDER THE PAPERWORK
REDUCTION ACT
Par. 16. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 17. In §602.101, paragraph (b) is
amended as follows:
1. The following entries to the table are
removed:
§602.101 OMB Control numbers.
*****
(b) * * *
2011–47 I.R.B.782November 21, 2011

CFR part or sect
ion where
identified and
described
Current OMB
Control No.
*****
1.181–1Tand1.181–2T...........................................................
1545–2059
*****
2. The following entries are added in
numerical order to table:
§602.101 OMB Control numbers.
*****
(b) * * *
CFR part or section where
identified and described
Current OMB
Control No.
*****
1.181–1...........................................................
1545–2059
1.181–2...........................................................
1545–2059
1.181–3...........................................................
1545–2059
*****
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved September 19, 2011.
Emily S. McMahon,
Acting Assistant Secretary of
theTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on
September 29, 2011, 8:45 a.m., and published in the issue of
the Federal Register for September 30, 2011, 76 F.R. 60721)
T.D. 9552
Deduction for Qualified Film
and Television Production
Costs
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and temporary regula-
tions.
SUMMARY: This document contains final
and temporary regulations relating to de-
ductions for the cost of producing film and
television productions. These temporary
regulations reflect changes to the law made
by the Tax Extenders and Alternative Min-
imum Tax Relief Act of 2008, and affect
taxpayers that produce films and television
productions within the United States. The
text of these temporary regulations also
serves as the text of the proposed regula-
tions (REG–146297–09) set forth in this
issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on October 18, 2011.
Applicability Dates:For dates of appli-
cability, see §1.181–6T.
FOR FURTHER INFORMATION
CONTACT: Bernard P. Harvey, (202)
622–4930 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to
26 CFR part 1 to provide regulations under
section 181 of the Internal Revenue Code
of 1986 (Code). Section 181 permits the
deduction of certain production costs by
the producer of a qualified film or televi-
sion production.
Section 181 was added to the Code by
section 244 of the American Jobs Creation
Act of 2004, Public Law No. 108–357
(118 Stat. 1418) (October 22, 2004), and
was modified by section 403(e) of the Gulf
Opportunity Zone Act of 2005, Public Law
No. 109–135 (119 Stat. 2577) (Decem-
ber 21, 2005). Section 502 of the Tax Ex-
tenders and Alternative Minimum Tax Re-
lief Act of 2008, Public Law No. 110–343
(122 Stat. 3765) (October 3, 2008) fur-
ther modified section 181 for film and tele-
vision productions commencing after De-
cember 31, 2007, and extended section 181
to film and television productions com-
mencing before January 1, 2010. Section
181 was extended again to film and televi-
sion productions commencing before Jan-
uary 1, 2012, by section 744 of the Tax Re-
lief, Unemployment Insurance Reautho-
rization, and Job Creation Act of 2010,
Public Law No. 111–312 (December 17,
2010).
On September 30, 2011, the IRS and
the Treasury Department published in
theFederal Register(T.D. 9551 [76 FR
60721]) final regulations relating to de-
ductions for the cost of producing film and
television productions under section 181
as enacted by the American Jobs Creation
Act of 2004 and modified by the Gulf
Opportunity Zone Act of 2005.
Explanation of Provisions
Section 181 permits an owner of a qual-
ified film or television production to elect
to deduct production costs paid or incurred
by that owner for the year the costs are
paid or incurred, in lieu of capitalizing the
costs and recovering them through depre-
ciation allowances. For a qualified film or
television production that commenced be-
fore January 1, 2008 (a “pre-amendment
production”), this deduction is available
only if the aggregate production costs paid
or incurred by all owners do not exceed
$15 million ($20 million if a significant
November 21, 20117832011–47 I.R.B.

amount of the production costs are paid
or incurred in certaindesignated areas) for
each qualified production (the “aggregate
production costs limit”). For productions
commencing on or after January 1, 2008,
the aggregate production costs limit does
not apply; instead, the aggregate deduc-
tion under section 181 for production costs
paid or incurred by all owners of a qual-
ified film or television production is lim-
ited to $15 million ($20 million if a sig-
nificant amount of the production costs are
incurred in certain designated areas) for
each qualified production (the “deduction
limit”). A film or television production
(“production”) is a qualified film or tele-
vision production ifat least 75 percent of
the total compensation of the production
is compensation for services performed in
the United States by actors, directors, pro-
ducers, and other production personnel.
These temporary regulations amend
§1.181–1 to define the term “post-amend-
ment production” and specify that the
aggregate deduction under section 181
(rather than the amount of aggregate pro-
duction costs) is subject to the dollar limits
imposed under §1.181–1(b). The tempo-
rary regulations also amend §§1.181–0
(table of contents) and 1.181–6 (effective
date provisions).
Effective Date
These temporary regulations apply to
qualified film and television productions
for which principal photography or, for
an animated production, in-between ani-
mation, commenced on or after October
18, 2011. An owner may choose to ap-
ply these temporary regulations to quali-
fied film or television productions com-
mencing on or after January 1, 2008, and
before October 18, 2011.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been determined
thatsection553(b)and(d)oftheAdmin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations. For
applicability of the Regulatory Flexibility
Act (5 U.S.C. chapter 6), please refer to
the Special Analyses section of the pre-
amble to the cross-reference notice of pro-
posedrulemakingpublishedinthisissueof
the Bulletin. Pursuant to section 7805(f)
of the Code, these temporary regulations
have been submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on its impact on
small business.
Drafting Information
The principal author of these regula-
tions is Bernard P. Harvey, Office of Asso-
ciate Chief Counsel (Income Tax and Ac-
counting). However, other personnel from
the IRS and the Treasury Department par-
ticipated in their development.
*****
Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.181–1 is amended
by revising paragraphs (a)(1)(ii), (a)(6),
(b)(1)(ii), (b)(2)(vi), and (c)(2) to read as
follows:
§1.181–1 Deduction for qualified film and
television production costs.
(a) * * *
(1) * * *
(ii)[Reserved]. For further guidance,
see §1.181–1T(a)(1)(ii).
*****
(6)[Reserved]. For further guidance,
see §1.181–1T(a)(6).
*****
(b) * * *
(1) * * *
(ii)[Reserved]. For further guidance,
see §1.181–1T(b)(1)(ii).
*****
(2) * * *
(vi)[Reserved]. For further guidance,
see §1.181–1T(b)(2)(vi).
*****
(c) * * *
(2)[Reserved]. For further guidance,
see §1.181–1T(c)(2).
*****
Par. 3. Section 1.181–0T is added to
read as follows:
§1.181–0T Table of contents (temporary).
This section lists the entries for
§§1.181–1T and 1.181–6T.
§1.181–1T Deduction for qualified
film and television production costs
(temporary).
(a) through (a)(5) [Reserved]. For fur-
ther guidance, see entries for §1.181–1(a)
through (a)(5).
(6) Post-amendment production.
(a)(7) through (b)(1)(i) [Reserved].
For further guidance, see entries for
§1.181–1(a)(7) through (b)(1)(i).
(ii) Post-amendment costs.
(b)(1)(iii) through (c)(1) [Reserved].
For further guidance, see entries for
§1.181–1(b)(1)(iii) through (c)(1).
(2) Post-amendment production.
§1.181–6T Effective/applicability dates
(temporary).
(a) In general.
(b) Application of temporary regula-
tions to pre-effectivedateproductions.
Par. 4. Section 1.181–1T is added to
read as follows:
§1.181–1T Deduction for qualified
film and television production costs
(temporary).
(a)(1)(i) [Reserved]. For further guid-
ance, see §1.181–1(a)(1)(i).
(ii) This section provides rules for
determining the owner of a production,
the production costs (as defined in para-
graph (a)(3) of this section), the maximum
amount of aggregate production costs (as
defined in paragraph (a)(4) of this sec-
tion) that may be paid or incurred for a
pre-amendment production (as defined in
paragraph (a)(5) of this section) for which
the owner makes an election under sec-
tion 181, and the maximum amount of
aggregate productioncoststhatmaybe
claimed as a deduction for a post-amend-
ment production (as defined in paragraph
(a)(6) of this section) for which the owner
makes an election under section 181. Sec-
tion 1.181–2 provides rules for making
the election under section 181. Section
1.181–3 provides definitions and rules
concerning qualified film and television
2011–47 I.R.B.784November 21, 2011

productions. Section 1.181–4 provides
special rules, including rules for recap-
ture of the deduction. Section 1.181–5
provides examples of the application
of §§1.181–1 through 1.181–4, while
§1.181–6 provides the effective date of
§§1.181–1 through 1.181–5.
(2) through (5) [Reserved]. For fur-
ther guidance, see §1.181–1(a)(2) through
(a)(5).
(6)Post-amendment production.The
termpost-amendment productionmeans
a qualified film or television production
commencing on or after January 1, 2008.
(7) [Reserved]. For further guidance,
see §1.181–1(a)(7) .
(b)(1)(i) [Reserved]. For further guid-
ance, see §1.181–1 (b)(1)(i).
(ii)Post-amendment production. Sec-
tion 181 permits a deduction for the first
$15,000,000 (or, if applicable under para-
graph (b)(2) of this section, $20,000,000)
of the aggregate production costs of any
post-amendment production.
(iii) [Reserved]. For further guidance,
see §1.181–1(b)(1)(iii).
(2)(i) through (v) [Reserved]. For
further guidance, see §1.181–1(b)(2)(i)
through (b)(2)(v).
(vi)Allocation. Solely for purposes of
determining whether a production quali-
fies for the higher production cost limit
(for pre-amendment productions) or de-
duction limit (for post-amendment pro-
ductions) provided under this paragraph
(b)(2), compensation to actors (as defined
in §1.181–3(f)(1)), directors, producers,
and other relevant production personnel
(as defined in §1.181–3 (f)(2)) is allocated
entirely to first-unit principal photography.
(c)(1) [Reserved]. For further guid-
ance, see §1.181–1(c)(1).
(2)Post-amendment production.
Amounts not allowable as a deduction
under section 181 for a post-amendment
production may be deducted under any
other applicable provision of the Code.
Par. 4. Section 1.181–6T is added to
read as follows:
§1.181–6T Effective/applicability dates
(temporary).
(a)In general. (1) Except as provided
in paragraph (b) of this section, §1.181–1T
applies to productions, the first day of
principal photography for which occurs on
or after October 18, 2011, and before the
date of expiration of section 181 as pro-
videdinsection181(f). Forananimated
production, this paragraph (a) applies by
substituting “in-between animation” in
place of “principal photography.” Pro-
ductions involving both animation and
live-action photography may use either
standard.
(2) The applicability of §1.181–1T ex-
pires on October 17, 2014.
(b)Application of temporary regula-
tions to pre-effective date productions.
An owner may apply §1.181–1T to pro-
ductions, the first day of principal pho-
tography (or “in-between” animation) for
which occurs after December 31, 2007,
and before October 18, 2011, provided
that the taxpayer applies all provisions
in §1.181–1T and in §§1.181–1 through
1.181–5 (other than provisions specific to
pre-amendment productions) to the pro-
ductions. If a taxpayer does not choose
to apply §1.181–1T to a production, the
first day of principal photography (or
“in-between” animation) for which oc-
curs after December 31, 2007, and before
October 18, 2011, then the taxpayer must
use a reasonable method to take into
account the statutory change to section 181
under section 502 of the Tax Extenders
and Alternative Minimum Tax Relief Act
of 2008. See §1.181–6.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved September 19, 2011.
Emily S. McMahon,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on October 18,
2011, 8:45 a.m., and published in the issue of the Federal
Register for October 19, 2011, 76 F.R. 64816)
Section 6707A.—Penalty
for Fai
lure to Include
Repor
table Transaction
Information With Return
26 CFR 301.6707A–1: Failure to include on any re-
turn or statement any information required to be dis-
closed under section 6011 with respect to a reportable
transaction.
T.D. 9550
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Section 6707A and the Failure
to Include on any Return or
Statement any Information
Required to be Disclosed
Under Section 6011 with
Respect to a Reportable
Transaction
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains
final regulations that provide guidance
regarding section 6707A of the Internal
Revenue Code (Code) with respect to
the penalties applicable to the failure to
include on any return or statement any
information required to be disclosed under
section 6011 with respect to a reportable
transaction. These final regulations reflect
amendments under the Small Business
Jobs Act of 2010 that revise the penalty
calculation.
DATES:Effective Date:These regulations
are effective on September 7, 2011.
Applicability Date:For dates of appli-
cability, see §301.6707A–1(f).
FOR FURTHER INFORMATION
CONTACT: Spence Hanemann, (202)
622–4940 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to
26 CFR part 301 under section 6707A of
the Code. On September 11, 2008, tempo-
rary regulations (T.D. 9425, 2008–2 C.B.
1100) relating to the penalty under section
6707A for the failure to include on any
November 21, 20117852011–47 I.R.B.

return or statement any information re-
quired to be disclosed under section 6011
with respect to a reportable transaction
were published in theFederal Register
(73 FR 52784). A notice of proposed rule-
making (REG–160868–04, 2008–2 C.B.
1115) cross-referencing the temporary
regulations was published in theFederal
Registeron the same day (73 FR 52805).
No public hearing was requested or held.
One written comment responding to the
notice of proposed rulemaking was re-
ceived from the public. This comment
was considered and is available for pub-
lic inspection atwww.regulations.govor
upon request. Upon due consideration,
the proposed regulations are adopted as
amended by this Treasury decision, and
the corresponding temporary regulations
are removed. The revisions are discussed
in this preamble.
Summary of Comments and
Explanation of Revisions
1.2010 Amendments to Section 6707A
On September 27, 2010, the Presi-
dent signed into law the Small Business
Jobs Act of 2010, Public Law 111–240
(124 Stat. 2504), section 2041 of which
amended section 6707A of the Code.
The amendments revise the amount of
the penalty to make the penalty propor-
tionate to the decrease in tax shown on
the return as a result of the reportable
transaction (or which would have re-
sulted from the reportable transaction if it
were respected for Federal tax purposes).
The amendments also establish maxi-
mum and minimum penalty amounts. The
amended penalty calculation was made
retroactive to penalties assessed after De-
cember 31, 2006. To account for the
change in the law, these final regulations
conform to the statutory language of sec-
tion 6707A, as amended. These changes
are reflected in §§301.6707A–1(a) and
301.6707A–1(e). These final regulations
follow the amended statutory language
regarding the amount of the penalty en-
acted in the Small Business Jobs Act of
2010, but do not give further guidance on
how the amount of the penalty is com-
puted. The Treasury Department and the
IRS are aware that questions have been
raised regarding the 2010 amendments to
section 6707A and expect to issue regu-
lations that will provide guidance on the
computation of the amount of the penalty,
as amended, at a later time. Interested
persons may submit comments regarding
the 2010 amendments to section 6707A
relating to the computation of the penalty,
including how to determine the decrease
in tax shown on the return and application
of the maximum penalty. For information
on how to submit comments, see the sec-
tion on “Comments on Future Notice of
Proposed Rulemaking” in this preamble.
The proposed regulations included fac-
tors the Commissioner would consider
and weigh in determining whether to grant
a request for rescission of the section
6707A penalty associated with a nonlisted
reportable transaction. Under the law in
effect at the time the proposed regulations
were issued, the section 6707A penalty
amount was a fixed dollar amount that did
not account for the tax benefit associated
with the reportable transaction. The pro-
posed regulations included consideration
of whether the penalty assessed was dis-
proportionately larger than the tax benefit
received among the factors in the Com-
missioner’s determination. Because the
2010 amendments to section 6707A pro-
vide that the penalty is a percentage of the
tax benefit associated with the reportable
transaction subject to maximum and min-
imum limitations on the penalty amounts,
consideration of whether the penalty as-
sessed is disproportionately larger than
the tax benefit received for purposes of
rescission was eliminated.
Also, at the time the proposed regula-
tions were issued, the section 6707A(e)
penalty for failing to disclose the require-
ment to pay certain penalties in certain Se-
curities and Exchange Commission (SEC)
filings was treated in the same way as the
penalty for failure to disclose a listed trans-
action as required under section 6011. Be-
cause a penalty for failing to disclose a
listed transaction is not subject to rescis-
sion, the proposed regulations stated that
the section 6707A(e) penalty for failing to
make a disclosure in an SEC filing also
was not subject to rescission. As a result
of the 2010 amendments to section 6707A,
the penalty for failure to make a disclo-
sure in an SEC filing is no longer treated
exclusively like a section 6707A penalty
for failure to disclose a listed transaction
as required by section 6011. These final
regulations adopt the rule that the section
6707A(e) penalty for failing to disclose
certain penalties in SEC filings will be re-
scinded if the IRS rescinds in full the sec-
tion 6707A penalty for failing to disclose
under section 6011 the reportable trans-
action that underlies the section 6707A(e)
penalty.
2.Clarifying Changes
The final regulations clarify where a
late Form 8886 should be filed in order
for the late submission to weigh in favor
of rescinding the penalty for not filing the
form as required by §1.6011–4. These
final regulations generally state that, if a
taxpayer inadvertently fails to file a Form
8886 as required by §1.6011–4 and, upon
becoming aware of the failure, files an un-
timely but otherwise complete and proper
Form 8886, the filing of the untimely dis-
closure statement will weigh in favor of
rescission. Under §1.6011–4, a taxpayer
who has participated in a reportable trans-
action must file a disclosure statement,
Form 8886,“Reportable Transaction Dis-
closure Statement,”providing detailed
information about the transaction and its
expected tax treatment and all potential
tax benefits. The taxpayer must attach a
Form 8886 to any tax return (including
any amended return or application for ten-
tative refund) that reflects participation in
a reportable transaction. At the same time
that the Form 8886 is first filed by the tax-
payer pertaining to a particular reportable
transaction, the taxpayer also must send a
copy of the Form 8886 to the Office of Tax
Shelter Analysis (OTSA). These final reg-
ulations generally provide that, in order to
weighinfavorofrescission,anuntimely
disclosure statement should be filed with
the office or offices where the disclosure
statement should have been filed in the
first instance. If the taxpayer failed to file
a disclosure statement with a return (in-
cluding an amended return or application
for tentative refund), the taxpayer must
file an amended return with the disclosure
statement so that the service center can
associate the untimely disclosure state-
ment with the proper return. The amended
return accompanying the untimely disclo-
sure statement must make no amendments
to the original return other than the inclu-
sion of the untimely disclosure statement.
Additionally, the taxpayer must state in
the space provided for an explanation of
2011–47 I.R.B.786November 21, 2011

changes on the amended return that it is
filing the amended return solely because it
failed to disclose a reportable transaction
on its original return. An example was
addedtothefinalregulationtoillustrate
these rules.
A clarifying change was also made
with respect to §1.6707A–1(d)(5) relating
to rescission. Reasonable cause and good
faith is a factor that may weigh in favor
of rescission. Part of a determination
whether reasonable cause and good faith
exist may depend upon whether a tax-
payer reasonably believed that the Code
did not require disclosure or disclosure
was adequately made. To acknowledge
that these are appropriate considerations, a
statement was added to the regulation that
the Commissioner may consider doubt as
to liability to the extent it is a factor in
the determination of reasonable cause and
good faith. Otherwise, the Commissioner
(or the Commissioner’s delegate) will
not consider doubt as to liability for the
penalties in determining whether to grant
rescission.
In addition to the changes described in
this preamble, these final regulations clar-
ify the language of the proposed regula-
tions in a few other ways not intended to
be substantive.
3.Clarification of Section 6011
References
A commenter suggested that references
to section 6011 be revised to reference ei-
ther §1.6011–4 or the other Code provi-
sions that deal specifically with reportable
transactions. In response to this comment
pinpoint citations to the regulations under
section6011wereaddedinsomeexam-
ples. The language used in section 6707A
refers to the general provision of section
6011 rather than to a specific regulatory
section under section 6011. These regula-
tions include language that mirrors the lan-
guageusedinsection6707A,butalsoin-
clude appropriate citations to regulations
under section 6011 to add clarity to the
scope of these regulations.
4.Comments on Future Notice of
Proposed Rulemaking
As discussed in this preamble, inter-
ested persons may submit comments on
the future Notice of Proposed Rulemaking
regarding the 2010 amendments to section
6707A relating to the computation of the
penalty under section 6707A. Comments
should be submitted in writing and can
be mailed to Office of Associate Chief
Counsel (Procedure and Administration),
Re: REG–103033–11, CC:PA:B02, Room
5135, 1111 Constitution Avenue, NW,
Washington, DC 20224.
Special Analyses
It has been determined that this final
rule is not a significant regulatory action
as defined in Executive Order 12866, as
supplemented by Executive Order 13563.
Therefore, a regulatory assessment is not
required. It also has been determined that
section553(b)oftheAdministrativePro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations and, because
these regulations do not impose a collec-
tion of information on small entities, the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) does not apply.
Pursuant to section 7805(f) of the Code,
the notice of proposed rulemaking preced-
ing this regulation was submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Drafting Information
The principal authors of these reg-
ulations are Spence Hanemann of the
Office of the Associate Chief Counsel
(Procedure and Administration) and
Adrienne Mikolashek, formerly of the
Office of the Associate Chief Counsel
(Procedure and Administration).
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 301 is
amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6707A–1 is added
to read as follows:
§301.6707A–1 Failure to include on
any return or statement any information
required to be disclosed under section
6011 with respect to a reportable
transaction.
(a)In general. Any person who fails to
include on any return or statement any in-
formation required to be disclosed under
section 6011 with respect to a reportable
transaction may be subject to a monetary
penalty. Subject to maximum and mini-
mum limits, the penalty for failure to in-
clude information with respect to any re-
portable transaction is 75 percent of the de-
crease in tax shown on the return as a re-
sult of the transaction or the decrease that
would have resulted from the transaction if
it were respected for Federal tax purposes.
The penalty for failure to include infor-
mation with respect to a listed transaction
shall not exceed $100,000 for a natural per-
son and $200,000 for all other persons.
The penalty for failure to include informa-
tion with respect to any other reportable
transaction shall not exceed $10,000 for a
natural person and $50,000 for all other
persons. The penalty with respect to any
reportable transaction shall not be less than
$5,000 for a natural person and $10,000
for all other persons. The section 6707A
penalty is in addition to any other penalty
that may be imposed.
(b)Definitions—(1)Reportable trans-
action. The term “reportable transaction”
is defined in section 6707A(c)(1) of the
Code and §1.6011–4(b)(1) of this chapter.
(2)Listed transaction.Theterm
“listed transaction” is defined in sec-
tion 6707A(c)(2) of the Code and
§1.6011–4(b)(2) of this chapter.
(c)Assessment of the penalty—(1)In
general. The Internal Revenue Service
may assess a penalty under section 6707A
with respect to each failure to disclose
a reportable transaction within the time
and in the form and manner provided by
§§1.6011–4(d) and 1.6011–4(e) of this
chapter or pursuant to the time, form, and
manner stated in other published guid-
ance. Section 1.6011–4(e) provides, in
part, that a taxpayer must attach a disclo-
sure statement to the taxpayer’s return for
each taxable year for which the taxpayer
participates in a reportable transaction.
A taxpayer also must attach a disclosure
statement to each amended return that
reflects the taxpayer’s participation in a
November 21, 20117872011–47 I.R.B.

reportable transaction and, if a reportable
transaction results in a loss that is car-
ried back to a prior year, a taxpayer must
attach a disclosure statement to the tax-
payer’s application for tentative refund
or amended return for that prior year. In
addition, a copy of thedisclosurestate-
ment must be sent to the IRS Office of Tax
Shelter Analysis (OTSA) at the same time
that any disclosure statement is first filed
by the taxpayer pertaining to a particular
reportable transaction. Nonetheless, a tax-
payer who is required to disclose a trans-
action by filing Form 8886,“Reportable
Transaction Disclosure Statement,”(or
successor form) witha return (including
an amended return or application for ten-
tative refund) and who is also required to
disclose the transaction by filing that form
with OTSA, is subject to only a single
section 6707A penalty for failure to make
either one or both of those disclosures. If
section 6011 and the regulations thereun-
der require a disclosure statement to be
filed at the time that a return is filed, the
disclosure statement is considered to be
timely filed if it is filed at the same time
as the return, even if the return is filed
untimely after its due date (including ex-
tensions).
(2)Examples. The rules of paragraph
(c)(1) of this section are illustrated by the
following examples:
Example 1. Taxpayer T is required to attach a
Form 8886 to its return for the 2008 taxable year and
to send a copy of the Form 8886 to OTSA at the
time it files its return. Taxpayer T fails to attach the
Form 8886 to its return and fails to send a copy of
the Form 8886 to OTSA. Taxpayer T is subject to a
single penalty under section 6707A for failure to dis-
close because Taxpayer T failed to comply with the
disclosure requirements of section 6011 as described
in §§1.6011–4(d) and 1.6011–4(e) of this chapter. A
penalty under section 6707A also would apply if Tax-
payer T had failed to comply with only one of the two
requirements.
Example 2.SameasExample 1,exceptthatTax-
payer T also subsequently files an amended return for
2008 that reflects Taxpayer T’s participation in the
reportable transaction described inExample 1.Tax-
payer T fails to attach a Form 8886 to the amended
return as required by §1.6011–4(e)(1) of this chap-
ter. Taxpayer T is subject toan additional penalty un-
der section 6707A for failing to disclose a reportable
transaction on the amended return for 2008.
Example 3. In November 2009, Taxpayer U par-
ticipates in a reportable transaction resulting in a loss.
On March 15, 2010, Taxpayer U files its 2009 return,
on which it reports the loss and to which it fails to at-
tach a Form 8886. One month later, Taxpayer U files
an amended return for 2008, on which it carries back
the loss and to which it fails to attach a Form 8886.
Section 1.6011–4(e)(1) of this chapter requires Tax-
payer U to attach a Form 8886 to its amended return
for the 2008 taxable year. Taxpayer U is subject to
two penalties under section 6707A: one for the failure
to attach Form 8886 to its amended return for 2008
and another for the failure to attach Form 8886 to its
2009 return.
Example 4. Taxpayer V participates in a nonlisted
reportable transaction and is required to attach a Form
8886 to its return for the 2009 taxable year that is due
on March 15, 2010. Taxpayer V timely files its re-
turn but fails to attach the Form 8886 to its return.
After the due date of Taxpayer V’s return and with-
out an extension of time to file, Taxpayer V files an
amendedreturnrelatingtothe2009taxableyearto
which Taxpayer V attaches the Form 8886. Taxpayer
V is subject to a penalty under section 6707A for fail-
ure to disclose because Taxpayer V failed to comply
with the disclosure requirements of section 6011 (de-
scribed in §1.6011–4(e)(1) of this chapter) by not at-
taching a Form 8886 to its original return for the 2009
taxable year that was timely filed on or before the due
date of March 15, 2010. An additional penalty under
section 6707A would apply if Taxpayer V had failed
to attach a Form 8886 to its amended return.
Example 5. Shareholder W, a shareholder in
an S Corporation, receives a timely Schedule K–1,
“Shareholder’s Share of Income, Deductions, Cred-
its, etc.,” on April 10, 2009, and determines that she
is required to attach a Form 8886 to her individual
income tax return for the 2008 taxable year. Share-
holder W fails to attach the Form 8886 to her 2008
individual income tax return but files a proper and
complete Form 8886 with OTSA on June 12, 2009.
Section 1.6011–4(e)(1) of this chapter provides that if
a taxpayer who is a partner in a partnership, a share-
holder in an S corporation, or a beneficiary of a trust
receives a timely Schedule K–1 less than 10 calendar
days before the due date of the taxpayer’s return
(including extensions) and, based on receipt of the
timely Schedule K–1, the taxpayer determines that
the taxpayer participated in a reportable transaction,
the disclosure statement will not be considered late
if the taxpayer discloses the reportable transaction
by filing a disclosure statement with OTSA within
60 calendar days after the due date of the taxpayer’s
return (including extensions). Accordingly, Share-
holder W is not subject to a penalty under section
6707A for failure to disclose.
Example 6. In July 2008, Taxpayer X participates
in Transaction Z, a transaction that is not reportable as
of April 15, 2009, the date Taxpayer X files his indi-
vidual income tax return for 2008. On July 15, 2009,
Transaction Z is identified as a transaction of inter-
est. Section 1.6011–4(e)(2)(i) of this chapter pro-
vides that if a transaction that is not otherwise a re-
portable transaction becomes a listed transaction or
a transaction of interest after the taxpayer has filed
a tax return (including an amended return) reflecting
the taxpayer’s participation in the listed transaction or
transaction of interest and before the end of the period
of limitations for assessment of tax for any taxable
year in which the taxpayer participated in the listed
transaction or transaction of interest, then a disclo-
sure statement must be filed with OTSA within 90
calendar days after the date on which the transaction
became a listed transaction or transaction of interest,
regardless of whether the taxpayer participated in the
transaction in the year the transaction became a listed
transaction or a transaction of interest. Taxpayer X
fails to file a Form 8886 with OTSA by October 13,
2009, 90 calendar days after the date that the trans-
action was identified as a transaction of interest. Ac-
cordingly, Taxpayer X is subject to a penalty under
section 6707A.
Example 7. Taxpayer Y is required to attach a
Form 8886 to its return for the 2008 taxable year
with respect to participation in a listed transaction.
Taxpayer Y attaches the Form 8886 to its timely filed
return. The Form 8886, however, does not describe
all of the potential tax benefits expected to result
from this transaction and states that information will
be provided upon request. Because the Form 8886
does not describe all of the potential tax benefits
expected to result from the transaction and merely
provides that the information will be provided upon
request, the Form 8886 filed by Taxpayer Y is in-
complete and does not satisfy the requirements set
forth in §1.6011–4(d) of this chapter. Taxpayer Y is
subject to a penalty under section 6707A for failure
to disclose in the appropriate manner.
(d)Rescission authority—(1)In gen-
eral.The Commissioner (or the Commis-
sioner’s delegate) may rescind the section
6707A penalty if—
(i) The violation relates to a reportable
transaction that is not a listed transaction;
and
(ii) Rescinding the penalty would pro-
mote compliance with the requirements of
the Code and effective tax administration.
(2)Requesting rescission. The Secre-
tary may prescribe the procedures for a
taxpayer to request rescission of a section
6707A penalty with respect to a reportable
transaction other than a listed transaction
by publishing a revenue procedure or other
guidance in the Internal Revenue Bulletin.
(3)Factors that weigh in favor of grant-
ing rescission.In determining whether
rescission would promote compliance with
the requirements of the Internal Revenue
Code and effective taxadministration, the
Commissioner (or the Commissioner’s
delegate) will take into account the fol-
lowing list of factors that weigh in favor
of granting rescission. This is not an ex-
clusive list and no single factor will be
determinative of whether to grant rescis-
sion in any particular case. Rather, the
Commissioner (or the Commissioner’s
delegate) will consider and weigh all rel-
evant factors, regardless of whether the
factor is included in this list.
(i) The taxpayer, upon becoming aware
that it failed, in whole or in part, to disclose
a reportable transaction in accordance
with the requirements of §1.6011–4 of
this chapter, filed a complete and proper,
albeit untimely, Form 8886 (or successor
form), as required by §1.6011–4. If the
2011–47 I.R.B.788November 21, 2011

penalty is due to the taxpayer’s failure to
file Form 8886 (or successor form) with
a return (including an amended return or
application for tentative refund), in order
for an untimely disclosure to weigh in
favor of rescission, the taxpayer must file
an amended return with the appropriate
Service Center and attach a complete and
proper Form 8886 (or successor form) to
that amended return. The amended re-
turnfiledwiththeuntimelyForm8886
(or successor form) must not reflect any
other changes to the return (including an
amended return or application for tentative
refund) that it amends, and the taxpayer
must, in the space provided for an expla-
nation of changes on the amended return,
state the reason for filing the amended re-
turn. If the penalty is due to the taxpayer’s
failure to file Form 8886 (or successor
form) with OTSA, in order for an untimely
disclosure to weigh in favor of rescission,
the taxpayer must file a complete and
proper Form 8886 (or successor form)
with OTSA. If the taxpayer fails to file a
complete and proper Form 8886 (or suc-
cessor form) with the return (including an
amended return or application for tenta-
tive refund) and also fails to file a copy
of the complete and proper Form 8886
(or successor form) with OTSA, incurring
one penalty for both failures, then the tax-
payer must, in the manner prescribed in
this paragraph (d)(3)(i), file complete and
proper Forms 8886 with both the Service
Center and OTSA in order for the untimely
disclosures to weigh in favor of rescission.
This factor will weigh heavily in favor of
rescission provided that—
(A) The taxpayer files the Form 8886
prior to the date the IRS first contacts the
taxpayer (including contacts by the IRS
with any partnership in which the taxpayer
is a partner, any S corporation in which the
taxpayer is a shareholder, or any trust in
which the taxpayer is a beneficiary) con-
cerning a tax examination for the tax pe-
riod in which the taxpayer participated in
the reportable transaction; and
(B) Other circumstances suggest that
the taxpayer did not delay filing an un-
timely but properly completed Form 8886
until after the IRS had taken steps to iden-
tify the taxpayer’s participation in the re-
portable transaction in question.
(ii) The failure, in whole or in part, to
disclose in accordance with the require-
ments of §1.6011–4 of this chapter was due
to an unintentional mistake of fact that ex-
isted despite the taxpayer’s reasonable at-
tempts to ascertain the correct facts with
respect to the transaction.
(iii) The taxpayer has an established
history of properly disclosing other re-
portable transactions and complying with
other tax laws.
(iv) The taxpayer demonstrates that
the failure to include on any return or
statement any information required to be
disclosed under section 6011 arose from
events beyond the taxpayer’s control.
(v) The taxpayer cooperates with the
IRS by providing timely information with
respect to the transaction at issue that the
Commissioner (or the Commissioner’s
delegate) may request in consideration
of the rescission request. In considering
whether a taxpayer cooperates with the
IRS, the Commissioner (or the Commis-
sioner’s delegate) will take into account
whether the taxpayer meets the deadlines
described in Rev. Proc. 2007–21, 2007–1
C.B. 613 (or successor document) (see
§601.601(d)(2)(ii)(b) of this chapter) for
complying with requests for additional
information.
(vi) Assessment of the penalty weighs
against equity andgood conscience, in-
cluding whether the taxpayer demonstrates
that there was reasonable cause for, and
the taxpayer acted in good faith with re-
spect to, the failure to timely file or to in-
clude on any return any information re-
quired to be disclosed under section 6011.
An important factor in determining reason-
able cause and good faith is the extent of
the taxpayer’s efforts to ensure that per-
sons who prepared the taxpayer’s return
were informed of the taxpayer’s partici-
pation in the reportable transactions; this
factor will be disregarded, however, if the
persons who prepared the taxpayer’s re-
turn were material advisors with respect to
the reportable transaction. The presence of
reasonable cause, however, will not neces-
sarily be determinative of whether to grant
rescission.
(4)Absence of favorable factors weighs
against rescission. The absence of facts
establishing the factors described in para-
graph (d)(3) of this section weighs against
granting rescission. The absence of any
one of these factors, however, will not
necessarily be determinative of whether to
grant rescission.
(5)Factors not considered. In deter-
mining whether to grant rescission, the
Commissioner (or the Commissioner’s
delegate) will not consider collectability
of, or doubt as to liability for, the penalties
(except that the Commissioner may con-
sider doubt as to liability to the extent it is
a factor in the determination of reasonable
cause and good faith).
(6)Example. The following example
illustrates the rules of paragraph (d)(3) of
this section:
Example. In 2008, Taxpayer Z participated in a
nonlisted reportable transaction for the first time. Un-
der §1.6011–4(e)(1) of this chapter, he was required
to attach a complete and proper Form 8886 to his
2008 return, due on April 15, 2009, and to file a copy
of the Form 8886 with OTSA. Taxpayer Z timely
filed his 2008 return but failed to attach a Form 8886
to his return or file a Form 8886 with OTSA. On
June 1, 2009, Taxpayer Z discovered his error. On
June 8, 2009, Taxpayer Z filed an amended return
for tax year 2008 and attached a complete and proper
Form 8886 that disclosed his participation in the
reportable transaction. The amended return reflected
no changes from the original return and explained
that the sole purpose of the amended return was to
correct Taxpayer Z’s failure to file a Form 8886 with
his original return. On June 8, 2009, Taxpayer Z
also filed a copy of the complete and proper Form
8886 with OTSA. The IRS later notified Taxpayer Z
that he was subject to a penalty under section 6707A
because he failed to comply with the disclosure
requirements of section 6011 by not attaching Form
8886 to his return for the 2008 taxable year. The
IRS properly assessed the penalty under section
6707A and, on October 15, 2010, issued notice and
demand. On November 1, 2010, in accordance with
Rev. Proc. 2007–21, Taxpayer Z submitted a written
request for rescission of the assessed penalty. The
fact that Taxpayer Z filed an untimely Form 8886
shortly after discovery of his error but before the IRS
first contacted him concerning his return for the 2008
taxable year will weigh heavily in favor of rescission.
(e)Reports to the Securities and Ex-
change Commission (SEC)—(1)In gen-
eral. Under section 6707A(e), a taxpayer
who is required to file periodic reports un-
der section 13 or section 15(d) of the Secu-
rities Exchange Act of 1934 (or is required
to be consolidated with another person for
purposes of these reports) must disclose in
certain reports, as provided in revenue pro-
cedures or other guidance published pur-
suant to paragraph (e)(2) of this section,
the requirement to pay each of the follow-
ing penalties:
(i) The penalty imposed by section
6707A(a) for failure to disclose a listed
transaction.
(ii) The accuracy-related penalty
imposed by section 6662A(a) at the
30-percent rate determined under section
November 21, 20117892011–47 I.R.B.

6662A(c) for a reportable transaction un-
derstatement with respect to which the
relevant facts affecting the tax treatment
of the reportable transaction were not
adequately disclosed in accordance with
regulations prescribed under section 6011.
(iii) The accuracy-related penalty im-
posed by section 6662(a) at the 40-percent
rate determined under section 6662(h) for
a gross valuation misstatement, if the tax-
payer (but for the exclusionary rule of sec-
tion 6662A(e)(2)(C)(ii)) would have been
subject to the accuracy-related penalty un-
der section 6662A(a) at the 30-percent rate
determined under section 6662A(c).
(iv) The penalty described in paragraph
(e)(3) of this section for failure to disclose
in periodic reports filed with the SEC the
requirement to pay any of the penalties
described in paragraphs (e)(1)(i) through
(e)(1)(iii) or paragraph (e)(3) of this sec-
tion.
(2)Manner and content of disclosure.
The Secretary may, by publishing a rev-
enue procedure or other guidance in the
Internal Revenue Bulletin, prescribe the
manner in which the disclosure under para-
graph (e)(1) of this section must be made,
including identification of the specific
SEC form and section thereof in which the
taxpayer must make the disclosure as well
as specification of the timing and contents
of the disclosure.
(3)Penalty for failure to disclose in
SEC filings. Any taxpayer who is required
to file periodic reports under section 13 or
section 15(d) of the Securities Exchange
Act of 1934 (or is required to file con-
solidated reports with another person)
may be subject to a penalty under section
6707A(b) for each failure to disclose the
requirement to pay a penalty identified
in paragraphs (e)(1)(i) through (e)(1)(iii)
of this section in the manner specified
by revenue procedure or other guidance
published in the Internal Revenue Bul-
letin. The taxpayer also may be subject
to an additional penalty under section
6707A(b) for each failure to disclose a
penalty arising under this section in the
manner specified by revenue procedure
or other guidance published in the In-
ternal Revenue Bulletin. The penalty
provided by this paragraph (e)(3) will
be rescinded if the IRS rescinds in full
the penalty for failing to disclose under
section 6011 the reportable transaction
underlying the penalty provided by this
section. Otherwise, the penalty provided
by this paragraph (e)(3) is not subject to
rescission.
(f)Effective/applicability date.(1)The
rules of this section apply to disclosure
statements that are due after September 11,
2008.
(2) The penalty calculations set forth
in paragraph (a) of this section apply to
penalties assessed after December 31,
2006.
§301.6707A–1T [Removed].
Par. 3. Section 301.6707A–1T is re-
moved.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
Approved August 19, 2011.
Emily S. McMahon,
Acting Assistant Secretary
oftheTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on September 1,
2011, 4:15 p.m., and published in the issue of the Federal
Register for September 7, 2011, 76 F.R. 55256)
Section 6721.—Failure to
File Correct Information
Returns
The Service announces where certain state housing
finance agencies and HUD should send to the IRS the
information required by Notice 2011–14, 2011–11
I.R.B. 544. The Service also advises those agencies
and HUD of Form 1098-MA,Mortgage Assistance
Payments, which they may, at their option, use to pro-
vide to homeowners and the IRS the information re-
quired by Notice 2011–14.
Section 6722.—Failure
to Furnish Correct Payee
Statements
The Service announces where certain state housing
finance agencies and HUD should send to the IRS the
information required by Notice 2011–14, 2011–11
I.R.B. 544. The Service also advises those agencies
and HUD of Form 1098-MA,Mortgage Assistance
Payments, which they may, at their option, use to pro-
vide to homeowners and the IRS the information re-
quired by Notice 2011–14.
2011–47 I.R.B.790November 21, 2011

Part III. Administrative, Procedural, and Miscellaneous
2012 Limitations Adjusted As
Provided in Section 415(d),
etc.
1
Notice 2011–90
Section 415 of the Internal Revenue
Code (the Code) provides for dollar lim-
itations on benefits and contributions un-
der qualified retirement plans. Section
415(d) requires that the Commissioner an-
nually adjust these limits for cost-of-living
increases. Other limitations applicable to
deferred compensation plans are also af-
fected by these adjustments under § 415.
Under § 415(d), the adjustments are to be
made pursuant to adjustment procedures
whicharesimilartothoseusedtoadjust
benefit amounts under § 215(i)(2)(A) of
the Social Security Act.
The limitations that are adjusted by
reference to § 415(d) generally will
change for 2012 because the increase in
the cost-of-living index met the statu-
tory thresholds that trigger their adjust-
ment. For example, the limitation under
§ 402(g)(1) on the exclusion for elective
deferrals described in § 402(g)(3) will in-
crease from $16,500 to $17,000 for 2012.
This limitation affects elective deferrals
to § 401(k) plans, § 403(b) plans, and
the Federal Government’s Thrift Savings
Plan, among other plans.
Cost-of-Living Adjusted Limits for
2012
Effective January 1, 2012, the limi-
tation on the annual benefit under a de-
fined benefit plan under § 415(b)(1)(A)
is increased from $195,000 to $200,000.
Pursuant to § 1.415(d)–1(a)(2)(ii) of the
Income Tax Regulations, the adjustment
to the limitation under a defined benefit
plan under § 415(b)(1)(B) is determined
using a special rule. This special rule
takes into account the following recent
history of changes in the cost-of-living
indexes: (1) the cost-of-living index for
the quarter ended September 30, 2009,
was less than the cost-of-living index for
the quarter ended September 30, 2008;
(2) the cost-of-living index for the quarter
ended September 30, 2010, was greater
than the cost-of-living index for the quar-
ter ended September 30, 2009, but less
than the cost-of-living index for the quar-
ter ended September 30, 2008; and (3) the
cost-of-living indexfor the quarter ended
September 30, 2011, was greater than the
cost-of-living index for all prior periods.
For a participant who separated from
service before Jan. 1, 2010, the partic-
ipant’s limitation under a defined benefit
plan under § 415(b)(1)(B) for 2012 is com-
puted by multiplying the participant’s 2011
compensation limitation by 1.0327 in or-
der to reflect changes in the cost-of-liv-
ing index from the quarter ended Septem-
ber 30, 2008, to the quarter ended Septem-
ber 30, 2011. For a participant who sep-
arated from service during 2010 or 2011,
the limitation under a defined benefit plan
under § 415(b)(1)(B) for 2012 is com-
puted by multiplying the participant’s 2011
compensation limitation by 1.0376 in or-
der to reflect changes in the cost-of-liv-
ing index from the quarter ended Septem-
ber 30, 2010, to the quarter ended Septem-
ber 30, 2011.
The limitation for defined contribution
plans under § 415(c)(1)(A) is increased in
2012 from $49,000 to $50,000.
The Code provides that various other
dollar amounts are to be adjusted at the
same time and in the same manner as the
dollar limitation of § 415(b)(1)(A). After
taking into account the applicable round-
ing rules, the amounts for 2012 are as fol-
lows:
The limitation under § 402(g)(1) on
the exclusion for elective deferrals de-
scribed in § 402(g)(3) is increased from
$16,500 to $17,000.
The annual compensation limit un-
der §§ 401(a)(17), 404(l), 408(k)(3)(C),
and 408(k)(6)(D)(ii) is increased from
$245,000 to $250,000.
The dollar limitation under
§ 416(i)(1)(A)(i) concerning the defi-
nition of key employee in a top-heavy
plan is increased from $160,000 to
$165,000.
The dollar amount under
§ 409(o)(1)(C)(ii) for determining the
maximum account balance in an em-
ployee stock ownership plan subject to
a 5-year distribution period is increased
from $985,000 to $1,015,000, while
the dollar amount used to determine the
lengthening of the 5-year distribution
period is increased from $195,000 to
$200,000.
The limitation used in the definition
of highly compensated employee un-
der § 414(q)(1)(B) is increased from
$110,000 to $115,000.
The dollar limitation under
§ 414(v)(2)(B)(i) for catch-up con-
tributions to an applicable employer
plan other than a plan described in
§ 401(k)(11) or 408(p) for individuals
aged 50 or over remains unchanged
at $5,500. The dollar limitation under
§ 414(v)(2)(B)(ii) for catch-up contri-
butions to an applicable employer plan
described in § 401(k)(11) or 408(p) for
individuals aged 50 or over remains
unchanged at $2,500.
The annual compensation limita-
tion under § 401(a)(17) for eligible
participants in certain governmental
plans that, under the plan as in effect
on July 1, 1993, allowed cost-of-living
adjustments to the compensation limi-
tation under the plan under § 401(a)(17)
to be taken into account, is increased
from $360,000 to $375,000.
The compensation amount under
§ 408(k)(2)(C) regarding simplified
employee pensions (SEPs) remains un-
changed at $550.
The limitation under § 408(p)(2)(E)
regarding SIMPLE retirement accounts
remains unchanged at $11,500.
The limitation on deferrals under
§ 457(e)(15) concerning deferred com-
pensation plans of state and local gov-
ernments and tax-exempt organizations
is increased from $16,500 to $17,000.
The compensation amounts un-
der § 1.61–21(f)(5)(i) of the Income
Tax Regulations concerning the def-
inition of “control employee” for
fringe benefit valuation purposes is
increased from $95,000 to $100,000.
The compensation amount under
§ 1.61–21(f)(5)(iii) is increased from
$195,000 to $205,000.
The Code also provides that several
pension-related amounts are to be adjusted
using the cost-of-living adjustment un-
1
Based on News Release IR–2011–103 dated October 20, 2011.
November 21, 20117912011–47 I.R.B.

der § 1(f)(3). After taking the applicable
rounding rules into account, the amounts
for 2012 are as follows:
The adjusted gross income limita-
tion under § 25B(b)(1)(A) for determin-
ing the retirement savings contribution
credit for taxpayers filing a joint return
is increased from $34,000 to $34,500;
the limitation under § 25B(b)(1)(B) is
increased from $36,500 to $37, 500;
and the limitation under § 25B(b)(1)(C)
and (D) is increased from $56,500 to
$57,500.
The adjusted gross income limita-
tion under § 25B(b)(1)(A) for deter-
mining the retirement savings contri-
bution credit for taxpayers filing as
head of household is increased from
$25,500 to $25,875; the limitation un-
der § 25B(b)(1)(B)is increased from
$27,375 to $28,125; and the limitation
under § 25B(b)(1)(C) and (D) is in-
creased from $42,375 to $43,125.
The adjusted gross income limita-
tion under § 25B(b)(1)(A) for deter-
mining the retirement savings contri-
bution credit for all other taxpayers is
increased from $17,000 to $17,250; the
limitation under § 25B(b)(1)(B) is in-
creased from $18,250 to $18,750; and
the limitation under § 25B(b)(1)(C)
and (D) is increased from $28,250 to
$28,750.
The deductible amount under
§ 219(b)(5)(A) for an individual mak-
ing qualified retirement contributions
remains unchanged at $5,000.
The applicable dollar amount under
§ 219(g)(3)(B)(i) for determining the
deductible amount of an IRA contri-
bution for taxpayers who are active
participants filing a joint return or as a
qualifying widow(er) is increased from
$90,000 to $92,000. The applicable
dollar amount under § 219(g)(3)(B)(ii)
for all other taxpayers (other than mar-
ried taxpayers filing separate returns)
is increased from $56,000 to $58,000.
The applicable dollar amount under
§ 219(g)(7)(A) for a taxpayer who is
not an active participant but whose
spouse is an active participant is in-
creased from $169,000 to $173,000.
The adjusted gross income limita-
tion under § 408A(c)(3)(C)(ii)(I) for
determining the maximum Roth IRA
contribution for taxpayers filing a joint
return or as a qualifying widow(er) is
increased from $169,000 to $173,000.
The adjusted gross income limitation
under § 408A(c)(3)(C)(ii)(II) for all
other taxpayers (other than married
taxpayers filing separate returns) is in-
creased from $107,000 to $110,000.
The dollar amount under Section
430(c)(7)(D)(i)(II) used to determine
excess employee compensation with
respect to a single-employer defined
benefit pension plan for which the spe-
cial election under section 430(c)(2)(D)
has been made is increased from
$1,014,000 to $1,039,000.
Drafting Information
The principal author of this notice is
John Heil of the Employee Plans, Tax Ex-
empt and Government Entities Division.
For further information regarding the data
in this notice, please contact the Employee
Plans’ taxpayer assistance telephone ser-
vice at 1–877–829–5500 (a toll-free call)
between the hours of 8:30 a.m. and
4:30 p.m. Eastern time Monday through
Friday. For information regarding the
methodology used in arriving at the data
in this notice, please e-mail Mr. Heil at
RetirementPlanQuestions@irs.gov.
Certain Enrolled Retirement
Plan Agents Not Required to
Obtain a PTIN
Notice 2011–91
The regulations governing practice
beforetheIRS,whicharepublished
in 31 CFR part 10 and are reprinted
as Treasury Department Circular No.
230 (Circular 230), establish enrolled
retirement plan agents as individuals who
may practice before the IRS. Enrolled
retirement plan agents’ practice is limited
under section 10.3(e) of Circular 230 to
representing taxpayers before the IRS with
respect to issues involving the following
programs or forms: employee plans
determination letter program, employee
plans compliance resolution system,
employee plans master and prototype and
volume submitter program, and the Form
5300 and the Form 5500 series that are
filed by retirement plans and plan sponsors
but not with respect to actuarial forms or
schedules.
Section 10.4(b) of Circular 230 requires
individuals who want to become an en-
rolled retirement plan agent to have a valid
preparer tax identification number (PTIN),
and section 10.6(d)(3) requires enrolled re-
tirement plan agents to have a valid PTIN
to be eligible to renew their status as an en-
rolled retirement plan agent.
Section 1.03 of Notice 2011–6, 2011–3
I.R.B. 315 provides that a tax return pre-
parer must have a PTIN to prepare for
compensation any IRS form unless the
form is expressly identified as not re-
quiring a PTIN. Notice 2011–6 further
provides a list of forms for which no PTIN
is required. Among the forms included
on this list are the Form 5300 and the
Form 5500 series returns. The IRS has
been informed, through public comments,
that many enrolled retirement plan agents
prepare only the Form 5300 or the Form
5500 series returns. These public com-
ments are available upon request or at
www.regulations.gov.
The Treasury Department and the IRS
therefore intend to amend Circular 230 to
remove the requirement for individuals to
have a PTIN prior to applying for enroll-
ment or renewing enrollment as enrolled
retirement plan agents. Thus, effective im-
mediately, enrolled retirement plan agents
and applicants to become enrolled retire-
ment plan agents are not required to have
a PTIN to apply for enrollment or renew
enrollment as an enrolled retirement plan
agent. Enrolled retirement plan agents
must, however, obtain a PTIN if, for com-
pensation, they prepare, or assist in the
preparation of, all or substantially all of
any tax return or claim for refund that is not
on the list of forms exempt from the PTIN
requirement as provided in section 1.03 of
Notice 2011–6 or any future guidance.
The principal author of this notice
is Emily M. Lesniak of the Office of
Associate Chief Counsel (Procedure
and Administration).For further
information regarding this notice, contact
Emily M. Lesniak at (202) 622–4570 (not
a toll-free call).
2011–47 I.R.B.792November 21, 2011

26 CFR 1.6050H–1: Information reporting of mort-
gage interest received in a trade or business from an
individual.
(Also: Part 1, §§ 6721, 6722.)
Rev. Proc. 2011–55
SECTION 1. PURPOSE
This revenue procedure specifies the
Internal Revenue Service (IRS) office
to which state housing finance agen-
cies (State HFAs) and the Department of
Housing and Urban Development (HUD)
should send the statements described in
Notice 2011–14, 2011–11 I.R.B. 544.
This revenue procedure also advises State
HFAs and HUD of Form 1098-MA,Mort-
gage Assistance Payments, which they
may, at their option, use as a statement
that satisfies the requirements of Notice
2011–14.
SECTION 2. BACKGROUND
.01 Notice 2011–14 provides guid-
ance on the federal tax consequences of
payments made to or on behalf of finan-
cially distressed homeowners under (1)
programs designed by State HFAs with
funds allocated from the Housing Finance
Agency Innovation Fund for the Hard-
est-Hit Housing Markets (State Programs),
and (2) HUD’s Emergency Homeowners’
Loan Program (EHLP) and any existing
state program receiving funding from the
EHLP (the substantially similar state pro-
grams, or SSSPs). Notice 2011–14 also
provides guidance on the information re-
porting obligations for these payments.
.02 Section 6050H of the Internal Rev-
enue Code requires every person engaged
in a trade or business (including govern-
ments and their agencies) to (1) file an in-
formation return for each calendar year in
which the person receives in the course
of its trade or business payments from an
individual of interest on a mortgage ag-
gregating $600 or more, and (2) furnish
acopyoftheinformationreturntothat
individual. See § 6050H(a) and (d) and
§ 1.6050H–1(a) of the Income Tax Regu-
lations.
.03 Section 6721 of the Code imposes
penalties on a person for failing to include
all required information or including incor-
rect information on an information return.
Section 6722 imposes penalties on a per-
son for failing to include all required infor-
mation or including incorrect information
on a payee statement.
.04 Notice 2011–14 provides that the
IRS will not assert penalties under §§ 6721
and 6722 of the Code against any State
HFA for failing to file and furnish correct
Forms 1098,Mortgage Interest Statement,
for calendar years 2011 and 2012 if the
State HFA provides each homeowner and
the IRS a statement setting forth (1) the
homeowner’s name and TIN, and (2) the
amount of payments that the State HFA
made to a mortgage servicer under the
State Program or the SSSP during that year
(separately stating the amount the State
HFA paid and the amount the homeowner
paid).
.05 Notice 2011–14 provides that,
for calendar years 2011 and 2012, HUD
should provide each homeowner and the
IRS a statement setting forth (1) the home-
owner’s name and TIN, and (2) the amount
of payments HUD made to the mortgage
servicer under the EHLP during that year
(separately stating the amount HUD paid
and the amount the homeowner paid).
.06 Notice 2011–14 advises State HFAs
and HUD to use a single statement to pro-
vide the required names, TINs, and pay-
ment amounts of each homeowner to the
IRS.
.07 Notice 2011–14 provides that the
IRS intends to issue future guidance speci-
fying the IRS office where the State HFAs
and HUD should send the single state-
ments.
SECTION 3. SCOPE
This revenue procedure applies to State
HFAs that make payments to mortgage ser-
vicers under a State Program or an SSSP,
and applies to HUD for payments made to
mortgage servicers under the EHLP, dur-
ing calendar years 2011 and 2012.
SECTION 4. APPLICATION
.01Filing address.StateHFAsand
HUD (collectively, Filers) should send the
statement described in Notice 2011–14 to
the IRS at the following address:
Department of the Treasury
Internal Revenue Service Center
Stop 6728AUSC
Austin, TX 73301
.02Filers using Form 1098-MA.Filers
may, at their option, use Copy A of Form
1098-MA to provide to the IRS the infor-
mation required by Notice 2011–14. Fil-
ers file Copy A of Form 1098-MA with the
IRS at the address listed in section 4.01 of
this revenue procedure. Copy A of Form
1098-MA may not be filed electronically.
Filing Copy A of Form 1098-MA for all
homeowners satisfies the requirement in
Notice 2011–14 to file a single statement
with the IRS.
Filers may, at their option, use Copy
B of Form 1098-MA to provide home-
owners the information required by Notice
2011–14. See section 2.04 of this revenue
procedure for the information required by
Notice 2011–14.
.03Filers not using Form 1098-MA. Fil-
ers who choose not to use Form 1098-MA
should provide each homeowner with a
statement setting forth the information re-
quired by Notice 2011–14, and provide the
IRS with a single statement that lists the in-
formation for each homeowner required by
Notice 2011–14. See section 2.04 of this
revenue procedure for the information re-
quired by Notice 2011–14.
.04Due dates. Filers must file the sin-
gle statement (or Copy A of Form 1098-
MA) with the IRS by February 28, and fur-
nish the homeowner’s statement (or Copy
B of Form 1098-MA) to homeowners by
January 31, of the year following the calen-
dar year in which the Filer made payments
to a mortgage servicer on a homeowner’s
mortgage.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Notice 2011–14 is modified to (1) spec-
ify the IRS office to which State HFAs and
HUD should send the statements required
by Notice 2011–14, and (2) provide that
State HFAs and HUD may, at their option,
use IRS Form 1098-MA to satisfy the re-
quirements of Notice 2011–14.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective for
calendar years 2011 and 2012.
SECTION 7. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Shareen S. Pflanz of the Of-
November 21, 20117932011–47 I.R.B.

fice of Associate Chief Counsel (Income
Tax & Accounting). For further infor-
mation regarding this revenue procedure, please contact Shareen S. Pflanz at (202)
622–4920 (not a toll-free call).
2011–47 I.R.B.794November 21, 2011

Part IV. Items o
fGeneralInterest
Noti
ce of Proposed
Rule
making by Cross
Ref
erence to Temporary
Reg
ulation
Ded
uction for Qualified Film
an
d Television Production
Co
sts
REG–146297–09
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross reference to temporary regulation.
SUMMARY: In this issue of the Bulletin,
the IRS is issuing temporary regulations
(T.D. 9552) relating to deductions for the
costs of producing filmand television pro-
ductions. Those temporary regulations re-
flect changes to the law made by the Tax
Extenders and Alternative Minimum Tax
Relief Act of 2008, and affect taxpayers
that produce films and television produc-
tions within the United States. The text of
those temporary regulations also serves as
the text of these proposed regulations.
DATES: Written comments and requests
for a public hearing must be received by
January 17, 2012.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR(REG–146297–09),
room 5205, Internal Revenue Service,
PO Box 7604, Ben Franklin Station,
Washington, 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–146297–09),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue N.W.,
Washington, DC, or sent electronically
viatheFederaleRulemaking
Portal atwww.regulations.gov(IRS
REG–146297–09).
FOR FURTHER INFORMATION
CONTACT: Concerning the reg-
ulations,BernardP.Harvey,
(202)622–4930;concerning
submissions and to request a hearing,
Richard.A.Hurst@irscounsel.treas.gov,
(202) 622–7180 (not toll-free numbers).
SUPP
LEMENTARY INFORMATION:
Background
Section 181 was added to the Code by
section 244 of the American Jobs Creation
Act of 2004, Public Law No. 108–357
(118 Stat. 1418) (October 22, 2004), and
was modified by section 403(e) of the Gulf
Opportunity Zone Act of 2005, Public Law
No. 109–135 (119 Stat. 2577) (Decem-
ber 21, 2005). Section 502 of the Tax Ex-
tenders and Alternative Minimum Tax Re-
lief Act of 2008, Public Law No. 110–343
(122 Stat. 3765) (October 3, 2008) fur-
ther modified section 181 for film and tele-
vision productions commencing after De-
cember 31, 2007, and extended section 181
to film and television productions com-
mencing before January 1, 2010. Section
181 was extended again to film and televi-
sion productions commencing before Jan-
uary 1, 2012, by section 744 of the Tax Re-
lief, Unemployment Insurance Reautho-
rization, and Job Creation Act of 2010,
Public Law No. 111–312 (December 17,
2010).
Explanation of Provisions
Temporary regulations in this issue of
the Bulletin amend the Income Tax Regu-
lations (26 CFR part 1) to add regulations
under section 181 of the Internal Revenue
Code. The temporary regulations provide
rules specific to film and television pro-
ductions commencing on or after January
1, 2008, to reflect the Tax Extenders and
Alternative Minimum Tax Relief Act of
2008. The text of those temporary regula-
tions also serves as the text of these pro-
posed regulations. The preamble to the
temporary regulations explains these pro-
posed regulations.
Special Analyses
It has been determined that this no-
tice of proposed rulemaking is not a
significant regulatory action as defined
in Executive Order 12866. Therefore,
a regulatory assessment is not required.
It also has been determined that section
553(b) and (d) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations. Because these
proposed regulations do not impose a
coll
ection of information on small entities,
the R
egulatory Flexibility Act (5 U.S.C.
Chap
ter 6) does not apply. Pursuant to
sec
tion 7805(f) of the Code, this notice of
pro
posed rulemaking has been submitted
to t
he Chief Counsel for Advocacy of
the
Small Business Administration for
com
ment on its impact on small business.
Com
ments and Requests for a Public
He
aring
Be
fore these proposed regulations are
ad
opted as final regulations, consideration
wi
ll be given to any written comments
(a
signed original and eight (8) copies)
or
electronically generated comments that
a
re submitted timely to the IRS. The IRS
a
nd the Treasury Department request com-
m
ents on the clarity of the proposed rule
a
nd how it may be made easier to under-
s
tand. All comments will be available for
public inspection and copying. A public
hearing may be scheduled if requested in
writing by a person who timely submits
comments. If a public hearing is sched-
uled, notice of the date, time, and place for
the hearing will be published in theFed-
eral Register.
Drafting Information
The principal author of these regula-
tions is Bernard P. Harvey, Office of Asso-
ciate Chief Counsel (Income Tax and Ac-
counting). However, other personnel from
the IRS and the Treasury Department par-
ticipated in their development.
*****
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 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.181–0 is added as
follows:
§1.181–0 Table of contents.
[The text of this proposed amendment
to §1.181–0 is the same as the text of
November 21, 20117952011–47 I.R.B.

§1.181–0T published elsewhere in this is-
sue of the Bulletin].
Par . 3. Section 1.181–1 is amended
by adding paragraphs (a)(1)(ii), (a)(6),
(b)(1)(ii), (b)(2)(vi) and (c)(2) to read as
follows:
§1.181–1 Deduction for qualified film and
television production costs.
(a)***(1)***
(ii) [The text of this proposed amend-
ment to §1.181–1(a)(1)(ii) is the same as
the text for §1.181–1T(a)(1)(ii) published
elsewhere in this issue of the Bulletin].
*****
(6) [The text of this proposed amend-
ment to §1.181–1(a)(6) is the same as the
text for §1.181–1T(a)(6) published else-
where in this issue of the Bulletin].
*****
(b)***(1)***
(ii) [The text of this proposed amend-
ment to §1.181–1(b)(1)(ii) is the same as
the text for §1.181T(b)(1)(ii) published
elsewhere in this issue of the Bulletin].
*****
(2)* * *
(vi) [The text of this proposed amend-
ment to §1.181–1(b)(2)(vi) is the same as
the text for §1.181–1T(b)(2)(vi) published
elsewhere in this issue of the Bulletin].
*****
(c) * * *
(2) [The text of this proposed amend-
ment to §1.181–1(c)(2) is the same as the
text for §1.181–1T(c)(2) published else-
where in this issue of the Bulletin].
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on October 18,
2011, 8:45 a.m., and published in the issue of the Federal
Register for October 19, 2011, 76 F.R. 64879)
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2011–72
The Internal Revenue Service has re-
voked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin November 21, 2011,
and would end on the date the court first
determines that the organization is not de-
scribed in section 170(c)(2) as more partic-
ularly set forth in section 7428(c)(1). For
individual contributors, the maximum de-
duction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were the
basis for revocation.
National Heritage Foundation, Inc.
Falls Church, VA
Announcement of Disciplinary Sanctions From the Office
of Professional Responsibility
Announcement 2011-74
TheOfficeofProfessionalResponsi-
bility (OPR) announcesrecent disciplinary
sanctions involving attorneys, certified
public accountants, enrolled agents, en-
rolled actuaries, enrolled retirement plan
agents, and appraisers. These individuals
are subject to the regulations governing
practice before the Internal Revenue Ser-
vice (IRS), which are set out in Title 31,
Code of Federal Regulations, Part 10, and
which are published in pamphlet form as
Treasury Department Circular No. 230.
The regulations prescribe the duties and
restrictions relating to such practice and
prescribe the disciplinary sanctions for
violating the regulations.
The disciplinary sanctions to be im-
posed for violation of the regulations are:
Disbarred from practice before the
IRS—An individual who is disbarred is
not eligible to represent taxpayers before
the IRS.
Suspended from practice before the
IRS—An individual who is suspended is
not eligible to represent taxpayers before
the IRS during the term of the suspension.
Censured in practice before the
IRS—Censure is a public reprimand. Un-
like disbarment or suspension, censure
does not affect an individual’s eligibility
to represent taxpayers before the IRS, but
OPR may subject the individual’s future
representations to conditions designed to
promote high standards of conduct.
Monetary penalty—A monetary
penalty may be imposed on an individual
who engages in conduct subject to sanc-
tion or on an employer, firm, or entity
if the individual was acting on its behalf
and if it knew, or reasonably should have
known, of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in
any administrative proceeding before the
Department of the Treasury or the IRS.
Under the regulations, attorneys, cer-
tified public accountants, enrolled agents,
2011–47 I.R.B.796November 21, 2011

enrolled actuaries, and enrolled retirement
plan agents may not assist, or accept assis-
tance from, individuals who are suspended
or disbarred with respect to matters consti-
tuting practice (i.e., representation) before
the IRS, and they may not aid or abet sus-
pended or disbarred individuals to practice
before the IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision after hearing,
Suspended by decision after hearing,
Censured by decision after hearing,
Monetary penalty imposed after hear-
ing, and Disqualified after hearing—An
administrative law judge (ALJ) conducted
an evidentiary hearing upon OPR’s com-
plaint alleging violation of the regulations
and issued a decision imposing one of
these sanctions. After 30 days from the
issuance of the decision, in the absence of
an appeal, the ALJ’s decision became the
final agency decision.
Disbarred by default decision, Sus-
pended by default decision, Censured by
default decision, Monetary penalty im-
posed by default decision, and Disqual-
ified by default decision—An ALJ, after
findingthatnoanswertoOPR’scomplaint
had been filed, granted OPR’s motion for a
default judgment and issued a decision im-
posing one of these sanctions.
Disbarment by decision on appeal,
Suspended by decision on appeal, Cen-
sured by decision on appeal, Monetary
penalty imposed by decision on ap-
peal, and Disqualified by decision on
appeal—The decision of the ALJ was
appealed to the agency appeal authority,
acting as the delegate of the Secretary
of the Treasury, and the appeal authority
issued a decision imposing one of these
sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Mone-
tary penalty imposed by consent, and
Disqualified by consent—In lieu of a
disciplinary proceeding being instituted
or continued, an individual offered a con-
sent to one of these sanctions and OPR
accepted the offer. Typically, an offer
of consent will provide for: suspension
for an indefinite term; conditions that the
individual must observe during the sus-
pension; and the individual’s opportunity,
after a stated number of months, to file
with OPR a petition for reinstatement af-
firming compliance with the terms of the
consent and affirming current eligibility
to practice (i.e., an active professional
license or active enrollment status). An
enrolled agent or an enrolled retirement
plan agent may also offer to resign in order
to avoid a disciplinary proceeding.
Suspended by decision in expedited
proceeding, Suspended by default de-
cision in expedited proceeding, Sus-
pended by consent in expedited pro-
ceeding—OPR instituted an expedited
proceeding for suspension (based on cer-
tain limited grounds, including loss of a
professional license and criminal convic-
tions).
OPR has authority to disclose the
grounds for disciplinary sanctions in these
situations: (1) an ALJ or the Secretary’s
delegate on appeal has issued a decision
on or after September 26, 2007, which was
theeffectivedateofamendmentstothe
regulations that permit making such deci-
sions publicly available; (2) the individual
has settled a disciplinary case by signing
OPR’s “consent to sanction” form, which
requires consenting individuals to admit to
one or more violations of the regulations
and to consent to the disclosure of the in-
dividual’s own return information related
to the admitted violations (for example,
failure to file Federal income tax returns);
or (3) OPR has issued a decision in an
expedited proceeding for suspension.
Announcements of disciplinary sanc-
tions appear in the Internal Revenue Bul-
letin at the earliest practicable date. The
sanctions announced below are alphabet-
ized first by the names of states and sec-
ond by the last names of individuals. Un-
less otherwise indicated, section numbers
(e.g., §10.51) refer to the regulations.
City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Alabama
TuscaloosaDionne, Donald L.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
August 25, 2011
Arizona
SedonaKazragis, Gary W.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
Indefinite from
August 25, 2011
November 21, 20117972011–47 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
California
VenturaFindley, John W.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
July 22, 2011
SacramentoFerris, Frank J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
August 31, 2011
Canoga ParkGarrett, Jack E.CPASuspended by decision
in expedited proceeding
under §10.82 (conviction
under 26 U.S.C. §7206(2),
aiding and assisting the
preparation of false U.S.
tax return)
Indefinite from
August 22, 2011
Agoura HillsHasting, Carl D.CPASuspended by decision
in expedited proceeding
under §10.82 (suspension
of CPA license)
Indefinite from
September 20, 2011
OaklandLenz, Stewart W.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
August 31, 2011
OxnardMendoza, Ricardo L.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
August 31, 2011
AuroraO’Donnell, LawrenceCPASuspended by default
decision in expedited
proceeding under §10.82
(revocation of CPA
license in Colorado)
Indefinite from
August 31, 2011
Fort CollinsWalker, Scott N.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license in Colorado)
Indefinite from
August 25, 2011
Colorado
O’Donnell, Lawrence,
See California
DenverPavek, David D.AttorneySuspended by decision
in expedited proceeding
under §10.82 (suspension
of attorney license)
Indefinite from
August 4, 2011
Walker, Scott N.,
See California
2011–47 I.R.B.798November 21, 2011

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Colorado (Continued)
DenverZodrow, John J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
August 4, 2011
Massachusetts
LawrenceBuck, John K.AttorneySuspended by decision
in expedited proceeding
under §10.82 (suspension
of attorney license)
Indefinite from
July 22, 2011
DorchesterSilva, Deanna M.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
September 29, 2011
Michigan
DavisonCochran, Linda D.Enrolled AgentSuspended by decision
in expedited proceeding
under §10.82 (conviction
under 26 U.S.C. §7206(a),
willfully filing a false U.S.
tax return)
Indefinite from
July 28, 2011
Missouri
Platte CityStover, A. BlairAttorneySuspended by default
decision in expedited
proceeding under §10.82
(injunction against certain
activities regarding tax
plans)
Indefinite from
September 29, 2011
New Jersey
West OrangeKirnan, Matthew J.AttorneySuspended by decision
in expedited proceeding
under §10.82 (attorney
disbarment)
Indefinite from
July 22, 2011
BridgewaterTsai, StephenAttorneySuspended by decision
in expedited proceeding
under §10.82 (attorney
disbarment)
Indefinite from
July 22, 2011
New York
New YorkAuslander, Kenneth J. AttorneySuspended by decision
in expedited proceeding
under §10.82 (attorney
disbarment)
Indefinite from
August 10, 2011
November 21, 20117992011–47 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
New York (Continued)
Mt. SinaiBuscemi, LawrenceAttorneySuspended by decision
in expedited proceeding
under §10.82 (attorney
disbarment)
Indefinite from
July 22, 2011
Ellis, Scevia S.,
See Virginia
CarmelLeibell III, Vincent L.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(conviction under
26 U.S.C. §7206(1),
subscribing to false
and fraudulent U.S.
individual income tax
returns; and conviction
under 18 U.S.C. §1503,
obstruction of justice)
Indefinite from
September 29, 2011
W. Hampton BeachMcVann Jr., ThomasT AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
September 29, 2011
PurchaseMangone, Anthony J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
Indefinite from
September 29, 2011
Ohio
SolonDavis, Scott E.CPASuspended by default
decision in expedited
proceeding under §10.82
(conviction under
26 U.S.C. §7206(2),
aiding and assisting the
preparation of false U.S.
income tax returns)
Indefinite from
August 11, 2011
2011–47 I.R.B.800November 21, 2011

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Oklahoma
TulsaGordon, George D.AttorneySuspended by decision
in expedited proceeding
under §10.82 (conviction
under 18 U.S.C §371,
conspiracy; 18 U.S.C
§1343 & 2(a), wire fraud,
aiding and abetting;
15 U.S.C. §§78j(b), 78ff
& 17 C.F.R §240.10b–5,
18 U.S.C. 2(a), securities
fraud, aiding and abetting;
18 U.S.C. §§1957(a) &
2(a), money laundering,
aiding and abetting;
18 U.S.C. §1001, false
statement; 18 U.S.C.
§ 1512(c)(2), obstruction
of justice)
Indefinite from
August 9, 2011
Texas
TexarkanaSmith, Terry L.CPASuspended by decision
in expedited proceeding
under §10.82 (revocation
of CPA license)
Indefinite from
August 4, 2011
Virginia
FairfaxEllis, Scevia S.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment in
New York)
Indefinite from
September 29, 2011
WoodbridgeOmozee, Henry O.CPASuspended by decision
in expedited proceeding
under §10.82 (conviction
under 26 U.S.C.
§7206 (1), making and
subscribing false tax
returns)
Indefinite from
August 4, 2011
Washington
Alderwood ManorMullen, Richard H.CPASuspended by default
decision in expedited
proceeding under §10.82
(suspension of CPA
license)
Indefinite from
August 11, 2011
November 21, 20118012011–47 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Wisconsin
JanesvilleCompton, Stephen M. AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
Indefinite from
August 11, 2011
Fox PointGoldstein, Harvey J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
Indefinite from
August 11, 2011
2011–47 I.R.B.802November 21, 2011

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.
November 21, 2011i2011–47 I.R.B.

Numerical Finding List
1
Bulletins 2011–27 through 2011–47
Announcements:
2011-37, 2011-27 I.R.B.37
2011-38, 2011-28 I.R.B.45
2011-39, 2011-28 I.R.B.46
2011-40, 2011-29 I.R.B.56
2011-41, 2011-28 I.R.B.47
2011-42, 2011-32 I.R.B.138
2011-43, 2011-35 I.R.B.198
2011-44, 2011-33 I.R.B.164
2011-45, 2011-34 I.R.B.178
2011-46, 2011-34 I.R.B.178
2011-47, 2011-34 I.R.B.178
2011-48, 2011-36 I.R.B.227
2011-49, 2011-36 I.R.B.228
2011-50, 2011-38 I.R.B.409
2011-51, 2011-38 I.R.B.409
2011-52, 2011-38 I.R.B.409
2011-53, 2011-38 I.R.B.409
2011-54, 2011-38 I.R.B.409
2011-55, 2011-38 I.R.B.409
2011-56, 2011-38 I.R.B.409
2011-57, 2011-38 I.R.B.409
2011-58, 2011-38 I.R.B.410
2011-59, 2011-37 I.R.B.335
2011-61, 2011-39 I.R.B.453
2011-62, 2011-40 I.R.B.483
2011-63, 2011-41 I.R.B.503
2011-64, 2011-41 I.R.B.503
2011-65, 2011-44 I.R.B.691
2011-66, 2011-44 I.R.B.691
2011-67, 2011-44 I.R.B.691
2011-68, 2011-44 I.R.B.691
2011-69, 2011-44 I.R.B.691
2011-70, 2011-45 I.R.B.715
2011-71, 2011-46 I.R.B.770
2011-72, 2011-47 I.R.B.796
2011-74, 2011-47 I.R.B.796
Notices:
2011-47, 2011-27 I.R.B.34
2011-50, 2011-27 I.R.B.35
2011-51, 2011-27 I.R.B.36
2011-52, 2011-30 I.R.B.60
2011-53, 2011-32 I.R.B.124
2011-54, 2011-29 I.R.B.53
2011-55, 2011-29 I.R.B.53
2011-56, 2011-29 I.R.B.54
2011-57, 2011-31 I.R.B.84
2011-58, 2011-31 I.R.B.85
2011-59, 2011-31 I.R.B.86
2011-60, 2011-31 I.R.B.90
2011-61, 2011-31 I.R.B.91
2011-62, 2011-32 I.R.B.126
Notices— Continued:
2011-63, 2011-34 I.R.B.172
2011-64, 2011-37 I.R.B.231
2011-65, 2011-34 I.R.B.173
2011-66, 2011-35 I.R.B.184
2011-67, 2011-34 I.R.B.174
2011-68, 2011-36 I.R.B.205
2011-69, 2011-39 I.R.B.445
2011-70, 2011-32 I.R.B.135
2011-71, 2011-37 I.R.B.233
2011-72, 2011-38 I.R.B.407
2011-73, 2011-40 I.R.B.474
2011-74, 2011-41 I.R.B.496
2011-75, 2011-40 I.R.B.475
2011-76, 2011-40 I.R.B.479
2011-78, 2011-41 I.R.B.497
2011-79, 2011-41 I.R.B.498
2011-80, 2011-43 I.R.B.591
2011-81, 2011-42 I.R.B.513
2011-82, 2011-42 I.R.B.516
2011-83, 2011-43 I.R.B.593
2011-84, 2011-43 I.R.B.595
2011-85, 2011-44 I.R.B.605
2011-86, 2011-45 I.R.B.698
2011-87, 2011-45 I.R.B.699
2011-88, 2011-46 I.R.B.748
2011-89, 2011-46 I.R.B.748
2011-90, 2011-47 I.R.B.791
2011-91, 2011-47 I.R.B.792
Proposed Regulations:
REG-128224-06, 2011-42 I.R.B.533
REG-137128-08, 2011-28 I.R.B.43
REG-140280-09, 2011-45 I.R.B.709
REG-146297-09, 2011-47 I.R.B.795
REG-112805-10, 2011-40 I.R.B.482
REG-120391-10, 2011-39 I.R.B.451
REG-125592-10, 2011-32 I.R.B.137
REG-125949-10, 2011-45 I.R.B.712
REG-131491-10, 2011-36 I.R.B.208
REG-133002-10, 2011-46 I.R.B.766
REG-140038-10, 2011-42 I.R.B.537
REG-109006-11, 2011-37 I.R.B.334
REG-101352-11, 2011-30 I.R.B.75
REG-111283-11, 2011-42 I.R.B.573
REG-116284-11, 2011-43 I.R.B.598
REG-118809-11, 2011-33 I.R.B.162
REG-122813-11, 2011-35 I.R.B.197
REG-126519-11, 2011-39 I.R.B.452
Revenue Procedures:
2011-38, 2011-30 I.R.B.66
2011-39, 2011-30 I.R.B.68
2011-40, 2011-37 I.R.B.235
2011-41, 2011-35 I.R.B.188
2011-42, 2011-37 I.R.B.318
Revenue Procedures— Continued:
2011-43, 2011-37 I.R.B.326
2011-44, 2011-39 I.R.B.446
2011-45, 2011-39 I.R.B.449
2011-46, 2011-42 I.R.B.518
2011-47, 2011-42 I.R.B.520
2011-48, 2011-42 I.R.B.527
2011-49, 2011-44 I.R.B.608
2011-50, 2011-44 I.R.B.628
2011-51, 2011-44 I.R.B.669
2011-52, 2011-45 I.R.B.701
2011-53, 2011-46 I.R.B.749
2011-54, 2011-46 I.R.B.759
2011-55, 2011-47 I.R.B.793
Revenue Rulings:
2011-14, 2011-27 I.R.B.31
2011-15, 2011-30 I.R.B.57
2011-16, 2011-32 I.R.B.93
2011-17, 2011-33 I.R.B.160
2011-18, 2011-39 I.R.B.428
2011-19, 2011-36 I.R.B.199
2011-20, 2011-36 I.R.B.202
2011-21, 2011-40 I.R.B.458
2011-22, 2011-41 I.R.B.489
2011-23, 2011-43 I.R.B.585
2011-24, 2011-41 I.R.B.485
2011-25, 2011-45 I.R.B.695
Treasury Decisions:
9527, 2011-27 I.R.B.1
9528, 2011-28 I.R.B.38
9529, 2011-30 I.R.B.57
9530, 2011-31 I.R.B.77
9531, 2011-31 I.R.B.79
9532, 2011-32 I.R.B.95
9533, 2011-33 I.R.B.139
9534, 2011-33 I.R.B.144
9535, 2011-39 I.R.B.415
9536, 2011-39 I.R.B.426
9537, 2011-35 I.R.B.181
9538, 2011-37 I.R.B.229
9539, 2011-35 I.R.B.179
9540, 2011-38 I.R.B.341
9541, 2011-39 I.R.B.438
9542, 2011-39 I.R.B.411
9543, 2011-40 I.R.B.470
9544, 2011-40 I.R.B.458
9545, 2011-41 I.R.B.490
9546, 2011-42 I.R.B.505
9547, 2011-43 I.R.B.580
9548, 2011-46 I.R.B.716
9549, 2011-46 I.R.B.718
9550, 2011-47 I.R.B.785
9551, 2011-47 I.R.B.774
9552, 2011-47 I.R.B.783
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2011–1 through 2011–26 is in Internal Revenue Bulletin
2011–26, dated June 27, 2011.
2011–47 I.R.B.iiNovember 21, 2011

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2011–27 through 2011–47
Announcements:
2007-47
Updated and superseded by
Ann. 2011-59, 2011-37 I.R.B.335
Notices:
2002-1
Amplified by
Notice 2011-86, 2011-45 I.R.B.698
2006-101
Amplified and superseded by
Notice 2011-64, 2011-37 I.R.B.231
2007-93
Obsoleted by
T.D. 9545, 2011-41 I.R.B.490
2010-23
Modified and supplemented by
Notice 2011-54, 2011-29 I.R.B.53
2010-77
Modified by
Notice 2011-85, 2011-44 I.R.B.605
2010-81
Amended and supplemented by
Notice 2011-63, 2011-34 I.R.B.172
2010-88
Modified by
Ann. 2011-40, 2011-29 I.R.B.56
2010-90
Modified by
Notice 2011-85, 2011-44 I.R.B.605
Proposed Regulations:
REG-118761-09
Hearing scheduled by
Ann. 2011-38, 2011-28 I.R.B.45
REG-151687-10
Hearing scheduled by
Ann. 2011-48, 2011-36 I.R.B.227
Revenue Procedures:
72-36
Amplified and modified by
Rev. Proc. 2011-42, 2011-37 I.R.B.318
2004-29
Amplified and modified by
Rev. Proc. 2011-42, 2011-37 I.R.B.318
2005-16
Modified and superseded by
Rev. Proc. 2011-49, 2011-44 I.R.B.608
Revenue Procedures— Continued:
2006-56
Modified and amplified by
Rev. Proc. 2011-46, 2011-42 I.R.B.518
2007-35
Amplified and modified by
Rev. Proc. 2011-42, 2011-37 I.R.B.318
2008-24
Modified and superseded by
Rev. Proc. 2011-38, 2011-30 I.R.B.66
2008-32
Superseded by
Rev. Proc. 2011-39, 2011-30 I.R.B.68
2010-33
Superseded by
Rev. Proc. 2011-50, 2011-44 I.R.B.628
2010-37
Superseded by
Rev. Proc. 2011-51, 2011-44 I.R.B.669
2010-39
Amplified, modified, and superseded by
Rev. Proc. 2011-47, 2011-42 I.R.B.520
2011-4
Modified by
Rev. Proc. 2011-44, 2011-39 I.R.B.446
2011-6
Modified by
Rev. Proc. 2011-49, 2011-44 I.R.B.608
2011-8
Modified by
Rev. Proc. 2011-49, 2011-44 I.R.B.608
2011-14
Modified by
Rev. Proc. 2011-43, 2011-37 I.R.B.326
2011-35
Amplified and modified by
Rev. Proc. 2011-42, 2011-37 I.R.B.318
Revenue Rulings:
58-225
Obsoleted by
Rev. Rul. 2011-15, 2011-30 I.R.B.57
92-19
Supplemented in part by
Rev. Rul. 2011-23, 2011-43 I.R.B.585
Treasury Decisions:
9527
Corrected by
Ann. 2011-49, 2011-36 I.R.B.228
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2011–1 through 2011–26 is in Internal Revenue Bulletin 2011–26, dated June 27, 2011.
November 21, 2011iii2011–47 I.R.B.

2011–47 I.R.B.November 21, 2011

November 21, 20112011–47 I.R.B.

INTERNAL REVENUE BULLETIN
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