Internal Revenue Bulletin 2020-17 (PDF rendition): IRS Announcements

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Bulletin No. 2020–17
April 20, 2020
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.
ADMINISTRATIVE
Action On Decision 2020-3, page 663.
Acquiescence to the holding that the term “taxpayer” in sec-
tion 7811 can be broadly interpreted to include a wrong-
ful-levy claimant. Nonacquiescence to the holding that sec-
tion 7811(d) suspends the running of the limitations periods
for third-parties to file wrongful levy claims or suits.
ADMINISTRATIVE &
EMPLOYMENT TAX
Notice 2020-22, page 664.
This notice provides a waiver of additions to tax for failure
to make a deposit of taxes for employers required to pay
qualified sick leave wages and qualified family leave wages
mandated by the Families First Coronavirus Response Act
(Families First Act) and qualified health plan expenses allo-
cable to these wages. This notice also provides a waiver
of additions to tax for failure to make a deposit of taxes
for certain employers experiencing a full or partial business
suspension due to orders from a governmental authority due
to the coronavirus disease 2019 or experiencing a statuto-
rily specified decline in business under the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act). This notice
applies to deposits of Employment Taxes (including withheld
income taxes, taxes under the Federal Insurance Contribu-
tions Act and taxes under the Railroad Retirement Act) re-
duced in anticipation of the credits with respect to qualified
sick leave wages and qualified family leave wages paid with
respect to the period beginning April 1, 2020, and ending
December 31, 2020. This notice applies with respect to
deposits of Employment Taxes reduced in anticipation of the
credits with respect to qualified wages paid with respect to
the period beginning on March 13, 2020, and ending Decem-
ber 31, 2020.
ADMINISTRATIVE & SPECIAL
ANNOUNCEMENT
Announcement 2020-4, page 667.
Announcement 2020-4 provides that public hearings on
notices of proposed rulemaking will be held telephonical-
ly and encourages taxpayers to submit public comments
electronically.
INCOME TAX
REG-132529-17, page 667.
The proposed regulations provide guidance on determining
life insurance reserves and changing the method of com-
puting certain insurance company reserves. The proposed
regulations also authorize changes to insurance company
reporting requirements and propose numerous conforming
changes to other regulations. The proposed regulations im-
plement legislative changes made by sections 13513 and
13517 of the Tax Cuts and Jobs Act.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management 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 rul-
ings 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.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation 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
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
April 20, 2020 Bulletin No. 2020–17

Actions Relating to
Decisions of the Tax Court
It is the policy of the Internal Reve­
nue Service to announce at an early date
whether it will follow the holdings in cer­
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on un­
appealed issues decided adverse to the
government. Generally, an Action on De­
cision is issued where its guidance would
be helpful to Service personnel working
with the same or similar issues. Unlike a
Treasury Regulation or a Revenue Ruling,
an Action on Decision is not an affirma­
tive statement of Service position. It is not
intended to serve as public guidance and
may not be cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu­
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda­
tion of the Action on Decision to similar
cases where the facts are different. More­
over, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published
acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help­
ful. Accordingly, the Service now may
acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid­
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as ac­
quiescence, acquiescence in result only,
or nonacquiescence. Both “acquiescence”
and “acquiescence in result only” mean
that the Service accepts the holding of the
court in a case and that the Service will
follow it in disposing of cases with the
same controlling facts. However, “acqui­
escence” indicates neither approval nor
disapproval of the reasons assigned by the
court for its conclusions; whereas, “acqui­
escence in result only” indicates disagree­
ment or concern with some or all of those
reasons. “Nonacquiescence” signifies that,
although no further review was sought,
the Service does not agree with the hold­
ing of the court and, generally, will not
follow the decision in disposing of cases
involving other taxpayers. In reference to
an opinion of a circuit court of appeals, a
“nonacquiescence” indicates that the Ser­
vice will not follow the holding on a na­
tionwide basis. However, the Service will
recognize the precedential impact of the
opinion on cases arising within the venue
of the deciding circuit.
The Commissioner does ACQUIESCE
IN RESULT ONLY in the following de­
cision:
Rothkamm v. United States, 802
F.3d 699 (5th Cir. 2015), rev’g 2014 WL
4986884 (M.D. La. Sept. 15, 2014)
1

1
Acquiescence to the holding that the term “taxpayer” in section 7811 can be broadly interpreted to include a wrongful­levy claimant. Nonacquiescence to the holding that section 7811(d)
suspends the running of the limitations periods for third­parties to file wrongful levy claims or suits.
Bulletin No. 2020–17 663 April 20, 2020

Part III
Relief from Penalty
for Failure to Deposit
Employment Taxes
Notice 2020-22
SECTION 1. PURPOSE
The purpose of this notice is to provide
penalty relief with respect to certain em­
ployers’ deposits of Federal employment
taxes with the Internal Revenue Service
(IRS) under §§ 31.6302­1 or 31.6302­2
of the Employment Taxes and Collection
of Income Tax at Source Regulations, in­
cluding deposits of withheld income tax­
es, taxes under the Federal Insurance Con­
tributions Act (FICA), and taxes under
the Railroad Retirement Tax Act (RRTA)
(collectively, Employment Taxes). Spe­
cifically, this notice provides relief to em­
ployers entitled to the new refundable tax
credits provided under the Families First
Coronavirus Response Act (Families First
Act), Public Law No. 116­127 (March
18, 2020), and the Coronavirus Aid, Re­
lief, and Economic Security Act (CARES
Act), Public Law No. 116­136 (March 27,
2020).
Employers paying qualified sick leave
wages and qualified family leave wages
required by the Families First Act (collec­
tively, Qualified Leave Wages), as well as
qualified health plan expenses allocable to
Qualified Leave Wages (Qualified Health
Plan Expenses) are eligible for refundable
tax credits under the Families First Act.
Additionally, certain employers experi­
encing a full or partial business suspen­
sion due to orders from a governmental
authority due to the coronavirus disease
2019 (COVID­19) or experiencing a statu­
torily specified decline in business are
also allowed a refundable tax credit under
the CARES Act of up to fifty percent of
the qualified wages, including allocable
qualified health expenses and limited to
$10,000 per employee over all calendar
quarters combined (Qualified Retention
Wages). Under the Families First Act
and the CARES Act, an employer paying
Qualified Leave Wages or Qualified Re­
tention Wages may take refundable tax
credits against a specified portion of the
employer’s share of certain Employment
Taxes.
Section 3 of this notice provides em­
ployers relief from the failure to depos­
it penalty imposed by section 6656 of
the Internal Revenue Code (Code) for
an employer’s failure to timely depos­
it Employment Taxes to the extent that
the amounts not deposited are equal to
or less than the amount of refundable
tax credits to which the employer is en­
titled under the Families First Act and
the CARES Act. This relief ensures that
such employers may pay Qualified Leave
Wages required by the Families First Act
or Qualified Retention Wages under the
CARES Act using Employment Taxes
that would otherwise be required to be
deposited without incurring a failure to
deposit penalty. This notice applies to
deposits of Employment Taxes reduced
in anticipation of the credits with respect
to Qualified Leave Wages paid with re­
spect to the period beginning April 1,
2020, and ending December 31, 2020,
and in anticipation of the credits with re­
spect to Qualified Retention Wages paid
with respect to the period beginning on
March 13, 2020, and ending December
31, 2020.
SECTION 2. BACKGROUND
Section 3111(a) of the Code (employ­
er’s share of the Old Age, Survivors, and
Disability Insurance (social security) por­
tion of FICA tax) and section 3221(a) of
the Code (employer’s share of the social
security and Hospital Insurance (Medi­
care) portions of RRTA tax), along with
section 3402 related to Federal income tax
withholding, impose Employment Tax lia­
bility on employers. For most employers,
this liability is reported on the quarterly
Form 941, Employer’s QUARTERLY
Federal Tax Return.
Section 2302 of the CARES Act pro­
vides that the payment and deposit of the
employer’s share of the social security
portion of FICA tax and the employ­
er’s share of the social security portion
of RRTA tax for deposits that are due to
be made during the period beginning on
March 27, 2020, and ending before Janu­
ary 1, 2021, is not due before December
31, 2021 (for the first 50 percent of the
liability), and December 31, 2022 (for
the remaining 50 percent of the liabili­
ty). Under this provision, an employer is
treated as having timely made these re­
quired deposits of FICA and RRTA tax­
es if all such deposits are made not later
than the applicable due dates. This defer­
ral of payment does not apply to employ­
ers that have had indebtedness forgiven
under either section 1106 or 1109 of the
CARES Act.
Although Form 941 is due quarterly
and payment and deposit of certain FICA
(and RRTA) taxes is deferred under sec­
tion 2302 of the CARES Act, section 6302
of the Code and regulations under that
section generally require deposits of Em­
ployment Taxes to be made on a monthly
or bi­weekly basis. Employers that accu­
mulate $100,000 or more of Employment
Taxes on any day within a deposit period
are required to deposit those liabilities
with the IRS the next banking day. See
§ 31.6302­1(c).
The Families First Act generally re­
quires employers of fewer than 500 em­
ployees to provide paid sick leave and
expanded family and medical leave, up to
specified limits, to employees unable to
work or telework due to certain circum­
stances related to COVID­19. Generally,
employers that are required to pay Quali­
fied Leave Wages under the Families First
Act are entitled to refundable tax credits
administered by the IRS. (The govern­
ment of the United States, the government
of any State or political subdivision there­
of, or any agency or instrumentality of the
foregoing is not entitled to these refund­
able tax credits.)
Sections 7001 and 7003 of the Families
First Act provide a refundable tax credit
against an employer’s share of the social
security portion of FICA tax and an em­
ployer’s share of the social security and
Medicare portions of RRTA tax for each
calendar quarter in an amount equal to 100
percent of Qualified Leave Wages paid by
the employer plus Qualified Health Plan
Expenses with respect to that calendar
April 20, 2020 664 Bulletin No. 2020–17

Bulletin No. 2020–17 665 April 20, 2020
quarter. (For purposes of this notice, an
employer’s share of the social security
portion of FICA tax and an employer’s
share of the social security and Medicare
portions of RRTA tax, as applicable, are
referred to as, Creditable Employment
Taxes.) For employers subject to FICA
tax, the credits under section 7001 and
7003 are increased by the amount of the
employer’s share of Medicare tax imposed
on Qualified Leave Wages. . See section
7005(b)(1) of the Families First Act. (For
purposes of this notice, the increase in
credit under section 7005(b)(1) is treated
as a credit under section 7001 or section
7003.) The refundable tax credit is report­
ed on the employer’s return for reporting
its liability for FICA tax or RRTA tax,
as applicable, which for most employers
subject to FICA tax is the quarterly Form
941. An employer may claim an advance
payment of the refundable tax credits by
filing Form 7200, Advance Payment of
Employer Credits Due to COVID­19.
Section 2301 of the CARES Act pro­
vides a refundable tax credit against an
employer’s Creditable Employment Taxes
for each calendar quarter for Qualified Re­
tention Wages paid by the employer. The
refundable tax credit is reported on the
employer’s return for reporting its liability
for FICA tax or RRTA tax, as applicable,
which for most employers subject to FICA
tax is the quarterly Form 941. An employer
may claim an advance payment of the re­
fundable tax credit for Qualified Retention
Wages under section 2301 of the CARES
Act by filing Form 7200, Advance Payment
of Employer Credits Due to COVID­19.
Section 6656 of the Code imposes a
penalty for any failure to deposit amounts
as required by the Code or regulations on
the date prescribed therefor, unless such
failure is due to reasonable cause and not
due to willful neglect. A failure to deposit
taxes as required under section 6302 of the
Code would generally subject an employ­
er to the section 6656 penalty.
Sections 7001(i) and 7003(i) of the
Families First Act, as added by section
3606(a) and (c) of the CARES Act, and
section 2301(k) of the CARES Act, in­
struct the Secretary of the Treasury (or the
Secretary’s delegate) to waive the penalty
under section 6656 of the Code for failure
to deposit the employer share of social se­
curity tax in anticipation of the allowance
of the refundable tax credits allowed un­
der the Families First Act and the CARES
Act. Furthermore, sections 7001(f) and
7003(f) of the Families First Act specif­
ically authorize guidance providing for
waiver of penalties for failure to deposit
amounts in anticipation of the allowance
of the credits provided by the Families
First Act. Section 3 of this notice provides
relief from the penalty under section 6656
pursuant to the Families First Act and the
CARES Act.
SECTION 3. RELIEF FROM
FAILURE TO MAKE A DEPOSIT OF
TAXES
a. Employment Taxes Related to Quali-
fied Leave Wages
An employer will not be subject to a
penalty under section 6656 for failing to
deposit Employment Taxes relating to
Qualified Leave Wages in a calendar quar­
ter if—
(1) The employer paid Qualified Leave
Wages to its employees in the calendar
quarter prior to the time of the required
deposit,
(2) The amount of Employment Taxes
that the employer does not timely deposit
is less than or equal to the amount of the
employer’s anticipated credits under sec­
tions 7001 and 7003 of the Families First
Act for the calendar quarter as of the time
of the required deposit, and
(3) The employer did not seek payment
of an advance credit by filing Form 7200,
Advance Payment of Employer Credits
Due to COVID­19, with respect to the an­
ticipated credits it relied upon to reduce its
deposits.
Thus, an employer may reduce, with­
out a penalty under section 6656 of the
Code, the amount of a deposit of Employ­
ment Taxes by the amount of Qualified
Leave Wages and Qualified Health Plan
Expenses paid by the employer in the cal­
endar quarter prior to the required deposit,
plus the amount of the employer’s share
of Medicare tax on such Qualified Leave
Wages, as long as the employer does not
also seek an advance credit with regard to
the same amount.
For purposes of this section 3.a of this
notice, the total amount of any reduction
in any required deposit may not exceed
the total amount of Qualified Leave Wag­
es and Qualified Health Plan Expenses
and the employer’s share of Medicare tax
on the Qualified Leave Wages in the cal­
endar quarter, minus any amount of Qual­
ified Leave Wages, Qualified Health Plan
Expenses, and employer’s share of Medi­
care tax that had been previously used (1)
to reduce a prior required deposit in the
calendar quarter and obtain the relief pro­
vided by this notice or (2) to seek payment
of an advance credit.
b. Employment Taxes Related to Quali-
fied Retention Wages
An eligible employer will not be sub­
ject to a penalty under section 6656 for
failing to deposit Employment Taxes re­
lating to Qualified Retention Wages in a
calendar quarter if—
(1) The employer paid Qualified Re­
tention Wages to its employees in the
calendar quarter prior to the time of the
required deposit,
(2) The amount of Employment Taxes
that the employer does not timely depos­
it, reduced by the amount of Employment
Taxes not deposited in anticipation of the
credits claimed for Qualified Leave Wag­
es, Qualified Health Plan Expenses, and
the employer’s share of Medicare tax on
the Qualified Leave Wages under sections
7001 and 7003 (as described in section
3.a of this notice), is less than or equal to
the amount of the employer’s anticipated
credits under section 2301 of the CARES
Act for the calendar quarter as of the time
of the required deposit, and
(3) The employer did not seek payment
of an advance credit by filing Form 7200,
Advance Payment of Employer Credits
Due to COVID­19, with respect to the an­
ticipated credits it relied upon to reduce its
deposits.
Thus, after a reduction, if any, of a de­
posit of Employment Taxes by the amount
of credits anticipated for Qualified Leave
Wages under sections 7001 and 7003 (as
described in section 3.a of this notice), an
employer may further reduce, without a
penalty under section 6656 of the Code,
the amount of the deposit of Employment
Taxes by the amount of Qualified Reten­
tion Wages paid by the employer in the
calendar quarter prior to the required de­
posit, as long as the employer does not

April 20, 2020 666 Bulletin No. 2020–17
also seek an advance credit with regard to
the same amount.
For purposes of this section 3.b of this
notice, the total amount of any reduction
in any required deposit may not exceed
the total amount of Qualified Retention
Wages in the calendar quarter, minus any
amount of Qualified Retention Wages that
had been previously used (1) to reduce
a prior required deposit in the calendar
quarter and obtain the relief provided by
this notice or (2) to seek payment of an
advance credit.
SECTION 4. CONTACT
INFORMATION
The principal author of this notice is
Michael A. Franklin of the Office of the
Associate Chief Counsel (Procedure and
Administration). For further information,
please contact Mr. Franklin at (202)317­
5436 (not a toll­free number).

Bulletin No. 2020–17 667 April 20, 2020
Part IV
Announcement Regarding
Procedures Related to
Regulations
Announcement 2020-4
The Department of the Treasury and
the Internal Revenue Service (IRS) an­
nounce that public hearings conducted by
the IRS on notices of proposed rulemak­
ing related to the internal revenue laws
will be held telephonically until further
notice, and encourage taxpayers to submit
public comments electronically.
Conducting Public Hearings
Telephonically
Until further notice, all public hearings
on notices of proposed rulemaking will be
conducted by telephone. Individuals who
want to testify at a public hearing still must
request to testify, submit timely public com­
ments, and submit outlines of topics they
intend to cover in their testimony. Deadlines
for timely submission can be found in no­
tices of proposed rulemaking. Speakers still
will have up to ten minutes to testify and
may be asked questions by the panel.
Additionally, individuals who want to
testify (by telephone) at a public hearing
must send an email to publichearings@irs.
gov to receive the telephone number and ac­
cess code for the hearing. The subject line of
the email must contain the regulation num­
ber (REG­XXXXXX­XX) for the hearing
and the word TESTIFY. For example, the
subject line may say: Request to TESTIFY
at Hearing for REG­123456­00. The email
should also include a copy of the speaker’s
public comments and outline of topics. The
email must be received by the deadline, as
identified in the notice of proposed rulemak­
ing, to submit an outline of topics.
Individuals who want to attend (by tele­
phone) a public hearing must also send an
email to publichearings@irs.gov to receive
the telephone number and access code for
the hearing. The subject line of the email
must contain the regulation number (REG­
XXXXXX­XX) and the word ATTEND.
For example, the subject line may say:
Request to ATTEND Hearing for REG­
123456­00. The email requesting to attend
the public hearing must be received by 5:00
P.M. two (2) business days before the date
that the hearing is scheduled.
Any questions regarding speaking at
or attending a public hearing may also be
emailed to publichearings@irs.gov.
The telephonic hearings will be made
accessible to people with disabilities. To
request special assistance during the tele­
phonic hearing please contact the Publica­
tions and Regulations Branch of the Office
of Associate Chief Counsel (Procedure and
Administration) by sending an email to
publichearings@irs.gov (preferred) or by
telephone at (202) 317­5177 (not a toll­free
number) at least three (3) days prior to the
date that the telephonic hearing is scheduled.
Submission of Public Comments
through Regulations.gov
Commenters are strongly encouraged
to submit public comments via the Federal
eRulemaking Portal at www.regulations.
gov. The IRS expects to have limited per­
sonnel available to process public com­
ments that are submitted on paper through
mail. Until further notice, any comments
submitted on paper will be considered to
the extent practicable.
CONTACT INFORMATION
The principal author of this notice is Em­
ily M. Lesniak of the Office of the Associate
Chief Counsel (Procedure and Administra­
tion). For further information regarding this
notice, contact Emily M. Lesniak at (202)
317­3400 (not a toll­free number).
Notice of Proposed
Rulemaking
Computation and Reporting
of Reserves for Life
Insurance Companies
REG-132529-17
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed regulations that provide guid­
ance on the computation of life insur­
ance reserves and the change in basis of
computing certain reserves of insurance
companies. These proposed regulations
implement recent legislative changes to
the Internal Revenue Code. This docu­
ment invites comments on these proposed
regulations. This document affects entities
taxable as insurance companies.
DATES: Written or electronic comments
and requests for a public hearing must be
received by June 1, 2020.
ADDRESSES: Submit electronic submis­
sions via the Federal eRulemaking Portal
at www.regulations.gov (indicate IRS and
REG­132529­17) by following the online
instructions for submitting comments.
Once submitted to the Federal eRulemak­
ing Portal, comments cannot be edited or
withdrawn. The Department of the Trea­
sury (Treasury Department) and the IRS
will publish for public availability any
comment received to its public docket,
whether submitted electronically or in
hard copy. Send hard copy submissions
to: CC:PA:LPD:PR (REG­132529­17),
Room 5203, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044.
FOR FURTHER INFORMATION CON­
TACT: Concerning the proposed regu­
lations, Dan Phillips, (202) 317­6995;
concerning submissions of comments
and requests for a public hearing, Regina
Johnson, (202) 317­5177 or fdms.data­
base@irscounsel.treas.gov (not toll­free
numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed
amendments to 26 CFR part 1 under sec­
tions 807 and 816 of the Internal Revenue
Code (Code). Sections 807 and 816 were
added to the Code by section 211(a) of
the Deficit Reduction Act of 1984, Public

April 20, 2020 668 Bulletin No. 2020–17
Law 98­369, 98 Stat. 494. Section 807 was
amended by sections 13513 and 13517 of
the Tax Cuts and Jobs Act, Public Law
115­97, 131 Stat. 2054, 2143, 2144 (2017)
(TCJA). These amendments by the TCJA
apply to taxable years beginning after De­
cember 31, 2017.
This document also proposes to amend
or remove the following regulations in
26 CFR: §§1.338­11, 1.381(c)(22)­1,
1.801­2, 1.801­5, 1.801­7, 1.801­8, 1.806­
4, 1.807­1, 1.809­2, 1.809­5, 1.810­3,
1.817A­0, 1.817A­1, 1.818­2, 1.818­4,
1.848­1, 1.6012­2, and 301.9100­6T.
These proposed changes are conforming
changes to regulations that (i) relate to re­
pealed or amended law, (ii) reference reg­
ulations that are proposed to be removed,
(iii) have no future application, or (iv) re­
late to other regulations proposed by this
document.
A. Reserves Taken into Account in
Determining Life Insurance Company
Taxable Income
Section 801(a) imposes a tax on the
life insurance company taxable income
of every life insurance company. Section
801(b) defines life insurance company
taxable income to mean life insurance
gross income, reduced by life insurance
deductions. Under section 803(a)(2), life
insurance gross income includes a net de­
crease in items described in section 807(c)
as required by section 807(a). Under sec­
tions 804 and 805(a)(2), life insurance
deductions include a deduction for a net
increase in items as required by section
807(b).
The items described in section 807(c)
are: (i) life insurance reserves (as defined
in section 816(b)); (ii) unearned premi­
ums and unpaid losses included in total
reserves; (iii) amounts that are discounted
at the appropriate rate of interest to satisfy
obligations under insurance and annuity
contracts that do not involve life, accident,
or health contingencies when the compu­
tation is made; (iv) dividend accumula­
tions and other amounts held at interest
in connection with insurance and annuity
contracts; (v) premiums received in ad­
vance and liabilities for premium deposit
funds; and (vi) reasonable special contin­
gency reserves under contracts of group
term life insurance or group accident and
health insurance that are held for retired
lives, premium stabilization, or a combi­
nation of both.
B. Life Insurance Reserves Taken into
Account in Determining Premiums
Earned for a Nonlife Insurance Company
Section 831(a) generally imposes a
tax on the taxable income of every insur­
ance company other than a life insurance
company (a nonlife insurance company).
Section 832 defines taxable income for
this purpose to be gross income (as de­
fined in section 832(b)(1)) less allowed
deductions. Section 832(b)(1) provides
that gross income includes underwriting
income, and section 832(b)(3) provides
that underwriting income means premi­
ums earned on insurance contracts during
the taxable year less losses incurred and
expenses incurred.
Under sections 832(b)(4) and 832(b)
(7)(A), premiums earned on insurance
contracts during the taxable year are re­
duced by life insurance reserves at the
end of the taxable year and increased
by life insurance reserves at the end of
the preceding taxable year. For this pur­
pose, life insurance reserves are defined
in section 816(b) but determined under
section 807(d).
C. Method of Computing Life Insurance
Reserves for Purposes of Determining
Income
1. Prior to modification by the TCJA
Section 807(d) sets forth rules for com­
puting the amount of life insurance reserves
for a contract for purposes of determining
life insurance company taxable income
and for purposes of computing premiums
earned for a nonlife insurance company.
Prior to amendment by the TCJA, section
807(d)(1) provided that the amount of the
life insurance reserves for any contract was
the greater of the net surrender value of the
contract (determined under section 807(e)
(1)) or the federally prescribed reserve
determined under section 807(d)(2). This
amount, however, could not exceed the
amount that would have been taken into
account with respect to the contract in de­
termining statutory reserves (as defined in
prior section 807(d)(6)).
Prior section 807(d)(2) provided that
the federally prescribed reserve for a con­
tract was computed using (i) the tax re­
serve method applicable to the contract,
(ii) the greater of the applicable Federal
interest rate or the prevailing state as­
sumed interest rate, and (iii) the prevailing
commissioners’ standard tables for mor­
tality and morbidity, adjusted as appro­
priate to reflect the risks (such as substan­
dard risks) incurred under the contract that
were not otherwise taken into account.
In the case of a contract to which the
Commissioners’ Reserve Valuation Meth­
od (CRVM) applied (generally, a life in­
surance contract), prior sections 807(d)
(3)(A)(i) and 807(d)(3)(B)(i) provided
that the tax reserve method applicable to
the contract was the CRVM as prescribed
by the National Association of Insurance
Commissioners (NAIC) that was in effect
on the date the contract was issued. Sim­
ilarly, in the case of a contract to which
the Commissioners’ Annuity Reserve Val­
uation Method (CARVM) applied (gener­
ally, an annuity contract), prior sections
807(d)(3)(A)(ii) and 807(d)(3)(B)(ii) pro­
vided that the tax reserve method appli­
cable to the contract was the CARVM as
prescribed by the NAIC that was in effect
on the date the contract was issued. Other
parameters, such as the appropriate inter­
est rate and mortality tables, were likewise
generally determined with reference to the
date the contract was issued.
Section 1.807­1 provided instructions
on what mortality and morbidity tables
taxpayers should have used to compute
life insurance reserves for a contract for
which there were no applicable commis­
sioners’ standard tables when the contract
was issued. Section 1.807­1 was pub­
lished as a final regulation in the Federal
Register (54 FR 52933) on December 26,
1989 (T.D. 8278).
2. Principle-based reserves and IRS
notices
In recent years, the NAIC has pro­
mulgated and states have adopted prin­
ciple­based reserving methods to better
reflect the economics of more complex
life insurance and annuity products. Prin­
ciple­based reserves (PBR) are intended
to replace a more formulaic approach to
determining policy reserves with an ap­

Bulletin No. 2020–17 669 April 20, 2020
proach that takes into account a range
of future economic conditions and more
closely reflects the risks of complex insur­
ance products. See, e.g., Principle-Based
Reserves for Life Products under the
NAIC Valuation Manual, Actuarial Stan­
dard of Practice No. 52, Actuarial Stan­
dards Board, Sept. 2017, App 1.
Federal income tax issues arose when
trying to apply the requirements of prior
section 807(d) to tax reserve methods that
were PBR methods. It was not clear how
aspects of PBR methods fit within the stat­
utory requirements of prior section 807(d).
For example, a PBR method may require
reserves to be computed based on many
different scenarios in which many differ­
ent interest rate assumptions are made, but
prior section 807(d) required the use of a
single interest rate when computing the
reserve for a contract.
In 2008, the IRS issued Notice 2008­18,
2008­1 C.B. 363, to alert life insurance com­
panies that Federal tax issues might arise as
a result of the then­proposed PBR methods,
identify areas of concern, and invite com­
ments on these and other issues. Several
comments were received and considered.
In 2010, the IRS issued Notice 2010­
29, 2010­15 I.R.B. 547, to provide inter­
im guidance to issuers of variable annuity
contracts as a result of the adoption by
the NAIC of Actuarial Guideline 43 (AG
43), which describes a PBR method. The
interim guidance provided, among other
things, that (i) for purposes of determining
whether an insurance company satisfies
the 50 percent of reserves test for quali­
fication as a life insurance company un­
der section 816(a), the Standard Scenario
Amount (SSA) determined under AG 43
is included in life insurance reserves as
defined in section 816(b) and total re­
serves as defined in section 816(c), (ii) for
purposes of applying the statutory reserve
cap of section 807(d)(1), the term “statu­
tory reserves” under prior section 807(d)
(6) (current section 807(d)(4)) includes
the SSA, provided the requirements of
prior section 807(d)(6) are otherwise met,
and (iii) for purposes of determining the
amount of the reserve under prior section
807(d)(2) for contracts falling within the
scope of AG 43 and issued on or after De­
cember 31, 2009, the provisions for deter­
mining the SSA are taken into account and
the provisions for determining the condi­
tional tail expectation amount (a compo­
nent of AG 43) are not taken into account.
3. Modification by the TCJA
Section 13517 of the TCJA amend­
ed section 807(d)(1) to provide general­
ly that, for purposes of determining life
insurance company taxable income, the
amount of the life insurance reserves
for any contract (other than a contract to
which section 807(d)(1)(B) applies (relat­
ing to variable contracts)), is the greater
of the net surrender value of such contract
or 92.81 percent of the reserve determined
under section 807(d)(2). The amount of
the life insurance reserve for a variable
contract, as specified in amended section
807(d)(1)(B), is the sum of (i) the greater
of the net surrender value of such contract
or the portion of the reserve that is sepa­
rately accounted for under section 817 and
(ii) 92.81 percent of the excess (if any)
of the reserve determined under section
807(d)(2) over the amount in clause (i).
Section 13517 of the TCJA amended
prior section 807(d)(2) to provide that
the amount of the reserve under section
807(d)(2) is determined using the tax re­
serve method applicable to such contract.
Section 13517 of the TCJA also amended
prior section 807(d)(3) to provide general­
ly that the tax reserve method applicable
to a contract is the method prescribed by
the NAIC that applies to the contract as
of the date the reserve is determined, not
the date the contract was issued, as was
required prior to the TCJA.
The TCJA did not change the treatment
of asset adequacy reserves. Asset adequa­
cy reserves and similar reserves that ad­
dress solvency concerns of state regulators
but do not meet technical actuarial re­
quirements have long been excluded from
life insurance reserves for Federal income
tax purposes. See, e.g., Rev. Rul. 67­435,
1967­2C.B. 232; Old Line Insurance Co.
v. Commissioner, 13 B.T.A. 758 (1928).
The Conference Report to the TCJA states
that “[a]s under present law, no deduction
for asset adequacy reserves or deficiency
reserves is allowed.” H.R. Rep. No. 115­
466, at 477 (2017) (Conference Report).
See also Staff of the Joint Committee on
Taxation, 115th Cong., General Explana­
tion of Public Law 115­97, 235 (Comm.
Print 2018) (Bluebook).
Section 13517(c)(3) of the TCJA pro­
vided a transition rule that requires any
difference between (i) the amount of life
insurance reserves with respect to any
contract as of the close of the taxable year
preceding the first taxable year beginning
after December 31, 2017, computed using
the method prescribed by the TCJA and
(ii) the amount of such reserves computed
using the method prior to the amendments
by the TCJA, to be taken into account
over the eight succeeding taxable years.
Rev. Proc. 2019­34, 2019­35 I.R.B. 669,
provides simplified procedures for an in­
surance company to obtain consent of the
Commissioner of Internal Revenue or his
delegate (Commissioner) to change its
method of accounting for life insurance
reserves to comply with the amendments
to section 807 made by the TCJA.
D. Change in Basis of Computing
Reserves
1. Prior to modification by the TCJA
a. Statutory provisions
Prior to amendment by the TCJA, sec­
tion 807(f)(1) provided that if the basis for
determining any item described in sec­
tion 807(c) (for example, life insurance
reserves) as of the close of any taxable
year differed from the basis for that deter­
mination as of the close of the preceding
taxable year, then so much of the differ­
ence between the amount of the items at
the close of the taxable year computed on
the new basis and the amount of the item
at the close of the taxable year computed
on the old basis, as is attributable to con­
tracts issued before the taxable year, was
taken into account ratably for each of the
succeeding ten taxable years.
Prior section 807(f) was substantial­
ly similar to and replaced prior section
810(d) as enacted by the Life Insurance
Company Income Tax Act of 1959, Public
Law 86­69, 73 Stat. 112 (1959). By en­
acting prior section 810(d), Congress pro­
vided a specific treatment for adjustments
resulting from a change in method of com­
puting reserves that otherwise would have
been subject to the general tax rules un­
der section 481 for changes in method of
accounting. See, e.g., American General
Life and Accident Insurance Co. v. United

April 20, 2020 670 Bulletin No. 2020–17
States, 90­1 USTC (CCH) ¶ 50,010 (M.D.
Tenn.1989) (section 481 is a more general
provision dealing with a broad variety of
cases and section 810, on the other hand,
is much more specific and deals with a
very narrow and limited type of change in
method of accounting).
If a company ceases to qualify as a life
insurance company, section 807(f)(2),
which was not amended by the TCJA,
requires, except as provided in section
381(c)(22), that the balance of any ad­
justment under section 807(f) be taken
into account in the taxable year preced­
ing the taxable year in which the taxpay­
er no longer qualifies as a life insurance
company.
b. Regulatory provisions
Regulations relating to the change in
method of computing reserves were ad­
opted under Code provisions that existed
prior to their repeal by the Deficit Reduc­
tion Act of 1984. If and to the extent the
Deficit Reduction Act of 1984 incorpo­
rated provisions of prior law, regulations
and other guidance generally continued
to serve as interpretive guides to the new
provisions. H.R. Rep. No. 98­432, pt. 2, at
1401 (1984).
Section 1.801­5(c) provides that if
reserves are claimed by a life insurance
company then sufficient information must
be filed with the return to enable the val­
idation of the claim. Section 1.801­5(c)
also requires certain information to be
filed if the basis (for Federal income tax
purposes) for determining the amount of
the life insurance reserves as of the close
of the taxable year differs from the basis
for such determination as of the beginning
of the taxable year. Section 1.801­5 was
published as a final regulation in the Fed-
eral Register (25 FR 12654) on Decem­
ber 10, 1960 (T.D. 6513).
Section 1.806­4 describes prior sec­
tion 806(b) and provides that a change
in basis of computing any of the items in
prior section 810(c) (the predecessor to
section 807(c)) is not a change in method
of accounting requiring the consent of the
Secretary of the Treasury or his delegate
(Secretary) under section 446(e). Section
1.806­4 was published as a final regulation
in the Federal Register (25 FR 12654) on
December 10, 1960 (T.D. 6513).
Section 1.810­3 describes how a
change in basis of computing the items
in prior section 810(c) should have been
treated under the Code prior to its amend­
ment by the Deficit Reduction Act of
1984. Section 1.810­3(a) provides that if
the basis for determining an item in pri­
or section 810(c) at the end of a taxable
year differs from the basis for such deter­
mination at the end of the preceding tax­
able year, then the difference between the
amount of the item computed at the end
of the taxable year on the new basis and
the amount of the item computed at the
end of the taxable year on the old basis is
generally taken into account ratably over
the 10 succeeding taxable years. Example
1 of §1.810­3(b) illustrates that if there is
a change in basis of computing an item
described in former section 810(c) during
a taxable year, then for purposes of deter­
mining any increase or decrease in such
item during the taxable year, such increase
or decrease is the difference between the
amount of such item computed at the be­
ginning of the taxable year on the old ba­
sis and the amount of such item computed
at the end of the taxable year on the old
basis. Section 1.810­3(c) further provides
that, subject to section 381(c)(22), if a
company ceases to qualify as a life insur­
ance company, the balance of any adjust­
ment resulting from the change in method
of computing reserves must be taken into
account in the taxable year preceding the
taxable year in which the taxpayer no lon­
ger qualifies as a life insurance company.
Section 1.810­3 was published as a final
regulation in the Federal Register (25
FR 12654) on December 10, 1960 (T.D.
6513).
Section 1.818­2(c) describes prior sec­
tions 806(b) and 810(d)(1). Section 1.818­
2 was published as a final regulation in the
Federal Register (26 FR 2781) on April
4, 1961 (T.D. 6558).
c. IRS guidance
The application of section 807(f) prior
to its amendment by the TCJA and the ap­
plication of prior section 810(d) are illus­
trated by Rev. Rul. 2002­6, 2002­1 C.B.
460 (inclusion of factors omitted in a pre­
vious year’s determination of reserves is a
change in basis under prior section 807(f)
and taxpayer may correct the method on an
amended return); Rev. Rul. 94­74, 1994­2
C.B. 157 (applying prior section 807(f)
in several situations in which taxpayer
changed the basis of computing life insur­
ance reserves); Rev. Rul. 80­117, 1980­1
C.B. 143 (revocation of the election to re­
compute life insurance reserves under pri­
or section 818(c) of a company acquired
in a merger results in a recomputation of
the reserves, which is a change in basis of
computing the reserves subject to the 10
year spread of prior section 810(d)); Rev.
Rul. 80­116, 1980­1 C.B. 141 (recomputa­
tion of life insurance reserves under prior
section 818(c) of a company acquired in
a merger is not a change in basis of com­
puting reserves under prior section 810(d)
because reserves must be recomputed for
both beginning and end of year); Rev.
Rul. 78­354, 1978­2 C.B. 190 (election
of a life insurance company to recompute
life insurance reserves under prior section
818(c) is terminated when company fails
to qualify as a life insurance company
and the required recomputation of the re­
serves is a change in basis of computing
the reserves subject to the 10 year spread
of prior section 810(d); method of nonlife
insurance company taking 10 year spread
into account is shown); Rev. Rul. 77­198,
1977­1 C.B. 190 (recomputation of cer­
tain reserves from a nonactuarial method
to a method utilizing recognized mortality
tables and assumed rates of interest is a
change in basis of computing reserves un­
der prior sections 806(b) and 810(d)); Rev.
Rul. 75­308, 1975­2 C.B. 264 (change in
basis of computing reserves under prior
section 810(d) occurs when the addition
to the reserve is made, not when the com­
pany adopts the policy to change the basis
of computing reserves); Rev. Rul. 74­57,
1974­1 C.B. 163 (life insurance company
that changes basis of computing reserves
must take into account the entire adjust­
ment under prior section 810(d) in the year
of change if it ceases to qualify as a life in­
surance company in the year after the year
of change); Rev. Rul. 70­568, 1970­2 C.B.
140 (recomputation of reserves under
prior section 818(c) applies to contracts
at beginning of year even if they are not
held at end of year; prior section 810(d)
does not apply to the recomputation); Rev.
Rul. 70­192, 1970­1 C.B. 153 (change in
assumption of when in year death bene­
fits would be paid is a change in basis of

Bulletin No. 2020–17 671 April 20, 2020
computing reserves under prior sections
806(b) and 810 (d)); Rev. Rul. 69­444,
1969­2 C.B. 145 (an increase in life in­
surance reserves attributable solely to the
addition of a new benefit on existing con­
tracts is not a change in basis of comput­
ing reserves under prior sections 806(b)
and 810(d)); Rev. Rul. 65­240, 1965­2
C.B. 236 (a nonlife company’s change in
basis of computing life insurance reserves
is a change in basis of computing reserves
under prior section 810(d) and is subject
to the 10 year spread); Rev. Rul. 65­233,
1965­2 C.B. 228 (prior sections 806(b)
and 810(d) apply in the year of a change
in basis of computing reserves notwith­
standing that state regulatory approval for
change was not received until the follow­
ing year); and Rev. Rul. 65­143, 1965­1
C.B. 261 (change in method of computing
life insurance reserves from a preliminary
term basis to a net level premium basis is
a change in basis of computing reserves
under prior sections 806(b) and 810(d);
election under prior section 818(c) does
not apply to life insurance contracts that
are computed for statutory purposes on a
net level premium basis at the end of the
year of election).
d. Nonlife insurance companies
Section 832(b)(4) requires a nonlife
insurance company to include life insur­
ance reserves, as defined in section 816(b)
and determined under section 807, in its
determination of premiums earned on in­
surance contracts during the taxable year,
which is a component of underwriting
income. Section 807(f) provides rules for
changing the basis for determining any
item referred to in section 807(c), and
life insurance reserves are referred to in
section 807(c)(1). Nonlife insurance com­
panies are required to follow the require­
ments in section 807(f) to change the basis
of computing life insurance reserves. Rev.
Rul. 65­240.
2. Modification by the TCJA
Section 13513 of the TCJA amended
prior section 807(f) to provide that any
difference between the amount of an item
referred to in section 807(c) as of the close
of the taxable year computed on a new ba­
sis and the amount of such item as of the
close of the taxable year computed on the
old basis, as is attributable to contracts is­
sued before the taxable year, is to be taken
into account under section 481 as adjust­
ments attributable to a change in method
of accounting initiated by the taxpayer and
made with the consent of the Secretary.
Section 811(a), which was not amend­
ed by the TCJA, generally provides that
computations made for the determination
of Federal income taxes imposed by the
provisions of subchapter L of chapter 1
of the Code (subchapter L) that are set
forth in part I shall be made under an ac­
crual method of accounting or, to the ex­
tent permitted under regulations, under
a combination of an accrual method and
any other permitted method. To the extent
not inconsistent with the preceding sen­
tence or any other provision in part I of
subchapter L, these computations are to
be made in a manner consistent with the
manner required for the annual statement
approved by the NAIC. Section 811(a)
does not affect the application of section
446(e), which generally requires a taxpay­
er to secure the consent of the Secretary
before changing the method of computing
the taxpayer’s taxable income. See also
§1.446­1(e).
After the amendment of section 807(f)
by the TCJA, a life insurance company
must follow the regular administrative
procedures for a change in method of ac­
counting for a change in basis of comput­
ing reserves referred to in section 807(c).
See, e.g., §1.446­1(e); Rev. Proc. 2015­13,
2015­5 I.R.B. 419, Rev. Proc. 2019­43,
2019­48 I.R.B. 1107; Rev. Proc. 2002­
18, 2002­1 C.B. 678. Similarly, a nonlife
insurance company must follow the ad­
ministrative procedures for a change in
method of accounting to change its basis
of computing life insurance reserves (as
defined in section 816(b)).
The Conference Report explained that
under the amended law “[i]ncome or loss
[sic] resulting from a change in method
of computing life insurance company re­
serves is taken into account consistent
with IRS procedures, generally ratably
over a four­year period, instead of over
a 10­year period.” Conference Report at
467. The Joint Committee on Taxation
explained that a company that makes a
change in method of computing life in­
surance company reserves is required to
report and file such statements and oth­
er information as the Secretary requires
under the IRS procedures for accounting
method changes, including the procedures
for obtaining automatic consent to change
an accounting method. Bluebook at 228.
Rev. Proc. 2015­13 provides the IRS
procedures for a taxpayer to obtain the
advance (non­automatic) or automatic
consent of the Commissioner to change
a method of accounting. These proce­
dures generally require a taxpayer to file
a Form 3115, “Application for Change in
Accounting Method,” to change the tax­
payer’s method of accounting. Rev. Proc.
2019­10, 2019­02 I.R.B. 296, modified
the list of automatic accounting method
changes in Rev. Proc. 2018­31, 2018­22
I.R.B. 637, to add section 26.04, which
provided procedures for an insurance
company to obtain automatic consent of
the Commissioner to change its method of
accounting to comply with section 807(f)
for taxable years beginning after Decem­
ber 31, 2017. In response to comments,
section 26.04 of Rev. Proc. 2018­31 was
modified and superseded by Rev. Proc.
2019­43. See section 26.04 of Rev. Proc.
2019­43 for the current procedures for an
insurance company to obtain automatic
consent of the Commissioner to change
its method of accounting to comply with
section 807(f). Rev. Proc. 2019­10 also
modified Rev. Rul. 94­74 and Rev. Rul.
2002­6 to the extent their holdings are
inconsistent with the general rules for
changing a method of accounting under
section 446(e) and §1.446­1(e). Rev. Proc.
2002­18 provides the IRS procedures for
changes in method of accounting imposed
by the IRS and other procedures for re­
solving accounting method issues.
E. Reporting of Reserves
Section 13517 of the TCJA added sec­
tion 807(e)(6), which provides that the
Secretary shall require reporting (at such
time and in such manner as the Secretary
shall prescribe) with respect to the open­
ing and closing balance of reserves and
with respect to the method of computing
reserves for purposes of determining in­
come.
The Conference Report states that for
this purpose the Secretary may require a
life insurance company (including an af­

April 20, 2020 672 Bulletin No. 2020–17
filiated group filing a consolidated return
that includes a life insurance company)
to report each of the line item elements
of each separate account by combining
them with such items from other separate
accounts and the general account and re­
port the combined amounts on a line­by­
line basis. The Secretary may also provide
that the reporting on a separate account
by separate account basis is generally
not permitted. The Conference Report
further states that under existing regula­
tory authority, the Secretary may require
e­filing or comparable filing of the returns
and may require that the taxpayer provide
its annual statement via a link, electronic
copy, or other similar means. Conference
Report at 478­79.
F. Annual Statements and Electronically
Filed Forms 1120-L and 1120-PC
Section 6012(a)(2) generally requires
that returns with respect to income taxes
must be made by every corporation sub­
ject to taxation under subtitle A of the
Code. Final regulations under section
6012 related to insurance companies were
published in the Federal Register (72
FR 32794) on June 14, 2007 (T.D. 9329).
Section 1.6012­2(c)(1) provides that a life
insurance company must make a return
on Form 1120­L, “U.S. Life Insurance
Company Income Tax Return,” and, ex­
cept as provided in §1.6012­2(c)(4), file
with its return a copy of its annual state­
ment. Similarly, §1.6012­2(c)(2) requires
every domestic insurance company other
than a life insurance company to make a
return on Form 1120­PC, “U.S. Property
and Casualty Insurance Company Income
Tax Return,” and, except as provided in
§1.6012­2(c)(4), file with its return a copy
of its annual statement. For these purpos­
es, an annual statement means the annual
statement, the form of which is approved
by the NAIC, that is filed by an insurance
company for the year with the applicable
state regulators or, if the insurance compa­
ny is not required to file the NAIC annual
statement, a pro forma annual statement.
Section 1.6012­2(c)(3) generally provides
that the requirements of §1.6012­2(c)(1)
and (2) concerning returns and annual
statements also apply to foreign insurance
companies subject to tax under section
801 or section 831.
Section 1.6012­2(c)(4) provides that
if an insurance company described in
§1.6012­2(c)(1), (2), or (3) files its re­
turn electronically, it should not include
its annual statement with such return but
that such statement (or pro forma annual
statement) must be available at all times
to the IRS.
Explanation of Provisions
A. Computation of Life Insurance
Reserves
Section 1.807­1(a) of the proposed
regulations provides that no asset adequa­
cy reserve may be included in the deter­
mination of the amount of life insurance
reserves under section 807(d). This pro­
posed regulation is consistent with the law
both before and after the TCJA. The sub­
stantive rules in current §1.807­1 have no
application for taxable years beginning af­
ter December 31, 2017, and therefore, are
not included in §1.807­1 of the proposed
regulations.
B. Reporting of Reserves
Section 1.807­3 of the proposed regu­
lations allows the IRS to require informa­
tion necessary for the proper reporting of
items described in section 807(c), includ­
ing separate account items. This provision
is consistent with section 807(e)(6), as
added by the TCJA.
C. Change in Basis of Computing
Reserves
1. Proposed Section 1.807-4
Section 1.807­4 of the proposed reg­
ulations provides guidance relating to
both the change in basis of computing
reserves of a life insurance company and
the change in basis of computing life in­
surance reserves of a nonlife insurance
company. Section 1.807­4(a) of the pro­
posed regulations requires an insurance
company to follow administrative proce­
dures prescribed by the Commissioner to
change the basis of computing reserves.
This requirement is consistent with the
Conference Report relating to section
13513 of the TCJA, which provides that a
taxpayer is required to follow IRS proce­
dures. Conference Report at 467; see also
Bluebook at 228 (a company is required
to comply with procedures for automat­
ic method changes and to report and file
statements and other information as the
Secretary requires).
Section 1.807­4(b) of the proposed reg­
ulations provides that, to avoid the double
counting of income or a deduction, a tax­
payer that changes its basis of computing
reserves is required to take into account
under section 481(a) an adjustment at­
tributable to the change in basis. The pro­
posed regulations provide that if a taxpay­
er loses its insurance company status, then
any remaining balance of a section 481(a)
adjustment must be taken into account in
the last taxable year the taxpayer was an
insurance company. This proposed rule,
however, would not require an insurance
company to accelerate the accounting for
such adjustment if it changes from a life
insurance company to a nonlife insurance
company or vice versa.
Section 1.807­4(c) of the proposed
regulations provides that for purposes of
determining any increase or decrease in
items described in section 807(c) (for a
life insurance company) or the amount
of life insurance reserves (for a nonlife
insurance company), the determination
should be made for the year of change
using the old basis of computing reserves
and should be made in the following tax­
able year using the new basis of comput­
ing reserves.
Certain revenue rulings are inconsis­
tent with section 807(f), as amended by
the TCJA. Accordingly, these revenue rul­
ings are proposed to be obsoleted for tax­
able years beginning on or after the date
of publication of the Treasury decision
adopting these rules as final regulations in
the Federal Register. See Effect on Other
Documents.
2. Procedure for Obtaining Automatic
Consent
Section 26.04 of Rev. Proc. 2019­43
provides the current procedures for an
insurance company to obtain automatic
consent of the Commissioner to change
its method of accounting to comply with
section 807(f). In response to comments,
the Treasury Department and the IRS in­
tend to revise section 26.04 of Rev. Proc.

Bulletin No. 2020–17 673 April 20, 2020
2019­43 as described in the following
paragraphs.
First, section 26.04(2)(b)(ii) of Rev.
Proc. 2019­43 provides that multiple
changes during the same taxable year for
the same type of contract are considered
a single change in basis and the effects of
such changes are netted and treated as a
single section 481(a) adjustment. Section
807(f)(1), however, provides that the sec­
tion 481(a) adjustment is the difference
between the amount of any item referred
to in section 807(c) computed on the
new basis and the amount of such item
computed on the old basis. Accordingly,
the Treasury Department and the IRS in­
tend to revise section 26.04 of Rev. Proc.
2019­43 to require netting of the section
481(a) adjustments at the level of each
item referred to in section 807(c) so there
is a single section 481(a) adjustment for
each of the items referred to in section
807(c).
Second, section 26.04(1) of Rev. Proc.
2019­43 provides that the automatic
change procedures apply to a nonlife in­
surance company. The Treasury Depart­
ment and the IRS intend to revise section
26.04 of Rev. Proc. 2019­43 to clarify the
manner in which nonlife insurance com­
panies implement changes to the basis of
computing life insurance reserves (as de­
fined in section 816(b)) during a taxable
year (year of change). Specifically, the
clarification would provide that, if a non­
life insurance company changes the basis
of computing its life insurance reserves,
then for purposes of applying section
832(b)(4), (i) for the year of change, life
insurance reserves at the end of the year
of change with respect to contracts issued
before the year of change are determined
on the old basis and (ii) for the year fol­
lowing the year of change, life insurance
reserves at the end of the preceding tax­
able year with respect to contracts issued
before the year of change are determined
on the new basis. Life insurance reserves
attributable to contracts issued during the
year of change and thereafter must be
computed on the new basis.
D. Definition of Life Insurance Reserves
The TCJA modified section 807(d)
to provide that, for purposes of part I of
subchapter L (other than section 816), the
amount of life insurance reserves for any
contract (other than a variable contract)
is the greater of the net surrender value
of such contract or 92.81 percent of the
reserve determined under the applica­
ble tax reserve method. For any variable
contract, the amount of the life insurance
reserve is the sum of (i) the greater of the
net surrender value of such contract or
the portion of the reserve that is separate­
ly accounted for under section 817 and
(ii) 92.81 percent of the excess (if any) of
the reserve determined under the applica­
ble tax reserve method over the amount
in clause (i).
Section 807(d)(3) provides that the ap­
plicable tax reserve method is CRVM in
the case of a contract covered by CRVM
and CARVM in the case of a contract
covered by CARVM. The CRVM and
CARVM may be PBR methods, which
may be gross premium reserves and may
take into account certain expenses and
other factors. Congress understood that for
this purpose life insurance reserves could
be determined using PBR methods. The
Joint Committee on Taxation described
the purpose of the TCJA’s amendments
to section 807(d) as “accomodat[ing] the
NAIC­prescribed principle­based reserve
methodology.” Bluebook at 235.
Section 807(c)(1), however, provides
that the reserves referred to in sections
807(a) and (b), which are the reserves tak­
en into account in determining the gross
income or deductions of a life insurance
company, are “life insurance reserves (as
defined in section 816(b)).”
Section 816(b) generally defines life
insurance reserves to be amounts that are
(i) computed or estimated on the basis of
recognized mortality or morbidity tables
and assumed rates of interest, (ii) set aside
to mature or liquidate, either by payment
or reinsurance, future unaccrued claims
arising from life insurance, annuity, and
noncancellable accident and health insur­
ance contracts involving, at the time with
respect to which the reserves are comput­
ed, life, accident, or health contingencies,
and (iii) with some exceptions, required
by law. Section 816(b) (and its prede­
cessor provisions) have been interpreted
as describing a net premium reserve that
does not take into account expenses or
certain other factors. See, e.g., Rev. Rul.
77­451, 1977­2 C.B. 224; Maryland Ca-
sualty Co. v. United States, 251 U.S. 342
(1920).
Thus, although Congress intended
that the tax reserve method used to com­
pute life insurance reserves under section
807(d), as amended by the TCJA, could
include PBR methods, section 816(b) (by
virtue of the reference in section 807(c)
(1)) could be interpreted to preclude re­
serves determined under PBR methods
from qualifying as life insurance reserves
for purposes of section 807. To clarify
the interaction between sections 807 and
816, §1.816­1 of the proposed regulations
provides that a reserve that meets the re­
quirements in sections 816(b)(1) and (2)
will not be disqualified as a life insurance
reserve if it is determined using a meth­
od that takes into account other factors,
provided that the method used to compute
the reserves is a “tax reserve method” as
defined in section 807(d)(3). This defini­
tion would apply to life insurance reserves
taken into account by nonlife insurance
companies under section 832(b)(4) and
for purposes of determining an insurance
company’s qualification as a life insurance
company under section 816.
E. Electronic Filing of Annual Statements
The Conference Report contemplates
requiring the electronic filing of annual
statements to improve reporting of in­
surance reserves, as necessary to carry
out and enforce section 807. Conference
Report at 478­79. The Treasury Depart­
ment and the IRS believe that requiring
an insurance company to file its annual
statement electronically (if the company’s
Form 1120­L or Form 1120­PC is also filed
electronically) is necessary to allow the
IRS to better and more efficiently exam­
ine the return. Accordingly, §1.6012­2(c)
is proposed to be amended to remove the
rule that prohibits an insurance company
that files its Form 1120­L or Form 1120­
PC electronically from filing its annual
statement (or pro forma annual statement)
electronically. The Treasury Department
and the IRS request comments regarding
potential issues that may arise in filing
the annual statement (or pro forma annual
statements) electronically (for example,
if the size of the annual statement(s) may
exceed or cause the filed return to exceed
the size limits in section 2.1.2 (Submis­

April 20, 2020 674 Bulletin No. 2020–17
sion Size) of IRS Publication 4164, Mod-
ernized e-File (MeF) Guide for Software
Developers and Transmitters, Processing
Year 2020.)
F. Proposed Removal or Revision of
Regulations with No Future Application.
1. In general
This notice of proposed rulemaking
proposes to remove §§1.801­7, 1.801­8(e),
1.806­4, 1.809­2, 1.810­3, 1.818­2(c), and
1.818­4 because these provisions provide
guidance under law that has been repealed
or substantially changed and will have no
application after the adoption of the pro­
posed regulations as final. Section 1.801­
5(c) is proposed to be removed because
its requirement that a taxpayer file certain
information when it changes the basis of
computing life insurance reserve is obvi­
ated by the requirement in §1.807­4(b) of
the proposed regulations that a taxpayer
changing the basis of computing any item
referred to in section 807(c) follow the ad­
ministrative procedures prescribed by the
Commissioner.
This notice of proposed rulemaking
proposes to revise §301.9100­6T to re­
move provisions related to elections under
law that has been repealed or elections
that may no longer be made.
2. Section 1.381(c)(22)-1
This notice of proposed rulemaking
proposes to remove §1.381(c)(22)­1(b)
(6) because its requirement that an acquir­
ing corporation take into account any net
increases or net decreases in reserves of
the distributor or transferor corporation
under section 810(d)(1) is no longer ap­
plicable. The principle in §1.381(c)(22)­
1(b)(6), however, applies to transactions
in which the distributor or transferor cor­
poration has any remaining portion of an
adjustment that was required to be taken
into account over 10 years under prior sec­
tion 807(f). See section 2.08 of Rev. Proc.
2019­10. After the amendment of section
807(f) by the TCJA, an acquiring corpora­
tion must take into account any remaining
section 481(a) adjustment of the transferor
or distributor corporation pursuant to the
IRS’s administrative procedures. See sec­
tion 7.03 of Rev. Proc. 2015­13.
3. Section 1.817A-1
This notice of proposed rulemaking
proposes to revise §1.817A­1 to remove
the requirement that the current market
rate of interest prescribed in §1.817A­1(a)
(5) be used to determine both the life in­
surance reserve and the required interest
(as provided in prior section 812(b)(2)
(A)) during the temporary guarantee peri­
od of a non­equity indexed modified guar­
anteed contract (MGC).
Prior to its amendment by the TCJA,
section 807(d) generally provided that
life insurance reserves for a contract were
determined using a rate of interest appli­
cable when the contract was issued. Prior
section 807(d)(2)(B) provided that the rate
of interest to be used was the greater of
the applicable Federal interest rate or the
prevailing State assumed interest rate. The
TCJA amended section 807(d), however,
to provide that life insurance reserves for
a contract are generally computed using
a method applicable to the contract and
in effect as of the date the reserve is de­
termined. Section 807(d), as amended,
does not prescribe a particular interest
rate to be used in determining life insur­
ance reserves. Thus, the requirement in
§1.817A­1(b)(2) that the applicable inter­
est rate to be used under section 807(d)
(2)(B) to compute life insurance reserves
for an MGC is a prescribed current mar­
ket interest rate is now inapplicable. Ad­
ditionally, the need for §1.817A­1(b)(1)
to prescribe a current market interest rate
to determine life insurance reserves for
MGCs (as opposed to an interest rate ap­
plicable when the contract was issued) is
no longer present because section 807(d),
as amended, requires the use of a method
in effect as of the date the reserve is de­
termined.
Prior to its amendment by the TCJA,
section 812 determined “company’s
share” and “policyholder’s share,” in part,
by reference to required interest on cer­
tain reserves under section 807(c). Prior
section 812(b)(2)(A) provided that the re­
quired interest was computed at the greater
of the prevailing State assumed rate or the
applicable Federal interest rate. The TCJA
amended section 812 to provide that the
“company’s share” means 70% and the
“policyholder’s share” means 30%. Ac­
cordingly, after the TCJA’s amendment
of section 812, a particular interest rate is
no longer needed to determine the “com­
pany’s share” and the “policyholder’s
share.”
Section 1.817A­1 also requires that the
current market rate of interest prescribed
in §1.817A­1(a)(5) be used to determine
reserves under section 807(c)(3) for an
MGC during any temporary guarantee
period. Prior to amendment of section
807(c), the “appropriate rate of interest”
that was otherwise required to determine
reserves for MGCs under section 807(c)
(3) (the highest of the applicable Federal
interest rate, the prevailing State assumed
interest rate, or the interest rate assumed
by the company in determining the guar­
anteed benefit) was determined when the
obligation first did not involve life, ac­
cident, or health contingencies, and was
thus not necessarily a current interest rate.
The TCJA, however, modified the flush
language in section 807(c)(3) to provide
that the “appropriate rate of interest” is the
highest rate or rates permitted to be used
to discount the obligations by the NAIC as
of the date the reserve is determined. Be­
cause the interest rate now required to be
used to determine reserves under section
807(c)(3) (in the absence of the application
of §1.817A­1) is a current market interest
rate, §1.817A­1 may no longer be need­
ed to provide a current interest rate. The
Treasury Department and the IRS request
comments on whether the current market
rate of interest prescribed by §1.817A­1
should continue to apply to reserves under
section 807(c)(3) for an MGC during any
temporary guarantee period.
4. Section 1.338-11
This notice of proposed rulemaking
proposes to revise §1.338­11(d)(2) to re­
flect the change in section 807(f) made
by the TCJA. Section 1.338­11(d) gen­
erally provides that when a section 338
election is made for an insurance compa­
ny, new target must effectively capitalize
its subsequent increase in reserves for
any acquired contracts in the deemed as­
set sale to the extent the fair market value
of certain assets acquired by new target
in the deemed asset sale exceeds the ad­
justed grossed­up basis (AGUB) allocat­
ed to those assets (that is, to the extent of
a “bargain purchase”). In the absence of

Bulletin No. 2020–17 675 April 20, 2020
this rule, new target could obtain a better
tax result if it acquired understated re­
serves and subsequently increased them
rather than acquiring adequately stated
reserves.
Section 1.338­11(d) was intended to
minimize incentives for sellers to defer
increases in reserves. See T.D. 9257 (71
FR 17990). An exception to §1.338­11(d),
however, is provided if new target is re­
quired by section 807(f) to spread the re­
serve increase over the 10 succeeding tax­
able years. See §1.338­11(d)(2)(ii). There
was limited incentive for sellers to defer
increases in reserves when new target was
required to spread the deduction resulting
from the reserve increase over 10 years,
as was the case under section 807(f) pri­
or to its amendment by the TCJA. The
amendment to section 807(f) by the TCJA
together with the applicable adminis­
trative procedures require a deduction
resulting from a reserve increase under
section 807(f) to be taken into account in
one year. As a result, there is greater in­
centive for a seller to defer increases in
reserves if new target would be allowed
to take the deduction into account in one
year, and the reason for providing the ex­
ception currently in §1.338­11(d)(2)(ii) no
longer exists. Accordingly, this notice of
proposed rulemaking proposes to remove
the exception for reserve increases under
section 807(f) that is currently provided in
§1.338­11(d)(2)(ii).
A new §1.338­11(d)(3)(iii) is also pro­
posed to be added so the standard used
for determining when there is an addi­
tional premium under §1.338­11(d)(3)
for a change in items referenced in sec­
tion 807(c) is the same as that used under
section 807(f). Changes in PBRs that are
contemplated by the applicable method,
for example, may not constitute changes
in the basis of computing reserves under
section 807(f) and should not result in
an amount of additional premium under
§1.338­11(d)(3).
G. Proposed Conforming Changes to
Regulations.
This notice of proposed rulemaking
proposes to revise §§1.801­2, 1.809­5,
and 1.848­1 to correct references to Code
provisions or regulations that have been
changed, removed, or are proposed to
be removed by this notice of proposed
rulemaking.
Determination of Life Insurance or
Annuity Contract Status for Certain
Foreign-Issued Contracts
The Code contains a statutory defi­
nition of a life insurance contract under
section 7702, rules applicable to certain
flexible premium contracts under section
101(f), distribution on death requirements
under section 72(s), and diversification
requirements under section 817(h). These
requirements, which reflect Congress’s
concern that the tax­favored treatment
generally accorded life insurance and an­
nuity contracts was available to contracts
that were too investment oriented or pro­
vided for undue tax deferral, are relevant
to the tax treatment of a policyholder, an­
nuitant, or beneficiary as well as the entity
that issues or reinsures a life insurance or
annuity contract.
The Treasury Department and IRS re­
ceived a request to promulgate regulations
under section 807 that generally would
provide, for purposes of subchapter L,
that the determination of whether a con­
tract issued by a non­United States insur­
ance company and reinsured by a United
States insurance company is a life insur­
ance or annuity contract is made without
regard to these statutory requirements,
provided that (i) no policyholder, insured,
annuitant, or beneficiary with respect to
the contract is a United States person and
(ii) such contract is regulated as a life in­
surance or annuity contract by a foreign
regulator. Under the requested approach, a
United States insurance company may be
able to establish additional life insurance
or other tax reserves for such a contract
that is reinsured by a United States insur­
ance company even if the contract does
not meet these statutory requirements.
The Treasury Department and the
IRS are evaluating this request, includ­
ing whether to address it as part of this
rulemaking. Comments are requested gen­
erally in respect of the requested change,
including in respect of statutory interpre­
tation and implications in various contexts
and provisions outside of subchapter L,
such as, for example, the interaction with
policies underlying the Federal withhold­
ing tax provisions that could apply to re­
insurance payments from a United States
reinsurer to a non­United States insurer as
well as the administrability of requiring
a United States reinsurance company to
track the residence of direct and indirect
beneficial owners of any interest in the
contract, policyholder, insured, annuitant,
or beneficiary of a contract issued by a
non­United States insurance company that
it may not administer.
Proposed Applicability Dates
The rules in this notice of proposed
rulemaking are proposed to apply to tax­
able years beginning on or after the date
of publication of the Treasury decision
adopting these rules as final regulations in
the Federal Register.
A taxpayer may choose to apply
§§1.807­4, 1.816­1, and 1.817A­1(b) of
the final regulations to taxable years be­
ginning after December 31, 2017, the ef­
fective date of the revision of section 807
made by the TCJA, and ending before the
first taxable year that begins on or after
the date of publication of the Treasury de­
cision adopting these rules as final in the
Federal Register. See section 7805(b)
(7). Alternatively, a taxpayer may rely on
§§1.807­4 and 1.816­1 of the proposed
regulations for taxable years beginning af­
ter December 31, 2017, and ending before
the first taxable year that begins on or after
the date of publication of the Treasury de­
cision adopting these rules as final in the
Federal Register.
Under proposed §1.6012­2(l), taxpay­
ers may choose to apply §1.6012­2(c) of
the final regulations to any original Fed­
eral income tax return (including any
amended return filed on or before the due
date (including extensions) of such origi­
nal return) timely filed on or after the date
of publication of the Treasury decision
adopting these rules as final in the Feder-
al Register.
Effect on Other Documents
The following revenue rulings are pro­
posed to be obsoleted for taxable years be­
ginning on or after the date of publication
of the Treasury decision adopting these
rules as final regulations in the Federal
Register: Rev. Rul. 2002­6, Rev. Rul. 94­
74, Rev. Rul. 80­117, Rev. Rul. 80­116,

April 20, 2020 676 Bulletin No. 2020–17
Rev. Rul. 78­354, Rev. Rul. 77­198, Rev.
Rul. 75­308, Rev. Rul. 74­57, Rev. Rul.
70­568, Rev. Rul. 70­192, Rev. Rul. 69­
444, Rev. Rul. 65­240, Rev. Rul. 65­233,
Rev. Rul. 65­143. Comments are request­
ed regarding principles contained within
these revenue rulings that are consistent
with current section 807(f) and for which
additional guidance is needed if these rul­
ings are obsoleted.
Notice 2010­29 is proposed to be ob­
soleted for taxable years beginning after
December 31, 2017.
Special Analyses
This regulation is not subject to review
under section 6(b) of Executive Order
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) between the
Treasury Department and the Office of
Management and Budget regarding re­
view of tax regulations.
Paperwork Reduction Act
The collection of information relating
to this notice of proposed rulemaking will
be submitted to the Office of Management
and Budget for review under OMB Con­
trol Number 1545­0123 in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)).
In response to the Conference Report,
§1.6012­2 of the proposed regulations
would require an insurance company to
include the insurance company’s annual
statement (as defined in §1.6012­2(c)(5))
with an electronically filed Federal in­
come tax return (Form 1120­L for a life
insurance company and Form 1120­PC
for a nonlife insurance company). Federal
income tax items of an insurance compa­
ny are determined in part based upon the
insurance company’s annual statement.
Providing the annual statement to the IRS
with an electronically filed Federal in­
come tax return is necessary to allow the
IRS to better and more efficiently examine
an insurance company’s Federal income
tax return.
In accordance with section 807(e)
(6), as added by the TCJA, §1.807­3 of
the proposed regulations provides that
the IRS may require reporting on Form
1120­L of the opening balance and clos­
ing balance of items described in sec­
tion 807(c) (for example, life insurance
reserves) and the method of computing
such items for purposes of determining
income. Providing this information is
necessary to allow the IRS to better ex­
amine an insurance company’s Federal
income tax return.
For purposes of the Paperwork Reduc­
tion Act, the burden for the collection of
information associated with §1.6012­2 of
the proposed regulations will be reflected
in the burden on the Form 1120­L and in
the burden on the Form 1120­PC (OMB
Control Number 1545­0123) when the
burden for each is revised to reflect the
collection of information associated with
§1.6012­2 of the proposed regulations.
The respondents to the collection of infor­
mation are life insurance companies that
file the Form 1120­L electronically and
nonlife insurance companies that file the
Form 1120­PC electronically.
For purposes of the Paperwork Reduc­
tion Act, the burden for the collection of
information associated with §1.807­3 of
the proposed regulations will be reflected
in the burden on the Form 1120­L (OMB
Control Number 1545­0123) when the
burden is revised to reflect the collection
of information associated with §1.807­3
of the proposed regulations. The respon­
dents to the collection of information are
life insurance companies that file a Form
1120­L.
Comments on the collection of infor­
mation should be sent to the Office of
Management and Budget, Attn: Desk
Officer for the Department of the Trea­
sury, Office of Information and Regula­
tory Affairs, Washington, DC 20503, with
copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, SE:­
CAR:MP:T:T:SP, Washington, DC 20224.
Comments on the collection of informa­
tion should be received by June 1, 2020.
Comments are specifically requested con­
cerning:
Whether the proposed collection of in­
formation is necessary for the proper per­
formance of the functions of the IRS, in­
cluding whether the information will have
practical utility;
How the quality, utility, and clarity of
the information to be collected may be en­
hanced;
How the burden of complying with
the proposed collection of information
may be minimized, including through the
application of automated collection tech­
niques or other forms of information tech­
nology; and
Estimates of capital or start­up costs
and costs of operation, maintenance, and
purchase of services to provide informa­
tion.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis­
plays a valid control number assigned by
the Office of Management and Budget.
Regulatory Flexibility Act
It is hereby certified that the proposed
regulations will not have a significant eco­
nomic impact on a substantial number of
small entities pursuant to the Regulatory
Flexibility Act (5 U.S.C. chapter 6).
Section 13517 of the TCJA added sec­
tion 807(e)(6) to the Code. Under section
807(e)(6), the Secretary may require re­
porting (at such time and in such manner
as the Secretary shall prescribe) with re­
spect to the opening balances and the clos­
ing balances of reserves and with respect
to the method of computing reserves for
purposes of determining income. Section
1.807­3 of the proposed regulations would
allow the IRS to require the reporting of
this information on any prescribed forms,
such as the Form 1120­L.
The Conference Report at 478­479
provides that, under existing authority,
the Secretary may require an insurance
company to provide its annual statement
via a link, electronic copy, or other sim­
ilar means. Section 1.6012­2(c) of the
proposed regulations would require an
insurance company to include the insur­
ance company’s annual statement with
an electronically filed Federal income tax
return (Form 1120­L for a life insurance
company and Form 1120­PC for a non­
life insurance company). Under current
procedures, an insurance company can
only electronically file a Form 1120­L or
Form 1120­PC if the insurance compa­
ny is part of an affiliated group filing a
consolidated return, the parent of which
files a Form 1120. Although data are not
readily available, the IRS and the Trea­
sury Department expect that any report­
ing burden associated with §1.6012­2(c)
of the proposed regulations will fall pri­

Bulletin No. 2020–17 677 April 20, 2020
marily on financial and insurance firms
with annual receipts greater than $41.5
million and, therefore, will not affect a
substantial number of small entities. See
13 CFR 121.201, sector 52 (finance and
insurance).
As stated in the preceding paragraph,
the rule is not expected to affect a substan­
tial number of small entities; however,
even if a substantial number of small en­
tities were affected, the economic impact
of the regulation is not likely to be sig­
nificant. Section 1.807­3 of the proposed
regulations is limited in scope to time and
manner of information reporting, and any
economic impact associated with this pro­
posed regulation is expected to be mini­
mal. Further, the information reported to
the IRS is information that the insurance
company has readily available.
Notwithstanding this certification, the
Treasury Department and the IRS invite
comments on the impact this rule would
have on small entities.
Pursuant to section 7805(f) of the
Code, the notice of proposed rulemaking
will be submitted to the Chief Counsel for
Advocacy of the Small Business Adminis­
tration for comment on its impact on small
business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submitted timely to the IRS as prescribed
in this preamble under the ADDRESSES
heading. The Treasury Department and
the IRS request comments on all aspects
of the proposed rules and the other pro­
posed actions described herein. All com­
ments that are submitted by the public
will be available for public inspection and
copying at http://www.regulations.gov or
upon request.
A public hearing will be scheduled if
requested in writing by any person that
timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place for the hearing will
be published in the Federal Register.
Drafting Information
The principal author of these regula­
tions is Dan Phillips, Office of Associate
Chief Counsel (Financial Institutions and
Products), IRS. However, other personnel
from the Treasury Department and the
IRS participated in their development.
Statement of Availability of IRS
Documents
The IRS notices, revenue procedures,
and revenue rulings cited in this pream­
ble are published in the Internal Revenue
Bulletin (or Cumulative Bulletin) and are
available from the Superintendent of Doc­
uments, U.S. Government Publishing Of­
fice, Washington, DC 20402, or by visit­
ing the IRS website at http://www.irs.gov.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record­
keeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes, Ex­
cise Taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 301
are proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding a sectional
authority for §1.807­3 in numerical order
to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.807­3 also issued under 26
U.S.C. 807(e)(6).
* * * * *
§1.338-11 [Amended]
Par. 2. Section 1.338­11 is amended by:
1. Revising paragraph (d)(2).
2. Removing the language “and (d)(3)
(iii)” from the first sentence in paragraph
(d)(3)(i) and adding “through (iv)” in its
place.
3. Redesignating paragraph (d)(3)(iii)
as paragraph (d)(3)(iv).
4. Adding a new paragraph (d)(3)(iii).
5. Revising newly redesignated para­
graph (d)(3)(iv).
6. Adding paragraph (d)(7)(iii).
The revisions and additions read as fol­
lows:
§1.338-11 Effect of section 338 election
on insurance company targets.
* * * * *
(d) * * *
(2) Exception. New target is not treat­
ed as receiving additional premium under
paragraph (d)(1) of this section if it is un­
der state receivership as of the close of the
taxable year for which the increase in re­
serves occurs.
(3) * * * * *
(iii) Increases in section 807(c) re-
serves. The positive amounts with respect
to the items referred to in section 807(c)
other than discounted unpaid loss reserves
is the sum of the net increases in such
items that are required to be taken into ac­
count under section 807(f).
(iv) Increases in other reserves. The
positive amount with respect to reserves
other than discounted unpaid loss re­
serves and other items referred to in sec­
tion 807(c) is the net increase of those
reserves due to changes in estimate,
methodology, or other assumptions used
to compute the reserves (including the
adoption by new target of a methodology
or assumptions different from those used
by old target).
* * * * *
(7) * * *
(iii) Application of paragraphs (d)(2)
and (3) of this section. Paragraphs (d)
(2) and (3) of this section apply to tax­
able years beginning on or after [DATE
FINAL REGULATIONS ARE PUB-
LISHED IN THE FEDERAL REGIS-
TER]. For taxable years beginning before
such date, see paragraph (d) of this section
as contained in 26 CFR part 1 revised as
of April 1, 2019.
* * * * *
§1.381(c)(22)-1 [Amended]
Par. 3. In §1.381(c)(22)­1, paragraph
(b)(6) is removed and reserved.

April 20, 2020 678 Bulletin No. 2020–17
§1.801-2 [Amended]
Par. 4. Section 1.801­2 is amended
by removing the language “1.801­7” and
adding the language “1.801­6” in its place.
Par. 5. Section 1.801­5 is amended by:
1. Removing paragraph (c) and redes­
ignating paragraph (d) as paragraph (c).
2. In newly redesignated paragraph (c),
designating the Example as paragraph (c)
(1).
3. In newly designated paragraph (c)
(1):
i. Designating the introductory text as
paragraph (c)(1)(i).
ii. Adding a heading for the table in
newly designated paragraph (c)(1)(i).
iii. Designating the undesignated para­
graph following newly designated para­
graph (c)(1)(i) as paragraph (c)(1)(ii).
4. Adding reserved paragraph (c)(2).
The addition reads as follows:
§1.801-5 [Amended]
* * * * *
(c) * * *
(1) * * *
(i) * * *
Table 1 to Paragraph (c)(1)(i)
* * * * *
§1.801-7 [Removed and Reserved]
Par. 6. Section 1.801­7 is removed and
reserved.
§1.801-8(e) [Amended]
Par. 7. In §1.801­8, paragraph (e) is re­
moved and reserved.
§1.806-4 [Removed]
Par. 8. Section 1.806­4 is removed.
Par. 9. Section 1.807­1 is revised to
read as follows:
§1.807-1 Computation of life insurance
reserves.
(a) No asset adequacy reserve. The life
insurance reserve determined under section
807(d)(1) does not include any asset ade­
quacy reserve. An asset adequacy reserve
includes any reserve that is established as
an additional reserve based upon an analy­
sis of the adequacy of reserves that would
otherwise be established or any reserve
that is not held with respect to a particular
contract. In determining whether a reserve
is a life insurance reserve, the label placed
on such reserve is not determinative, pro­
vided, however, any reserve or portion of
a reserve that would have been established
pursuant to an asset adequacy analysis re­
quired by the National Association of In­
surance Commissioner’s Valuation Manual
30 as it existed on December 22, 2017, the
date of enactment of Public Law 115­97, is
an asset adequacy reserve.
(b) Applicability date. The rules of this
section apply to taxable years beginning
on or after [DATE FINAL REGULA-
TIONS ARE PUBLISHED IN THE
FEDERAL REGISTER].
Par. 10. Section 1.807­3 is added to
read as follows:
§1.807-3 Reporting of reserves.
(a) Reserve reporting. A life insurance
company subject to tax under section 801
is required to make a return on Form 1120­
L, U.S. Life Insurance Company Income
Tax Return. The Internal Revenue Service
may require reporting with respect to the
opening balance and closing balance of
items described in section 807(c) and with
respect to the method of computing such
items for purposes of determining income.
Such reporting may provide for the man­
ner in which separate account items are re­
ported. (See section 6011 and §301.6011­
1 of this chapter.)
(b) Applicability date. The rules of this
section apply to taxable years beginning
on or after [DATE FINAL REGULA-
TIONS ARE PUBLISHED IN THE
FEDERAL REGISTER].
Par. 11. Section 1.807­4 is added to
read as follows:
§1.807-4 Adjustment for change in
computing reserves.
(a) Requirement to follow administra-
tive procedures. Except as provided in
§1.446­1(e), a change in basis of comput­
ing an item referred to in section 807(c)
is a change in method of accounting for
purposes of §1.446­1(e). Before comput­
ing such item under a new basis, a life in­
surance company must obtain the consent
of the Commissioner of Internal Revenue
or his delegate (Commissioner) pursuant
to administrative procedures prescribed
by the Commissioner. Similarly, an insur­
ance company other than a life insurance
company (a nonlife insurance company)
that changes its basis of computing life in­
surance reserves must obtain the consent
of the Commissioner pursuant to adminis­
trative procedures prescribed by the Com­
missioner.
(b) Section 481 adjustment—(1) In
general. If the basis of computing any
item referred to in section 807(c) as of
the close of any taxable year (the year of
change) differs from the basis of comput­
ing such item at the close of the preceding
taxable year, then the difference between
the amount of the item at the close of the
taxable year computed on the new basis
and the amount of the item at the close of
the taxable year computed on the old basis
that is attributable to contracts issued be­
fore the taxable year, is taken into account
under section 481 and §§1.481­1 through
1.481­5 as an adjustment attributable to a
change in method of accounting.
(2) Loss of company status. If for any
taxable year a taxpayer that was an in­
surance company for the year of change
is no longer an insurance company, then
the taxpayer must take into account in the
preceding taxable year (that is, the last
taxable year it was an insurance compa­
ny) the balance of any section 481(a) ad­
justment determined under paragraph (b)
(1) of this section. A taxpayer that was an
insurance company for the year of change
does not accelerate the balance of any sec­
tion 481(a) adjustment determined under
paragraph (b)(1) of this section merely
because it changes from a life insurance
company to a nonlife insurance company
or because it changes from a nonlife in­
surance company to a life insurance com­
pany.
(c) Effect on determining increase or
decrease in reserves—(1) Effect under
section 807(a) and (b). If there is a change
in basis of computing any item described
in section 807(c) for a taxable year, then,
for purposes of section 807(a) and (b), the
closing balance for such item for the year
of change with respect to contracts issued
before the year of change is determined
on the old basis and the opening balance
for such item for the next taxable year for

Bulletin No. 2020–17 679 April 20, 2020
such contracts is computed on the new ba­
sis.
(2) Effect under section 832. The fol­
lowing rules apply for purposes of section
832(b)(4):
(i) For the year of change, life insur­
ance reserves at the end of the year of
change with respect to contracts issued
before the year of change are determined
on the old basis.
(ii) For the taxable year following the
year of change, life insurance reserves at
the end of the preceding taxable year (that
is, the year of change) with respect to con­
tracts issued before the year of change are
determined on the new basis.
(d) Examples. The principles of para­
graphs (a) through (c) of this section are
illustrated by the following examples.
For purposes of these examples and ex­
cept as otherwise provided, IC is a life
insurance company within the meaning
of section 816(a) that issues life insur­
ance and annuity contracts. IC is required
to determine the amount of life insurance
reserves under section 807(d) and to take
net increases or decreases in the reserves
into account in computing life insurance
company taxable income. IC’s reserve for
each insurance contract at issue exceeds
the net surrender value for such contract
and does not exceed the statutory reserve
for such contract. IC uses a calendar year
as its taxable year.
(1) Example 1—(i) Facts. In 2021, IC discovered
that it had computed the amount of life insurance re­
serves for its 2019 and 2020 taxable years by using
a mortality table that was not permitted by the tax
reserve method (as defined in section 807(d)(3)).
(ii) Analysis. To comply with section 807(d), IC
must use the appropriate mortality table to compute
its life insurance reserves for the 2021 taxable year.
This change is a change in basis of computing life
insurance reserves and a change in method of ac­
counting described in §1.446­1(e). IC is required to
obtain the consent of the Commissioner to change
its basis of computing its life insurance reserves by
following the administrative procedures prescribed
by the Commissioner.
(2) Example 2—(i) Facts. IC issues variable an­
nuity contracts with guaranteed minimum benefits.
In Year 1, the National Association of Insurance
Commissioners makes a change to the Commission­
ers’ Annuity Reserve Valuation Method that impos­
es a new computational requirement on issuers of
variable annuities with guaranteed minimum ben­
efits. The requirement applies to the determination
of statutory reserves as of December 31, Year 1, for
contracts issued on or prior to December 31, Year 1.
(ii) Analysis. To comply with section 807(d), IC
must compute its life insurance reserves for variable
annuities with guaranteed minimum benefits for the
Year 1 taxable year using the new computational
requirement. This change is a change in basis of
computing life insurance reserves for such contracts
issued prior to Year 1 and a change in method of ac­
counting described in §1.446­1(e). IC is required to
obtain the consent of the Commissioner to change
its basis of computing its life insurance reserves by
following the administrative procedures prescribed
by the Commissioner.
(3) Example 3—(i) Facts. In 2021, IC changed
the basis of computing the amount of life insurance
reserves for a certain type of life insurance contract
as described in section 807(f). Both the basis used
for computing the reserves for the relevant contracts
at the close of the 2020 taxable year (old basis) and
the basis of computing the reserves for the relevant
type of contract at the close of the 2021 taxable year
(new basis) are consistent with the applicable Com­
missioners’ Reserve Valuation Method. IC followed
the administrative procedures prescribed by the
Commissioner to obtain consent to change the basis
of computing these reserves. IC determined that the
life insurance reserves as of December 31, 2021, for
the relevant contracts issued prior to 2021 were $110
if computed using the old method and $120 if com­
puted using the new method. IC also determined that
the life insurance reserves as of December 31, 2021,
for the relevant contracts issued during 2021 were
$15 using the new basis.
(ii) Analysis. IC must take into account under
section 481 and the administrative procedures pre­
scribed by the Commissioner the $10 difference be­
tween the reserves for the relevant contracts issued
prior to 2021 computed under the old basis ($110)
and the reserves for such contracts computed under
the new basis ($120). For purposes of determining
any net increase or net decrease in reserves in taxable
year 2021 under section 807(a) or (b), IC’s closing
balance of life insurance reserves computed under
section 807(d) with respect to the relevant contracts
is $110 for contracts issued prior to 2021 (computed
on the old basis) and $15 for contracts issued during
2021 (computed on the new basis). IC’s opening bal­
ance in 2022 for life insurance reserves for the rele­
vant contracts is $135 (computed on the new basis).
(4) Example 4—(i) Facts. The facts are the same
as in paragraph (d)(3) of this section (the facts in
Example 3), except that IC is an insurance company
that is not a life insurance company. IC is required to
compute taxable income under section 832.
(ii) Analysis. IC must take into account under
section 481 and the administrative procedures pre­
scribed by the Commissioner the $10 difference be­
tween the reserves for the relevant contracts issued
prior to 2021 computed under the old basis ($110)
and the reserves for such contracts computed under
the new basis ($120). For purposes of determining
the premiums earned on insurance contracts during
the taxable year as described in section 832(b)(4) for
the year of change, the life insurance reserves at the
end of the taxable year are $110 for contracts issued
prior to 2021 (computed on the old basis) and $15
for contracts issued during 2021 (computed on the
new basis). For purposes of determining the premi­
ums earned on insurance contracts during the taxable
year as described in section 832(b)(4) for the taxable
year following the year of change, the life insurance
reserves at the end of the preceding taxable year (the
year of change) with respect to relevant contracts are
$135 (computed on the new basis).
(e) Applicability date. The rules of this
section apply to taxable years beginning
on or after [DATE FINAL REGULA-
TIONS ARE PUBLISHED IN THE
FEDERAL REGISTER]. However, a
taxpayer may choose to apply the rules
of this section for taxable years begin­
ning after December 31, 2017, the effec­
tive date of the revision of section 807
by Public Law 115­97, and ending before
the first taxable year that begins on or
after [DATE FINAL REGULATIONS
ARE PUBLISHED IN THE FEDERAL
REGISTER]. See section 7805(b)(7).
§1.809-2 [Removed]
Par. 12. Section 1.809­2 is removed.
§1.809-5 [Amended]
Par. 13. Section 1.809­5 is amended by
removing the language “and §1.810­3” from
the last sentence of paragraph (a)(5)(iii).
§1.810-3 [Removed]
Par. 14. Section 1.810­3 is removed.
Par. 15. Section 1.816­1 is added before
the undesignated center heading “Miscel­
laneous Provisions” to read as follows:
§1.816-1 Life insurance reserves.
(a) Definition of life insurance reserves.
Except as provided in section 816(h), a
reserve that meets the requirements of
section 816(b)(1) and (2) will not be dis­
qualified as a life insurance reserve solely
because the method used to compute the
reserve takes into account other factors,
provided that the method used to compute
the reserve is a tax reserve method as de­
fined in section 807(d)(3) and that such
reserve is not an asset adequacy reserve as
described in §1.807­1(a).
(b) Applicability date. The section
applies to taxable years beginning on or
after [DATE FINAL REGULATIONS
ARE PUBLISHED IN THE FEDERAL
REGISTER]. However, a taxpayer may
choose to apply the rules of this section
for taxable years beginning after Decem­
ber 31, 2017, the effective date of the revi­
sion of section 807 by Public Law 115­97,

April 20, 2020 680 Bulletin No. 2020–17
and ending before the first taxable year
that begins on or after [DATE FINAL
REGULATIONS ARE PUBLISHED
IN THE FEDERAL REGISTER]. See
section 7805(b)(7).
§1.817A-0 [Removed]
Par. 16. Section 1.817A­0 is removed.
Par. 17. Section 1.817A­1 is amended
by:
1. Revising the heading to paragraph
(b) and paragraph (b)(1).
2. Removing paragraph (b)(2).
3. Redesignating paragraphs (b)(3) and
(4) as paragraph (b)(2) and (3).
5. In newly redesignated paragraph (b)
(3):
i. Revising the first sentence.
ii. Removing the word “None” in the
second sentence and adding “Neither” in
its place.
6. Removing paragraph (b)(5)
7. Revising paragraph (d).
The revisions read as follows:
§1.817A-1 Certain modified
guaranteed contracts.
* * * * *
(b) Applicable interest rates for certain
non-equity-indexed modified guaranteed
contracts—(1) Tax reserves during tempo-
rary guarantee period under section 807(c)
(3). An insurance company is required
to determine the tax reserves for certain
MGCs under section 807(c)(3). During
the temporary guarantee period of such an
MGC that is a non­equity­indexed MGC,
the applicable interest rate to be used is the
current market rate, as defined in paragraph
(a)(5) of this section. For periods after the
end of such a temporary guarantee period,
section 807(c)(3) is not modified when ap­
plied to a non­equity indexed MGC. Sec­
tion 807(c)(3) is not affected by the defi­
nition of current market rate contained in
paragraph (a)(5) of this section once the
temporary guarantee period has expired.
* * * * *
(3) Periods after the end of the tempo-
rary guarantee period. For periods after
the end of the temporary guarantee peri­
od, sections 807(c)(3) and 811(d) are not
modified when applied to non­equity­in­
dexed MGCs. * * *
* * * * *
(d) Applicability dates. Paragraph (b)
of this section applies to taxable years
beginning on or after [DATE FINAL
REGULATIONS ARE PUBLISHED
IN THE FEDERAL REGISTER]. How­
ever, a taxpayer may choose to apply the
rules of paragraph (b) of this section for
taxable years beginning after December
31, 2017, the effective date of the revision
of section 807 by Public Law 115­97, and
ending before the first taxable year that
begins on or after [DATE FINAL REGU-
LATIONS ARE PUBLISHED IN THE
FEDERAL REGISTER]. See section
7805(b)(7). For taxable years beginning
before [DATE FINAL REGULATIONS
ARE PUBLISHED IN THE FEDERAL
REGISTER], see paragraph (b) of this
section as contained in 26 CFR part 1 re­
vised as of April 1, 2019.
§1.818-2 [Amended]
Par. 18. Section 1.818­2 is amended by
removing paragraph (c).
§1.818-4 [Removed and Reserved]
Par. 19. Section 1.818­4 is removed
and reserved.
§1.848-1 [Amended]
Par. 20. Section 1.848­1 is amended
by removing the language “section 807(e)
(4)” in paragraph (b)(2)(i) and adding the
language “section 807(e)(3)” in its place.
Par. 21. Section 1.6012­2 is amended
by:
1. In the second sentence of paragraph
(c)(1)(i), removing “Except as provided in
paragraph (c)(4) of this section, such” and
adding “Such” in its place.
2. In the third sentence of paragraph
(c)(2), removing “Except as provided in
paragraph (c)(4) of this section, such” and
adding “Such” in its place.
3. Removing paragraph (c)(4).
4. Redesignating paragraph (c)(5) as
paragraph (c)(4).
5. Revising paragraph (l).
The revision reads as follows.
§1.6012-2 Corporations required to
make returns of income.
* * * * *
(l) Applicability date. Except as pro­
vided in this paragraph (l), paragraph (c)
of this section applies to any taxable year
beginning on or after [DATE FINAL
REGULATIONS ARE PUBLISHED
IN THE FEDERAL REGISTER]. How­
ever, a taxpayer may choose to apply para­
graph (c) of this section to any original
Federal income tax return (including any
amended return filed on or before the due
date (including extensions) of such origi­
nal return) timely filed on or after [DATE
FINAL REGULATIONS ARE PUB-
LISHED IN THE FEDERAL REGIS-
TER]. For taxable years beginning be­
fore [DATE FINAL REGULATIONS
ARE PUBLISHED IN THE FEDERAL
REGISTER] see paragraph (c) of this
section as contained in 26 CFR part 1 in
effect on April 1, 2019.
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 22. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§301.9100-6T [Amended]
Par. 25. Section 301.9100­6T is amend­
ed by:
1. Removing from the table in para­
graph (a)(1) the three entries for “211”
and the entries for “216(c)(1),” “216(c)
(2),” “217(i),” and “217(l)(2)(B).”
2. Removing and reserving paragraph
(a)(2)(iii).
3. Removing paragraph (a)(3)(v).
4. In paragraph (a)(4):
i. Removing “211 (Code section 810(b)
(3)), 216(c) (1) and (2), 217(l),” from the
first sentence.
ii. Removing “211 (Code sections
806(d)(4), and 807(d)(4)(C)), 217(i),”
from the second sentence.
iii. Removing the last sentence.
Sunita Lough,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on April
1, 2019, 8:45 a.m., and published in the issue of the
Federal Register for April 2, 2019, 85 F.R. 18496)

Bulletin No. 2020–17 i April 20, 2020
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub­
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap­
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is 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 rul­
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub­
lished ruling and points out an essential
difference between them.
Modified is 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
with amplified and clarified, above).
Obsoleted describes a previously pub­
lished ruling that is not considered deter­
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings 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.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub­
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes 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 previous­
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul­
ings in the series.
Suspended is 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 cas­
es in litigation, or the outcome of a Ser­
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

April 20, 2020 ii Bulletin No. 2020–17
Numerical Finding List
1
Bulletin 2020–17
AOD:
2020­1, 2020­12 I.R.B. 521
2020­2, 2020­14 I.R.B. 558
2020­3, 2020­17 I.R.B. 663
Announcements:
2020­1, 2020­5 I.R.B. 552
2020­2, 2020­15 I.R.B. 609
2020­3, 2020­15 I.R.B. 655
2020­4, 2020­17 I.R.B. 667
Notices:
2020­1, 2020­2 I.R.B. 290
2020­2, 2020­3 I.R.B. 327
2020­3, 2020­3 I.R.B. 330
2020­4, 2020­4 I.R.B. 380
2020­5, 2020­4 I.R.B. 380
2020­6, 2020­7 I.R.B. 411
2020­7, 2020­7 I.R.B. 411
2020­8, 2020­7 I.R.B. 415
2020­9, 2020­7 I.R.B. 417
2020­10, 2020­10 I.R.B. 456
2020­11, 2020­11 I.R.B. 492
2020­12, 2020­11 I.R.B. 495
2020­13, 2020­11 I.R.B. 502
2020­14, 2020­13 I.R.B. 555
2020­15, 2020­14 I.R.B. 559
2020­16, 2020­14 I.R.B. 559
2020­17, 2020­15 I.R.B. 590
2020­18, 2020­15 I.R.B. 590
2020­19, 2020­15 I.R.B. 591
2020­20, 2020­16 I.R.B. 660
2020­21, 2020­16 I.R.B. 660
2020­22, 2020­17 I.R.B. 664
Proposed Regulations:
REG­107431­19, 2020­3 I.R.B. 332
REG­122180­18, 2020­3 I.R.B. 342
REG­100956­19, 2020­4 I.R.B. 383
REG­125710­18, 2020­5 I.R.B. 554
REG­132741­17, 2020­10 I.R.B. 458
REG­100814­19, 2020­12 I.R.B. 542
REG­132529­17, 2020­12 I.R.B. 667
Revenue Procedures:
2020­1, 2020­01 I.R.B. 1
2020­2, 2020­01 I.R.B. 107
2020­3, 2020­01 I.R.B. 131
2020­4, 2020­01 I.R.B. 148
2020­5, 2020­01 I.R.B. 241
2020­7, 2020­01 I.R.B. 281
Revenue Procedures:—Continued
2020­9, 2020­02 I.R.B. 294
2020­10, 2020­02 I.R.B. 295
2020­11, 2020­06 I.R.B. 406
2020­8, 2020­08 I.R.B. 447
2020­12, 2020­11 I.R.B. 511
2020­13, 2020­11 I.R.B. 515
2020­17, 2020­12 I.R.B. 539
2020­18, 2020­15 I.R.B. 592
2020­14, 2020­16 I.R.B. 661
Revenue Rulings:
2020­1, 2020­3 I.R.B. 296
2020­2, 2020­3 I.R.B. 298
2020­3, 2020­3 I.R.B. 409
2020­4, 2020­4 I.R.B. 444
2020­5, 2020­5 I.R.B. 454
2020­6, 2020­11 I.R.B. 490
2020­7, 2020­12 I.R.B. 522
2020­9, 2020­15 I.R.B. 563
2020­10, 2020­15 I.R.B. 565
Treasury Decisions:
9886, 2020­2 I.R.B. 285
9887, 2020­3 I.R.B. 302
9888, 2020­3 I.R.B. 306
9891, 2020­8 I.R.B. 419
9892, 2020­8 I.R.B. 439
9893, 2020­9 I.R.B. 449
9895, 2020­15 I.R.B. 565
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

Bulletin No. 2020–17 iii April 20, 2020
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2020–17
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

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Washington, DC 20224
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