us-irs-announcements-irb-2010-7-pdf•Internal Revenue Bulletin 2010-7 (PDF rendition): IRS Announcements
Internal Revenue Bulletin 2010-7 (PDF rendition): IRS Announcements
us-irs-announcements-irb-2010-7-pdfInternal Revenue Bulletin 2010-7 (PDF rendition): IRS AnnouncementsGuidance
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Bulletin No. 201 0-7 February 16, 201 0 HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. GIFT TAX Notice 2010–19, page 404. This notice applies to taxpayers making gifts in trust during 2010. Under section 2511(c) of the Code, a transfer of prop- erty to a non-wholly owned grantor trust is a transfer by gift of the entire interest in the property. To determine whether a transfer to a wholly owned grantor trust constitutes a gift, the gift tax provisions in effect prior to 2010 apply. ADMINISTRATIVE Rev. Proc. 2010–15, page 404. This procedure updates Rev. Proc. 2008–14, 2008–1 C.B. 435, and identifies circumstances under which the disclosure on a taxpayer’s income tax return with respect to an item or a position is adequate for purposes of reducing the understate- ment of income tax under section 6662(d) of the Code (relating to the substantial understatement aspect of the accuracy-re- lated penalty), and for the purpose of avoiding the tax return preparer penalty under section 6694(a) (relating to understate- ments due to unreasonable positions) with respect to income tax returns. Announcement 2010–8, page 408. This document contains a correction to final regulations (T.D. 9443, 2009–8 I.R.B. 564) relating to postponement of certain tax-related deadlines either due to service in a combat zone or due to a federally declared disaster. The regulations reflect changes in the law made by the Victims of Terrorism Tax Relief Act of 2001, the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (TEAMTRA), and current IRS practice. Announcement 2010–9, page 408. This announcement explains the potential content of a schedule that will require certain business taxpayers to report uncertain tax positions on their tax returns and invites public comments on the Internal Revenue Service’s approach. Announcement 2010–10, page 410. This document contains a correction to (Announcement 2010–4, 2010–5 I.R.B. 384) regarding Deletions From Cu- mulative List of Organizations Contributions to Which are Deductible Under Section 170 of the Code. Announcements of Disbarments and Suspensions begin on page 410. Finding Lists begin on page ii. The IRS Mission Provide Americ a’s taxpayers top quality service by helping them understand an d meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Introduction The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conven- tions, legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin contents are compiled semiannually into Cumulative Bulletins, which are sold on a single-copy basis. It is the policy of the Service to publish in the Bulletin all sub- stantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, mod- ify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indi- cated. Procedures relating solely to matters of internal man- agement are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. The Bulletin is divided into four parts as follows: Part I.—19 86 Code. This part i ncludes rulings and decisions based on provisions of the Intern al Revenue Code of 1986. Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions and Other Related Items, and Subpart B, Leg- islation and Related Committee Reports. Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rul- ings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secre- tary (Enforcement). Part IV .—Items of General Interest. This par t includes notices of proposed rulemakings, disbar- ment an d suspension lists, and announcements. The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period. The c ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402. February 16, 20102010–7 I.R.B. Part III. Administrative, Procedural, and Miscellaneous Guidance for Persons Making Transfers in Trust After December 31, 2009 Notice 2010–19 PURPOSE AND BACKGROUND This notice alerts taxpayers that the Internal Revenue Service (IRS) intends to issue guidance under section 2511(c) of the Internal Revenue Code. Congress enacted this section in section 511(e) of the Economic Growth and Tax Relief Rec- onciliation Act of 2001 (EGTRRA) and amended it in section 411(g)(1) of the Job Creation and Worker Assistance Act of 2002. Public Laws 107–16, 115 Stat. 71, and 107–147, 116 Stat. 46. Section 2511(c) is effective for transfers made after December 31, 2009, and before Jan- uary 1, 2011. Section 2511(a) generally provides that the gift tax shall apply to transfers in trust or otherwise, whether direct or indirect. Under § 25.2511–2(b) of the Gift Tax Reg- ulations, a gift is complete when the donor parts with sufficient dominion and control as to leave in the donor no power to change its disposition. Section 2511(c) provides that, notwithstandingany other provision of section 2511 and except as provided in regulations, a transfer in trust shall be treated as a transfer of property by gift unless the trust is treated as wholly owned by the donor or the donor’s spouse under subpart E of part I of subchapter J of chap- ter 1. The Joint Committee on Taxation’s explanation of section 2511(c) provides that certain transfers in trust are treated as transfers of property by gift even though such transfers would have been regarded as incomplete gifts, or would not have been treated as transfers under the gift tax provisions in effect prior to 2010. Joint Committee on Taxation,Technical Expla- nation of the “Job Creation and Worker Assistance Act of 2002”(JCX–12–02), March 6, 2002. INTERIM PROVISIONS Some taxpayers may have inaccurately interpreted section 2511(c) as excluding from the gift tax transfers to a trust treated as wholly owned by the donor or the donor’s spouse under subpart E of part I of subchapter J of chapter 1, even though those transfers would otherwise be tax- able under Chapter 12. The provisions of Chapter 12 regarding the substantive law applicable to the gift tax were not amended by EGTRRA, and those provisions con- tinue to apply to all transfers made by donors during 2010. Section 2511(c) is an addition to those substantive law provi- sions and is applicable to transfers made in 2010. Section 2511(c) broadens the types of transfers subject to the transfer tax un- der Chapter 12 to include certain transfers to trusts that, before 2010, would have been considered incomplete and, thus, not subject to the gift tax. Accordingly, each transfer made in 2010 to a trust that is not treated as wholly owned by the donor or the donor’s spouse under subpart E of part I of subchapter J of chapter 1 is considered to be a transfer by gift of the entire interest in the property under section 2511(c). The provisions of Chapter 12 as in effect on December 31, 2009, continue to apply (both before and during 2010) to all trans- fers made to any other trust to determine whether the transfer is subject to gift tax. EFFECTIVE DATE This notice is applicable to transfers made in trust after December 31, 2009. The Treasury Department and the IRS in- tend to issue regulations to confirm the conclusions set forth in this notice. DRAFTING INFORMATION The principal author of this notice is Laura Urich Daly of the Office of Associate Chief Counsel (Passthroughs & Special Industries).For further information regarding this notice, contact Laura Urich Daly at (202) 622–3090 (not a toll-free call). 26 CFR 601.105: Examination of returns and claims for refund, credit or abatement; determination of cor- rect tax liability. (Also: Part 1, §§ 6662, 6694, 1.6662–4, 1.6694–2.) Rev. Proc. 2010–15 SECTION 1. PURPOSE This revenue procedure updates Rev. Proc. 2008–14, 2008–1 C.B. 435, and identifies circumstances under which the disclosure on a taxpayer’s income tax re- turn with respect to an item or a position is adequate for the purpose of reducing the understatement of income tax under section 6662(d) of the Internal Revenue Code (relating to the substantial under- statement aspect of the accuracy-related penalty), and for the purpose of avoiding the tax return preparer penalty under sec- tion 6694(a) (relating to understatements due to unreasonable positions) with re- spect to income tax returns. This rev- enue procedure does not apply with re- spect to any other penalty provisions (in- cluding the disregard provisions of the sec- tion 6662(b)(1) accuracy-related penalty, which are subject to an exception for ad- equate disclosure). Also, under this rev- enue procedure, no disclosure on a return other than an income tax return will be ad- equate with respect to a tax return preparer penalty under section 6694(a). This revenue procedure applies to any income tax return filed on 2009 tax forms for a taxable year beginning in 2009, and to any income tax return filed on 2009 tax forms in 2010 for short taxable years beginning in 2010. SECTION 2. CHANGES FROM REV. PROC. 2008–14 .01. This revenue procedure has been updated to reflect changes made to sec- tion 6694(a) by the Tax Extenders and Alternative Minimum Tax Relief Act, Pub. L. 110–343, section 506, 122 Stat. 3765 (2008). This update also describes a new schedule required of taxpayers filing Schedule M–3 (Form 1120) or Schedule M–3 (Form 1065). 2010–7 I.R.B.404February 16, 2010 SECTION 3. BACKGROUND .01 If section 6662 applies to any por- tion of an underpayment of tax required to be shown on a return, an amount equal to 20 percent of the portion of the under- payment to which the section applies is added to the tax (the penalty rate is 40 per- cent in the case of gross valuation mis- statements under section 6662(h)). Sec- tion 6662(b)(2) applies to the portion of an underpayment of tax that is attributable to a substantial understatement of income tax. .02 Section 6662(d)(1) provides that there is a substantial understatement of income tax if the amount of the understate- ment exceeds the greater of 10 percent of the amount of tax required to be shown on the return for the taxable year or $5,000. Section 6662(d)(1)(B) provides special rules for corporations. A corporation (other than an S corporation or personal holding company) has a substantial under- statement of income tax if the amount of the understatement exceeds the lesser of 10 percent of the tax required to be shown on the return for a taxable year (or, if greater, $10,000) or $10,000,000. Section 6662(d)(2) defines an understatement as the excess of the amount of tax required to be shown on the return for the taxable year over the amount of the tax that is shown on the return reduced by any rebate (within the meaning of section 6211(b)(2)). .03 In the case of an item not at- tributable to a tax shelter, section 6662(d)(2)(B)(ii) provides that the amount of the understatement is reduced by the portion of the understatement attributable to any item with respect to which the relevant facts affecting the item’s tax treat- ment are adequately disclosed in the return or in a statement attached to the return, and there is a reasonable basis for the tax treatment of the item by the taxpayer. .04 Section 6694(a) imposes a penalty on a tax return preparer who prepares a re- turn or claim for refund reflecting an un- derstatement of liability due to an “unrea- sonable position” if the tax return preparer knew (or reasonably should have known) of the position. A position (other than a position with respect to a tax shelter or a reportable transaction to which section 6662A applies) is generally treated as un- reasonable unless (i) there is or was sub- stantial authority for the position, or (ii) the position was properly disclosed in ac- cordance with section6662(d)(2)(B)(ii)(I) and had a reasonable basis. If the position is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a reportable transaction to which section 6662A ap- plies, the position is treated as unreason- able unless it is reasonable to believe that the position would more likely than not be sustained on the merits. See Notice 2009–5, 2009–3 I.R.B. 309 (January 21, 2009) for interim penalty compliance rules for tax shelter transactions. .05 In general, this revenue proce- dure provides guidance for determining when disclosure is adequate for purposes of section 6662(d)(2)(B)(ii) and section 6694(a)(2)(B). For purposes of this rev- enue procedure, the taxpayer must furnish all required information in accordance with the applicable forms and instructions, andthemoneyamountsenteredonthese forms must be verifiable. .06 Fiscal and short tax year returns. (a) In general. This revenue procedure may apply to a return for a fiscal tax year that begins in 2009 and ends in 2010. This rev- enue procedure may also apply to a short year return for a period beginning in 2010 if the return is to be filed before the 2010 forms are available. (Note that individu- als are generally not put in this position as a decedent’s final return for a fractional part of a year is due the fifteenth day of the fourth month following the close of the 12-month period which began with the first day of such fractional part of the year. SeeTreas. Reg. § 1.6072–1(b).) In the case of fiscal year and short year returns, the taxpayer must take into account any tax law changes that are effective for tax years beginning after December 31, 2009, even though these changes are not reflected on the form. (b) Tax law changes effective after De- cember 31, 2009. This document does not take into account the effect of tax law changes effective for tax years beginning after December 31, 2009. If a line ref- erenced in this revenue procedure is af- fected by such a change and requires ad- ditional reporting, a taxpayer may have to file Form 8275,Disclosure Statement, or Form 8275–R,Regulation Disclosure Statementuntil the Service prescribes cri- teria for complying with the requirement. SECTION 4. PROCEDURE .01 General. (1) Additional disclosure of facts rel- evant to, or positions taken with respect to, issues involving any of the items set forth below is unnecessary for purposes of reducing any understatement of income tax under section 6662(d) (except as other- wise provided in section 4.02(3) concern- ing Schedules M–1 and M–3), provided that the forms and attachments are com- pleted in a clear manner and in accordance with their instructions. (2) The money amounts entered on the forms must be verifiable, and the informa- tion on the return must be disclosed in the manner described below. For purposes of this revenue procedure, a number is veri- fiable if, on audit, the taxpayer can prove the origin of the amount (even if that num- ber is not ultimately accepted by the Inter- nal Revenue Service) and the taxpayer can show good faith in entering that number on the applicable form. (3) The disclosure of an amount as pro- videdinsection4.02belowisnotade- quate when the understatement arises from a transaction between related parties. If an entry may present a legal issue or contro- versy because of a related-party transac- tion, then that transaction and the relation- ship must be disclosed on a Form 8275, Disclosure Statement, or Form 8275–R, Regulation Disclosure Statement. (4) When the amount of an item is shown on a line that does not have a preprinted description identifying that item(suchasonanunnamedlineunder an “Other Expense” category) the tax- payer must clearly identify the item by including the description on that line. For example, to disclose a bad debt for a sole proprietorship, the words “bad debt” must be written or typed on the line of Schedule C that shows the amount of the bad debt. Also, for Schedule M–3 (Form 1120), Part II, line 25, Other income (loss) items with differences, or Part III, line 35, Other expense/deduction items with differences, the entry must provide descriptive language; for example, “Cost of non-compete agreement deductible not capitalizable.” If space limitations on a form do not allow for an adequate description, the description must be continued on an attachment. February 16, 20104052010–7 I.R.B. (5) Although a taxpayer may literally meet the disclosure requirements of this revenue procedure, the disclosure will have no effect for purposes of the sec- tion 6662 accuracy-related penalty if the item or position on the return: (1) Does not have a reasonable basis as defined in Treas. Reg. § 1.6662–3(b)(3); (2) Is attributable to a tax shelter item as defined in section 6662(d)(2); or (3) Is not prop- erly substantiated or the taxpayer failed to keep adequate books and records with respect to the item or position. (6) Disclosure also will have no effect for purposes of the section 6694(a) penalty as applicable to tax return preparers if the position is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a reportable transaction to which section 6662A applies. .02 Items. (1) Form 1040, Schedule A,Itemized Deductions: (a) Medical and Dental Expenses: Complete lines 1 through 4, supplying all required information. (b) Taxes: Complete lines 5 through 9, supplying all required information. Line 8 must list each type of tax and the amount paid. (c) Interest Expenses: Complete lines 10 through 15, supplying all required in- formation. This section 4.02(1)(c) does not apply to (i) amounts disallowed under section 163(d) unless Form 4952,Invest- ment Interest Expense Deduction,iscom- pleted, or (ii) amounts disallowed under section 265. (d) Contributions: Complete lines 16 through 19, supplying all required infor- mation. Enter the amount of the contribu- tion reduced by the value of any substan- tial benefit (goods or services) provided by the donee organization in consideration, in whole or in part. Entering the value of the contribution unreduced by the value of the benefit received will not constitute adequate disclosure. If a contribution of $250 or more is made, this section will not apply unless a contemporaneous writ- ten acknowledgment, as required by sec- tion 170(f)(8), is obtained from the donee organization. If a contribution of cash of less than $250 is made, this section will not apply unless a bank record or writ- ten communication from the donee, as re- quired by section 170(f)(17), is obtained from the donee organization. If a contri- bution of property other than cash is made and the amount claimed as a deduction ex- ceeds $500, attach a properly completed Form 8283,Noncash Charitable Contri- butions, to the return. In addition to the Form 8283, if a contribution of a quali- fied motor vehicle, boat, or airplane has a value of more than $500, this section will not apply unless a contemporaneous writ- ten acknowledgment, as required by sec- tion 170(f)(12), is obtained from the donee organization and attached to the return. An acknowledgment under section 170(f)(8) is not required if an acknowledgment un- der section 170(f)(12) is required. (e) Casualty and Theft Losses: Com- plete Form 4684,Casualties and Thefts, and attach to the return. Each item or ar- ticle for which a casualty or theft loss is claimed must be listed on Form 4684. (2) Certain Trade or Business Expenses (including, for purposes of this section, the following six expenses as they relate to the rental of property): (a) Casualty and Theft Losses: The pro- cedure outlined in section 4.02(1)(e) must be followed. (b) Legal Expenses: The amount claimed must be stated. This section does not apply, however, to amounts prop- erly characterized as capital expenditures, personal expenses, or non-deductible lob- bying or political expenditures, including amounts that are required to be (or that are) amortized over a period of years. (c) Specific Bad Debt Charge-off: The amount written off must be stated. (d) Reasonableness of Officers’ Com- pensation: Form 1120, Schedule E,Com- pensation of Officers, must be completed when required by its instructions. The time devoted to business must be expressed as a percentage as opposed to “part” or “as needed.” This section does not apply to “golden parachute” payments, as defined under section 280G. This section will not apply to the extent that remuneration paid or incurred exceeds the $1 million-em- ployee-remuneration limitation, if applica- ble. (e) Repair Expenses: The amount claimed must be stated. This section does not apply, however, to any repair expenses properly characterized as capital expendi- tures or personal expenses. (f) Taxes (other than foreign taxes): The amount claimed must be stated. (3) Differences in book and income tax reporting. For Schedule M–1 and all Schedules M–3, including those listed in (a)-(f) be- low, the information provided must rea- sonably apprise the Service of the poten- tial controversy concerning the tax treat- ment of the item. If the information pro- vided does not so apprise the Service, a Form 8275 or Form 8275–R must be used to adequately disclose the item (see Part II of the instructions for those forms). Note: Anitemreportedonalinewith a pre-printed description, shown on an attached schedule or “itemized” on Schedule M–1, may represent the ag- gregate amount of several transactions producing that item (i.e.,agroupof similar items, such as amounts paid or incurred for supplies by a taxpayer en- gaged in business). In some instances, a potentially controversial item may in- volve a portion of the aggregate amount disclosed on the schedule. The Service will not be reasonably apprised of a potential controversy by the aggregate amount disclosed. In these instances, the taxpayer must use Form 8275 or Form 8275–R regarding that portion of the item. Combining unlike items, whether on Schedule M–1 or Schedule M–3 (or on an attachment when directed by the instruc- tions), will not constitute an adequate dis- closure. Additionally, for taxpayers that file the Schedule M–3 (Form 1120), the new Schedule B,Additional Information for Schedule M–3 Filers,must also be com- pleted. For taxpayers that file the Schedule M–3 (Form 1065), the new Schedule C, Additional Information for Schedule M–3 Filers, must also be completed. When re- quired, these new Schedules are necessary to constitute adequate disclosure. (a) Form 1065. Schedule M–3 (Form 1065),Net Income (Loss) Reconciliation for Certain Partnerships:Column(a), Income (Loss) per Income Statement,of Part II (reconciliation of income (loss) items) and Column (a),Expense per In- come Statement, of Part III (reconciliation of expense/deduction items); Column (b), Temporary Difference,andColumn(c), Permanent Difference,ofPartII(recon- ciliation of income (loss) items) and Part III (reconciliation of expense/deduction items); and Column (d),Income (Loss) 2010–7 I.R.B.406February 16, 2010 per Tax Return, of Part II (reconciliation of income (loss) items) and Column (d), Deduction per Tax Return, of Part III (rec- onciliation of expense/deduction items). (b) Form 1120. (i) Schedule M–1,Rec- onciliation of Income (Loss) per Books With Income per Return. (ii) Schedule M–3 (Form 1120),Net Income (Loss) Reconciliation for Corpo- rations with Total Assets of $10 Million or More:Column(a),Income (Loss) per Income Statement, of Part II (reconcilia- tion of income (loss) items) and Column (a),Expense per Income Statement,of Part III (reconciliation of expense/de- duction items); Column (b),Temporary Difference,andColumn(c),Permanent Difference, of Part II (reconciliation of income (loss) items) and Part III (recon- ciliation of expense/deduction items) and Column (d),Income (Loss) per Tax Re- turn, of Part II (reconciliation of income (loss) items); and Column (d),Deduction per Tax Return, of Part III (reconciliation of expense/deduction items). (c) Form 1120–L. Schedule M–3 (Form 1120–L),Net Income (Loss) Reconcilia- tion for U.S. Life Insurance Companies With Total Assets of $10 Million or More: Column (a),Income (Loss) per Income Statement, of Part II (reconciliation of income (loss) items) and Column (a), Expense per Income Statement,ofPart III (reconciliation of expense/deduction items); Column (b),Temporary Differ- ence,andColumn(c),Permanent Differ- ence, of Part II (reconciliation of income (loss) items) and Part III (reconciliation of expense/deduction items); and Col- umn (d),Income (Loss) per Tax Return, of Part II (reconciliation of income (loss) items) and Column (d),Deduction per Tax Return, of Part III (reconciliation of expense/deduction items). (d) Form 1120–PC. Schedule M–3 (Form 1120–PC),Net Income (Loss) Rec- onciliation for U.S. Property and Casualty Insurance Companies With Total Assets of $10 Million or More:Column(a),In- come (Loss) per Income Statement,of Part II (reconciliation of income (loss) items) and Column (a),Expense per In- come Statement, of Part III (reconciliation of expense/deduction items); Column (b), Temporary Difference,andColumn(c), Permanent Difference, of Part II (recon- ciliation of income (loss) items) and Part III (reconciliation of expense/deduction items); and Column (d),Income (Loss) per Tax Return, of Part II (reconciliation of income (loss) items) and Column (d), Deduction per Tax Return, of Part III (rec- onciliation of expense/deduction items). (e) Form 1120S. Schedule M–3 (Form 1120S),Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More:Column(a),Income (Loss) per Income Statement,ofPartII (reconciliation of income (loss) items) and Column (a),Expense per Income Statement, of Part III (reconciliation of expense/deduction items); Column (b), Temporary Difference,andColumn(c), Permanent Difference, of Part II (recon- ciliation of income (loss) items) and Part III (reconciliation of expense/deduction items); and Column (d),Income (Loss) per Tax Return, of Part II (reconciliation of income (loss) items) and Column (d), Deduction per Tax Return, of Part III (rec- onciliation of expense/deduction items). (f) Form 1120–F. Schedule M–3 (Form 1120–F),Net Income (Loss) Reconcilia- tion for Foreign Corporations With Re- portable Assets of $10 Million or More: Column (b),Temporary Difference,Col- umn (c),Permanent Difference,andCol- umn (d),Other Permanent Differences for Allocations to Non-ECI and ECI,of Part II (reconciliation of income (loss) items) and Part III (reconciliation of expense/deduc- tion items). (4) Foreign Tax Items: (a) International Boycott Transactions: Transactions disclosed on Form 5713, International Boycott Report; Schedule A,International Boycott Factor (Sec- tion 999(c)(1)); Schedule B,Specifically Attributable Taxes and Income (Section 999(c)(2)); and Schedule C,Tax Effect of the International Boycott Provisions, must be completed when required by their instructions. (b) Treaty-Based Return Position: Transactions and amounts under section 6114 or section 7701(b) as disclosed on Form 8833,Treaty-Based Return Posi- tion Disclosure Under Section 6114 or 7701(b), must be completed when required by its instructions. (5) Other: (a) Moving Expenses: Complete Form 3903,Moving Expenses, and attach to the return. (b) Employee Business Expenses: Complete Form 2106,Employee Business Expenses, or Form 2106–EZ,Unreim- bursed Employee Business Expenses,and attach to the return. This section does not apply to club dues, or to travel expenses for any non-employee accompanying the taxpayer on the trip. (c) Fuels Credit: Complete Form 4136, Credit for Federal Tax Paid on Fuels,and attach to the return. (d) Investment Credit: Complete Form 3468,Investment Credit, and attach to the return. SECTION 5. EFFECTIVE DATE This revenue procedure applies to any income tax return filed on a 2009 tax form for a taxable year beginning in 2009, and to any income tax return filed on a 2009 taxformin2010forashorttaxableyear beginning in 2010. SECTION 6. DRAFTING INFORMATION The principal author of this revenue procedure is Ryan M. Wyzik of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue procedure, contact Branch 2 of Procedure and Administration at (202) 622–4940 (not a toll-free call). February 16, 20104072010–7 I.R.B. Part IV. Items o fGeneralInterest Postponement of Certain Tax-Related D eadlines by Reason of a Fed erally Declared Dis aster or Terroristic or Military Action; Correction Announceme nt 2010–8 AGENCY: Int ernal Revenue Service (IRS), Trea sury. ACTION: Cor rection to final regulations. SUMMARY: Th is document contains a correctio n to final regulations (T.D. 9443, 2009–8 I.R .B. 564) that were published in theFedera lRegisteron Thursday, Jan- uary 15, 20 09 (74 FR 2370) relating to postpone ment of certain tax-related dead- lines eit her due to service in a combat zone or du e to a federally declared dis- aster. Th e regulations reflect changes in the law ma de by the Victims of Terrorism Tax Relie f Act of 2001, the Tax Extenders and Alte rnative Minimum Tax Relief Act of 2008 ( TEAMTRA), and current IRS practic e. DATES: T his correction is effective on De- cember 1 7, 2009, and is applicable on Jan- uary 15 , 2009. FOR FUR THER INFORMATION CONTAC T: Mary Ellen Keys, (202) 622–45 70 (not a toll-free number). SUPPLE MENTARY INFORMATION: Backgr ound The fin al regulations (T.D. 9443) that are the subject of this document are un- der sec tion 7508A of the Internal Revenue Code. Need fo r Correction As publ ished, the final regulations (T.D. 9443) contain an error that may prove to be misleading and is in need of clari fication. Correction of Publication Accordingly, the publication of the final regulations ( T.D. 9443), which were the subject of FR D oc. E9–767, is corrected as follows: On page 2370, c olumn 3, in the pre- amble, under the paragraph heading “Ex- planation of Revisions”, last paragraph of the column, t hird through twelfth lines, the language “Example 9.Example 9, which reflec ts current IRS practice, ex- plains the i mpact of disaster relief on installmen t agreement payments that be- come due dur ing the postponement period. Example 9 ex plains that the affected tax- payer’s ob ligation to make installment agreement payments is suspended during the postpo nement period.Example 9fur- ther expla ins that,” is corrected to read “Example 8.Example 8, which reflects current I RS practice, explains the impact of disast er relief on installment agreement payments that become due during the post- ponement period.Example 8explains that the affe cted taxpayer’s obligation to make install ment agreement payments is sus- pended d uring the postponement period. Example 8further explains that,”. LaNita V an Dyke, Chief, Publications and Regula tions Branch, Legal P rocessing Division, Associ ate Chief Counsel (Proce dure and Administration). (Filed by the Office of the Federal Register on December 16, 2009, 8:45 a.m., and published in the issue of the Federal Regis ter for December 17, 2009, 74 F.R. 66915) Uncer tain Tax Positions — Poli cy of Restraint Anno uncement 2010–9 The I nternal Revenue Service is con- side ring changes to reporting requirements rega rding certain business taxpayers’ un- cer tain tax positions in order to improve tax compliance and administration. The Ser vice is developing a schedule requir- ing certain business taxpayers to report un- cer tain tax positions on their tax returns. This Announce ment discusses the poten- tial content o f such a schedule and invites public commen t on the Service’s proposed approach. The schedule will require the annual disclo sure of uncertain tax posi- tions in the f orm of a concise description of those positi ons and information about their magnitude. T he proposal does not require the taxpayer to disclose the taxpayer’s risk assessment or tax reserve amounts, even though the S ervice can compel the pro- duction of t his information through a sum- mons.Unite d States v. Arthur Young,465 U.S. 805, 8 15 (1984). While the Service intends to require the reporting of uncer- tain tax po sitions, the Service is propos- ingtoothe rwise retain its existing pol- icy of rest raint as described in Announce- ment 2002 –63, 2002–2 C.B. 72, and IRM 4.10.20. BACKGROU ND Uncertai n Tax Positions The Unite d States federal income tax system re lies on taxpayers to make a self- assessme nt of tax and to file the appropri- ate form of return that shows the facts upon which ta x liability may be determined and assesse d. Section 601.103 of the Proce- dure and Administration Regulations. To dischar ge its obligation to fairly and uni- formly administer the tax laws, the Service must be able to identify quickly and ef- ficien tly significant issues (including un- certai n tax positions) underlying the tax return . Existing business tax returns do not cu rrently require that taxpayers iden- tify a nd explain uncertain tax positions un- derly ing their returns. Many t axpayers are required by FASB Inter pretation No. 48,Accounting for Un- certa inty in Income Taxes, an Interpreta- tion o f FASB Statement No. 109(FIN 48) 1 to ide ntify and quantify uncertain tax po- siti ons taken in the return for financial ac- coun ting purposes. That is, taxpayers must iden tify and quantify for financial account- ing p urposes a tax position relating to a spec ific federal tax return for which a tax- pay er is required to reserve an amount un- der FIN 48. A taxpayer’s tax reserves and rep orting regarding its uncertain tax posi- 1 Under the codification of accountingstandards, the relevant portions of FIN 48 are now contained in Accounting Standards Codification subtopic 740–10,Income Taxes. FASB ASC 740–10. 2010–7 I.R.B.408February 16, 2010 tions may be reflected in its own books and records or financial statements, or in the books and records or financial state- ments of a related domestic or foreign en- tity. Taxpayers not subject to FIN 48 may be subject to other requirements regarding accounting for uncertain tax positions. For example, taxpayers may be subject to other generally accepted accounting standards, including International Financial Report- ing Standards (IFRS) and country-specific generally accepted accounting standards. The information developed in the course of complying with FIN 48 or other accounting standards is highly relevant to understanding the taxpayer’s tax positions and assessing how those positions affect the taxpayer’s tax liability.United States v. Arthur Young, 465 U.S. at 815. That information also would aid the Service in focusing its examination resources on returns that contain specific uncertain tax positions that are of particular interest or of sufficient magnitude to warrant Service inquiry, as well as allowing examination teams to identify all of the issues under- lying the tax returns more quickly and efficiently. Schedule The Service is developing a schedule that will require certain filers to provide information about their uncertain tax po- sitions that affect their United States fed- eral income tax liability. This schedule will be filed with the Form 1120,U.S. Corporation Income Tax Return,or other business tax returns. The schedule will require (i) a concise description of each uncertain tax position for which the tax- payer or a related entity has recorded a reserve in its financial statements and (ii) the maximum amount of potential federal tax liability attributable to each uncertain tax position (determined without regard to the taxpayer’s risk analysis regarding its likelihood of prevailing on the merits). In addition to those positions for which a tax reserve must be established under FIN 48 or other accounting standards, un- certain tax positions will include any po- sition related to the determination of any United States federal income tax liability for which a taxpayer or a related entity has not recorded a tax reserve because (i) the taxpayer expects to litigate the position, or (ii) the taxpayer has determined that the Service has a general administrative prac- tice not to examine the position. For this purpose, a related entity is any entity that is related to the taxpayer under sections 267(b), 318(a), or 707(b). The schedule will require a concise de- scription of each uncertain tax position in sufficient detail so that the Service can de- termine the nature of the issue. The suffi- ciency of a description will depend on the taxpayer’s particular facts and the nature of the underlying transaction. As currently contemplated, this concise description will include the rationale for the position and a concise general statement of the reasons for determining that the position is an un- certain tax position. To be sufficient, the description must contain: 1. The Code sections potentially impli- cated by the position; 2. A description of the taxable year or years to which the position relates; 3. A statement that the position in- volves an item of income, gain, loss, de- duction, or credit against tax; 4. A statement that the position in- volves a permanent inclusion or exclusion of any item, the timing of that item, or both; 5. A statement whether the position involves a determination of the value of any property or right; and 6. A statement whether the position involves a computation of basis. In addition, the schedule will require a taxpayer to specify for each uncertain tax position the entire amount of United States federal income tax that would be due if the position were disallowed in its entirety on audit. This amount is the maximum tax adjustment for the position reflecting all changes to items of income, gain, loss, deduction, or credit if the position is not sustained. The Service anticipates publishing a no- tice of proposed rulemaking to provide that certain businesses required to make a return (including corporations required to make a return under section 6012) will be required to file a form or schedule relat- ing to the disclosure of uncertain tax po- sitions as part of its return in accordance with the forms, instructions, or other ap- propriate guidance provided by the Ser- vice. The Service is also evaluating addi- tional options for penalties or sanctions to be imposed when a taxpayer fails to make adequate disclosure of the required information regarding its uncertain tax positions. One option being considered is to seek legislation imposing a penalty for failure to file the schedule or to make adequate disclosure. Continuation of Policy of Restraint Except as described in this Announce- ment, the Service intends to retain the ex- isting policy of restraint for requesting tax accrual workpapers during the course of examinations described in IRM 4.10.20. The Service will continue to review the policy and to consider additional modifica- tions, however, as appropriate or necessary to ensure it obtains complete and accurate information regardinga taxpayer’s uncer- tain tax positions on a timely basis. SCOPE The Service intends the new schedule to be filed by a business taxpayer with to- tal assets in excess of $10 million if the taxpayer has one or more uncertain tax po- sitions of the type required to be reported on the new schedule. This includes a tax- payer who prepares financial statements, or is included in the financial statements of a related entity that prepares financial statements, if that taxpayer or related en- tity determines its United States federal in- come tax reserves under FIN 48, or other accounting standards relating to uncertain tax positions involving United States fed- eral income tax. REQUEST FOR COMMENTS Given the importance of these issues to both the Service and taxpayers, the Ser- vice intends to publish the new schedule as quickly as possible and therefore invites the public to submit comments on the pro- posal described in this Announcement by March 29, 2010. The Service intends to mandate that the new schedule for uncer- tain tax positions be filed with returns filed after release of the schedule. The Service is particularly interested in comments re- garding: 1. How the maximum tax adjustment should be reflected on the schedule so that it provides the Service with an objective and quantifiable measure of each reported tax position (e.g., specific dollar amount or by appropriate dollar ranges); February 16, 20104092010–7 I.R.B. 2. What alternative methods of disclo- sure of the amount at issue would allow the Service to identify the relative importance of the uncertain tax positions; 3. Whether the calculation of the maxi- mum tax adjustment should relate solely to the tax period for which the return is filed or to all tax periods to which the position relates, and whether net operating losses or excess credits should be taken into ac- count in determining the maximum tax ad- justment; 4. How the related entity rules should be applied; 5. Whether the scope of the Announce- ment should be modified regarding the un- certain tax positions for which information is required to be reported (e.g., positions for which no tax reserve has been estab- lished because the taxpayer determined the Service has a general administrative prac- tice not to examine the position); 6. Whether transition rules should be used or criteria modified to either include or exclude certain businesses taxpayers (e.g., the proposed threshold of $10 mil- lion total assets); 7. How the new schedule should ad- dress taxpayers that initially did not record a reserve for an issue, but in later years do record a reserve; and 8. Whether the list of information pro- posed to be included should be modified, including whether certain information should be requested in some circumstances upon examination rather than with tax return. Comments should be submitted to: In- ternal Revenue Service, CC:PA:LPD:PR (Announcement 2010–9), Room 5203, P.O. Box 7604, Ben Franklin Station, N.W., Washington, D.C. 20044. Alter- natively, comments may be hand deliv- ered between the hours of 8:00 a.m. and 4:00 p.m., Monday through Friday, to CC:PA:LPD:PR (Announcement 2010–9), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. Comments may also be transmitted electronically via the following e-mail address: Announcement.Comments@irscounsel.treas.gov. Please include “Announcement 2010–9” in the subject line of any electronic communications. All comments will be available for public inspection and copying. DRAFTING INFORMATION The principal author of this Announce- ment is Kathryn Zuba of the Office of Associate Chief Counsel (Procedure and Administration). For further informa- tion regarding this announcement, contact the Office the Associate Chief Counsel (Procedure and Administration) at (202) 622–3400 (not a toll-free call). Deletions From Cumulative List of Organizations Contributions to Which are Deductible Under Section 170 of the Code; Correction Announcement 2010–10 This document contains a correction to Announcement 2010–4, 2010–5 I.R.B. 384, regarding Deletions From Cumula- tive List of Organizations Contributions to Which are Deductible Under Section 170 of the Code. Accordingly, the publication of this an- nouncement is corrected as follows: On page 384, the text should read Coin- mach Disaster Relief Fund Trust of Plain- view, NY. Announcement of Disciplinary Sanctions From the Office of Professional Responsibility Announcement 2010-12 TheOfficeofProfessionalResponsi- bility (OPR) announcesrecent disciplinary sanctions involving attorneys, certified public accountants, enrolled agents, en- rolled actuaries, enrolled retirement plan agents, and appraisers. These individuals are subject to the regulations governing practice before the Internal Revenue Ser- vice (IRS), which are set out in Title 31, Code of Federal Regulations, Part 10, and which are published in pamphlet form as Treasury Department Circular No. 230. The regulations prescribe the duties and restrictions relating to such practice and prescribe the disciplinary sanctions for violating the regulations. The disciplinary sanctions to be im- posed for violation of the regulations are: Disbarred from practice before the IRS—An individual who is disbarred is not eligible to represent taxpayers before the IRS. Suspended from practice before the IRS—An individual who is suspended is not eligible to represent taxpayers before the IRS during the term of the suspension. Censured in practice before the IRS—Censure is a public reprimand. Un- like disbarment or suspension, censure does not affect an individual’s eligibility to represent taxpayers before the IRS, but OPR may subject the individual’s future representations to conditions designed to promote high standards of conduct. Monetary penalty—A monetary penalty may be imposed on an individual who engages in conduct subject to sanc- tion or on an employer, firm, or entity if the individual was acting on its behalf and if it knew, or reasonably should have known, of the individual’s conduct. Disqualification of appraiser—An appraiser who is disqualified is barred from presenting evidence or testimony in any administrative proceeding before the Department of the Treasury or the IRS. Under the regulations, attorneys, cer- tified public accountants, enrolled agents, enrolled actuaries, and enrolled retirement plan agents may not assist, or accept assis- tance from, individuals who are suspended or disbarred with respect to matters consti- tuting practice (i.e., representation) before theIRS,andtheymaynotaidorabetsus- pended or disbarred individuals to practice before the IRS. 2010–7 I.R.B.410February 16, 2010 Disciplinary sanctions are described in these terms: Disbarred by decision after hearing, Suspended by decision after hearing, Censured by decision after hearing, Monetary penalty imposed after hear- ing, and Disqualified after hearing—An administrative law judge (ALJ) conducted an evidentiary hearing upon OPR’s com- plaint alleging violation of the regulations and issued a decision imposing one of these sanctions. After 30 days from the issuance of the decision, in the absence of an appeal, the ALJ’s decision became the final agency decision. Disbarred by default decision, Sus- pended by default decision, Censured by default decision, Monetary penalty im- posed by default decision, and Disqual- ified by default decision—An ALJ, after findingthatnoanswertoOPR’scomplaint had been filed, granted OPR’s motion for a default judgment and issued a decision im- posing one of these sanctions. Disbarment by decision on appeal, Suspended by decision on appeal, Cen- sured by decision on appeal, Monetary penalty imposed by decision on ap- peal, and Disqualified by decision on appeal—The decision of the ALJ was appealed to the agency appeal authority, acting as the delegate of the Secretary of the Treasury, and the appeal authority issued a decision imposing one of these sanctions. Disbarred by consent, Suspended by consent, Censured by consent, Mone- tary penalty imposed by consent, and Disqualified by consent—In lieu of a disciplinary proceeding being instituted or continued, an individual offered a con- sent to one of these sanctions and OPR accepted the offer. Typically, an offer of consent will provide for: suspension for an indefinite term; conditions that the individual must observe during the sus- pension; and the individual’s opportunity, after a stated number of months, to file with OPR a petition for reinstatement af- firming compliance with the terms of the consent and affirming current eligibility to practice (i.e., an active professional license or active enrollment status). An enrolled agent or an enrolled retirement plan agent may also offer to resign in order to avoid a disciplinary proceeding. Suspended by decision in expedited proceeding, Suspended by default de- cision in expedited proceeding, Sus- pended by consent in expedited pro- ceeding—OPR instituted an expedited proceeding for suspension (based on cer- tain limited grounds, including loss of a professional license and criminal convic- tions). OPR has authority to disclose the grounds for disciplinary sanctions in these situations: (1) an ALJ or the Secretary’s delegate on appeal has issued a decision on or after September 26, 2007, which was theeffectivedateofamendmentstothe regulations that permit making such deci- sions publicly available; (2) the individual has settled a disciplinary case by signing OPR’s “consent to sanction” form, which requires consenting individuals to admit to one or more violations of the regulations and to consent to the disclosure of the in- dividual’s own return information related to the admitted violations (for example, failure to file Federal income tax returns); or (3) OPR has issued a decision in an expedited proceeding for suspension. Announcements of disciplinary sanc- tions appear in the Internal Revenue Bul- letin at the earliest practicable date. The sanctions announced below are alphabet- ized first by the names of states and sec- ond by the last names of individuals. Un- less otherwise indicated, section numbers (e.g., § 10.51) refer to the regulations. City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation Arizona ScottsdaleWise, DannyCPASuspended by default decision in expedited proceeding under § 10.82 (revocation of CPA license in California) Indefinite from December 14, 2009 California W. HollywoodKitt, Eli A.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 27, 2010 Wise, Danny, See Arizona February 16, 20104112010–7 I.R.B. City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation Colorado Colorado SpringsMarple, Jon R.CPASuspended by decision in expedited proceeding under § 10.82 (suspension of CPA license in Washington State) Indefinite from January 26, 2010 Connecticut West SimsburyCarpenter, DanielE.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 5, 2010 Georgia AtlantaAnderson, Wade G.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from December 14, 2009 Illinois DeerfieldGreisman, Robert S.AttorneySuspended by decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 11, 2010 Kansas ShawneeRuther, Scott L.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 8, 2010 Louisiana Baton RougeHolliday, Stephen J.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 8, 2010 Maryland RockvilleCinquegrani, Peter J.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 8, 2010 Bel AirHolmes, Stephen J.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 8, 2010 2010–7 I.R.B.412February 16, 2010 City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation Maryland (Continued) CockeysvilleCvach, Paul R.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 8, 2010 BrooklandvilleWest, Brian G.AttorneySuspended by decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 8, 2010 Massachusetts WalthamConner, William E.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment in New Hampshire) Indefinite from January 8, 2010 Michigan PortageCampbell, John A.AttorneySuspended by default decision in expedited proceeding under § 10.82 (conviction under 18 U.S.C. § 371, conspiracy to defraud the United States) Indefinite from January 8, 2010 Missouri Cape GirardeauBuerkle, Joe T.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 8, 2010 Wynne, George, See New York New Hampshire Conner, William E., See Massachusetts New Jersey MontvaleHover, Philip B.AttorneySuspended by decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 8, 2010 February 16, 20104132010–7 I.R.B. City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation New York RochesterCamarata, Mark S.CPASuspended by default decision in expedited proceeding under § 10.82 (conviction under 18 U.S.C. § 1951, conspiracy with respect to a public official obtaining property from another under the color of official right; and 18 U.S.C. § 1957, money laundering) Indefinite from January 8, 2010 RidgeKelly, William R.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 8, 2010 North White Plains Pilotti, Dennis M.CPASuspended by default decision in expedited proceeding under § 10.82 (conviction under 26 U.S.C. § 7201, tax evasion; and 18 U.S.C. § 1014 & 2, making false statements on a loan application) Indefinite from January 8, 2010 New YorkWynne, GeorgeAttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment in Missouri) Indefinite from January 8, 2010 North Carolina GreensboroStakias, Gregory A.CPASuspended by default decision in expedited proceeding under § 10.82 (revocation of CPA license) Indefinite from January 8, 2010 Oklahoma TulsaClausing, W. K.AttorneySuspended by decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from January 26, 2010 2010–7 I.R.B.414February 16, 2010 City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation Oregon GreshamSunderland, Brian J.AttorneySuspended by default decision in expedited proceeding under § 10.82 (suspension of attorney license) Indefinite from December 14, 2009 South Carolina Mt. PleasantRobertson, Marvin L.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 Texas El PasoDominguez, Joe A.CPASuspended by decision in expedited proceeding under § 10.82 (revocation of CPA license) Indefinite from January 26, 2010 Virginia BristowWalker, Andrew J.CPASuspended by default decision in expedited proceeding under § 10.82 (revocation of CPA license) Indefinite from December 14, 2009 Washington TacomaBenton, Charles F.CPASuspended by default decision in expedited proceeding under § 10.82 (revocation of CPA license) Indefinite from January 26, 2010 OlympiaBurtch, Jack L.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 BellevueHamley, Allen C.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 Marple, Jon, See Colorado EdmondPoole, Jeffrey G.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 February 16, 20104152010–7 I.R.B. City & StateNameProfessionalDisciplinary SanctionEffective Date(s) Designation Washington (Continued) SeattleSughrua, Thomas P.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 Des MoinesZoro, Gregory S.AttorneySuspended by default decision in expedited proceeding under § 10.82 (attorney disbarment) Indefinite from January 26, 2010 2010–7 I.R.B.416February 16, 2010 Definition of Terms Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the ef- fect: Amplifieddescribes a situation where no change is being made in a prior pub- lished position, but the prior position is be- ingextendedtoapplytoavariationofthe fact situation set forth therein. Thus, if an earlier ruling held that a principle ap- plied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare withmodi- fied,below). Clarifiedis used in those instances where the language in a prior ruling is be- ing made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior ruling is being changed. Distinguisheddescribes a situation where a ruling mentions a previously pub- lished ruling and points out an essential difference between them. Modifiedis used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior ruling is modified because it corrects a published position. (Compare withamplifiedandclarified, above). Obsoleteddescribes a previously pub- lished ruling that is not considered deter- minative with respect to future transac- tions. This term is most commonly used in a ruling that lists previously published rul- ings that are obsoleted because of changes in laws or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted. Revokeddescribes situations where the position in the previously published ruling is not correct and the correct position is beingstatedinanewruling. Supersededdescribes a situation where the new ruling does nothing more than re- state the substance and situation of a previ- ously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same po- sition published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single rul- ing a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the new rul- ing does more than restate the substance of a prior ruling, a combination of terms is used. For example,modifiedandsu- persededdescribes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case, the previously pub- lished ruling is first modified and then, as modified, is superseded. Supplementedis used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original rul- ing has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the ad- ditions, and supersedes all prior rulings in the series. Suspendedis used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study. Abbreviations The fol lowing abbreviations in current use and for merly used will appear in material publis hedintheBulletin. A—Individual. Acq.—A cquiescence. B—Individual. BE—Beneficiary. BK—Bank . B.T.A.—Board of Tax Appeals. C—Individual. C.B.—Cu mulative Bulletin. CFR—Code of Federal Regulations. CI—City. COOP—Coo perative. Ct.D.—Court Decision. CY—County. D—Decede nt. DC—Dummy Corporation. DE—Donee. Del. Order —Delegation Order. DISC—Domestic International Sales Corporation. DR—Donor. E—Estate. EE—Employee. E.O.—Executive Order. ER—Emp loyer. ERISA—Employee Retirement Income Security Act. EX—Executor. F—Fiduc iary. FC—Foreign Country. FICA—Federal Insurance Contributions Act. FISC—Fo reign International Sales Company. FPH—Foreign Personal Holding Company. F.R.—Federal Register. FUTA—Fed eral Unemployment Tax Act. FX—Foreign corporation. G.C.M.—Chief Counsel’s Memorandum. GE—Grante e. GP—General Partner. GR—Grantor. IC—Insura nce Company. I.R.B.—Internal Revenue Bulletin. LE—Lessee. LP—Limited Partner. LR—Lessor. M—Minor. Nonacq.—No nacquiescence. O—Organization. P—Parent Corporation. PHC—Persona l Holding Company. PO—Possession of the U.S. PR—Partner. PRS—Pa rtnership. PTE—Prohibited Transaction Exemption. Pub. L.—Public Law. REIT—Re al Estate Investment Trust. Rev. Proc.—Revenue Procedure. Rev. Rul.—Revenue Ruling. S—Subsi diary. S.P.R.—Statement of Procedural Rules. Stat.—Statutes at Large. T—Target Corporation. T.C.—Tax Court. T.D.—Treasury Decision. TFE—Trans feree. TFR—Transferor. T.I.R.—Technical Information Release. TP—Taxpay er. TR—Trust. TT—Trustee. U.S.C.—Uni ted States Code. X—Corporation. Y—Corporation. Z—Corporat ion. February 16, 2010i2010–7 I.R.B. Numerical Finding List 1 Bulletins 2010–1 through 2010–7 Announcements: 2010-1, 2010-4 I.R.B.333 2010-2, 2010-2 I.R.B.271 2010-3, 2010-4 I.R.B.333 2010-4, 2010-5 I.R.B.384 2010-5, 2010-6 I.R.B.402 2010-6, 2010-6 I.R.B.402 2010-7, 2010-6 I.R.B.403 2010-8, 2010-7 I.R.B.408 2010-9, 2010-7 I.R.B.408 2010-10, 2010-7 I.R.B.410 2010-12, 2010-7 I.R.B.410 Notices: 2010-1, 2010-2 I.R.B.251 2010-2, 2010-2 I.R.B.251 2010-3, 2010-2 I.R.B.253 2010-4, 2010-2 I.R.B.253 2010-5, 2010-2 I.R.B.256 2010-6, 2010-3 I.R.B.275 2010-7, 2010-3 I.R.B.296 2010-8, 2010-3 I.R.B.297 2010-9, 2010-3 I.R.B.298 2010-10, 2010-3 I.R.B.299 2010-11, 2010-4 I.R.B.326 2010-12, 2010-4 I.R.B.326 2010-13, 2010-4 I.R.B.327 2010-14, 2010-5 I.R.B.344 2010-15, 2010-6 I.R.B.390 2010-16, 2010-6 I.R.B.396 2010-19, 2010-7 I.R.B.404 Proposed Regulations: REG-132232-08, 2010-6 I.R.B.401 REG-137036-08, 2010-6 I.R.B.398 REG-101896-09, 2010-5 I.R.B.347 REG-131028-09, 2010-4 I.R.B.332 Revenue Procedures: 2010-1, 2010-1 I.R.B.1 2010-2, 2010-1 I.R.B.90 2010-3, 2010-1 I.R.B.110 2010-4, 2010-1 I.R.B.122 2010-5, 2010-1 I.R.B.165 2010-6, 2010-1 I.R.B.193 2010-7, 2010-1 I.R.B.231 2010-8, 2010-1 I.R.B.234 2010-9, 2010-2 I.R.B.258 2010-10, 2010-3 I.R.B.300 2010-11, 2010-2 I.R.B.269 2010-12, 2010-3 I.R.B.302 2010-13, 2010-4 I.R.B.329 Revenue Procedures— Continued: 2010-15, 2010-7 I.R.B.404 Revenue Rulings: 2010-1, 2010-2 I.R.B.248 2010-2, 2010-3 I.R.B.272 2010-3, 2010-3 I.R.B.272 2010-4, 2010-4 I.R.B.309 2010-5, 2010-4 I.R.B.312 2010-6, 2010-6 I.R.B.387 Treasury Decisions: 9474, 2010-4 I.R.B.322 9475, 2010-4 I.R.B.304 9476, 2010-5 I.R.B.336 9477, 2010-6 I.R.B.385 9478, 2010-4 I.R.B.315 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2009–27 through 2009–52 is in Internal Revenue Bulletin 2009–52, dated December 28, 2009. 2010–7 I.R.B.iiFebruary 16, 2010 Finding List of Current Actions on Previously Published Items 1 Bulletins 2010–1 through 2010–7 Announcements: 2010-4 Corrected by Ann. 2010-10, 2010-7 I.R.B.410 Notices: 2005-88 Superseded by Notice 2010-13, 2010-4 I.R.B.327 2008-41 Modified by Notice 2010-7, 2010-3 I.R.B.296 2008-55 Modified by Notice 2010-3, 2010-2 I.R.B.253 2008-88 Modified by Notice 2010-7, 2010-3 I.R.B.296 2008-113 Modified by Notice 2010-6, 2010-3 I.R.B.275 2008-115 Modified by Notice 2010-6, 2010-3 I.R.B.275 2009-11 Amplified by Notice 2010-9, 2010-3 I.R.B.298 2009-13 Obsoleted by T.D. 9478, 2010-4 I.R.B.315 REG-131028-09, 2010-4 I.R.B.332 2009-38 Amplified and superseded by Notice 2010-2, 2010-2 I.R.B.251 Proposed Regulations: REG-127270-06 Hearing scheduled by Ann. 2010-6, 2010-6 I.R.B.402 Revenue Procedures: 80-59 Modified and superseded by Rev. Proc. 2010-11, 2010-2 I.R.B.269 87-35 Obsoleted by Rev. Proc. 2010-3, 2010-1 I.R.B.110 Revenue Procedures— Continued: 2008-14 Updated by Rev. Proc. 2010-15, 2010-7 I.R.B.404 2009-1 Superseded by Rev. Proc. 2010-1, 2010-1 I.R.B.1 2009-2 Superseded by Rev. Proc. 2010-2, 2010-1 I.R.B.90 2009-3 Superseded by Rev. Proc. 2010-3, 2010-1 I.R.B.110 2009-4 Superseded by Rev. Proc. 2010-4, 2010-1 I.R.B.122 2009-5 Superseded by Rev. Proc. 2010-5, 2010-1 I.R.B.165 2009-6 Superseded by Rev. Proc. 2010-6, 2010-1 I.R.B.193 2009-7 Superseded by Rev. Proc. 2010-7, 2010-1 I.R.B.231 2009-8 Superseded by Rev. Proc. 2010-8, 2010-1 I.R.B.234 2009-9 Superseded by Rev. Proc. 2010-9, 2010-2 I.R.B.258 2009-15 Amplified and superseded by Rev. Proc. 2010-12, 2010-3 I.R.B.302 2009-25 Superseded by Rev. Proc. 2010-3, 2010-1 I.R.B.110 2010-1 Corrected by Ann. 2010-5, 2010-6 I.R.B.402 Revenue Rulings: 67-436 Obsoleted by REG-101896-09, 2010-5 I.R.B.347 2008-52 Supplemented and superseded by Rev. Rul. 2010-2, 2010-3 I.R.B.272 Treasury Decisions: 9443 Corrected by Ann. 2010-8, 2010-7 I.R.B.408 9458 Corrected by Ann. 2010-7, 2010-6 I.R.B.403 1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2009–27 through 2009–52 is in Internal Revenue Bulletin 2009–52, dated December 28, 2009. February 16, 2010iii2010–7 I.R.B. INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin- tendent of Documents when their subscriptions must be renewed. CUMULATIVE BULLETINS The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single copy basis andare notincluded as part of the subscription to the Internal Revenue Bulletin. 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