Internal Revenue Bulletin 2011-32 (PDF rendition): IRS Announcements

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Bulletin No. 201
1-32
August 8, 2011
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2011–16, page 93.
Federal rates; adjusted federal rates; adjusted federal
long-termrateandthelong-termexemptrate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for August 2011.
Notice 2011–53, page 124.
This notice describes transition rules for phased implementa-
tion of Chapter 4 of the Code.
Notice 2011–70, page 135.
This notice enlarges the period within which individuals may
request equitable relief from joint and several liability under
section 6015(f) of the Code.
EMPLOYEE PLANS
T.D. 9532, page 95.
REG–125592–10, page 137.
Final, temporary, and proposed regulations under section 9815
of the Code contain amendments implementing the require-
ments regarding internal claims and appeals and external re-
view processes for group health plans and health insurance
coverage in the group and individual markets under provisions
of the Affordable Care Act. These rules are intended to respond
to feedback on the regulations and to assist plans and issuers
in coming into full compliance with the law.
EXCISE TAX
T.D. 9532, page 95.
REG–125592–10, page 137.
Final, temporary, and proposed regulations under section 9815
of the Code contain amendments implementing the require-
ments regarding internal claims and appeals and external re-
view processes for group health plans and health insurance
coverage in the group and individual markets under provisions
of the Affordable Care Act. These rules are intended to respond
to feedback on the regulations and to assist plans and issuers
in coming into full compliance with the law.
ADMINISTRATIVE
Notice 2011–62, page 126.
This notice provides a proposed revenue procedure that will
update Rev. Proc. 2000–43, 2000–2 C.B. 404, which pro-
vides guidance regardingex partecommunications between
Appeals and other Internal Revenue Service functions. Com-
ments should be submitted by August 18, 2011.
Notice 2011–70, page 135.
This notice enlarges the period within which individuals may
request equitable relief from joint and several liability under
section 6015(f) of the Code.
Announcement 2011–42, page 138.
Discontinuance of high-lowmethod for substantiating
travel expenses.This announcement advises taxpayers that
the IRS intends to discontinue authorizing the high-lowper
diemmethod for substantiating lodging, meal, and incidental
expenses incurred in traveling away from home under section
274(d) of the Code.
Finding Lists begin on page ii.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
August 8, 20112011–32 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of August 2011
. See Rev. Rul. 2011-16, page 93.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of August 2011. See Rev.
Rul. 2011-16, page 93.
Section 382.—Limitations
on Net Operating Loss
Carryforwa
rds and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of August 2011. See Rev. Rul.
2011-16, page 93.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 468.—Special
Rules for Mining and Solid
Waste
Reclamation and
Closi
ng Costs
The ad
justed applicable federal short-term, mid-
term,
and long-term rates are set forth for the month
of Aug
ust 2011. See Rev. Rul. 2011-16, page 93.
Section 482.—
Allocation
of Income and D
eductions
Among Taxpaye
rs
Federal short
-term, mid-term, and long-term rates
are set forth f
or the month of August 2011. See Rev.
Rul. 2011-16
, page 93.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of August 2011. See Rev.
Rul. 2011-16, page 93.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382,
642, 1274, 1288, and other
sections of th
e Code, tables set forth the
rates for Augu
st 2011.
Rev. Rul. 2011
–16
This revenue
ruling provides various
prescribed r
ates for federal income tax
purposes for
August 2011 (the current
month). Tabl
e 1 contains the short-term,
mid-term, an
d long-term applicable fed-
eral rates (
AFR) for the current month
for purpose
s of section 1274(d) of the
Internal Re
venue Code. Table 2 contains
the short-t
erm, mid-term, and long-term
adjusted a
pplicable federal rates (ad-
justed AFR
) for the current month for
purposes o
f section 1288(b). Table 3 sets
forth the a
djusted federal long-term rate
and the lo
ng-term tax-exempt rate de-
scribed i
n section 382(f). Table 4 contains
the appro
priate percentages for deter-
mining th
e low-income housing credit
describe
d in section 42(b)(1) for build-
ings pla
ced in service during the current
month. H
owever, under section 42(b)(2),
the appl
icable percentage for non-feder-
ally sub
sidized new buildings placed in
service
after July 30, 2008, and before
Decemb
er 31, 2013, shall not be less than
9%. Fin
ally, Table 5 contains the federal
rate fo
r determining the present value of
an annu
ity, an interest for life or for a term
of year
s, or a remainder or a reversionary
inter
est for purposes of section 7520.
2011–32 I.R.B.93August 8, 2011

REV. RUL. 2011–16 TABLE 1
Applicable Federal Rates (AFR) for August 2011
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.32%.32%.32%.32%
110% AFR
.35%.35%.35%.35%
120% AFR.38%.38%.38%.38%
130% AFR.42%.42%.42%.42%
Mid-term
AFR1.90%1.89%1.89%1.88%
110% AFR2.09%2.08%2.07%2.07%
120% AFR2.28%2.27%2.26%2.26%
130% AFR2.48%2.46%
2.45%2.45%
150% AFR
2.86%2.84%2.83%2.82%
175% AFR
3.34%3.31%3.30%3.29%
Long-term
AFR3.86%3.82%3.80%3.79%
110% AFR4.24%4.20%4.18%4.16%
120% AFR4.63%
4.58%4.55%4.54%
130% AFR
5.03%
4.97%4.94%4.92%
REV. RUL. 2011–16 TABLE 2
Adjusted AFR for August 2011
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-ter
madjusted
AFR
.44%.44%.44%.44%
Mid-term adjusted AFR1.62%1.61%1.61%1.60%
Long-term adjusted
AFR
3.82%3.78%3.76%
3.75%
REV. RUL.
2011–16 TABLE 3
Rates Und
er Section 382 for August 2011
Adjusted
federal long-term rate for the current month
3.82%
Long-ter
m tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal l
ong-term rates for the current month and the prior two months.)
4.17%
August 8, 2011942011–32 I.R.B.

REV. RUL. 2011–16 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for August 2011
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service
after July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.66%
Appropriate percentage for the 30% present value low-income housing credit3.28%
REV. RUL. 2011–16 TABLE 5
Rate Under Section 7520 for August 2011
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest2.2%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2011. See Rev. Rul. 2011-16, page 93.
Section 9815.—Additional
Market Reforms
26 CFR 54.9815–2719T: Internal claims and appeals
and external review processes (temporary).
T.D. 9532
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
DEPARTMENT OF HEALTH
AND HUMAN SERVICES
45 CFR Part 147
Group Health Plans and Health
Insurance Issuers: Rules
Relating to Internal Claims
and Appeals and External
Review Processes
AGENCIES:Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration, Depart-
ment of Labor; Centers for Medicare &
Medicaid Services, Department of Health
and Human Services.
ACTION:Amendment to interim final
rules with request for comments.
SUMMARY:This document contains
amendments to interim final regulations
implementing the requirements regarding
internal claims and appeals and external
review processes for group health plans
and health insurance coverage in the group
and individual markets under provisions
oftheAffordableCareAct. Theserules
are intended to respond to feedback from a
wide range of stakeholders on the interim
final regulations and to assist plans and is-
suers in coming into full compliance with
the law through an orderly and expeditious
implementation process.
DATES:Effective date:This amendment
to the interim final regulations is effective
on July 22, 2011.
Comment date:Comments are due on
or before July 25, 2011.
ADDRESSES:Written comments may be
submitted to any of the addresses specified
below. Any comment that is submitted to
any Department will be shared with the
other Departments. Please do not submit
duplicates.
All comments will be made available to
the public.Warning:Do not include any
personally identifiable information (such
as name, address, or other contact informa-
tion) or confidential business information
that you do not want publicly disclosed.
All comments may be posted on the Inter-
net and can be retrieved by most Internet
search engines. Comments may be sub-
mitted anonymously.
Department of Labor. Comments to the
Department of Labor, identified by RIN
2011–32 I.R.B.95August 8, 2011

1210–AB45, by one of the following meth-
ods:
•FederaleRulemakingPortal:
http://www.regulations.gov.Follow
the instructions for submitting
comments.
•Email:
E-OHPSCA2719amend.EBSA@dol.gov.
•Mail or Hand Delivery:Officeof
Health Plan Standards and Compliance
Assistance, Employee Benefits Secu-
rity Administration, Room N–5653,
U.S. Department of Labor, 200 Con-
stitution Avenue NW, Washington, DC
20210,Attention: RIN 1210–AB45.
Comments received by the Depart-
ment of Labor will be posted with-
out change towww.regulations.govand
www.dol.gov/ebsa, and available for pub-
lic inspection at the Public Disclosure
Room, N–1513, Employee Benefits Se-
curity Administration, 200 Constitution
Avenue, NW, Washington, DC 20210.
Department of Health and Human Ser-
vices. In commenting, please refer to file
code CMS–9993–IFC2.Because of staff
and resource limitations, we cannot accept
comments by facsimile (FAX) transmis-
sion.
You may submit comments in one of
four ways (please choose only one of the
ways listed):
1.Electronically. You may submit
electronic comments on this regulation to
http://www.regulations.gov. Follow the
instructions under the “More Search Op-
tions” tab.
2.By regular mail.Youmaymail
writtencommentstothefollowingaddress
ONLY:
Centers for Medicare &
Medicaid Services,
Department of Health and
Human Services,
Attention: CMS–9993–IFC2,
P.O. Box 8010,
Baltimore, MD 21244–8010.
Please allow sufficient time for mailed
comments to be received before the close
of the comment period.
3.By express or overnight mail.You
maysendwrittencommentstothefollow-
ing address ONLY:
Centers for Medicare &
Medicaid Services,
Department of Health and
Human Services,
Attention: CMS–9993–IFC2,
Mail Stop C4–26–05,
7500 Security Boulevard,
Baltimore, MD 21244–1850.
4.By hand or courier. If you prefer,
you may deliver (by hand or courier) your
written comments before the close of the
comment period to either of the following
addresses:
a. For delivery in Washington, DC—
Centers for Medicare &
Medicaid Services,
Department of Health and
Human Services,
Room 445-G,
Hubert H. Humphrey Building,
200 Independence Avenue, S.W.,
Washington, DC 20201.
(Because access to the interior of the
Hubert H. Humphrey Building is not read-
ily available to persons without Federal
government identification, commenters
are encouraged to leave their comments
in the CMS drop slots located in the main
lobby of the building. A stamp-in clock is
available for persons wishing to retain a
proof of filing by stamping in and retain-
ing an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD—
Centers for Medicare &
Medicaid Services,
Department of Health and
Human Services,
7500 Security Boulevard,
Baltimore, MD 21244–1850.
If you intend to deliver your comments
to the Baltimore address, please call tele-
phone number (410) 786–9994 in advance
to schedule your arrival with one of our
staff members.
Comments mailed to the addresses in-
dicated as appropriate for hand or courier
delivery may be delayed and received after
the comment period.
Internal Revenue Service. Comments
to the IRS, identified by REG–125592–10,
by one of the following methods:
•FederaleRulemakingPortal:
http://www.regulations.gov. Follow
the instructions for submitting
comments.
•Mail:CC:PA:LPD:PR
(REG–125592–10), room 5205, Inter-
nal Revenue Service, P.O. Box 7604,
Ben Franklin Station, Washington, DC
20044.
•Hand or courier delivery: Monday
through Friday between the hours of
8a.m.and4p.m.to:CC:PA:LPD:PR
(REG–125592–10), Courier’s Desk,
Internal Revenue Service, 1111
Constitution Avenue, NW, Washington
DC 20224.
All submissions to the IRS will be open
to public inspection and copying in room
1621, 1111 Constitution Avenue, NW,
Washington, DC from 9 a.m. to 4 p.m.
FOR FURTHER INFORMATION
CONTACT:Amy Turner or Beth
Baum, Employee Benefits Security
Administration, Department of Labor, at
(202) 693–8335; Karen Levin, Internal
Revenue Service, Department of the
Treasury, at (202) 622–6080; Ellen
Kuhn, Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, at (301) 492–4263.
CUSTOMERSERVICE
INFORMATION:Individuals interested
in obtaining information from the
Department of Labor concerning
employment-based health coverage
laws may call the EBSA Toll-Free
Hotline at 1–866–444–EBSA (3272)
or visit the Department of Labor’s
website (http://www.dol.gov/ebsa). In
addition, information from HHS on
private health insurance for consumers
can be found on the Centers for
Medicare & Medicaid Services (CMS)
website(http://www.cms.hhs.gov/
HealthInsReformforConsume/
01_Overview.asp).Information
on health reform can be found at
www.healthcare.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Patient Protection and Affordable
Care Act, Public Law 111–148, was en-
acted on March 23, 2010; the Health Care
August 8, 2011962011–32 I.R.B.

and Education Reconciliation Act, Public
Law 111–152, was enacted on March 30,
2010 (collectively known as the “Afford-
ableCareAct”).TheAffordableCareAct
reorganizes, amends, and adds to the pro-
visions in part A of title XXVII of the Pub-
lic Health Service Act (PHS Act) relating
to group health plans and health insurance
issuers in the group and individual mar-
kets. The term “group health plan” in-
cludes both insured and self-insured group
health plans.
1
The Affordable Care Act
adds section 715(a)(1) to the Employee
Retirement Income Security Act (ERISA)
and section 9815(a)(1) to the Internal Rev-
enue Code (the Code) to incorporate the
provisions of part A of title XXVII of
the PHS Act into ERISA and the Code,
and make them applicable to group health
plans, and health insurance issuers provid-
ing health insurance coverage in connec-
tion with group health plans. The PHS
Act sections incorporated by this reference
are sections 2701 through 2728. PHS Act
sections 2701 through 2719A are substan-
tially new, though they incorporate some
provisions of prior law. PHS Act sections
2722 through 2728 are sections of prior
law renumbered, with some, mostly minor,
changes.
On July 23, 2010, the Departments of
Health and Human Services (HHS), La-
bor, and the Treasury (the Departments) is-
sued interim final regulations implement-
ing PHS Act section 2719 at 75 FR 43330
(July 2010 regulations), regarding inter-
nal claims and appeals and external re-
view processes for group health plans and
health insurance issuers offering coverage
in the group and individual markets. The
requirements of PHS Act section 2719 and
the July 2010 regulations do not apply to
grandfathered health plans under section
1251 of the Affordable Care Act.
2
A.Internal Claims and Appeals
With respect to internal claims and
appeals processes for group health plans
and health insurance issuers offering
group health insurance coverage, PHS
Act section 2719 provides that plans and
issuers must initially incorporate the in-
ternal claims and appeals processes set
forth in regulations promulgated by the
Department of Labor (DOL) at 29 CFR
2560.503–1 (the DOL claims procedure
regulation) and update such processes in
accordance with standards established by
the Secretary of Labor. Similarly, with
respect to internal claims and appeals pro-
cesses for individual health insurance cov-
erage, issuers must initially incorporate
the internal claims and appeals processes
set forth in applicable State law and up-
date such processes in accordance with
standards established by the Secretary of
HHS.
The July 2010 regulations provided
such updated standards for compliance
and invited comment on the updated stan-
dards. In particular, the July 2010 regu-
lations provided the following additional
standards
3
for internal claims and appeals
processes:
1. The scope of adverse benefit determi-
nations eligible for internal claims and
appeals includes a rescission of cov-
erage (whether or not the rescission
has an adverse effect on any particu-
lar benefit at the time).
4
2. Notwithstanding the rule in the DOL
claims procedure regulation that pro-
vides for notification in the case of
urgent care claims
5
not later than
72 hours after the receipt of the claim,
a plan or issuer must notify a claimant
of a benefit determination (whether
adverse or not) with respect to a
claim involving urgent care as soon
as possible, taking into account the
medical exigencies, but not later than
24 hours after the receipt of the claim
by the plan or issuer.
6
3. Clarifications with respect to full and
fair review, such that plans and is-
suers are clearly required to provide
the claimant (free of charge) with new
or additional evidence considered, re-
lied upon, or generated by (or at the
direction of) the plan or issuer in con-
nection with the claim, as well as any
new or additional rationale for a denial
at the internal appeals stage, and a rea-
sonable opportunity for the claimant
to respond to such new evidence or ra-
tionale.
4. Clarifications regarding conflicts of
interest, such that decisions regarding
hiring, compensation, termination,
promotion, or other similar matters
with respect to an individual, such as a
claims adjudicator or medical expert,
must not be based upon the likelihood
that the individual will support the
denial of benefits.
5. Notices must be provided in a cul-
turally and linguistically appropriate
manner, as required by the statute, and
as set forth in paragraph (e) of the July
2010 regulations.
6. Notices to claimants must provide ad-
ditional content. Specifically:
a. Any notice of adverse benefit de-
termination or final internal ad-
verse benefit determination must
include information sufficient to
identify the claim involved, in-
cluding the date of the service,
the health care provider, the claim
amount (if applicable), the diag-
nosis code and its corresponding
1
The term “group health plan” is used in title XXVII of the PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is distinct from the term “health plan”,as used in other provisions of
title I of the Affordable Care Act. The term “health plan”, as used in those provisions, does not include self-insured group health plans.
2
The Departments published interim final regulations implementing section 1251 of the Affordable Care Act on June 17, 2010, at 75 FR 34538, as amended on November 17, 2010 at 75 FR
7
0114.
3
To address certain relevant differences in the group and individual markets, the July 2010 regulations provided that health insurance issuers offering individual health insurance coverage
must comply with three additional requirements for internal claims and appeals processes. First, the July 2010 regulations include initial eligibility determinations in the individual market
within the scope of claims eligible for internal appeals. Second, health insurance issuers offering individualhealth insurance coverage are permitted only one level of internal appeal. Third,
health insurance issuers offering individual health insurance coverage must maintain all records of claims and notices associated with internal claims and appeals for six years and must make
these records available for examination by the claimant, Stateor Federal oversight agency. 75 FR 43330, 43334 (July 23, 2010).
4
This definition is broader than the definition in the DOL claims procedure regulation, which provides that a denial, reduction, or termination of, ora failure to provide payment (in whole or
in part) for a benefit is an adverse benefit determination eligible for internal claims and appeals processes.
5
A claim involving urgent care is generally a claim for medical care or treatment with respect to which the application of the time periods for making non-urgent care determinations could
seriously jeopardize the life or health of the claimant or the ability of the claimant to regain maximum function; or, in the opinion of the physician with knowledge of the claimant’s medical
condition, would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim.
6
Under the July 2010 regulations, there is a special exception if the claimantfails to provide sufficient information to determine whether, or to whatextent, benefits are covered or payable
under the plan.
2011–32 I.R.B.97August 8, 2011

meaning, and the treatment code
and its corresponding meaning.
b. The plan or issuer must ensure
that the reason or reasons for an
adverse benefit determination or
final internal adverse benefit de-
termination includes the denial
code and its corresponding mean-
ing, as well as a description of
the plan’s or issuer’s standard, if
any, that was used in denying the
claim. In the case of a final in-
ternal adverse benefit determina-
tion, this description must also in-
clude a discussion of the decision.
c. The plan or issuer must provide
a description of available internal
appeals and external review pro-
cesses, including information re-
garding how to initiate an appeal.
d. The plan or issuer must disclose
the availability of, and contact
information for, an applicable
office of health insurance con-
sumer assistance or ombudsman
established under PHS Act sec-
tion 2793.
7. If a plan or issuer fails to strictly ad-
here to all the requirements of the
July 2010 regulations, the claimant is
deemed to have exhausted the plan’s
or issuer’s internal claims and appeals
process, regardless of whether the
plan or issuer asserts that it has sub-
stantially complied, and the claimant
may initiate any available external
review process or remedies available
under ERISA or under State law.
On September 20, 2010, based on a
preliminary review of comments from
stakeholders which indicated that they be-
lieved more time was needed to come into
compliance with PHS Act section 2719
and the additional internal claims and ap-
peal standards in the July 2010 regulations,
the Department of Labor issued Technical
Release 2010–02 (T.R. 2010–02), which
set forth an enforcement grace period until
July 1, 2011 for compliance with certain
new provisions with respect to internal
claims and appeals.
7
Specifically, T.R. 2010–02 set forth
an enforcement grace period until July 1,
2011 with respect to standard #2 above
(regarding the timeframe for making ur-
gent care claims decisions), standard #5
above (regarding providing notices in a
culturally and linguistically appropriate
manner), standard #6 above (requiring
broader content and specificity in notices),
and standard #7 above (regarding exhaus-
tion). T.R. 2010–02 also stated that, during
that period, the Department of Labor and
the Internal Revenue Service (IRS) would
not take any enforcement action against
a group health plan, and HHS would
not take any enforcement action against
a self-funded nonfederal governmental
health plan that is working in good faith to
implement such additional standards but
does not yet have them in place.
8
Based on further review of the com-
ments received on the July 2010 reg-
ulations and T.R. 2010–02, and other
feedback from interested stakehold-
ers, on March 18, 2011, the Depart-
ment of Labor issued Technical Re-
lease 2011–01
9
(T.R. 2011–01), which
modified and extended the enforcement
grace period set forth in T.R. 2010–02.
Specifically, T.R. 2011–01 extended
the enforcement grace period until plan
years beginning on or after January 1,
2012 with respect to standard #2 above
(regarding the timeframe for making
urgent care claims decisions), standard #5
above (regarding providing notices in a
culturally and linguistically appropriate
manner), and standard #7 above (regarding
exhaustion). Moreover, whereas T.R.
2010–02 required plans to be working in
good faith to implement such standards for
the enforcement grace period to apply, T.R.
2011–01 stated that no such requirement
would apply for either the extended or the
original enforcement grace period.
With respect to standard #6 above (re-
quiring broader content and specificity
in notices), T.R. 2011–01 extended the
enforcement grace period only in part.
Specifically, with respect to the require-
ment to disclose diagnosis codes and
treatment codes (and their correspond-
ing meanings), T.R. 2011–01 extended
the enforcement grace period until plan
years beginning on or after January 1,
2012.
10
With respect to the other dis-
closure requirements of standard #6, the
enforcement grace period was extended
from July 1, 2011 until the first day of
the first plan year beginning on or after
July 1, 2011 (which is January 1, 2012
for calendar year plans), affecting: (a)
the disclosure of information sufficient to
identify a claim (other than the diagnosis
and treatment information), (b) the reasons
for an adverse benefit determination,
(c) the description of available internal
appeals and external review processes, and
(d) for plans and issuers in States in which
an office of health consumer assistance
program or ombudsman is operational,
the disclosure of the availability of, and
contact information for, such program.
11
T.R. 2011–01 also stated the Depart-
ments’ intent to issue an amendment to the
July 2010 regulations that would take into
account comments and other feedback re-
ceived from stakeholders and make mod-
ifications to certain provisions of the July
2010 regulations. T.R. 2011–01 went on
to state that the relief was intended to act
as a bridge until an amendment to the July
2010 regulations was issued.
This amendment to the July 2010 reg-
ulations makes changes with respect to
the provisions subject to the enforcement
grace period under T.R. 2011–01. At the
expiration of the enforcement grace pe-
riod, the Departments will begin enforcing
the relevant requirements of the July 2010
regulations, as amended by this rulemak-
ing.
7
Technical Release 2010–02 is available athttp://www.dol.gov/ebsa/pdf/ACATechnicalRelease2010–02.pdf. HHS published a corresponding guidance document, available at:
http://cciio.cms.gov/resources/files/interim_procedures_for_internal_claims_and_appeals.pdf.
8
T.R. 2010–02 also stated that HHS was encouraging States to provide similar grace periods with respect to issuers and HHS would not cite a State for failing to substantially enforce the
provisions of part A of title XXVII of the PHS Act in these situations.
9
T.R. 2011–01 is available athttp://www.dol.gov/ebsa/pdf/tr11–01.pdf.
10
Information related to diagnosis and treatment codes (and/or their meanings) is, however, generally required to be provided to claimants upon request under existing DOL claims procedures.
See 29 CFR 2560.503–1(h)(2)(iii), which is also applicable to plans (whetheror not they are ERISA plans) and issuers that are not grandfathered health plans pursuant to paragraph (b)(2)(i)
of the July 2010 regulations. Nevertheless, a request for such information,in itself, should not be considered to be a request for (and therefore trigger the start of) an internal appeal or external
review.
11
Any enforcement grace period with respect to disclosure requirements that has been provided under T.R. 2010–02 or T.R. 2011–01 does not affect disclosure requirements still in effect for
ERISA plans under the DOL claims procedure regulation and/or Part 1 of ERISA.
August 8, 2011982011–32 I.R.B.

B.External Review
1.Applicability of Federal and State
external review processes.
PHS Act section 2719, the July 2010
regulations, and technical guidance issued
by the Departments
12
provide a system
with respect to applicability of either a
State external review process or a Federal
external review process for non-grandfa-
thered plans and issuers. How this impacts
plans and issuers varies, depending on the
type of coverage:
a.Self-insured plans subject to ERISA
and/or the Code.
In the case of self-insured plans subject
to ERISA and/or the Code, a Federal exter-
nal review process supervised by DOL and
Treasury applies (the “private accredited
IRO process”
13
). On August 23, 2010, the
Department of Labor issued Technical Re-
lease 2010–01 (T.R. 2010–01), which set
forth an interim enforcement safe harbor
for self-insured plans not subject to a State
external review process or to the HHS-su-
pervised process (the “HHS-administered
process”).
14
This interim enforcement safe
harbor essentially permits a private con-
tract process under which plans contract
with accredited independent review orga-
nizations (IROs) to perform reviews. Sep-
arate guidance being issued contempora-
neous with the publication of this amend-
ment makes adjustments to, and provides
clarifications regarding, the operation of
the private accredited IRO process.
b.Insured coverage.
In the case of health insurance issuers
in the group and individual market, the
July 2010 regulations set forth 16 mini-
mum consumer protections based on the
Uniform External Review Model Act pro-
mulgated by the National Association of
Insurance Commissioners (NAIC) that,
if provided by a State external review
process, will result in the State’s process
applying in lieu of a Federal external re-
view process. Moreover, for insured group
health plans, as provided under paragraph
(c)(1) of the July 2010 regulations, if a
State external review process applies to
and is binding on the plan’s health in-
surance issuer under paragraph (c) of the
July 2010 regulations (regarding State
standards for external review), then the
insured group health plan is not required
to comply with either the State external
review process or the Federal external re-
view process. The July 2010 regulations
provided a transition period for plan years
(in the individual market, policy years)
beginning before July 1, 2011, during
which any existing State external review
process will be considered sufficient (and
will apply to health insurance issuers in
that State). During the transition period, in
States and territories without an existing
State external review process (Alabama,
Mississippi, and Nebraska, Guam, Amer-
ican Samoa, U.S. Virgin Islands and the
Northern Mariana Islands), HHS guidance
generally provided that health insurance
issuers will participate in the HHS-ad-
ministered process. As explained later in
this preamble, this amendment to the July
2010 regulations modifies the transition
period originally issued as part of the July
2010 regulations so that the last day of the
transition period for all health insurance is-
suers offering group and individual health
insurance coverage is December 31, 2011.
In addition, the July 2010 regulations
provided that, following the conclusion
of the transition period, health insurance
issuers in a State that does not meet the
minimum consumer protection standards
set forth in paragraph (c) of the July
2010 regulations will participate in an
external review process under Federal
standards similar to the process under
the NAIC Uniform Model Act, such as
the HHS-administered process. Separate
guidance being issued contemporaneous
with the publication of this amendment
announces standards under which, until
January 1, 2014, a State may also operate
such an external review process under
Federal standards similar to the process
under the NAIC Uniform Model Act (an
“NAIC-similar process”). Accordingly,
if HHS determines that a State has nei-
ther implemented the minimum consumer
protections required under paragraph
(c) of the July 2010 regulations, nor an
NAIC-similar process, issuers in the State
will have the choice of participating in ei-
ther the HHS-administered process or the
private accredited IRO process. HHS is
adopting this approach to permit States to
operate their external review processes un-
der standards established by the Secretary
until January 1, 2014, avoiding unneces-
sary disruption, while States work to adopt
an “NAIC-parallel process,” consistent
with the consumer protections set forth in
paragraph (c) of the July 2010 regulations.
c.Self-insured, nonfederal governmental
plans.
For self-insured, nonfederal govern-
mental plans (which are subject to the PHS
Act, but not ERISA or the Code), pre-
vious HHS guidance generally provided
that they follow theprivate accredited
IRO process.
15
(In States and territories
that did not have an existing external re-
view process (Alabama, Mississippi, and
Nebraska, Guam, American Samoa, U.S.
Virgin Islands and the Northern Mariana
Islands), previous HHS guidance gener-
ally provided that such plans may choose
to follow the HHS-administered process
or follow the private accredited IRO
process.) Separate guidance being issued
contemporaneous with the publication of
this amendment generally treats self-in-
sured nonfederal governmental plans the
same as health insurance issuers. That
is, a State may temporarily operate such
an external review process applicable to
a self-insured nonfederal governmental
plan under Federal standards similar to the
12
See DOL Technical Release 2010–01, available athttp://www.dol.gov/ebsa/pdf/ACATechnicalRelease2010–01.pdf; HHS Technical Guidance issued August 26, 2010, available at
http://cciio.cms.gov/resources/files/interim_appeals_guidance.pdf; and HHS Technical Guidance issuedSeptember 23, 2010, available athttp://cciio.cms.gov/resources/files/technical_guid-
ance_for_self_funded_non_fed_plans.pdf. Additional clarifications were provided in the form of frequently-asked questions (FAQs), available athttp://www.dol.gov/ebsa/faqs/faq-aca.html
andhttp://cciio.cms.gov/resources/factsheets/aca_implementation_faqs.html#claims.
13
For simplicity, the Federal external review process for self-insured plans subject to ERISA and/or the Code supervised by DOL and Treasury is referred to as the “private accredited IRO
process” throughout this preamble. However, the interim procedures forFederal external review issued as DOL Technical Release 2010–01 also recognizes that States may choose to expand
access to their State external review process to plans not subject to applicable State laws (such as self-insured ERISA plans) and allows those plans to meet their responsibilities to provide
external review under PHS Act section 2719(b) by voluntarily complying with the provisions of that State external review process.
14
HHS Technical Guidance issued August 26, 2010 provided that, for insured coverage, the Federal external review process would be fulfilled through the HHS-administered process.
15
See HHS Technical Guidance issued September 23, 2010.
2011–32 I.R.B.99August 8, 2011

process under the NAIC Uniform Model
Act. If no such State-operated process ex-
ists, self-insured nonfederal governmental
plans have the choice of participating in
either the HHS-administered process or
the private accredited IRO process.
2.Scope of claims eligible for external
review.
While the process varies depending on
the type of coverage, so does the scope of
claims eligible for external review. That
is, for insurance coverage and self-insured
nonfederal governmental plans subject to
a State external review process (either an
NAIC-parallel process or an NAIC-simi-
lar process), the State determines the scope
of claims eligible for external review.
16
For coverage subject to either the HHS-ad-
ministered process or the private accred-
ited IRO process, the July 2010 regula-
tions provided that any adverse benefit de-
termination (or final internal adverse ben-
efit determination) could be reviewed un-
less it related to a participant’s or benefi-
ciary’s failure to meet the requirements for
eligibility under the terms of a group health
plan. As explained later in this preamble,
this amendment to the July 2010 regula-
tions modifies the scope of claims eligible
for external review under the Federal ex-
ternal review process.
II. Overview of Amendments to the
Interim Final Regulations
A.Internal Claims and Appeals
1.Expedited notification of benefit de-
terminations involving urgent care (para-
graph (b)(2)(ii)(B) of the July 2010 regu-
lations).
The July 2010 regulations provided that
a plan or issuer must notify a claimant of a
benefit determination (whether adverse or
not) with respect to a claim involving ur-
gent care (as defined in the DOL claims
procedure regulation)
17
as soon as possi-
ble, taking into account the medical ex-
igencies, but not later than 24 hours af-
ter the receipt of the claim by the plan
or issuer, unless the claimant fails to pro-
vide sufficient information to determine
whether, or to what extent, benefits are
covered or payable under the plan or health
insurance coverage. This was a change
from the DOL claims procedure regula-
tion, which generally requires a determi-
nation not later than 72 hours after receipt
of the claim by a group health plan for
urgent care claims. The preamble to the
July 2010 regulations stated that the De-
partments expected electronic communi-
cation would enable faster decision-mak-
ing than in the year 2000, when the DOL
claims procedure regulation was issued.
18
While some commenters supported the
24-hour rule (particularly consumer advo-
cates and medical associations, including
mental health providers who noted the
24-hour standard was especially important
for people in psychiatric crisis), concerns
were raised by many plans and issuers
regarding the burden of a 24-hour turn-
around. Some commenters argued that
some of the claims constituting “urgent
care” and thus qualifying for the expedited
timeframe really do not need to be made
within 24 hours. Moreover, a number of
commenters highlighted that the 72-hour
provision was intended only to serve as
a “backstop”; as the general rule under
both the July 2010 regulations and the
DOL claims procedure regulation requires
a decision as soon as possible consistent
with the medical exigencies involved,
making the change to a 24-hour timeframe
unnecessary for the most serious medi-
cal cases. Some commenters cited the
Emergency Medical Treatment and Labor
Act (EMTALA)
19
, which generally re-
quires hospitals to provide emergency care
to individuals with or without insurance
or preauthorization and, therefore, miti-
gates the need for expedited pre-service
emergency claims determinations in many
situations. Finally, some commenters
stated that a firm 24-hour turnaround for
urgent care claims will adversely affect
claimants, as plans and issuers will not
have sufficient time to properly review
a claim, adversely affecting the quality
of the review process in cases where the
provider cannot be consulted in time, and
leading to unnecessary denials of claims.
After considering the comments, and
the costs and benefits of an absolute
24-hour decision-making deadline for
pre-service urgent care claims, this amend-
ment permits plans and issuers to follow
the original rule in the DOL claims proce-
dure regulation (requiring decision-mak-
ing in the context of pre-service urgent
care claims as soon as possible consistent
with the medical exigencies involved but
in no event later than 72 hours),provided
that the plan or issuer defers to the attend-
ing provider with respect to the decision
as to whether a claim constitutes “urgent
care.” At the same time, the Departments
underscore that the 72-hour timeframe
remains only an outside limit and that, in
cases where a decision must be made more
quickly based on the medical exigencies
involved, the requirement remains that
the decision should be made sooner than
72 hours after receipt of the claim.
2.Additional notice requirements for
internal claims and appeals (paragraph
(b)(2)(ii)(E) of the July 2010 regulations).
The July 2010 regulations also pro-
vided additional content requirements for
any notice of adverse benefit determi-
nation or final internal adverse benefit
determination. The July 2010 regulations
required a plan or issuer to:
(a) Ensure that any notice of adverse
benefit determination or final internal ad-
verse benefit determination includes in-
formation sufficient to identify the claim
involved. Under the July 2010 regula-
tions, this information included the date
16
Under paragraphs (c)(2)(i) and (c)(2)(xvi) of the July 2010 regulations, State processes must provide externalreview for adverse benefit determinations (including final internal adverse
benefit determinations) that are based on issuer’s (or plan’s) requirements for medical necessity, appropriateness, health care setting, level ofcare, or effectiveness of a covered benefit; or that
involve experimental or investigational treatment. (A State external review process may also provide for external review of a broader scope of adverse benefit determinations.) At the same,
time, paragraph (c)(3) of the July 2010 regulations provides a transition period during which a State external review process will be considered binding on an issuer (or a plan), in lieu of the
requirements of any Federal external review process, even if the State process does not meet all the requirements of paragraph (c)(2) of the July 2010 regulations. That transition period is
being modified by this amendment, as described below.
17
Under the DOL claims procedure regulation, a “claim involving urgent care”is a claim for medical care or treatment with respect to which the application of the time periods for making
non-urgent care determinations could seriously jeopardize the life or health of the claimant or the ability of the claimant to regain maximum function; or, in the opinion of a physician with
knowledge of the claimant’s medical condition, would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim.
18
75 FR 43330, 43333 (July 23, 2010).
19
42 U.S.C. § 1395dd.
August 8, 20111002011–32 I.R.B.

of service, the health care provider, and
the claim amount (if applicable)
20
,aswell
as the diagnosis code (such as an ICD–9
code, ICD–10 code, or DSM-IV code)
21
,
the treatment code (such as a CPT code)
22
,
and the corresponding meanings of these
codes.
(b) Ensure that the description of the
reason or reasons for the adverse bene-
fit determination or final internal adverse
benefit determinationincludes the denial
code (such as a CARC and RARC)
23
and
its corresponding meaning. It must also in-
clude a description of the plan’s or issuer’s
standard, if any, that was used in denying
the claim (for example, if a plan applies
a medical necessity standard in denying a
claim, the notice must include a descrip-
tion of the medical necessity standard). In
the case of a notice of final internal ad-
verse benefit determination, this descrip-
tion must include a discussion of the deci-
sion.
(c) Provide a description of available
internal appeals and external review pro-
cesses, including information regarding
how to initiate an appeal.
(d) Disclose the availability of, and con-
tact information for, any applicable office
of health insurance consumer assistance
or ombudsman established under PHS Act
section 2793 to assist enrollees with the in-
ternal claims and appeals and external re-
view processes.
24
Many comments received on the July
2010 regulations raised concerns about
the additional content required to be in-
cluded in the notices. Comments by a
range of stakeholders, including plans,
issuers, and consumer advocacy organi-
zations focused heavily on the automatic
provision of the diagnosis and treatment
codes (and their meanings). Concerns
were raised about privacy (because expla-
nations of benefits (EOBs) often are sent
to an individual who is not the patient,
such as an employee who is the patient’s
spouse or parent), interference with the
doctor-patient relationship,
25
and high
costs.
26
More specifically, commenters
highlighted that sensitive issues such as
mental health treatments would be iden-
tified by specific treatment or diagnosis
codes and that privacy concerns are mag-
nified for adult dependents under age 26
who may be covered by their parent’s
health plan. Others pointed out that there
are over 20,000 treatment and diagnosis
codes in use today, presenting a costly ad-
ministrative and operational challenge for
plans and issuers. Comments also ques-
tioned the efficacy of providing the codes,
whichsomearguedareoftenverydifficult
for the average patient to understand.
27
Other comments were received in sup-
port of the coding provisions. Consumer
advocates commented positively on the re-
quirement that denialnotices include infor-
mation for consumers about their right to
appeal denials and the availability of state
consumer assistanceprograms (CAPs) that
will help consumers file appeals. There
were also positive comments on the re-
quirement to provide a rationale for the de-
nial (including a description of the plan’s
or issuer’s standard (such as “medical ne-
cessity”), if any, that was used denying
the claim). With respect to the provision
of coding information, some commented
that this would be helpful to consumers be-
cause coding errors and missing coding in-
formation often are the basis for denying
claims.
After considering all of the comments,
and the costs and benefits of the additional
disclosure, this amendment eliminates the
requirement to automatically provide the
diagnosis and treatment codes as part of a
notice of adverse benefit determination (or
final internal adverse benefit determina-
tion) and instead substitutes a requirement
that the plan or issuer must provide noti-
fication of the opportunity to request the
diagnosis and treatment codes (and their
meanings) in all notices of adverse bene-
fit determination (and notices of final in-
ternal adverse benefit determination), and
a requirement to provide this information
upon request.
28
This amendment also clar-
ifies that, in any case, a plan or issuer must
not consider a request for such diagnosis
and treatment information, in itself, to be a
request for (and therefore trigger the start
of) an internal appeal or external review.
3.Deemed exhaustion of internal
claims and appeals processes (paragraph
(b)(2)(ii)(F) of the July 2010 regulations).
The courts generally require claimants
to exhaust administrative proceedings be-
fore going to court or seeking external
review. When plans and issuers offer full
and fair internal procedures for resolv-
ing claims, it is reasonable to insist that
claimants first turn to those procedures
before seeking judicial or external review
of benefit denials. There is less justifica-
tion, however, for insisting that a claimant
exhaust administrative procedures that do
not comply with the law. Accordingly, the
July 2010 regulations permitted claimants
20
The amount of the claim may not be knowable or available at the time, such as in acase of preauthorization, or there may be no specific claim, such as in a case of rescission that is not
connected to a claim.
21
ICD–9 and ICD–10 codes refer to the International Classification of Diseases, 9th revision and 10th revision, respectively. The DSM-IV codes refer to the Diagnostic and Statistical Manual
o
f Mental Disorders, Fourth Edition.
22
CPT refers to Current Procedural Terminology.
23
CARC refers to Claim Adjustment Reason Code and RARC refers to Remittance Advice Remark Code.
24
To assist plans and issuers in making these disclosures, the Departments provided a current list of relevant consumer assistance programs and ombudsmen in the Appendix to T.R. 2011–01.
P
lans and issuers with July 1 plan years may rely upon the list in that Appendix when developing their notices of adverse benefit determination and finalinternal adverse benefit determination
for plan years beginning on July 1, 2011. The Departments are committed to reviewing and updating this list. The first update is being made available contemporaneous with publication of this
amendment. The first update isavailable (and any future updates will be made available) atwww.dol.gov/ebsa/healthreformandhttp://cciio.cms.gov/programs/consumer/capgrants/index.html.
25
Several commenters raised concerns that providers’ initial or suspected diagnosis may not match the ultimate diagnosis or patients’ perception of their diagnosis. One commenter gave the
example of a patient who has a biopsy procedure. In that case, the patient would receive an EOB with an initial diagnosis code of cancer, however the results of the biopsy may rule out cancer.
In that situation, the EOB can result in confusion and unnecessary mental anguish.
26
In particular, comment letters cited concerns with respect to programmingaspects of providing diagnosis codes at a time when plans and issuers are changing over from ICD–9 diagnosis
codes to more extensive and technical ICD–10 codes.
27
Several commenters noted that technical ICD–9 and/or ICD–10 codes can be confusing and/or cause worry. One commenter gave the example of a patient presenting with a white coating
on his tongue, who is told not to worry and to brush the tongue with a toothbrush. The diagnosis code is 529.3, hypertrophy of tongue papillae, a term not used by the patient’s doctor during
the office visit and, therefore, prone to cause confusion and/or concern.
28
As discussed earlier, in footnote 9, information related to diagnosis and treatment codes (and/or their meanings) is, however, generally required to be provided to claimants upon request
under existing DOL claims procedures, which is also incorporated in the July 2010 regulations.See29 CFR 2560.503–1(h)(2)(iii) and paragraph (b)(2)(i) of the July 2010 regulations.
2011–32 I.R.B.101August 8, 2011

to immediately seek review if a plan or
issuer failed to “strictly adhere” to all of
the July 2010 regulations’ requirements
for internal claims and appeals processes,
regardless of whether the plan or issuer as-
serted that it “substantially complied” with
the July 2010 regulations. The July 2010
regulations also clarified that, in such cir-
cumstances, the reviewing tribunal should
not give special deference to the plan’s or
issuer’s decision, but rather should resolve
the disputede novo. Consumer groups
generally supported this “strict adherence”
approach, but the approach received a
number of negative comments from some
issuers and plan sponsors, who advocate a
“substantial compliance” approach.
The Departments continue to believe
that claimants should not have to follow
an internal claims and appeals procedure
that is less than full, fair, and timely, as set
forth in the July 2010 regulations. In re-
sponse to comments, the Departments are
retaining the general approach to this re-
quirement, but this amendment also adds a
new paragraph (b)(2)(ii)(F)(2)totheJuly
2010 regulations to provide an exception
to the strict compliance standard for er-
rors that are minor and meet certain other
specified conditions. The new paragraph
will also protect claimants whose attempts
to pursue other remedies under paragraph
(b)(2)(ii)(F)(1) of the interim final reg-
ulations are rejected by a reviewing tri-
bunal. Under the amended approach, any
violation of the procedural rules of the
July 2010 regulations pertaining to inter-
nal claims and appeals would permit a
claimant to seek immediate external re-
view or court action, as applicable, unless
the violation was:
(1)De minimis;
(2) Non-prejudicial;
(3) Attributable to good cause or mat-
ters beyond the plan’s or issuer’s control;
(4) In the context of an ongoing good-
faith exchange of information; and
(5) Not reflective of a pattern or practice
of non-compliance.
In addition, the claimant would be en-
titled, upon written request, to an explana-
tion of the plan’s or issuer’s basis for as-
serting that it meets this standard, so that
the claimant could make an informed judg-
ment about whether to seek immediate re-
view. Finally, if the external reviewer or
the court rejects the claimant’s request for
immediate review on the basis that the plan
met this standard, this amendment would
give the claimant the right to resubmit and
pursue the internal appeal of the claim.
4.Form and manner of notice (para-
graph (e) of the July 2010 regulations).
PHS Act section 2719 requires group
health plans and health insurance issuers
to provide relevant notices in a culturally
and linguistically appropriate manner. The
July 2010 regulations set forth a require-
ment to provide notices in a non-English
language based on separate thresholds of
the number of people who are literate in the
same non-English language. In the group
market, the threshold set forth in the July
2010 regulations differs depending on the
number of participants in the plan:
•For a plan that covers fewer than 100
participants at the beginning of a plan
year, the threshold is 25 percent of all
plan participants being literate only in
the same non-English language.
•For a plan that covers 100 or more
participants at the beginning of a plan
year, the threshold is the lesser of 500
participants, or 10 percent of all plan
participants, being literate only in the
same non-English language.
These thresholds were adapted from
the DOL regulations regarding style
and format for a summary plan de-
scription, at 29 CFR 2520.102–2(c)
for participants whoare not literate in
English. For the individual market, the
threshold is 10 percent of the population
residing in the county being literate
only in the same non-English language.
The individual market threshold was
generally adapted from the approach used
under the Medicare Advantage program,
which required translation of materials in
languages spoken by more than 10 percent
of the general population in a service area
at the time the threshold was established.
Under the July 2010 regulations, if an
applicable threshold is met with respect to
a non-English language, the plan or issuer
must provide the notice upon request in the
non-English language. Additionally, the
plan or issuer must include a statement in
the English versions of all notices, promi-
nently displayed in the non-English lan-
guage, offering the provision of such no-
tices in the non-English language. Finally,
to the extent the plan or issuer maintains
a customer assistance process (such as a
telephone hotline) that answers questions
or provides assistance with filing claims
and appeals, the plan or issuer must pro-
vide such assistance in the non-English
language.
Comments received in response to the
July 2010 regulations raised several con-
cerns about this requirement. One group of
commenters stated that the thresholds for
the group market were difficult to comply
with, especially for small plans (where an
individual or a small number of individu-
als could cause a plan to change status with
respect to the threshold) and insured plans
(where the issuer may be in a very difficult
position to determine the English literacy
of an employer’s workforce). Some com-
menters stated that the threshold require-
ments for the group and individual markets
should be consistent.
Other commenters were concerned with
the high costs of compliance with this rule,
particularly the “tagging and tracking re-
quirement” to the extent that individuals
who request a document in a non-English
language would need to be “tagged” and
“tracked” so that any future notices would
be provided automatically in the non-Eng-
lish language. Some of these commenters
cited the high costs associated with imple-
menting translation requirements pursuant
to California State law and the low take-up
rates of translated materials in California.
Some commenters also cited the impor-
tance of having written translation of doc-
uments available (at a minimum, upon re-
quest), as well as having oral language ser-
vices for customer assistance.
Following review of the comments sub-
mitted on this issue and further review and
consideration of the provisions of PHS Act
section 2719, the Departments have deter-
mined it is appropriate to amend the pro-
visions of the July 2010 regulations re-
lated to the provision of notices in a cul-
turally and linguistically appropriate man-
ner. This amendment establishes a sin-
gle threshold with respect to the percent-
age of people who are literate only in the
same non-English language for both the
group and individual markets. With re-
spect to group health plans and health in-
surance issuers offering group or individ-
ual health insurance coverage, the thresh-
old percentage of people who are liter-
ate only in the same non-English language
will be set at 10 percent or more of the pop-
ulation residing in the claimant’s county, as
August 8, 20111022011–32 I.R.B.

determined based on American Commu-
nity Survey data published by the United
States Census Bureau.
29
The Departments
will update this guidance annually on their
website if there are changes to the list of
the counties determined to meet this 10
percent threshold for the county’s popula-
tion being literate only in the same non-
English language.
30
This amendment to the July 2010 reg-
ulations requires that each notice sent
by a plan or issuer to an address in a
county that meets this threshold include
a one-sentence statement in the relevant
non-English language about the availabil-
ity of language services. The Departments
have provided guidance with sample sen-
tences in the relevant languages in separate
guidance being issued contemporaneous
with the publication of this amendment.
For ease of administration, some plans and
issuers may choose to use a one-sentence
statement for all notices within an entire
State (or for a particular service area)
that reflects the threshold language or
languages in any county within the State
or service area. For example, statewide
notices in California could include the rel-
evant one-sentence statement in Spanish
and Chinese because, using the data from
Table 2, Spanish meets the 10 percent
threshold in Los Angeles County and 22
other counties and Chinese meets the 10
percent threshold in San Francisco County.
This would be a permissible approach to
meeting the rule under this amendment.
In addition to including a statement
in all notices in the relevant non-English
language, this amendment requires a plan
or issuer to provide a customer assistance
process (such as a telephone hotline) with
oral language services in the non-English
language and provide written notices in
the non-English language upon request.
For this purpose, plans and issuers are
permitted to direct claimants to the same
customer service telephone number where
representatives can first attempt to ad-
dress the consumer’s questions with an
oral discussion, but also provide a written
translation upon request in the thresh-
old non-English language. Finally, this
amendment removes any “tagging and
tracking” requirement that would have
otherwise applied under the July 2010
regulations.
This amendment to the July 2010 reg-
ulations provides standards for providing
culturally and linguistically appropriate
notices that balance the objective of
protecting consumers by providing under-
standable notices to individuals who speak
primary languages other than English with
the goal of simplifying information collec-
tion burdens on plans and issuers. (Note,
nothing in these regulations should be
construed as limiting an individual’s rights
under Federal or State civil rights statutes,
such as Title VI of the Civil Rights Act of
1964 (Title VI) which prohibits recipients
of Federal financial assistance, including
issuers participating in Medicare Advan-
tage, from discriminating on the basis of
race, color, or national origin. To ensure
non-discrimination on the basis of national
origin, recipients are required to take rea-
sonable steps to ensure meaningful access
to their programs and activities by limited
English proficient persons. For more
information, see, “Guidance to Federal
Financial Assistance Recipients Regard-
ing Title VI Prohibition Against National
Origin Discrimination Affecting Limited
English Proficient Persons,” available
athttp://www.hhs.gov/ocr/civilrights/
resources/specialtopics/lep/
policyguidancedocument.html.)
The Departments welcome comments
on this amendment, including whether it
would be appropriate to include a provi-
sion in the final rules requiring health in-
surance issuers providing group health in-
surance coverage to provide language ser-
vices in languages that do not meet the req-
uisite threshold for an applicable non-Eng-
lish language, if requested by the adminis-
trator or sponsor of the group health plan
to which the coverage relates. For exam-
ple, if Chinese does not meet the 10 per-
cent threshold in New York County, but
an employer with a large Chinese-speaking
population asks the health insurance issuer
providing its group health insurance cov-
erage to provide language services in Chi-
nese (as described in the amendment), the
Departments invite comment on what obli-
gations should be imposed on the issuer, if
any, to provide language services in Chi-
nese.
B.External Review
1.Duration of transition period for
State external review processes.
In general, if State laws do not meet
the minimum consumer protections of
the NAIC Uniform Model Act
31
,asset
forth in paragraph (c)(2) of the July 2010
regulations, insurance coverage (as well
as self-insured nonfederal governmental
plan and church plan coverage) is subject
to the requirements of an external review
process under Federal standards similar
to the process under the NAIC Uniform
Model Act, such as the HHS-administered
process. Paragraph (c)(3) of the July 2010
regulations provided a transition period for
plan years (in the individual market, pol-
icy years) beginning before July 1, 2011
in order to allow States time to amend
their laws to meet or go beyond the min-
imum consumer protections of the NAIC
Uniform Model Act set forth in paragraph
(c)(2) of the July 2010 regulations. HHS
has been working closely with States re-
garding enactment of laws to conform
to paragraph (c)(2) and much progress
has been made. However, enacting State
legislation and regulations can often be
a complex and time-consuming process.
Accordingly, the Departments are modify-
ing the transition period under paragraph
(c)(3) of the July 2010 regulations so that
the last day of the transition period is De-
cember31,2011togiveStates,whichare
making substantial progress in implement-
ing State external review processes that
conform to paragraph (c)(2), the requisite
time to complete that process. Because
the July 2010 regulations would have
ended the transition period for plan years
(in the individual market, policy years)
beginning on or after July 1, 2011, the De-
partments note that ending the transition
period on December 31, 2011 will reduce
the length of the transition period for plans
29
At the time of publication of this amendment, 255 U.S. counties (78 of which are in Puerto Rico) meet this threshold. The overwhelming majority of theseare Spanish; however, Chinese,
Tagalog, and Navajo are present in a few counties, affecting five states (specifically, Alaska, Arizona, California, New Mexico, and Utah). A full list of the affected U.S.counties in 2011 is
included in Table 2 later in this preamble, under the heading, “IV. Economic Impact and Paperwork Burden.”
30
This information will be made available atwww.dol.gov/ebsa/healthreformandhttp://cciio.cms.gov/.
31
The NAIC Uniform Model Act in place on July 23, 2010 provides external reviewfor claims involving medical necessity, appropriateness, health care setting, level of care, effectiveness
(of a covered benefit), whether a treatment is experimental, and whether a treatment is investigational.
2011–32 I.R.B.103August 8, 2011

and policies with plan years (in the in-
dividual market, policy years) beginning
after January 1 but before July 1. When
the July 2010 regulations were published,
the Departments anticipated that issuers
in every State that had not enacted laws
to conform to paragraph (c)(2) of the July
2010 regulations would need to participate
in the HHS-administered process. Now,
the Departments have decided that
issuers may continue to participate in
a State external review process under
Federal standards similar to the process
under the NAIC Uniform Model Act
(an NAIC-similar process), which the
Departments anticipate will reduce market
disruption when the transition period ends.
Therefore, based on the Departments’
concerns for making the consumer
protections of the Affordable Care Act
available without undue delay and for
ensuring as much uniformity as possible
in the availability of those protections
regardless of the form of a consumer’s
health coverage, the Departments have
decidedtoendthetransitionperiodon
December 31, 2011. Therefore, this
amendment to the July 2010 regulations
provides that, before January 1, 2012,
an applicable State external process
will apply in lieu of the requirements
of the Federal external review process.
PHS Act section 2719(c) authorizes the
Departments to deem an external review
process “in operation as of the date of
enactment” of the Affordable Care Act
as compliant with the external review
requirements of PHS Act section 2719(b).
Through December 31, 2011, any
currently effective State external review
process satisfies the requirements of
either PHS Act section 2719(c) or section
2719(b)(2). If there is no applicable
State external review process, separate
guidance being issued contemporaneous
with the publication of this amendment
generally provides a choice between the
HHS-administered process or the private
accredited IRO process.
2.Scope of the Federal External Review
Process
Paragraph (d)(1) of the July 2010 reg-
ulations sets forth the scope of claims el-
igible for external review under the Fed-
eral external review process. Specifically,
any adverse benefit determination (includ-
ing a final internal adverse benefit deter-
mination) could be reviewed unless it re-
lated to a participant’s or beneficiary’s fail-
ure to meet the requirements for eligibil-
ity under the terms of a group health plan
(i.e., worker classification and similar is-
sues were not within the scope of the Fed-
eral external review process).
Comments received in response to the
July 2010 regulations were mixed on the
scope of claims eligible for external re-
view. Some commenters argued that PHS
Act section 2719 requires the Federal ex-
ternal review process to be “similar to”
the NAIC Uniform Model Act and that
the broader scope of claims eligible for
the Federal external review process is a
major departure from the NAIC Uniform
Model Act. In addition, some comments
from plans and issuers stated that the IROs
that are used in the private accredited IRO
process traditionally have expertise in ad-
judicating medical claims, and questioned
IROs’ experience and expertise with legal
and contractual claims. Other comments
from IROs and the IRO industry stated that
these organizationsdo currently conduct
reviews that involve both medical judg-
ment issues and legal and contractual is-
sues, and that there is sufficient capacity
for conducting reviews of such disputes.
Some plan and issuer comments high-
lighted that, with a limited number of ac-
credited IROs and increased demand for
their services, the cost of external review
for self-insured group health plans will
likely increase. By contrast, an IRO asso-
ciation group commented that member or-
ganizations are not at capacity with regard
to the volume of work they can perform,
and that they are confident that the number
of accredited IROs can adequately handle
the volume of reviews anticipated for the
Federal external review process.
Some plans and issuers stated that
handing plan document interpretation and
legal interpretation issues over to an IRO
may raise issues of consistency of in-
terpretations within a plan, unwarranted
consistency across plans that have unique
standards, ERISA fiduciary responsibility
concerns, and possible conflicts. At the
same time, other comments generally sup-
ported the broad scope of claims eligible
for the Federal external review process
as set forth in the July 2010 regulations.
These commenters argued very strongly
that it is nearly impossible to adjudicate
contractual claims through traditional
ERISA enforcement (which generally re-
lies on Federal court adjudication), leaving
plan participants and beneficiaries with no
effective means of enforcing their rights
to benefits under a plan. Consumer orga-
nizations further commented that external
review finally provides the free, indepen-
dent means of enforcement to level the
playing field of claims adjudication and,
therefore, the scope ofclaims eligible for
the Federal external review process should
be as broad as possible.
After considering all the comments,
with respect to claims for which exter-
nal review has not been initiated before
September 20, 2011, the amendment
suspends the original rule in the July
2010 regulations regarding the scope of
claims eligible for external review for
plans using a Federal external review
process (regardless of which type of
Federal process), temporarily replacing
it with a different scope. Specifically,
this amendment suspends the broad
scope of claims eligible for the Federal
external review process and narrows the
scope to claims that involve (1) medical
judgment (excluding those that involve
only contractual or legal interpretation
without any use of medical judgment), as
determined by the external reviewer; or (2)
a rescission of coverage. The more narrow
scope under this amendment is more
similar to the scope of claims eligible for
external review under the NAIC Uniform
Model Act. This amendment provides an
example describing a plan that generally
only provides 30 physical therapy visits
but will provide more with an approved
treatment plan. The plan’s rejection of a
treatment plan submitted by a provider for
the 31
st
visit based on a failure to meet
the plan’s standard for medical necessity
involves medical judgment and, therefore,
the claim is eligible for external review.
Similarly, another example describes
a plan that generally does not provide
coverage for services provided on an
out-of-network basis, but will provide
coverage if the service cannot effectively
be provided in network. In this example,
again, the plan’s rejection of a claim
for out-of-network services involves
medical judgment. Additional examples
of situations in which a claim is considered
to involve medical judgment include
adverse benefit determinations based on:
August 8, 20111042011–32 I.R.B.

•The appropriate health care setting for
providing medical care to an individ-
ual (such as outpatient versus inpatient
care or home care versus rehabilitation
facility);
•Whether treatment by a specialist is
medically necessary or appropriate
(pursuant to the plan’s standard for
medical necessity or appropriateness);
•Whether treatment involved “emer-
gency care” or “urgent care”, affecting
coverage or the level of coinsurance;
•A determination that a medical condi-
tion is a preexisting condition;
•A plan’s general exclusion of an item
or service (such as speech therapy), if
the plan covers the item or service in
certain circumstances based on a med-
ical condition (such as, to aid in the
restoration of speech loss or impair-
ment of speech resulting from a med-
ical condition);
•Whether a participant or beneficiary
is entitled to a reasonable alternative
standard for a reward under the plan’s
wellness program;
32
•The frequency, method, treatment, or
setting for a recommended preventive
service, to the extent not specified,
in the recommendation or guideline
of the U.S. Preventive Services Task
Force, the Advisory Committee on
Immunization Practices of the Centers
for Disease Control and Prevention,
or the Health Resources and Services
Administration (as described in PHS
Act section 2713 and its implementing
regulations);
33
and
•Whether a plan is complying with
the nonquantitative treatment limita-
tion provisions of the Mental Health
Parity and Addiction Equity Act and
its implementing regulations, which
generally require, among other things,
parity in the application of medical
management techniques.
34
The suspension is intended to give the
marketplace time to adjust to providing
external review. It will also allow the De-
partments time to evaluate IROs’ capacity
for handling external reviews; to consider
whether current accreditation standards
are sufficient to ensure that IROs are ca-
pable of making accurate and consistent
decisions (both across different plans and
across different IROs) regarding legal
and contractual issues that do not involve
medical judgment or rescissions; and to
assess the mechanics of the Federal ex-
ternal review process (and any potential
adjustments). The Departments solicit
comments on these issues, including on
whether limiting the scope of claims dur-
ing the suspension period will impose ad-
ministrative costs in determining whether
a claim is eligible for external review. The
Departments also welcome any data on
external review claims actually performed
to date under private contracts pursuant
to the private accredited IRO process for
implementing PHS Act § 2719(b), includ-
ing number of claims reviewed, type of
review (such as whether it involved any
medical judgment or not), and costs asso-
ciated with the review. The Departments
expect that the suspension will be lifted
by January 1, 2014, when other consumer
protections under the Affordable Care
Act take effect. Moreover, if, after taking
into account all the relevant information,
including public comments, the Depart-
ments decide to return to the original rule
providing for a broad scope of claims or
permanently modify the scope of claims
through rulemaking, the Departments will
give sufficient advance notice to enable
plans, their service providers, IROs, and
other affected parties sufficient time to
comply with a new rule.
Separate guidance being issued con-
temporaneous with the publication of this
amendment announces standards under
which, until January 1, 2014, a State may
operate an external review process under
Federal standards similar to the process
under the NAIC Uniform Model Act (an
NAIC-similar process). The Departments
are adopting this approach to permit States
to operate their external review processes
under standards established by the De-
partments until January 1, 2014, avoiding
unnecessary disruption, while States work
to adopt the consumer protections set
forth in paragraph (c) of the July 2010
regulations. Paragraph (d)(1) of the July
2010 regulations, as amended, will gov-
ern the scope of a State external review
process under Federal standards similar
to the process under the NAIC Uniform
Model Act. Because the amended para-
graph (d)(1) creates a broader scope of
external review than is required under the
NAIC Uniform Model Act, and because
it would be illogical to require States to
make changes to their process to encom-
pass the broader scope of paragraph (d)(1)
in their external review process while they
work to adopt the consumer protections of
the NAIC Uniform Model Act (which has
a narrower scope), the Departments are
also amending paragraph (d)(1) to permit
the Secretaries to modify the scope of the
Federal external review process in future
guidance to permit State external review
processes (both NAIC-similar processes
and NAIC-parallel processes) to the scope
that applies underthe NAIC Uniform
Model Act.
3.Clarification regarding requirement
that external review decision be binding
The Departments have received a num-
ber of comments on the requirement that
an IRO decision be binding on parties.
Specifically, the July 2010 regulations pro-
vided that an external review decision by
an IRO is binding on the plan or issuer,
as well as the claimant, except to the ex-
tent that other remedies are available un-
der State or Federal law.
35
This binding re-
quirement is also one of the minimum con-
32
See 26 CFR 54.9802–1(f)(2)(iv)(A), 29 CFR 2590.702(f)(2)(iv)(A), and 45 CFR146.121(f)(2)(iv)(A), requiring that wellness programs that requireindividuals to satisfy a standard related
to a health factor in order to obtain a reward allow areasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for
that period, it is either unreasonably difficult dueto a medical condition to satisfy the otherwise applicable standard, or medically inadvisable to attempt to satisfy the otherwise applicable
standard.
33
See 26 CFR 54.9815–2713T, 29 CFR 2590.715–2713, and 45 CFR 147.130; see also FAQ 8, FAQs About the Affordable Care Act Implementation Part II, regarding the scope, set-
ting, or frequency of the items or services to be covered under the preventive health services recommendations and guidelines (available athttp://www.dol.gov/ebsa/faqs/faq-aca2.htmland
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs2.html).
34
See Code section 9812 and 26 CFR 54.9812–1T, ERISA section 712 and 29 CFR 2590.712, and PHS Act section 2726 and 45 CFR 146.136.
35
See 26 CFR 54.9815–2719T(d)(2)(iv), 29 CFR 2590.715–2719(d)(2)(iv), and 45 CFR 147.136(d)(2)(iv).
2011–32 I.R.B.105August 8, 2011

sumer protections set forth in paragraph (c)
of the July 2010 regulations.
36
Some comments received in response
to the July 2010 regulations highlighted
the importance of this consumer protection
and expressed approval that this require-
ment would minimize delays that could
further hurt claimants, as the plan or is-
suer must provide coverage or payment for
the claim immediately upon receipt of a
notice of a final external review decision.
Other commenters questioned whether the
requirement that external review is bind-
ing eliminates the plan’s or issuer’s option
to choose to pay a claim at any time during
or after the external review process.
Nothing in PHS Act section 2719(b),
the July 2010 regulations, or related guid-
ance precludes a plan or issuer from choos-
ing to provide coverage or payment for a
benefit. Instead, the Departments read the
requirement of the NAIC Uniform Model
Act, which is incorporated into the July
2010 regulations, to require plans and is-
suers to provide a benefit if that is the de-
cision of the IRO. A plan or issuer may
not delay payment because the plan dis-
agrees and intends to seek judicial review.
Instead, while the plan may be entitled to
seek judicial review, it must act in accor-
dance with the IRO’s decision (including
by making payment on the claim) unless
or until there is a judicial decision other-
wise. However, the requirement that the
IRO’s decision be binding does not pre-
clude the plan or issuer from making pay-
ment on the claim or otherwise providing
benefits at any time, including following a
final external review decision that denies
the claim or otherwise fails to require such
payment or benefits.
After considering all the comments on
the requirement that an IRO decision be
binding on the plan and issuer, as well
as the claimant, this amendment clarifies
the language in paragraphs (c)(2)(xi) (re-
garding the minimum standards for State
external review processes) and (d)(2)(iv)
(regarding Federal external review process
standards). Specifically, these two provi-
sions are amended to add language stat-
ing that, for purposes of the binding provi-
sion, the plan or issuer must provide ben-
efits (including by making payment on the
claim) pursuant to the final external re-
view decision without delay, regardless of
whether the plan or issuer intends to seek
judicial review of the external review de-
cision and unless or until there is a judicial
decision otherwise. The Departments wel-
come comments as to whether any addi-
tional clarificationsabout the binding pro-
vision would be helpful.
C.Separate, Contemporaneous Technical
Guidance
Separate technical guidance is being
issued by the Departments contempora-
neous with the publication of this amend-
ment. This technical guidance addresses
both State- and Federally-administered
external review processes. An appendix
to this technical guidance contains re-
vised versions of the three model notices
issued by the Departments in connec-
tion with the July 2010 regulations. The
updated versions of the model notice
of adverse benefit determination, model
notice of final internal adverse benefit
determination, and model notice of final
external review decision reflect the re-
quirements contained in the provisions of
this amendment and the guidance. This
technical guidance will be available at
http://www.dol.gov/ebsa/healthreformand
http://cciio.cms.gov.
HHS is issuing also two additional tech-
nical guidance documents. The first pro-
vides instructions for self-insured nonfed-
eral governmental plans and health insur-
ance issuers with respect to election of a
Federal external review process. The sec-
ond provides, for transparency purposes,
updated information on how the county-
level estimates pertaining to the 10 percent
threshold were calculated for the rules re-
lated to culturally and linguistically appro-
priate notices. Both of these documents
will be available athttp://cciio.cms.gov.
III. Interim Final Rules
Section 9833 of the Code, section 734
ofERISA,andsection2792ofthePHS
Act authorize the Secretaries of the Trea-
sury, Labor, and HHS (collectively, the
Secretaries) to promulgate any interim fi-
nal rules that they determine are appro-
priate to carry out the provisions of chap-
ter 100 of the Code, part 7 of subtitle
BoftitleIofERISA,andpartAofti-
tle XXVII of the PHS Act, which include
PHS Act sections 2701 through 2728 and
the incorporation of those sections into
ERISA section 715 and Code section 9815.
The amendments promulgated in this rule-
making carry out the provisions of these
statutes. Therefore, the foregoing interim
final rule authority applies to these amend-
ments.
Under the Administrative Procedure
Act (APA) (5 U.S.C. 551et seq.), while
a general notice of proposed rulemaking
and an opportunity for public comment
is generally required before promulga-
tion of regulations, this is not required
when an agency, for good cause, finds that
notice and public comment thereon are
impracticable, unnecessary, or contrary
to the public interest. The provisions of
the APA that ordinarily require a notice
of proposed rulemaking do not apply here
because of the specific authority to issue
interim final rules granted by section 9833
of the Code, section 734 of ERISA, and
section 2792 of the PHS Act. Moreover,
even if the APA requirements for notice
and comment were applicable to this reg-
ulation, they have been satisfied. This is
because the matters that are the subject
of these amendments have already been
subjected to public notice and comment,
as they were addressed in the July 2010
regulations, and are a logical outgrowth
of that document. The amendments made
in this interim final rule are being made
in response to public comments received
on the July 2010 regulations. While the
Departments have determined that, even
if the APA were applicable, an additional
opportunity for public comment is unnec-
essary in the case of these amendments,
the Departments are issuing these amend-
ments as an interim final rule so as to
provide the public with an opportunity for
public comment on these modifications.
IV. Economic Impact and Paperwork
Burden
A.Summary and Need for Regulatory
Action—Department of Labor and
Department of Health and Human
Services
As stated earlier in this preamble,
the Departments previously issued the
July 2010 regulations implementing PHS
Act section 2719, which were published
36
See 26 CFR 54.9815–2719T(c)(2)(xi), 29 CFR 2590.715–2719(c)(2)(xi), and 45 CFR 147.136(c)(2)(xi).
August 8, 20111062011–32 I.R.B.

in theFederal Registeron July 23,
2010 (75 FR 43330). The July 2010
regulations set forth rules with respect to
internal claims and appeals and external
appeals processes forgroup health plans
and health insurance issuers that are not
grandfathered health plans.
AsdescribedindetailinSectionIIof
this preamble, after the July 2010 regu-
lations were issued, the Departments re-
ceived public comments expressing con-
cerns about the burdens associated with
several of the regulations’ provisions. In
response to such comments, the Depart-
ments are hereby amending the following
provisions of the July 2010 regulations:
•Expedited notification of benefit deter-
minations involving urgent care (para-
graph (b)(2)((ii)(B) of the July 2010
regulations);
•Additional notice requirements with
respect to notice of adverse benefit
determinations or final internal ad-
verse benefit determination (paragraph
(b)(2)(ii)(E) of the July 2010 regula-
tions);
37
•Deemed exhaustion of internal claims
and appeals processes (paragraph
(b)(2)(ii)(F) of the July 2010 regula-
tions);
•Providing notices in a culturally and
linguistically appropriate manner
(paragraph (e) of the July 2010 regu-
lations);
•The duration of the transition period
for State external review processes
(paragraph (c)(3) of the July 2010 reg-
ulations); and
•The scope of claims eligible for ex-
ternal review under the Federal exter-
nal appeals process (paragraph (d)(1)
of the July 2010 regulations).
The Departments crafted these amend-
ments to the July 2010 regulations to se-
cure the protections intended by Congress.
In accordance with OMB Circular A–4, the
Departments have quantified the costs of
these amendments where feasible and pro-
vided a qualitative discussion of some of
the benefits and costs that may stem from
them.
The Departments believe that (i) the
costs associated with the amended rules
are less than the costs associated with the
July 2010 regulations, (ii) the amended
rules adequately protect the rights of par-
ticipants, beneficiaries, and policyholders,
and (iii) the benefits of the amended rules
justify their costs relative to the pre-Af-
fordable Care Act baseline and the July
2010 regulations.
B.Executive Orders 12866 and
13563—Department of Labor and
Department of Health and Human
Services
Executive Orders 13563 and 12866
direct agencies to assess all costs and ben-
efits of available regulatory alternatives
and, if regulation is necessary, to select
regulatory approaches that maximize net
benefits (including potential economic,
environmental, public health and safety
effects, distributiveimpacts, and equity).
Executive Order 13563 emphasizes the
importance of quantifying both costs and
benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This
rule has been designated a “significant
regulatory action” although not econom-
ically significant, under section 3(f) of
Executive Order 12866. Accordingly, the
rule has been reviewed by the Office of
Management and Budget.
The Departments provide an assess-
ment of the potential costs and benefits
associated with each amended regulatory
provision below, as summarized in Table
1.
TABLE. 1—Accounting Table
Benefits
Qualitative: Amendments to the interim final regulations ensure urgent care benefit determinations are made in a timely
manner, increase patient privacy, ensurenon-English speakers understand their rights, and provide that claimants will be
deemed to have exhausted their administrative proceedings andcan proceed to court or external review if a plan or issuer fails
to strictly adhere to the regulatory requirements with the exception of the requirements that are described in the amendment.
These amendments are expected to reduce compliance costs while still ensuring patient protections.
CostsEstimateYear Dollar
Discount
Rate
Period
Covered
1.720117%2012–2014
Annualiz
ed Monetized ($millions/year)
1.720113%2012–2014
Qualitative: Monetized costs are for providing notices upon request in a culturally and linguistically appropriate manner.
Non-monetized costs include costs for plans and issuers to respond to requests for diagnostic and treatment codes, and costs
incurred by claimants to resolve whether a plan or insurer’s failure to strictly adhere to the regulatory requirementsissufficient
for a claimant to proceed directly to an external or court review.
37
Under the July 2010 regulations, this included the date of service, the health care provider, and the claim amount (if applicable), as well as the diagnosis code (such as an ICD–9 code,
ICD–10 code, or DSM-IV code), the treatment code (such as aCPT code) , and the corresponding meanings of these codes.
2011–32 I.R.B.107August 8, 2011

1. Estimated Number of Affected Entities
For purposes of estimating the entities
affected by these amendments to the July
2010 regulations, the Departments have
defined a large group health plan as an em-
ployer plan with 100 or more workers and
asmallgroupplanasanemployerplan
with fewer than 100 workers. The Depart-
ments make the following estimates about
plans and issuers affected by these amend-
ments: (1) there are approximately 72,000
large and 2.8 million small ERISA-cov-
ered group health plans with an estimated
97.0 million participants in large group
plans and 40.9 million participants in small
group plans;
38
(2) there are 126,000 gov-
ernmental plans with 36.1 million partici-
pants in large plans and 2.3 million partic-
ipants in small plans;
39
and (3) there are
16.7 million individuals under age 65 cov-
ered by individual health insurance poli-
cies.
40
The actual number of affected individ-
uals depends on several factors, includ-
ing whether (i) a health plan retains its
grandfather status, (ii) the plan is subject
to ERISA, (iii) benefits provided under the
plan are self-funded or financed by the pur-
chase of an insurance policy, (iii) the appli-
cable State has enacted an internal claims
and appeals law, and (iv) the applicable
State has enacted an external review law,
and if so the scope of such law, and (v) the
number of new plans and enrollees in such
plans.
2. Benefits and Costs
The benefits and costs of the amend-
ments to the July 2010 regulations are dis-
cussed together under this section, because
the primary effect of the amendments is to
reduce the cost of compliance.
a.Expedited notification of benefit de-
termination involving urgent care.Asdis-
cussed in detail above, the July 2010 regu-
lations generally provide that a plan or is-
suer must notify a claimant of a benefit de-
termination with respect to an urgent care
claim as soon as possible taking into ac-
count the medical exigencies, but no later
than 24 hours after the receipt of the claim
by the plan or issuer. This was a change
from the DOL claims procedure regula-
tion, which requires an urgent care deter-
minationtobemadenotlaterthan72hours
after receipt of the claim by a group health
plan. The Departments received several
comments regarding the burdens associ-
ated with meeting the 24-hour turnaround.
Some commenters argued that some of the
claims constituting “urgent care” and thus
qualifying for the expedited timeframe re-
ally do not need to be decided within 24
hours. Moreover, a number of commenters
highlighted that the 72-hour provision was
never anything more than a “backstop”;
the general rule under both the July 2010
regulations and the DOL claims proce-
dure regulation is for a decision as soon
as possible consistent with the medical ex-
igencies involved, making the change to
a 24-hour timeframe unnecessary for the
most serious medical cases. Finally, some
commenters cited the Emergency Medical
Treatment and Labor Act (EMTALA)
41
,
which generally requires emergency room
care to be treated with or without insur-
ance or preauthorization and, therefore,
mitigates much of the need for expedited
pre-service emergency claims determina-
tions in many situations.
After considering the comments, and
the costs and benefits of an absolute
24-hour decision-making deadline, the
amendment permits plans and issuers
to follow the original rule in the DOL
claims procedure regulation (requiring
decision-making in the context of pre-ser-
vice urgent care claims as soon as possible
consistent with the medical exigencies
involved but in no event no later than 72
hours),providedthe plan or issuer defers
to the attending provider with respect to
the decision as to whether a claim consti-
tutes “urgent care.”
The Departments expect that this
amendment will ensure urgent care benefit
determinations are made in a timely man-
ner while reducing burden on plans and
issuers for several reasons. ERISA-cov-
ered plans were already subject to this
requirement; therefore, there is no addi-
tional burden imposed on such plans from
the pre-Affordable Care Act baseline.
For self-insured nonfederal governmental
plans and issuers in the individual market,
the 72-hour requirement would increase
burden from a pre-Affordable Care Act
baseline to the extent that such plans and
issuers are not already meeting this stan-
dard. The Departments do not have suffi-
cient data to estimate the fraction of plans
and issuers that were not already in com-
pliance with this standard. Many claims
filed with self-insured nonfederal govern-
mental plans and individual market issuers
already could have been meeting this re-
quirement for urgent care claims, because
ERISA claims constitute a large portion
of health claims, and the Departments
understand that, in general, issuers and
service providers apply the same claims
and appeals standards to ERISA-covered
and non-ERISA-covered plans.
Plans and issuers that previously were
not subject to the DOL claims procedure
regulation and that are not already meeting
the claims and appeals standard under the
DOL claims procedure regulation, could
incur additional costs to become compli-
ant with the 72-hour standard, but the De-
partments expect these costs to be less than
those associated with a 24-hour standard.
Speeding up the notification process for
these determinations to meet the 72-hour
standard could necessitate incurring addi-
tional cost to add more employees or find
other ways to shorten the timeframe, but
again such costs are expected to be less
than the costs associated with meeting the
24-hour standard provided in the July 2010
regulations. Additional costs for claimants
may be associated with this requirement if
meeting the 72-hour timeframe results in
more claims being denied than would have
been denied under a longer notification pe-
riod, but again such costs are expected to
be less than the costs associated with meet-
ing the 24-hour standard provided in the
July 2010 regulations. The Departments
do not have sufficient data to estimate such
costs.
b.Additional notice requirements for
internal claims and appeals. As discussed
above, the July 2010 regulations had
38
All participant counts and the estimates of individual policies are from theU.S. Department of Labor, EBSA calculations using the March 2009 CurrentPopulation Survey Annual Social
and Economic Supplement and the 2008 Medical Expenditure Panel Survey.
39
Estimate is from the 2007 Census of Government.
40
US Census Bureau, Current Population Survey, March 2009.
41
42 U.S.C. §1395dd.
August 8, 20111082011–32 I.R.B.

additional content requirements for the re-
quired notices. The Departments received
comments addressing the requirements
to include the diagnosis code (such as an
ICD–9 code, ICD–10 code, or DSM-IV
code), the treatment code (such as a CPT
code), and the corresponding meanings of
these codes. Concerns were raised about
patient privacy, interference with the doc-
tor-patient relationship, and high costs.
Commenters also pointed out that there
are currently over 20,000 treatment and
diagnosis codes in use today, presenting a
costly administrative and operational chal-
lenge for plans and issuers. Comments
also questioned the efficacy of providing
codes which some argued are often very
difficult for the average patient to under-
stand.
After considering all the comments, and
the costs and benefits of the additional dis-
closure, the amendment to the July 2010
regulations eliminates the requirement to
automatically provide the diagnosis and
treatment codes as part of a notice of ad-
verse benefit determination (or final in-
ternal adverse benefit determination) and
instead requires plans and issuers to pro-
vide notification of the opportunity to re-
quest the diagnosis and treatment codes
(and their meanings) in all notices of ad-
verse benefit determination (and notices
of final internal adverse benefit determina-
tion) and to provide this information upon
request.
Making the codes only available upon
request protects patients’ privacy while re-
ducing the burden for plans and issuers to
redesign notices. However, plans and is-
suers will still incur costs to establish pro-
cedures to receive, process, and mail the
requests. The Departments do not have
a basis to estimate the net cost associated
with this amendment, because they do not
have sufficient data available to estimate
the savings that will result from plans and
issuers not needing to redesign notices or
calculate the number of future requests.
c.Deemed exhaustion of internal
claims and appeals process.TheJuly
2010 regulations provide that claimants
can immediately seek judicial or external
review if a plan or issuer failed to “strictly
adhere”toalloftheJuly2010regulations’
requirements for internal claims and ap-
peals processes, regardless of whether the
plan or issuer asserted that it “substantially
complied” with the July 2010 regulations.
This approach received a number of neg-
ativecommentsfromsomeissuersand
plan sponsors, who prefer a “substantial
compliance” approach, especially in cases
where deviations from the regulatory stan-
dards were minor.
In response to these comments, the De-
partments are retaining the approach to this
requirement, but this amendment also adds
a new paragraph (b)(2)(ii)(F)(2)totheJuly
2010 regulations to provide an exception
to the strict compliance standard for er-
rors that are minor and meet certain other
specified conditions. The new paragraph
will also protect claimants whose attempts
to pursue other remedies under paragraph
(b)(2)(ii)(F)(1)oftheinterimfinalregula-
tions are rejected by a reviewing tribunal.
Under the amended approach, any viola-
tion of the procedural rules of July 2010
regulations pertaining to internal claims
and appeals would permit a claimant to
seek immediate external review or court
action, as applicable, unless the violation
was:
(1)De minimis;
(2) Non-prejudicial;
(3) Attributable to good cause or mat-
ters beyond the plan’s or issuer’s control;
(4) In the context of an ongoing good-
faith exchange of information; and
(5) Not reflective of a pattern or practice
of non-compliance.
42
The Departments expect that this
amendment will protect patients’ right to
proceed to external review while lowering
costs based on the assumption that internal
appeals are less expensive than exter-
nal reviews or litigation. However, the
amendment may add some costs, because
participants and policyholders now may
face uncertainty regarding whether a par-
ticular violation is minor. Many claimants
may incur a cost to seek professional
advice, because they will not be able to
make this judgment on their own behalf.
Alternatively, some claimants might seek
immediate external review or judicial re-
view and be denied it. The Departments
do not have a sufficient basis to estimate
these costs.
d.Culturally and Linguistically Appro-
priate Notices. PHS Act section 2719 re-
quires group health plans and health in-
surance issuers to provide relevant notices
in a culturally and linguistically appropri-
ate manner. The July 2010 regulations set
forth a requirement to provide notices in
a non-English language based on separate
thresholds of the number of people who
are literate in the same non-English lan-
guage. In the group market, the threshold
set forth in the July 2010 regulations dif-
fers depending on the number of partici-
pants in the plan as follows:
•For a plan that covers fewer than 100
participants at the beginning of a plan
year, the threshold is 25 percent of all
plan participants being literate only in
the same non-English language.
•For a plan that covers 100 or more
participants at the beginning of a plan
year, the threshold is the lesser of 500
participants, or 10 percent of all plan
participants, being literate only in the
same non-English language.
43
For the individual market, the threshold
is 10 percent of the population residing in
the county being literate only in the same
non-English language.
44
Under the July 2010 regulations, if an
applicable threshold is met with respect to
a non-English language, the plan or issuer
must provide the notice upon request in the
non-English language. Additionally, the
plan or issuer must include a statement in
the English versions of all notices, promi-
nently displayed in the non-English lan-
guage, offering the provision of such no-
tices in the non-English language. Finally,
to the extent the plan or issuer maintains
a customer assistance process (such as a
telephone hotline) that answers questions
or provides assistance with filing claims
and appeals, the plan or issuer must pro-
42
In addition, the claimant would be entitled, upon written request, to an explanation of the plan’s or issuer’s basis for asserting that it meets this standard, so that the claimant could make
an informed judgment about whether to seek immediate review. Finally, if the external reviewer or the court rejects the claimant’s request for immediate review on the basis that the plan met
this standard, this amendment would give the claimant the right to resubmit and pursue the internal appeal of the claim.
43
These thresholds were adapted from the DOL regulations regarding style and format for a summary plan description, at 29 CFR 2520.102–2(c) for participants who are not literate in English.
44
The individual market threshold was generally adapted from the approach used under the Medicare Advantage program, which required translation of materials in languages spoken by
more than 10 percent of the general population in a service area at the time the threshold was established.
2011–32 I.R.B.109August 8, 2011

vide such assistance in the non-English
language.
As discussed earlier in this preamble,
the Departments received comments that
raised concerns regarding the burdens im-
posed by this provision. In response to
these comments, the Departments have
decided to amend the July 2010 regula-
tions’ provisions related to the provision
of notices in a culturally and linguisti-
cally appropriate manner to establish a
single threshold with respect to the num-
ber of people who are literate only in the
same non-English language for both the
group and individual markets. Under the
amended provision, for group health plans
and health insurance issuers offering group
or individual health insurance coverage,
the threshold percentage of people who
are literate only in the same non-English
language will be set at 10 percent or more
of the population residing in the claimant’s
county, as determined based on American
Community Survey (ACS) data published
by the United States Census Bureau. Ta-
ble 2, below provides a chart listing those
255 U.S. counties (78/255 are in Puerto
Rico) in which at least 10 percent of the
population speak a particular non-Eng-
lish language and speak English less than
“very well.” These data are applicable for
2011 and are calculated using 2005–2009
ACS data. The Departments will update
this guidance annually on their website if
there are changes to the list of the coun-
ties determined to meet this 10 percent
threshold for the county’s population be-
ing literate only in the same non-English
language.
TABLE 2.—Percent of the County Population that Speak a Particular Non-English Language and Speak English Less Than
“Very Well”, by U.S. County
45
NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
AKAleutians West Census Area1316
AKAleutians East Borough
35
ARSevier County17
AZApache County12
AZMaricopa County11
AZYuma County22
AZSanta Cruz County39
CAColusa County27
CAFresno County
15
CAGlenn County14
CAImperial County32
CAKern County16
CAKings County18
CALos Angeles County19
CAMadera County18
CAMerced County20
CAMonterey County
25
CANapa County14
CAOrange County14
CARiverside County
15
CASanBenitoCounty21
CASan Bernardino County
15
CASan Diego County11
CASan Francisco County12
45
Data are from the 2005–2009 ACS available atwww.census.gov/acs. Only those counties where at least 10% of the county speak a particular non-English language and speak English less
than “very well” are listed.
August 8, 20111102011–32 I.R.B.

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
CASan Joaquin County12
CASanta Barbara County
15
CASanta Cruz County12
CAStanislaus County13
CASutter County12
CATulare County21
CAVentura County14
COAdams County12
COCostilla County11
CODenver County12
COEagle County16
COGarfield County12
COLake County11
COPhillips County12
COProwers County12
COSaguache County
15
COYuma County10
FLCollier County13
FLDeSoto County21
FLGlades County10
FLHardee County22
FLHendry County26
FLMiami-Dade County31
FLOkeechobee County12
FLOsceola County16
GAAtkinson County12
GAEchols County20
GAHall County16
GATelfair County10
GAWhitfield County18
IABuena Vista County12
IDClark County22
IDMinidoka County11
IDOwyhee County12
IDPower County13
ILKane County
15
KSFinney County16
KSFord County23
2011–32 I.R.B.111August 8, 2011

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
KSGrant County16
KSHamilton County11
KSSeward County26
KSStanton County19
KSStevens County11
KSWichita County12
KSWyandotte County10
NCAlleghany County14
NCDuplin County14
NEColfax County23
NEDakota County14
NEDawson County
15
NJHudson County18
NJPassaic County16
NJUnion County13
NMChaves County11
NMDona Ana County18
NMHidalgo County12
NMLea County11
NMLuna County18
NMMcKinley County
15
NMMora County11
NMSanta Fe County12
NMChaves County11
NVClark County,11
NYBronx County20
NYNew York County10
NYQueens County12
OKTexas County18
ORHood River County
15
ORMarion County11
ORMorrow County14
TXAndrews County11
TXAtascosa County11
TXBailey County18
TXBexar County12
TXBrooks County18
TXCalhoun County12
August 8, 20111122011–32 I.R.B.

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
TXCameron County30
TXCamp County11
TXCastro County20
TXCochran County18
TXConcho County29
TXCrane County10
TXCrockett County20
TXCrosby County11
TXCulberson County
15
TXDallam County12
TXDallas County18
TXDawson County12
TXDeaf Smith County20
TXDimmit County33
TXDuval County26
TXEctor County12
TXEdwards County10
TXEl Paso County29
TXFrio County16
TXGarza County
35
TXGonzales County14
TXHale County12
TXHall County14
TXHansford County16
TXHarris County18
TXHidalgo County
35
TXHoward County16
TXHudspeth County31
TXJim Hogg County26
TXJim Wells County13
TXKarnes County17
TXKenedy County14
TXKinney County
15
TXKleberg County11
TXLa Salle County22
TXLamb County
15
TXLipscomb County14
TXLynn County12
2011–32 I.R.B.113August 8, 2011

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
TXMaverick County48
TXMidland County11
TXMoore County19
TXNueces County12
TXOchiltree County17
TXParmer County22
TXPecos County18
TXPresidio County36
TXReagan County21
TXReeves County27
TXSan Patricio County12
TXSchleicher County12
TXSherman County14
TXStarr County43
TXSterling County11
TXSutton County18
TXTarrant County10
TXTerrell County12
TXTerry County11
TXTitus County20
TXTravis County12
TXUpton County11
TXUvalde County
15
TXVal Verde County29
TXWard County12
TXWebb County49
TXWillacy County20
TXWinkler County13
TXYoakum County23
TXZapata County36
TXZavala County33
UTSan Juan County12
VAManassas city17
VAManassas Park city18
WAAdams County23
WADouglas County11
WAFranklin County27
WAGrant County16
August 8, 20111142011–32 I.R.B.

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
WAYakima County17
PRAnasco Municipio
85
PRAdjuntas Municipio86
PRAguada Municipio81
PRAguadilla Municipio78
PRAguas Buenas Municipio90
PRAibonito Municipio82
PRArecibo Municipio83
PRArroyo Municipio84
PRBarceloneta Municipio78
PRBarranquitas Municipio87
PRBayamon Municipio78
PRCabo Rojo Municipio82
PRCaguas Municipio80
PRCamuy Municipio88
PRCanovanas Municipio83
PRCarolina Municipio77
PRCatano Municipio82
PRCayey Municipio86
PRCeiba Municipio73
PRCiales Municipio88
PRCidra Municipio86
PRCoamo Municipio84
PRComero Municipio93
PRCorozal Municipio88
PRCulebra Municipio76
PRDorado Municipio77
PRFajardo Municipio78
PRFlorida Municipio81
PRGuayama Municipio80
PRGuayanilla Municipio
85
PRGuaynabo Municipio69
PRGurabo Municipio81
PRGußnica Municipio83
PRHatillo Municipio86
PRHormigueros Municipio74
PRHumacao Municipio83
PRIsabela Municipio
85
2011–32 I.R.B.115August 8, 2011

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
PRJayuya Municipio91
PRJuana Diaz Municipio86
PRJuncos Municipio
85
PRLajas Municipio83
PRLares Municipio87
PRLas Marias Municipio91
PRLas Piedras Municipio
85
PRLoiza Municipio89
PRLuquillo Municipio79
PRManati Municipio84
PRMaricao Municipio
95
PRMaunabo Municipio88
PRMayaguez Municipio77
PRMoca Municipio86
PRMorovis Municipio87
PRNaguabo Municipio83
PRNaranjito Municipio91
PROrocovis Municipio91
PRPatillas Municipio84
PRPenuelas Municipio86
PRPonce Municipio80
PRQuebradillas Municipio83
PRRincon Municipio73
PRRio Grande Municipio
85
PRSabana Grande Municipio83
PRSalinas Municipio86
PRSan German Municipio
85
PRSan Juan Municipio73
PRSan Lorenzo Municipio83
PRSan Sebastian Municipio84
PRSanta Isabel Municipio86
PRToa Alta Municipio80
PRToaBajaMunicipio80
PRTrujillo Alto Municipio79
PRUtuado Municipio83
PRVega Alta Municipio83
PRVega Baja Municipio76
PRVieques Municipio83
August 8, 20111162011–32 I.R.B.

NON-ENGLISH LANGUAGE
STATECOUNTY
Spanish
%
Chinese
%
Tagalog
%
Navajo
%
PRVillalba Municipio88
PRYabucoa Municipio86
PRYauco Municipio
85
PRYauco Municipio
85
These amendments also require each
notice sent by a plan or issuer to an address
in a county that meets this threshold to in-
clude a one-sentence statement in the rele-
vant non-English language about the avail-
ability of language services to be provided
by the Departments. The Departments
have provided guidance with sample sen-
tences in the relevant languages in sep-
arate guidance being issued contempora-
neous with the publication of this amend-
ment.
In addition to including a statement
in all notices in the relevant non-English
language, a plan or issuer would be re-
quired to provide a customer assistance
process (such as a telephone hotline) with
oral language services in the non-English
language and provide written notices in
the non-English language upon request.
The Departments expect that the largest
cost associated with the amended rules for
culturally and linguistically appropriate
notices will be for plans and issuers to pro-
vide notices in the applicable non-English
language upon request. Based on the ACS
data, the Departments estimate that there
are about 12 million individuals living
in covered counties that are literate in a
non-English Language. The ACS did not
start collecting insurance coverage infor-
mation until 2008. Therefore, to estimate
the percentage of the 12 million affected
individuals that were insured, the Depart-
ments used the percentage of the popula-
tion in the State that reported being insured
by private or public employer insurance
or in the individual market from the 2009
Current Population Survey (CPS).
46
This
results in an estimate of approximately
seven million individuals who are eligible
to request translation services.
In discussions with the regulated com-
munity, the Departments found that ex-
perience in California, which has a State
law requirement for providing translation
services, indicates that requests for trans-
lations of written documents averages
0.098 requests per 1,000 members. While
the California law is not identical to the
amendment to the July 2010 regulations,
and the demographics for California do
not match other counties, for purposes of
this analysis, the Departments used this
percentage to estimate of the number of
translation service requests that plan and
issuers can expect to receive. Industry ex-
perts also told the Departments that while
the cost of translation services varies, $500
per document is a reasonable approxima-
tion of translation cost.
Using the ACS and the CPS, the De-
partments estimate 34 million insured
lives in the affected counties. Based on the
foregoing, the Departments estimate that
the cost to provide translation services will
be approximately $1.7 million annually
(34,087,000 lives * 0.098/1000 * $500).
e.Duration of the transition period
for State external review processes.These
amendments to the July 2010 regulations
modify the transition period under para-
graph (c)(3) so that the last day of the
transition period is December 31, 2011.
Modifying the transition period gives
states additional time to implement State
external review processes that conform
to paragraph (c)(2). This modification
produces benefits and costs to participants
and beneficiaries depending upon which
state they live in and the timing of the
beginning of the plan year. HHS is work-
ing closely with states to help them have
external review processes that meet the re-
quirements of paragraph (c)(2). The July
2010 regulations would have participants
living in states with laws that do not meet
the minimum consumer protections in
paragraph (c)(2) entering the Federal ex-
ternal review process that would provide
more consumer protections. However, this
requirement to enter the Federal external
review process would take effect upon the
start of a new plan year beginning on or
after July 1, 2011.
This modification delays coverage of
external review for participants whose
plan year would have started between
July 1, 2011 and December 31, 2011, but
provides coverage sooner for participants
in plans with plan years beginning after
January 1, 2012, and has no change for
participants in plans with plan years be-
ginning on January 1, 2012.
The annual reporting form for certain
ERISA covered health plans, the Form
5500, has information on health plan year
end dates and also the number of partici-
pants in health plans. While most health
plans with less than 100 participants are
not required to file the Form 5500, the De-
partments are able to observe the plan year
end dates and hence the plan year start
dates for large plans. The Departments
looked at the dispersion of plan year start
dates for plans that filed the Form 5500
and found that nearly 76 percent of partici-
pants are in plans with a plan year start date
of January 1, 2012 and hence will not be
effected by the change in the rule; nearly
13 percent of participants are in plans that
could possibly see a delay in receiving the
protections of external review, while just
over 10 percent of participants will be able
to access the protections sooner. These
estimates did not take into account the
state in which the plan was located. The
Departments do not have data on the start
date of policies in the individual market.
While on net about 2.4 percent of partic-
ipants in affected plans could see a delay
in receiving the protections, these costs
areoffsetbygivingstates,andissuers
additional time, and hence lower costs, to
prepare for complying with the rule.
46
Please note that using state estimates of insurance coverage could lead to anover estimate if those reporting in the ACS survey that they speak Englishless than “very well” are less likely
to be insured than the state average.
2011–32 I.R.B.117August 8, 2011

f.Scope of Federal External Review.
Paragraph (d)(1) of the July 2010 regu-
lations provides that any adverse bene-
fit determination (including a final inter-
nal adverse benefit determination) could
be brought to the Federal external review
process unless it related to a participant’s
or beneficiary’s failure to meet the require-
ments for eligibility under the terms of
a group health plan (i.e., worker classifi-
cation and similar issues were not within
the scope of the Federal external review
process). As discussed earlier in this pre-
amble, comments received in response to
the July 2010 regulations indicate that the
scope of external review claims was too
broad.
After considering all the comments,
with respect to plans subject to the Fed-
eral external review process, for claims
for which external review has not been
initiated before September 20, 2011, the
amendment suspends the original rule in
the July 2010 regulations regarding the
scope of claims eligible for external re-
view for plans using the Federal process,
temporarily replacing it with a different
scope. Specifically, this amendment sus-
pends the broad scope of claims eligible
for external review and narrows the scope
to those that involve (1) medical judg-
ment (excluding those that involve only
contractual or legal interpretation without
any use of medical judgment), as deter-
mined by the external reviewer; or (2) a
rescission of coverage. The suspension is
intended to give the marketplace time to
adjust to providing external review. The
Departments believe that, once the market
has so adjusted, it will become clear that
the benefits of the July 2010 regulations’
broader scope would be likely to justify its
costs.
C.Regulatory Flexibility
Act—Department of Labor and
Department of Health and Human
Services
The Regulatory Flexibility Act
(5 U.S.C. 601et seq.)(RFA)imposes
certain requirements with respect to
Federal rules that are subject to the notice
and comment requirements of section
553(b) of the APA (5 U.S.C. 551et seq.)
and that are likely to have a significant
economic impact on a substantial number
of small entities. Under Section 553(b)
of the APA, a general notice of proposed
rulemaking is not required when an
agency, for good cause, finds that
notice and public comment thereon are
impracticable, unnecessary, or contrary
to the public interest. The interim final
regulations were exempt from the APA,
because the Departments made a good
cause finding that a general notice of
proposed rulemaking is not necessary
earlier in this preamble. Therefore, the
RFA did not apply and the Departments
were not required to either certify that the
regulations or this amendment would not
have a significant economic impact on
a substantial number of small entities or
conduct a regulatory flexibility analysis.
Nevertheless, the Departments care-
fully considered the likely impact of the
rule on small entities in connection with
their assessment under Executive Order
12866. Consistent with the policy of
the RFA, the Departments encourage the
public to submit comments that suggest
alternative rules that accomplish the stated
purpose of the Affordable Care Act and
minimize the impact on small entities.
D.Special Analyses-Department of the
Treasury
Notwithstanding the determinations of
the Department of Labor and Department
of Health and Human Services, for pur-
poses of the Department of the Treasury, it
has been determined that this Treasury de-
cision is not a significant regulatory action
for purposes of Executive Order 12866.
Therefore, a regulatory assessment is not
required. It has also been determined that
section 553(b) of the APA (5 U.S.C. chap-
ter 5) does not apply to these temporary
regulations. For the applicability of the
RFA, refer to the Special Analyses section
in the preamble to the cross-referencing
notice of proposed rulemaking published
elsewhere in this issue of the Bulletin. Pur-
suant to section 7805(f) of the Code, these
temporary regulations have been submit-
ted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on their impact on small busi-
nesses.
E.Paperwork Reduction Act
1.Department of Labor and Department
of the Treasury
Currently, the Departments are solicit-
ing 60 days of public comments concern-
ing these disclosures. The Departments
have submitted a copy of these interim fi-
nal regulations to OMB in accordance with
44 U.S.C. 3507(d) for review of the infor-
mation collections. The Departments and
OMB are particularly interested in com-
ments that:
•Evaluate whether the collection of in-
formation is necessary for the proper
performance of the functions of the
agency, including whether the infor-
mation will have practical utility;
•Evaluate the accuracy of the agency’s
estimate of the burden of the collection
of information, including the validity
of the methodology and assumptions
used;
•Enhance the quality, utility, and clarity
of the information to be collected; and
•Minimize the burden of the collection
of information on those who are to re-
spond, including through the use of
appropriate automated, electronic, me-
chanical, or other technological collec-
tion techniques or other forms of in-
formation technology, for example, by
permitting electronic submission of re-
sponses.
Comments should be sent to the Office
of Information and Regulatory Affairs,
Attention: Desk Officer for the Employee
Benefits Security Administration either
by fax to (202) 395–7285 or by email to
oira_submission@omb.eop.gov.Acopy
of the ICR may be obtained by contacting
the PRA addressee: G. Christopher
Cosby, Office of Policy and Research,
U.S. Department of Labor, Employee
Benefits Security Administration, 200
Constitution Avenue, NW, Room N–5718,
Washington, DC 20210. Telephone:
(202) 693–8410; Fax: (202) 219–4745.
These are not toll-free numbers. E-mail:
ebsa.opr@dol.gov. ICRs submitted to
OMB also are available atreginfo.gov
(
http://www.reginfo.gov/public/do/PRAMain).
August 8, 20111182011–32 I.R.B.

a.Department of Labor and Department
of the Treasury: Affordable Care
Act Internal Claims and Appeals
and External Review Disclosures for
Non-Grandfathered Plans
These amendments make two changes
to the interim final regulations that affect
the paperwork burden. The first is an
amendment no longer requiring that diag-
nosis and treatment codes be included on
notices of adverse benefit determination
and final internal adverse benefit determi-
nation. Instead, they must notify claimants
of the opportunity to receive the codes on
request and plans and issuers must provide
the codes upon request. The Departments
expect that this change will lower costs,
because plans and issuers no longer will
have to provide the codes on the notices.
Plans and issuers will incur a cost to estab-
lish procedures for receive, process, and
mail the codes upon request; however, the
Departments are unable to estimate such
cost due to a lack of a basis for an estimate
of the number of requests that will be made
for the codes.
The amendments also change the
method for determining who is eligible
to receive a notice in aculturally and lin-
guistically appropriate manner, and the
information that must be provided to such
persons. The previous rule was based on
the number of employees at a firm. The
new rule is based on whether a participant
or beneficiary resides in a county where
ten percent or more of the population re-
siding in the county is literate only in the
same non-English language.
Participants and beneficiaries residing
in an affected county and speaking an ap-
plicable non-English language will now
receive a one-sentence statement in all no-
tices written in the applicable non-English
language about the availability of language
services. In addition to including the state-
ment, plan and issuers are required to pro-
vide a customer assistance process (such
as a telephone hotline) with oral language
services in the non-English language and
provide written notices in the non-English
language upon requests.
The Departments understand that oral
translation servicesare already provided
for nearly all covered participants and ben-
eficiaries. Therefore, no additional bur-
den is associated with this requirement of
the amendment. The Departments esti-
mate that plans will incur an annual cost
burden of $1.2 million to translate written
notices into the relevant non-English lan-
guage.
47
Based on the foregoing, the Depart-
ments have adjusted the total estimated
cost burden for this information collection.
The cost burden is $243,000 in 2011, $1.7
million in 2012, and $1.8 million in 2013.
Type of Review: Revised collection.
Agencies: Employee Benefits Security
Administration, Department of Labor; In-
ternal Revenue Service, U.S. Department
of the Treasury,
Title: Affordable Care Act Internal
Claims and Appeals and External Review
Disclosures for Non-Grandfathered Plans
OMB Number:1210–0144;
1545–2182.
Affected Public: Business or other for-
profit; not-for-profit institutions.
Total Respondents: 1,020,000 (three-
year average).
Total Responses: 111,000 (three-year
average).
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
233 hours (Employee Benefits Security
Administration); 233 hours (Internal Rev-
enue Service) (three-year average).
Estimated Total Annual Burden Cost:
$628,900 (Employee Benefits Security
Administration); $628,900 (Internal Rev-
enue Service) (three-year average).
2.Department of Health and Human
Services
a.ICR Regarding Affordable Care
Act Internal Claims and Appeals
and External Review Disclosures for
Non-grandfathered Plans
As discussed above in the Department
of Labor and Department of the Treasury
PRA section, these amendments make two
changes to the interim final regulations
that affect the paperwork burden. The first
is an amendment no longer requiring that
diagnosis and treatment codes be included
on notices of adverse benefit determina-
tion and final internal adverse benefit de-
termination. Instead these codes are avail-
able upon request. The Departments ex-
pect that this change will lower costs com-
pared to the July 2010 regulations because
plans and issuers no longer will have to
provide the codes on the notices. Plans and
issuers will incur a cost to establish proce-
dures for receiving, processing, and mail-
ing the codes upon request; however, the
Departments are unable to estimate such
cost due to lack of a basis for an estimate
of the number of requests that will be made
for the codes. Second, the amendments
also changes who is eligible to receive a
notice in a culturally or linguistically ap-
propriate manner.
The Departments estimated the new
cost burden of providing the translation
of requested notices into the applicable
non-English language. The annual cost
burden is estimated to be $430,000 annu-
ally starting in 2012. The derivation of
this estimate was discussed above in the
Economic Impact section.
Due to the amendments, the Depart-
ment has adjusted the total estimated costs
of this information collection. The Depart-
ment estimates that State and local govern-
mental plans and issuers offering coverage
in the individual market will incur a to-
tal hour burden of 570,804 hours in 2011,
998,807 hours in 2012, and 1.22 million
hours in 2013 to comply with equivalent
costs of $28.2 million in 2011, $57.4 mil-
lion in 2012, and $70.5 million in 2013.
The total cost burden for those plans that
use service providers, including the cost
of mailing all responses is estimated to be
$20.7 million in 2011, $37.9 million in
2012, and $51.7 million in 2013.
The hour and cost burden is summa-
rized below:
Type of Review: Revised collection.
Agency: Department of Health and Hu-
man Services.
Title: Affordable Care Act Internal
Claims and Appeals and External Review
Disclosures
OMB Number: 0938–1099.
Affected Public: Business; State, Local,
or Tribal Governments.
Respondents: 46,773 (three-year aver-
age).
Responses: 218,650,000 (three-year
average).
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
929,870 hours (three-year average).
47
The Department’s methodology for this estimate is explained in IV, B, 2, d, above.
2011–32 I.R.B.119August 8, 2011

Estimated Total Annual Burden Cost:
$36,600,000 (three-year average).
We have requested emergency OMB
review and approval of the aforemen-
tioned information collection require-
ments by July 1, 2011. To obtain copies
of the supporting statement and any re-
lated forms for the proposed paperwork
collections referenced above, access
CMS’ Web site athttp://www.cms.gov/
PaperworkReductionActof1995/PRAL/
list.asp#TopOfPageor email your request,
including your address, phone number,
OMB number, and CMS document
identifier, toPaperwork@cms.hhs.gov,
or call the Reports Clearance Office at
410–786–1326.
If you comment on any of these infor-
mation collection requirements, please do
either of the following:
1. Submit your comments electroni-
cally as specified in the ADDRESSES sec-
tion of this proposed rule; or
2. Submit your comments to the Office
of Information and Regulatory Affairs, Of-
fice of Management and Budget,
Attention:CMS Desk Officer,
CMS–9993-IFC2
Fax: (202) 395–6974; or
Email:
OIRA_submission@omb.eop.gov
F.Congressional Review Act
These amendments to the interim final
regulations are subject to the Congres-
sional Review Act provisions of the Small
Business Regulatory Enforcement Fair-
ness Act of 1996 (5 U.S.C. 801et seq.)
and have been transmittedtoCongressand
the Comptroller General for review.
G.Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of
1995 (Public Law 104–4) requires agen-
cies to prepare several analytic statements
before proposing any rules that may result
in annual expenditures of $100 million (as
adjusted for inflation) by State, local and
tribal governments or the private sector.
These amendments to the interim final reg-
ulations are not subject to the Unfunded
Mandates Reform Act because they are
being issued as interim final regulations.
However, consistent with the policy em-
bodied in the Unfunded Mandates Reform
Act, the regulation has been designed to be
the least burdensome alternative for State,
local and tribal governments, and the pri-
vate sector, while achieving the objectives
of the Affordable Care Act.
H.Federalism Statement—Department
of Labor and Department of Health and
Human Services
Executive Order 13132 outlines fun-
damental principles of federalism, and
requires the adherence to specific criteria
by Federal agencies in the process of their
formulation and implementation of poli-
cies that have “substantial direct effects”
on the States, the relationship between the
national government and States, or on the
distribution of power and responsibilities
among the various levels of government.
Federal agencies promulgating regulations
that have federalism implications must
consult with State andlocal officials, and
describe the extent of their consultation
and the nature of the concerns of State
and local officials in the preamble to the
regulation.
In the Departments’ view, these amend-
ments to the interim final regulations have
federalism implications, because they
have direct effects on the States, the rela-
tionship between the national government
and States, or on the distribution of power
and responsibilities among various levels
of government. However, in the Depart-
ments’ view, the federalism implications
of these interim final regulations are sub-
stantially mitigated because, with respect
to health insurance issuers, the Depart-
ments expect that the majority of States
will enact laws or take other appropriate
action to implement an internal and ex-
ternal appeals process that will meet or
exceed federal standards.
In general, through section 514, ERISA
supersedes State laws to the extent that
they relate to any covered employee ben-
efit plan, and preserves State laws that
regulate insurance, banking, or securi-
ties. While ERISA prohibits States from
regulating a plan as an insurance or in-
vestment company or bank, the preemp-
tion provisions of section 731 of ERISA
and section 2724 of the PHS Act (im-
plemented in 29 CFR 2590.731(a) and
45 CFR 146.143(a)) apply so that the
HIPAA requirements (including those of
theAffordableCareAct)arenottobe
“construed to supersede any provision of
State law which establishes, implements,
or continues in effect any standard or
requirement solely relating to health
insurance issuers in connection with group
health insurance coverage except to the
extent that such standard or requirement
prevents the application of a requirement”
of a Federal standard. The conference
report accompanying HIPAA indicates
that this is intended to be the “narrowest”
preemption of State laws. (See House
Conf. Rep. No. 104–736, at 205, reprinted
in 1996 U.S. Code Cong. & Admin.
News 2018.) States may continue to
apply State law requirements except to
the extent that such requirements prevent
the application of the Affordable Care
Act requirements that are the subject of
this rulemaking. State insurance laws
that are more stringent than the Federal
requirements are unlikely to “prevent
the application of” the Affordable Care
Act, and be preempted. Accordingly,
States have significant latitude to impose
requirements on health insurance issuers
that are more restrictive than the Federal
law. Furthermore, the Departments
have opined that, in the instance of a
group health plan providing coverage
through group health insurance, the issuer
will be required to follow the external
review procedures established in State
law (assuming the State external review
procedure meets the minimum standards
set out in these interim final rules).
In compliance with the requirement of
Executive Order 13132that agencies ex-
amine closely any policies that may have
federalism implications or limit the pol-
icy making discretion of the States, the
Departments have engaged in efforts to
consult with and work cooperatively with
affected State and local officials, includ-
ing attending conferences of the National
Association of Insurance Commissioners
(NAIC), meeting with NAIC staff coun-
sel on issues arising from the interim fi-
nal regulations and consulting with State
insurance officials on an individual ba-
sis. It is expected that the Departments
will act in a similar fashion in enforcing
the Affordable Care Act requirements, in-
cluding the provisions of section 2719 of
the PHS Act. Throughout the process of
developing these amendments to the in-
terim final regulations, to the extent fea-
sible within the specific preemption pro-
visions of HIPAA as it applies to the Af-
fordable Care Act, the Departments have
August 8, 20111202011–32 I.R.B.

attempted to balance the States’ interests
in regulating health insurance issuers, and
Congress’ intent to provide uniform min-
imum protections to consumers in every
State. By doing so, it is the Departments’
view that they have complied with the re-
quirements of Executive Order 13132.
Pursuant to the requirements set forth in
section 8(a) of Executive Order 13132, and
by the signatures affixed to these regula-
tions, the Departments certify that the Em-
ployee Benefits Security Administration
and the Centers for Medicare and Medic-
aid Services have complied with the re-
quirements of Executive Order 13132 for
the attached amendment to the interim fi-
nal regulations in a meaningful and timely
manner.
V. Statutory Authority
The Department of the Treasury tem-
porary regulations are adopted pursuant to
the authority contained in sections 7805
and 9833 of the Code.
The Department of Labor interim final
regulations are adopted pursuant to the
authority contained in 29 U.S.C. 1027,
1059, 1135, 1161–1168, 1169, 1181–1183,
1181 note, 1185, 1185a, 1185b, 1191,
1191a, 1191b, and 1191c; sec. 101(g),
Pub. L.104–191, 110 Stat. 1936; sec.
401(b), Pub. L. 105–200, 112 Stat. 645
(42 U.S.C. 651 note); sec. 512(d), Pub. L.
110–343, 122 Stat. 3881; sec. 1001, 1201,
and 1562(e), Pub. L. 111–148, 124 Stat.
119, as amended by Pub. L. 111–152, 124
Stat. 1029; Secretary of Labor’s Order
6–2009, 74 FR 21524 (May 7, 2009).
The Department of Health and Hu-
man Services interim final regulations are
adopted pursuant to the authority con-
tained in sections 2701 through 2763,
2791, and 2792 of the PHS Act (42 USC
300gg through 300gg–63, 300gg–91, and
300gg–92), as amended.
*****
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement,
Internal Revenue Service.
Approved June 21, 2011.
Emily S. McMahon,
Acting Assistant Secretary of
theTreasury(TaxPolicy).
(Filed by the Office of the Federal Register on June 22, 2011,
4:15 p.m., and published in the issue of the Federal Register
for June 24, 2011, 76 F.R. 37208)
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Chapter I
Accordingly, 26 CFR Part 54 is
amended as follows:
PART 54—PEN
SION EXCISE TAXES
Paragraph 1. The general authority ci-
tation for part 54 continues to read as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 54.9815–2719T is
amended by:
1. Revising paragraphs (b)(2)(ii)(B),
(b)(2)(ii)(E)(1), (b)(2)(ii)(F), (c)(2)(xi),
(c)(3), (d)(1), (d)(2)(iv) and (e).
2.Redesignating (b)(2)(ii)(E)(2),
(b)(2)(ii)(E)(3), and (b)(2)(ii)(E)(4)as
(b)(2)(ii)(E)(3), (b)(2)(ii)(E)(4), and
(b)(2)(ii)(E)(5), respectively.
3.Adding new paragraph
(b)(2)(ii)(E)(2).
The revisions and addition read as fol-
lows:
§54.9815–2719T Internal claims and
appeals and external review processes
(temporary).
*****
(b) * * *
(2) * * *
(ii) * * *
(B)Expedited notification of ben-
efit determinations involving urgent
care. The requirements of 29 CFR
2560.503–1(f)(2)(i) (which generally pro-
vide, among other things, in the case of
urgent care claims for notification of the
plan’s benefit determination (whether ad-
verse or not) as soon as possible, taking
into account the medical exigencies, but
not later than 72 hours after receipt of
the claim) continue to apply to the plan
and issuer. For purposes of this paragraph
(b)(2)(ii)(B), a claim involving urgent
care has the meaning given in 29 CFR
2560.503–1(m)(1), as determined by the
attending provider, and the plan or issuer
shall defer to such determination of the
attending provider.
*****
(E) * * *
(1) The plan and issuer must ensure that
any notice of adverse benefit determina-
tion or final internal adverse benefit deter-
mination includes information sufficient to
identify the claim involved (including the
date of service, the health care provider,
the claim amount (if applicable), and a
statement describing the availability, upon
request, of the diagnosis code and its corre-
sponding meaning, and the treatment code
and its corresponding meaning).
(2) The plan and issuer must provide
to participants and beneficiaries, as soon
as practicable, upon request, the diagnosis
code and its corresponding meaning, and
the treatment code and its corresponding
meaning, associated with any adverse ben-
efit determination or final internal adverse
benefit determination. The plan or issuer
must not consider a request for such diag-
nosis and treatment information, in itself,
to be a request for an internal appeal under
this paragraph (b) or an external review un-
der paragraphs (c) and (d) of this section.
*****
(F)Deemed exhaustion of internal
claims and appeals processes—(1)Inthe
case of a plan or issuer that fails to adhere
to all the requirements of this paragraph
(b)(2) with respect to a claim, the claimant
is deemed to have exhausted the internal
claims and appeals process of this para-
graph (b), except as provided in paragraph
(b)(2)(ii)(F)(2) of this section. Accord-
ingly, the claimant may initiate an external
review under paragraph (c) or (d) of this
section, as applicable. The claimant is also
entitled to pursue any available remedies
under section 502(a) of ERISA or under
State law, as applicable, on the basis that
the plan or issuer has failed to provide
a reasonable internal claims and appeals
process that would yield a decision on the
merits of the claim. If a claimant chooses
to pursue remedies under section 502(a)
of ERISA under such circumstances, the
claim or appeal is deemed denied on re-
view without the exercise of discretion by
an appropriate fiduciary.
(2) Notwithstanding paragraph
(b)(2)(ii)(F)(1) of this section, the internal
claims and appeals process of this para-
graph (b) will not be deemed exhausted
based onde minimisviolations that do
not cause, and are not likely to cause,
prejudice or harm to the claimant so long
as the plan or issuer demonstrates that
2011–32 I.R.B.121August 8, 2011

the violation was for good cause or due
to matters beyond the control of the plan
or issuer and that the violation occurred
in the context of an ongoing, good faith
exchange of information between the plan
and the claimant. This exception is not
available if the violation is part of a pat-
tern or practice of violations by the plan
or issuer. The claimant may request a
written explanation of the violation from
the plan or issuer, and the plan or issuer
must provide such explanation within 10
days, including a specific description of
its bases, if any, for asserting that the vio-
lation should not cause the internal claims
and appeals process of this paragraph (b)
to be deemed exhausted. If an external
reviewer or a court rejects the claimant’s
request for immediate review under para-
graph (b)(2)(ii)(F)(1) of this section on
the basis that the plan met the standards
for the exception under this paragraph
(b)(2)(ii)(F)(2), the claimant has the right
to resubmit and pursue the internal appeal
of the claim. In such a case, within a rea-
sonable time after the external reviewer
or court rejects the claim for immediate
review (not to exceed 10 days), the plan
shall provide the claimant with notice of
the opportunity to resubmit and pursue the
internal appeal of the claim. Time periods
for re-filing the claim shall begin to run
upon claimant’s receipt of such notice.
*****
(c) * * *
(2) * * *
(xi) The State process must provide that
the decision is binding on the plan or is-
suer, as well as the claimant, except to the
extent other remedies are available under
State or Federal law, and except that the
requirement that the decision be binding
shall not preclude theplan or issuer from
making payment on the claim or otherwise
providing benefits at any time, including
after a final external review decision that
denies the claim or otherwise fails to re-
quire such payment or benefits. For this
purpose, the plan or issuer must provide
benefits (including by making payment on
the claim) pursuant to the final external re-
view decision without delay, regardless of
whether the plan or issuer intends to seek
judicial review of the external review de-
cision and unless or until there is a judicial
decision otherwise.
*****
(3)Transition period for external re-
view processes. (i) Through December 31,
2011, an applicable State external review
process applicable to a health insurance
issuer or group health plan is considered
to meet the requirements of PHS Act
section 2719(b). Accordingly, through
December 31, 2011, an applicable State
external review process will be considered
binding on the issuer or plan (in lieu of
the requirements of the Federal external
review process). If there is no applicable
State external review process, the issuer
or plan is required to comply with the
requirements of the Federal external
review process in paragraph (d) of this
section.
(ii) For final internal adverse benefit de-
terminations (or, in the case of simulta-
neous internal appeal and external review,
adverse benefit determinations) provided
on or after January 1, 2012, the Federal ex-
ternal review process will apply unless the
Department of Health and Human Services
determines that a State law meets all the
minimum standards of paragraph (c)(2) of
this section.
(d) * * *
(1)Scope—(i)In general. Subject
to the suspension provision in paragraph
(d)(1)(ii) of this section and except to the
extent provided otherwise by the Secretary
in guidance, the Federal external review
process established pursuant to this para-
graph (d) applies to any adverse benefit de-
termination or final internal adverse bene-
fit determination (as defined in paragraphs
(a)(2)(i) and (a)(2)(v) of this section), ex-
cept that a denial, reduction, termination,
or a failure to provide payment for a ben-
efit based on a determination that a partic-
ipant or beneficiary fails to meet the re-
quirements for eligibility under the terms
of a group health plan is not eligible for the
Federal external review process under this
paragraph (d).
(ii)Suspension of general rule.Un-
less or until this suspension is revoked in
guidance by the Secretary, with respect to
claims for which external review has not
been initiated before September 20, 2011,
the Federal external review process estab-
lished pursuant to this paragraph (d) ap-
plies only to:
(A) An adverse benefit determination
(including a final internal adverse benefit
determination) by a plan or issuer that in-
volves medical judgment (including, but
not limited to, those based on the plan’s
or issuer’s requirements for medical neces-
sity, appropriateness, health care setting,
level of care, or effectiveness of a covered
benefit; or its determination that a treat-
ment is experimental or investigational), as
determined by the external reviewer; and
(B) A rescission of coverage (whether
or not the rescission has any effect on any
particular benefit at that time).
(iii)Examples. This rules of paragraph
(d)(1)(ii) of this section are illustrated by
the following examples:
Example 1.(i)Facts. A group health plan pro-
vides coverage for 30 physical therapy visits gener-
ally. After the 30
th
visit, coverage is provided only if
the service is preauthorized pursuant to an approved
treatment plan that takes into account medical neces-
sity using the plan’s definition of the term. Individual
Aseeks coverage for a 31
st
physical therapy visit.A’s
health care provider submits a treatment plan for ap-
proval, but it is not approved by the plan, so coverage
for the 31
st
visit is not preauthorized. With respect to
the 31
st
visit,Areceives a notice of final internal ad-
verse benefit determination stating that the maximum
visit limit is exceeded.
(ii)Conclusion. In thisExample 1, the plan’s de-
nial of benefits is based on medical necessity and in-
volves medical judgment. Accordingly, the claim is
eligible for external review during the suspension pe-
riod under paragraph (d)(1)(ii) of this section. More-
over, the plan’s notification of final internal adverse
benefit determination is inadequate under paragraphs
(b)(2)(i) and (b)(2)(ii)(E)(3) of this section because
it fails to make clear that the plan will pay for more
than 30 visits if the service is preauthorized pursuant
to an approved treatment plan that takes into account
medical necessity using the plan’s definition of the
term. Accordingly, the notice of final internal adverse
benefit determination should refer to the plan provi-
sion governing the 31
st
visit and should describe the
plan’s standard for medical necessity, as well as how
the treatment fails to meet the plan’s standard.
Example 2.(i)Facts. A group health plan does
not provide coverage for services provided out of
network, unless the service cannot effectively be
provided in network. IndividualBseeks cover-
age for a specialized medical procedure from an
out-of-network provider becauseBbelieves that the
procedure cannot be effectivelyprovidedinnetwork.
Breceives a notice of final internal adverse benefit
determination stating that the claim is denied because
the provider is out-of-network.
(ii)Conclusion.InthisExample 2, the plan’s
denial of benefits is based on whether a service can
effectively be provided in network and, therefore,
involves medical judgment. Accordingly, the claim
is eligible for external review during the suspension
period under paragraph (d)(1)(ii) of this section.
Moreover, the plan’s notice of final internal adverse
benefit determination is inadequate under para-
graphs (b)(2)(i) and (b)(2)(ii)(E)(3)ofthissection
because the plan does provide benefits for services
on an out-of-network basis if the services cannot
effectively be provided in network. Accordingly,
the notice of final internal adverse benefit determi-
nation is required to refer to the exception to the
August 8, 20111222011–32 I.R.B.

out-of-network exclusion and should describe the
plan’s standards for determining effectiveness of
services, as well as how services available to the
claimant within the plan’s network meet the plan’s
standard for effectiveness of services.
*****
(2) * * *
(iv) These standards will provide that an
external review decision is binding on the
plan or issuer, as well as the claimant, ex-
cept to the extent other remedies are avail-
able under State or Federal law, and except
that the requirement that the decision be
binding shall not preclude the plan or is-
suer from making payment on the claim or
otherwise providing benefits at any time,
including after a final external review de-
cision that denies the claim or otherwise
fails to require suchpayment or benefits.
For this purpose, the plan or issuer must
provide any benefits (including by making
payment on the claim) pursuant to the fi-
nal external review decision without delay,
regardless of whether the plan or issuer in-
tends to seek judicial review of the external
review decision and unless or until there is
a judicial decision otherwise.
*****
(e)Form and manner of notice—(1)
In general. For purposes of this section, a
group health plan and a health insurance is-
suer offering group health insurance cover-
age are considered to provide relevant no-
tices in a culturally and linguistically ap-
propriate manner if the plan or issuer meets
all the requirements of paragraph (e)(2) of
this section with respect to the applicable
non-English languages described in para-
graph (e)(3) of this section.
(2)Requirements—(i)Theplanor
issuer must provide oral language services
(such as a telephone customer assistance
hotline) that include answering questions
in any applicable non-English language
and providing assistance with filing claims
and appeals (including external review) in
any applicable non-English language;
(ii) The plan or issuer must provide,
upon request, a notice in any applicable
non-English language; and
(iii) The plan or issuer must include in
the English versions of all notices, a state-
ment prominently displayed in any appli-
cable non-English language clearly indi-
cating how to access the language services
provided by the plan or issuer.
(3)Applicable non-English language.
With respect to an address in any United
States county to which a notice is sent,
a non-English language is an applica-
ble non-English language if ten percent
or more of the population residing in
the county is literate only in the same
non-English language, as determined in
guidance published by the Secretary.
*****
2011–32 I.R.B.123August 8, 2011

Part III. Administrative, Procedural, and Miscellaneous
Chapter 4 Implementation
Notice
Notice 2011–53
I. BACKGROUND AND PURPOSE
On March 18, 2010, the Hiring Incen-
tives to Restore Employment Act of 2010,
Pub. L. 111–147 (H.R. 2847) (the Act)
added chapter 4 (Chapter 4) to Subtitle
A of the Internal Revenue Code (Code).
Chapter 4 (comprising sections 1471
through 1474 of the Code) imposes infor-
mation reporting requirements on foreign
financial institutions (FFIs) with respect to
U.S. accounts and imposes withholding,
documentation, and reporting require-
ments with respect to certain payments
made to certain foreign entities.
On August 29, 2010, the Department
of the Treasury (Treasury) and the Internal
Revenue Service (IRS) released Notice
2010–60, 2010–37 I.R.B. 329, provid-
ing preliminary guidance regarding the
implementation of Chapter 4 and request-
ing comments on issues addressed in that
notice and otherwise relevant to the im-
plementation of Chapter 4. On April 8,
2011, Treasury and the IRS released No-
tice 2011–34, 2011–19 I.R.B. 765, which
modified and supplemented the guidance
in Notice 2010–60. Unless otherwise de-
fined, terms used in this notice have the
same meanings as set forth in sections
1471 through 1474, Notice 2010–60, and
Notice 2011–34.
Treasury and the IRS have received nu-
merous comments concerning the practical
difficulties in implementing aspects of the
Chapter 4 rules within the time frames pro-
vided in the Act and under Notice 2010–60
and Notice 2011–34. The challenges iden-
tified relate to the time to develop com-
pliance, reporting, and withholding sys-
tems necessary to comply with Chapter 4
and the implementing notices. In addition,
a number of stakeholders have noted that
complying with certain provisions may re-
quire coordination with a number of for-
eign governments. Treasury and the IRS
have met with stakeholders and foreign
governments to understand the specific ad-
ministrative and legal challenges that must
be addressed and the time necessary to do
so. While the Act provides that the pro-
visions of Chapter 4 are effective begin-
ning in 2013, Treasury and the IRS have
determined that because Chapter 4 creates
the need for significant modifications to
the information management systems of
FFIs, withholding agents, and the IRS, it is
reasonable for regulations to provide for a
phased implementation of the various pro-
visions of Chapter 4.
In light of these considerations, this
notice describes the timeline for the im-
plementation of Chapter 4 and discusses
certain substantive and procedural matters
that will be addressed in regulations issued
by Treasury and the IRS. As described
below, those regulations will provide that
certain obligations of participating FFIs
will commence in 2013. Further, those
regulations will provide that the section
1471(a) and section 1472(a) withholding
obligations of withholding agents with
respect to amounts described in section
1473(1)(A)(i) (U.S. source FDAP pay-
ments) will begin on January 1, 2014.
FFIs that would otherwise be subject to
Chapter 4 withholding will be identified
as participating FFIs and therefore should
not be subject to such withholding if they
have registered as participating FFIs and
entered into FFI Agreements by June 30,
2013. The section 1471(b)(1)(D) with-
holding obligations of participating FFIs
with respect to passthru payments will be
specified in future regulations, but will
begin no earlier than January 1, 2015.
II. PHASED IMPLEMENTATION
TIMELINE
A.Participating FFIs: Registration and
Due Diligence
1.Registration of FFIs Beginning in 2013
The IRS will begin accepting FFI ap-
plications throughits electronic submis-
sions process no later than January 1, 2013.
An FFI must enter into an FFI Agree-
ment by June 30, 2013, to ensure that it
will be identified as a participating FFI in
sufficient time to allow U.S. withholding
agents to refrain from withholding begin-
ning on January 1, 2014. Because of the
time needed for the IRS to process FFI ap-
plications and for U.S. withholding agents
to verify whether a payee is a participating
FFI, FFIs that enter into FFI Agreements
after June 30, 2013, but before January 1,
2014, will be participating FFIs with re-
spect to 2014, but might not be identified
as such in time to prevent withholding be-
ginning on January 1, 2014. The effective
date of an FFI Agreement entered into any
time before July 1, 2013, will be July 1,
2013. The effective date of an FFI Agree-
ment entered into after June 30, 2013, will
be the date the FFI enters into the FFI
Agreement.
2.Participating FFI Due Diligence
a.New Accounts
A participating FFI will be required to
put in place account opening procedures
described in Notice 2010–60, as imple-
mented in regulations, to identify U.S. ac-
counts among accounts opened on or after
the effective date of its FFI Agreement.
b.Pre-Existing Accounts
i.Certain Pre-Existing Private Banking
Accounts (Equal to or Greater than
$500,000)
Within one year of the effective date of
its FFI Agreement, a participating FFI will
be required to have completed Step 3 of the
pre-existing account due diligence proce-
dures described in Section I.A.2 of Notice
2011–34 (the private banking procedures),
for all accounts opened before the effective
date of its FFI Agreement that are asso-
ciated with a private banking relationship
(including individual and entity accounts)
and that have a balance or value of at least
$500,000 on the effective date of the FFI
Agreement.
ii.Private Banking Accounts Less than
$500,000
A participating FFI will be required by
the later of December 31, 2014, or the date
that is one year after the effective date of
its FFI Agreement, to complete the pri-
vate banking procedures for all accounts
opened before the effective date of its FFI
Agreement that are associated with a pri-
vate banking relationship and are not de-
scribed in (i), above.
August 8, 20111242011–32 I.R.B.

iii.Due Diligence for All Other
Pre-Existing Accounts
For all pre-existing accounts not cov-
ered in sections (i) and (ii) above, a
participating FFI must complete due dili-
gence procedures as prescribed in Notice
2010–60, Notice 2011–34, and forthcom-
ing regulations within two years of the
effective date ofits FFI Agreement.
iv.Private Banking Guidance
Regulations will provide further guid-
ance on the scope of the private banking
procedures and the associated search of
account holder files. Regulations will also
provide that, for purposes of applying the
private banking procedures: (1) although
private banking relationship managers
must identify any client for which such
relationship managers have actual knowl-
edge that the client is a U.S. person and
request a Form W–9 from such person,
as set forth in Notice 2011–34, the re-
view of account files may be completed
by any person designated by the partic-
ipating FFI; and (2) accounts subject to
due diligence procedures and identified as
either U.S. accounts or non-U.S. accounts
under such procedures will not be subject
to additional due diligence procedures in
subsequent years unless the account un-
dergoes a change of circumstance.
B.Reporting
1.New Accounts, Documented U.S.
Accounts, and Private Banking Accounts
An account for which a participating
FFI has received a Form W–9 from the
account holder (or, with respect to an ac-
count held by a U.S. owned foreign entity,
from a substantial U.S. owner of such en-
tity) by June 30, 2014, must be reported to
the IRS as a U.S. account by September 30,
2014. These accounts generally will in-
clude: (1) private banking accounts identi-
fied as U.S. accounts under the procedures
set forth above and for which a Form W–9
has been collected by June 30, 2014; (2)
new U.S. accounts opened after the effec-
tive date of the FFI’s FFI Agreement and
for which a Form W–9 has been collected;
(3) documented U.S. accounts described in
Section I.A.2 Step 1 of Notice 2011–34;
and (4) existing U.S. accounts documented
pursuant to Section 1.A.2 Steps 4 and 5 of
Notice 2011–34 for which a Form W–9 is
obtained by June 30, 2014. With respect
to these identified U.S. accounts, a partici-
pating FFI that does not elect to report un-
der section 1471(c)(2) must report in ac-
cordance with Notice 2011–34, except that
for this first year of reporting, the partici-
pating FFI will only be required to report
the following information:
i. the name, address, and U.S. TIN of
each specified U.S. person who is an
account holder and, in the case of any
account holder that is a U.S. owned
foreign entity, the name, address, and
U.S. TIN of each substantial U.S.
owner of such entity;
ii. the account balance as of
December 31, 2013, or, if the account
was closed after the effective date of
the FFI’s FFI Agreement, the balance
of such account immediately before
closure; and
iii. the account number.
The reporting described above is in-
tended to provide participating FFIs
greater flexibility to satisfy the reporting
requirements of section 1471(c) and sec-
tion IV.B of Notice 2011–34, and is not
intended to change the information that
generally must be reported as set forth in
Notice 2011–34. Accordingly, reporting
in 2014 will be made on the same forms as
will be used in subsequent years to report
all required information, and participating
FFIs may elect for 2014 to report any or
all of the additional information described
in section IV.B of Notice 2011–34 with
respect to U.S. accounts. With respect to a
participating FFI thatelects reporting un-
der section 1471(c)(2) for such accounts,
the FFI may report only the items listed in
(i) and (iii), above, for its report filed by
September 30, 2014.
In accordance with its normal practice,
the IRS will assess the accuracy of the re-
ported information and communicate with
the FFI to resolve discrepancies in the in-
formation, such as those regarding U.S.
TINs. Unresolved discrepancies could re-
sult in an account being treated as held by
a recalcitrant account holder.
For each account for which the partici-
pating FFI is not able to report the infor-
mation above, because, for example, the
account holder has not waived any appli-
cable reporting restrictions, the FFI will re-
port the account among its recalcitrant ac-
count holders with U.S. indicia in accor-
dance with section IV.F of Notice 2010–60
andasprescribedinfutureguidance.The
reporting with respect to recalcitrant ac-
count holders identified by June 30, 2014,
will be required to be filed with the IRS by
September 30, 2014.
2.Reporting with respect to Post–2013
Years
Reporting with respect to 2014 and
subsequent years will be required as con-
templated in Notice 2010–60 and Notice
2011–34 and as implemented in future
regulations.
C.Withholding
1. Withholdable payments
Pursuant to the phased implemen-
tation procedures contemplated in this
notice, regulations under Chapter 4 will
implement withholding by withholding
agents on withholdable payments in two
phases. For payments made on or af-
ter January 1, 2014, withholding agents
(whether domestic or foreign, including
participating FFIs) will be obligated
to withhold under section 1471(a) and
section 1472(a) only on U.S. source
FDAP payments. For payments made
on or after January 1, 2015, withholding
agents will be obligated to withhold under
section 1471(a) and section 1472(a) on
all withholdable payments (including
both U.S. source FDAP payments and
gross proceeds described in section
1473(1)(A)(ii)).
2. Passthru payments
Participating FFIs will be obligated
to withhold on withholdable payments
of U.S. source FDAP under section
1471(a) and section 1472(a) for pay-
ments made on or after January 1, 2014,
but will not be required to withhold un-
der section 1471(b)(1)(D) with respect
to other passthru payments made be-
fore January 1, 2015. Accordingly, the
obligations of participating FFIs with
respect to computing and publishing their
passthru payment percentage as set forth
in Notice 2011–34 will not begin before
the first calendar quarter of 2014.
2011–32 I.R.B.125August 8, 2011

III. TIMELINE FOR PUBLISHED
GUIDANCE
Treasury and the IRS anticipate issu-
ing proposed regulations incorporating
the guidance provided in Notice 2010–60
as amended and supplemented by Notice
2011–34 and this notice and providing
further guidance on implementing Chapter
4 by December 31, 2011. After consider-
ation of comments, Treasury and the IRS
anticipate publishing final regulations in
the summer of 2012. In conjunction with
these regulations, Treasury and the IRS
also anticipate issuing draft versions fol-
lowed by final versions of the associated
FFI Agreement and reporting forms for
use by withholding agents and participat-
ing FFIs in the summer of 2012.
IV. MISCELLANEOUS
A.Qualified Intermediary and Other
Withholding Agreements Expiring in 2012
All qualified intermediary agree-
ments, withholding foreign partnership
agreements, and withholding foreign
trust agreements of entities qualifying
as FFIs that expire on December 31,
2012, will be automatically extended
until December 31, 2013. Any FFI
that enters into an FFI Agreement on
or before December 31, 2013, will be
considered to have renewed its qualified
intermediary agreement, withholding
foreign partnership agreement, or
withholding foreign trust agreement, as
the case may be.
B.Clarification of the Scope of
Grandfathered Obligations
Section 501(d)(2) of the Act provides
that Chapter 4 shall not require any amount
to be deducted or withheld from any pay-
ment under any obligation outstanding on
March 18, 2012, or from the gross pro-
ceeds of any disposition of such an obli-
gation. Section I of Notice 2010–60 de-
fined the term “obligation” for this pur-
pose to mean any legal agreement that pro-
duces or could produce withholdable pay-
ments, but not including any instrument
treated as equity for U.S. tax purposes, or
any legal agreement that lacks a defini-
tive expiration or term. Questions have
been raised regarding whether legal agree-
ments that give rise to passthru payments
other than withholdable payments are ex-
cluded from the definition of “obligation”
for this purpose. Treasury and the IRS
intend to issue regulations clarifying that,
for purposes of section 501(d)(2) of the
Act, the term “obligation” means any le-
gal agreement that produces or could pro-
duce passthru payments (including with-
holdable payments), but not including any
instrument treated as equity for U.S. tax
purposes, or any legal agreement that lacks
a definitive expiration or term.
DRAFTING INFORMATION
The principal author of this notice is
John Sweeney of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Mr. Sweeney at (202) 622–3840 (not a
toll-free call).
Ex Parte Communications
Between Appeals and Other
Internal Revenue Service
Employees
Notice 2011–62
This notice provides a proposed rev-
enue procedure that will update Rev. Proc.
2000–43, 2000–2 C.B. 404, which pro-
vides guidance regardingex partecom-
munications between Appeals and other
Internal Revenue Service functions. The
proposed revenue procedure sets forth the
background concerning theex partecom-
munication rules, the reasons for updating
Rev. Proc. 2000–43, a summary of the
proposed changes to Rev. Proc. 2000–43
and the proposed text of the updated rev-
enue procedure. Before issuing an updated
revenue procedure addressing theex parte
communication rules, the Department of
the Treasury and the IRS invite comments
fromthepublicregardingtheproposed
revenue procedure. Until an updated rev-
enue procedure is issued with respect to the
ex partecommunication rules, Rev. Proc.
2000–43 will remain in effect.
Comments should be submitted by Au-
gust 18, 2011 to:
Internal Revenue Service
Attn: CC:PA:LPD:PR
(Notice 2011–62)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
or hand deliver comments Monday
through Friday between the hours of
8a.m.and4p.m.to:
Courier’s Desk
Internal Revenue Service
Attn: CC:PA:LPD:PR
(Notice 2011–62)
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
Alternatively, persons may sub-
mit comments electronically via
e-mail to the following address:
Notice.Comments@irscounsel.treas.gov.
Persons should include “Notice 2011–62”
in the subject line. All comments
submitted by the public will be available
for public inspection and copying in their
entirety.
Proposed Rev. Proc. [XXXX–XX]
SECTION 1. BACKGROUND
Section 1001(a) of the Internal Revenue
Service Restructuring and Reform Act of
1998, Pub. L. No. 105–206, 112 Stat. 685
(RRA), required the Commissioner of In-
ternal Revenue to develop and implement
a plan to reorganize the Internal Revenue
Service. In addition, the RRA specifically
directed the Commissioner to “ensure an
independent appeals function within the
Internal Revenue Service, including the
prohibition***ofex partecommunica-
tions between appeals officers and other
Internal Revenue Service employees to the
extent that such communications appear to
compromise the independence of the ap-
peals officers.” RRA section 1001(a)(4).
In accordance with that directive, the De-
partment of the Treasury and the IRS is-
sued guidance in Rev. Proc. 2000–43,
2000–2 C.B. 404.
Since the issuance of Rev. Proc.
2000–43 in October 2000, the IRS has
made changes to some of its business prac-
tices and adopted new ones that did not
exist at the time that the revenue procedure
was issued. Accordingly, the Department
August 8, 20111262011–32 I.R.B.

of the Treasury and the IRS are revising
Rev. Proc. 2000–43 to address these
changed circumstances, as well as to clar-
ify and modify the rules in light of the IRS’
experience working with that revenue
procedure. Also, the revenue procedure
has been redesigned from a question and
answer format to a narrative format to
improve usability. In connection with that
change, the material has been rearranged
and organized under appropriate headings
to make it easier to find.
The procedures set forth in this revenue
procedure are designed to accommodate
the overall interests of tax administration,
while preserving operational features that
are vital to Appeals’ case resolution pro-
cesses within the structure of the IRS and
ensuring open lines of communication be-
tween Appeals and the taxpayer/represen-
tative. Consistent with section 1001(a)(4),
this revenue procedure does not adopt the
formalex parteprocedures that would ap-
ply in a judicial proceeding. It is designed
to ensure the independence of the Appeals
organization, while preserving the role of
Appeals as a flexible administrative settle-
ment authority, operating within the IRS’
overall framework of tax administration
responsibilities.
.01Highlights. As previously provided
in Rev. Proc. 2000–43:
(1) Appeals will retain procedures for:
(a) Returning cases that are not ready
for Appeals consideration.
(b) Raising certain new issues.
(c) Seeking review and comments from
the originating function with respect to
new information or evidence furnished by
the taxpayer/representative.
(2) Appeals will continue to be able
to obtain legal advice from the Office of
Chief Counsel, subject to the limitations
set forth in section 2.06(1), below.
(3) The Commissioner and other IRS
officials responsible for overall IRS oper-
ations (including Appeals), as referenced
in section 2.07(5), below, may continue to
communicateex partewith Appeals in or-
der to fulfill their responsibilities.
.02Significant Changes
(1) Guiding principles have been added
to aid in understanding the overall ap-
proach to applying theex partecommuni-
cation rules.
(2) Definitions for certain terms have
been added or clarified.
(3) Transmittals and the permissible
content of the administrative file have
been clarified.
(4) The application of theex partecom-
munication rules to collection due process
cases, including those CDP cases that are
remanded by the Tax Court, has been ad-
dressed.
(5) The discussion of Appeals’ involve-
ment in multifunctional meetings has been
expanded.
(6) The application of theex partecom-
munication rules in the context of alter-
native dispute resolution proceedings has
been addressed.
(7) The remedies available to taxpayers
in the event of a breach of theex parte
communication rules have been clarified.
(8) A statement that theex partecom-
munication rules do not create substantive
rights affecting a taxpayer’s liability or the
IRS’ ability to determine, assess or collect
that tax liability has been added.
SECTION 2. GUIDANCE
CONCERNINGEX PARTE
COMMUNICATIONS AND THE
APPLICATION OF RRA SECTION
1001(a)(4)
.01Definitions. For purposes of this
revenue procedure and the application of
RRA section 1001(a)(4), the terms set
forth below are defined as follows:
(1)Ex Parte Communication.An“ex
partecommunication” is a communication
that takes place between any Appeals em-
ployee (e.g., Appeals Officers, Settlement
Officers, Appeals Team Case Leaders,
Appeals Tax Computation Specialists) and
employees of other IRS functions, without
the taxpayer/representative being given an
opportunity to participate in the commu-
nication. The term includes all forms of
communication, oral or written. Written
communications include those that are
manually or electronically generated.
(a)Communications Outside the Scope
oftheTerm“ExParteCommunication”.
The term “ex partecommunication” does
not include the following (not an exhaus-
tive list):
(i)Database Inquiries. Account in-
quiries, transcript requests and other simi-
lar inquiries conducted in an electronic en-
vironment are not considered communica-
tions because they do not involve a dia-
logue or interaction between two or more
individuals. This exception does not ap-
ply to the administrative file, which may
be maintained electronically in whole or in
part. For a discussion of the rules applica-
ble to the administrative file, see section
2.03(4), below.
(ii)Communications Solely Between or
Among Appeals Employees.Thesearenot
consideredex partecommunications be-
cause they do not involve employees from
IRS functions outside of Appeals.
(iii)Communications with IRS Func-
tions Other than Originating Functions.
Special rules apply to communications
between Appeals employees and employ-
ees of certain IRS functions other than
originating functions, as defined in section
2.01(2), below. Employees in other IRS
functions include those in Counsel, Crim-
inal Investigation,Competent Authority,
and Taxpayer Advocate Service, and the
Commissioner and other IRS officials
with overall supervisory responsibilities.
For a discussion of communications with
those functions, see 2.06, 2.07(2), 2.07(3),
2.07(4) and 2.07(5), respectively.
(iv)
Communications with Other Gov-
ernmental Entities.These are not con-
sideredex partecommunications because
RRA section 1001(a)(4) only applies to
communications between Appeals and
other IRS employees and the persons with
whom Appeals is communicating at other
governmental entities do not fall into that
category. See section 2.08, below, for
examples.
(v)Communications in Which the Tax-
payer/Representative Is Given an Oppor-
tunity to Participate. These are not con-
sideredex partecommunications because
the taxpayer/representative is offered a
chance to be involved in the communica-
tion. Even if the taxpayer/representative
chooses not to participate in the communi-
cation, theex partecommunication rules
do not apply.
(2)Originating Function.An“origi-
nating function” is an organization within
the IRS that makes determinations that
are subject to the Appeals process. For
purposes of this revenue procedure, the
term includes the Examination, Collection
and Service Center (Campus) functions,
or their successor organizations. For a
discussion of communications with Crim-
inal Investigation or Counsel, see sections
2.07(2) and 2.06, respectively. For a dis-
cussion of communications with other IRS
2011–32 I.R.B.127August 8, 2011

functions or other governmental entities,
see sections 2.07 and 2.08, respectively.
None of those functions are originating
functions.
(3)Opportunity to Participate.
(a)Oral communications.Thephrase
“opportunity to participate” means that
the taxpayer/representative will be given
a reasonable opportunity to attend a meet-
ingorbeaparticipantinaconference
call between Appeals and the originating
function when the strengths and weak-
nesses of the facts, issues or positions in
the taxpayer’s case are discussed. The tax-
payer/representative will be notified of a
scheduled meeting or conference call and
invited to participate. If the taxpayer/rep-
resentative is unable to participate in the
meeting or conference call at the sched-
uled time, reasonable accommodations
will be made to reschedule it. See also
section 2.01(3)(d), below.
(b)Written communications.Atax-
payer/representative is considered to have
been given an “opportunity to participate”
with respect to a written communication
that is received by Appeals if the tax-
payer/representative is furnished a copy
of the written communication and given a
chance to respond to it either orally or in
writing.
(c)Waiver. If the taxpayer/representa-
tive is given an opportunity to participate
in a discussion but declines to participate,
Appeals should proceed with the discus-
sion or meeting but should document the
taxpayer/representative’s declination. A
taxpayer/representative has the option of
granting a waiver on a communication-by-
communication basis or a waiver covering
all communications that might occur dur-
ing the course of Appeals’ consideration of
a specified case. If a taxpayer/representa-
tive provides a blanket waiver with respect
to a particular case, the taxpayer/represen-
tative may revoke that waiver at any time
effective with respect to communications
occurring subsequent to the revocation.
(d)Unreasonable delay.TheIRSwill
not delay scheduling a meeting for a pro-
tracted period of time to accommodate
the taxpayer/representative. Facts and cir-
cumstances will govern what constitutes
a reasonable delay. If the taxpayer/rep-
resentative seeks to unreasonably delay
a meeting or conference call, Appeals
should proceed with the discussion or
meeting but should document the reason
for proceeding without the taxpayer/rep-
resentative. Appeals should share with the
taxpayer/representative the substance of
the discussion, as appropriate, and give
the taxpayer/representative a reasonable
period of time within which to respond.
.02Guiding Principles. Except as
specifically addressed in other provisions
of this revenue procedure, the following
guiding principles govern communica-
tions between Appeals and other IRS
functions, including Counsel.
(1)Principles of Tax Administration.It
is the role of the IRS, and those employees
charged with the duty of interpreting the
law, to determine the reasonable meaning
of various Code provisions in light of the
Congressional purpose in enacting them;
to apply and administer the law in a reason-
able and practical manner; and to perform
this work in a fair and impartial manner,
with neither a government nor a taxpayer
point of view. See Rev. Proc. 64–22,
1964–1 C.B. 689.
(2)Appeals Independence. Appeals
serves as the administrative dispute reso-
lution forum for any taxpayer contesting
an IRS compliance action. It has long been
Appeals’ mission to “resolve tax contro-
versies, without litigation, on a basis that is
fair and impartial to both the Government
and the taxpayer in a manner that will
enhance voluntary compliance and public
confidence in the integrity and efficiency
of the Service.” IRM 8.1.1.1(1). RRA
section 1001(a)(4) established a statutory
basis for Appeals’ independence by re-
quiring that the Commissioner “ensure an
independent appeals function within the
InternalRevenueService....”Rather
than establish an external appeals function
(as suggested in some legislative propos-
als), RRA maintained Appeals within the
IRS while seeking to significantly rein-
force its independence. Consequently,
despite their distinct roles within tax ad-
ministration and required adherence to
policies set by the Commissioner, Appeals
and other IRS functions, including Coun-
sel, share a responsibility to interact —
in all circumstances — in a manner that
preserves and promotes Appeals’ inde-
pendence. To further this independence,
Appeals must continue its practice of
impartial decision making while coordi-
nating with other IRS functions to carry
out the Commissioner’s policies on tax
administration.
Independence, therefore, is one of Ap-
peals’ most important core values, and
the RRA statutory prohibition onex parte
communications “to the extent that such
communications appear to compromise
the independence of the appeals officers”
is a significant component of Appeals’
independence. The guidance set forth in
this revenue procedure is designed to ac-
commodate the overall interests of tax ad-
ministration while ensuring that Appeals
is adequately insulated from influence (or
the appearance of influence) by other IRS
functions, thereby providing Appeals with
an unencumbered working environment
within which to objectively and indepen-
dently evaluate the facts and law that are
relevant to each case and quantify the haz-
ards of litigation based on that evaluation.
(3)Legal Advice.
(a)In General. The Chief Counsel is
the legal adviser to the Commissioner and
the IRS’ officers and employees on all mat-
ters pertaining to the interpretation, admin-
istration and enforcement of the internal
revenue laws and related statutes. I.R.C.
§ 7803(b)(2)(A). As reflected in the Chief
Counsel mission statement, the IRS mis-
sion statement and section 2.02(1), above,
attorneys in the Office of Chief Counsel
are expected to provide legal advice based
on an independent determination of the
“correct and impartial interpretation of the
internal revenue laws” and by applying
“the [tax] law with integrity and fairness to
all.” The fact that various attorneys in the
Office of Chief Counsel may be simulta-
neously engaged in multiple activities, in-
cluding some activities involving an advo-
cacy role, does not diminish the responsi-
bility of each to exercise independent judg-
ment in rendering legal advice.
(b)Appeals. Appeals employees gen-
erally are not bound by the legal advice
that they receive from the Office of Chief
Counsel with respect to their cases. Rather,
the legal advice is but one factor that Ap-
peals will take into account in its consider-
ation of the case. Appeals employees re-
main ultimately responsible for indepen-
dently evaluating the strengths and weak-
nesses of the issues in the cases assigned to
them and making independent judgments
concerning the overall strengths and weak-
nesses of the cases and the hazards of lit-
igation. Accordingly, Appeals may ob-
tain legal advice from the Office of Chief
Counsel consistent with this revenue pro-
August 8, 20111282011–32 I.R.B.

cedure without compromising Appeals in-
dependence.
(4)Opportunity to Participate.Aspro-
vided in section 2.01(1) and (3), above,
by definition, if the taxpayer/representa-
tive is given an opportunity to participate
with respect to a communication, that com-
munication is notex parte, and thus, the
communication is permissible under theex
partecommunication rules.
(5)Exceptions. Not all communica-
tions between Appeals employees and em-
ployees of other IRS functions are prohib-
ited, even ifex parte. For example, as de-
scribed in more detail in section 2.03(2),
below, communications regarding ministe-
rial, administrative or procedural matters
are permissible. Similarly, as described in
more detail in section 2.04, below, Appeals
may listen to or be briefed on generic, non-
case-specific discussions of issues with-
out violating theex partecommunication
rules.
(6)Communications with Other IRS
Functions. To fulfill its role of provid-
ing an independent dispute resolution
function within the IRS, Appeals must
be able to make fully informed, indepen-
dent judgments regarding the strengths
and weaknesses of positions and to prop-
erly evaluate the hazards of litigation in
cases within its jurisdiction. To accom-
plish these tasks, Appeals stays abreast
of relevant legal and tax administration
developments, including the views and
analysis of stakeholders, as well as the
Commissioner’s policies and operational
goals. One effective and efficient way
of obtaining some of this information
is for Appeals to participate in generic,
noncase-specific discussions with other
IRS functions, including Counsel, such as
participation in multifunctional meetings.
Hence, Appeals’ participation in these
discussions or meetings is permissible un-
der theex partecommunication rules, as
described in more detail in section 2.04,
below.
In general, Appeals may not engage
in discussions of the strengths and weak-
nesses of the issues and positions in cases
with the originating function without
providing the taxpayer/representative an
opportunity to participate. Similarly, the
taxpayer/representative normally must
be given an opportunity to participate
in any case discussion with the originat-
ing function regarding matters other than
ministerial, administrative or procedural
matters. For a fuller discussion of these
rules, see section 2.03, below.
(7)CuringaBreachofExParteCom-
munication Rules. Most breaches of theex
partecommunication rules may be cured
by timely notifying the taxpayer/represen-
tative of the situation, sharing the commu-
nication or information in question and af-
fording the taxpayer/representative a rea-
sonable period of time within which to re-
spond. The specific administrative remedy
thatmaybemadeavailableinanyparticu-
lar case is within the sole discretion of Ap-
peals.
(8)No Substantive Rights.Theex parte
communication rules set forth in this rev-
enue procedure do not create substantive
rights affecting the taxpayer’s tax liability
or the IRS’ ability to determine, assess or
collect that tax liability, including statutory
interest and any penalties, if applicable.
.03Communications with Originating
Function
(1)General Rule.Ex partecommunica-
tions between Appeals employees and em-
ployees of originating functions are pro-
hibited to the extent the communications
appear to compromiseAppeals’ indepen-
dence. See RRA section 1001(a)(4). As
discussed more fully below, not allex parte
communications are prohibited.
(2)Ministerial, Administrative or Pro-
cedural Matters. Communications be-
tween Appeals and an originating function
regarding ministerial, administrative or
procedural matters during any stage of a
case are permissible without involving the
taxpayer/representative. If communica-
tions with the originating function extend
beyond ministerial, administrative or pro-
cedural matters in that the substance of
the issues in the case is addressed, those
communications are prohibited unless the
taxpayer/representative is given an oppor-
tunity to participate.
(a)Examples. Communications regard-
ing ministerial, administrative or proce-
dural matters include, but are not limited
to, the following:
(i) Communications about whether
certain information was requested and
whether it was received.
(ii) Communications about the avail-
ability of a document referred to in the
workpapers that the Appeals Officer can-
not locate in the file.
(iii) Communications to clarify the con-
tent of illegible documents or writings.
(iv) Communications regarding case
controls on the IRS’s management infor-
mation systems.
(v) Communications relating to tax cal-
culations that are solely mathematical in
nature.
(vi) Communications about whether
any closed cases exist that involve or af-
fect the taxpayer or a related party, or other
information about a closed case (includ-
ing the terms on which a closed case was
resolved), that do not extend beyond what
is in the public or administrative record.
Examples of these closed cases include,
but are not limited to, cases involving
bankruptcy, innocent spouse, TEFRA
partnership or criminal investigation is-
sues. Any discussion about the substance
of a closed case extending beyond what
is in the public or administrative record is
prohibited unless the taxpayer/representa-
tive is given an opportunity to participate.
For purposes of the preceding sentence,
any information contained in the adminis-
trativefilefortheclosedcaseoranyofthe
IRS’ databases is considered to be part of
the administrative record. Moreover, the
public or administrative record limitation
described in this paragraph does not apply
to discussions between Appeals and the
originating function in connection with
a post-settlement conference or equiva-
lent communication. For a discussion of
post-settlement conferences, see section
2.03(11), below. Additionally, this para-
graph is limited to closed cases and does
not apply to communications with respect
to the case that Appeals is reviewing. For
a discussion of communications relating to
other pending cases that involve or affect
the taxpayer or a related party, see section
2.03(13), below.
(vii) Communications regarding gen-
eral information about related cases, such
as the number of other pending cases in-
volving the same or substantially similar
type of transaction or issue,e.g., tax shel-
ter transactions, industry-wide issues, etc.,
and the aggregate amount of money in dis-
pute in those cases. This paragraph also
includes communications about the exis-
tence or status of related cases, such as
cases involving a promoter, material advi-
sor, or tax return preparer. For a discussion
of communications with respect to closed
cases that involve or affect the taxpayer or
2011–32 I.R.B.129August 8, 2011

a related party, see section 2.03(2)(a)(vi),
above. For a discussion of communica-
tions relating to other pending cases that
involveoraffectthetaxpayerorarelated
party, see section 2.03(13), below.
(viii) Communications regarding the
status of the case that Appeals is review-
ing, such as whether the case or an issue
in the case has been resolved or when a
case is expected to be closed. This does
not include any discussion of the terms
of the resolution of an issue prior to the
case being closed or the issue resolved
with finality, such as by the parties enter-
ing into a closing agreement. Permitted
communications concerning the status of
the case should be limited to a direct, nar-
row exchange of information without any
surrounding discussion. They are not in-
tended to provide the originating function
or other IRS function a chance to discuss
the strengths and weaknesses of the case
or position in the case, advocate for a
particular result, object to a potential res-
olution, or otherwise attempt to influence
Appeals’ decision in any way.
(ix) Communications regarding math-
ematical errors affecting the proposed tax
liability discovered upon computational
review. These errors should be discussed
with both the taxpayer/representative and
the originating function before the cor-
rection is made, but the discussions may
be held separately. If the error involves
the interpretation of a legal principle or
application of the law to a particular set
of facts, however, the taxpayer/represen-
tative should be given an opportunity to
participate in any scheduled meetings with
the originating function to discuss this type
of discrepancy. In some cases, Appeals
may choose to return the case to the orig-
inating function forfurther development
and correction.
(x) Communications referring a refund
claim filed during the Appeals process to
the originating function for consideration.
See section 2.03(9), below.
(xi) Communications in connection
with a CDP hearing to verify compliance
with legal or administrative requirements;
communications withrespect to verifica-
tion of assets/liabilities involving an offer
in compromise submitted as an alternative
payment option during a CDP hearing;
or communications regarding deadlines
relating to a remanded CDP case. See
sections 2.03(10)(b) and (c)(i)(B), below.
(3)Prohibited Communications.Ex-
amples of communications between Ap-
peals and an originating function that are
prohibited unless the taxpayer/representa-
tive is given an opportunity to participate
include, but are not limited to, the follow-
ing:
(a) Discussions about the accuracy of
the facts presented by the taxpayer and the
relative importance of the facts to the de-
termination.
(b) Discussions of the relative merits or
alternative legal interpretations of authori-
ties cited in a protest or in a report prepared
by the originating function.
(c) Discussions of the originating func-
tion’s perception of the demeanor or cred-
ibility of the taxpayer or taxpayer’s repre-
sentative.
(d) Discussions of the originating
function’s views concerning the level of
cooperation (or lack thereof) of the tax-
payer/representative during the originating
function’s consideration of the case.
(e) Discussions regarding the origi-
nating function’s views concerning the
strengths and weaknesses of the case or
the parties’ positions in the case.
(f) Communications from the originat-
ing function to advocate for a particular re-
sult or to object to a potential resolution of
the case or an issue in the case.
(4)Administrative File
(a)In General. The administrative file
transmitted to Appeals by the office that
made the determination that is subject to
the Appeals process (the originating func-
tion) is not considered to be anex parte
communication within the context of this
revenue procedure. The administrative
file, which contains, among other things,
the proposed determination and the tax-
payer’s protest or other approved means
of communicating disagreement with the
proposed determination, sets forth the
boundaries of the dispute between the tax-
payer and the IRS and forms the basis for
Appeals to assume jurisdiction.
(b)Transmittal. The transmittal mem-
orandum, a T-Letter, or any similar docu-
ment that the originating function uses to
transmit the administrative file (transmit-
tal) should not include statements or com-
ments intended to influence Appeals’ de-
cision-making process. This includes rec-
ommendations concerning what Appeals
should consider and how Appeals should
resolve the case. In contrast, it is permis-
sible to include in the transmittal a neutral
list of unagreed issues, without discussion,
and to indicate which ones, if any, are coor-
dinated issues. If the transmittal includes
the type of statements or comments de-
scribed in the second sentence of this para-
graph, or includes other prohibited com-
munications in a document that is either
placed on top of the administrative file as
a transmittal or inserted into the adminis-
trative file in conjunction with preparing
the case for transmission to Appeals, the
document must be shared by the originat-
ing function with the taxpayer/representa-
tive at the time that the administrative file
is sent to Appeals.
(c)Rebuttal to Protest. If a rebuttal to
the taxpayer’s protest is prepared by the
originating function, it must be shared with
the taxpayer/representative by the origi-
nating function at the time that it is sent to
Appeals.
(d)Contents of Administrative File.
The administrative file shall be compiled
and maintained by the originating function
in accordance with the established proce-
dures within that function or as otherwise
directed by the reviewer(s) assigned to the
case. The originating function, however,
shall refrain from placing in the adminis-
trative file any notes, memoranda or other
documents that normally would not be
included in the administrative file in the
ordinary course of developing the case if
the reason for including this material in the
administrative file is to attempt to influ-
ence Appeals’ decision-making process.
For example, the originating function
should not include gratuitous comments
in the case history, a memo to the file or a
transmittal document, such as a T-Letter,
if the substance of the comments would
be prohibited if they were communicated
to Appeals separate and apart from the
administrative file.
(5)Preconference Meetings. Precon-
ference meetings between Appeals and the
originating function without providing the
taxpayer/representative an opportunity to
participate are an example of the type of
communications that theex partecommu-
nication rules were designed to prohibit.
These meetings should not be held unless
the taxpayer/representative is given an op-
portunity to participate.
(6)Premature Referrals. Appeals is
the administrative settlement arm of the
IRS. If a case is not ready for Appeals
August 8, 20111302011–32 I.R.B.

consideration, Appeals may return it for
further development or for other reasons
described in IRM 8.2.1.6. Appeals may
communicate with the originating func-
tion regarding the anticipated return of the
case, including an explanation of the ad-
ditional developmentthat Appeals is re-
questing or other reasons why the case is
being returned, but generally may not en-
gage in a discussion of matters beyond the
types of ministerial, administrative or pro-
cedural matters set forth in section 2.03(2),
above, as part of a discussion of whether
the premature referral guidelines require
further activity by the originating function.
When the case is returned to the originat-
ing function, Appeals must timely notify
the taxpayer/representative that the case
has been returned to the originating func-
tion, in whole or in part, for further de-
velopment. In addition, the supplemen-
tal report prepared by the originating func-
tion reflecting the additional development
that was done must be shared with the tax-
payer/representative.
(7)Submission of New Information.If
new information or evidence is submitted
to Appeals by the taxpayer/representative,
the principles set forth in IRM 8.2.1.9.3
should be followed. In general, the orig-
inating function should be given the op-
portunity to timely review and comment
on significant new information presented
by the taxpayer. “Significant new informa-
tion” is information of a nonroutine nature
that, in the judgment of Appeals, may have
had an impact on the originating function’s
findings or that may impact Appeals’ in-
dependent evaluation of the strengths and
weaknesses of the issues, including the
litigating hazards relating to those issues.
Normally, the review can be accomplished
by sending the material to the originating
function while Appeals retains jurisdiction
of the case and proceeds with resolution
of other issues. Alternatively, Appeals
may return the entire case to the originat-
ing function and relinquish jurisdiction, in
its sole discretion, in accordance with the
IRM. The taxpayer/representative must be
timely notified when a case is returned to
the originating function or new material
not available during initial consideration
has been sent to the originating function.
The results of the originating function’s re-
view of the new information must be com-
municated to the taxpayer/representative.
(8)New Issues Raised in Appeals.Ap-
peals will continue to follow the principles
of Policy Statement 8–2 and the “General
Guidelines” outlined in IRM 8.6.1.6.2 in
deciding whether to raise a new issue.
Under Appeals’ new issue policy, new
issues must continue to meet the “mate-
rial” and “substantial” tests set forth in
the IRM. Communications will be in ac-
cordance with the guiding principles in
section 2.02(6), above.
(9)Refund Claims Filed During the Ap-
peals Process. Refund claims filed during
the Appeals process generally are referred
to the originating function with a request
for expedited review. Referral of these re-
fund claims to the originating function in-
volves no discussion about the strengths
and weaknesses of the issue, and thus, fall
within the ministerial, administrative or
procedural matters exception set forth in
section 2.03(2), above. The taxpayer/rep-
resentative must be timely notified when
the refund claim is referred to the originat-
ing function. The results of the originating
function’s review of the refund claim must
be communicated to the taxpayer/repre-
sentative.
(10)Collection Due Process
(a)Collection Cases In General.The
principles applicable to discussions be-
tween Appeals employees and officials in
originating functions apply to cases that
originate in the Collection function, such
as collection due process (CDP) appeals,
collection appeals program cases, offers
in compromise, and trust fund recovery
penalty cases. These discussions must be
held in accordance withthe guiding prin-
ciples in section 2.02(6), above.
(b)Ministerial, Administrative or Pro-
cedural Matters. Sections 6320 and 6330
provide that, as part of a CDP hearing,
the Appeals officer must obtain verifica-
tion that the requirements of any applica-
ble law or administrative procedure have
been met. Communications seeking to
verify compliance with legal and admin-
istrative requirements fall within the min-
isterial, administrative or procedural mat-
ters exception set forth in section 2.03(2),
above. Therefore, those communications
are permissible without providing the tax-
payer/representative an opportunity to par-
ticipate.
(c)Remand By Tax Court.Asprovided
in section 2.06(2)(a), below, theex parte
communication rules do not apply to com-
munications between Appeals and Coun-
sel with respect to cases docketed in the
Tax Court. CDP cases that are remanded
by the Tax Court for further considera-
tion (or reconsideration) by Appeals fall
into a different category, however. Al-
though remanded CDP cases remain un-
der the Tax Court’s jurisdiction, the Ap-
peals employee assigned to the remanded
CDP case must be impartial in the review
of the remanded case within the mean-
ing of section 6320(b)(3) or 6330(b)(3),
as applicable, requiring the application of
similar considerations to those underlying
theex partecommunication rules. There-
fore, the following guidelines apply to re-
manded CDP cases.
(i)Instructions Regarding the Remand
(A) The Counsel attorney who handled
theCDPcaseintheTaxCourtshouldpre-
pare a written memorandum to Appeals
explaining the reasons why the court re-
manded the case to Appeals, any special
requirements in the court’s Order (e.g.,
whether and to what extent a new con-
ference should be held; whether the case
must be reassigned to a different Appeals
employee than the Appeals employee who
handled the original CDP case; and what
material Appeals is prohibited from re-
viewing, if any), and what issues the court
has ordered Appeals to address on remand.
The memorandum should not discuss the
credibility of the taxpayer or the accuracy
of the facts presented by the taxpayer.
Nor should the memorandum contain any
legal analysis or legal advice. A copy of
the memorandum will be provided by the
Counsel attorney to the taxpayer/represen-
tative.
(B) Communications to Appeals from
the Counsel attorney handling the Tax
Court case regardingdeadlines relating
to the remanded CDP case fall within the
ministerial, administrative or procedural
matters exception, and thus, are permissi-
ble communications that may take place
without providing the taxpayer/represen-
tative an opportunity to participate.
(ii)Legal Advice
A request by Appeals for legal advice
in connection with a remanded CDP case
may be handled by the same Counsel at-
torney who is handling the Tax Court case.
(iii)Review of Supplemental Notice By
Counsel. The Counsel attorney handling
the Tax Court case should review the sup-
plemental notice of determination before it
2011–32 I.R.B.131August 8, 2011

is issued to the taxpayer. This review is
for the limited purpose of ensuring compli-
ance with the Tax Court’s remand Order.
(11)Post-Settlement Conference.The
post-settlement conference with Examina-
tion is held after the case has been closed
by Appeals. The purpose of the conference
is to inform Examination about the settle-
ment of issues to ensure that Examination
fully understands the settlement and the ra-
tionale for the resolution. The conference
provides an opportunity for Appeals to dis-
cuss with Examination the application of
Delegation Order 236, or subsequent del-
egation orders (i.e., settlement by Exam-
ination consistent with prior Appeals set-
tlement with the same or related taxpayer).
The tax periods that are the subject of the
post-settlement conference have been fi-
nalized and the participants are cautioned
to limit discussion to the results in the
closed cycle. Any discussion of the resolu-
tion of issues present in the closed periods
does not compromise the independence of
Appeals, and thus, post-settlement con-
ferences between Appeals and Examina-
tion are permissible without giving the tax-
payer/representative an opportunity to par-
ticipate. In contrast, any discussion that
addresses open cycles in either Examina-
tion or Appeals with respect to the same
or a related taxpayer is subject to the guid-
ance provided in this revenue procedure
relating to communications with the orig-
inating function contained in section 2.03,
above.
(12)Review of Coordinated Issues
(a)Cases in Compliance’s Jurisdiction.
Delegation Order 4–25 provides the Com-
pliance function with limited authority to
settle certain issues with Appeals’ review
and approval. Specifically, this limited
settlement authority applies with respect
to issues that are coordinated, for exam-
ple, in the Technical Advisor Program (or
any successor program), and are the sub-
ject of either an Appeals Settlement Guide-
line (ASG) or an Appeals Settlement Posi-
tion (ASP). Under existing procedures, the
proposed settlement generally must be ap-
proved by the Examination Technical Ad-
visor and the Appeals Technical Guidance
Coordinator (ATGC) for the issue in ques-
tion. The purpose of the required coordi-
nation is to ensure that the resolution by
Examination is consistent with the analy-
sis set forth in the ASG or ASP. Commu-
nications between Compliance employees
and the ATGC in connection with satisfy-
ing this coordination requirement are per-
missible without giving the taxpayer/rep-
resentative an opportunity to participate.
(b)Cases in Appeals’ Jurisdiction.
Under existing procedures, Appeals set-
tlements involving coordinated issues,
including but not limited to issues that are
the subject of either an ASG or an ASP,
must be approved by the ATGC for that
issue. The ATGC serves as a resource
person for the Appeals organization. The
purpose of the required coordination is
to ensure that resolutions of coordinated
issues are consistent nationwide. Com-
munications between Appeals employ-
ees and the ATGC are entirely internal
within Appeals, and consequently, theex
partecommunication rules do not apply
to those communications. See section
2.01(1)(a)(ii).
(13)Taxpayers with Multiple Open
Cases. Special considerations are required
when a taxpayer has multiple open cases.
This situation may arise, for example,
when the taxpayer has cases involving
thesameissuependingwithdifferentIRS
functions, including Counsel, which is
common with respect to large corporate
taxpayers, or the taxpayer has multiple
cases involving the same issue pending
with Appeals in both docketed and non-
docketed status. The IRS has an interest
in coordinating the handling of open cases
regarding the same taxpayer to ensure
that the responsible offices have complete
information to make informed decisions
about the cases within their respective
jurisdictions.
Discussions held with respect to open
cases must be in accordance with the guid-
ing principles in section 2.02(6) and the
operative rules set forth in section 2.03,
above, as well as sections 2.06, 2.07 and
2.08, below. Theex partecommunication
rules may not apply to some of the open
cases, such as those docketed in the Tax
Court or under the jurisdiction of the De-
partment of Justice, see sections 2.06(2)
and 2.08(2), below, but may apply to one
or more other open cases of the taxpayer.
.04Participation in Multifunctional
Meetings
(1)General Rule. Multifunctional
meetings are meetings that include repre-
sentatives from various IRS components,
usually Compliance and Counsel. A
meeting of the members of an Issue Man-
agement Team (IMT), or its successor
type function, is an example of this type of
meeting. These multifunctional meetings
usually involve general discussions of how
to handle technical issues or procedural
matters. Appeals does not participate
on IMTs but can be briefed by IMTs, as
long as the discussion remains generic
rather than case specific. Similarly, all
participants in any type of multifunctional
meeting need to be cognizant of theex
partecommunication rules and ensure that
taxpayer-specific discussions do not take
place while Appeals is present.
As provided in sections 2.02(2) and
(6), above, in order for Appeals to make
fully-informed, independent judgments,
Appeals must have access to the views
and analysis of stakeholders. Listening
to generic, noncase-specific discussions
involving other IRS functions, including
Counsel, in the context of a multifunc-
tional meeting provides Appeals with an
important forum in which to meet, in
part, these needs, and enables Appeals
to effectively serve as the administrative
settlement arm of the IRS. Accordingly,
Appeals may attend multifunctional meet-
ings subject to the restrictions in section
2.04(2), below, regarding case-specific
discussions.
(a)Settlement Initiatives. To achieve
their distinct roles, Appeals, Counsel and
Compliance must work collaboratively
to satisfy the tax administration policies
set by the Commissioner. As part of its
effort to address particular issues or types
of transactions, the IRS sometimes devel-
ops settlement initiatives either through
an IMT or otherwise. These settlement
initiatives are usually based on generic
discussions of issues and transactions
rather than on specific cases. The success
of these settlement initiatives is dependent
in large part on taxpayers’ knowledge that
the resolution of their case within Appeals
does not fall outside of the settlement
range unless the taxpayer can establish
the existence of atypical facts and cir-
cumstances. Appeals’ involvement in the
formulation of the terms contained in the
IRS’ settlement initiatives is essential to
the IRS’ ability to resolve cases without
litigation. Therefore, Appeals is per-
mitted to participate in the development
of settlement initiatives notwithstanding
that Appeals’ participation entails having
discussions with other IRS functions, in-
August 8, 20111322011–32 I.R.B.

cluding originating functions, regarding
the general strengths and weaknesses of
positions, litigation hazards, settlement
ranges and the applicability of penalties.
If the discussion is case specific, these
topics continue to be prohibited, unless
the taxpayer/representative is given an
opportunity to participate.
(2)Case-Specific Discussions.Any
discussion of a specific taxpayer’s case in
connection with a multifunctional meeting
should be postponed until such time as
it can be conducted outside of Appeals’
presence. The preceding sentence does
not apply with respect to post-settlement
conferences, as discussed in more detail in
section 2.03(11), above.
.05Alternative Dispute Resolution.
(1)Cases Not in Appeals’ Jurisdic-
tion. Certain alternative dispute resolu-
tion (ADR) programs, such as fast track
settlement, involve the use of Appeals
employees to facilitate settlement while
the case is still in Examination’s juris-
diction. See,e.g., Rev. Proc. 2003–40,
2003–1 C.B. 1044 (Large and Mid-Size
Business Fast Track Settlement Program);
Announcement 2011–5, 2011–4 I.R.B.
430 (Small Business/Self Employed Fast
Track Settlement Program); Announce-
ment 2008–105, 2008–2 C.B. 1219 (Tax
Exempt and Government Entities Fast
Track Settlement Program); and subse-
quent published guidance regarding these
or similar programs. Private caucuses be-
tween the mediator and individual parties
are often a key element in the process.
The prohibition againstex partecommu-
nications between Appeals employees and
other IRS employees does not apply be-
cause Appeals employees are not acting in
their traditional Appeals settlement role.
Consequently, Appeals employees may
haveex partecommunications with an
originating function in connection with
ADR proceedings. For a discussion of
communications between Appeals and
Counsel, see section 2.06, below. In con-
trast, theex partecommunication rules
apply in the context of Appeals consider-
ation of an issue under the Early Referral
to Appeals process, Rev. Proc. 99–28,
1999–2 C.B. 109, or the Accelerated Issue
Resolution program, Rev. Proc. 94–67,
1994–2 C.B. 800 (or subsequent published
guidance regarding these programs).Ex
partecommunications are not an integral
part of those types of ADR procedures
because jurisdiction has shifted to Appeals
in those cases.
(2)Post-Appeals Mediation.Theex
partecommunication rules do not apply
to communications in connection with
Post-Appeals Mediation proceedings.
Revenue Procedure 2009–44, 2009–40
I.R.B. 462, describes an optional Appeals
mediation procedure that is available after
Appeals settlement discussions are un-
successful and when all other issues are
resolved except for the issue(s) for which
mediation is being requested. See also An-
nouncement 2011–6, 2011–4 I.R.B.433.
Section 6.02 of Rev. Proc. 2009–44 states
that “the parties are encouraged to include,
in addition to the required decision-mak-
ers, those persons with information and
expertise that will be useful to the deci-
sion-makers and the mediator.” 2009–40
I.R.B. at 463. Section 6.02 further pro-
vides that “Appeals has the discretion to
communicateex partewith the IRS Office
of Chief Counsel, the originating function,
e.g., Compliance, or both, in prepara-
tion for or during the mediation session.
Appeals also has the discretion to have
Counsel, the originating function, or both,
participate in the mediation proceeding *
**.”Id.
.06Communications with Counsel
(1)General Rule. Asprovidedinsec-
tion 2.02(3), above, the Chief Counsel is
the legal adviser to the Commissioner and
his or her officers andemployees (includ-
ing employees of Appeals) on all mat-
ters pertaining to the interpretation, ad-
ministration and enforcement of the in-
ternal revenue laws and related statutes.
As part of the legal advice process, attor-
neys in the Office of Chief Counsel exer-
cise independent judgment in addressing
the strengths and weaknesses of the par-
ties’ respective positions, the hazards of
litigation, the quality and admissibility of
the evidence, and how a judge might react
to the evidence or particular arguments.
Appeals employees are entitled to ob-
tain legal advice from attorneys in the Of-
fice of Chief Counsel and, except as pro-
videdbelow,arepermittedtodosoun-
der theex partecommunication rules. Ap-
peals employees generally are not bound
by the legal advice that they receive from
theOfficeofChiefCounsel. Thelegal
advice is but one factor that Appeals will
take into account in its consideration of the
case. Appeals employees independently
evaluate the strengths and weaknesses of
the specific issues in the cases assigned
to them and make an independent judg-
ment concerning the overall strengths and
weaknesses of the cases they are review-
ing and the hazards of litigation. See IRM
8.6.2.6.4 and 8.6.4.1.
Appeals employeesshould not commu-
nicateex parteregarding an issue in a case
pending before them with a field attorney
if the field attorney personally provided le-
gal advice regarding the same issue in the
same case to the originating function or
personally served as an advocate for the
originating function regarding the same is-
sue in the same case. For purposes of
this section, in determining whether a field
attorney is considered to have personally
provided legal advice to the originating
function or personally served as an advo-
cate for the originating function, regarding
the same issue in the same case, the extent
and nature of the field attorney’s involve-
ment in the case relating to the issue with
respect to which Appeals is seeking legal
advice is determinative.
(2)Docketed Cases.
(a)In General.Theex partecommu-
nication rules do not apply to communica-
tions between Appeals and Counsel in con-
nection with cases docketed in the United
States Tax Court. Communications be-
tween Appeals and the originating func-
tion in docketed cases are still subject to
theex partecommunication rules if the
case is within Appeals’ jurisdiction.
(b)Collection Due Process Cases.For
a discussion of the application of theex
partecommunication rules to CDP cases
remanded by the Tax Court, see section
2.03(10)(c).
.07Communications with Other IRS
Functions
(1)Outside Consultants and Experts.
Outside consultants or experts under con-
tract to the IRS, other than those hired di-
rectly by Appeals, are treated as IRS em-
ployees for purposes of this revenue proce-
dure. Consequently, communications be-
tween Appeals and these outside consul-
tants or experts are subject to theex parte
communication rules. See section 2.02(6).
In contrast, communications between Ap-
peals and outside consultants or experts
hired by Counsel in docketed cases are
not subject to theex parte
communication
rules. See section 2.06(2).
2011–32 I.R.B.133August 8, 2011

(2)Criminal Investigation.Criminal
Investigation (CI) is not an originating
function as that term is defined in sec-
tion 2.01(2), above, because Appeals does
not review Criminal Investigation’s de-
terminations. Communications between
Appeals and CI are generally ministerial in
nature. For example, Appeals and CI may
confirm the existence of a CI investiga-
tion, which would freeze Appeals’ action,
or Appeals may review a CI closed case to
find information relevant to the case that
Appeals is reviewing. Similarly, CI may
communicateex partewith Appeals to ob-
tain information or documents in Appeals’
possession that may be relevant to the
activities of CI or to ensure that Appeals’
actions will not interfere with any ongoing
criminal investigation or be inconsistent
with any prior criminal investigations.
Since these types of communications do
not address the strengths or weaknesses of
an open case, they are permissible under
section 2.02(6), above. For a discussion
of communications between Appeals and
Criminal Investigation that go beyond
the above matters, see section 2.03(13),
above.
(3)Competent Authority.TheUnited
States Competent Authority is responsi-
ble for the timely and effective implemen-
tation of tax treaties and tax information
exchange agreements. Communications
between Appeals and IRS employees at
the request or on behalf of the competent
authority relating to a taxpayer’s request
for relief under competent authority pro-
cedures, see Rev. Proc. 2006–54, 2006–2
C.B. 1035, are permissible. It is presumed
that the competent authority is acting at the
request and with the consent of the tax-
payer. Communications between Appeals
and IRS employees that are unrelated to
the taxpayer’s request for relief under com-
petent authority procedures, however, con-
tinue to be subject to theex partecommu-
nication rules.
(4)Taxpayer Advocate Service.Com-
munications with Appeals that are initiated
by the Taxpayer Advocate Service (TAS)
are permissible. It is presumed that the
TAS employees are acting at the request
and with the consent of the taxpayer. Due
to the nature of their role within the IRS
and their relationship with the taxpayer,
TAS employees may discuss with Appeals
the strengths and weaknesses of the par-
ties’ respective positions and may advo-
cate for a particular result in the case.
(5)Commissioner and Other IRS Offi-
cials with Overall Supervisory Responsi-
bilities. The Commissioner is responsible
for administering, managing, conducting,
directing, and supervising the execution
and application of the internal revenue
laws or related statutes and tax conven-
tions to which the United States is a party.
I.R.C. § 7803(a)(2)(A). In the course of
exercising that statutory responsibility, the
Commissioner and those officials, such
as the Deputy Commissioners, who have
overall supervisory responsibility for IRS
operations may communicate with Ap-
peals about specific cases or issues and
may direct that other IRS officials, in-
cluding Counsel officials, participate in
meetings or discussions about cases or
issues without providing the taxpayer/rep-
resentative an opportunity to participate.
.08Communications with Other Gov-
ernmental Entities
(1)Joint Committee on Taxation. Sec-
tion 6405 requires the IRS to submit a
report to the Joint Committee on Taxa-
tion concerning any refundorcreditinex-
cess of the statutory amount and the IRS
must wait at least 30 days after submit-
ting the report before making the refund
or credit that is the subject of the report.
The Joint Committee or its staff will oc-
casionally question a settlement or raise
a new issue. Communications between
Appeals and the Joint Committee or its
staff are permissible without providing the
taxpayer/representative an opportunity to
participate. Theex partecommunication
rules only apply to communications be-
tween Appeals and other IRS employees.
Since the Joint Committee is part of the
Legislative Branch, not the IRS, theex
partecommunication rules do not apply to
communications with the Joint Committee
or its staff.
(2)Department of Justice. Appeals
may communicate with employees of the
Department of Justice, including the U.S.
Attorneys’ offices, without giving the
taxpayer/representative an opportunity to
participate. Theex partecommunication
rules only apply to communications be-
tween Appeals and other IRS employees.
Since the Department of Justice is not part
of the IRS, the ex parte communication
rules do not apply to communications with
the Department of Justice.
.09Monitoring Compliance.Itisthe
responsibility of all IRS employees to en-
sure compliance with theex partecom-
munication rules. All IRS employees will
make every effort to promptly terminate
any communications not permitted by the
ex partecommunication rules. To improve
understanding of theex partecommuni-
cation rules, Appeals and other impacted
IRS employees, including Counsel, will
receive training on the contents of this rev-
enue procedure and will be encouraged to
seek managerial guidance whenever they
have questions about the propriety of anex
partecommunication. Additionally, man-
agers will consider feedback from other
functions and will be responsible for mon-
itoring compliance during their day-to-day
interaction with employees, as well as dur-
ing workload reviews and closed case re-
views. Breaches will be addressed in ac-
cordance with existingadministrative and
personnel processes.
.10Remedies Available to Taxpayers
(1)General Rule.Theex partecom-
munication rules set forth in this revenue
procedure do not create substantive rights
affecting the taxpayer’s tax liability or the
IRS’ ability to determine, assess or col-
lect that tax liability, including statutory
interest and any penalties, if applicable.
The IRS takes theex partecommunica-
tion rules seriously and will continue its
efforts to ensure compliance through train-
ing and oversight. Most breaches of theex
partecommunication rules may be cured
by timely notifying the taxpayer/represen-
tative of the situation, sharing the commu-
nication or information in question and af-
fording the taxpayer/representative an op-
portunity to respond. The specific admin-
istrative remedy that may be made avail-
able in any particular case is within the
sole discretion of Appeals. For a discus-
sion of court directed cures for breach of
theex partecommunication rules, see sec-
tion 2.10(2), below.
(2)Collection Due Process Cases.If
the Tax Court determines that a breach
of theex partecommunication rules oc-
curred during the course of a CDP hearing
in Appeals, the Tax Court may remand the
case to Appeals for either a new or a sup-
plemental hearing, depending upon what
steps the court concludes is necessary to
rectify the breach. See section 2.03(10)(c),
above.
August 8, 20111342011–32 I.R.B.

Section 3. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2000–43, 2000–2 C.B. 404,
is amplified, modified and superseded.
Section 4. EFFECTIVE DATE
This revenue procedure is effective
for communications between Appeals
employees and other IRS employees, in-
cluding Counsel, that take place after
August 8, 2011, the date this revenue
procedure was released to the public.
Section 5. DRAFTING INFORMATION
The principal author of this revenue
procedure is Henry S. Schneiderman,
Office of the Associate Chief Counsel
(Procedure and Administration). For
further information regarding this revenue
procedure, contact Mr. Schneiderman at
(202) 622–3400 (not a toll-free number).
Equitable Relief Under Section
6015(f)
Notice 2011–70
PURPOSE
This notice expands the period within
which individuals may request equitable
relief from joint and several liability un-
der section 6015(f) of the Internal Rev-
enue Code. Specifically, this notice pro-
vides that the Internal Revenue Service
will consider requests for equitable relief
under section 6015(f) if the period of lim-
itation on collection of taxes provided by
section 6502 remains open for the tax years
at issue. If the relief sought involves a re-
fund of tax, then the period of limitation on
credits or refunds provided in section 6511
will govern whether the IRS will consider
the request for relief for purposes of deter-
mining whether a credit or refund may be
available. This notice also provides certain
transitional rules to implement this change.
BACKGROUND
In the case of married individuals who
file joint income tax returns, each spouse
is jointly and severally liable, under sec-
tion 6013(d), for the tax that is due for
the taxable year for which the joint re-
turn is filed. Section 6015 provides for re-
lief from joint and several liability in cer-
tain circumstances. Section 6015(f) pro-
vides for equitable relief from understate-
ments and underpayments when relief is
not available under section 6015(b) or (c).
By regulation, the Department of Treasury
and the Internal Revenue Service estab-
lished a two-year deadline to request eq-
uitable relief under subsection (f), to en-
courage the prompt resolution of liability
determinations and to consider evidence
relevant to a request while the evidence
remained available. Whether this regu-
lation was a valid exercise of rulemak-
ing authority has been challenged in liti-
gation. Circuit courts that have decided
the issue have upheld the validity of the
two-year deadline to request equitable re-
lief set forth in the regulations under sec-
tion 6015(f).Lantz v. Commissioner,
607 F.3d 479 (7th Cir. 2010);Mannella
v. Commissioner, 631 F.3d 115 (3d Cir.
2011);Jones v. Commissioner, 642 F.3d
459(4thCir.2011).
Notwithstanding these court decisions,
Treasury and the IRS have concluded
that the regulations issued under section
6015 should be revised so that individuals
who request equitable relief under section
6015(f) will no longer be required to sub-
mit a request for equitable relief within
two years of the IRS’s first collection ac-
tivity against the requesting spouse with
respect to the joint tax liability.
TRANSITIONAL RULES
Pending modification of the Treasury
regulations under section 6015(f) to for-
mally remove the two-year deadline for re-
quests for equitable relief, individuals may
rely on this notice, and the following tran-
sitional rules will apply:
•Future Requests
Individuals may request equitable relief
under section 6015(f) after the date of this
notice without regard to when the first col-
lection activity was taken. Requests must
be filed within the period of limitation on
collection in section 6502 or, for any credit
or refund of tax, within the period of limi-
tation in section 6511.
•Requests Pending With the IRS
For individuals who have already sub-
mitted requests for relief under section
6015(f) that the IRS has under considera-
tion or in suspense, the IRS will consider
the request for equitable relief even if the
request was submitted more than two years
after the first collection activity was taken,
so long as the applicable period of limi-
tation under section 6502 or section 6511
was open when the request for equitable
relief was filed with the IRS. Individuals
with cases under consideration or in sus-
pense should not reapply for relief under
section 6015(f).
•Requests that Were Denied Solely
for Untimeliness and Not Litigated
Individuals whose requests for equi-
table relief under section 6015(f) were de-
nied by the IRS solely for untimeliness and
were not litigated may reapply for relief
under section 6015(f) after the effective
date of this notice by filing a new Form
8857,Request for Innocent Spouse Relief.
In considering this request for relief, the
IRS will treat the original Form 8857 as
a claim for refund for purposes of the pe-
riod of limitation on refunds provided by
section 6511. This means that any amount
for which a refund was available as of the
date that the original Form 8857 was filed
and any amount subsequently collected
may be eligible for refund if warranted
by the IRS’s reconsideration of equitable
relief. The IRS can only grant relief with
respect to unpaid liabilities if the period
of limitation on collection, under section
6502, remains open as of the date of the
reapplication for relief.
•Requests in Litigation
In any case in litigation in which the
IRS denied a request for equitable relief
under section 6015(f) as untimely, the IRS
or the United States will take appropriate
action in the case as to the timeliness is-
sue consistent with the position announced
in this notice. Similarly, if equitable re-
lief under section 6015(f) was raised for
the first time in litigation and the two-year
deadline was raised as a defense, the IRS
or the United States will take appropriate
action in the case consistent with the po-
sition in this notice. Individuals in these
2011–32 I.R.B.135August 8, 2011

cases should not reapply for equitable re-
lief.
•Requests that Were in Litigation and
that Litigation Is Now Final
The IRS will, in the circumstances
set forth below, take no further collec-
tion activity with respect to an individual
who sought equitable relief under section
6015(f) in a judicialproceeding in which
the validity of the two-year deadline to
request equitable relief was at issue and
the decision in the case is final. If the IRS
stipulated in the court proceeding that the
individual’s request for equitable relief
would have been granted had the request
been timely, the IRS will not seek, after
the effective date of this notice, to collect
from the individual any portion of the
underlying liability for which equitable
relief would have been granted. Individ-
uals in these cases do not need to reapply
for equitable relief. The decision not to
collect is prospective only, and no refunds
or credits will be available. The relief
from collection provided in this notice
applies only to those liabilities for which
equitable relief would have been granted
under section 6015(f) and does not apply
to other liabilities, so the IRS may pursue
collection of other unpaid tax liabilities. In
cases in which section 6015(f) relief is not
provided, individuals may be able to avoid
enforced collection activity, such as a levy
on the individual’s wages or property, if
they qualify for a collection alternative,
such as an offer in compromise or an
installment agreement. See Publication
594,The IRS Collection Process,orvisit
www.irs.gov, for more information.
This notice only addresses the time pe-
riod within which individuals may request
equitable relief from joint and several li-
ability under section 6015(f). It has no
effect on the statutory two-year deadline
to elect relief under section 6015(b) or
(c). For more information about equitable
relief under section 6015(f) or innocent
spouse relief in general, see Publication
971,Innocent Spouse Relief.
EFFECTIVE DATE
This notice is effective on July 25,
2011. The transitional rules set forth in
this notice may be relied upon until final
regulations modifying the two-year rule
are published in theFederal Registeror
other published guidance is issued that
alters the applicability of this notice.
DRAFTING INFORMATION
The principal author of this notice is
Stuart Murray of the Office of Associate
Chief Counsel, Procedure and Adminis-
tration. For further information regarding
this notice, contact Stuart Murray at (202)
622–4940 (not a toll-free number).
August 8, 20111362011–32 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Requirement
s for Group
Health Plans
and Health
Insurance I
ssuers Relating
to Internal
Claims and
Appeals an
dExternalReview
Processes
under the Patient
Protecti
on and Affordable
Care Act
REG–1255
92–10
AGENCY: I
nternal Revenue Service
(IRS), Tr
easury.
ACTION: N
otice of proposed rulemaking
by cross
-reference to temporary regula-
tions.
SUMMARY
: Elsewhere in this issue of the
Bulleti
n, the IRS is issuing an amendment
to tempo
rary regulations (T.D. 9532) pub-
lished J
uly 23, 2010 under the provisions
of the P
atient Protection and Affordable
Care Ac
t(theAffordableCareAct)re-
gardin
g internal claims and appeals and
extern
al review processes. The IRS is issu-
ing th
e temporary regulations at the same
time t
hat the Employee Benefits Security
Admin
istration of the U.S. Department
of Lab
or and the Center for Consumer
Infor
mation & Insurance Oversight of the
U.S. D
epartment of Health and Human
Serv
ices are issuing a substantially similar
amen
dment to interim final regulations
publ
ished July 23, 2010 with respect to
grou
p health plans and health insurance
cove
rageofferedinconnectionwitha
gro
up health plan under the Employee
Ret
irement Income Security Act of 1974
and
the Public Health Service Act. The
tem
porary regulations provide guidance to
emp
loyers, group health plans, and health
ins
urance issuers providing group health
in
surance coverage. The text of those
te
mporary regulations also serves as the
te
xt of these proposed regulations.
DATES: Writte
n or electronic comments
and requests f
or a public hearing must be
received by Ju
ly 25, 2011.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR(REG–125592–10),
room 5205, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Sta-
tion, Washington, DC 20044. Sub-
missions may be hand-delivered to:
CC:PA:LPD:PR(REG–125592–10),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington DC 20224. Alternatively,
taxpayers may submit comments elec-
tronically via the Federal eRulemaking
Portal athttp://www.regulations.gov(IRS
REG–125592–10).
FOR FURTHER INFORMATION
CONTACT: Concerning the regula-
tions, Karen Levin at 202–622–6080;
concerning submissions of comments,
Oluwafunmilayo Taylor at 202–622–7180
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
The temporary regulations published
elsewhere in this issue of the Bulletin
amend §54.9815–2719T of the Miscel-
laneous Excise Tax Regulations. The
proposed and temporary regulations are
being published as part of a joint rulemak-
ing with the Department of Labor and the
Department of Health and Human Ser-
vices (the joint rulemaking). The text of
those temporary regulations also serves
as the text of these proposed regulations.
The preamble to the temporary regulations
explains the temporary regulations and
these proposed regulations.
Special Analyses
It h
as been determined that this notice
of p
roposed rulemaking is not a significant
reg
ulatory action as defined in Executive
Or
der 12866. Therefore, a regulatory as-
se
ssment is not required. It has also been
de
termined that section 553(b) of the Ad-
mi
nistrative Procedure Act (5 U.S.C. chap-
te
r 5) does not apply to this proposed regu-
la
tion. It is hereby certified that the collec-
tions of infor
mation contained in this no-
tice of propos
ed rulemaking will not have
a significant
impact on a substantial num-
ber of small en
tities. Accordingly, a reg-
ulatory flexi
bility analysis under the Reg-
ulatory Flex
ibility Act (5 U.S.C. chapter
6) is not requ
ired. Section 54.9815–2719T
of the tempor
ary regulations, as amended,
requires bot
h group health insurance is-
suers and gr
oup health plans to establish
internal cl
aims and appeals and external
review proc
esses for adverse benefit de-
terminatio
ns. Those processes require the
plan and is
suer to disclose evidence relied
upon in mak
ing an adverse benefit deter-
mination,
to disclose any new rationale for
upholding
an adverse benefit determina-
tion as par
t of an internal appeal, to pro-
vide noti
ce of an adverse benefit determi-
nation an
d of a final internal adverse bene-
fit deter
mination, and to disclose the right
to an exte
rnal review. Under the tempo-
rary reg
ulations, if a health insurance is-
suer sat
isfies the obligations to have effec-
tive int
ernal claims and appeals and exter-
nal revi
ew processes (including these in-
formati
on collection requirements that are
an inhe
rent part of those processes), those
obliga
tions are satisfied not just for the is-
suer bu
t also for the group health plan. For
group h
ealth plans maintained by small en-
tities
, it is anticipated that the health insur-
ance i
ssuer will satisfy those obligations to
have e
ffective internal claims and appeals
and ex
ternal review processes (including
these
information collection requirements
that a
re an inherent part of those processes)
for b
oth the plan and the issuer in almost
all c
ases. For this reason, these informa-
tion
collection requirements will not im-
pose
a significant impact on a substantial
numb
er of small entities. Pursuant to sec-
tion
7805(f) of the Internal Revenue Code,
thi
s regulation has been submitted to the
Chi
ef Counsel for Advocacy of the Small
Bus
iness Administration for comment on
its
impact on small business.
Com
ments and Requests for a Public
Hea
ring
Bef
ore these proposed regulations are
ad
opted as final regulations, consideration
wi
ll be given to any written comments
(a
signed original and eight (8) copies)
or
electronic comments that are submitted
2011–32 I.R.B.137August 8, 2011

timely to the IRS. Comments are specifi-
cally requested on the clarity of the pro-
posed regulations and how they may be
made easier to understand. All comments
will be available for public inspection and
copying. A public hearing may be sched-
uled if requested in writing by a 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 theFederal Register.
Drafting Information
The principal author of these pro-
posed regulations is Karen Levin, Office
of the Division Counsel/Associate Chief
Counsel (Tax Exempt and Government
Entities), IRS. The proposed regulations,
as well as the temporary regulations,
have been developed in coordination with
personnel from the U.S. Department of
Labor and the U.S. Department of Health
and Human Services.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 54 is pro-
posedtobeamendedasfollows:
PART 54—PENSION EXCISE TAXES
Paragraph 1. The authority citation for
part 54 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Proposed section 54.9815–2719
as published on July 23, 2010, 75 FR
43330, is amended by:
1. Revising paragraphs (b)(2)(ii)(B),
(b)(2)(ii)(E)(1), (b)(2)(ii)(F), (c)(2)(xi),
(c)(3), (d)(1), (d)(2)(iv), and (e).
2.Redesignating (b)(2)(ii)(E)(2),
(b)(2)(ii)(E)(3), and (b)(2)(ii)(E)(4)as
(b)(2)(ii)(E)(3), (b)(2)(ii)(E)(4), and
(b)(2)(ii)(E)(5), respectively.
3.Adding new paragraph
(b)(2)(ii)(E)(2).
The revisions and addition read as fol-
lows:
§54.9815–2719 Internal claims and
appeals and external review processes.
*****
(b) * * *
(2) * * *
(ii)***(B)[Thetextofproposed
§54.9815–2719(b)(2)(ii)(B) is the same as
the text of §54.9815–2719T(b)(2)(ii)(B)
published elsewhere in this issue of the
Bulletin].
*****
(E)***(1)[Thetextofpro-
posed§54.9815–2719(b)(2)(ii)(E)(1)
is the same as the text of
§54.9815–2719T(b)(2)(ii)(E)(1)pub-
lished elsewhere in this issue of the
Bulletin].
(2)[Thetextofproposed
§54.9815–2719(b)(2)(ii)(E)(2)
is the same as the text of
§54.9815–2719T(b)(2)(ii)(E)(2)pub-
lished elsewhere in this issue of the
Bulletin].
*****
(F)[Thetextofproposed
§54.9815–2719(b)(2)(ii)(F) is the same as
the text of §54.9815–2719T(b)(2)(ii)(F)
published elsewhere in this issue of the
Bulletin].
*****
(c) * * *
(2)***(xi)[Thetextofproposed
§54.9815–2719(c)(2)(xi) is the same as
the text of §54.9815–2719T(c)(2)(xi)
published elsewhere in this issue of the
Bulletin].
*****
(3) [The text of proposed
§54.9815–2719(c)(3) is the same as the
text of §54.9815–2719T(c)(3) published
elsewhere in this issue of the Bulletin].
(d) * * * (1) [The text of proposed
§54.9815–2719(d)(1) is the same as the
text of §54.9815–2719T(d)(1) published
elsewhere in this issue of the Bulletin].
*****
(2)***(iv)[Thetextofproposed
§54.9815–2719(d)(2)(iv) is the same as
the text of §54.9815–2719T(d)(2)(iv)
published elsewhere in this issue of the
Bulletin].
*****
(e) [The text of proposed
§54.9815–2719(e) is the same as the
text of §54.9815–2719T(e) published
elsewhere in this issue of the Bulletin].
*****
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 22, 2011,
4:15 p.m., and published in the issue of the Federal Register
for June 24, 2011, 76 F.R. 37037)
Discontinuance of High-Low
Method for Substantiating
Travel Expenses
Announcement 2011–42
In Rev. Proc. 2010–39, 2010–42
I.R.B. 459, the Internal Revenue Service
requested public comment on the contin-
uing need for the high-low method for
substantiating, under § 274(d) of the In-
ternal Revenue Code, lodging, meal, and
incidental expenses incurred in traveling
away from home. The Service received no
comments.
Accordingly, the Service intends to dis-
continue authorizing the high-low substan-
tiation method. In 2011, the Service plans
to publish a revenue procedure providing
the general rules andprocedures for sub-
stantiating lodging, meal, and incidental
expenses incurred in traveling away from
home (omitting the high-low substantia-
tion method). The Service will publish
a revenue procedure in subsequent years
only when modifying the substantiation
rules and procedures and will publish the
special transportation rate in an annual no-
tice.
For additional information re-
garding this announcement, contact
KarlaM.MeolaoftheOfficeof
Associate Chief Counsel (Income Tax and
Accounting) at (202) 622–4930 (not a
toll-free call).
August 8, 20111382011–32 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2011–32 I.R.B.iAugust 8, 2011

Numerical Finding List
1
Bulletins 2011–27 through 2011–32
Announcements:
2011-37, 2011-27 I.R.B.37
2011-38, 2011-28 I.R.B.45
2011-39, 2011-28 I.R.B.46
2011-40, 2011-29 I.R.B.56
2011-41, 2011-28 I.R.B.47
2011-42, 2011-32 I.R.B.138
Notices:
2011-47, 2011-27 I.R.B.34
2011-50, 2011-27 I.R.B.35
2011-51, 2011-27 I.R.B.36
2011-52, 2011-30 I.R.B.60
2011-53, 2011-32 I.R.B.124
2011-54, 2011-29 I.R.B.53
2011-55, 2011-29 I.R.B.53
2011-56, 2011-29 I.R.B.54
2011-57, 2011-31 I.R.B.84
2011-58, 2011-31 I.R.B.85
2011-59, 2011-31 I.R.B.86
2011-60, 2011-31 I.R.B.90
2011-61, 2011-31 I.R.B.91
2011-62, 2011-32 I.R.B.126
2011-70, 2011-32 I.R.B.135
Proposed Regulations:
REG-137128-08, 2011-28 I.R.B.43
REG-125592-10, 2011-32 I.R.B.137
REG-101352-11, 2011-30 I.R.B.75
Revenue Procedures:
2011-38, 2011-30 I.R.B.66
2011-39, 2011-30 I.R.B.68
Revenue Rulings:
2011-14, 2011-27 I.R.B.31
2011-15, 2011-30 I.R.B.57
2011-16, 2011-32 I.R.B.93
Treasury Decisions:
9527, 2011-27 I.R.B.1
9528, 2011-28 I.R.B.38
9529, 2011-30 I.R.B.57
9530, 2011-31 I.R.B.77
9531, 2011-31 I.R.B.79
9532, 2011-32 I.R.B.95
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2011–1 through 2011–26 is in Internal Revenue Bulletin
2011–26, dated June 27, 2011.
August 8, 2011ii2011–32 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2011–27 through 2011–32
Notices:
2010-23
Modified and supplemented by
Notice 2011-54, 2011-29 I.R.B.53
2010-88
Modified by
Ann. 2011-40, 2011-29 I.R.B.56
Proposed Regulations:
REG-118761-09
Hearing scheduled by
Ann. 2011-38, 2011-28 I.R.B.45
Revenue Procedures:
2008-24
Modified and superseded by
Rev. Proc. 2011-38, 2011-30 I.R.B.66
2008-32
Superseded by
Rev. Proc. 2011-39, 2011-30 I.R.B.68
Revenue Rulings:
58-225
Obsoleted by
Rev. Rul. 2011-15, 2011-30 I.R.B.57
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2011–1 through 2011–26 is in Internal Revenue Bulletin 2011–26, dated June 27, 2011.
2011–32 I.R.B.iiiAugust 8, 2011

August 8, 20112011–32 I.R.B.

2011–32 I.R.B.August 8, 2011

August 8, 20112011–32 I.R.B.

INTERNAL REVENUE BULLETIN
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tendent of Documents when their subscriptions must be renewed.
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