Internal Revenue Bulletin: 2005-49

December 5, 2005


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. 2005-75

CPI adjustment for below-market loans for 2006. The amount that section 7872(g) of the Code permits a taxpayer to lend to a qualified continuing care facility without incurring imputed interest is published and adjusted for inflation for years 1987-2006. Rev. Rul. 2004-108 supplemented and superseded.

Rev. Rul. 2005-76

Section 1274A - inflation adjusted numbers for 2006. This ruling provides the dollar amounts, increased by the 2006 inflation adjustment, for section 1274A of the Code. Rev. Rul. 2004-107 supplemented and superseded.

Rev. Rul. 2005-77

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 the Code, tables set forth the rates for December 2005.

Notice 2005-83

This notice provides relief for certain health plans with non-calendar year renewal dates that otherwise qualify as high-deductible health plans (HDHPs), except that the plans provide state-mandated benefits without regard to a deductible or with a deductible below the minimum annual deductible specified in section 223(c)(2) of the Code. Notice 2004-43 amplified.

Notice 2005-86

This notice provides guidance on the eligibility to contribute to a Health Savings Account (HSA) during the cafeteria plan grace period described in Notice 2005-42, 2005-23 I.R.B. 1204. Rev. Rul. 2004-45 and Notice 2005-42 amplified.

Notice 2005-89

This notice provides that the Service will not treat a hotel, motel, or other establishment that otherwise satisfies the definition of “lodging facility” under section 856(d)(9) of the Code as other than a “lodging facility” if it is used to provide temporary housing to certain persons affected by Hurricane Katrina or Hurricane Rita, provided certain recordkeeping requirements are satisfied.

Rev. Proc. 2005-72

Insurance companies; loss reserves; discounting unpaid losses. The loss payment patterns and discount factors are set forth for the 2005 accident year. These factors will be used to compute discounted unpaid losses under section 846 of the Code.

Rev. Proc. 2005-73

Insurance companies; discounted estimated salvage recoverable. The salvage discount factors are set forth for the 2005 accident year. These factors will be used to compute discounted estimated salvage recoverable under section 832 of the Code.

Preface

The IRS Mission

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, 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 substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in 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.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions and Other Related Items, and Subpart B, Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).

Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Rev. Rul. 2005-77

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 the Code, tables set forth the rates for December 2005.

This revenue ruling provides various prescribed rates for federal income tax purposes for December 2005 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520. Finally, Table 6 contains the 2006 interest rate for sections 846 and 807.

REV. RUL. 2005-77 TABLE 1
Applicable Federal Rates (AFR) for December 2005
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
AFR 4.34% 4.29% 4.27% 4.25%
110% AFR 4.78% 4.72% 4.69% 4.67%
120% AFR 5.22% 5.15% 5.12% 5.10%
130% AFR 5.66% 5.58% 5.54% 5.52%
Mid-term
AFR 4.52% 4.47% 4.45% 4.43%
110% AFR 4.98% 4.92% 4.89% 4.87%
120% AFR 5.43% 5.36% 5.32% 5.30%
130% AFR 5.89% 5.81% 5.77% 5.74%
150% AFR 6.82% 6.71% 6.65% 6.62%
175% AFR 7.97% 7.82% 7.75% 7.70%
Long-term
AFR 4.79% 4.73% 4.70% 4.68%
110% AFR 5.27% 5.20% 5.17% 5.14%
120% AFR 5.76% 5.68% 5.64% 5.61%
130% AFR 6.24% 6.15% 6.10% 6.07%
REV. RUL. 2005-77 TABLE 2
Adjusted AFR for December 2005
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term adjusted AFR 2.98% 2.96% 2.95% 2.94%
Mid-term adjusted AFR 3.51% 3.48% 3.46% 3.46%
Long-term adjusted AFR 4.40% 4.35% 4.33% 4.31%
REV. RUL. 2005-77 TABLE 3
Rates Under Section 382 for December 2005
Adjusted federal long-term rate for the current month 4.40%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 4.40%
REV. RUL. 2005-77 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for December 2005
Appropriate percentage for the 70% present value low-income housing credit 8.08%
Appropriate percentage for the 30% present value low-income housing credit 3.46%
REV. RUL. 2005-77 TABLE 5
Rate Under Section 7520 for December 2005
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 interest 5.4%
REV. RUL. 2005-77 TABLE 6
Applicable rate of interest for 2006 for purposes of sections 846 and 807 3.98%

Rev. Rul. 2005-76

Section 1274A - inflation adjusted numbers for 2006. This ruling provides the dollar amounts, increased by the 2006 inflation adjustment, for section 1274A of the Code. Rev. Rul. 2004-107 supplemented and superseded.

This revenue ruling provides the dollar amounts, increased by the 2006 inflation adjustment, for § 1274A of the Internal Revenue Code.

BACKGROUND

In general, §§ 483 and 1274 determine the principal amount of a debt instrument given in consideration for the sale or exchange of nonpublicly traded property. In addition, any interest on a debt instrument subject to § 1274 is taken into account under the original issue discount provisions of the Code. Section 1274A, however, modifies the rules under §§ 483 and 1274 for certain types of debt instruments.

In the case of a “qualified debt instrument,” the discount rate used for purposes of §§ 483 and 1274 may not exceed 9 percent, compounded semiannually. Section 1274A(b) defines a qualified debt instrument as any debt instrument given in consideration for the sale or exchange of property (other than new § 38 property within the meaning of § 48(b), as in effect on the day before the date of enactment of the Revenue Reconciliation Act of 1990) if the stated principal amount of the instrument does not exceed the amount specified in § 1274A(b). For debt instruments arising out of sales or exchanges before January 1, 1990, this amount is $2,800,000.

In the case of a “cash method debt instrument,” as defined in § 1274A(c), the borrower and lender may elect to use the cash receipts and disbursements method of accounting. In particular, for any cash method debt instrument, § 1274 does not apply, and interest on the instrument is accounted for by both the borrower and the lender under the cash method of accounting. A cash method debt instrument is a qualified debt instrument that meets the following additional requirements: (A) In the case of instruments arising out of sales or exchanges before January 1, 1990, the stated principal amount does not exceed $2,000,000; (B) the lender does not use an accrual method of accounting and is not a dealer with respect to the property sold or exchanged; (C) § 1274 would have applied to the debt instrument but for an election under § 1274A(c); and (D) an election under § 1274A(c) is jointly made with respect to the debt instrument by the borrower and lender. Section 1.1274A-1(c)(1) of the Income Tax Regulations provides rules concerning the time for, and manner of, making this election.

Section 1274A(d)(2) provides that, for any debt instrument arising out of a sale or exchange during any calendar year after 1989, the dollar amounts stated in § 1274A(b) and § 1274A(c)(2)(A) are increased by the inflation adjustment for the calendar year. Any increase due to the inflation adjustment is rounded to the nearest multiple of $100 (or, if the increase is a multiple of $50 and not of $100, the increase is increased to the nearest multiple of $100). The inflation adjustment for any calendar year is the percentage (if any) by which the CPI for the preceding calendar year exceeds the CPI for calendar year 1988. Section 1274A(d)(2)(B) defines the CPI for any calendar year as the average of the Consumer Price Index as of the close of the 12-month period ending on September 30 of that calendar year.

INFLATION-ADJUSTED AMOUNTS

For debt instruments arising out of sales or exchanges after December 31, 1989, the inflation-adjusted amounts under § 1274A are shown in Table 1.

Rev. Rul. 2005-76 Table 1
Inflation-Adjusted Amounts Under § 1274A
Calendar Year of Sale or Exchange 1274A(b) Amount (qualified debt instrument) 1274A(c)(2)(A) Amount (cash method debt instrument)
1990 $2,933,200 $2,095,100
1991 $3,079,600 $2,199,700
1992 $3,234,900 $2,310,600
1993 $3,332,400 $2,380,300
1994 $3,433,500 $2,452,500
1995 $3,523,600 $2,516,900
1996 $3,622,500 $2,587,500
1997 $3,723,800 $2,659,900
1998 $3,823,100 $2,730,800
1999 $3,885,500 $2,775,400
2000 $3,960,100 $2,828,700
2001 $4,085,900 $2,918,500
2002 $4,217,500 $3,012,500
2003 $4,280,800 $3,057,700
2004 $4,381,300 $3,129,500
2005 $4,483,000 $3,202,100
2006 $4,630,300 $3,307,400
Note: These inflation adjustments were computed using the All-Urban, Consumer Price Index, 1982-1984 base, published by the Bureau of Labor Statistics.

EFFECT ON OTHER DOCUMENTS

Rev. Rul. 2004-107, 2004-2 C.B. 852, is supplemented and superseded.

DRAFTING INFORMATION

The author of this revenue ruling is David B. Silber of the Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, please contact Mr. Silber at (202) 622-3930 (not a toll-free call).

Rev. Rul. 2005-75

CPI adjustment for below-market loans for 2006. The amount that section 7872(g) of the Code permits a taxpayer to lend to a qualified continuing care facility without incurring imputed interest is published and adjusted for inflation for years 1987-2006. Rev. Rul. 2004-108 supplemented and superseded.

This revenue ruling publishes the amount that § 7872(g) of the Internal Revenue Code permits a taxpayer to lend to a qualifying continuing care facility without incurring imputed interest. The amount is adjusted for inflation for the years after 1986.

Section 7872 generally treats loans bearing a below-market interest rate as if they bore interest at the market rate.

Section 7872(g)(1) provides that, in general, § 7872 does not apply for any calendar year to any below-market loan made by a lender to a qualified continuing care facility pursuant to a continuing care contract if the lender (or the lender’s spouse) attains age 65 before the close of the year.

Section 7872(g)(2) provides that, in the case of loans made after October 11, 1985, and before 1987, § 7872(g)(1) applies only to the extent that the aggregate outstanding amount of any loan to which § 7872(g) applies (determined without regard to § 7872(g)(2)), when added to the aggregate outstanding amount of all other previous loans between the lender (or the lender’s spouse) and any qualified continuing care facility to which § 7872(g)(1) applies, does not exceed $90,000.

Section 7872(g)(5) provides that, for loans made during any calendar year after 1986 to which § 7872(g)(1) applies, the $90,000 limit specified in § 7872(g)(2) is increased by an inflation adjustment. The inflation adjustment for any calendar year is the percentage (if any) by which the Consumer Price Index (CPI) for the preceding calendar year exceeds the CPI for calendar year 1985. Section 7872(g)(5) states that the CPI for any calendar year is the average of the CPI as of the close of the 12-month period ending on September 30 of that calendar year.

Table 1 sets forth the amount specified in § 7872(g)(2) of the Code. The amount is increased by the inflation adjustment for the years 1987-2006.

Rev. Rul. 2005-75 TABLE 1
Limit under § 7872(g)(2)
Year Amount
Before 1987 $90,000
1987 $92,200
1988 $94,800
1989 $98,800
1990 $103,500
1991 $108,600
1992 $114,100
1993 $117,500
1994 $121,100
1995 $124,300
1996 $127,800
1997 $131,300
1998 $134,800
1999 $137,000
2000 $139,700
2001 $144,100
2002 $148,800
2003 $151,000
2004 $154,500
2005 $158,100
2006 $163,300
Note: These inflation adjustments were computed using the All-Urban, Consumer Price Index 1982-1984 base, published by the Bureau of Labor Statistics.

EFFECT ON OTHER DOCUMENTS

Rev. Rul. 2004-108, 2004-2 C.B. 853, is supplemented and superseded.

DRAFTING INFORMATION

The author of this revenue ruling is David B. Silber of the Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, please contact Mr. Silber at (202) 622-3930 (not a toll-free call).

Part III. Administrative, Procedural, and Miscellaneous

Notice 2005-83

Health Savings Accounts - Guidance on State Mandates

PURPOSE

This notice provides relief for certain health plans with non-calendar year renewal dates that otherwise qualify as high-deductible health plans (HDHPs), except that the plans provide state-mandated benefits without regard to a deductible or with a deductible below the minimum annual deductible specified in § 223(c)(2) of the Internal Revenue Code.

BACKGROUND AND APPLICATION

Some states require that health plans provide certain benefits without regard to a deductible or with a deductible below the minimum annual deductible specified in § 223(c)(2) (e.g., first-dollar coverage or coverage with a low deductible). These health plans are not HDHPs under § 223(c)(2) and individuals covered under these health plans are generally not eligible to contribute to Health Savings Accounts (HSAs). Notice 2004-43, 2004-2 C.B. 10, provides transition relief that treats health plans as meeting the requirement of § 223(c)(2) when the sole reason the plans are not HDHPs is because of certain state-mandated benefits. For months before January 1, 2006, otherwise eligible individuals covered under these health plans will be treated as eligible individuals for purposes of § 223(c)(1) and may contribute to an HSA. The transition period provided in Notice 2004-43 covers months before January 1, 2006, for state-mandated requirements in effect on January 1, 2004.

Generally, a health plan may not reduce existing benefits before the plan’s renewal date. Thus, even though a state may amend its laws before January 1, 2006, to authorize HDHPs that comply with § 223(c)(2), non-calendar year plans may still fail to qualify as HDHPs after January 1, 2006, because existing benefits cannot be changed until the next renewal date. For example, a state amends its laws to authorize HDHPs, effective November 1, 2005. A health plan with a renewal date of July 1, 2005, is required to retain the state-mandated low-deductible coverage for the plan year July 1, 2005, through June 30, 2006, because the benefits can only be modified on the renewal date. As a result, although the state has amended its statute, the health plan will fail to be an HDHP for months after January 1, 2006 (i.e., for the months of January through June, 2006).

Therefore, additional transitional relief is appropriate for non-calendar year health plans. Accordingly, the transition relief in Notice 2004-43 is amplified to provide that for any coverage period of twelve months or less beginning before January 1, 2006, a health plan that otherwise qualifies as an HDHP as defined in § 223(c)(2), except that it complied on its most recent renewal date before January 1, 2006, with state-mandated requirements (in effect on January 1, 2004) to provide certain benefits without regard to a deductible or with a deductible below the minimum annual deductible specified in § 223(c)(2), will be treated as an HDHP. In no event will the additional transitional relief provided in this notice extend beyond the earlier of the health plan’s next renewal date or December 31, 2006.

EFFECT ON OTHER DOCUMENTS

Notice 2004-43, 2004-2 C.B. 10, is amplified.

DRAFTING INFORMATION

The principal author of this notice is Elizabeth Purcell of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this notice, contact Ms. Purcell at (202) 622-6080 (not a toll-free call).

Notice 2005-86

Health Savings Account Eligibility During A Cafeteria Plan Grace Period

PURPOSE

This notice provides guidance on eligibility to contribute to a Health Savings Account (HSA) during a cafeteria plan grace period as described in Notice 2005-42, 2005-23 I.R.B. 1204. As discussed below, an individual participating in a health flexible spending arrangement (health FSA) who is covered by the grace period is generally not eligible to contribute to an HSA until the first day of the first month following the end of the grace period, even if the participant’s health FSA has no unused benefits at the end of the prior cafeteria plan year. This notice, however, provides guidance on how an employer may amend the cafeteria plan document to enable a health FSA participant to become HSA eligible during the grace period.

BACKGROUND

Cafeteria Plans

Section 125(a) states that, in general, no amount is included in the gross income of a participant in a cafeteria plan solely because, under the plan, the participant may choose among the benefits of the plan. Section 125(d) defines a cafeteria plan as a written plan under which all participants are employees, and the participants may choose among two or more benefits consisting of cash and qualified benefits. “Qualified benefits” mean any benefit which, with the application of § 125(a), is not includible in the gross income of the employee by reason of an express provision of Chapter 1 of the Internal Revenue Code, including employer-provided accident and health coverage under §§ 106 and 105(b). A high deductible health plan (HDHP) as defined in § 223(c)(2)(A) can be employer-provided accident and health coverage. A health FSA, which pays or reimburses certain § 213(d) medical expenses (other than health insurance or long-term care services or insurance), is also employer-provided accident and health coverage. The term “qualified medical expenses” as used in this notice, means expenses which may be paid or reimbursed under a health FSA.

Cafeteria Plan Grace Period

Notice 2005-42, 2005-23 I.R.B. 1204, modifies the application of the rule prohibiting deferred compensation under a cafeteria plan (i.e., the “use-it-or-lose-it” rule). The notice permits a cafeteria plan to be amended, at the employer’s option, to provide a grace period immediately following the end of each plan year, during which an individual who incurs expenses for a qualified benefit during the grace period, may be paid or reimbursed for those expenses from the unused benefits or contributions relating to that benefit. A plan providing a grace period is required to provide the grace period to all participants who are covered on the last day of the plan year (including participants whose coverage is extended to the last day of the plan year through COBRA continuation coverage). The grace period remains in effect for the entire period even though the participant may terminate employment on or before the last day of the grace period. But an employer may limit the availability of the grace period to only certain cafeteria plan benefits and not others. For example, a cafeteria plan offering both a health FSA and a dependent care FSA may limit the grace period to the health FSA. The grace period must not extend beyond the fifteenth day of the third calendar month after the end of the immediately preceding plan year to which it relates, but may be adopted for a shorter period.

Interaction Between HSAs and Health FSAs

Section 223(a) allows a deduction for contributions to an HSA for an “eligible individual” for any month during the taxable year. An “eligible individual” is defined in § 223(c)(1)(A) and means, in general, with respect to any month, any individual who is covered under an HDHP on the first day of such month and is not, while covered under an HDHP, “covered under any health plan which is not a high-deductible health plan, and which provides coverage for any benefit which is covered under the high-deductible health plan.”

In addition to coverage under an HDHP, § 223(c)(1)(B) provides that an eligible individual may have disregarded coverage, including “permitted insurance” and “permitted coverage.” Section 223(c)(2)(C) also provides a safe harbor for the absence of a preventive care deductible. See Notice 2004-23, 2004-1 C.B. 725. Therefore, under § 223, an individual who is eligible to contribute to an HSA must be covered by a health plan that is an HDHP, and may also have permitted insurance, permitted coverage and preventive care, but no other coverage. A health FSA that reimburses all qualified § 213(d) medical expenses without other restrictions is a health plan that constitutes other coverage. Consequently, an individual who is covered by a health FSA that pays or reimburses all qualified medical expenses is not an eligible individual for purposes of making contributions to an HSA. This result is the same even if the individual is covered by a health FSA sponsored by a spouse’s employer.

However, as described in Rev. Rul. 2004-45, 2004-1 C.B. 971, an individual who is otherwise eligible for an HSA may be covered under specific types of health FSAs and remain eligible to contribute to an HSA. One arrangement is a limited-purpose health FSA, which pays or reimburses expenses only for preventive care and “permitted coverage” (e.g., dental care and vision care). Another HSA-compatible arrangement is a post-deductible health FSA, which pays or reimburses preventive care and for other qualified medical expenses only if incurred after the minimum annual deductible for the HDHP under § 223(c)(2)(A) is satisfied. This means that qualified medical expenses incurred before the HDHP deductible is satisfied may not be reimbursed by a post-deductible FSA even after the HDHP deductible has been satisfied. To summarize, an otherwise HSA eligible individual will remain eligible if covered under a limited-purpose health FSA or a post-deductible FSA, or a combination of both.

OPTIONS AVAILABLE TO AN EMPLOYER

An employer may adopt either of the following two options, which will affect participants’ HSA eligibility during the cafeteria plan grace period:

(1) General Purpose Health FSA During Grace Period

Employer amends the cafeteria plan document to provide a grace period but takes no other action with respect to the general purpose health FSA. Because a health FSA that pays or reimburses all qualified medical expenses constitutes impermissible “other coverage” for HSA eligibility purposes, an individual who participated in the health FSA (or a spouse whose medical expenses are eligible for reimbursement under the health FSA) for the immediately preceding cafeteria plan year and who is covered by the grace period, is not eligible to contribute to an HSA until the first day of the first month following the end of the grace period. For example, if the health FSA grace period ends March 15, 2006, an individual who did not elect coverage by a general health FSA or other disqualifying coverage for 2006 is HSA eligible on April 1, 2006, and may contribute 9/12ths of the 2006 HSA contribution limit. The result is the same even if a participant’s health FSA has no unused contributions remaining at the end of the immediately preceding cafeteria plan year.

(2) Mandatory Conversion from Health FSA to HSA-compatible Health FSA for All Participants

Employer amends the cafeteria plan document to provide for both a grace period and a mandatory conversion of the general purpose health FSA to a limited-purpose or post-deductible FSA (or combined limited-purpose and post-deductible health FSA) during the grace period. The amendments do not permit an individual participant to elect between an HSA-compatible FSA or an FSA that is not HSA-compatible. The amendments apply to the entire grace period and to all participants in the health FSA who are covered by the grace period. The amendments must satisfy all other requirements of Notice 2005-42. Coverage of these participants by the HSA-compatible FSA during the grace period does not disqualify participants who are otherwise eligible individuals from contributing to an HSA during the grace period.

TRANSITION RELIEF

For cafeteria plan years ending before June 5, 2006, an individual participating in a general purpose health FSA that provides coverage during a grace period will be eligible to contribute to an HSA during the grace period if the following requirements are met: (1) If not for the coverage under a general purpose health FSA described in clause (2), the individual would be an “eligible individual” as defined in § 223(c)(1)(A) during the grace period (in general, is covered under an HDHP and is not, while covered under an HDHP, covered under any impermissible other health coverage); and (2) Either (A) the individual’s (and the individual’s spouse’s) general purpose health FSA has no unused contributions or benefits remaining at the end of the immediately preceding cafeteria plan year, or (B) in the case of an individual who is not covered during the grace period under a general purpose health FSA maintained by the employer of the individual’s spouse, the individual’s employer amends its cafeteria plan document to provide that the grace period does not provide coverage to an individual who elects HDHP coverage.

EFFECT ON OTHER DOCUMENTS

Notice 2005-42 and Rev. Rul. 2004-45 are amplified.

DRAFTING INFORMATION

The principal author of this notice is Shoshanna Tanner of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this notice, contact Ms. Tanner at (202) 622-6080 (not a toll-free call).

Notice 2005-89

Temporary Relief for Certain REITs and Taxable REIT Subsidiaries that Provide Accommodations to Persons Affected by Hurricanes Katrina and Rita

The Internal Revenue Service will not treat a hotel, motel, or other establishment that otherwise satisfies the definition of a “lodging facility” under § 856(d)(9) of the Internal Revenue Code as other than a “lodging facility” if it is used to provide temporary housing to certain persons affected by Hurricane Katrina or Hurricane Rita, provided the recordkeeping requirements of this notice are satisfied.

BACKGROUND

On August 28, 2005, and August 29, 2005, the President issued major disaster declarations for the states of Florida, Alabama, Louisiana, and Mississippi as a result of Hurricane Katrina. On September 24, 2005, the President declared major disasters for the states of Louisiana and Texas as a result of Hurricane Rita. These declarations were made pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206.

Subsequently, the Federal Emergency Management Agency (FEMA) designated certain counties and parishes as being eligible for individual assistance (or individual and public assistance). For purposes of this notice, the term “covered disaster area” means the counties and parishes designated by FEMA as being eligible for individual assistance (or individual and public assistance) as a result of Hurricane Katrina and/or Hurricane Rita. For a list of counties and parishes designated by FEMA as being eligible for individual assistance (or individual and public assistance) as a result of Hurricane Katrina, see Notice 2005-73, 2005-42 I.R.B. 723. For a list of counties and parishes designated by FEMA as being eligible for individual assistance (or individual and public assistance) as a result of Hurricane Rita, see IR-2005-110 (September 26, 2005).

Certain real estate investment trusts (REITs) that own lodging facilities have expressed concern that extended stays at those facilities by persons affected by these disasters may cause the REITs to fail to satisfy the income tests under §§ 856(c)(2) and (c)(3). Although rents from real property generally are treated as qualifying income for purposes of these tests, amounts received or accrued from a corporation in which the REIT owns stock are subject to special rules. Under one of these rules, if a REIT leases an interest in real property that is a qualified lodging facility to a taxable REIT subsidiary (TRS) of that REIT, then the lease payments may qualify as rents from real property if the property is operated on behalf of the TRS by a person who is an eligible independent contractor. Section 856(d)(9)(D)(ii) provides that a “lodging facility” is a hotel, motel, or other establishment more than one-half of the dwelling units in which are used on a transient basis. Section 856 and the regulations thereunder do not define the term “transient basis”.

TRANSIENT BASIS REQUIREMENT

For purposes of § 856(d)(9)(D)(ii), the Service will treat a dwelling unit within a lodging facility as being used on a transient basis during any period in which the unit is used to provide shelter to (a) an individual whose principal residence for purposes of § 1033(h)(4) on August 28, 2005, was located in a covered disaster area and who has been displaced because the residence has been destroyed or damaged as a result of Hurricane Katrina or Hurricane Rita (a displaced resident); (b) employees of business entities whose principal place of business is located in a covered disaster area who have been relocated to other areas where the business entities have job openings (a displaced employee); or (c) a worker assisting in relief activities in the covered disaster area, whether or not the worker is affiliated with a recognized government or philanthropic organization (a relief worker).

A TRS that is the lessee of a hotel, motel, or other establishment and that seeks to rely on this notice with respect to the provision of shelter to a displaced resident, displaced employee, or relief worker for any period ending on or after November 29, 2005, must keep records indicating the dates on which shelter was provided and the name and address of the displaced resident, displaced employee, or relief worker. In addition, (a) with respect to a displaced employee, the TRS must keep records indicating the individual’s employer, and (b) with respect to any relief worker, the TRS must keep records indicating the name of the individual’s employer or sponsoring organization and the nature of the relief activities undertaken during the individual’s stay.

This notice will be effective for six (6) months from its effective date.

EFFECTIVE DATE

This notice is effective August 28, 2005 (the date of the President’s first major disaster declaration resulting from Hurricane Katrina).

PAPERWORK REDUCTION ACT

The collections of information in the notice have been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1977.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

The collections of information in the notice are in the section of this notice entitled “Transient Basis Requirement”. The collections of information are required for compliance with § 856(d)(9)(D). The collections of information are required to obtain a benefit. The likely respondents are corporations.

The estimated total annual reporting burden is 500 hours.

The estimated annual burden per respondent varies from 25-75 hours, depending on the circumstances, with an average of 50 hours. The estimated number of respondents is 10.

Books or records relating to a collection of information must be retained as long as their contents may become material to the administration of the internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

DRAFTING INFORMATION

The principal author of this notice is Jonathan D. Silver of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this notice, contact Mr. Silver at (202) 622-3930 (not a toll-free call).

Rev. Proc. 2005-72

SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2005 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2003-17, 2003-1 C.B. 427, for background concerning the loss payment patterns and application of the discount factors.

SEC. 2. SCOPE

This revenue procedure applies to any taxpayer that is required to discount its unpaid losses under § 846 for a line of business using discount factors published by the Secretary.

SEC. 3. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2005. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2005, which is 4.44 percent, and by assuming all loss payments occur in the middle of the calendar year.

.02 If the groupings of individual lines of business on the annual statement change, taxpayers must discount the unpaid losses on the affected lines of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2000 annual statement. See Rev. Proc. 2003-17, 2003-1 C.B. 427, section 2, for additional background on discounting under section 846 and the use of the Secretary’s tables.

.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.

.04 Section 2.03(4) of Rev. Proc. 2003-17 requested comments as to whether a methodology should be adopted to smooth the raw payment data and thus produce a more stable pattern of discount factors. This issue will be addressed in the new determination year, which is 2007. Accordingly, taxpayers may still submit comments that should include a reference to Rev. Proc. 2005-72 on this issue to the following address:

CC:PA:LPD:PR (Rev. Proc. 2005-72), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Comments may be hand delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD (Rev. Proc. 2005-72), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Alternatively, e-mail comments to Notice.Comments@irscounsel.treas.gov. All comments will be available for public inspection and copying.

.05 Tables.

Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2005
(Interest rate: 4.44 percent)
Accident and Health (Other Than Disability Income or Credit Disability Insurance)
Taxpayers that do not use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the 2005 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2005 taxable year.
Auto Physical Damage
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 89.6468 89.6468 10.3532 10.1113 97.6638
2006 99.6845 10.0377 0.3155 0.3022 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 0.1578 0.1578 0.1544 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
Commercial Auto/Truck Liability/Medical
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 28.8244 28.8244 71.1756 65.3965 91.8806
2006 54.9871 26.1626 45.0129 41.5630 92.3357
2007 72.8039 17.8168 27.1961 25.2004 92.6616
2008 85.0572 12.2533 14.9428 13.7969 92.3312
2009 91.6276 6.5704 8.3724 7.6948 91.9064
2010 94.9514 3.3239 5.0486 4.6396 91.8992
2011 97.0453 2.0938 2.9547 2.7058 91.5744
2012 98.1574 1.1121 1.8426 1.6894 91.6838
2013 98.7370 0.5796 1.2630 1.1721 92.7985
2014 99.1070 0.3700 0.8930 0.8460 94.7324
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.3700 0.5230 0.5054 96.6342
2016 and later years 0.3700 0.1530 0.1497 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 96.8695 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Composite
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 40.9985 40.9985 59.0015 53.2420 90.2384
2006 65.8439 24.8454 34.1561 30.2149 88.4613
2007 77.5023 11.6583 22.4977 19.6421 87.3071
2008 84.6221 7.1198 15.3779 13.2380 86.0849
2009 90.2455 5.6234 9.7545 8.0789 82.8227
2010 92.2780 2.0325 7.7220 6.3605 82.3688
2011 94.3974 2.1195 5.6026 4.4769 79.9089
2012 95.2526 0.8552 4.7474 3.8017 80.0811
2013 96.2792 1.0266 3.7208 2.9214 78.5162
2014 96.4323 0.1531 3.5677 2.8946 81.1355
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.1531 3.4145 2.8667 83.9550
2016 0.1531 3.2614 2.8374 87.0012
2017 0.1531 3.1083 2.8069 90.3057
2018 0.1531 2.9551 2.7751 93.9070
2019 and later years 0.1531 2.8020 2.7418 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 88.8907 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Fidelity/Surety
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 38.3328 38.3328 61.6672 57.8107 93.7463
2006 58.8485 20.5156 41.1515 39.4114 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 20.5758 20.5758 20.1336 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
Financial Guaranty/Mortgage Guaranty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 4.0723 4.0723 95.9277 90.2226 94.0527
2006 40.7639 36.6916 59.2361 56.7312 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 29.6180 29.6180 28.9816 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
International (Composite)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 40.9985 40.9985 59.0015 53.2420 90.2384
2006 65.8439 24.8454 34.1561 30.2149 88.4613
2007 77.5023 11.6583 22.4977 19.6421 87.3071
2008 84.6221 7.1198 15.3779 13.2380 86.0849
2009 90.2455 5.6234 9.7545 8.0789 82.8227
2010 92.2780 2.0325 7.7220 6.3605 82.3688
2011 94.3974 2.1195 5.6026 4.4769 79.9089
2012 95.2526 0.8552 4.7474 3.8017 80.0811
2013 96.2792 1.0266 3.7208 2.9214 78.5162
2014 96.4323 0.1531 3.5677 2.8946 81.1355
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.1531 3.4145 2.8667 83.9550
2016 0.1531 3.2614 2.8374 87.0012
2017 0.1531 3.1083 2.8069 90.3057
2018 0.1531 2.9551 2.7751 93.9070
2019 and later 0.1531 2.8020 2.7418 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 88.8907 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Medical Malpractice — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 7.3447 7.3447 92.6553 82.5239 89.0655
2006 29.0191 21.6744 70.9809 64.0376 90.2180
2007 53.3108 24.2917 46.6892 42.0557 90.0759
2008 69.1517 15.8409 30.8483 27.7343 89.9053
2009 82.0981 12.9464 17.9019 15.7350 87.8955
2010 86.3995 4.3014 13.6005 12.0377 88.5095
2011 89.7111 3.3116 10.2889 9.1879 89.2991
2012 92.4688 2.7577 7.5312 6.7776 89.9934
2013 94.5163 2.0475 5.4837 4.9860 90.9248
2014 95.7635 1.2471 4.2365 3.9329 92.8323
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 1.2471 2.9894 2.8330 94.7672
2016 1.2471 1.7422 1.6842 96.6692
2017 and later years 1.2471 0.4951 0.4845 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 95.5661 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Medical Malpractice — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 0.8316 0.8316 99.1684 83.1082 83.8051
2006 7.4573 6.6257 92.5427 80.0270 86.4758
2007 23.5575 16.1002 76.4425 67.1265 87.8130
2008 41.0062 17.4487 58.9938 52.2751 88.6111
2009 55.5832 14.5770 44.4168 39.6990 89.3782
2010 68.9413 13.3581 31.0587 27.8102 89.5407
2011 78.2095 9.2682 21.7905 19.5732 89.8245
2012 82.8727 4.6632 17.1273 15.6766 91.5303
2013 86.3178 3.4451 13.6822 12.8519 93.9319
2014 91.0834 4.7656 8.9166 8.5523 95.9147
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 and later years 4.7656 4.1510 4.0618 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Miscellaneous Casualty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 79.7790 79.7790 20.2210 19.4754 96.3125
2006 94.9417 15.1627 5.0583 4.8444 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 2.5292 2.5292 2.4748 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 59.7445 59.7445 40.2555 37.1445 92.2719
2006 81.0347 21.2902 18.9653 17.0360 89.8274
2007 87.3325 6.2978 12.6675 11.3563 89.6494
2008 91.0659 3.7334 8.9341 8.0452 90.0503
2009 95.1781 4.1122 4.8219 4.1999 87.1002
2010 95.7605 0.5824 4.2395 3.7911 89.4249
2011 97.0539 1.2933 2.9461 2.6377 89.5320
2012 97.6441 0.5903 2.3559 2.1516 91.3303
2013 98.7037 1.0596 1.2963 1.1643 89.8184
2014 98.6217 -0.0821 1.3783 1.2999 94.3059
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.5226 0.8558 0.8235 96.2318
2016 and later years 0.5226 0.3332 0.3260 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 96.6358 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Other (Including Credit)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 69.1729 69.1729 30.8271 29.6244 96.0986
2006 91.2168 22.0439 8.7832 8.4118 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 4.3916 4.3916 4.2973 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
Other Liability — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 14.9618 14.9618 85.0382 74.3656 87.4496
2006 36.2113 21.2494 63.7887 55.9513 87.7135
2007 54.2876 18.0763 45.7124 39.9623 87.4211
2008 64.2163 9.9288 35.7837 31.5899 88.2801
2009 73.2732 9.0569 26.7268 23.7367 88.8123
2010 80.5748 7.3016 19.4252 17.3286 89.2072
2011 87.6200 7.0452 12.3800 10.8982 88.0304
2012 89.9155 2.2955 10.0845 9.0361 89.6042
2013 93.3946 3.4791 6.6054 5.8818 89.0459
2014 94.6170 1.2223 5.3830 4.8938 90.9113
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 1.2223 4.1607 3.8619 92.8183
2016 1.2223 2.9383 2.7841 94.7528
2017 1.2223 1.7160 1.6586 96.6546
2018 and later years 1.2223 0.4936 0.4830 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 94.1292 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Other Liability — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 19.1133 19.1133 80.8867 68.6311 84.8484
2006 36.4434 17.3301 63.5566 53.9677 84.9128
2007 52.1648 15.7215 47.8352 40.2972 84.2417
2008 63.2383 11.0734 36.7617 30.7698 83.7006
2009 72.0780 8.8397 27.9220 23.1021 82.7380
2010 75.9021 3.8241 24.0979 20.2198 83.9068
2011 82.9305 7.0284 17.0695 13.9348 81.6357
2012 85.1441 2.2136 14.8559 12.2913 82.7368
2013 89.3006 4.1565 10.6994 8.5893 80.2780
2014 89.9898 0.6892 10.0102 8.2663 82.5786
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.6892 9.3210 7.9290 85.0657
2016 0.6892 8.6318 7.5767 87.7764
2017 0.6892 7.9426 7.2087 90.7606
2018 0.6892 7.2533 6.8244 94.0867
2019 and later years 0.6892 6.5641 6.4231 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 88.8152 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Private Passenger Auto Liability/Medical
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 43.1926 43.1926 56.8074 53.1786 93.6121
2006 72.2008 29.0082 27.7992 25.8946 93.1486
2007 84.5632 12.3625 15.4368 14.4104 93.3510
2008 91.9316 7.3684 8.0684 7.5200 93.2034
2009 95.8729 3.9413 4.1271 3.8261 92.7060
2010 97.7804 1.9075 2.2196 2.0465 92.2040
2011 98.7957 1.0153 1.2043 1.0999 91.3257
2012 99.2491 0.4535 0.7509 0.6853 91.2646
2013 99.5195 0.2703 0.4805 0.4394 91.4469
2014 99.6353 0.1159 0.3647 0.3405 93.3821
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.1159 0.2488 0.2373 95.3548
2016 0.1159 0.1330 0.1294 97.3165
2017 and later years 0.1159 0.0171 0.0167 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 96.0257 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Products Liability — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 6.5804 6.5804 93.4196 79.0050 84.5700
2006 26.7183 20.1379 73.2817 61.9327 84.5131
2007 43.1834 16.4652 56.8166 47.8558 84.2286
2008 43.9209 0.7375 56.0791 49.2269 87.7812
2009 54.3806 10.4597 45.6194 40.7232 89.2673
2010 78.3630 23.9824 21.6370 18.0223 83.2938
2011 82.8643 4.5013 17.1357 14.2223 82.9982
2012 68.2184 -14.6459 31.7816 29.8213 93.8320
2013 79.1582 10.9399 20.8418 19.9653 95.7947
2014 89.6963 10.5381 10.3037 10.0823 97.8513
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.1286 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Products Liability — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 9.4198 9.4198 90.5802 75.2456 83.0707
2006 20.5845 11.1647 79.4155 67.1766 84.5888
2007 36.7807 16.1962 63.2193 53.6074 84.7959
2008 55.5974 18.8167 44.4026 36.7576 82.7827
2009 66.6238 11.0263 33.3762 27.1212 81.2591
2010 77.2636 10.6399 22.7364 17.4519 76.7576
2011 79.1888 1.9251 20.8112 16.2593 78.1278
2012 83.6816 4.4928 16.3184 12.3898 75.9253
2013 85.5507 1.8691 14.4493 11.0297 76.3341
2014 85.7291 0.1784 14.2709 11.3371 79.4424
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.1784 14.0925 11.6582 82.7263
2016 0.1784 13.9141 11.9935 86.1968
2017 0.1784 13.7357 12.3437 89.8658
2018 0.1784 13.5573 12.7094 93.7461
2019 and later years 0.1784 13.3789 13.0914 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 86.9679 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Reinsurance A (Nonproportional Assumed Property)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 25.0571 25.0571 74.9429 68.9700 92.0300
2006 52.0402 26.9831 47.9598 44.4567 92.6956
2007 82.4709 30.4307 17.5291 15.3316 87.4636
2008 85.6387 3.1678 14.3613 12.7749 88.9539
2009 92.7228 7.0840 7.2772 6.1025 83.8577
2010 91.8604 -0.8624 8.1396 7.2548 89.1294
2011 96.5016 4.6412 3.4984 2.8338 81.0020
2012 96.1872 -0.3143 3.8128 3.2809 86.0493
2013 97.6206 1.4333 2.3794 1.9617 82.4450
2014 97.8419 0.2214 2.1581 1.8226 84.4552
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 0.2214 1.9367 1.6773 86.6060
2016 0.2214 1.7154 1.5256 88.9357
2017 0.2214 1.4940 1.3671 91.5049
2018 0.2214 1.2727 1.2016 94.4149
2019 and later years 0.2214 1.0513 1.0287 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 89.0524 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Reinsurance B (Nonproportional Assumed Liability)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 8.9223 8.9223 91.0777 75.0085 82.3566
2006 27.3618 18.4395 72.6382 59.4945 81.9052
2007 44.5758 17.2140 55.4242 44.5440 80.3692
2008 53.8781 9.3023 46.1219 37.0152 80.2551
2009 60.8896 7.0115 39.1104 31.4932 80.5238
2010 69.7327 8.8430 30.2673 23.8542 78.8118
2011 76.6292 6.8965 23.3708 17.8654 76.4433
2012 79.4030 2.7738 20.5970 15.8239 76.8263
2013 83.8936 4.4906 16.1064 11.9373 74.1151
2014 80.1707 -3.7229 19.8293 16.2719 82.0601
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 1.1805 18.6487 15.7879 84.6595
2016 1.1805 17.4682 15.2825 87.4873
2017 1.1805 16.2877 14.7546 90.5872
2018 1.1805 15.1072 14.2032 94.0165
2019 and later years 1.1805 13.9266 13.6274 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 87.9189 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Reinsurance C (Nonproportional Assumed Financial Lines)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 17.1195 17.1195 82.8805 73.7197 88.9470
2006 46.6590 29.5395 53.3410 46.8047 87.7462
2007 67.7135 21.0545 32.2865 27.3660 84.7599
2008 78.1379 10.4244 21.8621 17.9277 82.0037
2009 89.7346 11.5967 10.2654 6.8723 66.9470
2010 92.1268 2.3921 7.8732 4.7328 60.1128
2011 89.7323 -2.3945 10.2677 7.3900 71.9733
2012 90.0460 0.3137 9.9540 7.3975 74.3171
2013 94.8867 4.8407 5.1133 2.7790 54.3481
2014 86.7041 -8.1827 13.2959 11.2647 84.7228
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 1.4277 11.8683 10.3058 86.8351
2016 1.4277 10.4406 9.3044 89.1173
2017 1.4277 9.0129 8.2584 91.6292
2018 1.4277 7.5852 7.1661 94.4744
2019 and later years 1.4277 6.1575 6.0252 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 89.1998 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 62.9320 62.9320 37.0680 35.5638 95.9420
2006 88.4950 25.5631 11.5050 11.0185 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2007 and later years 5.7525 5.7525 5.6289 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 taxable year.
Workers’ Compensation
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2005 28.2489 28.2489 71.7511 63.4995 88.4998
2006 57.8739 29.6249 42.1261 36.0435 85.5608
2007 71.2999 13.4260 28.7001 23.9229 83.3549
2008 77.7584 6.4585 22.2416 18.3848 82.6595
2009 81.9301 4.1717 18.0699 14.9378 82.6666
2010 83.7739 1.8437 16.2261 13.7168 84.5350
2011 86.5350 2.7611 13.4650 11.5040 85.4365
2012 88.4367 1.9017 11.5633 10.0714 87.0975
2013 89.5926 1.1559 10.4074 9.3372 89.7172
2014 91.6441 2.0515 8.3559 7.6553 91.6150
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the tax year shown.
2015 2.0515 6.3045 5.8987 93.5633
2016 2.0515 4.2530 4.0641 95.5573
2017 2.0515 2.2016 2.1480 97.5677
2018 and later years 2.0515 0.1501 0.1469 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 95.7822 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622-8435 (not a toll-free call).

Rev. Proc. 2005-73

SECTION 1. PURPOSE

This revenue procedure prescribes the salvage discount factors for the 2005 accident year. These factors must be used to compute discounted estimated salvage recoverable under § 832 of the Internal Revenue Code.

SEC. 2. BACKGROUND

Section 832(b)(5)(A) requires that all estimated salvage recoverable (including that which cannot be treated as an asset for state accounting purposes) be taken into account in computing the deduction for losses incurred. Under § 832(b)(5)(A), paid losses are to be reduced by salvage and reinsurance recovered during the taxable year. This amount is adjusted to reflect changes in discounted unpaid losses on nonlife insurance contracts and in unpaid losses on life insurance contracts. An adjustment is then made to reflect any changes in discounted estimated salvage recoverable and in reinsurance recoverable.

Pursuant to § 832(b), the amount of estimated salvage is determined on a discounted basis in accordance with procedures established by the Secretary.

SEC. 3. SCOPE

This revenue procedure applies to any taxpayer that is required to discount estimated salvage recoverable under § 832.

SEC. 4. APPLICATION

.01 The following tables present separately for each line of business the discount factors under § 832 for the 2005 accident year. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2005, which is 4.44 percent, and by assuming all estimated salvage is recovered in the middle of each calendar year. See Rev. Proc. 2003-18, 2003-1 C.B. 439, for background regarding the tables.

.02 These tables must be used by taxpayers irrespective of whether they elected to discount unpaid losses using their own historical experience under § 846.

.03 Section V of Notice 88-100, 1988-2 C.B. 439, provides a composite discount factor to be used in determining the discounted unpaid losses for accident years that are not separately reported on the NAIC Annual Statement. The tables separately provide discount factors for taxpayers who elect to use the composite method. Rev. Proc. 2002-74, 2002-2 C.B. 980, clarifies that for certain insurance companies subject to tax under § 831 the composite method for discounting unpaid losses set forth in Notice 88-100, section V, 1988-2 C.B. 439, is permitted but not required. This revenue procedure further provides alternative methods for computing discounted unpaid losses that are permitted for insurance companies not using the composite method, and sets forth a procedure for insurance companies to obtain automatic consent of the Commissioner to change to one of the methods described in Rev. Proc. 2002-74.

.04 Tables.

Tables of Factors to be Used to Discount Salvage Recoverable With Respect to Losses Incurred in Accident Year 2005
(Interest rate: 4.44 percent)
Accident and Health (Other Than Disability Income or Credit Disability Insurance)
Taxpayers that do not use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable with respect to losses incurred in this line of business in the 2005 accident year as of the end of the 2005 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount all salvage recoverable in this line of business as of the end of the 2005 taxable year.
Auto Physical Damage
Tax Year Discount Factors (%)
2005 96.8175
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Commercial Auto/Truck Liability/Medical
Tax Year Discount Factors (%)
2005 91.3239
2006 91.0477
2007 90.8320
2008 91.3071
2009 91.8090
2010 91.2746
2011 92.4705
2012 93.5064
2013 93.7878
2014 95.8004
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Composite
Tax Year Discount Factors (%)
2005 91.2231
2006 89.9591
2007 89.4423
2008 88.8551
2009 87.7165
2010 87.7929
2011 87.5509
2012 87.5159
2013 87.6545
2014 89.4906
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 91.3750
2016 93.3052
2017 95.2703
2018 97.2162
2019 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 92.9728 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Fidelity/Surety
Tax Year Discount Factors (%)
2005 93.6793
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Financial Guaranty/Mortgage Guaranty
Tax Year Discount Factors (%)
2005 95.0705
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
International (Composite)
Tax Year Discount Factors (%)
2005 91.2231
2006 89.9591
2007 89.4423
2008 88.8551
2009 87.7165
2010 87.7929
2011 87.5509
2012 87.5159
2013 87.6545
2014 89.4906
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 91.3750
2016 93.3052
2017 95.2703
2018 97.2162
2019 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 92.9728 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Medical Malpractice — Claims-Made
Tax Year Discount Factors (%)
2005 86.4755
2006 81.7167
2007 86.5261
2008 84.1162
2009 85.1368
2010 79.5241
2011 89.5664
2012 92.5368
2013 96.0623
2014 97.8513
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Medical Malpractice — Occurrence
Tax Year Discount Factors (%)
2005 82.3660
2006 83.5715
2007 87.2656
2008 88.7913
2009 76.0729
2010 86.2799
2011 91.5010
2012 94.5994
2013 96.3703
2014 97.8513
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Miscellaneous Casualty
Tax Year Discount Factors (%)
2005 96.3339
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Tax Year Discount Factors (%)
2005 92.1974
2006 90.4717
2007 91.2273
2008 90.9380
2009 90.5278
2010 91.7899
2011 91.8465
2012 92.0455
2013 93.6189
2014 95.6204
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 97.6492
2016 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.6503 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Other (Including Credit)
Tax Year Discount Factors (%)
2005 96.5291
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Other Liability — Claims-Made
Tax Year Discount Factors (%)
2005 90.7061
2006 81.3335
2007 67.4471
2008 88.0410
2009 84.4392
2010 83.6931
2011 89.9416
2012 93.4492
2013 90.2612
2014 92.1610
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 94.1004
2016 96.0538
2017 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 95.1292 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Other Liability — Occurrence
Tax Year Discount Factors (%)
2005 85.5304
2006 86.9478
2007 88.0380
2008 84.7457
2009 88.1991
2010 90.6498
2011 91.0248
2012 93.0642
2013 94.3646
2014 96.2845
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Private Passenger Auto Liability/Medical
Tax Year Discount Factors (%)
2005 94.1806
2006 93.9873
2007 93.7150
2008 92.9128
2009 92.6982
2010 91.6917
2011 91.6408
2012 91.7062
2013 92.8870
2014 94.8239
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 96.7269
2016 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 96.9284 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Products Liability — Claims-Made
Tax Year Discount Factors (%)
2005 86.9346
2006 86.9867
2007 88.6095
2008 14.1032
2009 80.6321
2010 86.8941
2011 91.3609
2012 95.4486
2013 30.7119
2014 95.8584
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Products Liability — Occurrence
Tax Year Discount Factors (%)
2005 81.4063
2006 83.9954
2007 84.6302
2008 87.2364
2009 84.7065
2010 88.1295
2011 91.1267
2012 91.8405
2013 86.5573
2014 88.3625
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 90.2160
2016 92.1163
2017 94.0579
2018 96.0181
2019 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 93.2359 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Reinsurance A (Nonproportional Assumed Property)
Tax Year Discount Factors (%)
2005 86.3118
2006 83.4802
2007 87.5160
2008 91.1738
2009 91.8031
2010 93.5092
2011 95.2399
2012 96.4668
2013 97.0401
2014 97.8513
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Reinsurance B (Nonproportional Assumed Liability)
Tax Year Discount Factors (%)
2005 85.7554
2006 83.4923
2007 86.6760
2008 84.5425
2009 77.7160
2010 81.2321
2011 80.6015
2012 82.8262
2013 77.8936
2014 85.2736
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 87.3145
2016 89.5053
2017 91.9023
2018 94.6103
2019 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 89.5188 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Reinsurance C (Nonproportional Assumed Financial Lines)
Tax Year Discount Factors (%)
2005 85.5377
2006 86.2730
2007 89.6741
2008 87.1586
2009 90.2843
2010 83.5843
2011 86.7077
2012 93.3620
2013 94.6849
2014 96.5870
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft)
Tax Year Discount Factors (%)
2005 94.0942
2006 95.7713
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2007 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount salvage recoverable as of the end of the 2007 taxable year with respect to losses incurred in this line of business in 2005 and prior years.
Workers’ Compensation
Tax Year Discount Factors (%)
2005 86.3894
2006 87.6481
2007 88.0853
2008 88.0120
2009 87.3618
2010 88.1750
2011 87.9837
2012 88.1613
2013 88.9764
2014 90.8396
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2005 accident year.
2015 92.7444
2016 94.6769
2017 96.5791
2018 and later years 97.8513
Taxpayers that use the composite method of Notice 88-100 should use 94.0730 percent to discount salvage recoverable as of the end of the 2015 taxable year with respect to losses incurred in this line of business in 2005 and prior years.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of the Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622-8435 (not a toll-free call).

Definition of Terms and Abbreviations

Definition of Terms

Amplified describes a situation where no change is being made in a prior published position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle applied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below).

Clarified is used in those instances where the language in a prior ruling is being 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.

Distinguished describes a situation where a ruling mentions a previously published ruling and points out an essential difference between them.

Modified is used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior ruling is modified because it corrects a published position. (Compare with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in laws or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted.

Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in a new ruling.

Superseded describes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the new ruling does more than restate the substance of a prior ruling, a combination of terms is used. For example, modified and superseded describes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case, the previously published ruling is first modified and then, as modified, is superseded.

Supplemented is used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the effect:

Abbreviations

The following abbreviations in current use and formerly used will appear in material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D. —Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z —Corporation.

Numerical Finding List

Numerical Finding List

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2005-1 through 2005-26 is in Internal Revenue Bulletin 2005-26, dated June 27, 2005.

Bulletins 2005-27 through 2005-49

Announcements

Article Issue Link Page
2005-46 2005-27 I.R.B. 2005-27 63
2005-47 2005-28 I.R.B. 2005-28 71
2005-48 2005-29 I.R.B. 2005-29 111
2005-49 2005-29 I.R.B. 2005-29 119
2005-50 2005-30 I.R.B. 2005-30 152
2005-51 2005-32 I.R.B. 2005-32 283
2005-52 2005-31 I.R.B. 2005-31 257
2005-53 2005-31 I.R.B. 2005-31 258
2005-54 2005-32 I.R.B. 2005-32 283
2005-55 2005-33 I.R.B. 2005-33 317
2005-56 2005-33 I.R.B. 2005-33 318
2005-57 2005-33 I.R.B. 2005-33 318
2005-58 2005-33 I.R.B. 2005-33 319
2005-59 2005-37 I.R.B. 2005-37 524
2005-60 2005-35 I.R.B. 2005-35 455
2005-61 2005-36 I.R.B. 2005-36 495
2005-62 2005-36 I.R.B. 2005-36 495
2005-63 2005-36 I.R.B. 2005-36 496
2005-64 2005-37 I.R.B. 2005-37 537
2005-65 2005-38 I.R.B. 2005-38 587
2005-66 2005-39 I.R.B. 2005-39 613
2005-67 2005-40 I.R.B. 2005-40 678
2005-68 2005-39 I.R.B. 2005-39 613
2005-69 2005-40 I.R.B. 2005-40 681
2005-70 2005-40 I.R.B. 2005-40 682
2005-71 2005-41 I.R.B. 2005-41 714
2005-72 2005-41 I.R.B. 2005-41 692
2005-73 2005-41 I.R.B. 2005-41 715
2005-74 2005-42 I.R.B. 2005-42 764
2005-75 2005-42 I.R.B. 2005-42 764
2005-76 2005-42 I.R.B. 2005-42 765
2005-77 2005-44 I.R.B. 2005-44 855
2005-78 2005-44 I.R.B. 2005-44 918
2005-79 2005-45 I.R.B. 2005-45 941
2005-80 2005-46 I.R.B. 2005-46 967
2005-81 2005-45 I.R.B. 2005-45 941
2005-82 2005-45 I.R.B. 2005-45 941
2005-83 2005-45 I.R.B. 2005-45 941
2005-84 2005-48 I.R.B. 2005-48 1064
2005-85 2005-48 I.R.B. 2005-48 1065
2005-86 2005-48 I.R.B. 2005-48 1069


Notices

Article Issue Link Page
2005-48 2005-27 I.R.B. 2005-27 9
2005-49 2005-27 I.R.B. 2005-27 14
2005-50 2005-27 I.R.B. 2005-27 14
2005-51 2005-28 I.R.B. 2005-28 74
2005-52 2005-28 I.R.B. 2005-28 75
2005-53 2005-32 I.R.B. 2005-32 263
2005-54 2005-30 I.R.B. 2005-30 127
2005-55 2005-32 I.R.B. 2005-32 265
2005-56 2005-32 I.R.B. 2005-32 266
2005-57 2005-32 I.R.B. 2005-32 267
2005-58 2005-33 I.R.B. 2005-33 295
2005-59 2005-35 I.R.B. 2005-35 443
2005-60 2005-39 I.R.B. 2005-39 606
2005-61 2005-39 I.R.B. 2005-39 607
2005-62 2005-35 I.R.B. 2005-35 443
2005-63 2005-35 I.R.B. 2005-35 448
2005-64 2005-36 I.R.B. 2005-36 471
2005-65 2005-39 I.R.B. 2005-39 607
2005-66 2005-40 I.R.B. 2005-40 620
2005-67 2005-40 I.R.B. 2005-40 621
2005-68 2005-40 I.R.B. 2005-40 622
2005-69 2005-40 I.R.B. 2005-40 622
2005-70 2005-41 I.R.B. 2005-41 694
2005-71 2005-44 I.R.B. 2005-44 863
2005-72 2005-47 I.R.B. 2005-47 976
2005-73 2005-42 I.R.B. 2005-42 723
2005-74 2005-42 I.R.B. 2005-42 726
2005-75 2005-45 I.R.B. 2005-45 929
2005-76 2005-46 I.R.B. 2005-46 947
2005-77 2005-46 I.R.B. 2005-46 951
2005-78 2005-46 I.R.B. 2005-46 952
2005-79 2005-46 I.R.B. 2005-46 952
2005-80 2005-46 I.R.B. 2005-46 953
2005-81 2005-47 I.R.B. 2005-47 977
2005-82 2005-47 I.R.B. 2005-47 978
2005-83 2005-49 I.R.B. 2005-49
2005-84 2005-46 I.R.B. 2005-46 959
2005-85 2005-46 I.R.B. 2005-46 961
2005-86 2005-49 I.R.B. 2005-49
2005-88 2005-48 I.R.B. 2005-48 1060
2005-89 2005-49 I.R.B. 2005-49


Proposed Regulations

Article Issue Link Page
106030-98 2005-42 I.R.B. 2005-42 739
144615-02 2005-40 I.R.B. 2005-40 625
150088-02 2005-43 I.R.B. 2005-43 774
150091-02 2005-43 I.R.B. 2005-43 780
131739-03 2005-36 I.R.B. 2005-36 494
130241-04 2005-27 I.R.B. 2005-27 18
138362-04 2005-33 I.R.B. 2005-33 299
138647-04 2005-41 I.R.B. 2005-41 697
144898-04 2005-48 I.R.B. 2005-48 1062
149436-04 2005-35 I.R.B. 2005-35 454
156518-04 2005-38 I.R.B. 2005-38 582
158080-04 2005-43 I.R.B. 2005-43 786
104143-05 2005-41 I.R.B. 2005-41 708
105847-05 2005-47 I.R.B. 2005-47 987
111257-05 2005-42 I.R.B. 2005-42 759
114371-05 2005-45 I.R.B. 2005-45 930
114444-05 2005-45 I.R.B. 2005-45 934
121584-05 2005-37 I.R.B. 2005-37 523
122857-05 2005-39 I.R.B. 2005-39 609
129782-05 2005-40 I.R.B. 2005-40 675
133578-05 2005-39 I.R.B. 2005-39 610


Revenue Procedures

Article Issue Link Page
2005-35 2005-28 I.R.B. 2005-28 76
2005-36 2005-28 I.R.B. 2005-28 78
2005-37 2005-28 I.R.B. 2005-28 79
2005-38 2005-28 I.R.B. 2005-28 81
2005-39 2005-28 I.R.B. 2005-28 82
2005-40 2005-28 I.R.B. 2005-28 83
2005-41 2005-29 I.R.B. 2005-29 90
2005-42 2005-30 I.R.B. 2005-30 128
2005-43 2005-29 I.R.B. 2005-29 107
2005-44 2005-29 I.R.B. 2005-29 110
2005-45 2005-30 I.R.B. 2005-30 141
2005-46 2005-30 I.R.B. 2005-30 142
2005-47 2005-32 I.R.B. 2005-32 269
2005-48 2005-32 I.R.B. 2005-32 271
2005-49 2005-31 I.R.B. 2005-31 165
2005-50 2005-32 I.R.B. 2005-32 272
2005-51 2005-33 I.R.B. 2005-33 296
2005-52 2005-34 I.R.B. 2005-34 326
2005-53 2005-34 I.R.B. 2005-34 339
2005-54 2005-34 I.R.B. 2005-34 353
2005-55 2005-34 I.R.B. 2005-34 367
2005-56 2005-34 I.R.B. 2005-34 383
2005-57 2005-34 I.R.B. 2005-34 392
2005-58 2005-34 I.R.B. 2005-34 402
2005-59 2005-34 I.R.B. 2005-34 412
2005-60 2005-35 I.R.B. 2005-35 449
2005-61 2005-37 I.R.B. 2005-37 507
2005-62 2005-37 I.R.B. 2005-37 507
2005-63 2005-36 I.R.B. 2005-36 491
2005-64 2005-36 I.R.B. 2005-36 492
2005-65 2005-38 I.R.B. 2005-38 564
2005-66 2005-37 I.R.B. 2005-37 509
2005-67 2005-42 I.R.B. 2005-42 729
2005-68 2005-41 I.R.B. 2005-41 694
2005-69 2005-44 I.R.B. 2005-44 864
2005-70 2005-47 I.R.B. 2005-47 979
2005-71 2005-47 I.R.B. 2005-47 985
2005-72 2005-49 I.R.B. 2005-49
2005-73 2005-49 I.R.B. 2005-49


Revenue Rulings

Article Issue Link Page
2005-38 2005-27 I.R.B. 2005-27 6
2005-39 2005-27 I.R.B. 2005-27 1
2005-40 2005-27 I.R.B. 2005-27 4
2005-41 2005-28 I.R.B. 2005-28 69
2005-42 2005-28 I.R.B. 2005-28 67
2005-43 2005-29 I.R.B. 2005-29 88
2005-44 2005-29 I.R.B. 2005-29 87
2005-45 2005-30 I.R.B. 2005-30 123
2005-46 2005-30 I.R.B. 2005-30 120
2005-47 2005-32 I.R.B. 2005-32 261
2005-48 2005-32 I.R.B. 2005-32 259
2005-49 2005-30 I.R.B. 2005-30 125
2005-50 2005-30 I.R.B. 2005-30 124
2005-51 2005-31 I.R.B. 2005-31 163
2005-52 2005-35 I.R.B. 2005-35 423
2005-53 2005-35 I.R.B. 2005-35 425
2005-54 2005-33 I.R.B. 2005-33 289
2005-55 2005-33 I.R.B. 2005-33 284
2005-56 2005-35 I.R.B. 2005-35 427
2005-57 2005-36 I.R.B. 2005-36 466
2005-58 2005-36 I.R.B. 2005-36 465
2005-59 2005-37 I.R.B. 2005-37 505
2005-60 2005-37 I.R.B. 2005-37 502
2005-61 2005-38 I.R.B. 2005-38 538
2005-62 2005-38 I.R.B. 2005-38 557
2005-63 2005-39 I.R.B. 2005-39 603
2005-64 2005-39 I.R.B. 2005-39 600
2005-65 2005-41 I.R.B. 2005-41 684
2005-66 2005-41 I.R.B. 2005-41 686
2005-67 2005-43 I.R.B. 2005-43 771
2005-68 2005-44 I.R.B. 2005-44 853
2005-69 2005-44 I.R.B. 2005-44 852
2005-70 2005-45 I.R.B. 2005-45 919
2005-71 2005-45 I.R.B. 2005-45 923
2005-72 2005-46 I.R.B. 2005-46 944
2005-73 2005-48 I.R.B. 2005-48 1050
2005-75 2005-49 I.R.B. 2005-49
2005-76 2005-49 I.R.B. 2005-49
2005-77 2005-49 I.R.B. 2005-49


Social Security Contribution and Benefit Base; Domestic Employee Coverage Threshold

Article Issue Link Page
2005-85 2005-46 I.R.B. 2005-46 961


Tax Conventions

Article Issue Link Page
2005-47 2005-28 I.R.B. 2005-28 71
2005-72 2005-41 I.R.B. 2005-41 692
2005-77 2005-44 I.R.B. 2005-44 855


Treasury Decisions

Article Issue Link Page
9208 2005-31 I.R.B. 2005-31 157
9209 2005-31 I.R.B. 2005-31 153
9210 2005-33 I.R.B. 2005-33 290
9211 2005-33 I.R.B. 2005-33 287
9212 2005-35 I.R.B. 2005-35 429
9213 2005-35 I.R.B. 2005-35 440
9214 2005-35 I.R.B. 2005-35 435
9215 2005-36 I.R.B. 2005-36 468
9216 2005-36 I.R.B. 2005-36 461
9217 2005-37 I.R.B. 2005-37 498
9218 2005-37 I.R.B. 2005-37 503
9219 2005-38 I.R.B. 2005-38 538
9220 2005-39 I.R.B. 2005-39 596
9221 2005-39 I.R.B. 2005-39 604
9222 2005-40 I.R.B. 2005-40 614
9223 2005-39 I.R.B. 2005-39 591
9224 2005-41 I.R.B. 2005-41 688
9225 2005-42 I.R.B. 2005-42 716
9226 2005-43 I.R.B. 2005-43 772
9227 2005-45 I.R.B. 2005-45 924
9228 2005-47 I.R.B. 2005-47 972
9229 2005-48 I.R.B. 2005-48 1051


Effect of Current Actions on Previously Published Items

Finding List of Current Actions on Previously Published Items

A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2005-1 through 2005-26 is in Internal Revenue Bulletin 2005-26, dated June 27, 2005.

Bulletins 2005-27 through 2005-49

Announcements

Old Article Action New Article Issue Link Page
84-26 Obsoleted by REG-149436-04 2005-35 I.R.B. 2005-35 454
2004-72 Updated and superseded by Ann. 2005-59 2005-37 I.R.B. 2005-37 524
2005-36 Modified by Rev. Proc. 2005-66 2005-37 I.R.B. 2005-37 509
2005-53 Corrected by Ann. 2005-61 2005-36 I.R.B. 2005-36 495


Notices

Old Article Action New Article Issue Link Page
89-111 Amplified by Notice 2005-61 2005-39 I.R.B. 2005-39 607
2001-42 Modified by Rev. Proc. 2005-66 2005-37 I.R.B. 2005-37 509
2004-43 Amplified by Notice 2005-83 2005-49 I.R.B. 2005-49
2004-57 Superseded by Notice 2005-79 2005-46 I.R.B. 2005-46 952
2005-4 Modified by Notice 2005-62 2005-35 I.R.B. 2005-35 443
2005-4 Modified by Notice 2005-80 2005-46 I.R.B. 2005-46 953
2005-10 Clarified by Notice 2005-64 2005-36 I.R.B. 2005-36 471
2005-38 Modified by Notice 2005-64 2005-36 I.R.B. 2005-36 471
2005-42 Amplified by Notice 2005-86 2005-49 I.R.B. 2005-49
2005-51 Modified and superseded by Notice 2005-57 2005-32 I.R.B. 2005-32 267
2005-60 Superseded by Notice 2005-84 2005-46 I.R.B. 2005-46 959
2005-66 Supplemented by Notice 2005-81 2005-47 I.R.B. 2005-47 977


Proposed Regulations

Old Article Action New Article Issue Link Page
108524-00 Corrected by Ann. 2005-68 2005-39 I.R.B. 2005-39 613
142686-01 Withdrawn by Ann. 2005-55 2005-33 I.R.B. 2005-33 317
100420-03 Corrected by Ann. 2005-57 2005-33 I.R.B. 2005-33 318
102144-04 Corrected by Ann. 2005-56 2005-33 I.R.B. 2005-33 318


Revenue Procedures

Old Article Action New Article Issue Link Page
64-54 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
66-33 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
69-13 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
70-8 Modified by Rev. Proc. 2005-46 2005-30 I.R.B. 2005-30 142
71-1 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
72-22 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
83-77 Superseded by Rev. Proc. 2005-63 2005-36 I.R.B. 2005-36 491
87-8 Obsoleted by Rev. Proc. 2005-44 2005-29 I.R.B. 2005-29 110
87-9 Obsoleted by Rev. Proc. 2005-44 2005-29 I.R.B. 2005-29 110
89-20 Superseded by Rev. Proc. 2005-52 2005-34 I.R.B. 2005-34 326
90–11 Modified by Rev. Proc. 2005-40 2005-28 I.R.B. 2005-28 83
90-30 Section 4 superseded by Rev. Proc. 2005-54 2005-34 I.R.B. 2005-34 353
90-30 Section 5 superseded by Rev. Proc. 2005-55 2005-34 I.R.B. 2005-34 367
90-30 Section 6 superseded by Rev. Proc. 2005-56 2005-34 I.R.B. 2005-34 383
90-30 Section 7 superseded by Rev. Proc. 2005-58 2005-34 I.R.B. 2005-34 402
90-30 Section 8 superseded by Rev. Proc. 2005-59 2005-34 I.R.B. 2005-34 412
90-31 Section 4 superseded by Rev. Proc. 2005-52 2005-34 I.R.B. 2005-34 326
90-31 Section 5 superseded by Rev. Proc. 2005-54 2005-34 I.R.B. 2005-34 353
90-31 Section 6 superseded by Rev. Proc. 2005-55 2005-34 I.R.B. 2005-34 367
90-31 Section 7 superseded by Rev. Proc. 2005-56 2005-34 I.R.B. 2005-34 383
90-31 Section 8 superseded by Rev. Proc. 2005-58 2005-34 I.R.B. 2005-34 402
90-31 Section 9 superseded by Rev. Proc. 2005-59 2005-34 I.R.B. 2005-34 412
93-22 Obsoleted by Rev. Proc. 2005-44 2005-29 I.R.B. 2005-29 110
98-18 Obsoleted by Rev. Proc. 2005-45 2005-30 I.R.B. 2005-30 141
99-39 Superseded by Rev. Proc. 2005-60 2005-35 I.R.B. 2005-35 449
2000-27 Modified and superseded by Rev. Proc. 2005-66 2005-37 I.R.B. 2005-37 509
2000-31 Superseded by Rev. Proc. 2005-60 2005-35 I.R.B. 2005-35 449
2000-49 Superseded by Rev. Proc. 2005-41 2005-29 I.R.B. 2005-29 90
2001-9 Superseded by Rev. Proc. 2005-60 2005-35 I.R.B. 2005-35 449
2001-16 Superseded by Rev. Proc. 2005-42 2005-30 I.R.B. 2005-30 128
2002-9 Modified and amplified by Rev. Rul. 2005-42 2005-28 I.R.B. 2005-28 67
2002-9 Modified and amplified by Rev. Proc. 2005-35 2005-28 I.R.B. 2005-28 76
2002-9 Modified and amplified by Rev. Proc. 2005-43 2005-29 I.R.B. 2005-29 107
2002-9 Modified and amplified by Rev. Proc. 2005-47 2005-32 I.R.B. 2005-32 269
2002-49 Modified, amplified, and superseded by Rev. Proc. 2005-62 2005-37 I.R.B. 2005-37 507
2004-50 Superseded by Rev. Proc. 2005-49 2005-31 I.R.B. 2005-31 165
2004-54 Superseded by Rev. Proc. 2005-65 2005-38 I.R.B. 2005-38 564
2004-58 Superseded by Rev. Proc. 2005-69 2005-44 I.R.B. 2005-44 864
2004-59 Modified by Rev. Proc. 2005-71 2005-47 I.R.B. 2005-47 985
2004-64 Modified by Ann. 2005-71 2005-41 I.R.B. 2005-41 714
2005-1 Amplified by Rev. Proc. 2005-68 2005-41 I.R.B. 2005-41 694
2005-3 Amplified by Rev. Proc. 2005-68 2005-37 I.R.B. 2005-37 507
2005-6 Modified by Rev. Proc. 2005-66 2005-37 I.R.B. 2005-37 509
2005-10 Superseded by Rev. Proc. 2005-67 2005-42 I.R.B. 2005-42 729
2005-16 Modified by Rev. Proc. 2005-66 2005-37 I.R.B. 2005-37 509
2005-65 Corrected by Ann. 2005-78 2005-44 I.R.B. 2005-44 918


Revenue Rulings

Old Article Action New Article Issue Link Page
65-109 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
68-549 Obsoleted by Rev. Rul. 2005-43 2005-29 I.R.B. 2005-29 88
74-203 Revoked by Rev. Rul. 2005-59 2005-37 I.R.B. 2005-37 505
82-29 Modified and clarified by Rev. Proc. 2005-39 2005-28 I.R.B. 2005-28 82
2004-45 Amplified by Notice 2005-86 2005-49 I.R.B. 2005-49
2004-107 Supplemented and superseded by Rev. Rul. 2005-76 2005-49 I.R.B. 2005-49
2004-108 Supplemented and superseded by Rev. Rul. 2005-75 2005-49 I.R.B. 2005-49
2005-41 Corrected by Ann. 2005-50 2005-30 I.R.B. 2005-30 152


Treasury Decisions

Old Article Action New Article Issue Link Page
9149 Removed by T.D. 9221 2005-39 I.R.B. 2005-39 604
9186 Corrected by Ann. 2005-53 2005-31 I.R.B. 2005-31 258
9193 Corrected by Ann. 2005-62 2005-36 I.R.B. 2005-36 495
9205 Corrected by Ann. 2005-63 2005-36 I.R.B. 2005-36 496
9206 Corrected by Ann. 2005-49 2005-29 I.R.B. 2005-29 119
9207 Corrected by Ann. 2005-52 2005-31 I.R.B. 2005-31 257
9210 Corrected by Ann. 2005-64 2005-37 I.R.B. 2005-37 537


How to get the Internal Revenue Bulletin

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superintendent of Documents when their subscriptions must be renewed.

CUMULATIVE BULLETINS

The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the weekly Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the Superintendent of Documents.

ACCESS THE INTERNAL REVENUE BULLETIN ON THE INTERNET

You may view the Internal Revenue Bulletin on the Internet at www.irs.gov. Under information for: select Businesses. Under related topics, select More Topics. Then select Internal Revenue Bulletins.

INTERNAL REVENUE BULLETINS ON CD-ROM

Internal Revenue Bulletins are available annually as part of Publication 1796 (Tax Products CD-ROM). The CD-ROM can be purchased from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders (discount for online orders) or by calling 1-877-233-6767. The first release is available in mid-December and the final release is available in late January.

How to Order

Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance, detach entire page, and mail to the

P.O. Box 371954, Pittsburgh PA, 15250-7954

. Please allow two to six weeks, plus mailing time, for delivery.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we would be pleased to hear from you. You can e-mail us your suggestions or comments through the IRS Internet Home Page (www.irs.gov) or write to the

IRS Bulletin Unit, SE:W:CAR:MP:T:T:SP, Washington, DC 20224