Internal Revenue Bulletin: 2010-50

December 13, 2010


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. 2010-29 Rev. Rul. 2010-29

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 2010.

Rev. Rul. 2010-30 Rev. Rul. 2010-30

Section 1274A - inflation adjusted numbers for 2011. This ruling provides the dollar amounts, increased by the 2011 inflation adjustment, for section 1274A of the Code. Rev. Rul. 2010-2 supplemented and superseded.

Notice 2010-81 Notice 2010-81

This notice provides guidance on the determination of when state and local bonds (as defined in section 103(c)) are considered “issued” for purposes of deadlines on issuing bonds. The notice provides guidance on the relevant distinction between the “issue date” of a “bond” versus the “issue date” of an “issue” for purposes of this determination. One instance, among others in which this notice applies, is in determining when Build America Bonds, structured as “draw-down” bonds or loans in which draws are funded at different times are considered issued for purposes of statutory deadlines on issuing these bonds under section 54AA.

Rev. Proc. 2010-47 Rev. Proc. 2010-47

Cost limitations for expensing section 179 property. This procedure provides that for taxable years beginning in 2010, the aggregate cost of any section 179 property a taxpayer elects to treat as an expense cannot exceed $500,000. This amount is reduced by the amount by which the cost of the property placed in service during the year exceeds $2,000,000. Rev. Proc. 2009-50 modified and superseded. Rev. Proc. 2010-24 superseded.

Rev. Proc. 2010-49 Rev. Proc. 2010-49

Insurance companies; loss reserves; discounting unpaid losses. This procedure sets forth the loss payment patterns and discount factors for accident year 2010. Under section 846 of the Code, discount factors are determined by the Secretary based on the interest rate determined annually under section 846(c) and on loss payment patterns determined every five years under section 846(d). Section 846(d) directs the Secretary to use the most recent aggregate loss payment data of property and casualty insurance companies to determine and publish a loss payment pattern for each line of business every five years.

Rev. Proc. 2010-50 Rev. Proc. 2010-50

Insurance companies; discounting estimated salvage recoverable. This procedure sets forth the salvage discount factors for accident year 2010 for purposes of section 832 of the Code. Under section 832, discount factors are determined by the Secretary based on the interest rate determined annually under section 846(c) and on salvage recovery patterns determined every five years by the Secretary.

EMPLOYEE PLANS

Rev. Proc. 2010-48 Rev. Proc. 2010-48

This procedure provides guidance to drafters and users of pre-approved IRAs. Section 3 provides guidance to drafters and users of prototype IRAs, including rules for when documents must be submitted to the Internal Revenue Service and for new user fees for individual retirement annuities. Section 4 provides guidance to users of the Service’s model IRAs and describes the availability of new model individual retirement annuities. Rev. Procs. 87-50 and 98-59 modified.

EXEMPT ORGANIZATIONS

Announcement 2010-91 Announcement 2010-91

The IRS has revokded its determination that Debt Management Corporation of Orange Park, FL, qualifies as an organization described in sections 501(c)(3) and 170(c)(2) of the Code.

EMPLOYMENT TAX

Notice 2010-86 Notice 2010-86

2011 social security contribution and benefit base; domestic employee coverage threshold. The Commissioner of the Social Security Administration has announced (1) the OASDI contribution and benefit base for remuneration paid in 2011 and self-employment income earned in taxable years beginning in 2011, and (2) the domestic employee coverage threshold amount for 2011.

EXCISE TAX

Notice 2010-71 Notice 2010-71

This notice provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs by section 9008 of the Patient Protection and Affordable Care Act (ACA), as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA).

ADMINISTRATIVE

Announcement 2010-83 Announcement 2010-83

This document contains corrections to final regulations (T.D. 9340, 2007-2 C.B. 487) providing updated guidance on section 403(b) contracts of public schools and tax-exempt organizations described in section 501(c)(3). These regulations will affect sponsors of section 403(b) contracts, administrators, participants, and beneficiaries.

Preface

The IRS Mission

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

Introduction

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing 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. 2010-29

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 2010.

This revenue ruling provides various prescribed rates for federal income tax purposes for December 2010 (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)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, and before December 31, 2013, shall not be less than 9%. 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 contains the 2011 interest rate for sections 846 and 807.

REV. RUL. 2010-29 TABLE 1
Applicable Federal Rates (AFR) for December 2010
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
AFR .32% .32% .32% .32%
110% AFR .35% .35% .35% .35%
120% AFR .38% .38% .38% .38%
130% AFR .42% .42% .42% .42%
Mid-term
AFR 1.53% 1.52% 1.52% 1.52%
110% AFR 1.68% 1.67% 1.67% 1.66%
120% AFR 1.83% 1.82% 1.82% 1.81%
130% AFR 1.99% 1.98% 1.98% 1.97%
150% AFR 2.29% 2.28% 2.27% 2.27%
175% AFR 2.68% 2.66% 2.65% 2.65%
Long-term
AFR 3.53% 3.50% 3.48% 3.47%
110% AFR 3.89% 3.85% 3.83% 3.82%
120% AFR 4.24% 4.20% 4.18% 4.16%
130% AFR 4.60% 4.55% 4.52% 4.51%
REV. RUL. 2010-29 TABLE 2
Adjusted AFR for December 2010
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term adjusted AFR .49% .49% .49% .49%
Mid-term adjusted AFR 1.63% 1.62% 1.62% 1.61%
Long-term adjusted AFR 3.67% 3.64% 3.62% 3.61%
REV. RUL. 2010-29 TABLE 3
Rates Under Section 382 for December 2010
Adjusted federal long-term rate for the current month 3.67%
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.) 3.67%
REV. RUL. 2010-29 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for December 2010
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit 7.58%
Appropriate percentage for the 30% present value low-income housing credit 3.25%
REV. RUL. 2010-29 TABLE 5
Rate Under Section 7520 for December 2010
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 1.8%
REV. RUL. 2010-29 TABLE 6
Rates Under Sections 846 and 807
Applicable rate of interest for 2011 for purposes of sections 846 and 807 3.46%

Rev. Rul. 2010-30

Section 1274A - inflation adjusted numbers for 2011. This ruling provides the dollar amounts, increased by the 2011 inflation adjustment, for section 1274A of the Code. Rev. Rul. 2010-2 supplemented and superseded.

BACKGROUND

In general, sections 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 section 1274 is taken into account under the original issue discount provisions of the Code. Section 1274A, however, modifies the rules under sections 483 and 1274 for certain types of debt instruments.

In the case of a “qualified debt instrument,” the discount rate used for purposes of sections 483 and 1274 may not exceed nine 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 section 38 property within the meaning of section 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 section 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 section 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, section 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) section 1274 would have applied to the debt instrument but for an election under section 1274A(c); and (D) an election under section 1274A(c) is jointly made with respect to the debt instrument by the borrower and the 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 section 1274A(b) and section 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 UNDER Section 1274A

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

Rev. Rul. 2010-30 Table 1
Inflation-Adjusted Amounts Under Section 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
2007 $4,800,800 $3,429,100
2008 $4,913,400 $3,509,600
2009 $5,131,700 $3,665,500
2010 $5,115,100 $3,653,600
2011 $5,201,300 $3,715,200
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. 2010-2, 2010-3 I.R.B. 272, is supplemented and superseded.

DRAFTING INFORMATION

The author of this revenue ruling is Andrea M. Hoffenson of the Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, please contact Ms. Hoffenson at (202) 622-3920 (not a toll-free call).

Part III. Administrative, Procedural, and Miscellaneous

Notice 2010-71

Branded Prescription Drug Sales

This notice provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs by section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)). All references in this notice to section 9008 are references to section 9008 of the ACA, as amended by section 1404 of HCERA.

Part I of this notice describes a proposed methodology for calculating the section 9008 fee. Part II of this notice describes how the Internal Revenue Service (IRS) will use this proposed methodology to provide each covered entity with a preliminary 2011 fee calculation. The IRS and Treasury Department intend that a covered entity’s preliminary fee calculation for 2011 will serve as a basis for comments by the covered entity on the proposed methodology. Part III of this notice solicits public comments on all aspects of the notice.

Part I — Proposed Methodology for Calculating the Fee

Section 9008(b)(4) sets an applicable fee amount for each year, beginning with 2011, that will be allocated among covered entities with aggregate branded prescription drug sales of over $5 million to specified government programs or pursuant to coverage under such programs. Section 9008(e)(2) provides that “branded prescription drug” means (i) any prescription drug the application for which was submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)), or (ii) any biological product the license for which was submitted under section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)). The specified government programs are the Medicare Part B program, the Medicare Part D program, the Medicaid program, any program under which branded prescription drugs are procured by the Department of Veterans Affairs, any program under which branded prescription drugs are procured by the Department of Defense, and the TRICARE retail pharmacy program (collectively, the Programs). The applicable fee amount is allocated among the covered entities using a formula specified in section 9008(b) based on sales to the Programs, which sales data is to be provided by the Centers for Medicare and Medicaid Services of the Department of Health and Human Services (CMS), the Department of Veterans Affairs (VA), and the Department of Defense (DOD) (collectively, the Agencies).

There are two years relevant to the calculation of the section 9008 fee — the calendar year in which the fee must be paid (herein referred to as the fee year) and the calendar year of the branded prescription drug sales, which will be used to determine the amount of the fee (herein referred to as the sales year). As discussed more fully below, the IRS and Treasury Department are proposing to use the second calendar year preceding the fee year as the sales year for purposes of calculating the section 9008 fee. An adjustment amount will also be calculated as discussed below.

Definition of Covered Entity

Section 9008(a) imposes the fee on each covered entity engaged in the business of manufacturing or importing branded prescription drugs. Section 9008(d)(1) defines a covered entity as “any manufacturer or importer with gross receipts from branded prescription drug sales.” For purposes of section 9008(a), a manufacturer or importer is the person identified in the Labeler Code of the National Drug Code (NDC) for a branded prescription drug. The NDC is an identifier assigned by the Food and Drug Administration (FDA) to a branded prescription drug, as well as other drugs. The Labeler Code is the first five numeric characters of the NDC or the first six numeric characters when the available five-character code combinations are exhausted.

Section 9008(d)(2) provides a controlled group rule under which all persons treated as a single employer under section 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code (Code) shall be treated as a single covered entity. For this purpose, a foreign entity subject to tax under section 881 is included within a controlled group under section 52(a) or 52(b). This controlled group rule will be applied as of the end of the day on December 31 of the sales year. All persons treated as a single employer under section 9008(d)(2) are jointly and severally liable for the fee. See section 9008(d)(3).

In the case of a controlled group that is treated as a single covered entity under section 9008(d)(2), the controlled group must identify a single person as the “designated entity” that may act for the controlled group with respect to the section 9008 fee. If the controlled group, without regard to foreign corporations included under section 9008(d)(2)(B), is also an affiliated group that filed a consolidated return for federal income tax purposes, the designated entity is the common parent of the affiliated group as identified on the tax return filed for the sales year. In all other situations, the controlled group must select a person as the designated entity on Form 8947, Report of Branded Prescription Drug Information [1] (discussed further below), which is signed by the designated entity under penalties of perjury, stating that all the manufacturers or importers of branded prescription drugs who are members of the covered entity have consented to the selection of the designated entity.

Sales Taken Into Account

Section 9008(b) provides that the annual fee for each covered entity is calculated by determining the ratio of (i) the covered entity’s branded prescription drug sales taken into account during the preceding calendar year to (ii) the aggregate branded prescription drug sales taken into account for all covered entities during the same year, and applying this ratio to the applicable amount as specified in the statute. “Sales taken into account” means sales exclusive of certain orphan drugs and after application of the percentage adjustment table in section 9008(b)(2). Section 9008(b)(1) provides that the calculation of the fee in any given year is based on branded prescription drug sales in the immediately preceding calendar year.

Section 9008(b)(3) provides that the Secretary of the Treasury shall determine the amount of each covered entity’s fee. In determining that amount, the Secretary may rely on reports submitted by the Agencies and any other source of information. Section 9008(i) also provides the Secretary with regulatory authority to carry out the purposes of the statute.

The IRS and Treasury Department have determined that, although the DOD and VA are expected to have complete data on branded prescription drug sales for the calendar year immediately preceding the fee year within the time frame necessary to administer the fee, CMS is not expected to have comparable data because it cannot complete its data processing within the necessary time frame. Accordingly, the IRS and Treasury Department will calculate the fee based on the branded prescription drug sales data provided by the Agencies for the second calendar year preceding the fee year. Because the use of the second preceding year, rather than the immediately preceding year, as the sales year may affect the amount of the fee paid by any particular covered entity, the fee due in every year after 2011 will include an adjustment amount.

Adjustment Methodology

An adjustment amount will be calculated for each NDC and will be added or subtracted, as appropriate, to the fee otherwise payable by the covered entity responsible for the NDC in the fee year in which the adjustment is calculated. The adjustment amount added or subtracted to the amount payable in a fee year will reflect the difference between the fee determined for the NDC in the immediately prior fee year, using data from the second calendar year preceding that fee year, and what the fee for that NDC would have been for the immediately prior fee year using data from the calendar year immediately preceding that prior fee year. For example, the amount due from a covered entity in the 2012 fee year will include an adjustment amount for each NDC for which the covered entity is responsible in 2012 equal to the difference between the 2011 fee associated with that NDC using 2009 data, and what the 2011 fee for that NDC would have been using 2010 data.

To calculate the adjustment amount for an NDC, the IRS will first determine two ratios: one based on data from the second preceding calendar year; and the other based on data from the third preceding calendar year. In both cases, the numerator of the ratio is the sales taken into account for the particular NDC during the relevant calendar year, and the denominator of the ratio is aggregate branded prescription drug sales taken into account for all NDCs during the relevant calendar year. For each NDC, the IRS will then take the difference between the ratio using second preceding year data and the ratio using third preceding year data and multiply that amount by the applicable amount of the fee for the relevant fee year, as set forth in section 9008(b)(4), to determine an adjustment for the NDC. The adjustment amount for any particular NDC will then be added to, or subtracted from, as appropriate, the amount of the fee otherwise payable by the covered entity associated with the NDC for the fee year in which the adjustment amount is calculated.

For example, in 2012 the fee payable by each covered entity will consist of two components. First, the applicable amount for 2012 will be allocated to the covered entities based on sales data for 2010 (i.e., the second preceding calendar year). Second, an adjustment amount will be calculated in 2012 for each NDC with respect to the 2011 fee year, by multiplying (i) the difference between the sales ratio determined using 2010 data and the sales ratio determined using 2009 data by (ii) the applicable amount of the fee for 2011. The adjustment amount for each NDC will then be added to, or subtracted from, as appropriate, the fee otherwise payable in 2012 by the covered entity associated with the NDC for the 2012 fee year.

The adjustment amount is applied only with respect to the amount of the fee otherwise payable by the relevant covered entity in the year in which the adjustment is calculated, and is not a refund, credit, or recalculation of a fee payable by any covered entity in any preceding fee year. In any given fee year, the amount assessed by the IRS will be based on data provided to it by the Agencies. The IRS does not intend to recalculate either the fee allocations or the adjustment amounts based on data that becomes available after those amounts are assessed.

Information Requested from Covered Entities

Annually, each covered entity should submit a Form 8947 and provide the information specified by the form and instructions. The designated entity for a covered entity described in section 9008(d)(2) submits a single form for the covered entity. A covered entity should submit a completed Form 8947 by December 15 of each year unless an alternative date is prescribed by the form or instructions. The Form 8947 information is return information subject to the confidentiality protections of section 6103. Form 8947 will be available at http://www.irs.gov.

Form 8947 solicits the following information from each covered entity:

1. For a single-person covered entity, the covered entity’s name, address, and employer identification number. For a covered entity described in section 9008(d)(2), the name, address, and employer identification number of the designated entity and each manufacturer or importer with gross receipts from the sale of branded prescription drugs that was included in the covered entity as of the end of the day on December 31 of the sales year.

2. All of the NDCs for branded prescription drugs in which the covered entity is identified in the labeler code as of the end of the day on December 31 of the sales year. For a covered entity described in section 9008(d)(2), this includes all NDCs in which a member of the covered entity is identified in the labeler code as of the end of the day on December 31 of the sales year.

3. The brand name and NDC for each orphan drug for which the covered entity was allowed a section 45C credit. For purposes of section 9008(e)(3), the credit was “allowed” for any particular drug if the covered entity claimed the credit and there has not been a final assessment or a court order disallowing the full credit taken for the drug. In addition, even if the credit has been allowed, a covered entity must not report an NDC for an orphan drug for any sales year following the calendar year in which the FDA approved the drug for marketing for any indication other than the treatment of the rare disease or condition for which the section 45C credit was allowed.

4. The rebates for each NDC paid in the sales year by the covered entity to Medicare Part D with respect to sales occurring in that sales year. For this purpose, a rebate is considered paid in the sales year if it is taken into account on the covered entity’s tax return(s) for the sales year. This information is needed for the 2009 sales year because, at this time, CMS does not have rebate data on branded prescription drug sales by NDC. However, starting in 2011, CMS is planning to collect this rebate information by NDC for the 2010 and subsequent sales years. It is therefore possible that covered entities will not report this rebate information for years following 2009.

5. The state supplemental rebates for each NDC paid in the sales year by the covered entity with respect to sales under Medicaid occurring in that sales year. For this purpose, a rebate is considered paid in the sales year if it is taken into account on the covered entity’s tax return(s) for the sales year. This information is needed because Medicaid data will not include state supplemental rebates.

Information Provided by the Agencies

The IRS will compile a list of branded prescription drugs by NDC using the data submitted on Forms 8947. Appropriate due diligence will be performed to check for potential oversights. For example, the IRS may use information published by the FDA identifying drugs for which applications were submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act. The IRS will provide the Agencies with the compiled list of branded prescription drugs.

For each year in which the fee is due, the Agencies will provide data to the IRS on the branded prescription drug sales during the sales year by Program and NDC. The calculation methodology for each Program, including any reasonable estimation techniques and assumptions that the Agencies expect to use, are described below.

1. Medicare Part D. Section 9008 requires CMS to report the product of the per-unit ingredient cost reported by Part D sponsors (net of any per-unit rebate or other price concessions) and the number of units for each branded prescription drug. CMS currently collects prescription level encounter data from Part D sponsors on the Prescription Drug Event (PDE) records. On the PDE records, Part D sponsors report the NDC, as well as the ingredient cost, dispensing fee, sales tax, and units. CMS will aggregate the ingredient cost reported in the “Ingredient Cost Paid” field and the units reported in the “Quantity Dispensed” field of the PDE records for Part D covered drugs. These amounts will be aggregated at the NDC level for each sales year. Only PDE data that Part D sponsors have submitted by the PDE submission deadline (within 6 months after the end of the sales year) and have been approved for inclusion in the Part D payment reconciliation will be included.

2. Medicare Part B. First, for Healthcare Common Procedure Coding System (HCPCS) codes that consist solely and exclusively of branded prescription drugs (as identified by their respective NDCs) manufactured by a single entity, CMS will provide the total Medicare-allowed charges for the HCPCS code for the appropriate sales year.

Second, for HCPCS codes consisting of a mixture of branded prescription drugs made by different manufacturers or a mixture of branded prescription and generic drugs, CMS will determine: (i) the total Medicare-allowed charges for the HCPCS code for the appropriate sales year; (ii) the entities engaged in manufacturing each NDC assigned to the HCPCS code; and (iii) those entities (if any) that are manufacturing branded prescription drugs. CMS will then: (i) estimate the amount of Medicare-allowed charges for each manufacturer by applying the utilization percentage attributed to each manufacturer as determined under the Medicare Part B Program using manufacturer reported Average Sales Price sales data; (ii) multiply that percentage by the Medicare-allowed charge for that HCPCS code; and (iii) assign the result to each manufacturer within that HCPCS code.

Third, for the remainder of HCPCS codes that consist of multiple branded prescription drugs (as identified by their respective NDCs) manufactured by multiple entities that cannot be reliably calculated using the two methods above, CMS will determine: (i) the total Medicare-allowed charges for the HCPCS code for the appropriate sales year; (ii) the entities engaged in manufacturing each NDC assigned to the HCPCS code; and (iii) those entities (if any) that are manufacturing branded prescription drugs. CMS will then: (i) estimate the amount of Medicare-allowed charges for each manufacturer by applying the utilization percentage attributed to each manufacturer as determined under the Medicare Part D Program; (ii) multiply that percentage by the Medicare-allowed charge for that HCPCS code; and (iii) assign the result to each manufacturer within that HCPCS code.

Thus, the amounts attributed to branded prescription drugs within the HCPCS code will be estimated. CMS will calculate the sum of these components to arrive at an estimate of Medicare Part B spending on branded prescription drugs for each manufacturer.

3. Medicaid. The branded prescription drug sales for Medicaid may be determined as the per-unit Average Manufacturer Price less the Unit Rebate Amounts (URA) that CMS calculates based on manufacturer-reported pricing data multiplied by the number of units reported billed by states to manufacturers. This data would be based on the data reported to Medicaid by covered entities and the states. CMS does not currently intend to reduce this calculation for state supplemental rebates.

4. Department of Veterans Affairs. VA will provide, by NDC, the total amount paid for each branded prescription drug procured by the VA for its beneficiaries. The basis of this information will be national procurement data reported by VA’s Pharmaceutical Prime Vendor to the VA Pharmacy Benefits Management Service and National Acquisition Center. This information will not include procurement data that resides exclusively at the individual medical treatment facility level.

5. Department of Defense. The DOD will provide, by Labeler Code, the manufacturer’s name, the NDC, brand name, and the amount paid (net of rebates) for each branded prescription drug procured by DOD. TRICARE Management Activity will provide, by Labeler Code, the manufacturer’s name, the NDC, brand name, and the amount paid (net of refunds or rebates) for each branded prescription drug procured by DOD through the TRICARE Retail Pharmacy Program.

Fee calculation

After receiving data from the Agencies and information from the covered entities, the IRS will calculate each covered entity’s branded prescription drug sales for each Program by NDC. A covered entity’s branded prescription drug sales for each Program will equal (i) the sum of all the covered entity’s branded prescription drug sales reported by the Program, less (ii) the sum of all branded prescription drug sales reported by the Program for each NDC for which the covered entity has appropriately claimed the orphan drug exclusion, less (iii) the sum of rebates reported by the covered entity on Form 8947 for the sales year.

After calculating the branded prescription drug sales for each Program, the IRS will calculate each covered entity’s branded prescription drug sales taken into account for purposes of the ratio set forth in section 9008(b)(1). A covered entity’s branded prescription drug sales taken into account for purposes of section 9008(b)(1)(A) will equal the sum of the covered entity’s branded prescription drug sales for all Programs reduced by the appropriate percentages set forth in section 9008(b)(2). The IRS will then calculate the aggregate branded prescription drug sales of all covered entities taken into account for purposes of section 9008(b)(1)(B), which is the sum of all the covered entities branded prescription drug sales taken into account for purposes of section 9008(b)(1)(A).

To determine each covered entity’s fee, the IRS will divide each covered entity’s branded prescription drug sales taken into account for purposes of section 9008(b)(1)(A) by the aggregate branded prescription drug sales of all covered entities taken into account for purposes of section 9008(b)(1)(B) and multiply that fraction by the applicable amount for the appropriate year as set forth in section 9008(b)(4).

Part II — Preliminary Fee Calculation for 2011

The IRS will use the proposed methodology described in Part I to provide each covered entity with a preliminary 2011 fee calculation. The notification of the preliminary fee calculation will include the following: (1) the covered entity’s fee; (2) the covered entity’s branded prescription drug sales, by NDC, for each Program; (3) the covered entity’s branded prescription drug sales taken into account after application of section 9008(a)(2); and (4) the aggregate branded prescription drug sales taken into account for all covered entities.

To facilitate the preliminary 2011 fee calculation, Form 8947 should be submitted to the IRS by January 20, 2011. From the data on the Forms 8947, the IRS will compile a list of NDCs and provide that list to the Agencies by March 1, 2011. The IRS will use the data submitted on the Forms 8947 and the sales data provided by the Agencies to calculate the preliminary fee and will send to each covered entity notification of its preliminary fee calculation by May 2, 2011.

If the IRS and Treasury Department subsequently promulgate regulations that modify the methodology for calculating each covered entity’s fee, the modified methodology will be adopted in determining the final fee amount for each covered entity for 2011. Thus, if the methodology changes, the amount of the final fee for 2011 may vary from the preliminary fee calculation. The IRS will send the final fee calculation to each covered entity by August 15, 2011.

Part III — Request for comments

The IRS and Treasury Department request comments on the procedures described in this notice for consideration when promulgating regulations setting forth procedures for 2011 and the following years. The deadline for submission of comments is June 2, 2011. This date will give covered entities the opportunity to consider the information received in their preliminary fee calculation when providing comments. All materials submitted will be available for public inspection and copying. Written comments should be submitted to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2010-71), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2010-71), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Comments may be transmitted electronically via the following e-mail address: Notice.Comments@irscounsel.treas.gov. Please include “Notice 2010-71” in the subject line of any electronic communications.

Drafting Information

The principal author of this notice is Celia A. Gabrysh of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, contact Celia A. Gabrysh at (202) 622-3130 (not a toll-free call). For further information regarding Form 8947, contact Lou Milano at (908) 301-2106 (not a toll-free call).



[1] The Office of Management and Budget approved Form 8947 under control number 1545-2192.

Notice 2010-81

Build America Bonds and Other State and Local Bonds: Timing of Issuing Bonds

SECTION 1. PURPOSE

This notice provides guidance on the determination of when State and local bonds (as defined in § 103(c)) of the Internal Revenue Code (the “Code”) are considered “issued” for purposes of deadlines on issuing bonds. This notice provides guidance on the relevant distinction between the “issue date” of a “bond” versus the “issue date” of an “issue” for purposes of this determination. One instance, among others, in which this notice applies is in determining when Build America Bonds, structured as “draw-down” bonds or loans in which draws are funded at different times, are considered issued for purposes of statutory deadlines on issuing these bonds under § 54AA.

This notice does not apply for purposes of applying the qualified small issuer and de minimis exceptions to the tax-exempt carrying cost disallowance provision under § 265(b)(3) and § 265(b)(7) to draw-down loans.

SECTION 2. BACKGROUND

Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (“ARRA”) added § 54AA to the Code, which authorizes State and local governments, at their option, to issue Build America Bonds as taxable governmental bonds and receive Federal subsidies for a portion of their borrowing costs. Sections 54AA(d), 54AA(g), and 6431 require that Build America Bonds be issued before January 1, 2011.

In a related provision, § 1401 of ARRA added §§ 1400U-1 through 1400U-3 to the Code, which authorizes two types of “Recovery Zone Bonds,” including a type of Build America Bond known as “Recovery Zone Economic Development Bonds” and a type of traditional tax-exempt bond known as “Recovery Zone Facility Bonds.” These Recovery Zone Bonds have bond volume limitations and a statutory deadline that requires the bonds to be issued before January 1, 2011.

Section 1503(a) of ARRA amended § 57(a)(5)(C) to add new clause (vi), which provides, in part, that for purposes of the alternative minimum tax preference for interest on certain tax-exempt private activity bonds under § 57(a)(5)(C)(i), the term “private activity bond” shall not include any bond issued after December 31, 2008, and before January 1, 2011. Section 1503(b) of ARRA amended § 56(g)(4)(B) to add new clause (iv), which provides that the adjusted current earnings (ACE) adjustment under § 56(g)(4)(B)(i) for interest on certain tax-exempt bonds shall not include any interest on certain bonds issued after December 31, 2008, and before January 1, 2011.

In addition, other statutory provisions impose statutory time periods for issuing State and local bonds in both targeted circumstances and in more general circumstances. Another selected example of a targeted bond program that imposes a statutory time period on issuing bonds is the Gulf Opportunity Zone Bond program under § 1400N. One general provision that imposes statutory time periods on issuing bonds is the annual State private activity bond volume cap under § 146, which generally limits the amount of tax-exempt private activity bonds that may be issued in a State in a particular year. Similarly, certain types of qualified tax credit bonds under § 54A have volume caps and statutory time periods for issuing bonds. Another general provision is § 265(b)(3), which generally provides an exception to the carrying cost disallowance provision for financial institutions that purchase tax-exempt obligations from “qualified small issuers” that reasonably expect to issue no more than $10 million in tax-exempt bonds in a calendar year. ARRA raises the amount of this exception to $30 million for bonds issued in 2009 and 2010. Thus, the determination of when bonds are issued is relevant to the statutory limitations affecting Build America Bonds and many other State and local bond programs.

Recently, questions have arisen about which issue date rule applies for the statutory deadline on issuing Build America Bonds with respect to a financing structure known as “draw-down” loans in which funds are advanced at different times. The regulations provide issue date rules for “bonds” and for “issues” of bonds (with subsidiary special rules which treat bonds issued under draw-down loans or commercial paper programs as part of the same issue). Section 1.150-1(b) of the Income Tax Regulations includes a general definition for the “issue date” of a “bond,” that provides the issue date is the date on which the issuer receives the purchase price in exchange for that bond, provided that in no event is the issue date of a bond earlier than the first day on which interest begins to accrue on such bond for Federal income tax purposes. See also Harbor Bancorp v. Commissioner, 105 T.C. 260 (1995), aff’d 115 F.3d 722 (9th Cir. 1997) (citing regulatory predecessors to this general definition in interpreting statutory deadlines for issuing bonds under the Tax Reform Act of 1986).

Section 1.150-1(b) defines a “bond” to mean any “obligation” of a State or political subdivision thereof under § 103(c)(1). Section 1.150-1(b) also defines an “obligation” to mean any valid evidence of indebtedness under general Federal income tax principles.

By comparison, § 1.150-1(c) defines the broader term bond “issue” under a general definition and various special rules that may include bonds as part of the same issue even if they are issued at different times under a common tax plan. Section 1.150-1(b) defines the “issue date” of an “issue” to mean the first date on which the issuer receives the purchase price in exchange for delivery of the evidence of indebtedness representing any bond included in the issue, provided that in no event is the issue date of an issue earlier than the first day on which interest begins to accrue on the first bond included in the issue for Federal income tax purposes. Section 1.150-1(c)(1) provides a general rule which treats bonds as part of the same issue if the bonds are sold (versus issued) at substantially the same time (meaning sold less than 15 days apart), the bonds are part of the same plan of financing, and the bonds are reasonably expected to be paid from the same source of funds.

Section 1.150-1(c)(4)(i) treats bonds issued pursuant to a “draw-down loan” as part of the same bond issue. This special rule further provides that the issue date of the issue is the first date on which the aggregate draws under the loan exceed the lesser of $50,000 or five percent of the issue price. Section 1.150-1(c)(4)(ii) allows commercial paper issued pursuant to the same commercial paper program to be treated as part of the same issue. This special rule further provides that the issue date of the issue is the first date on which the aggregate amount of commercial paper issued under the program exceeds the lesser of $50,000 or five percent of the issue price. This special rule generally allows commercial paper to be treated as part of the same issue if it is issued to finance or refinance the same governmental purposes pursuant to a single master legal document during an 18-month period or if it is issued to refinance such commercial paper for up to 30 years if there is no increase in the principal amount after the initial 18-month period. These special rules apply to the issue date of the issue. The regulations do not provide special issue date rules for the issue date of bonds issued as draws under draw-down loans or as commercial paper. In Rev. Rul. 89-70, 1989-1 C.B. 88, however, the IRS ruled that the entire stated principal amount of a draw-down loan was considered issued on the date on which more than a de minimis amount of the loan was first advanced.

SECTION 3. SCOPE

This notice applies for determining compliance with deadlines for issuing State and local bonds such as Build America Bonds under §§ 54AA(d), 54AA(g) and 6431, and Recovery Zone Bonds under §§ 1400U-1 through 1400U-3. The analysis in this notice also applies for other deadlines for issuing bonds, such as, among others, the exceptions to the alternative minimum tax preferences and adjustments for interest on certain tax-exempt bonds under §§ 56(g)(4)(B)(iv) and 57(a)(5)(C)(vi), Gulf Opportunity Zone Bonds under § 1400N and various volume cap limitations on State and local bonds (as defined in § 103(c)).

This notice does not apply for purposes of applying the qualified small issuer and de minimis exceptions to the tax-exempt carrying cost disallowance provision under § 265(b)(3) and § 265(b)(7) to draw-down loans. For this purpose, Rev. Rul. 89-70 will continue in effect until further guidance is provided, which guidance will be prospective.

SECTION 4. GUIDANCE

In general, for determining compliance with deadlines on issuing bonds covered by this notice, a bond is considered issued on the “issue date” of the “bond” under § 1.150-1(b). Section 1.150-1(b) defines the “issue date” of a “bond” to mean the date on which the issuer receives the purchase price in exchange for that bond, provided that in no event is the issue date of a bond earlier than the first day on which interest begins to accrue on such bond for Federal income tax purposes.

By contrast, the issue date of an “issue” under § 1.150-1(b) is the first date on which the issuer receives the purchase price in exchange for delivery of the evidence of indebtedness representing any bond included in the issue, provided that in no event is the issue date of an issue earlier than the first day on which interest begins to accrue on the first bond included within the issue for Federal income tax purposes. Bonds may be issued at different times and nonetheless be treated as part of the same bond “issue” under the various special provisions for single issues under § 1.150-1(c). Thus, to ensure that an entire issue of bonds meets a statutory deadline on issuing bonds, all of the bonds that are part of the issue should be issued by the applicable statutory deadline.

In the particular case of a “draw-down” loan under § 1.150-1(c)(4)(i) or a commercial paper program under § 1.150-1(c)(4)(ii), in which a bond is issued as a draw or as commercial paper at different times and interest begins to accrue on each draw or commercial paper when it is funded, each draw or commercial paper constitutes a separate bond that is issued on the issue date of that draw or commercial paper when the issuer receives the purchase price, and interest begins to accrue, on that draw or commercial paper for Federal income tax purposes. Thus, for Build America Bonds structured as draw-down loans or commercial paper programs, only those draws or commercial paper that are funded before January 1, 2011, and for which interest begins to accrue for Federal income tax purposes before January 1, 2011, may qualify as Build America Bonds for purposes of the statutory time deadlines for issuing Build America Bonds.

SECTION 5. DRAFTING INFORMATION

The principal authors of this notice are Vicky Tsilas and Timothy L. Jones of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this notice, contact Vicky Tsilas at (202) 622-3980 (not a toll-free call).

Notice 2010-86

Social Security Contribution and Benefit Base for 2011

Under authority contained in the Social Security Act (Act), the Commissioner, Social Security Administration, has determined and announced (75 F.R. 65696, dated October 26, 2010) that the contribution and benefit base for renumeration paid in 2011, and self-employment income earned in taxable years beginning in 2011 is $106,800.

“Old-Law” Contribution and Benefit Base

General

The “old-law” contribution and benefit base for 2011 is $79,200. This is the base that would have been effective under the Act without the enactment of the 1977 amendments.

Domestic Employee Coverage Threshold

General

The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medicare is the domestic employee coverage threshold. For 2011, this threshold is $1,700. Section 3121(x) of the Internal Revenue Code provides the formula for increasing the threshold.

Computation

Under the formula, the domestic employee coverage threshold amount for 2011 shall be equal to the 1995 amount of $1,000 multiplied by the ratio of the national average wage index for 2009 to that for 1993. If the resulting amount is not a multiple of $100, it shall be rounded to the next lower multiple of $100.

Domestic Employee Coverage Threshold Amount

Multiplying the 1995 domestic employee coverage threshold amount ($1,000) by the ratio of the national average wage index for 2009 ($40,934.93) to that for 1993 ($23,132.67) produces the amount of $1,769.57. We then round this amount to $1,700. Accordingly, the domestic employee coverage threshold amount is $1,700 for 2011.

Note

(Filed by the Office of the Federal Register on October 25, 2010, 8:45 a.m., and published in the issue of the Federal Register for October 26, 2010, 75 F.R. 65696)

Rev. Proc. 2010-47

SECTION 1. PURPOSE

This revenue procedure modifies Rev. Proc. 2009-50, 2009-2 C.B. 617, as modified by Rev. Proc. 2010-24, 2010-25 I.R.B. 764, setting out the cost limitations for expensing property under § 179 of the Internal Revenue Code for taxable years beginning in 2010. This modification reflects a statutory amendment enacted subsequent to the publication of Rev. Proc. 2010-24.

SECTION 2. BACKGROUND

Prior to the enactment of the Small Business Jobs Act of 2010, Pub. L. No. 111-240, 124 Stat. 2504 (2010) (the Small Business Jobs Act) and the Hiring Incentives to Restore Employment Act of 2010, Pub. L. No. 111-147, 124 Stat. 71 (2010) (the HIRE Act), § 179(b)(1) prescribed a $125,000 limitation (the $125,000 amount) on the aggregate cost of § 179 property that could be treated as an expense for taxable years beginning after 2006 and before 2011. For those same taxable years, § 179(b)(2) provided that the $125,000 amount is reduced by the amount by which the cost of § 179 property placed in service during the taxable years exceeds $500,000 (the $500,000 amount). Both the $125,000 amount and the $500,000 amount were adjusted for inflation annually under § 179(b)(5). For taxable years beginning in 2010, section 3.20 of Rev. Proc. 2009-50 provides that the $125,000 amount and the $500,000 amount, adjusted for inflation, are $134,000 and $530,000, respectively.

Section 102 of the Economic Stimulus Act of 2008, Pub. L. No. 110-185, 122 Stat. 613 (2008), changed the $125,000 amount and the $500,000 amount to $250,000 and $800,000, respectively, for taxable years beginning in 2008. Section 1202 of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009), extended the $250,000 amount and the $800,000 amount to taxable years beginning in 2009.

Section 201 of the HIRE Act changed the $125,000 amount and the $500,000 amount to $250,000 and $800,000, respectively, for taxable years beginning in 2010.To reflect the HIRE Act changes, Rev. Proc. 2010-24 modified section 3.20 of Rev. Proc. 2009-50 to provide that the $125,000 amount and the $500,000 amount are $250,000 and $800,000, respectively, for taxable years beginning in 2010.

Subsequently, § 2021 of the Small Business Jobs Act extended and increased the $250,000 amount and the $800,000 amount to $500,000 and $2,000,000, respectively, for taxable years beginning in 2010 and 2011.

SECTION 3. APPLICATION

To reflect the statutory changes made to § 179 by § 2021 of the Small Business Jobs Act, section 3.20 of Rev. Proc. 2009-50, as modified by Rev. Proc. 2010-24, is modified to read as follows:

.20 Election to Expense Certain Depreciable Assets. For taxable years beginning in 2010, under § 179(b)(1)(B) the aggregate cost of any § 179 property a taxpayer may elect to treat as an expense cannot exceed $500,000. Under § 179(b)(2)(B), the $500,000 limitation is reduced (but not below zero) by the amount by which the cost of § 179 property placed in service during the 2010 taxable year exceeds $2,000,000.

SECTION 4. EFFECT ON OTHER DOCUMENTS

Section 3.20 of Rev. Proc. 2009-50, as modified and superseded by Rev. Proc. 2010-24, is modified and superseded. Rev. Proc. 2010-24 is superseded.

SECTION 5. EFFECTIVE DATE

This revenue procedure is effective for taxable years beginning in 2010.

SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Winston H. Douglas of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this revenue procedure, contact Winston H. Douglas at (202) 622-4930 (not a toll-free call).

Rev. Proc. 2010-48

SECTION 1. PURPOSE

This revenue procedure provides guidance to drafters and users of pre-approved IRAs. Section 3 of this revenue procedure provides guidance to drafters and users of prototype IRAs, including rules for when documents must be submitted to the Internal Revenue Service and new user fees for individual retirement annuities. Section 4 provides guidance to users of the Service’s model IRAs and describes the availability of new model individual retirement annuities.

SECTION 2. BACKGROUND AND GENERAL INFORMATION

.01 Rev. Proc. 87-50, 1987-2 C.B. 647, as modified by Rev. Proc. 97-29, 1997-1 C.B. 698, and Rev. Proc. 98-59, 1998-2 C.B. 727, provides the procedures for a sponsoring organization or a mass submitter (a “prototype sponsor”) to apply to the Service for an opinion letter on whether a prototype traditional, SIMPLE or Roth IRA meets the requirements of Internal Revenue Code § 408(a) or (b), § 408(p) or § 408A, respectively. Rev. Proc. 87-50 also contains procedures for employers and employee associations to apply for a ruling on a § 408(c) IRA.

.02 Rev. Proc. 2002-10, 2002-1 C.B. 401, provided guidance on updating IRAs for new regulations on required minimum distributions and for changes made by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), Pub. L. 107-16.

.03 Ann. 2007-55, 2007-1 C.B. 1384, provided guidance to sponsors of prototype Roth IRAs who wished to amend their documents to accept rollovers from designated Roth accounts described in § 402A.

.04 Notice 2009-82, 2009-41 I.R.B. 491, provides that IRAs do not have to be amended for new § 401(a)(9)(H) pending the issuance of further guidance.

.05 Model forms are available for taxpayers who want to use a pre-approved document to establish an IRA without using a prototype document. The model IRA forms are: Form 5305, Traditional Individual Retirement Trust Account; Form 5305-A, Traditional Individual Retirement Custodial Account; Form 5305-R, Roth Individual Retirement Trust Account; Form 5305-RA, Roth Individual Retirement Custodial Account; Form 5305-RB, Roth Individual Retirement Annuity Endorsement; Form 5305-S, SIMPLE Individual Retirement Trust Account; and Form 5305-SA, SIMPLE Individual Retirement Custodial Account. Also, two new model forms will soon be available: Form 5305-TB, Traditional Individual Retirement Annuity Endorsement; and Form 5305-SB, SIMPLE Individual Retirement Annuity Endorsement (see Section 4.02 below).

.06 Statutory changes since 2002. The following statutory changes relating to the qualification of IRAs became effective after mandatory amendments were announced in Rev. Proc. 2002-10 and Ann. 2007-55:

(1) Section 201 of the Gulf Opportunity Zone Act of 2005 (“GOZA”), Pub. L. 109-135, provided that certain distributions from retirement plans made on account of Hurricane Katrina, Rita or Wilma may be repaid to an eligible retirement plan (as defined in Code § 402(c)(8)(B)).

(2) Section 512 of the Tax Increase Prevention and Reconciliation Act of 2005 (“TIPRA”), Pub. L. 109-222, eliminated the $100,000 modified adjusted gross income limit and the joint filing requirement for individuals wanting to make qualified rollover contributions (other than from a designated Roth account or from a Roth IRA) to Roth IRAs, effective for distributions after 2009.

(3) Section 2 of the Heroes Earned Retirement Opportunities Act (“HERO Act”), Pub. L. 109-227, provided that compensation earned by members of the armed forces for service in a combat zone is taken into account for purposes of making IRA contributions, effective for taxable years beginning after 2003.

(4) Section 824 of the Pension Protection Act of 2006 (“PPA”), Pub. L. 109-280, as amended by WRERA (see Section 2.06(15) of this revenue procedure), provided that Roth IRAs can accept rollovers from any eligible retirement plan (as defined in Code § 402(c)(8)(B)), effective for distributions after 2007.

(5) Section 827 of PPA, as amended by WRERA (see item (15) below), provided that qualified reservist distributions (as defined in Code § 72(t)(2)(G)) may be repaid to an IRA, effective for individuals called to active duty after September 11, 2001.

(6) Section 829 of PPA, as amended by WRERA (see item (15) below), provided that a nonspouse beneficiary of a deceased participant’s accrued benefit in an eligible retirement plan, other than an IRA, can roll over any portion of the benefit in a direct trustee-to-trustee transfer to an IRA established to receive such rollover, effective for distributions made after 2006.

(7) Section 831 of PPA provided that certain individuals who were participants in a § 401(k) plan maintained by certain indicted employers could make special catch-up contributions equal to three times the otherwise applicable IRA contribution limit, effective for taxable years beginning after 2006 and before 2010.

(8) Section 833 of PPA provided that the modified adjusted gross income limits for regular contributions to Roth IRAs are adjusted for inflation, effective for taxable years beginning after 2006.

(9) Section 105 of the Heroes Earnings Assistance and Relief Act of 2008 (“HEART Act”), Pub. L. 110-245, provides that compensation for purposes of making IRA contributions includes differential wage payments (as defined in Code § 3401(h)(2)), effective for years beginning after 2008.

(10) Section 107 of the HEART Act extended the application of the rules on qualified reservist distributions (see item (5) above).

(11) Section 109 of the HEART Act provided that certain military death gratuities are treated as qualified rollover contributions within the meaning of Code § 408A(e) and thus can be contributed to Roth IRAs, effective for deaths occurring after October 6, 2001.

(12) Section 15345 of the Food, Conservation, and Energy Act of 2008, Pub. L. 110-246, provided that certain distributions from retirement plans made on account of the Kansas May 4, 2007, severe storms and tornados may be repaid to an eligible retirement plan (as defined in Code § 402(c)(8)(B)).

(13) Section 504 of Division C of the Emergency Economic Stabilization Act of 2008 (“EESA”), Pub. L. 110-343, provides that certain amounts received in connection with the Exxon Valdez litigation may be contributed to an eligible retirement plan (as defined in Code § 402(c)(8)(B)).

(14) Section 702 of Division C of EESA provided that certain distributions from retirement plans made on account of severe storms, tornados and flooding that occurred in certain parts of the Midwest during May and June of 2008 may be repaid to an eligible retirement plan (as defined in Code § 402(c)(8)(B)).

(15) Section 108(d), (e) and (f) of the Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”), Pub. L. 110-458, made technical corrections to PPA §§ 824, 827 and 829, respectively. Section 2.06(4), (5) and (6) of this revenue procedure reflects these PPA sections as amended by WRERA.

(16) Section 125 of WRERA provided that certain bankruptcy payments made in settlement of claims against airline carriers are treated as qualified rollover contributions within the meaning of Code § 408A(e) and thus can be contributed to Roth IRAs, effective for contributions made after December 23, 2008, with respect to payments made any time.

(17) Section 201 of WRERA provided that required minimum distributions from IRAs are not required for 2009.

.07 Rev. Proc. 2010-8, 2010-1 I.R.B. 234, lists the user fees for opinion letters on prototype IRAs.

SECTION 3. OPINION LETTERS FOR IRAS

.01 Amendment not required. A prototype IRA may, but need not, be amended to reflect a statutory change listed in Section 2.06 of this revenue procedure in order for a trustee, custodian or issuer (hereinafter “trustee”) to take advantage of the change. Thus, a trustee may accept the additional IRA contributions listed in Section 2.06(1) through (16) of this revenue procedure and suspend 2009 required minimum distributions pursuant to Section 2.06(17) of this revenue procedure without specific authorizing language in the prototype IRA. Similarly, a § 408(c) IRA need not be amended.

.02 Permissive amendment. Prototype IRAs may be amended, solely to incorporate the statutory changes listed in Section 2.06 of this revenue procedure, without affecting reliance on a favorable opinion letter. Similarly, a § 408(c) IRA may be so amended without affecting reliance on a favorable ruling. Sample language for these changes is available on the Service’s Web Site (see Section 3.04 of this revenue procedure).

.03 Application for new opinion letters. A prototype sponsor may apply to the Service any time for an IRA opinion letter, including an opinion letter for an amendment solely to incorporate the statutory changes listed in Section 2.06 of this revenue procedure. The IRA document must be submitted using the appropriate application form and following the instructions on that form. Form 5306, Application for Approval of Prototype or Employer Sponsored Individual Retirement Arrangement (IRA), is used for prototype IRA submissions.

.04 Sample language. A Listing of Required Modifications, or LRMs, that the Service finds acceptable for prototype IRAs is available on the Service’s Web Site at www.irs.gov . (Search for “LRMs”.) In order to receive a favorable opinion letter, prototype documents must include language that addresses every issue addressed in the LRMs, unless clearly inapplicable. Identical language is not necessary, but issues addressed in an LRM may not be abbreviated by using references to Code sections or such phrases as “in accordance with the law.”

.05 Revised procedures and user fees for annuities. Beginning with applications submitted after December 13, 2010, prototype sponsors of individual retirement annuities described in § 408(b) that use one IRA endorsement with one or more annuity contracts may submit only the IRA endorsement (and not the contracts) to the Service for approval. Sponsors that take advantage of this new procedure will be issued an opinion letter referencing the IRA endorsement, thereby reducing the number of opinion letters issued and, correspondingly, the applicable user fees. The Service recently issued a revised Form 5306, reflecting the new procedures. The IRA endorsement must include all IRA qualification rules and must provide that the terms of the IRA endorsement supersede any conflicting terms in the annuity contracts to which the IRA endorsement applies. Sponsors that use different IRA endorsements for each contract, that use no endorsements or that simply want an opinion letter for each contract may submit applications to the Service, including with such applications the document or documents that constitute the IRA.

.06 Dual-purpose IRAs. Rev. Proc. 98-59 required applicants for opinion letters on prototype documents designed to be used as either a traditional IRA or a Roth IRA to write “Dual-purpose IRA” on Form 5306. Form 5306 has been revised to include a checkbox to identify a dual-purpose IRA application, so writing “Dual-purpose IRA” on the form will no longer be required.

SECTION 4. MODEL IRAS

.01 Amendment not required. Model IRAs need not be amended in order for trustees to operate in accordance with the statutory provisions listed in Section 2.06 above. The Service expects to issue revised model IRAs shortly, and although use of the new models is not required, the Service recommends adoption of the latest model IRAs.

.02 New model IRAs. The Service will issue two model IRAs for use by issuers and annuitants to establish a traditional individual retirement annuity or a SIMPLE individual retirement annuity. The forms — Form 5305-TB, Traditional Individual Retirement Annuity Endorsement; and Form 5305-SB, SIMPLE Individual Retirement Annuity Endorsement — are expected to be available shortly.

SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Procs. 87-50 and 98-59 are modified.

DRAFTING INFORMATION

The principal author of this revenue procedure is Roger Kuehnle of the Employee Plans, Tax Exempt and Government Entities Division. Questions regarding this revenue procedure may be sent via e-mail to RetirementPlanQuestions@irs.gov.

Rev. Proc. 2010-49

SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2010 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2008-10, 2008-1 C.B. 290, for background concerning the loss payment patterns and application of the discount factors.

SECTION 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.

SECTION 3. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2010. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2010, which is 3.81 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 2005 annual statement. See Rev. Proc. 2008-10, section 2, for additional background on discounting under § 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 Tables.

Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2010
(Interest rate: 3.81 percent)
Lines of Business
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 98.1478 percent to discount unpaid losses incurred in this line of business in the 2010 accident year and that are outstanding at the end of the 2010 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2010 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 (%)
2010 89.4096 89.4096 10.5904 10.3774 97.9889
2011 99.6848 10.2752 0.3152 0.3037 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 0.1576 0.1576 0.1547 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 23.6718 23.6718 76.3282 70.5406 92.4174
2011 47.5425 23.8708 52.4575 48.9069 93.2316
2012 66.6847 19.1421 33.3153 31.2669 93.8514
2013 81.5105 14.8258 18.4895 17.3526 93.8509
2014 90.0548 8.5443 9.9452 9.3062 93.5944
2015 94.7311 4.6763 5.2689 4.8983 92.9653
2016 97.0602 2.3292 2.9398 2.7118 92.2448
2017 98.1174 1.0572 1.8826 1.7379 92.3179
2018 98.8692 0.7518 1.1308 1.0382 91.8115
2019 99.1160 0.2467 0.8840 0.8263 93.4738
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.2467 0.6373 0.6064 95.1568
2021 0.2467 0.3906 0.3782 96.8210
2022 and later years 0.2467 0.1439 0.1412 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 95.9976 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 34.7004 34.7004 65.2996 59.6104 91.2876
2011 58.6076 23.9072 41.3924 37.5232 90.6525
2012 71.7608 13.1532 28.2392 25.5514 90.4822
2013 81.4987 9.7379 18.5013 16.6033 89.7412
2014 87.8488 6.3501 12.1512 10.7660 88.5998
2015 91.4226 3.5739 8.5774 7.5348 87.8456
2016 93.4057 1.9831 6.5943 5.8014 87.9763
2017 94.2280 0.8222 5.7720 5.1847 89.8241
2018 95.4875 1.2595 4.5125 4.0989 90.8346
2019 96.3560 0.8685 3.6440 3.3702 92.4859
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.8685 2.7754 2.6136 94.1702
2021 0.8685 1.9069 1.8283 95.8774
2022 0.8685 1.0383 1.0130 97.5588
2023 and later years 0.8685 0.1698 0.1666 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2071 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 25.2328 25.2328 74.7672 71.3063 95.3711
2011 61.1025 35.8698 38.8975 37.4764 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 19.4487 19.4487 19.0885 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 7.7824 7.7824 92.2176 88.4888 95.9565
2011 62.1390 54.3565 37.8610 36.4778 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 18.9305 18.9305 18.5799 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 34.7004 34.7004 65.2996 59.6104 91.2876
2011 58.6076 23.9072 41.3924 37.5232 90.6525
2012 71.7608 13.1532 28.2392 25.5514 90.4822
2013 81.4987 9.7379 18.5013 16.6033 89.7412
2014 87.8488 6.3501 12.1512 10.7660 88.5998
2015 91.4226 3.5739 8.5774 7.5348 87.8456
2016 93.4057 1.9831 6.5943 5.8014 87.9763
2017 94.2280 0.8222 5.7720 5.1847 89.8241
2018 95.4875 1.2595 4.5125 4.0989 90.8346
2019 96.3560 0.8685 3.6440 3.3702 92.4859
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.8685 2.7754 2.6136 94.1702
2021 0.8685 1.9069 1.8283 95.8774
2022 0.8685 1.0383 1.0130 97.5588
2023 and later years 0.8685 0.1698 0.1666 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2071 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 4.9425 4.9425 95.0575 85.5860 90.0359
2011 19.9369 14.9944 80.0631 73.5694 91.8892
2012 44.3489 24.4120 55.6511 51.4996 92.5402
2013 64.8374 20.4885 35.1626 32.5867 92.6741
2014 80.2530 15.4156 19.7470 18.1217 91.7692
2015 85.7907 5.5377 14.2093 13.1699 92.6850
2016 91.2722 5.4815 8.7278 8.0867 92.6547
2017 93.3314 2.0593 6.6686 6.2967 94.4240
2018 96.1257 2.7942 3.8743 3.6897 95.2335
2019 97.6538 1.5281 2.3462 2.2733 96.8916
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 1.5281 0.8182 0.8030 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 1.5878 1.5878 98.4122 83.0418 84.3816
2011 4.4720 2.8842 95.5280 82.2670 87.1650
2012 17.7738 13.3018 82.2262 72.8866 88.6416
2013 35.8814 18.1076 64.1186 57.2143 89.2320
2014 52.9447 17.0633 47.0553 42.0088 89.2755
2015 68.4348 15.4901 31.5652 27.8270 88.1571
2016 79.5616 11.1268 20.4384 17.5503 85.8696
2017 85.8198 6.2582 14.1802 11.8427 83.5160
2018 90.1267 4.3069 9.8733 7.9057 80.0721
2019 90.3701 0.2434 9.6299 7.9590 82.6486
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.2434 9.3865 8.0142 85.3803
2021 0.2434 9.1431 8.0716 88.2805
2022 0.2434 8.8998 8.1312 91.3639
2023 0.2434 8.6564 8.1930 94.6469
2024 and later years 0.2434 8.4130 8.2572 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 89.4537 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 72.9064 72.9064 27.0936 26.2493 96.8838
2011 93.5836 20.6771 6.4164 6.1820 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 3.2082 3.2082 3.1488 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 52.5880 52.5880 47.4120 44.4297 93.7097
2011 80.0449 27.4570 19.9551 18.1473 90.9409
2012 86.1625 6.1175 13.8375 12.6057 91.0982
2013 90.7452 4.5827 9.2548 8.4168 90.9453
2014 93.9006 3.1555 6.0994 5.5225 90.5422
2015 95.7613 1.8607 4.2387 3.8371 90.5259
2016 96.8755 1.1141 3.1245 2.8481 91.1536
2017 97.6715 0.7960 2.3285 2.1456 92.1445
2018 98.0329 0.3615 1.9671 1.8591 94.5101
2019 98.6810 0.6481 1.3190 1.2696 96.2555
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.6481 0.6709 0.6577 98.0252
2021 and later years 0.6481 0.0228 0.0224 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0254 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 67.9528 67.9528 32.0472 30.8911 96.3926
2011 89.4609 21.5081 10.5391 10.1541 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 5.2695 5.2695 5.1719 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 5.8796 5.8796 94.1204 83.8370 89.0742
2011 18.8735 12.9938 81.1265 73.7921 90.9593
2012 41.6840 22.8105 58.3160 53.3626 91.5059
2013 62.5322 20.8483 37.4678 34.1540 91.1557
2014 73.5207 10.9885 26.4793 24.2594 91.6166
2015 82.0036 8.4829 17.9964 16.5408 91.9114
2016 88.6279 6.6244 11.3721 10.4216 91.6420
2017 90.7107 2.0828 9.2893 8.6965 93.6193
2018 94.8439 4.1332 5.1561 4.8167 93.4178
2019 96.2689 1.4249 3.7311 3.5484 95.1017
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 1.4249 2.3062 2.2317 96.7713
2021 and later years 1.4249 0.8812 0.8649 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.1192 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 13.6594 13.6594 86.3406 75.1929 87.0887
2011 24.8389 11.1795 75.1611 66.6672 88.6992
2012 41.7792 16.9403 58.2208 51.9473 89.2247
2013 58.4995 16.7203 41.5005 36.8907 88.8921
2014 69.5197 11.0203 30.4803 27.0680 88.8049
2015 77.7513 8.2316 22.2487 19.7123 88.6000
2016 84.2243 6.4730 15.7757 13.8682 87.9089
2017 83.2275 -0.9968 16.7725 15.4122 91.8899
2018 88.8524 5.6249 11.1476 10.2684 92.1130
2019 91.3852 2.5328 8.6148 8.0790 93.7807
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 2.5328 6.0820 5.8062 95.4658
2021 2.5328 3.5492 3.4468 97.1162
2022 and later years 2.5328 1.0164 0.9976 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.9123 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 42.6108 42.6108 57.3892 54.2420 94.5161
2011 71.5827 28.9719 28.4173 26.7900 94.2735
2012 84.6947 13.1120 15.3053 14.4512 94.4197
2013 92.3556 7.6610 7.6444 7.1963 94.1386
2014 96.2369 3.8812 3.7631 3.5160 93.4328
2015 97.9275 1.6907 2.0725 1.9274 92.9997
2016 98.7719 0.8444 1.2281 1.1405 92.8686
2017 99.2692 0.4973 0.7308 0.6773 92.6773
2018 99.5053 0.2361 0.4947 0.4625 93.4984
2019 99.6440 0.1387 0.3560 0.3389 95.1810
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.1387 0.2174 0.2105 96.8431
2021 and later years 0.1387 0.0787 0.0773 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.1586 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 1.0259 1.0259 98.9741 84.5737 85.4504
2011 11.7927 10.7667 88.2073 76.8261 87.0971
2012 29.3642 17.5716 70.6358 61.8499 87.5618
2013 55.1655 25.8012 44.8345 37.9183 84.5738
2014 83.4171 28.2516 16.5829 10.5782 63.7897
2015 64.8933 -18.5238 35.1067 29.8546 85.0396
2016 82.3346 17.4414 17.6654 13.2216 74.8445
2017 86.3986 4.0640 13.6014 9.5846 70.4680
2018 76.3310 -10.0676 23.6690 20.2074 85.3750
2019 78.7910 2.4600 21.2090 18.4709 87.0899
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 2.4600 18.7490 16.6682 88.9018
2021 2.4600 16.2890 14.7969 90.8395
2022 2.4600 13.8290 12.8542 92.9509
2023 2.4600 11.3691 10.8376 95.3250
2024 and later years 2.4600 8.9091 8.7441 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 91.2831 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 5.0466 5.0466 94.9534 80.9549 85.2575
2011 13.6935 8.6469 86.3065 75.2292 87.1651
2012 28.2541 14.5606 71.7459 63.2600 88.1723
2013 41.3083 13.0542 58.6917 52.3697 89.2284
2014 59.3693 18.0610 40.6307 35.9631 88.5121
2015 73.0717 13.7024 26.9283 23.3723 86.7946
2016 74.6612 1.5895 25.3388 22.6433 89.3621
2017 78.9833 4.3221 21.0167 19.1024 90.8912
2018 86.1231 7.1398 13.8769 12.5556 90.4784
2019 88.6931 2.5700 11.3069 10.4155 92.1160
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 2.5700 8.7369 8.1938 93.7837
2021 2.5700 6.1669 5.8875 95.4689
2022 2.5700 3.5969 3.4933 97.1193
2023 and later years 2.5700 1.0269 1.0079 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2670 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — 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 (%)
2010 12.9458 12.9458 87.0542 81.1839 93.2567
2011 60.1796 47.2338 39.8204 36.1518 90.7872
2012 80.8225 20.6429 19.1775 16.4967 86.0213
2013 84.9430 4.1205 15.0570 12.9270 85.8537
2014 85.6680 0.7250 14.3320 12.6808 88.4791
2015 80.0452 -5.6229 19.9548 18.8929 94.6784
2016 86.7013 6.6561 13.2987 12.8310 96.4830
2017 97.2533 10.5520 2.7467 2.5688 93.5201
2018 97.6721 0.4188 2.3279 2.2399 96.2189
2019 98.8078 1.1357 1.1922 1.1680 97.9772
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 1.1357 0.0564 0.0554 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0716 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — 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 (%)
2010 32.5917 32.5917 67.4083 55.1981 81.8862
2011 33.3995 0.8078 66.6005 56.4781 84.8014
2012 35.4948 2.0953 64.5052 56.4951 87.5823
2013 44.0321 8.5373 55.9679 49.9492 89.2461
2014 64.8299 20.7979 35.1701 30.6619 87.1818
2015 66.4358 1.6059 33.5642 30.1939 89.9588
2016 77.8097 11.3738 22.1903 19.7558 89.0289
2017 82.4438 4.6341 17.5562 15.7869 89.9222
2018 84.1944 1.7507 15.8056 14.6047 92.4025
2019 87.9223 3.7279 12.0777 11.3629 94.0821
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 3.7279 8.3498 7.9976 95.7823
2021 3.7279 4.6219 4.5041 97.4510
2022 and later years 3.7279 0.8940 0.8775 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.2504 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Reinsurance — 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 (%)
2010 8.4783 8.4783 91.5217 83.1236 90.8239
2011 28.0475 19.5693 71.9525 66.3521 92.2165
2012 60.4351 32.3875 39.5649 35.8813 90.6897
2013 82.4448 22.0097 17.5552 14.8233 84.4382
2014 90.2720 7.8271 9.7280 7.4132 76.2044
2015 85.3168 -4.9551 14.6831 12.7442 86.7951
2016 88.3777 3.0608 11.6223 10.1112 86.9983
2017 89.9934 1.6157 10.0066 8.8503 88.4442
2018 81.6664 -8.3269 18.3336 17.6716 96.3891
2019 91.0491 9.3827 8.9509 8.7851 98.1478
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0675 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, 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 (%)
2010 44.5756 44.5756 55.4244 53.6764 96.8407
2011 88.4263 41.8507 13.5737 13.0778 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 6.7869 6.7869 6.6612 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 19.0410 19.0410 80.9590 70.2208 86.7362
2011 40.2442 21.2032 59.7558 51.2928 85.8374
2012 57.1497 16.9055 42.8503 36.0225 84.0661
2013 67.8601 10.7104 32.1399 26.4825 82.3975
2014 75.5399 7.6797 24.4601 19.6668 80.4034
2015 80.1157 4.5758 19.8843 15.7539 79.2278
2016 82.1828 2.0672 17.8172 14.2480 79.9677
2017 84.4045 2.2217 15.5955 12.5272 80.3259
2018 85.5195 1.1150 14.4805 11.8685 81.9618
2019 86.2855 0.7661 13.7145 11.5402 84.1460
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 0.7661 12.9484 11.1993 86.4920
2021 0.7661 12.1823 10.8455 89.0265
2022 0.7661 11.4163 10.4782 91.7830
2023 0.7661 10.6502 10.0969 94.8047
2024 and later years 0.7661 9.8842 9.7011 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 89.9627 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Sarah E. Swan of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Swan at (202) 622-8443 (not a toll-free call).

Rev. Proc. 2010-50

SECTION 1. PURPOSE

This revenue procedure prescribes the salvage discount factors for the 2010 accident year. These factors must be used to compute discounted estimated salvage recoverable under § 832 of the Internal Revenue Code.

SECTION 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.

SECTION. 3. SCOPE

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

SECTION 4. APPLICATION

.01 The following tables present separately for each line of business the discount factors under § 832 for the 2010 accident year. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2010, which is 3.81 percent, and by assuming all estimated salvage is recovered in the middle of each calendar year. See Rev. Proc. 2008-11, 2008-1 C.B. 301, 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 annual statement approved by the National Association of Insurance Commissioners. 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, 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 2010
(Interest rate: 3.81 percent)
Lines of Business
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 98.1478 percent to discount salvage recoverable with respect to losses incurred in this line of business in the 2010 accident year as of the end of the 2010 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount all salvage recoverable in this line of business as of the end of the 2010 taxable year.
Auto Physical Damage
Tax Year Discount Factors (%)
2010 97.3968
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Commercial Auto/Truck Liability/Medical
Tax Year Discount Factors (%)
2010 92.7837
2011 92.7323
2012 93.0580
2013 93.3885
2014 94.0857
2015 93.8868
2016 92.4123
2017 93.2791
2018 96.4600
2019 98.1478
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Composite
Tax Year Discount Factors (%)
2010 92.7966
2011 92.5582
2012 92.3906
2013 92.2259
2014 91.6392
2015 90.7679
2016 91.5729
2017 92.8475
2018 94.7606
2019 96.4814
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1394 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Fidelity/Surety
Tax Year Discount Factors (%)
2010 94.0623
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Financial Guaranty/Mortgage Guaranty
Tax Year Discount Factors (%)
2010 95.0489
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
International (Composite)
Tax Year Discount Factors (%)
2010 92.7966
2011 92.5582
2012 92.3906
2013 92.2259
2014 91.6392
2015 90.7679
2016 91.5729
2017 92.8475
2018 94.7606
2019 96.4814
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1394 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Medical Malpractice — Claims-Made
Tax Year Discount Factors (%)
2010 93.0786
2011 94.0952
2012 92.5904
2013 93.1817
2014 92.5233
2015 88.3749
2016 85.2082
2017 90.8503
2018 96.6547
2019 98.1478
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Medical Malpractice — Occurrence
Tax Year Discount Factors (%)
2010 86.3162
2011 90.4919
2012 92.7220
2013 85.1582
2014 95.0887
2015 91.9139
2016 93.4195
2017 96.1175
2018 97.2711
2019 98.1478
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Miscellaneous Casualty
Tax Year Discount Factors (%)
2010 96.7847
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 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 (%)
2010 93.4004
2011 92.8257
2012 92.7508
2013 92.6906
2014 91.9254
2015 90.4434
2016 91.5362
2017 93.8270
2018 95.1497
2019 96.8145
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Other (Including Credit)
Tax Year Discount Factors (%)
2010 95.8998
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Other Liability — Claims-Made
Tax Year Discount Factors (%)
2010 89.0574
2011 90.1163
2012 88.3414
2013 91.3936
2014 92.7947
2015 94.5684
2016 93.5605
2017 92.2516
2018 97.5182
2019 98.1478
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Other Liability — Occurrence
Tax Year Discount Factors (%)
2010 87.8282
2011 88.8138
2012 91.0169
2013 91.7356
2014 91.2069
2015 91.3193
2016 90.8227
2017 93.4080
2018 96.0113
2019 97.7168
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Private Passenger Auto Liability/Medical
Tax Year Discount Factors (%)
2010 94.8467
2011 94.8695
2012 94.6345
2013 93.8178
2014 93.2668
2015 92.5396
2016 93.3887
2017 94.8601
2018 94.9293
2019 96.6211
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Products Liability — Claims-Made
Tax Year Discount Factors (%)
2010 89.5111
2011 53.8777
2012 56.2338
2013 91.2109
2014 81.2016
2015 91.8947
2016 61.7067
2017 91.0293
2018 92.1071
2019 93.1849
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 2010 accident year.
2020 94.8773
2021 96.5773
2022 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 95.8305 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Products Liability — Occurrence
Tax Year Discount Factors (%)
2010 88.3200
2011 90.2935
2012 92.0747
2013 92.8492
2014 93.2720
2015 90.9592
2016 91.5621
2017 94.3528
2018 94.6093
2019 96.3618
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1145 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Reinsurance — Nonproportional Assumed Property
Tax Year Discount Factors (%)
2010 91.5967
2011 93.1520
2012 95.9361
2013 81.1923
2014 90.4025
2015 82.5156
2016 54.0401
2017 93.2324
2018 74.7782
2019 88.7685
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 2010 accident year.
2020 90.4287
2021 92.1524
2022 93.9603
2023 95.9026
2024 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 92.3206 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Reinsurance — Nonproportional Assumed Liability
Tax Year Discount Factors (%)
2010 87.4907
2011 90.5937
2012 91.9716
2013 89.2639
2014 91.2258
2015 92.0480
2016 91.9513
2017 93.6177
2018 95.4465
2019 97.0969
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0840 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Reinsurance — Nonproportional Assumed Financial Lines
Tax Year Discount Factors (%)
2010 87.8550
2011 86.6634
2012 90.4544
2013 79.6749
2014 90.7909
2015 81.3855
2016 90.9640
2017 91.3553
2018 97.6631
2019 98.1478
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 2010 accident year.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft)
Tax Year Discount Factors (%)
2010 95.1830
2011 96.3467
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 2010 accident year.
2012 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount salvage recoverable as of the end of the 2012 taxable year with respect to losses incurred in this line of business in 2010 and prior years.
Workers’ Compensation
Tax Year Discount Factors (%)
2010 89.0169
2011 90.9477
2012 91.7039
2013 91.6235
2014 90.2053
2015 88.8704
2016 89.4375
2017 89.1742
2018 91.2385
2019 92.9096
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 2010 accident year.
2020 94.6208
2021 96.3708
2022 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 95.6888 percent to discount salvage recoverable as of the end of the 2020 taxable year with respect to losses incurred in this line of business in 2010 and prior years.

DRAFTING INFORMATION

The principal author of this revenue procedure is Sarah E. Swan of the Office of the Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Swan at (202) 622-8443 (not a toll-free call).

Part IV. Items of General Interest

Announcement 2010-83

Revised Regulations Concerning Section 403(b) Tax-Sheltered Annuity Contracts; Correction

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Correcting amendment.

SUMMARY:

This document contains corrections to final regulations (T.D. 9340, 2007-2 C.B. 487) that were published in the Federal Register on Thursday, July 26, 2007 (72 FR 41128) providing updated guidance on section 403(b) contracts of public schools and tax-exempt organizations described in section 501(c)(3). These regulations will affect sponsors of section 403(b) contracts, administrators, participants, and beneficiaries.

DATES:

The correction is effective October 26, 2010, and is applicable on July 26, 2007.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, John Tolleris at (202) 622-6060; concerning the regulations as applied to church-related entities, Sherri Edelman or Jason Levine at (202) 283-9634 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of this correction are under section 403(b) of the Internal Revenue Code.

Need for Correction

As published, final regulations (T.D. 9340) contain errors that may prove to be misleading and are in need of clarification.

* * * * *

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by the making following correcting amendments:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.403(b)-4 is amended by revising the third and fourth sentences of paragraph (c)(5) Example 12.(i) to read as follows:

§1.403(b)-4 Contribution limitations.

* * * * *

(c) * * *

(5) * * *

Example 12. (i) * * * However, the $5,000 age 50 catch-up amount deferred in 2006 is disregarded for purposes of applying the limitation at paragraph (c)(3)(i)(C) of this section to determine the special section 403(b) catch-up amount. Thus, for 2007, only $80,000 of section 403(b) elective deferrals are taken into account in applying the limitation at paragraph (c)(3)(i)(C) of this section. * * *

* * * * *

Par. 3. Section 1.403(b)-6 is amended by revising the last sentence of paragraph (e)(5) to read as follows:

§1.403-6 Timing of distributions and benefits.

* * * * *

(e) * * *

(5) * * * See also §1.403(b)-9(a)(5) for additional rules relating to annuities payable from a retirement income account.

* * * * *

Par. 4. Section 1.403(b)-7 is amended by revising the fourth sentence of paragraph (b)(1) to read as follows:

§1.403(b)-7 Taxation of distributions and benefits.

* * * * *

(b) * * *

(1) * * * Thus, to the extent that a portion of a distribution (including a distribution from a designated Roth account) would be excluded from gross income if it were not rolled over, if that portion of the distribution is to be rolled over into an eligible retirement plan that is not an IRA, the rollover must be accomplished through a direct rollover of the entire distribution to a plan qualified under section 401(a) or a section 403(b) plan and that plan must agree to separately account for the amount not includible in income (so that a 60-day rollover to a plan qualified under section 401(a) or another section 403(b) plan is not available for this portion of the distribution). * * *

* * * * *

Par. 5. Section 1.403(b)-10 is amended by revising the heading of paragraph (b)(3) and adding a heading to paragraph (b)(3)(i) to read as follows:

(b)(3)(i) to read as follows:

§1.403(b)-10 Miscellaneous provisions.

* * * * *

(b) * * *

(3) Requirements for plan-to-plan transfers—(i) In general. * * *

* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).

Note

(Filed by the Office of the Federal Register on October 25, 2010, 8:45 a.m., and published in the issue of the Federal Register for October 26, 2010, 75 F.R. 65566)

Announcement 2010-91

Deletions From Cumulative List of Organizations Contributions to Which are Deductible Under Section 170 of the Code

The Internal Revenue Service has revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Internal Revenue Code of 1986.

Generally, the Service will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization no longer qualifies. However, the Service is not precluded from disallowing a deduction for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on December 13, 2010, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual, in whole or in part, for the acts or omissions of the organization that were the basis for revocation.

Org. Name City State
Debt Management Corporation Orange Park FL

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 2010-1 through 2010-26 is in Internal Revenue Bulletin 2010-26, dated June 28, 2010.

Bulletins 2010-27 through 2010-50

Announcements

Article Issue Link Page
2010-43 2010-27 I.R.B. 2010-27 42
2010-44 2010-28 I.R.B. 2010-28 54
2010-45 2010-29 I.R.B. 2010-29 87
2010-46 2010-29 I.R.B. 2010-29 87
2010-47 2010-30 I.R.B. 2010-30 173
2010-48 2010-32 I.R.B. 2010-32 234
2010-49 2010-34 I.R.B. 2010-34 272
2010-50 2010-33 I.R.B. 2010-33 260
2010-51 2010-33 I.R.B. 2010-33 261
2010-52 2010-36 I.R.B. 2010-36 315
2010-53 2010-36 I.R.B. 2010-36 323
2010-54 2010-38 I.R.B. 2010-38 386
2010-55 2010-37 I.R.B. 2010-37 346
2010-56 2010-39 I.R.B. 2010-39 398
2010-57 2010-38 I.R.B. 2010-38 386
2010-58 2010-38 I.R.B. 2010-38 387
2010-59 2010-39 I.R.B. 2010-39 399
2010-60 2010-40 I.R.B. 2010-40 417
2010-61 2010-40 I.R.B. 2010-40 417
2010-62 2010-40 I.R.B. 2010-40 417
2010-63 2010-40 I.R.B. 2010-40 417
2010-64 2010-40 I.R.B. 2010-40 418
2010-65 2010-40 I.R.B. 2010-40 418
2010-66 2010-40 I.R.B. 2010-40 418
2010-67 2010-40 I.R.B. 2010-40 418
2010-68 2010-40 I.R.B. 2010-40 418
2010-69 2010-40 I.R.B. 2010-40 418
2010-70 2010-40 I.R.B. 2010-40 418
2010-71 2010-40 I.R.B. 2010-40 418
2010-72 2010-40 I.R.B. 2010-40 419
2010-73 2010-40 I.R.B. 2010-40 419
2010-74 2010-40 I.R.B. 2010-40 419
2010-75 2010-41 I.R.B. 2010-41 428
2010-76 2010-41 I.R.B. 2010-41 432
2010-77 2010-41 I.R.B. 2010-41 433
2010-78 2010-41 I.R.B. 2010-41 433
2010-79 2010-42 I.R.B. 2010-42 475
2010-80 2010-45 I.R.B. 2010-45 638
2010-81 2010-45 I.R.B. 2010-45 638
2010-82 2010-42 I.R.B. 2010-42 476
2010-83 2010-50 I.R.B. 2010-50
2010-84 2010-44 I.R.B. 2010-44 603
2010-85 2010-44 I.R.B. 2010-44 604
2010-86 2010-44 I.R.B. 2010-44 604
2010-87 2010-43 I.R.B. 2010-43 557
2010-88 2010-47 I.R.B. 2010-47 753
2010-89 2010-46 I.R.B. 2010-46 669
2010-90 2010-50 I.R.B. 2010-50 816
2010-91 2010-50 I.R.B. 2010-50


Notices

Article Issue Link Page
2010-48 2010-27 I.R.B. 2010-27 9
2010-49 2010-27 I.R.B. 2010-27 10
2010-50 2010-27 I.R.B. 2010-27 12
2010-51 2010-29 I.R.B. 2010-29 83
2010-52 2010-30 I.R.B. 2010-30 88
2010-53 2010-31 I.R.B. 2010-31 182
2010-54 2010-40 I.R.B. 2010-40 403
2010-55 2010-33 I.R.B. 2010-33 253
2010-56 2010-33 I.R.B. 2010-33 254
2010-57 2010-34 I.R.B. 2010-34 267
2010-58 2010-37 I.R.B. 2010-37 326
2010-59 2010-39 I.R.B. 2010-39 396
2010-60 2010-37 I.R.B. 2010-37 329
2010-61 2010-40 I.R.B. 2010-40 408
2010-62 2010-40 I.R.B. 2010-40 411
2010-63 2010-41 I.R.B. 2010-41 420
2010-64 2010-41 I.R.B. 2010-41 421
2010-65 2010-41 I.R.B. 2010-41 424
2010-66 2010-42 I.R.B. 2010-42 437
2010-67 2010-43 I.R.B. 2010-43 529
2010-68 2010-44 I.R.B. 2010-44 576
2010-69 2010-44 I.R.B. 2010-44 576
2010-70 2010-44 I.R.B. 2010-44 576
2010-71 2010-50 I.R.B. 2010-50
2010-72 2010-46 I.R.B. 2010-46 661
2010-73 2010-46 I.R.B. 2010-46 662
2010-74 2010-46 I.R.B. 2010-46 663
2010-75 2010-48 I.R.B. 2010-48 781
2010-76 2010-47 I.R.B. 2010-47 712
2010-78 2010-49 I.R.B. 2010-49 808
2010-79 2010-49 I.R.B. 2010-49 809
2010-81 2010-50 I.R.B. 2010-50
2010-86 2010-50 I.R.B. 2010-50


Proposed Regulations

Article Issue Link Page
138637-07 2010-44 I.R.B. 2010-44 581
132554-08 2010-48 I.R.B. 2010-48 783
139343-08 2010-33 I.R.B. 2010-33 256
119921-09 2010-45 I.R.B. 2010-45 626
137486-09 2010-46 I.R.B. 2010-46 668
142800-09 2010-44 I.R.B. 2010-44 580
144762-09 2010-45 I.R.B. 2010-45 637
151605-09 2010-31 I.R.B. 2010-31 184
153340-09 2010-42 I.R.B. 2010-42 469
112841-10 2010-27 I.R.B. 2010-27 41
118412-10 2010-29 I.R.B. 2010-29 85
119046-10 2010-40 I.R.B. 2010-40 415
120391-10 2010-35 I.R.B. 2010-35 310
120399-10 2010-32 I.R.B. 2010-32 239
125592-10 2010-43 I.R.B. 2010-43 556


Revenue Procedures

Article Issue Link Page
2010-25 2010-27 I.R.B. 2010-27 16
2010-26 2010-30 I.R.B. 2010-30 91
2010-27 2010-31 I.R.B. 2010-31 183
2010-28 2010-34 I.R.B. 2010-34 270
2010-29 2010-35 I.R.B. 2010-35 309
2010-30 2010-36 I.R.B. 2010-36 316
2010-31 2010-40 I.R.B. 2010-40 413
2010-32 2010-36 I.R.B. 2010-36 320
2010-33 2010-38 I.R.B. 2010-38 347
2010-34 2010-41 I.R.B. 2010-41 426
2010-35 2010-42 I.R.B. 2010-42 438
2010-36 2010-42 I.R.B. 2010-42 439
2010-37 2010-42 I.R.B. 2010-42 440
2010-38 2010-43 I.R.B. 2010-43 530
2010-39 2010-42 I.R.B. 2010-42 459
2010-40 2010-46 I.R.B. 2010-46 663
2010-41 2010-48 I.R.B. 2010-48 781
2010-42 2010-47 I.R.B. 2010-47 715
2010-43 2010-47 I.R.B. 2010-47 738
2010-44 2010-49 I.R.B. 2010-49 811
2010-45 2010-49 I.R.B. 2010-49 813
2010-46 2010-49 I.R.B. 2010-49 814
2010-47 2010-50 I.R.B. 2010-50
2010-48 2010-50 I.R.B. 2010-50
2010-49 2010-50 I.R.B. 2010-50
2010-50 2010-50 I.R.B. 2010-50


Revenue Rulings

Article Issue Link Page
2010-18 2010-27 I.R.B. 2010-27 1
2010-19 2010-31 I.R.B. 2010-31 174
2010-20 2010-36 I.R.B. 2010-36 312
2010-21 2010-39 I.R.B. 2010-39 388
2010-22 2010-39 I.R.B. 2010-39 388
2010-23 2010-39 I.R.B. 2010-39 388
2010-24 2010-40 I.R.B. 2010-40 400
2010-25 2010-44 I.R.B. 2010-44 571
2010-26 2010-44 I.R.B. 2010-44 573
2010-27 2010-45 I.R.B. 2010-45 620
2010-28 2010-49 I.R.B. 2010-49 804
2010-29 2010-50 I.R.B. 2010-50
2010-30 2010-50 I.R.B. 2010-50


Tax Conventions

Article Issue Link Page
2010-48 2010-32 I.R.B. 2010-32 234
2010-52 2010-36 I.R.B. 2010-36 315


Treasury Decisions

Article Issue Link Page
9486 2010-27 I.R.B. 2010-27 3
9487 2010-28 I.R.B. 2010-28 48
9488 2010-28 I.R.B. 2010-28 51
9489 2010-29 I.R.B. 2010-29 55
9490 2010-31 I.R.B. 2010-31 176
9491 2010-32 I.R.B. 2010-32 186
9492 2010-33 I.R.B. 2010-33 242
9493 2010-35 I.R.B. 2010-35 273
9494 2010-43 I.R.B. 2010-43 500
9495 2010-43 I.R.B. 2010-43 477
9496 2010-43 I.R.B. 2010-43 484
9497 2010-44 I.R.B. 2010-44 558
9498 2010-45 I.R.B. 2010-45 605
9499 2010-45 I.R.B. 2010-45 622
9500 2010-46 I.R.B. 2010-46 649
9501 2010-46 I.R.B. 2010-46 651
9502 2010-46 I.R.B. 2010-46 641
9503 2010-47 I.R.B. 2010-47 706
9504 2010-47 I.R.B. 2010-47 670
9505 2010-48 I.R.B. 2010-48 755


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 2010-1 through 2010-26 is in Internal Revenue Bulletin 2010-26, dated June 28, 2010.

Bulletins 2010-27 through 2010-50

Notices

Old Article Action New Article Issue Link Page
96-53 Modified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2003-19 Revoked by Notice 2010-53 2010-31 I.R.B. 2010-31 182
2004-2 Modified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2004-50 Modified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2005-90 Supplemented by Notice 2010-65 2010-41 I.R.B. 2010-41 424
2006-69 Amplified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2008-51 Modified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2008-52 Modified by Notice 2010-59 2010-39 I.R.B. 2010-39 396
2009-47 Obsoleted by Rev. Proc. 2010-28 2010-34 I.R.B. 2010-34 270
2009-80 Corrected by Ann. 2010-59 2010-39 I.R.B. 2010-39 399
2009-90 Superseded by Notice 2010-54 2010-40 I.R.B. 2010-40 403


Proposed Regulations

Old Article Action New Article Issue Link Page
115037-00 Withdrawn by Ann. 2010-60 2010-40 I.R.B. 2010-40 417
146893-02 Withdrawn by Ann. 2010-60 2010-40 I.R.B. 2010-40 417


Revenue Procedures

Old Article Action New Article Issue Link Page
81-18 Obsoleted by Rev. Proc. 2010-27 2010-31 I.R.B. 2010-31 183
87-50 Modified by Rev. Proc. 2010-48 2010-50 I.R.B. 2010-50
98-59 Modified by Rev. Proc. 2010-48 2010-50 I.R.B. 2010-50
2007-44 Modified by Notice 2010-48 2010-27 I.R.B. 2010-27 9
2008-33 Superseded by Rev. Proc. 2010-42 2010-47 I.R.B. 2010-47 715
2008-49 Superseded by Rev. Proc. 2010-38 2010-43 I.R.B. 2010-43 530
2008-52 Modified by Rev. Proc. 2010-44 2010-49 I.R.B. 2010-49 811
2008-52 Modified by T.D. 9504 2010-47 I.R.B. 2010-47 670
2009-18 Obsoleted in part by Rev. Proc. 2010-25 2010-27 I.R.B. 2010-27 16
2009-30 Superseded by Rev. Proc. 2010-26 2010-30 I.R.B. 2010-30 91
2009-35 Superseded by Rev. Proc. 2010-33 2010-38 I.R.B. 2010-38 347
2009-46 Superseded by Rev. Proc. 2010-37 2010-42 I.R.B. 2010-42 440
2009-47 Superseded by Rev. Proc. 2010-39 2010-42 I.R.B. 2010-42 459
2009-48 Superseded by Rev. Proc. 2010-43 2010-47 I.R.B. 2010-47 738
2009-50 Modified by Rev. Proc. 2010-35 2010-42 I.R.B. 2010-42 438
2009-50 Modified and superseded by Rev. Proc. 2010-47 2010-50 I.R.B. 2010-50
2010-3 Modified by Notice 2010-62 2010-40 I.R.B. 2010-40 411
2010-24 Superseded by Rev. Proc. 2010-47 2010-50 I.R.B. 2010-50


Revenue Rulings

Old Article Action New Article Issue Link Page
67-436 Obsoleted by T.D. 9504 2010-47 I.R.B. 2010-47 670
2003-102 Obsoleted by Rev. Rul. 2010-23 2010-39 I.R.B. 2010-39 388
2010-2 Supplemented and superseded by Rev. Rul. 2010-30 2010-50 I.R.B. 2010-50


Treasury Decisions

Old Article Action New Article Issue Link Page
9487 Corrected by Ann. 2010-50 2010-33 I.R.B. 2010-33 260


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