Breadcrumb Region

Internal Revenue Bulletin: 2011-26

June 27, 2011


Highlights of This Issue

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 2011-12 Rev. Rul. 2011-12

Interest rates; underpayments and overpayments. The rates for interest determined under section 6621 of the Code for the calendar quarter beginning July 1, 2011, will be 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments, and 6 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 1.5 percent.

EMPLOYEE PLANS

Notice 2011-49 Notice 2011-49

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in June 2011; the 24-month average segment rates; the funding transitional segment rates applicable for June 2011; and the minimum present value transitional rates for May 2011.

EXEMPT ORGANIZATIONS

Announcement 2011-33 Announcement 2011-33

A list is provided of organizations now classified as private foundations.

Announcement 2011-36 Announcement 2011-36

This announcement invites public comments on transitional issues and frequently asked questions involving the redesigned Form 990. Comments are requested by August 1, 2011.

ADMINISTRATIVE

Notice 2011-48 Notice 2011-48

This notice invites public comments on the content and administration of the registered tax return preparer competency examination. Comments are requested by July 7, 2011.

Rev. Proc. 2011-37 Rev. Proc. 2011-37

Qualified mortgage bonds; mortgage credit certificates; national median gross income. Guidance is provided concerning the use of the national and area median gross income figures by issuers of qualified mortgage bonds and mortgage credit certificates in determining the housing cost/income ratio described in section 143(f) of the Code. Rev. Proc. 2010-23 obsoleted in part.

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. 2011-12

Interest rates; underpayments and overpayments. The rates for interest determined under section 6621 of the Code for the calendar quarter beginning July 1, 2011, will be 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments, and 6 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 1.5 percent.

Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and section 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and section 301.6621-3 are generally effective for periods after December 31, 1990.

Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter. Section 6621(b)(2)(A) provides that the federal short-term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after that month. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during that month by the Secretary in accordance with section 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

Notice 88-59, 1988-1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding.

The federal short-term rate determined in accordance with section 1274(d) during April 2011 is the rate published in Revenue Ruling 2011-11, 2011-19 I.R.B. 758 to take effect beginning May 1, 2011. The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of April 2011 is 1 percent. Accordingly, an overpayment rate of 4 percent (3 percent in the case of a corporation) and an underpayment rate of 4 percent are established for the calendar quarter beginning July 1, 2011. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning July 1, 2011, is 1.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning July 1, 2011, is 6 percent. These rates apply to amounts bearing interest during that calendar quarter.

Interest factors for daily compound interest for annual rates of 1.5 percent, 3 percent, 4 percent and 6 percent are published in Tables 8, 11, 13, and 17 of Rev. Proc. 95-17, 1995-1 C.B. 556, 562, 567, and 571. Interest factors for daily compound interest for an annual rate of 0.5 percent are published in Appendix A of Revenue Ruling 2010-31, 2010-52 I.R.B. 898, 899.

Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

DRAFTING INFORMATION

The principal author of this revenue ruling is Deborah Colbert-James of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Ms. Colbert-James at (202) 622-8143 (not a toll-free call).

APPENDIX A

365 Day Year
0.5% Compound Rate 184 Days
Days Factor Days Factor Days Factor
1 0.000013699 63 0.000863380 125 0.001713784
2 0.000027397 64 0.000877091 126 0.001727506
3 0.000041096 65 0.000890801 127 0.001741228
4 0.000054796 66 0.000904512 128 0.001754951
5 0.000068495 67 0.000918223 129 0.001768673
6 0.000082195 68 0.000931934 130 0.001782396
7 0.000095894 69 0.000945646 131 0.001796119
8 0.000109594 70 0.000959357 132 0.001809843
9 0.000123294 71 0.000973069 133 0.001823566
10 0.000136995 72 0.000986781 134 0.001837290
11 0.000150695 73 0.001000493 135 0.001851013
12 0.000164396 74 0.001014206 136 0.001864737
13 0.000178097 75 0.001027918 137 0.001878462
14 0.000191798 76 0.001041631 138 0.001892186
15 0.000205499 77 0.001055344 139 0.001905910
16 0.000219201 78 0.001069057 140 0.001919635
17 0.000232902 79 0.001082770 141 0.001933360
18 0.000246604 80 0.001096484 142 0.001947085
19 0.000260306 81 0.001110197 143 0.001960811
20 0.000274008 82 0.001123911 144 0.001974536
21 0.000287711 83 0.001137625 145 0.001988262
22 0.000301413 84 0.001151339 146 0.002001988
23 0.000315116 85 0.001165054 147 0.002015714
24 0.000328819 86 0.001178768 148 0.002029440
25 0.000342522 87 0.001192483 149 0.002043166
26 0.000356225 88 0.001206198 150 0.002056893
27 0.000369929 89 0.001219913 151 0.002070620
28 0.000383633 90 0.001233629 152 0.002084347
29 0.000397336 91 0.001247344 153 0.002098074
30 0.000411041 92 0.001261060 154 0.002111801
31 0.000424745 93 0.001274776 155 0.002125529
32 0.000438449 94 0.001288492 156 0.002139257
33 0.000452154 95 0.001302208 157 0.002152985
34 0.000465859 96 0.001315925 158 0.002166713
35 0.000479564 97 0.001329641 159 0.002180441
36 0.000493269 98 0.001343358 160 0.002194169
37 0.000506974 99 0.001357075 161 0.002207898
38 0.000520680 100 0.001370792 162 0.002221627
39 0.000534386 101 0.001384510 163 0.002235356
40 0.000548092 102 0.001398227 164 0.002249085
41 0.000561798 103 0.001411945 165 0.002262815
42 0.000575504 104 0.001425663 166 0.002276544
43 0.000589211 105 0.001439381 167 0.002290274
44 0.000602917 106 0.001453100 168 0.002304004
45 0.000616624 107 0.001466818 169 0.002317734
46 0.000630331 108 0.001480537 170 0.002331465
47 0.000644039 109 0.001494256 171 0.002345195
48 0.000657746 110 0.001507975 172 0.002358926
49 0.000671454 111 0.001521694 173 0.002372657
50 0.000685161 112 0.001535414 174 0.002386388
51 0.000698869 113 0.001549133 175 0.002400120
52 0.000712578 114 0.001562853 176 0.002413851
53 0.000726286 115 0.001576573 177 0.002427583
54 0.000739995 116 0.001590293 178 0.002441315
55 0.000753703 117 0.001604014 179 0.002455047
56 0.000767412 118 0.001617734 180 0.002468779
57 0.000781121 119 0.001631455 181 0.002482511
58 0.000794831 120 0.001645176 182 0.002496244
59 0.000808540 121 0.001658897 183 0.002509977
60 0.000822250 122 0.001672619 184 0.002523710
61 0.000835960 123 0.001686340
62 0.000849670 124 0.001700062
365 Day Year
0.5% Compound Rate 184 Days
Days Factor Days Factor Days Factor
1 0.000013661 63 0.000861020 125 0.001709097
2 0.000027323 64 0.000874693 126 0.001722782
3 0.000040984 65 0.000888366 127 0.001736467
4 0.000054646 66 0.000902040 128 0.001750152
5 0.000068308 67 0.000915713 129 0.001763837
6 0.000081970 68 0.000929387 130 0.001777522
7 0.000095632 69 0.000943061 131 0.001791208
8 0.000109295 70 0.000956735 132 0.001804893
9 0.000122958 71 0.000970409 133 0.001818579
10 0.000136620 72 0.000984084 134 0.001832265
11 0.000150283 73 0.000997758 135 0.001845951
12 0.000163947 74 0.001011433 136 0.001859638
13 0.000177610 75 0.001025108 137 0.001873324
14 0.000191274 76 0.001038783 138 0.001887011
15 0.000204938 77 0.001052459 139 0.001900698
16 0.000218602 78 0.001066134 140 0.001914385
17 0.000232266 79 0.001079810 141 0.001928073
18 0.000245930 80 0.001093486 142 0.001941760
19 0.000259595 81 0.001107162 143 0.001955448
20 0.000273260 82 0.001120839 144 0.001969136
21 0.000286924 83 0.001134515 145 0.001982824
22 0.000300590 84 0.001148192 146 0.001996512
23 0.000314255 85 0.001161869 147 0.002010201
24 0.000327920 86 0.001175546 148 0.002023889
25 0.000341586 87 0.001189223 149 0.002037578
26 0.000355252 88 0.001202900 150 0.002051267
27 0.000368918 89 0.001216578 151 0.002064957
28 0.000382584 90 0.001230256 152 0.002078646
29 0.000396251 91 0.001243934 153 0.002092336
30 0.000409917 92 0.001257612 154 0.002106025
31 0.000423584 93 0.001271291 155 0.002119715
32 0.000437251 94 0.001284969 156 0.002133405
33 0.000450918 95 0.001298648 157 0.002147096
34 0.000464586 96 0.001312327 158 0.002160786
35 0.000478253 97 0.001326006 159 0.002174477
36 0.000491921 98 0.001339685 160 0.002188168
37 0.000505589 99 0.001353365 161 0.002201859
38 0.000519257 100 0.001367044 162 0.002215550
39 0.000532925 101 0.001380724 163 0.002229242
40 0.000546594 102 0.001394404 164 0.002242933
41 0.000560262 103 0.001408085 165 0.002256625
42 0.000573931 104 0.001421765 166 0.002270317
43 0.000587600 105 0.001435446 167 0.002284010
44 0.000601269 106 0.001449127 168 0.002297702
45 0.000614939 107 0.001462808 169 0.002311395
46 0.000628608 108 0.001476489 170 0.002325087
47 0.000642278 109 0.001490170 171 0.002338780
48 0.000655948 110 0.001503852 172 0.002352473
49 0.000669618 111 0.001517533 173 0.002366167
50 0.000683289 112 0.001531215 174 0.002379860
51 0.000696959 113 0.001544897 175 0.002393554
52 0.000710630 114 0.001558580 176 0.002407248
53 0.000724301 115 0.001572262 177 0.002420942
54 0.000737972 116 0.001585945 178 0.002434636
55 0.000751643 117 0.001599628 179 0.002448331
56 0.000765315 118 0.001613311 180 0.002462025
57 0.000778986 119 0.001626994 181 0.002475720
58 0.000792658 120 0.001640678 182 0.002489415
59 0.000806330 121 0.001654361 183 0.002503110
60 0.000820003 122 0.001668045 184 0.002516806
61 0.000833675 123 0.001681729
62 0.000847348 124 0.001695413
TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 — PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
PERIOD RATE In 1995-1 C.B. DAILY RATE TABLE
Before Jul. 1, 1975 6% Table 2, pg.557
Jul. 1, 1975—Jan. 31, 1976 9% Table 4, pg.559
Feb. 1, 1976—Jan. 31, 1978 7% Table 3, pg.558
Feb. 1, 1978—Jan. 31, 1980 6% Table 2, pg.557
Feb. 1, 1980—Jan. 31, 1982 12% Table 5, pg.560
Feb. 1, 1982—Dec. 31, 1982 20% Table 6, pg.560
Jan. 1, 1983—Jun. 30, 1983 16% Table 37, pg. 591
Jul. 1, 1983—Dec. 31, 1983 11% Table 27, pg. 581
Jan. 1, 1984—Jun. 30, 1984 11% Table 75, pg. 629
Jul. 1, 1984—Dec. 31, 1984 11% Table 75, pg. 629
Jan. 1, 1985—Jun. 30, 1985 13% Table 31, pg. 585
Jul. 1, 1985—Dec. 31, 1985 11% Table 27, pg. 581
Jan. 1, 1986—Jun. 30, 1986 10% Table 25, pg. 579
Jul. 1, 1986—Dec. 31, 1986 9% Table 23, pg. 577
TABLE OF INTEREST RATES
FROM JAN. 1, 1987 — DEC. 31, 1998
OVERPAYMENTS UNDERPAYMENTS
1995-1 C.B. 1995-1 C.B.
RATE TABLE PG RATE TABLE PG
Jan. 1, 1987—Mar. 31, 1987 8% 21 575 9% 23 577
Apr. 1, 1987—Jun. 30, 1987 8% 21 575 9% 23 577
Jul. 1, 1987—Sep. 30, 1987 8% 21 575 9% 23 577
Oct. 1, 1987—Dec. 31, 1987 9% 23 577 10% 25 579
Jan. 1, 1988—Mar. 31, 1988 10% 73 627 11% 75 629
Apr. 1, 1988—Jun. 30, 1988 9% 71 625 10% 73 627
Jul. 1, 1988—Sep. 30, 1988 9% 71 625 10% 73 627
Oct. 1, 1988—Dec. 31, 1988 10% 73 627 11% 75 629
Jan. 1, 1989—Mar. 31, 1989 10% 25 579 11% 27 581
Apr. 1, 1989—Jun. 30, 1989 11% 27 581 12% 29 583
Jul. 1, 1989—Sep. 30, 1989 11% 27 581 12% 29 583
Oct. 1, 1989—Dec. 31, 1989 10% 25 579 11% 27 581
Jan. 1, 1990—Mar. 31, 1990 10% 25 579 11% 27 581
Apr. 1, 1990—Jun. 30, 1990 10% 25 579 11% 27 581
Jul. 1, 1990—Sep. 30, 1990 10% 25 579 11% 27 581
Oct. 1, 1990—Dec. 31, 1990 10% 25 579 11% 27 581
Jan. 1, 1991—Mar. 31, 1991 10% 25 579 11% 27 581
Apr. 1, 1991—Jun. 30, 1991 9% 23 577 10% 25 579
Jul. 1, 1991—Sep. 30, 1991 9% 23 577 10% 25 579
Oct. 1, 1991—Dec. 31, 1991 9% 23 577 10% 25 579
Jan. 1, 1992—Mar. 31, 1992 8% 69 623 9% 71 625
Apr. 1, 1992—Jun. 30, 1992 7% 67 621 8% 69 623
Jul. 1, 1992—Sep. 30, 1992 7% 67 621 8% 69 623
Oct. 1, 1992—Dec. 31, 1992 6% 65 619 7% 67 621
Jan. 1, 1993—Mar. 31, 1993 6% 17 571 7% 19 573
Apr. 1, 1993—Jun. 30, 1993 6% 17 571 7% 19 573
Jul. 1, 1993—Sep. 30, 1993 6% 17 571 7% 19 573
Oct. 1, 1993—Dec. 31, 1993 6% 17 571 7% 19 573
Jan. 1, 1994—Mar. 31, 1994 6% 17 571 7% 19 573
Apr. 1, 1994—Jun. 30, 1994 6% 17 571 7% 19 573
Jul. 1, 1994—Sep. 30, 1994 7% 19 573 8% 21 575
Oct. 1, 1994—Dec. 31, 1994 8% 21 575 9% 23 577
Jan. 1, 1995—Mar. 31, 1995 8% 21 575 9% 23 577
Apr. 1, 1995—Jun. 30, 1995 9% 23 577 10% 25 579
Jul. 1, 1995—Sep. 30, 1995 8% 21 575 9% 23 577
Oct. 1, 1995—Dec. 31, 1995 8% 21 575 9% 23 577
Jan. 1, 1996—Mar. 31, 1996 8% 69 623 9% 71 625
Apr. 1, 1996—Jun. 30, 1996 7% 67 621 8% 69 623
Jul. 1, 1996—Sep. 30, 1996 8% 69 623 9% 71 625
Oct. 1, 1996—Dec. 31, 1996 8% 69 623 9% 71 625
Jan. 1, 1997—Mar. 31, 1997 8% 21 575 9% 23 577
Apr. 1, 1997—Jun. 30, 1997 8% 21 575 9% 23 577
Jul. 1, 1997—Sep. 30, 1997 8% 21 575 9% 23 577
Oct. 1, 1997—Dec. 31, 1997 8% 21 575 9% 23 577
Jan. 1, 1998—Mar. 31, 1998 8% 21 575 9% 23 577
Apr. 1, 1998—Jun. 30, 1998 7% 19 573 8% 21 575
Jul. 1, 1998—Sep. 30, 1998 7% 19 573 8% 21 575
Oct. 1, 1998—Dec. 31, 1998 7% 19 573 8% 21 575
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995-1 C.B.
RATE TABLE PG
Jan. 1, 1999—Mar. 31, 1999 7% 19 573
Apr. 1, 1999—Jun. 30, 1999 8% 21 575
Jul. 1, 1999—Sep. 30, 1999 8% 21 575
Oct. 1, 1999—Dec. 31, 1999 8% 21 575
Jan. 1, 2000—Mar. 31, 2000 8% 69 623
Apr. 1, 2000—Jun. 30, 2000 9% 71 625
Jul. 1, 2000—Sep. 30, 2000 9% 71 625
Oct. 1, 2000—Dec. 31, 2000 9% 71 625
Jan. 1, 2001—Mar. 31, 2001 9% 23 577
Apr. 1, 2001—Jun. 30, 2001 8% 21 575
Jul. 1, 2001—Sep. 30, 2001 7% 19 573
Oct. 1, 2001—Dec. 31, 2001 7% 19 573
Jan. 1, 2002—Mar. 31, 2002 6% 17 571
Apr. 1, 2002—Jun. 30, 2002 6% 17 571
Jul. 1, 2002—Sep. 30, 2002 6% 17 571
Oct. 1, 2002—Dec. 31, 2002 6% 17 571
Jan. 1, 2003—Mar. 31, 2003 5% 15 569
Apr. 1, 2003—Jun. 30, 2003 5% 15 569
Jul. 1, 2003—Sep. 30, 2003 5% 15 569
Oct. 1, 2003—Dec. 31, 2003 4% 13 567
Jan. 1, 2004—Mar. 31, 2004 4% 61 615
Apr. 1, 2004—Jun. 30, 2004 5% 63 617
Jul. 1, 2004—Sep. 30, 2004 4% 61 615
Oct. 1, 2004—Dec. 31, 2004 5% 63 617
Jan. 1, 2005—Mar. 31, 2005 5% 15 569
Apr. 1, 2005—Jun. 30, 2005 6% 17 571
Jul. 1, 2005—Sep. 30, 2005 6% 17 571
Oct. 1, 2005—Dec. 31, 2005 7% 19 573
Jan. 1, 2006—Mar. 31, 2006 7% 19 573
Apr. 1, 2006—Jun. 30, 2006 7% 19 573
Jul. 1, 2006—Sep. 30, 2006 8% 21 575
Oct. 1, 2006—Dec. 31, 2006 8% 21 575
Jan. 1, 2007—Mar. 31, 2007 8% 21 575
Apr. 1, 2007—Jun. 30, 2007 8% 21 575
Jul. 1, 2007—Sep. 30, 2007 8% 21 575
Oct. 1, 2007—Dec. 31, 2007 8% 21 575
Jan. 1, 2008—Mar. 31, 2008 7% 67 621
Apr. 1, 2008—Jun. 30, 2008 6% 65 619
Jul. 1, 2008—Sep. 30, 2008 5% 63 617
Oct. 1, 2008—Dec. 31, 2008 6% 65 619
Jan. 1, 2009—Mar. 31, 2009 5% 15 569
Apr. 1, 2009—Jun. 30, 2009 4% 13 567
Jul. 1, 2009—Sep. 30, 2009 4% 13 567
Oct. 1, 2009—Dec. 31, 2009 4% 13 567
Jan. 1, 2010—Mar. 31, 2010 4% 13 567
Apr. 1, 2010—Jun. 30, 2010 4% 13 567
Jul. 1, 2010—Sep. 30, 2010 4% 13 567
Oct. 1, 2010—Dec. 31, 2010 4% 13 567
Jan. 1, 2011—Mar. 31, 2011 3% 11 565
Apr. 1, 2011—Jun. 30, 2011 4% 13 567
Jul. 1, 2011—Sep. 30, 2011 4% 13 567
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 — PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTS UNDERPAYMENTS
1995-1 C.B. 1995-1 C.B.
RATE TABLE PG RATE TABLE PG
Jan. 1, 1999—Mar. 31, 1999 6% 17 571 7% 19 573
Apr. 1, 1999—Jun. 30, 1999 7% 19 573 8% 21 575
Jul. 1, 1999—Sep. 30, 1999 7% 19 573 8% 21 575
Oct. 1, 1999—Dec. 31, 1999 7% 19 573 8% 21 575
Jan. 1, 2000—Mar. 31, 2000 7% 67 621 8% 69 623
Apr. 1, 2000—Jun. 30, 2000 8% 69 623 9% 71 625
Jul. 1, 2000—Sep. 30, 2000 8% 69 623 9% 71 625
Oct. 1, 2000—Dec. 31, 2000 8% 69 623 9% 71 625
Jan. 1, 2001—Mar. 31, 2001 8% 21 575 9% 23 577
Apr. 1, 2001—Jun. 30, 2001 7% 19 573 8% 21 575
Jul. 1, 2001—Sep. 30, 2001 6% 17 571 7% 19 573
Oct. 1, 2001—Dec. 31, 2001 6% 17 571 7% 19 573
Jan. 1, 2002—Mar. 31, 2002 5% 15 569 6% 17 571
Apr. 1, 2002—Jun. 30, 2002 5% 15 569 6% 17 571
Jul. 1, 2002—Sep. 30, 2002 5% 15 569 6% 17 571
Oct. 1, 2002—Dec. 31, 2002 5% 15 569 6% 17 571
Jan. 1, 2003—Mar. 31, 2003 4% 13 567 5% 15 569
Apr. 1, 2003—Jun. 30, 2003 4% 13 567 5% 15 569
Jul. 1, 2003—Sep. 30, 2003 4% 13 567 5% 15 569
Oct. 1, 2003—Dec. 31, 2003 3% 11 565 4% 13 567
Jan. 1, 2004—Mar. 31, 2004 3% 59 613 4% 61 615
Apr. 1, 2004—Jun. 30, 2004 4% 61 615 5% 63 617
Jul. 1, 2004—Sep. 30, 2004 3% 59 613 4% 61 615
Oct. 1, 2004—Dec. 31, 2004 4% 61 615 5% 63 617
Jan. 1, 2005—Mar. 31, 2005 4% 13 567 5% 15 569
Apr. 1, 2005—Jun. 30, 2005 5% 15 569 6% 17 571
Jul. 1, 2005—Sep. 30, 2005 5% 15 569 6% 17 571
Oct. 1, 2005—Dec. 31, 2005 6% 17 571 7% 19 573
Jan. 1, 2006—Mar. 31, 2006 6% 17 571 7% 19 573
Apr. 1, 2006—Jun. 30, 2006 6% 17 571 7% 19 573
Jul. 1, 2006—Sep. 30, 2006 7% 19 573 8% 21 575
Oct. 1, 2006—Dec. 31, 2006 7% 19 573 8% 21 575
Jan. 1, 2007—Mar. 31, 2007 7% 19 573 8% 21 575
Apr. 1, 2007—Jun. 30, 2007 7% 19 573 8% 21 575
Jul. 1, 2007—Sep. 30, 2007 7% 19 573 8% 21 575
Oct. 1, 2007—Dec. 31, 2007 7% 19 573 8% 21 575
Jan. 1, 2008—Mar. 31, 2008 6% 65 619 7% 67 621
Apr. 1, 2008—Jun. 30, 2008 5% 63 617 6% 65 619
Jul. 1, 2008—Sep. 30, 2008 4% 61 615 5% 63 617
Oct. 1, 2008—Dec. 31, 2008 5% 63 617 6% 65 619
Jan. 1, 2009—Mar. 31, 2009 4% 13 567 5% 15 569
Apr. 1, 2009—Jun. 30, 2009 3% 11 565 4% 13 567
Jul. 1, 2009—Sep. 30, 2009 3% 11 565 4% 13 567
Oct. 1, 2009—Dec. 31, 2009 3% 11 565 4% 13 567
Jan. 1, 2010—Mar. 31, 2010 3% 11 565 4% 13 567
Apr. 1, 2010—Jun. 30, 2010 3% 11 565 4% 13 567
Jul. 1, 2010—Sep. 30, 2010 3% 11 565 4% 13 567
Oct. 1, 2010—Dec. 31, 2010 3% 11 565 4% 13 567
Jan. 1, 2011—Mar. 31, 2011 2% 9 563 3% 11 565
Apr. 1, 2011—Jun. 30, 2011 3% 11 565 4% 13 567
Jul. 1, 2011—Sep. 30, 2011 3% 11 565 4% 13 567
TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 — PRESENT
1995-1 C.B.
RATE TABLE PG
Jan. 1, 1991—Mar. 31, 1991 13% 31 585
Apr. 1, 1991—Jun. 30, 1991 12% 29 583
Jul. 1, 1991—Sep. 30, 1991 12% 29 583
Oct. 1, 1991—Dec. 31, 1991 12% 29 583
Jan. 1, 1992—Mar. 31, 1992 11% 75 629
Apr. 1, 1992—Jun. 30, 1992 10% 73 627
Jul. 1, 1992—Sep. 30, 1992 10% 73 627
Oct. 1, 1992—Dec. 31, 1992 9% 71 625
Jan. 1, 1993—Mar. 31, 1993 9% 23 577
Apr. 1, 1993—Jun. 30, 1993 9% 23 577
Jul. 1, 1993—Sep. 30, 1993 9% 23 577
Oct. 1, 1993—Dec. 31, 1993 9% 23 577
Jan. 1, 1994—Mar. 31, 1994 9% 23 577
Apr. 1, 1994—Jun. 30, 1994 9% 23 577
Jul. 1, 1994—Sep. 30, 1994 10% 25 579
Oct. 1, 1994—Dec. 31, 1994 11% 27 581
Jan. 1, 1995—Mar. 31, 1995 11% 27 581
Apr. 1, 1995—Jun. 30, 1995 12% 29 583
Jul. 1, 1995—Sep. 30, 1995 11% 27 581
Oct. 1, 1995—Dec. 31, 1995 11% 27 581
Jan. 1, 1996—Mar. 31, 1996 11% 75 629
Apr. 1, 1996—Jun. 30, 1996 10% 73 627
Jul. 1, 1996—Sep. 30, 1996 11% 75 629
Oct. 1, 1996—Dec. 31, 1996 11% 75 629
Jan. 1, 1997—Mar. 31, 1997 11% 27 581
Apr. 1, 1997—Jun. 30, 1997 11% 27 581
Jul. 1, 1997—Sep. 30, 1997 11% 27 581
Oct. 1, 1997—Dec. 31, 1997 11% 27 581
Jan. 1, 1998—Mar. 31, 1998 11% 27 581
Apr. 1, 1998—Jun. 30, 1998 10% 25 579
Jul. 1, 1998—Sep. 30, 1998 10% 25 579
Oct. 1, 1998—Dec. 31, 1998 10% 25 579
Jan. 1, 1999—Mar. 31, 1999 9% 23 577
Apr. 1, 1999—Jun. 30, 1999 10% 25 579
Jul. 1, 1999—Sep. 30, 1999 10% 25 579
Oct. 1, 1999—Dec. 31, 1999 10% 25 579
Jan. 1, 2000—Mar. 31, 2000 10% 73 627
Apr. 1, 2000—Jun. 30, 2000 11% 75 629
Jul. 1, 2000—Sep. 30, 2000 11% 75 629
Oct. 1, 2000—Dec. 31, 2000 11% 75 629
Jan. 1, 2001—Mar. 31, 2001 11% 27 581
Apr. 1, 2001—Jun. 30, 2001 10% 25 579
Jul. 1, 2001—Sep. 30, 2001 9% 23 577
Oct. 1, 2001—Dec. 31, 2001 9% 23 577
Jan. 1, 2002—Mar. 31, 2002 8% 21 575
Apr. 1, 2002—Jun. 30, 2002 8% 21 575
Jul. 1, 2002—Sep. 30, 2002 8% 21 575
Oct. 1, 2002—Dec. 30, 2002 8% 21 575
Jan. 1, 2003—Mar. 31, 2003 7% 19 573
Apr. 1, 2003—Jun. 30, 2003 7% 19 573
Jul. 1, 2003—Sep. 30, 2003 7% 19 573
Oct. 1, 2003—Dec. 31, 2003 6% 17 571
Jan. 1, 2004—Mar. 31, 2004 6% 65 619
Apr. 1, 2004—Jun. 30, 2004 7% 67 621
Jul. 1, 2004—Sep. 30, 2004 6% 65 619
Oct. 1, 2004—Dec. 31, 2004 7% 67 621
Jan. 1, 2005—Mar. 31, 2005 7% 19 573
Apr. 1, 2005—Jun. 30, 2005 8% 21 575
Jul. 1, 2005—Sep. 30, 2005 8% 21 575
Oct. 1, 2005—Dec. 31, 2005 9% 23 577
Jan. 1, 2006—Mar. 31, 2006 9% 23 577
Apr. 1, 2006—Jun. 30, 2006 9% 23 577
Jul. 1, 2006—Sep. 30, 2006 10% 25 579
Oct. 1, 2006—Dec. 31, 2006 10% 25 579
Jan. 1, 2007—Mar. 31, 2007 10% 25 579
Apr. 1, 2007—Jun. 30, 2007 10% 25 579
Jul. 1, 2007—Sep. 30, 2007 10% 25 579
Oct. 1, 2007—Dec. 31, 2007 10% 25 579
Jan. 1, 2008—Mar. 31, 2008 9% 71 625
Apr. 1, 2008—Jun. 30, 2008 8% 69 623
Jul. 1, 2008—Sep. 30, 2008 7% 67 621
Oct. 1, 2008—Dec. 31, 2008 8% 69 623
Jan. 1, 2009—Mar. 31, 2009 7% 19 573
Apr. 1, 2009—Jun. 30, 2009 6% 17 571
Jul. 1, 2009—Sep. 30, 2009 6% 17 571
Oct. 1, 2009—Dec. 31, 2009 6% 17 571
Jan. 1, 2010—Mar. 31, 2010 6% 17 571
Apr. 1, 2010—Jun. 30, 2010 6% 17 571
Jul. 1, 2010—Sep. 30, 2010 6% 17 571
Oct. 1, 2010—Dec. 31, 2010 6% 17 571
Jan. 1, 2011—Mar. 31, 2011 5% 15 569
Apr. 1, 2011—Jun. 30, 2011 6% 17 571
Jul. 1, 2011—Sep. 30, 2011 6% 17 571
TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 — PRESENT
1995-1 C.B.
RATE TABLE PG
Jan. 1, 1995—Mar. 31, 1995 6.5% 18 572
Apr. 1, 1995—Jun. 30, 1995 7.5% 20 574
Jul. 1, 1995—Sep. 30, 1995 6.5% 18 572
Oct. 1, 1995—Dec. 31, 1995 6.5% 18 572
Jan. 1, 1996—Mar. 31, 1996 6.5% 66 620
Apr. 1, 1996—Jun. 30, 1996 5.5% 64 618
Jul. 1, 1996—Sep. 30, 1996 6.5% 66 620
Oct. 1, 1996—Dec. 31, 1996 6.5% 66 620
Jan. 1, 1997—Mar. 31, 1997 6.5% 18 572
Apr. 1, 1997—Jun. 30, 1997 6.5% 18 572
Jul. 1, 1997—Sep. 30, 1997 6.5% 18 572
Oct. 1, 1997—Dec. 31, 1997 6.5% 18 572
Jan. 1, 1998—Mar. 31, 1998 6.5% 18 572
Apr. 1, 1998—Jun. 30, 1998 5.5% 16 570
Jul. 1, 1998—Sep. 30, 1998 5.5% 16 570
Oct. 1, 1998—Dec. 31, 1998 5.5% 16 570
Jan. 1, 1999—Mar. 31, 1999 4.5% 14 568
Apr. 1, 1999—Jun. 30, 1999 5.5% 16 570
Jul. 1, 1999—Sep. 30, 1999 5.5% 16 570
Oct. 1, 1999—Dec. 31, 1999 5.5% 16 570
Jan. 1, 2000—Mar. 31, 2000 5.5% 64 618
Apr. 1, 2000—Jun. 30, 2000 6.5% 66 620
Jul. 1, 2000—Sep. 30, 2000 6.5% 66 620
Oct. 1, 2000—Dec. 31, 2000 6.5% 66 620
Jan. 1, 2001—Mar. 31, 2001 6.5% 18 572
Apr. 1, 2001—Jun. 30, 2001 5.5% 16 570
Jul. 1, 2001—Sep. 30, 2001 4.5% 14 568
Oct. 1, 2001—Dec. 31, 2001 4.5% 14 568
Jan. 1, 2002—Mar. 31, 2002 3.5% 12 566
Apr. 1, 2002—Jun. 30, 2002 3.5% 12 566
Jul. 1, 2002—Sep. 30, 2002 3.5% 12 566
Oct. 1, 2002—Dec. 31, 2002 3.5% 12 566
Jan. 1, 2003—Mar. 31, 2003 2.5% 10 564
Apr. 1, 2003—Jun. 30, 2003 2.5% 10 564
Jul. 1, 2003—Sep. 30, 2003 2.5% 10 564
Oct. 1, 2003—Dec. 31, 2003 1.5% 8 562
Jan. 1, 2004—Mar. 31, 2004 1.5% 56 610
Apr. 1, 2004—Jun. 30, 2004 2.5% 58 612
Jul. 1, 2004—Sep. 30, 2004 1.5% 56 610
Oct. 1, 2004—Dec. 31, 2004 2.5% 58 612
Jan. 1, 2005—Mar. 31, 2005 2.5% 10 564
Apr. 1, 2005—Jun. 30, 2005 3.5% 12 566
Jul. 1, 2005—Sep. 30, 2005 3.5% 12 566
Oct. 1, 2005—Dec. 31, 2005 4.5% 14 568
Jan. 1, 2006—Mar. 31, 2006 4.5% 14 568
Apr. 1, 2006—Jun. 30, 2006 4.5% 14 568
Jul. 1, 2006—Sep. 30, 2006 5.5% 16 570
Oct. 1, 2006—Dec. 31, 2006 5.5% 16 570
Jan. 1, 2007—Mar. 31, 2007 5.5% 16 570
Apr. 1, 2007—Jun. 30, 2007 5.5% 16 570
Jul. 1, 2007—Sep. 30, 2007 5.5% 16 570
Oct. 1, 2007—Dec. 31, 2007 5.5% 16 570
Jan. 1, 2008—Mar. 31, 2008 4.5% 62 616
Apr. 1, 2008—Jun. 30, 2008 3.5% 60 614
Jul. 1, 2008—Sep. 30, 2008 2.5% 58 612
Oct. 1, 2008—Dec. 31, 2008 3.5% 60 614
Jan. 1, 2009—Mar. 31, 2009 2.5% 10 564
Apr. 1, 2009—Jun. 30, 2009 1.5% 8 562
Jul. 1, 2009—Sep. 30, 2009 1.5% 8 562
Oct. 1, 2009—Dec. 31, 2009 1.5% 8 562
Jan. 1, 2010—Mar. 31, 2010 1.5% 8 562
Apr. 1, 2010—Jun. 30, 2010 1.5% 8 562
Jul. 1, 2010—Sep. 30, 2010 1.5% 8 562
Oct. 1, 2010—Dec. 31, 2010 1.5% 8 562
Jan. 1, 2011—Mar. 31, 2011 0.5%*
Apr. 1, 2011—Jun. 30, 2011 1.5% 8 562
Jul. 1, 2011—Sep. 30, 2011 1.5% 8 562

Part III. Administrative, Procedural, and Miscellaneous

Notice 2011-48

Registered Tax Return Preparer Competency Examination

Purpose

This notice invites public comments on the content and administration of the registered tax return preparer competency examination (competency examination). The Treasury Department and the Internal Revenue Service have published final regulations (T.D. 9527, 76 FR 32286) under 31 CFR Part 10 that require certain individuals to pass a competency examination to become a registered tax return preparer. The IRS has selected a vendor to support the IRS in developing and administering the competency examination for the Form 1040 series tax returns and accompanying schedules. The IRS and the vendor will soon begin developing the Form 1040 competency examination.

Prior to developing the competency examination, however, the IRS seeks the input of tax return preparers, the associated industry and consumer groups, and taxpayers. Thus, comments regarding the Form 1040 series competency examination are requested. The information collected will assist the IRS in developing the competency examination.

Request for Public Comment

The IRS requests comments on the content and administration of the Form 1040 series competency examination. The IRS is particularly interested in any comments regarding:

  • The areas of tax law that should be covered by the examination;

  • The approximate percentage of the examination that should be dedicated to each area of tax law identified above;

  • The format of the examination (e.g., multiple choice, short-answer questions, written tax computations problems, or a combination thereof);

  • The general difficulty and approximate length of the examination;

  • The detail of examination result information reported to the applicant (e.g., pass/fail, numeric scores);

  • The appropriate time-of-year/month to annually update the examination to reflect the most current law;

  • The frequency that the examination should be administered (e.g., annually, semi-annually, quarterly, monthly, weekly, or daily);

  • The period of time that applicants, other than those individuals who obtain a preparer tax identification number prior to the examination being offered, should be required to wait before retaking the examination if the applicant does not pass;

  • The administration of the examination in languages other than English and the other languages that should be considered;

  • The elements of the special enrollment examination (content or test administration) for either enrolled agents or enrolled retirement plan agents that the competency examination should attempt to utilize or should not attempt to reproduce; and

  • Any additional information that the IRS should consider when developing the content of, and the procedures for administering, the competency examination.

Written comments should be sent to:

Internal Revenue Service
Attn: CC:PA:LPD:PR
(Notice 2011-48)
Room 5205
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

or hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:

Courier’s Desk
Internal Revenue Service
Attn: CC:PA:LPD:PR
(Notice 2011-48)
1111 Constitution Avenue, N.W.
Washington, D.C. 20224

Alternatively, comments may be submitted electronically via e-mail to the following address: Notice.Comments@irscounsel.treas.gov. “Notice 2011-48” should be in the subject line of the e-mail. All comments will be available for public inspection and copying. Comments are requested by July 7, 2011.

Drafting Information

The principal author of this notice is Matthew D. Lucey of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, contact Matthew D. Lucey at (202) 622-4940 (not a toll-free call).

Notice 2011-49

Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 through 2007 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004-34, 2004-1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices. The methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004-34 continues to apply in determining that rate. See Notice 2006-75, 2006-2 C.B. 366.

The composite corporate bond rate for May 2011 is 5.37 percent. Pursuant to Notice 2004-34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

For Plan Years Beginning in Corporate Bond Weighted Average Permissible Range
Month Year 90% to 100%
June 2011 6.00 5.40 6.00

YIELD CURVE AND SEGMENT RATES

Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 430 of the Code specifies the minimum funding requirements that apply to single employer plans pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. Section 430(h)(2)G) set forth a transitional rule applicable to plan years beginning in 2008 and 2009 under which the segment rates were blended with the corporate bond weighted average described above, including an election under § 430(h)(2)(G)(iv) for an employer to use the segment rates without the transitional rule.

Notice 2007-81, 2007-2 C.B. 899, provides guidelines for determining the monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007-81, the monthly corporate bond yield curve derived from May 2011 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of May 2011 are, respectively, 1.72, 5.00, and 6.21. The three 24-month average corporate bond segment rates applicable for June 2011 under the election of § 430(h)(2)(G)(iv) are as follows:

First Segment Second Segment Third Segment
2.27 5.43 6.34

The transitional rule of § 430(h)(2)(G) does not apply to plan years beginning after December 31, 2009. Therefore, for a plan year beginning after 2009 with a lookback month to June 2011, the funding segment rates are the three 24-month average corporate bond segment rates applicable for June 2011, listed above without blending for any transitional period.

30-YEAR TREASURY SECURITIES INTEREST RATES

Section 417(e)(3)(A)(ii)(II) (prior to amendment by PPA) defines the applicable interest rate, which must be used for purposes of determining the minimum present value of a participant’s benefit under § 417(e)(1) and (2), as the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. Section 1.417(e)-1(d)(3) of the Income Tax Regulations provides that the applicable interest rate for a month is the annual rate of interest on 30-year Treasury securities as specified by the Commissioner for that month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

The rate of interest on 30-year Treasury securities for May 2011 is 4.29 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in February 2041 determined each day through May 11, 2011, and the yield on the 30-year Treasury bond maturing in May 2041 determined each day for the balance of the month.

Generally for plan years beginning after 2007, § 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in section 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88-73, 1988-2 C.B. 383, provides guidelines for determining the weighted average interest rate. The following rates were determined for plan years beginning in the month shown below.

For Plan Years Beginning in 30-Year Treasury Weighted Average Permissible Range
Month Year 90% to 105%
June 2011 4.28 3.85 4.49

MINIMUM PRESENT VALUE SEGMENT RATES

Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007-81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for May 2011, taking into account the May 2011 30-year Treasury rate of 4.29 stated above, are as follows:

For Plan Years Beginning in First Segment Second Segment Third Segment
2010 2.75 4.72 5.44
2011 2.23 4.86 5.83

DRAFTING INFORMATION

The principal author of this notice is Tony Montanaro of the Employee Plans, Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov.

Table I
Monthly Yield Curve for May 2011
Derived from May 2011 Data
Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield
0.5 0.43 20.5 5.81 40.5 6.26 60.5 6.41 80.5 6.49
1.0 0.67 21.0 5.83 41.0 6.26 61.0 6.41 81.0 6.49
1.5 0.93 21.5 5.85 41.5 6.27 61.5 6.42 81.5 6.49
2.0 1.22 22.0 5.87 42.0 6.27 62.0 6.42 82.0 6.49
2.5 1.53 22.5 5.89 42.5 6.28 62.5 6.42 82.5 6.49
3.0 1.86 23.0 5.91 43.0 6.28 63.0 6.42 83.0 6.50
3.5 2.19 23.5 5.92 43.5 6.29 63.5 6.43 83.5 6.50
4.0 2.50 24.0 5.94 44.0 6.29 64.0 6.43 84.0 6.50
4.5 2.80 24.5 5.95 44.5 6.30 64.5 6.43 84.5 6.50
5.0 3.07 25.0 5.97 45.0 6.30 65.0 6.43 85.0 6.50
5.5 3.32 25.5 5.98 45.5 6.31 65.5 6.44 85.5 6.50
6.0 3.55 26.0 6.00 46.0 6.31 66.0 6.44 86.0 6.50
6.5 3.75 26.5 6.01 46.5 6.32 66.5 6.44 86.5 6.51
7.0 3.94 27.0 6.02 47.0 6.32 67.0 6.44 87.0 6.51
7.5 4.11 27.5 6.04 47.5 6.33 67.5 6.44 87.5 6.51
8.0 4.26 28.0 6.05 48.0 6.33 68.0 6.45 88.0 6.51
8.5 4.41 28.5 6.06 48.5 6.33 68.5 6.45 88.5 6.51
9.0 4.54 29.0 6.07 49.0 6.34 69.0 6.45 89.0 6.51
9.5 4.65 29.5 6.08 49.5 6.34 69.5 6.45 89.5 6.51
10.0 4.76 30.0 6.09 50.0 6.35 70.0 6.45 90.0 6.51
10.5 4.86 30.5 6.10 50.5 6.35 70.5 6.46 90.5 6.51
11.0 4.96 31.0 6.11 51.0 6.35 71.0 6.46 91.0 6.52
11.5 5.04 31.5 6.12 51.5 6.36 71.5 6.46 91.5 6.52
12.0 5.12 32.0 6.13 52.0 6.36 72.0 6.46 92.0 6.52
12.5 5.19 32.5 6.14 52.5 6.36 72.5 6.46 92.5 6.52
13.0 5.25 33.0 6.15 53.0 6.37 73.0 6.46 93.0 6.52
13.5 5.31 33.5 6.16 53.5 6.37 73.5 6.47 93.5 6.52
14.0 5.37 34.0 6.17 54.0 6.37 74.0 6.47 94.0 6.52
14.5 5.42 34.5 6.18 54.5 6.38 74.5 6.47 94.5 6.52
15.0 5.47 35.0 6.18 55.0 6.38 75.0 6.47 95.0 6.52
15.5 5.51 35.5 6.19 55.5 6.38 75.5 6.47 95.5 6.53
16.0 5.55 36.0 6.20 56.0 6.39 76.0 6.48 96.0 6.53
16.5 5.59 36.5 6.21 56.5 6.39 76.5 6.48 96.5 6.53
17.0 5.62 37.0 6.21 57.0 6.39 77.0 6.48 97.0 6.53
17.5 5.65 37.5 6.22 57.5 6.40 77.5 6.48 97.5 6.53
18.0 5.68 38.0 6.23 58.0 6.40 78.0 6.48 98.0 6.53
18.5 5.71 38.5 6.23 58.5 6.40 78.5 6.48 98.5 6.53
19.0 5.74 39.0 6.24 59.0 6.40 79.0 6.48 99.0 6.53
19.5 5.76 39.5 6.25 59.5 6.41 79.5 6.49 99.5 6.53
20.0 5.79 40.0 6.25 60.0 6.41 80.0 6.49 100.0 6.53

Rev. Proc. 2011-37

SECTION 1. PURPOSE

This revenue procedure provides guidance with respect to the United States and area median gross income figures that are to be used by issuers of qualified mortgage bonds, as defined in § 143(a) of the Internal Revenue Code, and issuers of mortgage credit certificates, as defined in § 25(c), in computing the housing cost/income ratio described in § 143(f)(5).

SECTION 2. BACKGROUND

.01 Section 103(a) provides that, except as provided in § 103(b), gross income does not include interest on any state or local bond. Section 103(b)(1) provides that § 103(a) shall not apply to any private activity bond that is not a qualified bond (within the meaning of § 141). Section 141(e) provides that the term “qualified bond” includes any private activity bond that (1) is a qualified mortgage bond, (2) meets the applicable volume cap requirements under § 146, and (3) meets the applicable requirements under § 147.

.02 Section 143(a)(1) provides that the term “qualified mortgage bond” means a bond that is issued as part of a “qualified mortgage issue”. Section 143(a)(2)(A) provides that the term “qualified mortgage issue” means an issue of one or more bonds by a state or political subdivision thereof, but only if (i) all proceeds of the issue (exclusive of issuance costs and a reasonably required reserve) are to be used to finance owner-occupied residences; (ii) the issue meets the requirements of subsections (c), (d), (e), (f), (g), (h), (i), and (m)(7) of § 143; (iii) the issue does not meet the private business tests of paragraphs (1) and (2) of § 141(b); and (iv) with respect to amounts received more than 10 years after the date of issuance, repayments of $250,000 or more of principal on financing provided by the issue are used not later than the close of the first semi-annual period beginning after the date the prepayment (or complete repayment) is received to redeem bonds that are part of the issue.

.03 Section 143(f) imposes eligibility requirements concerning the maximum income of mortgagors for whom financing may be provided by qualified mortgage bonds. Section 25(c)(2)(A)(iii)(IV) provides that recipients of mortgage credit certificates must meet the income requirements of § 143(f). Generally, under §§ 143(f)(1) and 25(c)(2)(A)(iii)(IV), these income requirements are met only if all owner-financing under a qualified mortgage bond and all certified indebtedness amounts under a mortgage credit certificate program are provided to mortgagors whose family income is 115 percent or less of the applicable median family income. Under § 143(f)(6), the income limitation is reduced to 100 percent of the applicable median family income if there are fewer than three individuals in the family of the mortgagor.

.04 Section 143(f)(4) provides that the term “applicable median family income” means the greater of (A) the area median gross income for the area in which the residence is located, or (B) the statewide median gross income for the state in which the residence is located.

.05 Section 143(f)(5) provides for an upward adjustment of the income limitations in certain high housing cost areas. Under § 143(f)(5)(C), a high housing cost area is a statistical area for which the housing cost/income ratio is greater than 1.2. The housing cost/income ratio is determined under § 143(f)(5)(D) by dividing (a) the applicable housing price ratio by (b) the ratio that the area median gross income bears to the median gross income for the United States. The applicable housing price ratio is the new housing price ratio (new housing average purchase price for the area divided by the new housing average purchase price for the United States) or the existing housing price ratio (existing housing average area purchase price divided by the existing housing average purchase price for the United States), whichever results in the housing cost/income ratio being closer to 1. This income adjustment applies only to bonds issued, and nonissued bond amounts elected, after December 31, 1988. See § 4005(h) of the Technical and Miscellaneous Revenue Act of 1988, 1988-3 C.B. 1, 311 (1988).

.06 The Department of Housing and Urban Development (HUD) has computed the median gross income for the United States, the states, and statistical areas within the states. The income information was released to the HUD regional offices on May 31, 2011, and may be obtained by calling the HUD reference service at 1-800-245-2691. The income information is also available at HUD’s World Wide Web site, http://www.huduser.org/portal/datasets/il.html, which provides a menu from which you may select the year and type of data of interest. The Internal Revenue Service annually publishes the median gross income for the United States.

.07 The most recent nationwide average purchase prices and average area purchase price safe harbor limitations were published on April 11, 2011, in Rev. Proc. 2011-23, 2011-15 I.R.B. 626.

SECTION 3. APPLICATION

.01 When computing the income requirements of § 143(f), issuers of qualified mortgage bonds and mortgage credit certificates must use either (1) the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 14, 2010, or (2) the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 31, 2011.

.02 If an issuer uses the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 14, 2010, to compute the housing cost/income ratio under § 143(f)(5), the issuer must use the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 14, 2010, for all purposes under § 143(f). Likewise, if an issuer uses the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 31, 2011, to compute the housing cost/income ratio under § 143(f)(5), the issuer must use the median gross income for the United States, the states, and statistical areas within the states, as released to the HUD regional offices on May 31, 2011, for all purposes under § 143(f).

SECTION 4. EFFECT ON OTHER REVENUE PROCEDURES

.01 Rev. Proc. 2010-23, 2010-24 I.R.B. 762, is obsolete except as provided in §§ 3.01, 3.02, or 5.01 of this revenue procedure.

.02 This revenue procedure does not affect the effective date provisions of Rev. Rul. 86-124, 1986-2 C.B. 27. Those effective date provisions will remain operative at least until the Service publishes a new revenue ruling that conforms the approach to effective dates set forth in Rev. Rul. 86-124 to the general approach taken in this revenue procedure.

SECTION 5. EFFECTIVE DATES

.01 Issuers must use the United States and area median gross income figures specified in § 3.01 of this revenue procedure for commitments to provide financing that are made, or (if the purchase precedes the financing commitment) for residences that are purchased, in the period that begins on May 31, 2011, and ends on the date when these United States and area median gross income figures are rendered obsolete by a new revenue procedure.

DRAFTING INFORMATION

The principal authors of this revenue procedure are David White and Timothy Jones of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Mr. White or Mr. Jones at (202) 622-3980 (not a toll-free call).

Part IV. Items of General Interest

Announcement 2011-33

Foundations Status of Certain Organizations

The following organizations have failed to establish or have been unable to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices under section 508(b) of the Code. This listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.

Former Public Charities. The following organizations (which have been treated as organizations that are not private foundations described in section 509(a) of the Code) are now classified as private foundations:

Org. Name City State
Accion Latina, Inc., Alexandria VA
Amazing Grace Help, Inc., Columbus MS
Endorse Peace Foundation, Beverly Hills CA
Friends of Creative Kids, Inc., Houston TX
Incredible Dreams Childcare and Learning Center, Inc., Munster IN
Lotus Fund, Santa Monica CA
Myanmar Youth Association, Inc., North Bergen NJ
Northeast Regional Forest Foundation, Brattleboro VT
Rib Lake Community Development Foundation, Inc., Rib Lake WI
Total Community Development Corporation, Montgomery AL
Urban Hope International, Inc., Stockton CA
Woodleaf Endowment Foundation, Inc., Yuba City CA

If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Internal Revenue Service will issue a ruling or determination letter with the revised classification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as provided in section 1.509(a)-7 of the Income Tax Regulations. It is not the practice of the Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

Announcement 2011-36

2011 Form 990 - Issues for Public Comment

PURPOSE

This announcement invites public comments on transitional issues and frequently asked questions involving the redesigned Form 990.

BACKGROUND

The IRS extensively redesigned Form 990, Return of Organization Exempt from Income Tax, for tax year 2008 to promote tax compliance and increase transparency. The redesign was a collaborative process based on the over 800 formal public comments on drafts of the 2008 Form 990, schedules, and instructions.

The major reconstruction of the Form is complete, but the IRS continues to refine the Form in response to questions and comments from the public. We have made many revisions to the 2009 and 2010 Forms 990, schedules, and instructions, mostly corrections and clarifications to make the Form easier to understand and complete, and plan to make further revisions. As the second filing season for the redesigned Form nears completion, the IRS invites public input on the following issues.

ISSUES FOR PUBLIC COMMENT

1. Activity codes.

Part III of the Form 990 includes spaces for reporting activity codes to characterize certain program service activities. The instructions ask filers to leave these spaces blank for tax year 2010, because the IRS has not decided which, if any, coding system would best facilitate research on exempt organizations by the IRS and the public. All such coding systems that the IRS is familiar with, including the National Taxonomy of Exempt Entity (NTEE) codes, the North American Industry Classification System (NAICS) Business Activity Codes and the IRS’s internal activity codes, have significant limitations. In particular, these systems do not adequately reflect the wide range of program service activities provided by tax-exempt organizations. These systems also lack the consistency, flexibility, and real-time adaptability that would be needed to facilitate complete and accurate reporting.

In light of these limitations, the IRS is considering removing the spaces in Part III for reporting activity codes. We request comments on whether removal is preferable to the adoption of a coding system.

2. Reporting compensation to management companies and leasing companies owned or controlled by directors, officers, trustees, or key employees.

In 1999, the Service added the following instruction to the Form 990 to address the practice of officers, directors, trustees, and/or key employees (ODTKEs) organizing management companies and other separate legal entities to avoid reporting of their compensation on the Form 990:

If you pay any other person, such as a management services company, for the services provided by any of your officers, directors, trustees, or key employees, report the compensation and other items as if you had paid them directly.

The instruction generated controversy and much commentary. Some argued that these reporting requirements were burdensome, requiring the organization to obtain detailed information from third-party contractors; others argued that the requirements invaded the privacy of individuals who were not employees of the filing organization. In Announcement 2001-33, the IRS said it would not penalize an organization if it reported in the compensation section of its Form 990 the name of a management company it paid for services rather than the person who provided services to the organization on behalf of that management company.

The redesigned 2008 Form 990 expanded upon Ann. 2001-33 by stating in the Part VII instructions that the filing organization should not report a payment to a management company as a payment directly to an ODTKE, even if that ODTKE owned or controlled the management company. Rather, the compensation to the management company would only be reported in Part VII, if at all, as compensation to one of the organization’s five most highly compensated independent contractors. The one exception to this rule is to report employees of a management company as the organization’s own employees if they are common law employees of the organization under state law. (Also, if an ODTKE of the organization received compensation through a management company of which the ODTKE or a family member was a 35% owner, director, officer, or key employee, then the transaction may need to be listed and explained in Schedule L, Part IV, including the amount of the payment to the management company and the ODTKE’s relationship with the management company.) The Form 990 instructions also state that payments to leasing companies should be treated in the same way as payments to management companies.

Some have expressed concern that this type of reporting allows organizations to shield compensation to highly-paid executives from disclosure by paying those executives indirectly through management companies. Others have explained the difficulty of determining whether a person is a common law employee under state law.

In light of these concerns, the IRS requests further comments on how a filing organization’s payments to management companies and other third parties (e.g., leasing companies, affiliates of filing organization, professional employer organizations) for an ODTKE’s services to the filing organization should be reported on the Form 990. For instance, should an organization’s payments to another person or entity, such as a management company, for the services provided by any of the organization’s ODTKEs be reported on the Form 990 as compensation by the filing organization to the ODTKEs? Should the IRS retain its current instructions for reporting compensation in this scenario? Should the IRS ask about such third party compensation arrangements in a separate section of Part VII, to increase transparency?

3. Thresholds for reporting compensation to key employees, highest compensated employees, independent contractors, and former officers, directors, trustees, and key employees.

Part VII of the Form 990 requires the organization to list:

  • all persons who served as its officers, directors, and trustees during the tax year;

  • its top 20 highest compensated “key employees” (not including officers and directors/trustees); that is, employees who had certain management responsibilities and received over $150,000 of reportable compensation from the organization and related organizations, in the aggregate;

  • its top 5 highest compensated employees (not including officers, directors/trustees, and key employees) who received over $100,000 of reportable compensation from the organization and related organizations, in the aggregate;

  • any of its former officers, key employees, or highest compensated employees (who had served in such capacities in the prior five years but not in the current tax year) who received over $100,000 of reportable compensation from the organization and related organizations, in the aggregate;

  • any of its former directors or trustees (who had served in such capacities in the prior five years but not in the current tax year) who received over $10,000 of reportable compensation from the organization and related organizations, in the aggregate, for services provided in the person’s capacity as director or trustee; and

  • its top 5 highest compensated independent contractors that the organization paid more than $100,000.

These reporting thresholds became effective for tax year 2008. Prior to 2008, the Form 990 compensation reporting threshold for independent contractors and highest compensated employees was $50,000, rather than $100,000. Prior to 2008, the definition of key employee did not include any compensation threshold. Also prior to 2008, all former officers, directors, and trustees who received compensation during the tax year were reportable, regardless of their level of compensation.

Some have expressed concern that these increased thresholds decrease transparency, and prevent reporting of some persons who receive unreasonable compensation. Others have suggested that a single, uniform reporting threshold be adopted. The IRS requests comment on whether some or all of these Form 990 compensation reporting thresholds should be lowered, raised, or retained as is.

4. Reporting revenue from governmental units.

The instructions for Form 990, Part VIII distinguish between reporting of contributions and program service revenue from governmental units. A payment from a governmental unit should be reported as a contribution on Part VIII, line 1e (government grants (contributions)) if its primary purpose is to enable the organization to provide a service to or maintain a facility for the direct benefit of the public, rather than to serve the direct and immediate needs of the governmental unit. A payment from a governmental unit should be reported as program service revenue on Part VIII, line 2 if it represents a payment for a service, facility, or product that primarily gives some economic or physical benefit to that governmental unit. The instructions provide various examples of how such payments should be characterized and reported.

Some have expressed concern that the Form 990 does not provide for sufficient transparency in reporting of revenue from governmental units because much of this revenue is included in program service revenue in line 2, rather than as “Government grants” in line 1e. Accordingly, the IRS requests further comments on whether and how it should change reporting requirements in this area. For instance, should Part VIII, line 2 be revised to itemize certain government payments, such as Medicaid and Medicare payments? Should Part VIII, line 1e and/or the instructions for that line be revised to clarify that government contributions may include grants made pursuant to government contracts?

5. Net asset reconciliation.

The 2007 Form 990 included a “Net Assets” section that required filers to reconcile discrepancies between net assets or fund balances from the prior to current tax year. This section was removed from the redesigned 2008 Form 990, but an expanded section for net asset reconciliation was included in the new Schedule D, Supplemental Financial Statements, which most but not all Form 990 filers are required to complete.

In response to many requests to include a net asset reconciliation section in the Core Form, the IRS has added a new Part XI, Net Asset Reconciliation, to the 2010 Form 990. Subsequently, some have commented that Schedule D, Part XI is now redundant.

The IRS requests comments on whether the Net Asset Reconciliation section in Schedule D, Part XI is still needed and, if so, how it should be revised to avoid or minimize redundancy.

6. Reporting on audited financial statements.

Form 990, Part XII, line 2 requires organizations to report whether their financial statements were compiled, reviewed, or audited by an independent accountant, and whether those financial statements were issued on a separate or consolidated basis.

Suggestions have been made that Part XII should require additional reporting on audited financial statements. For instance, some have suggested that Form 990 filers should report whether their financial statements were audited on a separate basis by an independent accountant. Others have suggested that a Form 990 filer should report whether its auditor issued a qualified opinion, an unqualified opinion, an adverse opinion, or a disclaimer of opinion regarding the organization’s financial statements, and to explain in Schedule O if such opinion was qualified, adverse, or a disclaimer. The IRS requests comment on whether this additional reporting should be required.

7. Names and EINs of foreign grantees.

The redesigned Form 990 includes a Schedule F, Statement of Activities Outside the United States. Part II of this Schedule, Grants and Other Assistance to Organizations or Entities Outside the United States, includes a column (a) for reporting the name of each grantee organization and a column (b) for reporting of the employer identification number (EIN) and IRS code section (if applicable) of each grantee. In response to public comment that disclosure of such information could jeopardize the confidentiality of sensitive foreign operations and the safety of such grantees, the IRS retained but shaded out these two columns so they could not be completed for tax years 2008-2010.

The IRS invites comment on whether these two columns should be unshaded or, alternatively, deleted entirely from Part II, and the rationale for taking such action.

8. Indirect foreign expenditures.

When the IRS released the instructions for Schedule F, some commented that it would not be possible for their organizations to report certain foreign expenditures on Schedule F, because they lacked accounting systems that tracked indirect foreign expenditures (e.g., the expenses of listing a “study abroad” program in a school’s website or paper catalog). For tax years 2008-2010, the IRS has allowed organizations not to report such indirect expenditures on Schedule F if the organizations do not separately track them.

The IRS requests comment on whether this instruction should be revised now that Form 990 filers have had several years to develop procedures and adopt systems to separately track indirect foreign expenditures. Particularly, should the IRS require that all Schedule F filers account for and report indirect foreign expenditures in Part I, line 3, column (f)?

9. Reporting bank deposits as loans or business transactions on Schedule L.

In its list of Frequently Asked Questions on Form 990, Schedule L, Transactions with Interested Persons, the IRS states that, for tax years 2008-2010, deposits into and withdrawals from a bank account do not constitute “payments” or “business transactions” that need to be reported in Schedule L, Part IV, nor do such deposits constitute “loans” that need to be reported in Schedule L, Part II. See http://www.irs.gov/charities/article/0,,id=215126,00.html. The IRS requests comment on the pros and cons of requiring reporting of such deposits and withdrawals as business transactions in Schedule L, Part IV, or reporting deposits as loans in Schedule L, Part II.

10. Reporting of component parts of community trusts on Form 990-series returns.

Under Regulation §1.170A-9(T)(f)(11), any separately organized trust, not-for-profit corporation, or association that meets certain requirements may be treated as a component part of a community trust, and that trust may be treated as a single entity rather than as an aggregation of separate funds, for purposes of sections 170, 501, 507, 508, 509, and Chapter 42 of the Code. One benefit of an organization being treated as a component part of a community trust is that the organization is not required to independently meet the public support requirements for public charity status.

The IRS has not required separately organized component parts of community trusts to file separate Forms 990. Schedule A (Public Charity Status), Part I, line 8 asks a filing organization that is a “community trust described in section 170(b)(1)(A)(vi)” to check the box and complete Schedule A, Part II to establish its public support status. Otherwise, Form 990 and Form 990-EZ do not ask any specific questions about community trusts or their component parts.

The IRS requests comments on whether separately organized component parts of community trusts should file separate Form 990-series returns or, if not, how to increase transparency in reporting by community trusts and their component parts. In particular, what, if any, types of information regarding component parts of community trusts should be reported on a component part-by-component part basis rather than on an aggregate basis on Form 990-series returns? For instance, should reporting be required for each component part’s employer identification number (if any), trustees’ names and relationships to the trust (e.g., donor, disqualified person, commercial trustee), compensation to trustees, annual income, annual expenses, total assets, closely held business interests, real estate holdings, and/or charitable distributions?

11. Scope of related organization reporting on Schedule R.

The Form 990 requires reporting of related organizations on Schedule R. This reporting provides the IRS and the public with a more complete picture of the organization’s structure and controlling relationships. For purposes of Form 990, “related organization” means an organization that controls or is controlled by the filing organization, is controlled by the same person or persons who control the filing organization, is a 509(a)(3) supporting or supported organization of the filing organization, or is a sponsoring organization of or contributing employer to a filing organization that is exempt under section 501(c)(9) as a voluntary employees’ beneficiary association (VEBA). Schedule R contains exceptions for reporting of certain related organizations (e.g., certain bank trustees, subordinate organizations of a group exemption included in the central organization’s group return).

Some have expressed concern that Schedule R requires reporting that, in some cases, is overly burdensome (e.g., reporting of religious organizations and churches in a religious denomination or association, affiliates in a hospital system, chapters of a national organization) and/or compromises the confidentiality of the related organizations and/or their employees (e.g., reporting of foreign affiliates, charitable remainder trusts, contributing employers of VEBAs), and have asked that such organizations be excepted from reporting in Schedule R. The IRS requests comment on the pros and cons of adopting these or similar Schedule R exceptions.

REQUEST FOR COMMENTS

The IRS requests comments on the issues described above. Comments should be submitted in writing on or before August 1, 2011. Please include “Announcement 2011-36” on the cover page. Comments should be sent to the following address:

Internal Revenue Service
Attn: Stephen Clarke
(Announcement 2011-36)
SE:T:EO (3C1)
1111 Constitution Avenue, N.W.
Washington, DC 20224

Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:

Internal Revenue Service
Courier’s Desk
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: Stephen Clarke
(Announcement 2011-36)
SE:T:EO (3C1)

Submissions may also be sent electronically to the following e-mail address:

Form990Revision@IRS.gov

Please include “Announcement 2011-36” in the subject line.

All comments will be available for public inspection and copying.

DRAFTING INFORMATION

The principal author of this announcement is Stephen Clarke of the Exempt Organizations, Tax Exempt and Government Entities Division. For further information regarding this announcement, contact Mr. Clarke at (202) 283-9474 (not a toll-free call).

Definition of Terms and Abbreviations

Definition of Terms

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

Clarified is used in those instances where the language in a prior ruling is being made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior ruling is being changed.

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

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

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

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

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

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

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

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

Abbreviations

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

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D. —Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

Numerical Finding List

Numerical Finding List

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2010-27 through 2010-52 is in Internal Revenue Bulletin 2010-52, dated December 27, 2010.

Bulletins 2011-1 through 2011-26

Announcements

Article Issue Link Page
2011-1 2011-2 I.R.B. 2011-2 304
2011-2 2011-3 I.R.B. 2011-3 324
2011-3 2011-3 I.R.B. 2011-3 324
2011-4 2011-4 I.R.B. 2011-4 424
2011-5 2011-4 I.R.B. 2011-4 430
2011-6 2011-4 I.R.B. 2011-4 433
2011-7 2011-5 I.R.B. 2011-5 446
2011-8 2011-5 I.R.B. 2011-5 446
2011-9 2011-7 I.R.B. 2011-7 499
2011-10 2011-7 I.R.B. 2011-7 499
2011-11 2011-7 I.R.B. 2011-7 500
2011-12 2011-9 I.R.B. 2011-9 532
2011-13 2011-8 I.R.B. 2011-8 525
2011-14 2011-9 I.R.B. 2011-9 532
2011-15 2011-8 I.R.B. 2011-8 526
2011-16 2011-7 I.R.B. 2011-7 500
2011-17 2011-9 I.R.B. 2011-9 532
2011-18 2011-12 I.R.B. 2011-12 567
2011-19 2011-11 I.R.B. 2011-11 553
2011-20 2011-10 I.R.B. 2011-10 542
2011-21 2011-12 I.R.B. 2011-12 567
2011-22 2011-16 I.R.B. 2011-16 672
2011-23 2011-12 I.R.B. 2011-12 568
2011-24 2011-12 I.R.B. 2011-12 569
2011-25 2011-14 I.R.B. 2011-14 608
2011-26 2011-14 I.R.B. 2011-14 608
2011-27 2011-15 I.R.B. 2011-15 651
2011-28 2011-18 I.R.B. 2011-18 748
2011-29 2011-18 I.R.B. 2011-18 748
2011-30 2011-20 I.R.B. 2011-20 791
2011-31 2011-22 I.R.B. 2011-22 836
2011-32 2011-22 I.R.B. 2011-22 836
2011-33 2011-26 I.R.B. 2011-26
2011-34 2011-24 I.R.B. 2011-24 877
2011-35 2011-25 I.R.B. 2011-25 916
2011-36 2011-26 I.R.B. 2011-26


Notices

Article Issue Link Page
2011-1 2011-2 I.R.B. 2011-2 259
2011-2 2011-2 I.R.B. 2011-2 260
2011-3 2011-2 I.R.B. 2011-2 263
2011-4 2011-2 I.R.B. 2011-2 282
2011-5 2011-3 I.R.B. 2011-3 314
2011-6 2011-3 I.R.B. 2011-3 315
2011-7 2011-5 I.R.B. 2011-5 437
2011-8 2011-8 I.R.B. 2011-8 503
2011-9 2011-6 I.R.B. 2011-6 459
2011-10 2011-6 I.R.B. 2011-6 463
2011-11 2011-7 I.R.B. 2011-7 497
2011-12 2011-8 I.R.B. 2011-8 514
2011-13 2011-9 I.R.B. 2011-9 529
2011-14 2011-11 I.R.B. 2011-11 544
2011-15 2011-10 I.R.B. 2011-10 539
2011-16 2011-17 I.R.B. 2011-17 720
2011-17 2011-10 I.R.B. 2011-10 540
2011-18 2011-11 I.R.B. 2011-11 549
2011-19 2011-11 I.R.B. 2011-11 550
2011-20 2011-16 I.R.B. 2011-16 652
2011-21 2011-19 I.R.B. 2011-19 761
2011-22 2011-12 I.R.B. 2011-12 557
2011-23 2011-13 I.R.B. 2011-13 588
2011-24 2011-14 I.R.B. 2011-14 603
2011-25 2011-14 I.R.B. 2011-14 604
2011-26 2011-17 I.R.B. 2011-17 720
2011-27 2011-17 I.R.B. 2011-17 723
2011-28 2011-16 I.R.B. 2011-16 656
2011-29 2011-16 I.R.B. 2011-16 663
2011-30 2011-17 I.R.B. 2011-17 724
2011-31 2011-17 I.R.B. 2011-17 724
2011-32 2011-18 I.R.B. 2011-18 737
2011-33 2011-19 I.R.B. 2011-19 761
2011-34 2011-19 I.R.B. 2011-19 765
2011-35 2011-25 I.R.B. 2011-25 879
2011-36 2011-21 I.R.B. 2011-21 792
2011-37 2011-20 I.R.B. 2011-20 785
2011-38 2011-20 I.R.B. 2011-20 785
2011-39 2011-20 I.R.B. 2011-20 786
2011-40 2011-22 I.R.B. 2011-22 806
2011-41 2011-21 I.R.B. 2011-21 798
2011-42 2011-23 I.R.B. 2011-23 866
2011-43 2011-25 I.R.B. 2011-25 882
2011-44 2011-25 I.R.B. 2011-25 883
2011-45 2011-25 I.R.B. 2011-25 886
2011-46 2011-25 I.R.B. 2011-25 887
2011-48 2011-26 I.R.B. 2011-26
2011-49 2011-26 I.R.B. 2011-26


Proposed Regulations

Article Issue Link Page
140108-08 2011-13 I.R.B. 2011-13 591
149335-08 2011-6 I.R.B. 2011-6 468
118761-09 2011-21 I.R.B. 2011-21 803
146097-09 2011-8 I.R.B. 2011-8 516
153338-09 2011-14 I.R.B. 2011-14 606
154159-09 2011-19 I.R.B. 2011-19 777
124018-10 2011-2 I.R.B. 2011-2 301
131151-10 2011-8 I.R.B. 2011-8 519
131947-10 2011-8 I.R.B. 2011-8 521
132724-10 2011-7 I.R.B. 2011-7 498
151687-10 2011-23 I.R.B. 2011-23 867


Revenue Procedures

Article Issue Link Page
2011-1 2011-1 I.R.B. 2011-1 1
2011-2 2011-1 I.R.B. 2011-1 90
2011-3 2011-1 I.R.B. 2011-1 111
2011-4 2011-1 I.R.B. 2011-1 123
2011-5 2011-1 I.R.B. 2011-1 167
2011-6 2011-1 I.R.B. 2011-1 195
2011-7 2011-1 I.R.B. 2011-1 233
2011-8 2011-1 I.R.B. 2011-1 237
2011-9 2011-2 I.R.B. 2011-2 283
2011-10 2011-2 I.R.B. 2011-2 294
2011-11 2011-4 I.R.B. 2011-4 329
2011-12 2011-2 I.R.B. 2011-2 297
2011-13 2011-3 I.R.B. 2011-3 318
2011-14 2011-4 I.R.B. 2011-4 330
2011-15 2011-3 I.R.B. 2011-3 322
2011-16 2011-5 I.R.B. 2011-5 440
2011-17 2011-5 I.R.B. 2011-5 441
2011-18 2011-5 I.R.B. 2011-5 443
2011-19 2011-6 I.R.B. 2011-6 465
2011-20 2011-11 I.R.B. 2011-11 551
2011-21 2011-12 I.R.B. 2011-12 560
2011-22 2011-18 I.R.B. 2011-18 737
2011-23 2011-15 I.R.B. 2011-15 626
2011-24 2011-20 I.R.B. 2011-20 787
2011-25 2011-17 I.R.B. 2011-17 725
2011-26 2011-16 I.R.B. 2011-16 664
2011-27 2011-18 I.R.B. 2011-18 740
2011-28 2011-18 I.R.B. 2011-18 743
2011-29 2011-18 I.R.B. 2011-18 746
2011-30 2011-21 I.R.B. 2011-21 802
2011-31 2011-22 I.R.B. 2011-22 808
2011-32 2010-22 I.R.B. 2010-22 835
2011-33 2011-25 I.R.B. 2011-25 887
2011-34 2011-24 I.R.B. 2011-24 875
2011-35 2011-25 I.R.B. 2011-25 890
2011-36 2011-25 I.R.B. 2011-25 915
2011-37 2011-26 I.R.B. 2011-26


Revenue Rulings

Article Issue Link Page
2011-1 2011-2 I.R.B. 2011-2 251
2011-2 2011-2 I.R.B. 2011-2 256
2011-3 2011-4 I.R.B. 2011-4 326
2011-4 2011-6 I.R.B. 2011-6 448
2011-5 2011-13 I.R.B. 2011-13 577
2011-6 2011-10 I.R.B. 2011-10 537
2011-7 2011-10 I.R.B. 2011-10 534
2011-8 2011-12 I.R.B. 2011-12 554
2011-9 2011-12 I.R.B. 2011-12 554
2011-10 2011-14 I.R.B. 2011-14 597
2011-11 2011-19 I.R.B. 2011-19 758
2011-12 2011-26 I.R.B. 2011-26
2011-13 2011-23 I.R.B. 2011-23 841


Treasury Decisions

Article Issue Link Page
9507 2011-3 I.R.B. 2011-3 305
9508 2011-7 I.R.B. 2011-7 495
9509 2011-6 I.R.B. 2011-6 450
9510 2011-6 I.R.B. 2011-6 453
9511 2011-6 I.R.B. 2011-6 455
9512 2011-7 I.R.B. 2011-7 473
9513 2011-8 I.R.B. 2011-8 501
9514 2011-9 I.R.B. 2011-9 527
9515 2011-14 I.R.B. 2011-14 599
9516 2011-13 I.R.B. 2011-13 575
9517 2011-15 I.R.B. 2011-15 610
9518 2011-17 I.R.B. 2011-17 710
9519 2011-18 I.R.B. 2011-18 734
9520 2011-18 I.R.B. 2011-18 730
9521 2011-19 I.R.B. 2011-19 750
9522 2011-20 I.R.B. 2011-20 780
9523 2011-20 I.R.B. 2011-20 781
9524 2011-23 I.R.B. 2011-23 843
9525 2011-23 I.R.B. 2011-23 837
9526 2011-24 I.R.B. 2011-24 869


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 2010-27 through 2010-52 is in Internal Revenue Bulletin 2010-52, dated December 27, 2010.

Bulletins 2011-1 through 2011-26

Announcements

Old Article Action New Article Issue Link Page
85-88 Obsoleted by Rev. Proc. 2011-10 2011-2 I.R.B. 2011-2 294
2008-11 Modified by Ann. 2011-6 2011-4 I.R.B. 2011-4 433
2009-62 Obsoleted by Rev. Proc. 2011-10 2011-2 I.R.B. 2011-2 294


Notices

Old Article Action New Article Issue Link Page
2006-87 Superseded by Notice 2011-8 2011-8 I.R.B. 2011-8 503
2007-25 Superseded by Notice 2011-8 2011-8 I.R.B. 2011-8 503
2007-77 Superseded by Notice 2011-8 2011-8 I.R.B. 2011-8 503
2008-107 Superseded by Notice 2011-8 2011-8 I.R.B. 2011-8 503
2009-4 Obsoleted by Rev. Proc. 2011-35 2011-25 I.R.B. 2011-25 890
2009-23 Modified by Notice 2011-24 2011-14 I.R.B. 2011-14 603
2009-24 Modified by Notice 2011-24 2011-14 I.R.B. 2011-14 603
2009-83 Modified by Notice 2011-25 2011-14 I.R.B. 2011-14 604
2009-93 Modified by Notice 2011-38 2011-20 I.R.B. 2011-20 785
2010-27 Superseded by Notice 2011-8 2011-8 I.R.B. 2011-8 503
2010-32 Modified and superseded by Notice 2011-37 2011-20 I.R.B. 2011-20 785
2010-59 Modified by Notice 2011-5 2011-3 I.R.B. 2011-3 314
2010-60 Supplemented and superseded by Notice 2011-34 2011-19 I.R.B. 2011-19 765
2010-71 Modified and superseded by Notice 2011-9 2011-6 I.R.B. 2011-6 459
2010-79 Clarified and modified by Notice 2011-4 2011-2 I.R.B. 2011-2 282
2011-9 Modified by Notice 2011-46 2011-25 I.R.B. 2011-25 887


Proposed Regulations

Old Article Action New Article Issue Link Page
132554-08 Corrected by Ann. 2011-11 2011-7 I.R.B. 2011-7 500
149335-08 Hearing scheduled by Ann. 2011-26 2011-14 I.R.B. 2011-14 608
146097-09 Hearing rescheduled by Ann. 2011-30 2011-20 I.R.B. 2011-20 791


Revenue Procedures

Old Article Action New Article Issue Link Page
72-50 Modified and superseded by Rev. Proc. 2011-10 2011-2 I.R.B. 2011-2 294
76-34 Modified and superseded by Rev. Proc. 2011-10 2011-2 I.R.B. 2011-2 294
81-70 Obsoleted by Rev. Proc. 2011-35 2011-25 I.R.B. 2011-25 890
82-39 Modified and superseded by Rev. Proc. 2011-33 2011-25 I.R.B. 2011-25 887
83-23 Modified and superseded by Rev. Proc. 2011-15 2011-3 I.R.B. 2011-3 322
94-17 Modified and superseded by Rev. Proc. 2011-15 2011-3 I.R.B. 2011-3 322
97-27 Clarified and modified by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2001-10 Modified by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2002-28 Modified by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2003-21 Modified and superseded by Rev. Proc. 2011-15 2011-3 I.R.B. 2011-3 322
2004-34 Modified by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2004-34 Modified and clarified by Rev. Proc. 2011-18 2011-5 I.R.B. 2011-5 443
2006-44 Modified by Ann. 2011-6 2011-4 I.R.B. 2011-4 433
2006-56 Modified by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2008-52 Modified by Notice 2011-4 2011-2 I.R.B. 2011-2 282
2008-52 Modified by Rev. Proc. 2011-17 2011-5 I.R.B. 2011-5 441
2008-52 Superseded in part by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2009-32 Modified and superseded by Rev. Proc. 2011-33 2011-25 I.R.B. 2011-25 887
2009-39 Superseded in part by Rev. Proc. 2011-14 2011-4 I.R.B. 2011-4 330
2009-44 Modified by Ann. 2011-6 2011-4 I.R.B. 2011-4 433
2010-1 Superseded by Rev. Proc. 2011-1 2011-1 I.R.B. 2011-1 1
2010-2 Superseded by Rev. Proc. 2011-2 2011-1 I.R.B. 2011-1 90
2010-3 Superseded by Rev. Proc. 2011-3 2011-1 I.R.B. 2011-1 111
2010-4 Superseded by Rev. Proc. 2011-4 2011-1 I.R.B. 2011-1 123
2010-5 Superseded by Rev. Proc. 2011-5 2011-1 I.R.B. 2011-1 167
2010-6 Superseded by Rev. Proc. 2011-6 2011-1 I.R.B. 2011-1 195
2010-7 Superseded by Rev. Proc. 2011-7 2011-1 I.R.B. 2011-1 233
2010-8 Superseded by Rev. Proc. 2011-8 2011-1 I.R.B. 2011-1 237
2010-9 Superseded by Rev. Proc. 2011-9 2011-2 I.R.B. 2011-2 283
2010-15 Updated by Rev. Proc. 2011-13 2011-3 I.R.B. 2011-3 318
2010-18 Amplified and modified by Rev. Proc. 2011-21 2011-12 I.R.B. 2011-12 560
2010-23 Obsoleted in part by Rev. Proc. 2011-37 2011-26 I.R.B. 2011-26
2010-25 Obsoleted in part by Rev. Proc. 2011-23 2011-15 I.R.B. 2011-15 626
2011-1 Corrected by Ann. 2011-7 2011-5 I.R.B. 2011-5 446
2011-8 Corrected by Ann. 2011-8 2011-5 I.R.B. 2011-5 446
2011-8 Modified by Rev. Proc. 2011-36 2011-25 I.R.B. 2011-25 915
2011-11 Corrected by Ann. 2011-9 2011-7 I.R.B. 2011-7 499
2011-14 Modified by Rev. Proc. 2011-27 2011-18 I.R.B. 2011-18 740
2011-14 Modified by Rev. Proc. 2011-28 2011-18 I.R.B. 2011-18 743
2011-14 Modified and amplified by Rev. Proc. 2011-22 2011-18 I.R.B. 2011-18 737
2011-21 Amplified by Rev. Proc. 2011-26 2011-16 I.R.B. 2011-16 664
2011-24 Modified by Notice 2011-46 2011-25 I.R.B. 2011-25 887


Revenue Rulings

Old Article Action New Article Issue Link Page
81-100 Modified by Rev. Rul. 2011-1 2011-2 I.R.B. 2011-2 251
2004-67 Modified by Rev. Rul. 2011-1 2011-2 I.R.B. 2011-2 251
2008-40 Modified by Rev. Rul. 2011-1 2011-2 I.R.B. 2011-2 251
2011-3 Corrected by Ann. 2011-16 2011-7 I.R.B. 2011-7 500


Treasury Decisions

Old Article Action New Article Issue Link Page
9391 Corrected by Ann. 2011-12 2011-9 I.R.B. 2011-9 532
9505 Corrected by Ann. 2011-10 2011-7 I.R.B. 2011-7 499


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