- Highlights of This Issue
- Part III. Administrative, Procedural, and Miscellaneous
- Definition of Terms and Abbreviations
- Numerical Finding List
- Effect of Current Actions on Previously Published Items
Internal Revenue Bulletin: 2014-39
September 22, 2014
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.
This revenue procedure provides domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2012.
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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.
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 Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases.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.
This revenue procedure provides the domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2012. Instructions are provided for computing foreign insurance companies’ liabilities for the estimated tax and installment payments of estimated tax for taxable years beginning after December 31, 2012. For more specific guidance regarding the computation of the amount of net investment income to be included by a foreign insurance company on its U.S. income tax return, see Notice 89–96, 1989–2 C.B. 417. For the domestic asset/liability percentage and domestic investment yield, as well as instructions for computing foreign insurance companies’ liabilities for estimated tax and installment payments of estimated tax for taxable years beginning after December 31, 2011, see Rev. Proc. 2013–33, 2013–38 I.R.B. 209.
DOMESTIC ASSET/LIABILITY PERCENTAGES FOR 2013. The Secretary determines the domestic asset/liability percentage separately for life insurance companies and property and liability insurance companies. For the first taxable year beginning after December 31, 2012, the relevant domestic asset/liability percentages are:
[134.6] percent for foreign life insurance companies, and
[188.4] percent for foreign property and liability insurance companies.
.02 DOMESTIC INVESTMENT YIELDS FOR 2013. The Secretary is required to prescribe separate domestic investment yields for foreign life insurance companies and for foreign property and liability insurance companies. For the first taxable year beginning after December 31, 2012, the relevant domestic investment yields are:
[4.2] percent for foreign life insurance companies, and
[4.1] percent for foreign property and liability insurance companies.
.03 SOURCE OF DATA FOR 2013. The section 842(b) percentages to be used for the 2013 tax year are based on tax return data following the same methodology used for the 2012 year.
To compute estimated tax and the installment payments of estimated tax due for taxable years beginning after December 31, 2012, a foreign insurance company must compute its estimated tax payments by adding to its income other than net investment income the greater of (i) its net investment income as determined under section 842(b)(5), that is actually effectively connected with the conduct of a trade or business within the United States for the relevant period, or (ii) the minimum effectively connected net investment income under section 842(b) that would result from using the most recently available domestic asset/liability percentage and domestic investment yield. Thus, for installment payments due after the publication of this revenue procedure, the domestic asset/liability percentages and the domestic investment yields provided in this revenue procedure must be used to compute the minimum effectively connected net investment income. However, if the due date of an installment is less than 20 days after the date this revenue procedure is published in the Internal Revenue Bulletin, the asset/liability percentages and domestic investment yields provided in Rev. Proc. 2013–33 may be used to compute the minimum effectively connected net investment income for such installment. For further guidance in computing estimated tax, see Notice 89–96.
This revenue procedure is effective for taxable years beginning after December 31, 2012.
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:
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.
The following abbreviations in current use and formerly used will appear in material published in the Bulletin.
B.T.A.—Board of Tax Appeals.
CFR—Code of Federal Regulations.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
ERISA—Employee Retirement Income Security Act.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
FUTA—Federal Unemployment Tax Act.
G.C.M.—Chief Counsel’s Memorandum.
I.R.B.—Internal Revenue Bulletin.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T.I.R.—Technical Information Release.
U.S.C.—United States Code.
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014–01 through 2014–26 is in Internal Revenue Bulletin 2014–26, dated June 30, 2014.
Bulletins 2014–27 through 2014–39
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014–01 through 2014–26 is in Internal Revenue Bulletin 2014–26, dated June 30, 2014.
Bulletins 2014–27 through 2014–39
|Old Article||Action||New Article||Issue||Link||Page|
|1981-38||Superseded by||Rev. Proc. 2014-42||2014-29 I.R.B.||2014-29||193|
|93-37||Modified and Superseded by||Rev. Proc. 2014-43||2014-32 I.R.B.||2014-43||273|
|1981-38||Modified by||Rev. Proc. 2014-42||2014-29 I.R.B.||2014-29||193|
|2000-12||Superseded by||Rev. Proc. 2014-39||2014-29 I.R.B.||2014-29||151|
|2002-55||Revoked by||Rev. Proc. 2014-39||2014-29 I.R.B.||2014-29||151|
|2003-64||Superseded by||Rev. Proc. 2014-47||2014-35 I.R.B.||2014-35||393|
|2004-21||Superseded by||Rev. Proc. 2014-47||2014-35 I.R.B.||2014-35||393|
|2005-77||Superseded by||Rev. Proc. 2014-47||2014-35 I.R.B.||2014-35||393|
|2011-14||Modified by||Rev. Proc. 2014-48||2014-36 I.R.B.||2014-36||527|
|2011-16||Superseded by||Rev. Proc. 2014-51||2014-37 I.R.B.||2014-37||543|
|2011-16||Modified by||Rev. Proc. 2014-51||2014-51 I.R.B.||2014-51||543|
|2012-38||Superseded by||Rev. Proc. 2014-27||2014-27 I.R.B.||2014-27||26|
|2012-46||Superseded by||Rev. Proc. 2014-26||2014-27 I.R.B.||2014-27||41|
|2014-4||Amplified by||Rev. Proc. 2014-40||2014-30 I.R.B.||2014-30||229|
|2014-5||Amplified by||Rev. Proc. 2014-40||2014-30 I.R.B.||2014-30||229|
|2014-8||Amplified by||Rev. Proc. 2014-40||2014-30 I.R.B.||2014-30||229|
|2014-9||Amplified by||Rev. Proc. 2014-40||2014-30 I.R.B.||2014-30||229|
|2014-10||Amplified by||Rev. Proc. 2014-40||2014-30 I.R.B.||2014-30||229|
|2014-13||Modified by||Rev. Proc. 2014-38||2014-29 I.R.B.||2014-29||132|
|2014-13||Superseded by||Rev. Proc. 2014-38||2014-29 I.R.B.||2014-29||132|
|2014-16||Superseded by||Rev. Proc. 2014-51||2014-37 I.R.B.||2014-37||543|
|2014-16||Modified by||Rev. Proc. 2014-51||2014-37 I.R.B.||2014-37||543|
|Old Article||Action||New Article||Issue||Link||Page|
|2013-11||Modified by||Notice 2014-48||2014-36 I.R.B.||2014-36||523|
|2013-23||Modified by||Notice 2014-48||2014-36 I.R.B.||2014-36||523|
|2013-28||Modified by||Notice 2014-48||2014-36 I.R.B.||2014-36||523|
|2013-29||Modified by||Notice 2014-46||2014-36 I.R.B.||2014-36||520|
|2013-29||Clarified by||Notice 2014-46||2014-36 I.R.B.||2014-36||520|
|2013-32||Modified by||Notice 2014-48||2014-36 I.R.B.||2014-36||523|
|2013-37||Modified by||Notice 2014-48||2014-36 I.R.B.||2014-36||523|
|2013-51||Obsoleted by||Notice 2014-42||2014-34 I.R.B.||2014-34||387|
|2013-60||Modified by||Notice 2014-46||2014-36 I.R.B.||2014-36||520|
|2013-60||Clarified by||Notice 2014-46||2014-36 I.R.B.||2014-36||520|
|2014-44||Supplemented by||Notice 2014-45||2014-34 I.R.B.||2014-34||388|
|Old Article||Action||New Article||Issue||Link||Page|
|2005-47||Obsoleted by||T.D. 9668||2014-27 I.R.B.||2014-27||1|
|2010-51||Obsoleted by||T.D. 9684||2014-33 I.R.B.||2014-33||345|
|2010-71||Obsoleted by||T.D. 9684||2014-33 I.R.B.||2014-33||345|
|2011-6||Obsoleted by||T.D. 9684||2014-33 I.R.B.||2014-33||345|
|2011-9||Obsoleted by||T.D. 9684||2014-33 I.R.B.||2014-33||345|
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletins are available at www.irs.gov/irb/.
The contents of the weekly Bulletins were consolidated semiannually into permanent, indexed, Cumulative Bulletins through the 2008–2 edition.
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