Highlights of This Issue INCOME TAX EXEMPT ORGANIZATIONS Preface The IRS Mission Introduction Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Rev. Rul. 201707 Part IV. Items of General Interest Announcement 201702 Definition of Terms and Abbreviations Definition of Terms Abbreviations Numerical Finding List Numerical Finding List Effect of Current Actions on Previously Published Items Finding List of Current Actions on Previously Published Items INTERNAL REVENUE BULLETIN We Welcome Comments About the Internal Revenue Bulletin Internal Revenue Bulletin: 2017-10 March 6, 2017 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. 2017–07 Rev. Rul. 2017–07 Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, 7872, and other sections of the Code, tables set forth the rates for March 2017. EXEMPT ORGANIZATIONS Announcement 2017–02 Announcement 2017–02 Revocation of IRC 501(c)(3) Organizations for failure to meet the code section requirements. Contributions made to the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A). 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. 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. 2017–07 This revenue ruling provides various prescribed rates for federal income tax purposes for March 2017 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520. REV. RUL. 2017–07 TABLE 1 Applicable Federal Rates (AFR) for March 2017 Period for Compounding Annual Semiannual Quarterly Monthly Short-term AFR 1.01% 1.01% 1.01% 1.01% 110% AFR 1.11% 1.11% 1.11% 1.11% 120% AFR 1.21% 1.21% 1.21% 1.21% 130% AFR 1.31% 1.31% 1.31% 1.31% Mid-term AFR 2.05% 2.04% 2.03% 2.03% 110% AFR 2.25% 2.24% 2.23% 2.23% 120% AFR 2.47% 2.45% 2.44% 2.44% 130% AFR 2.67% 2.65% 2.64% 2.64% 150% AFR 3.08% 3.06% 3.05% 3.04% 175% AFR 3.60% 3.57% 3.55% 3.54% Long-term AFR 2.78% 2.76% 2.75% 2.74% 110% AFR 3.06% 3.04% 3.03% 3.02% 120% AFR 3.34% 3.31% 3.30% 3.29% 130% AFR 3.62% 3.59% 3.57% 3.56% REV. RUL. 2017–07 TABLE 2 Adjusted AFR for March 2017 Period for Compounding Annual Semiannual Quarterly Monthly Short-term adjusted AFR .75% .75% .75% .75% Mid-term adjusted AFR 1.53% 1.52% 1.52% 1.52% Long-term adjusted AFR 2.06% 2.05% 2.04% 2.04% REV. RUL. 2017–07 TABLE 3 Rates Under Section 382 for March 2017 Adjusted federal long-term rate for the current month 2.06% Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 2.09% REV. RUL. 2017–07 TABLE 4 Appropriate Percentages Under Section 42(b)(1) for March 2017 Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Appropriate percentage for the 70% present value low-income housing credit 7.56% Appropriate percentage for the 30% present value low-income housing credit 3.24% REV. RUL. 2017–07 TABLE 5 Rate Under Section 7520 for March 2017 Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 2.4% Part IV. Items of General Interest Announcement 2017–02 Deletions From Cumulative List of Organizations, Contributions to Which are Deductible Under Section 170 of the Code Table of Contents The Internal Revenue Service has revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Internal Revenue Code of 1986. Generally, the IRS will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization no longer qualifies. However, the IRS is not precluded from disallowing a deduction for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation. If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on March 6, 2017 and would end on the date the court first determines the organization is not described in section 170(c)(2) as more particularly set for in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual, in whole or in part, for the acts or omissions of the organization that were the basis for revocation. NAME OF ORGANIZATION Effective Date of Revocation LOCATION Palms Residential Care Facility 1/1/2012 Los Angeles, CA Albina Youth Opportunity School, Inc. 7/1/2013 Portland, OR Peoples Communication, Inc. 1/1/2014 New York, NY East Alabama Community Development Corporation 10/1/2012 Anniston, AL Marion Shooters Club 1/1/2014 Marion, MT Brownsville Board of Realtors Educational Foundation 1/1/2012 Brownsville, TX The Adam Project, Inc. 1/1/2014 Dayton, OH Friendly Earth, Inc. 1/1/2013 Seattle, WA Wise Business Association, Inc. 1/1/2014 Wise, VA Arizona Latin Association Community Productions 1/1/2013 Tolleson, AZ Logansport Burmese Community, Inc. 1/1/2014 Logansport, IN Banditos Baseball Club 9/18/2014 Katy, TX Kelly Enterprise, Inc. 1/1/2014 Baltimore, MD NABA-Elite, Inc. 1/1/2014 Santa Fe Springs, CA Dr. Zachery Tims Enrichment Center Inc. 1/1/2014 Windermere, FL Definition of Terms and Abbreviations Definition of Terms Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the 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. 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 2016–27 through 2016–52 is in Internal Revenue Bulletin 2016–52, dated December 26, 2016. Bulletin 2017–1 through 2017–10 Action on Decision: Article Issue Link Page 2017-1 2017-07 I.R.B. 2017-07 868 Announcements: Article Issue Link Page 2017-01 2017-08 I.R.B. 2017-08 941 2017-02 2017-10 I.R.B. 2017-10 1007 Notices: Article Issue Link Page 2017-1 2017-02 I.R.B. 2017-02 367 2017-2 2017-04 I.R.B. 2017-04 539 2017-3 2017-02 I.R.B. 2017-02 368 2017-4 2017-04 I.R.B. 2017-04 541 2017-5 2017-06 I.R.B. 2017-06 779 2017-6 2017-03 I.R.B. 2017-03 422 2017-7 2017-03 I.R.B. 2017-03 423 2017-8 2017-03 I.R.B. 2017-03 423 2017-9 2017-04 I.R.B. 2017-04 542 2017-10 2017-04 I.R.B. 2017-04 544 2017-12 2017-05 I.R.B. 2017-05 742 2017-13 2017-06 I.R.B. 2017-06 780 2017-14 2017-06 I.R.B. 2017-06 783 2017-15 2017-06 I.R.B. 2017-06 783 2017-16 2017-07 I.R.B. 2017-07 913 2017-18 2017-09 I.R.B. 2017-09 997 2017-19 2017-09 I.R.B. 2017-09 1000 Proposed Regulations: Article Issue Link Page REG-137604-07 2017-07 I.R.B. 2017-07 923 REG-128276-12 2017-02 I.R.B. 2017-02 369 REG-103477-14 2017-05 I.R.B. 2017-05 746 REG-112324-15 2017-04 I.R.B. 2017-04 547 REG-127203-15 2017-07 I.R.B. 2017-07 918 REG-131643-15 2017-06 I.R.B. 2017-06 865 REG-134438-15 2017-02 I.R.B. 2017-02 373 REG-112800-16 2017-04 I.R.B. 2017-04 569 REG-123829-16 2017-05 I.R.B. 2017-05 764 REG-123841-16 2017-05 I.R.B. 2017-05 766 REG-133353-16 2017-02 I.R.B. 2017-02 372 REG-134247-16 2017-05 I.R.B. 2017-05 744 REG-135122-16 2017-09 I.R.B. 2017-09 1005 Revenue Procedures: Article Issue Link Page 2017-1 2017-01 I.R.B. 2017-01 1 2017-2 2017-01 I.R.B. 2017-01 106 2017-3 2017-01 I.R.B. 2017-01 130 2017-4 2017-01 I.R.B. 2017-01 146 2017-5 2017-01 I.R.B. 2017-01 230 2017-7 2017-01 I.R.B. 2017-01 269 2017-12 2017-03 I.R.B. 2017-03 424 2017-13 2017-06 I.R.B. 2017-06 787 2017-14 2017-03 I.R.B. 2017-03 426 2017-15 2017-03 I.R.B. 2017-03 437 2017-16 2017-03 I.R.B. 2017-03 501 2017-18 2017-05 I.R.B. 2017-05 743 2017-19 2017-07 I.R.B. 2017-07 913 2017-21 2017-06 I.R.B. 2017-06 791 2017-22 2017-06 I.R.B. 2017-06 863 2017-23 2017-07 I.R.B. 2017-07 915 2017-24 2017-07 I.R.B. 2017-07 916 Revenue Rulings: Article Issue Link Page 2017-1 2017-03 I.R.B. 2017-03 377 2017-2 2017-02 I.R.B. 2017-02 364 2017-3 2017-04 I.R.B. 2017-04 522 2017-4 2017-06 I.R.B. 2017-06 776 2017-5 2017-09 I.R.B. 2017-09 1000 2017-7 2017-10 I.R.B. 2017-10 1009 Treasury Decisions: Article Issue Link Page 9794 2017-02 I.R.B. 2017-02 273 9795 2017-02 I.R.B. 2017-02 326 9796 2017-03 I.R.B. 2017-03 380 9801 2017-02 I.R.B. 2017-02 355 9802 2017-02 I.R.B. 2017-02 361 9803 2017-03 I.R.B. 2017-03 384 9804 2017-03 I.R.B. 2017-03 406 9806 2017-04 I.R.B. 2017-04 524 9807 2017-05 I.R.B. 2017-05 573 9808 2017-05 I.R.B. 2017-05 580 9809 2017-05 I.R.B. 2017-05 664 9810 2017-06 I.R.B. 2017-06 775 9811 2017-07 I.R.B. 2017-07 869 9814 2017-07 I.R.B. 2017-07 878 9815 2017-09 I.R.B. 2017-09 944 9817 2017-09 I.R.B. 2017-09 968 Effect of Current Actions on Previously Published Items Finding List of Current Actions on Previously Published Items A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016–27 through 2016–52 is in Internal Revenue Bulletin 2016–52, dated December 26, 2016. Bulletin 2017–1 through 2017–10 Notices: Old Article Action New Article Issue Link Page 2002-1 Amplified by Notice 2017-1 2017-02 I.R.B. 2017-02 367 2010-46 Obsoleted by Notice 2017-1 2017-02 I.R.B. 2017-02 367 2016-29 Modified by Notice 2017-6 2017-03 I.R.B. 2017-03 422 Revenue Procedures: Old Article Action New Article Issue Link Page 2013-22 Clarified by Rev. Proc. 2017-18 2017-05 I.R.B. 2017-05 743 2015-57 Modified by Rev. Proc. 2017-24 2017-07 I.R.B. 2017-07 916 Treasury Decisions: Old Article Action New Article Issue Link Page 2010-46 Obsoleted by T.D. 9815 2017-09 I.R.B. 2017-09 944 INTERNAL REVENUE BULLETIN 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/. We Welcome Comments About the Internal Revenue Bulletin If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page (www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave. NW, IR-6230 Washington, DC 20224.