HIGHLIGHTS OF THIS ISSUE EMPLOYMENT TAX INCOME TAX The IRS Mission Introduction Actions Relating to Court Decisions Part I Rev. Rul. 2021-11 Definition of Terms Abbreviations Numerical Finding List1 Numerical Finding List Finding List of Current Actions on Previously Published Items1 How to get the Internal Revenue Bulletin INTERNAL REVENUE BULLETIN We Welcome Comments About the Internal Revenue Bulletin Internal Revenue Bulletin: 2021-24 June 14, 2021 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. EMPLOYMENT TAX AOD 2021-3, page 1199. Nonacquiescence to the holdings that Gevity, rather than its clients, had “control of the payment of wages” and that Gevity was the statutory employer under I.R.C. § 3401(d). INCOME TAX Rev. Rul. 2021-11, page 1200. Fringe benefits aircraft valuation formula. For purposes of section 1.61-21(g) of the Income Tax Regulations, relating to the rule for valuing non-commercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the first half of 2021 are set forth. 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. Actions Relating to Court Decisions It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent. Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions. Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin. The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both “acquiescence” and “acquiescence in result only” mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, “acquiescence” indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, “acquiescence in result only” indicates disagreement or concern with some or all of those reasons. “Nonacquiescence” signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a “nonacquiescence” indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit. The Commissioner does NOT ACQUIESCE in the following decision: TriNet Group, Inc. v. United States of America, 979 F.3d 1311 (11th Cir. 2020).1 1 Nonacquiescence to the holdings that Gevity, rather than its clients, had “control of the payment of wages” and that Gevity was the statutory employer under I.R.C. § 3401(d). Part I Rev. Rul. 2021-11 For purposes of the taxation of fringe benefits under section 61 of the Internal Revenue Code, section 1.61-21(g) of the Income Tax Regulations provides a rule for valuing noncommercial flights on employer-provided aircraft. Section 1.61-21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in section 1.61-21(g)(7) and then adding the applicable terminal charge. The SIFL cents-per-mile rates in the formula and the terminal charge are calculated by the Department of Transportation (DOT) and are reviewed semi-annually. According to DOT, due to the effect of the COVID-19 pandemic, airline industry capacity (as measured by airline seat miles) was reduced faster than airline industry expenses were reduced. Generally, the SIFL rate is the result of airline industry expenses divided by airline seat miles. Because airline seat miles were reduced faster than airline industry expenses, the SIFL rate for the 6-month Tax Period Effective 1/1/2021 increased substantially. Furthermore, in March 2020, the Coronavirus Aid, Relief, and Economic Security Act was enacted, directing the Treasury Department to allot up to $25 billion for domestic carriers to cover payroll expenses via grants and promissory notes, known as the Payroll Support Program (PSP). The PSP grants and PSP promissory notes offset airline industry expenses. Accordingly, DOT provided two alternatives to incorporate differing levels of the PSP into the SIFL rate calculations to both account for the PSP in the rate calculations and to mitigate the pandemic impact on the SIFL rate. One calculation adjusts the SIFL rates to account for PSP grants only while the other calculation adjusts the SIFL rates to account for both the PSP grants and PSP promissory notes. This revenue ruling contains these three SIFL rates: (1) the Unadjusted SIFL Rate, (2) the SIFL Rate Adjusted for PSP Grants, and (3) the SIFL Rate Adjusted for PSP Grants and Promissory Notes. Taxpayers may use any of the three rates when determining the value on noncommercial flights of employer-provided aircraft under section 1.61-21(g). The following charts set forth the terminal charges and SIFL mileage rates: Unadjusted SIFL Rate Period During Which the Flight Is Taken Terminal Charge SIFL Mileage Rates 1/1/21 - 6/30/21 $61.88 Up to 500 miles = $.3385 per mile 501-1500 miles = $.2581 per mile Over 1500 miles = $.2481 per mile SIFL Rate Adjusted for PSP Grants 1/1/21 - 6/30/21 $44.35 Up to 500 miles = $.2426 per mile 501-1500 miles = $.1850 per mile Over 1500 miles = $.1778 per mile SIFL Rate Adjusted for PSP Grants and Promissory Notes 1/1/21 - 6/30/21 $38.03 Up to 500 miles = $.2080 per mile 501-1500 miles = $.1586 per mile Over 1500 miles = $.1525 per mile DRAFTING INFORMATION The principal author of this revenue ruling is Kathleen Edmondson of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 317-6798 (not a toll-free number). 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 List1 Numerical Finding List Bulletin 2021–24 AOD: Article Issue Link Page 2021-1 2021-15 I.R.B. 2021-15 985 2021-2 2021-21 I.R.B. 2021-21 1156 2021-3 2021-24 I.R.B. 2021-24 1199 Announcements: Article Issue Link Page 2021-01 2021-04 I.R.B. 2021-04 506 2021-02 2021-08 I.R.B. 2021-08 892 2021-03 2021-08 I.R.B. 2021-08 892 2021-04 2021-09 I.R.B. 2021-09 895 2021-05 2021-13 I.R.B. 2021-13 965 2021-06 2021-15 I.R.B. 2021-15 1011 2021-07 2021-15 I.R.B. 2021-15 1061 2021-08 2021-18 I.R.B. 2021-18 1146 2021-09 2021-20 I.R.B. 2021-20 1155 2021-10 2021-22 I.R.B. 2021-22 1170 2021-11 2021-23 I.R.B. 2021-23 1196 Notices: Article Issue Link Page 2021-01 2021-02 I.R.B. 2021-02 315 2021-03 2021-02 I.R.B. 2021-02 316 2021-04 2021-02 I.R.B. 2021-02 319 2021-02 2021-03 I.R.B. 2021-03 478 2021-05 2021-03 I.R.B. 2021-03 479 2021-07 2021-03 I.R.B. 2021-03 482 2021-09 2021-05 I.R.B. 2021-05 678 2021-06 2021-06 I.R.B. 2021-06 822 2021-08 2021-06 I.R.B. 2021-06 823 2021-11 2021-06 I.R.B. 2021-06 827 2021-12 2021-06 I.R.B. 2021-06 828 2021-13 2021-06 I.R.B. 2021-06 832 2021-10 2021-07 I.R.B. 2021-07 888 2021-15 2021-10 I.R.B. 2021-10 898 2021-16 2021-10 I.R.B. 2021-10 907 2021-18 2021-11 I.R.B. 2021-11 911 2021-19 2021-11 I.R.B. 2021-11 920 2021-20 2021-11 I.R.B. 2021-11 922 2021-17 2021-14 I.R.B. 2021-14 984 2021-21 2021-15 I.R.B. 2021-15 986 2021-22 2021-15 I.R.B. 2021-15 987 2021-23 2021-16 I.R.B. 2021-16 1113 2021-25 2021-17 I.R.B. 2021-17 1118 2021-24 2021-18 I.R.B. 2021-18 1122 2021-27 2021-18 I.R.B. 2021-18 1125 2021-28 2021-18 I.R.B. 2021-18 1130 2021-29 2021-19 I.R.B. 2021-19 1149 2021-30 2021-19 I.R.B. 2021-19 1149 2021-26 2021-21 I.R.B. 2021-21 1157 2021-32 2021-21 I.R.B. 2021-21 1159 2021-31 2021-23 I.R.B. 2021-23 1173 2021-33 2021-23 I.R.B. 2021-23 1190 2021-34 2021-23 I.R.B. 2021-23 1194 Proposed Regulations: Article Issue Link Page REG-130081-19 2021-02 I.R.B. 2021-02 321 REG-114615-16 2021-03 I.R.B. 2021-03 489 REG-111950-20 2021-05 I.R.B. 2021-05 683 REG-115057-20 2021-05 I.R.B. 2021-05 714 REG-121095-19 2021-18 I.R.B. 2021-18 1131 Revenue Procedures: Article Issue Link Page 2021-01 2021-01 I.R.B. 2021-01 1 2021-02 2021-01 I.R.B. 2021-01 116 2021-03 2021-01 I.R.B. 2021-01 140 2021-04 2021-01 I.R.B. 2021-01 157 2021-05 2021-01 I.R.B. 2021-01 250 2021-07 2021-01 I.R.B. 2021-01 290 2021-09 2021-03 I.R.B. 2021-03 485 2021-08 2021-04 I.R.B. 2021-04 502 2021-10 2021-04 I.R.B. 2021-04 503 2021-12 2021-05 I.R.B. 2021-05 681 2021-11 2021-06 I.R.B. 2021-06 833 2021-15 2021-08 I.R.B. 2021-08 891 2021-17 2021-15 I.R.B. 2021-15 991 2021-18 2021-15 I.R.B. 2021-15 1007 2021-19 2021-15 I.R.B. 2021-15 1008 2021-21 2021-17 I.R.B. 2021-17 1118 2021-20 2021-19 I.R.B. 2021-19 1150 2021-23 2021-20 I.R.B. 2021-20 1153 2021-25 2021-21 I.R.B. 2021-21 1161 2021-26 2021-22 I.R.B. 2021-22 1163 Revenue Rulings: Article Issue Link Page 2021-01 2021-02 I.R.B. 2021-02 294 2021-02 2021-04 I.R.B. 2021-04 495 2021-03 2021-05 I.R.B. 2021-05 674 2021-04 2021-06 I.R.B. 2021-06 724 2021-05 2021-10 I.R.B. 2021-10 896 2021-06 2021-12 I.R.B. 2021-12 946 2021-07 2021-14 I.R.B. 2021-14 982 2021-08 2021-18 I.R.B. 2021-18 1120 2021-09 2021-23 I.R.B. 2021-23 1171 2021-11 2021-24 I.R.B. 2021-24 1200 Treasury Decisions: Article Issue Link Page 9925 2021-02 I.R.B. 2021-02 296 9940 2021-02 I.R.B. 2021-02 311 9932 2021-03 I.R.B. 2021-03 345 9939 2021-03 I.R.B. 2021-03 376 9941 2021-03 I.R.B. 2021-03 396 9942 2021-03 I.R.B. 2021-03 450 9937 2021-04 I.R.B. 2021-04 495 9936 2021-05 I.R.B. 2021-05 508 9943 2021-05 I.R.B. 2021-05 577 9945 2021-05 I.R.B. 2021-05 627 9946 2021-06 I.R.B. 2021-06 726 9947 2021-06 I.R.B. 2021-06 748 9948 2021-06 I.R.B. 2021-06 801 Treasury Decisions:—Continued Article Issue Link Page 9938 2021-07 I.R.B. 2021-07 838 9944 2021-16 I.R.B. 2021-16 1062 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin 2020–52, dated December 27, 2020. Finding List of Current Actions on Previously Published Items1 Bulletin 2021–24 How to get the Internal Revenue Bulletin INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue 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.