Source: https://www.irs.gov/irb/2004-48_IRB
Timestamp: 2019-11-13 10:35:39
Document Index: 280679323

Matched Legal Cases: ['§ 1', '§ 42', '§ 42', '§ 1', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 1', '§ 42', '§ 42', '§ 42', '§ 1', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 1', '§ 42', '§ 42', '§ 1', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 42', '§ 1', '§ 417', '§ 415', '§ 415', '§ 415', '§ 415', '§ 415', '§ 417', '§ 417', '§ 417', '§ 417', '§ 415', '§ 417', '§ 417', '§ 411', '§ 417', '§ 415', '§ 415', '§ 415', '§ 417', '§ 415', '§ 417', '§ 415', '§ 415', '§ 415', '§ 417', '§ 415', '§ 415', '§ 415', '§ 415', '§ 101', '§ 101', '§ 411', '§ 411', '§ 415', '§ 415', '§ 415', '§ 415']

Internal Revenue Bulletin: 2004-48 | Internal Revenue Service
Internal Revenue Bulletin: 2004-48
Rev. Rul. 2004-105
Announcement 2004-93
Announcement 2004-93 Announcement 2004-93
Rev. Rul. 2004-105 Rev. Rul. 2004-105
Notice 2004-78 Notice 2004-78
Notice 2004-74 Notice 2004-74
Notice 2004-75 Notice 2004-75
Notice 2004-76 Notice 2004-76
The following Department Store Inventory Price Indexes for September 2004 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under § 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, September 30, 2004.
Percent Change from Sept. 2003 to Sept. 20041
1. Piece Goods 482.6 488.9 1.3
2. Domestics and Draperies 559.7 526.6 -5.9
3. Women’s and Children’s Shoes 651.9 657.4 0.8
4. Men’s Shoes 847.3 842.8 -0.5
5. Infants’ Wear 611.8 582.8 -4.7
6. Women’s Underwear 517.8 509.6 -1.6
7. Women’s Hosiery 355.5 336.6 -5.3
8. Women’s and Girls’ Accessories 584.6 576.2 -1.4
9. Women’s Outerwear and Girls’ Wear 377.3 371.0 -1.7
10. Men’s Clothing 542.3 531.2 -2.0
11. Men’s Furnishings 579.8 567.1 -2.2
12. Boys’ Clothing and Furnishings 448.2 425.7 -5.0
13. Jewelry 875.9 886.2 1.2
14. Notions 788.2 797.8 1.2
15. Toilet Articles and Drugs 980.4 993.2 1.3
16. Furniture and Bedding 620.7 608.0 -2.0
17. Floor Coverings 588.6 584.0 -0.8
18. Housewares 717.2 711.7 -0.8
19. Major Appliances 210.3 197.4 -6.1
20. Radio and Television 44.7 41.1 -8.1
21. Recreation and Education2 81.9 79.9 -2.4
22. Home Improvements2 123.9 128.9 4.0
23. Automotive Accessories2 111.7 113.0 1.2
Groups 1-15: Soft Goods 568.8 559.8 -1.6
Groups 16-20: Durable Goods 391.4 379.8 -3.0
Groups 21-23: Misc. Goods2 93.5 93.0 -0.5
Store Total3 504.3 495.4 -1.8
Relief From Certain Low-Income Housing Credit Requirements in the State of Alabama Due to Hurricane Ivan
The Internal Revenue Service is suspending certain income limitation requirements under § 42 of the Internal Revenue Code for certain low-income housing credit properties in Alabama as a result of the devastation caused by Hurricane Ivan. This relief is being granted pursuant to the Service’s authority under § 42(n) and § 1.42-13(a) of the Income Tax Regulations.
On September 15, 2004, the President declared a major disaster for the State of Alabama as a result of Hurricane Ivan. This declaration was made under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Title 42 U.S.C. 5121-5206 (2000 & Supp. I 2001). Subsequently, the Federal Emergency Management Agency (FEMA) designated counties for Individual Assistance.
The State of Alabama has requested that the Service allow owners of low-income housing credit projects to provide temporary housing in vacant units to individuals displaced because their homes were destroyed or damaged as a result of the devastation caused by Hurricane Ivan (displaced individuals). The State of Alabama has further requested that the temporary housing of the displaced individuals in low-income units without regard to income not cause the owners to lose low-income housing credits.
SUSPENSION OF INCOME LIMITATIONS
Because of the widespread damage to housing caused by Hurricane Ivan, the Service has determined that it is appropriate to temporarily suspend certain income limitation requirements under § 42 for qualified low-income housing projects in the State of Alabama that are beyond the first year of the credit period under § 42(f)(1). The suspension will apply to low-income housing projects, approved by the Alabama Housing Finance Authority, in which vacant units are rented to individuals displaced by Hurricane Ivan. The Alabama Housing Finance Authority will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
During the temporary housing period established by the Alabama Housing Finance Authority, the status of a vacant unit (that is, market rate or low-income for purposes of § 42) that becomes temporarily occupied by a displaced individual remains the same as the unit’s status before the displaced individual moves in. Displaced individuals temporarily occupying vacant units will not be treated as low-income tenants under § 42(i)(3)(A)(ii) (a low-income unit that was vacant before the effective date of this notice will continue to be treated as a vacant low-income unit even if it houses a displaced individual and a market rate unit that was vacant before the effective date of this notice will continue to be treated as a vacant market rate unit even if it houses a displaced individual). Thus, the fact that a vacant unit becomes occupied by a displaced individual will not affect the building’s applicable fraction under § 42(c)(1)(B) for purposes of determining the building’s qualified basis, nor will it affect the 20-50 test or 40-60 test of § 42(g)(1). If the income of occupants in low-income units exceeds 140 percent of the applicable income limitation, the temporary occupancy of a unit by a displaced individual will not cause application of the available unit rule under § 42(g)(2)(D)(ii). In addition, the project owner is not required during the temporary housing period to make attempts to rent to low-income individuals the low-income units housing displaced individuals. All other rules and requirements of § 42 will continue to apply.
At the end of the temporary housing period established by the Alabama Housing Finance Authority, the applicable income limitations contained in § 42(g)(1), the available unit rule under § 42(g)(2)(D)(ii), and the requirement to make reasonable attempts to rent vacant units to low-income individuals resume.
The suspension of income limitations is subject to the requirements listed below.
REQUIREMENTS FOR SUSPENSION OF INCOME LIMITATIONS
To qualify for the suspension of income limitations, the project owner must meet all of the following requirements:
The displaced individual must have resided in an Alabama county designated for Individual Assistance by FEMA as a result of Hurricane Ivan.
(2) Approval of Alabama Housing Finance Authority
The project owner must obtain approval from the Alabama Housing Finance Authority to obtain the relief described in this notice. The Alabama Housing Finance Authority will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
To comply with the requirements of § 1.42-5, project owners are required to maintain and certify certain information concerning each displaced individual temporarily housed in the project, specifically: name, address of damaged home, social security number, and a statement signed under penalties of perjury by the displaced individual that, because of damage to the individual’s home in an Alabama county designated for Individual Assistance by FEMA as a result of Hurricane Ivan, the individual requires temporary housing. The owner must also certify the date the individual began temporary occupancy and the date the project will discontinue providing temporary housing as established by the Alabama Housing Finance Authority. The certifications and recordkeeping for displaced individuals must be maintained as part of the annual compliance monitoring process with the Alabama Housing Finance Authority.
Rent for the low-income units housing displaced individuals must not exceed the existing rent-restricted rates for the low-income units established under § 42(g)(2).
This notice is effective September 15, 2004 (the date of the President’s major disaster declaration as a result of Hurricane Ivan).
The collection of information contained in this notice has been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1907.
The collection of information in this notice is in the section titled “REQUIREMENTS FOR SUSPENSION OF INCOME LIMITATIONS,” under “(3) Certifications and Recordkeeping.” This information is required to enable the Service and the Alabama Housing Finance Authority to verify that the individuals obtaining temporary housing in approved low-income housing projects are displaced from their homes in an Alabama county designated for Individual Assistance by FEMA as a result of Hurricane Ivan.
This information will be used in the Alabama Housing Finance Authority’s compliance monitoring process. The collection of information is required to obtain a benefit. The likely respondents are individuals, businesses, and nonprofit institutions.
The estimated total annual recordkeeping burden is 175 hours.
The estimated annual burden per recordkeeper is approximately 15 minutes. The estimated number of recordkeepers is 700.
The principal author of this notice is Jack Malgeri of the Office of the Associate Chief Counsel (Passthroughs and Special Industries).For further information regarding this notice, contact Mr. Malgeri at (202) 622-3040 (not a toll-free call).
Relief From Certain Low-Income Housing Credit Requirements in the State of Ohio Due to Post-Hurricane Severe Storms and Flooding
The Internal Revenue Service is suspending certain income limitation requirements under § 42 of the Internal Revenue Code for certain low-income housing credit properties in Ohio as a result of the devastation caused by severe storms and flooding from the remnants of Hurricanes Frances and Ivan. This relief is being granted pursuant to the Service’s authority under § 42(n) and § 1.42-13(a) of the Income Tax Regulations.
On September 19, 2004, the President declared a major disaster for the State of Ohio as a result of severe storms and flooding from the remnants of Hurricanes Frances and Ivan. This declaration was made under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Title 42 U.S.C. 5121-5206 (2000 & Supp. I 2001). Subsequently, the Federal Emergency Management Agency (FEMA) designated counties for Individual Assistance.
The State of Ohio has requested that the Service allow owners of low-income housing credit projects located in Ohio counties designated for Individual Assistance by FEMA (designated counties) to provide temporary housing in vacant units to individuals displaced because their homes were destroyed or damaged as a result of the devastation caused by the severe storms and flooding from the remnants of Hurricanes Frances and Ivan (displaced individuals). The State of Ohio has further requested that the temporary housing of the displaced individuals in low-income units without regard to income not cause the owners to lose low-income housing credits.
Because of the significant damage to housing caused by the post-hurricane severe storms and flooding in designated counties in the State of Ohio, the Service has determined that it is appropriate to temporarily suspend certain income limitation requirements under § 42 for qualified low-income housing projects located in designated counties that are beyond the first year of the credit period under § 42(f)(1). The suspension will apply to low-income housing projects, approved by the Ohio Housing Finance Agency, in which vacant units are rented to individuals displaced by the post-hurricane severe storms and flooding. The Ohio Housing Finance Agency will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
During the temporary housing period established by the Ohio Housing Finance Agency, the status of a vacant unit (that is, market rate or low-income for purposes of § 42) that becomes temporarily occupied by a displaced individual remains the same as the unit’s status before the displaced individual moves in. Displaced individuals temporarily occupying vacant units will not be treated as low-income tenants under § 42(i)(3)(A)(ii) (a low-income unit that was vacant before the effective date of this notice will continue to be treated as a vacant low-income unit even if it houses a displaced individual and a market rate unit that was vacant before the effective date of this notice will continue to be treated as a vacant market rate unit even if it houses a displaced individual). Thus, the fact that a vacant unit becomes occupied by a displaced individual will not affect the building’s applicable fraction under § 42(c)(1)(B) for purposes of determining the building’s qualified basis, nor will it affect the 20-50 test or 40-60 test of § 42(g)(1). If the income of occupants in low-income units exceeds 140 percent of the applicable income limitation, the temporary occupancy of a unit by a displaced individual will not cause application of the available unit rule under § 42(g)(2)(D)(ii). In addition, the project owner is not required during the temporary housing period to make attempts to rent to low-income individuals the low-income units housing displaced individuals. All other rules and requirements of § 42 will continue to apply.
At the end of the temporary housing period established by the Ohio Housing Finance Agency, the applicable income limitations contained in § 42(g)(1), the available unit rule under § 42(g)(2)(D)(ii), and the requirement to make reasonable attempts to rent vacant units to low-income individuals resume.
The displaced individual must have resided in an Ohio county designated for Individual Assistance by FEMA as a result of the severe storms and flooding from the remnants of Hurricane Frances or Hurricane Ivan. Additionally, the low-income housing project providing temporary housing to the displaced individual must be located in an Ohio county designated for Individual Assistance by FEMA as a result of the severe storms and flooding from the remnants of Hurricane Frances or Hurricane Ivan.
(2) Approval of Ohio Housing Finance Agency
The project owner must obtain approval from the Ohio Housing Finance Agency to obtain the relief described in this notice. The Ohio Housing Finance Agency will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
To comply with the requirements of § 1.42-5, project owners are required to maintain and certify certain information concerning each displaced individual temporarily housed in the project, specifically: name, address of damaged home, social security number, and a statement signed under penalties of perjury by the displaced individual that, because of damage to the individual’s home in an Ohio county designated for Individual Assistance by FEMA as a result of the severe storms and flooding, the individual requires temporary housing. The owner must also certify the date the individual began temporary occupancy and the date the project will discontinue providing temporary housing as established by the Ohio Housing Finance Agency. The certifications and recordkeeping for displaced individuals must be maintained as part of the annual compliance monitoring process with the Ohio Housing Finance Agency.
This notice is effective September 19, 2004 (the date of the President’s major disaster declaration in Ohio as a result of the severe storms and flooding).
The collection of information in this notice is in the section titled “REQUIREMENTS FOR SUSPENSION OF INCOME LIMITATIONS,” under “(3) Certifications and Recordkeeping.” This information is required to enable the Service and the Ohio Housing Finance Agency to verify that the individuals obtaining temporary housing in approved low-income housing projects are displaced from their homes in an Ohio county designated for Individual Assistance by FEMA as a result of the severe storms and flooding.
This information will be used in the Ohio Housing Finance Agency’s compliance monitoring process. The collection of information is required to obtain a benefit. The likely respondents are individuals, businesses, and nonprofit institutions.
The estimated total annual recordkeeping burden is 63 hours.
The estimated annual burden per recordkeeper is approximately 15 minutes. The estimated number of recordkeepers is 250.
Relief From Certain Low-Income Housing Credit Requirements in the State of Florida Due to Hurricanes Charley, Frances, Ivan, and Jeanne
The Internal Revenue Service is suspending certain income limitation requirements under § 42 of the Internal Revenue Code for certain low-income housing credit properties in Florida as a result of the devastation caused by Hurricanes Charley, Frances, Ivan, and Jeanne. This relief is being granted pursuant to the Service’s authority under § 42(n) and § 1.42-13(a) of the Income Tax Regulations. This notice amplifies and supersedes Notice 2004-66, 2004-42 I.R.B. 677.
On August 13, 2004, September 4, 2004, September 16, 2004, and September 26, 2004, respectively, the President declared major disasters for the State of Florida as a result of Hurricanes Charley, Frances, Ivan, and Jeanne. These declarations were made under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Title 42 U.S.C. 5121-5206 (2000 & Supp. I 2001). Subsequently, the Federal Emergency Management Agency (FEMA) designated counties for Individual Assistance.
On September 16, 2004, the Service issued Notice 2004-66, which, because of the widespread damage to housing caused by Hurricanes Charley and Frances, temporarily suspended certain income limitation requirements under § 42 for qualified low-income housing projects in the State of Florida.
The State of Florida has requested that the Service extend the relief granted in Notice 2004-66 (applying to Hurricanes Charley and Frances) to allow owners of low-income housing credit projects in the State of Florida to provide temporary housing in vacant units to individuals displaced because their homes were destroyed or damaged as a result of the devastation caused by Hurricane Ivan or Jeanne.
Because of the widespread damage to housing caused by Hurricanes Charley, Frances, Ivan, and Jeanne, the Service has determined that it is appropriate to temporarily suspend certain income limitation requirements under § 42 for qualified low-income housing projects in the State of Florida that are beyond the first year of the credit period under § 42(f)(1). The suspension will apply to low-income housing projects, approved by the Florida Housing Finance Corporation, in which vacant units are rented to individuals displaced by Hurricane Charley, Frances, Ivan, or Jeanne (displaced individuals). The Florida Housing Finance Corporation will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
During the temporary housing period established by the Florida Housing Finance Corporation, the status of a vacant unit (that is, market rate or low-income for purposes of § 42) that becomes temporarily occupied by a displaced individual remains the same as the unit’s status before the displaced individual moves in. Displaced individuals temporarily occupying vacant units will not be treated as low-income tenants under § 42(i)(3)(A)(ii) (a low-income unit that was vacant before the effective date of this notice will continue to be treated as a vacant low-income unit even if it houses a displaced individual and a market rate unit that was vacant before the effective date of this notice will continue to be treated as a vacant market rate unit even if it houses a displaced individual). Thus, the fact that a vacant unit becomes occupied by a displaced individual will not affect the building’s applicable fraction under § 42(c)(1)(B) for purposes of determining the building’s qualified basis, nor will it affect the 20-50 test or 40-60 test of § 42(g)(1). If the income of occupants in low-income units exceeds 140 percent of the applicable income limitation, the temporary occupancy of a unit by a displaced individual will not cause application of the available unit rule under § 42(g)(2)(D)(ii). In addition, the project owner is not required during the temporary housing period to make attempts to rent to low-income individuals the low-income units housing displaced individuals. All other rules and requirements of § 42 will continue to apply.
At the end of the temporary housing period established by the Florida Housing Finance Corporation, the applicable income limitations contained in § 42(g)(1), the available unit rule under § 42(g)(2)(D)(ii), and the requirement to make reasonable attempts to rent vacant units to low-income individuals resume.
The displaced individual must have resided in a Florida county designated for Individual Assistance by FEMA as a result of Hurricane Charley, Frances, Ivan, or Jeanne.
(2) Approval of Florida Housing Finance Corporation
The project owner must obtain approval from the Florida Housing Finance Corporation to obtain the relief described in this notice. The Florida Housing Finance Corporation will determine the appropriate period of temporary housing for each project, not to extend beyond September 30, 2005.
To comply with the requirements of § 1.42-5, project owners are required to maintain and certify certain information concerning each displaced individual temporarily housed in the project, specifically: name, address of damaged home, social security number, and a statement signed under penalties of perjury by the displaced individual that, because of damage to the individual’s home in a Florida county designated for Individual Assistance by FEMA as a result of Hurricane Charley, Frances, Ivan, or Jeanne, the individual requires temporary housing. The owner must also certify the date the individual began temporary occupancy and the date the project will discontinue providing temporary housing as established by the Florida Housing Finance Corporation. The certifications and recordkeeping for displaced individuals must be maintained as part of the annual compliance monitoring process with the Florida Housing Finance Corporation.
This notice is effective August 13, 2004 (the date of the President’s major disaster declaration as a result of Hurricane Charley).
Notice 2004-66 is amplified and superseded.
The collection of information in this notice is in the section titled “REQUIREMENTS FOR SUSPENSION OF INCOME LIMITATIONS,” under “(3) Certifications and Recordkeeping.” This information is required to enable the Service and the Florida Housing Finance Corporation to verify that individuals obtaining temporary housing in approved low-income housing projects are displaced from their homes in a Florida county designated for Individual Assistance by FEMA as a result of Hurricane Charley, Frances, Ivan, or Jeanne.
This information will be used in the Florida Housing Finance Corporation’s compliance monitoring processes. The collection of information is required to obtain a benefit. The likely respondents are individuals, businesses, and nonprofit institutions.
The estimated total annual recordkeeping burden is 1,700 hours.
The estimated annual burden per recordkeeper is approximately 15 minutes. The estimated number of recordkeepers is 6,800.
This notice provides guidance regarding the actuarial assumptions that must be used for distributions with annuity starting dates occurring during plan years beginning in 2004 and 2005, to determine whether an amount payable under a defined benefit plan in a form that is subject to the minimum present value requirements of § 417(e)(3) of the Internal Revenue Code (“Code”) satisfies the requirements of § 415. This guidance reflects the change to the required interest rate rule of § 415(b)(2)(E)(ii) that was made by section 101(b)(4) of the Pension Funding Equity Act of 2004, Pub. L. 108-218 (“PFEA ’04”), the anti-cutback relief provided under section 101(c) of PFEA ’04, and the transition rule of section 101(d)(3).
Section 415(b) of the Code provides limitations on the annual benefit under a defined benefit plan. Under § 415(b)(2)(B), if the benefit under the plan is payable in any form other than a straight life annuity, the determination as to whether the limitations of § 415(b) have been satisfied shall be made by adjusting such benefit so that it is equivalent to a straight life annuity.
Section 415(b)(2)(E) provides limitations on the actuarial assumptions that must be used to adjust a benefit payable in a form other than a straight life annuity to determine the annual benefit for this purpose. Prior to its amendment by PFEA ’04, § 415(b)(2)(E)(ii) provided that, for purposes of adjusting any benefit payable in a form that is subject to the minimum present value requirements of § 417(e)(3), the interest rate assumption must not be less than the greater of the applicable interest rate (as defined in § 417(e)(3)) or the rate specified in the plan. Section 415(b)(2)(E)(v) also prescribes a specific mortality table to be used for this purpose.
Rev. Rul. 98-1, 1998-1 C.B. 249, Q&A 8 provides that the actuarially equivalent straight life annuity for a benefit that is paid in a form that is subject to the minimum present value requirements of § 417(e)(3) is the greater of (1) the actuarially equivalent straight life annuity computed using the plan rate and plan mortality table or plan tabular factor specified in the plan for actuarial equivalence for the particular form of benefit payable and (2) the actuarially equivalent straight life annuity computed using the applicable interest rate and the applicable mortality table under § 417(e)(3).
Section 101(b)(4) of PFEA ’04 amended § 415(b)(2)(E)(ii) of the Code to provide that, for purposes of adjusting any benefit payable in a form that is subject to the minimum present value requirements of § 417(e)(3), the interest rate assumption must not be less than the greater of the applicable interest rate (as defined in § 417(e)(3)) or the rate specified in the plan, except that in the case of plan years beginning in 2004 or 2005, 5.5% is used in lieu of the applicable interest rate.
Section 101(c)(1) of PFEA ’04 provides that a plan that is amended pursuant to any change made by section 101 shall not fail to meet the requirements of § 411(d)(6) of the Code and section 204(g) of the Employee Retirement Income Security Act of 1974 (“ERISA”), provided that the plan is amended on or before the last day of the first plan year beginning on or after January 1, 2006, and the plan is operated as though the amendment were in effect during the period beginning on the date the amendment is effective.
Section 101(d)(3) of PFEA ’04 provides that, in the case of any participant or beneficiary receiving a distribution after December 31, 2003, and before January 1, 2005, the amount payable under any form of benefit subject to § 417(e)(3) of the Code and subject to any adjustment under § 415(b)(2)(B) shall not, solely by reason of the change to § 415(b)(2)(E)(ii) made by section 101(b)(4) of PFEA ’04, be less than the amount that would have been so payable had the amount payable been determined using the applicable interest rate in effect on the last day of the last plan year beginning before January 1, 2004.
Q-1. What is the effect of section 101(b)(4) of PFEA ’04?
A-1 Under the changes to § 415(b)(2) of the Code made by section 101(b)(4) of PFEA ’04, if a defined benefit plan provides a benefit in a form that is subject to the minimum present value requirements of § 417(e)(3) of the Code in a plan year beginning in 2004 or 2005, the actuarially equivalent straight life annuity (that is used for demonstrating compliance with § 415) is the greater of the straight life annuity determined using the plan rate and plan mortality table and the straight life annuity determined using 5.5% and the applicable mortality table. Thus, for example, where a plan’s interest rate is 5%, the applicable interest rate under § 417(e)(3) is 5.25%, and where the plan uses the applicable mortality table for determining actuarial equivalence, the effect of section 101(b)(4) of PFEA ’04 would be to require the conversion of a single-sum distribution paid during the plan year beginning in 2004 to an equivalent straight life annuity using 5.5% rather than the applicable interest rate of 5.25% as under prior law. In such a case, to satisfy the limitations of § 415 of the Code, the maximum single-sum distribution for a participant who is age 65 in 2004 would be $1,866,645 calculated using 5.5% as required by section 101(b)(4) of PFEA ’04 rather than $1,905,638 calculated using 5.25% as required under prior law.However, higher distributions may be permitted in certain situations during 2004 pursuant to the transition rule of section 101(d)(3). See Q&A 4.
Q-2. What is the effective date of the changes made to § 415 of the Code by PFEA ’04?
A-2. The changes to § 415 of the Code made by PFEA ’04 are effective for plan years beginning on or after January 1, 2004. However, the changes do not apply to plans that terminated prior to April 10, 2004, the date of enactment of PFEA ’04.
Q-3.What is the effect of the transition rule prescribed in section 101(d)(3) of PFEA ’04?
A-3. The transition rule of section 101(d)(3) of PFEA ’04 sets out a transition period during which a plan is permitted to pay a benefit subject to § 417(e)(3) of the Code in an amount that would be higher than what is otherwise permitted under § 415 as amended by PFEA ’04. This higher amount is the lesser of the transition amount as calculated in Q&A-4 and the benefit calculated under the terms of the plan reflecting the limitations of § 415 disregarding the enactment of PFEA ’04.
Q-4. How is the transition amount calculated?
A-4. The transition amount is the otherwise determined benefit that when converted to an actuarially equivalent straight life annuity determined using the plan rate and the plan mortality table is within the limitations of § 415 of the Code and when converted to an actuarially equivalent straight life annuity determined using the transition rate and the applicable mortality table is within the limitations of § 415. For this purpose, the transition rate is the applicable interest rate determined under the plan terms that are adopted and in effect on the last day of the last plan year beginning before January 1, 2004. In the example in Q&A-1, if the transition rate is 5.25%, when a plan provides a single-sum distribution, then the effect of the transition rule of § 101(d)(3) of PFEA ’04 would be to allow the conversion of the single sum distribution to an equivalent straight life annuity using the transition rate of 5.25% (the greater of the transition rate and the plan rate) rather than 5.5% which was required under § 101(b)(4) of PFEA ’04. In such a case, the maximum single-sum distribution for a participant who is age 65 in 2004 would be $1,905,638.
Q-5. What is the period during which the transition rule of section 101(d)(3) of PFEA ’04 applies (transition period)?
A-5. The transition period begins on the first day of the first plan year beginning on or after January 1, 2004. The transition period ends on December 31, 2004. Thus, the transition rule of section 101(d)(3) of PFEA ’04 applies to a distribution if the distribution has an annuity starting date that is on or after the first day of the first plan year beginning in 2004, but only if the annuity starting date is before December 31, 2004.
Q-6. Which plan amendments relating to sections 101(b)(4) and 101(d)(3) of PFEA ’04 are treated as not violating the requirements of § 411(d)(6) of the Code and section 204(g) of ERISA pursuant to section 101(c) of PFEA ’04?
A-6. Under section 101(c)(1) of PFEA ’04, a plan that is amended pursuant to any change made by section 101 does not fail to meet the requirements of § 411(d)(6) of the Code and section 204(g) of ERISA, provided that the plan is amended on or before the last day of the first plan year beginning on or after January 1, 2006, and the plan is operated as though the amendment were in effect during the period beginning on the date the amendment is effective. With respect to plan amendments implementing the change to § 415 of the Code under section 101(b)(4) of PFEA ’04 or the transition rule under section 101(d)(3) of PFEA ’04, this relief applies to:
Plan amendments that implement the change to § 415 of the Code under section 101(b)(4) of PFEA ’04 and the transition rule of section 101(d)(3) of PFEA ’04 pursuant to the guidance set forth this notice;
Plan amendments that implement the change to § 415 of the Code under section 101(b)(4) of PFEA ’04 but do not implement the transition rule of section 101(d)(3) of PFEA ’04; and
Plan amendments that implement the change to § 415 of the Code under section 101(b)(4) of PFEA ’04 and the transition rule of section 101(d)(3) of PFEA ’04 pursuant to a reasonable interpretation of that transition rule that is different than the guidance set forth in Q&A-3 through Q&A-5 but that results in a lower distribution amount than the amount that would have been distributed under that guidance.
The principal authors of this notice are Kathleen J. Herrmann of the Employee Plans, Tax Exempt and Government Entities Division and Linda S. F. Marshall of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). Ms. Herrmann may be reached at 202-283-9635 (not a toll-free number).
Request for Applications to Participate in the 2005 IRS Individual e-file Partnership Program
The Stakeholder Partnerships, Education and Communication (SPEC) function within the Internal Revenue Service (IRS) is continuing its efforts to establish IRS e-file partnerships with various entities. The IRS is seeking non-monetary e-file partnerships for Filing Season 2005. No applications for funding (monetary compensation) will be considered. A commercial business, non-profit organization, state government or local government may submit applications. Applications are not solicited from other Federal government agencies. The program is an annual program and covers the period January 2005, through October 15, 2005. All prior year partners must reapply for Filing Season 2005.
Continued opportunities for growth in electronic tax administration are evident. For Filing Season 2004, the IRS received 61.5 million electronically filed returns, an increase of 16.17% over the previous year. Visit the IRS web site, http://www.irs.gov, for the most current results from market research on individual taxpayers, including demographic data and psychographic studies. This research includes attitudinal surveys, customer satisfaction surveys, Public Service communications, tracking studies and any focus group results.
FILING SEASON 2005
For Filing Season 2005, the IRS will focus on the 1040 series income tax returns covering “IRS e-file Using a Tax Preparer” and “IRS e-file Using a Personal Computer.” Additional emphasis is being placed on the following features: “Self-Select Personal Identification Number (PIN) for e-file”, “Using e-file for Federal/State Returns”, and “Electronic Payment Options” for balance due and estimated payment options.
Participants should also reach first-time filers and those individuals eligible for the Earned Income Tax Credit (EITC). It’s important to note that many of the military families may also qualify for EITC since supplemental payments and combat pay are exempt from the income calculations.
Participants are encouraged to focus on reducing the number of errors made on electronically filed returns, including those returns claiming EITC. A new electronic tool has been established to help tax professionals determine whether their clients are eligible for EITC. The new “EITC Assistant” is a step taken by the IRS to maximize taxpayer participation, minimize EITC errors while increasing compliance. The “EITC Assistant” will make its debut for Filing Season 2005, and it will be prominently displayed on the IRS Homepage at http://www.irs.gov.
The IRS expects all accepted partners to aggressively market, promote and offer e-file products and services through October 15, 2005. The IRS will supply the partners with the Filing Season and post-April 15th e-file campaign message(s), as they become available, to target additional qualified taxpayers, i.e., extensions, military returns, etc. For additional information on the various e-file programs, features, and market research, visit our web site at http://www.irs.gov.
The Participant will target EITC eligibles, first-time filers and v-coders.
The Participant will aggressively market, promote and offer e-file services through October 15, 2005. The Participant is encouraged to use the current Filing Season e-file marketing key messages developed by the IRS. In addition, the Participant is encouraged to use the post-April 15th e-file campaign messages and other promotional tools, as they become available, to target qualified taxpayers (i.e., extensions, military returns, etc.).
The Participant will be required to supply the IRS with a link to their web site in their application or no less than ten (10) business days before the site is expected to go live (start date of electronic filing). All sites must be examined before they can be posted on the IRS e-file Partners Page. The purpose of the review is to ensure each Participant’s web site complies with the standards and requirements set forth in this document.
A Participant’s web site must be functionally adequate and consistent with the Participant’s offer in permitting a taxpayer to complete their return. Failure to comply could result in the Participant’s removal from the Partners Page.
The Participant will place the IRS e-file logo on its web site. The e-file logo and guidelines can be downloaded from http://www.irs.gov.
The Participant will be required to prove and display third-party certifications for the privacy/security/authenticity of its online service. The Participant’s web site should display the third-party certification and privacy seals. Examples of third-party certifications are those received from VeriSign, Thawte, Truste, etc.
The Participant will clearly disclose its customer service support options (including associated fees, if any) and privacy policy on the landing page of its web site. Participants must provide taxpayers with a business contact point by on-line form, email, mail, facsimile or telephone number which the Participant maintains and reviews. The Participant must provide taxpayers a method to obtain the status of their tax return. Taxpayers can be directed to “Where’s My Tax Refund?” located on the Homepage of irs.gov (http://www.irs.gov).
The Participant will prominently display on the landing page of its web site the promotion of income tax preparation and electronic filing for EITC eligibles, low-income taxpayers, and first-time filers. Participants are encouraged to offer a monetary incentive (reduced return preparation and electronic filing costs) to attract these taxpayers.
The Participant will disclose limitations in the forms and schedules that are likely to be needed to support their offerings. The Participant should display a listing of the forms and schedules that will be offered either from the Participant’s landing page or the Participant must have a clear link from the landing page that takes the user to a forms and schedules listing.
The Participant will clearly disclose on its web site the States that their software supports. This disclosure can appear on the Participant’s landing page of its web site or the Participant must have a clear link from the landing page which will take the user to a listing of States.
The Participant will submit Performance Reports to the IRS Point of Contact by May 31, 2005, covering Filing Season activity, and by November 15, 2005, covering post Filing Season activity. The reports will cover information such as e-file statistics (including the number of EITC returns), web site activity and anything else the IRS deems necessary. The IRS Point of Contact will provide written reporting instructions and requirements to accepted Participants.
The IRS will have the accepted Participant’s hyperlink(s) available on the IRS web site for the start of electronic filing, subject to the participant’s passing of the annual Suitability, PATS testing, and web site review. Hyperlinks will remain on the IRS e-file Partners Page through October 15, 2005, or later, at the discretion of the IRS.
The IRS will randomize on a daily basis the hyperlinks that exist on the IRS e-file Partners Page.
Include the Applicant’s Point of Contact information (name, title, address, telephone number, fax number and email address) for discussion of your application.
Identify the Applicant’s third party administrators (i.e., VeriSign, Thawte, Truste) that certify the privacy and security of its online service.
Describe steps the Applicant will take to reach EITC and first-time filers. This can include marketing/promotional efforts, monetary incentives (reduced return preparation and electronic filing costs).
If you wish to have a hyperlink(s) on the IRS e-file Partners Page for the start of electronic filing, your application must be submitted by December 10, 2004. If your application is received after the deadline, the IRS has a right not to accept the application.
Bulletins 2004-27 through 2004-48
2004-93 2004-48 I.R.B. 2004-48
2004-74 2004-48 I.R.B. 2004-48
2004-75 2004-48 I.R.B. 2004-48
2004-76 2004-48 I.R.B. 2004-48
2004-78 2004-48 I.R.B. 2004-48
2004-105 2004-48 I.R.B. 2004-48
2004-66 Amplified and superseded by Notice 2004-76 2004-48 I.R.B. 2004-48