Source: https://www.irs.gov/irb/2010-34_IRB
Timestamp: 2020-04-08 19:33:41
Document Index: 96676585

Matched Legal Cases: ['§ 430', '§ 430', '§ 430', '§ 417', '§ 417', '§ 7702', '§ 7702', '§ 7702', '§ 7702', '§ 807', '§ 7702', '§ 7702', '§ 7702', '§ 601', '§ 7702', '§ 7702', '§ 7702', '§ 7702', '§ 7702']

Internal Revenue Bulletin: 2010-34 | Internal Revenue Service
Internal Revenue Bulletin: 2010-34
Notice 2010-57
Announcement 2010-49
Notice 2010-57 Notice 2010-57
Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in August 2010; the 24-month average segment rates; the funding transitional segment rates applicable for August 2010; and the minimum present value transitional rates for July 2010.
Announcement 2010-49 Announcement 2010-49
The IRS has revoked its determination that Advanced Debt Management Solutions, Inc., of Tampa, FL; Aviation Volunteer Fire Department Engine Company 3, Inc., of Bronx, NY; C.C. Financial Health and Life Skills, Inc., of Chesterfield, VA; Consumer Counseling Centers of America of Fort Lauderdale, FL; Continental Credit Counseling Services, Inc., of North Miami Beach, FL; Credit Counseling Concepts, Inc., of Indianapolis, IN; The Credit Counseling Foundation, Inc., of Fort Lauderdale, FL; Credit Debt Consolidators and Counselors Foundation, Inc., of North Bergen, NJ; Debt Reduction Solutions, Inc., of St. Petersburg, FL; Debticated Consumer Counseling, Inc., of Huntington, NY; Friends of Child Abuse Prevention of Farmington Hills, MI; Giving Tree Foundation of Park City, UT; Greater ST. James Holiness Community Development Corporation of Fremont, OH; Independence Restoration, Inc., of Tampa, FL; Merrimac Camping Club of College Park, GA; One World Online Charitable Foundation, of Springville, UT; Project Oz Adoption, Inc., of Tarboro, NC; Southeastern Anthropological Institute, Inc., of Huntsville, AL; Southeastern Kentucky Association of Native People, Inc., of Corbin, KY; Tricap Academy of Olive Branch, MS; and Yonkers Alliance for Latino and Immigrant Services, Inc., of Yonkers, NY, qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Code.
Rev. Proc. 2010-28 Rev. Proc. 2010-28
This procedure proposes a safe harbor for contracts with a maturity date of 100, which are intended to qualify as life insurance contracts under section 7702 of the Code and avoid characterization as a MEC under section 7702A, provided the contract complies with certain testing methodologies set out in the revenue procedure. Notice 2009-47 obsoleted.
The composite corporate bond rate for July 2010 is 5.44 percent. Pursuant to Notice 2004-34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.
August 2010 6.28 5.65 6.28
Notice 2007-81, 2007-2 C.B. 899, provides guidelines for determining the monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007-81, the monthly corporate bond yield curve derived from July 2010 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of July 2010 are, respectively, 2.06, 5.10, and 6.11. The three 24-month average corporate bond segment rates applicable for August 2010 under the election of § 430(h)(2)(G)(iv) are as follows:
3.92 6.40 6.61
The transitional segment rates under § 430(h)(2)(G) applicable for August 2010, taking into account the corporate bond weighted average of 6.28 stated above, are as follows:
2009 4.71 6.36 6.50
The transitional rule of § 430(h)(2)(G) does not apply to plan years starting in 2010. Therefore, for a plan year starting in 2010 with a lookback month to August 2010, the funding segment rates are the three 24-month average corporate bond segment rates applicable for August 2010, listed above without blending for the transitional period.
The rate of interest on 30-year Treasury securities for July 2010 is 3.99 percent. The Service has determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in May 2040.
August 2010 4.33 3.90 4.55
Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007-81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for July 2010, taking into account the July 2010 30-year Treasury rate of 3.99 stated above, are as follows:
2009 3.22 4.43 4.84
2010 2.83 4.66 5.26
Monthly Yield Curve for July 2010
Derived from July 2010 Data
0.5 0.97 20.5 5.80 40.5 6.14 60.5 6.26 80.5 6.32
1.0 1.13 21.0 5.82 41.0 6.15 61.0 6.27 81.0 6.33
1.5 1.33 21.5 5.83 41.5 6.15 61.5 6.27 81.5 6.33
2.0 1.57 22.0 5.85 42.0 6.16 62.0 6.27 82.0 6.33
2.5 1.85 22.5 5.86 42.5 6.16 62.5 6.27 82.5 6.33
3.0 2.15 23.0 5.87 43.0 6.17 63.0 6.27 83.0 6.33
3.5 2.46 23.5 5.89 43.5 6.17 63.5 6.28 83.5 6.33
4.0 2.76 24.0 5.90 44.0 6.17 64.0 6.28 84.0 6.33
4.5 3.05 24.5 5.91 44.5 6.18 64.5 6.28 84.5 6.33
5.0 3.31 25.0 5.92 45.0 6.18 65.0 6.28 85.0 6.33
5.5 3.55 25.5 5.93 45.5 6.18 65.5 6.28 85.5 6.34
6.0 3.76 26.0 5.94 46.0 6.19 66.0 6.28 86.0 6.34
6.5 3.96 26.5 5.95 46.5 6.19 66.5 6.29 86.5 6.34
7.0 4.14 27.0 5.96 47.0 6.19 67.0 6.29 87.0 6.34
7.5 4.30 27.5 5.97 47.5 6.20 67.5 6.29 87.5 6.34
8.0 4.45 28.0 5.98 48.0 6.20 68.0 6.29 88.0 6.34
8.5 4.58 28.5 5.99 48.5 6.20 68.5 6.29 88.5 6.34
9.0 4.70 29.0 6.00 49.0 6.21 69.0 6.29 89.0 6.34
9.5 4.81 29.5 6.01 49.5 6.21 69.5 6.30 89.5 6.34
10.0 4.91 30.0 6.02 50.0 6.21 70.0 6.30 90.0 6.34
10.5 5.00 30.5 6.03 50.5 6.22 70.5 6.30 90.5 6.34
11.0 5.08 31.0 6.03 51.0 6.22 71.0 6.30 91.0 6.35
11.5 5.16 31.5 6.04 51.5 6.22 71.5 6.30 91.5 6.35
12.0 5.23 32.0 6.05 52.0 6.22 72.0 6.30 92.0 6.35
12.5 5.29 32.5 6.06 52.5 6.23 72.5 6.30 92.5 6.35
13.0 5.35 33.0 6.06 53.0 6.23 73.0 6.31 93.0 6.35
13.5 5.40 33.5 6.07 53.5 6.23 73.5 6.31 93.5 6.35
14.0 5.45 34.0 6.08 54.0 6.24 74.0 6.31 94.0 6.35
14.5 5.49 34.5 6.08 54.5 6.24 74.5 6.31 94.5 6.35
15.0 5.53 35.0 6.09 55.0 6.24 75.0 6.31 95.0 6.35
15.5 5.57 35.5 6.09 55.5 6.24 75.5 6.31 95.5 6.35
16.0 5.60 36.0 6.10 56.0 6.24 76.0 6.31 96.0 6.35
16.5 5.63 36.5 6.10 56.5 6.25 76.5 6.32 96.5 6.36
17.0 5.65 37.0 6.11 57.0 6.25 77.0 6.32 97.0 6.36
17.5 5.68 37.5 6.12 57.5 6.25 77.5 6.32 97.5 6.36
18.0 5.70 38.0 6.12 58.0 6.25 78.0 6.32 98.0 6.36
18.5 5.73 38.5 6.13 58.5 6.26 78.5 6.32 98.5 6.36
19.0 5.75 39.0 6.13 59.0 6.26 79.0 6.32 99.0 6.36
19.5 5.77 39.5 6.14 59.5 6.26 79.5 6.32 99.5 6.36
20.0 5.78 40.0 6.14 60.0 6.26 80.0 6.32 100.0 6.36
This revenue procedure provides a safe harbor concerning the application of §§ 7702 and 7702A of the Internal Revenue Code to life insurance contracts that (1) have mortality guarantees based upon the 2001 Commissioners’ Standard Ordinary Mortality Tables (“2001 CSO tables”), and (2) may continue in force after the day on which the insured individual (“the insured”) attains age 100. Notice 2009-47, 2009-24 I.R.B. 1083, is obsoleted.
.01 Section 7702 of the Code defines the term “life insurance contract” for purposes of the Code. Section 7702(a) provides that a “life insurance contract” is any contract that is a life insurance contract under the applicable law, but only if such contract either (1) meets the cash value accumulation test of § 7702(b), or (2) both meets the guideline premium requirements of § 7702(c) and falls within the cash value corridor of § 7702(d). Section 7702 was added to the Code by the Deficit Reduction Act of 1984, P.L. 98-369 (the 1984 Act).
.07 The 2001 CSO tables became the prevailing commissioners’ standard tables within the meaning of § 807(d)(5) during calendar year 2004, and have been adopted by all 50 states and the District of Columbia. For tax purposes, the 2001 CSO tables generally must be used for purposes of applying the reasonable mortality charge requirements of § 7702(c)(3)(B)(i) with regard to contracts issued after December 31, 2008. See Notice 2006-95, 2006-2 C.B. 848, modifying and superseding Notice 2004-61, 2004-2 C.B. 596, supplementing Notice 88-128, 88-2 C.B. 540.
.08 Unlike the 1958 Commissioners Standard Ordinary Mortality Tables (“1958 CSO tables”) and the 1980 Commissioners’ Standard Ordinary Mortality Tables (“1980 CSO tables”), the 2001 CSO tables extend to age 121. As a result, an increasing number of issuers now develop contracts with maturity dates beyond age 100, even though the qualification of a contract as a life insurance contract (and as a MEC) is tested using computational rules that deem the contract to mature between the day on which the insured attains age 95 and the day on which the insured attains age 100.
.09 The 2001 CSO Maturity Age Task Force of the Taxation Section of the Society of Actuaries (“Task Force”) recommended a series of computational rules for compliance with the requirements of §§ 7702 and 7702A in a manner that is actuarially sound in the case of contracts that do not provide for actual maturity before age 100. See 2001 CSO Implementation Under IRC Sections 7702 and 7702A, 2 Taxing Times 23 (May 2006).
.10 Notice 2009-47, 2009-24 I.R.B. 1083, proposed a safe harbor drawn from the recommendations of the Task Force, with modifications. Specifically, the notice addressed the application §§ 7702 and 7702A to a contract that has mortality guarantees based on the 2001 CSO tables and that may continue in force after the day on which the insured attains age 100. The notice requested comments on the proposed safe harbor and on other issues, including the applicability of pre-1984 Act case law for purposes of defining a life insurance contract, and the applicability of the doctrine of constructive receipt to a contract that, by its terms, matures while the insured is still alive.
.11 Treasury and the Service have determined that it is in the interest of sound tax administration to adopt the safe harbor that was proposed in Notice 2009-47, with modifications, in the form of a revenue procedure. See § 601.601(d)(2)(vi) of the Procedure and Administration regulations. In particular, this revenue procedure removes a proposed requirement that, in order to qualify for the safe harbor, a contract must provide a death benefit equal to or greater than 105 percent of the cash value. This revenue procedure does not address the other issues on which comments were requested in Notice 2009-47.
.01 In general. The Service will not challenge the qualification of a contract as a life insurance contract under § 7702, or assert that a contract is a MEC under § 7702A, if the contract satisfies the requirements of those provisions using all of the Age 100 Safe Harbor Testing Methodologies of section 3.02 of this revenue procedure.
(a) All determinations under §§ 7702 and 7702A (other than the cash value corridor) assume that the contract will mature by the day on which the insured attains age 100, notwithstanding that the contract specifies a later maturity date (such as by reason of using the 2001 CSO mortality tables).
.03 No inference. No adverse inference should be drawn with respect to the qualification of a contract as a life insurance contract under § 7702, or its status as not a MEC under § 7702A, merely by reason of a failure to satisfy all of the requirements of this section 3. Furthermore, this revenue procedure neither answers nor comments on any issue raised in Notice 2009-47 that is not specifically covered by the safe harbor in this revenue procedure.
Notice 2009-47 is obsoleted.
This revenue procedure is effective August 23, 2010.
The principal author of this revenue procedure is Christine K. Lane of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Christine K. Lane at (202) 622-4653 (not a toll-free call).
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 August 23, 2010, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth 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.
Advanced Debt Management Solutions, Inc. Tampa FL
Aviation Volunteer Fire Department Engine Company 3, Inc. Bronx NY
C. C. Financial Health and Life Skills, Inc. Chesterfield VA
Consumer Counseling Centers of America Fort Lauderdale FL
Continental Credit Counseling Services, Inc. North Maimi Beach FL
Credit Counseling Concepts, Inc. Indianapolis IN
The Credit Counseling Foundation, Inc. Fort Lauderdale FL
Credit Debt Consolidators and Counselors Foundation, Inc North Bergen NJ
Debt Reduction Solutions, Inc. St. Petersburg FL
Debticated Consumer Counseling, Inc. Huntington NY
Friends of Child Abuse Prevention Farmington Hills MI
Giving Tree Foundation Park City UT
Greater ST. James Holiness Community Development Corporation Fremont OH
Independence Restoration, Inc. Tampa FL
Merrimac Camping Club College Park GA
One World Online Charitable Foundation Springville UT
Project Oz Adoption, Inc Springville Tarboro NC
Southeastern Anthropological Institute, Inc. Huntsville AL
Southeastern Kentucky Association of Native People, Inc. Corbin KY
Tricap Academy Olive Branch MS
Yonkers Alliance for Latino and Immigrant Services, Inc. Yonkers NY
Bulletins 2010-27 through 2010-34
2010-49 2010-34 I.R.B. 2010-34
2010-57 2010-34 I.R.B. 2010-34
2010-28 2010-34 I.R.B. 2010-34
2009-47 Obsoleted by Rev. Proc. 2010-28 2010-34 I.R.B. 2010-34