Source: https://www.scribd.com/document/537666/US-Internal-Revenue-Service-irb07-11
Timestamp: 2017-01-16 20:23:37
Document Index: 798858460

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 1', '§ 101', '§ 675', '§ 671', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 461', '§ 404', '§ 3111', '§ 1', '§ 461', '§ 404', '§ 404', '§ 404', '§ 404', '§ 404', '§ 404', '§ 404', '§ 404', '§ 1', '§ 1', '§ 404', '§ 461', '§ 1', '§ 404', '§ 404', '§ 404', '§ 404', '§ 404', '§ 461', '§ 461', '§ 404', '§ 446', '§ 446', '§ 1', '§ 1', '§ 42', '§ 141', '§ 42', '§ 146', '§ 142', '§ 146', '§ 42', '§ 42', '§ 146', 'art 5', 'art 1', 'art 54', 'ART 54', 'art 54', '§ 54']

US Internal Revenue Service: irb07-11 | Irs Tax Forms
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Rev. Rul. 2007–12, page 685.
Payroll taxes on deferred compensation. This ruling provides guidance on when a taxpayer using an accrual method of accounting incurs a liability under section 461 of the Code for payroll taxes on deferred compensation. Rev. Rul. 69–587 revoked. Rev. Rul. 96–51 amplified.
Notice 2007–23, page 690.
Rev. Rul. 2007–13, page 684.
Rev. Proc. 2007–24, page 692.
Substitute tax forms and schedules. Requirements are set forth for privately designed and printed federal tax forms and conditions under which the Service will accept computer prepared and computer-generated tax forms and schedules. Rev. Proc. 2005–74 superseded.
Announcement 2007–27, page 733.
This document provides notice of a public hearing on proposed regulations (REG–103043–05, 2006–49 I.R.B. 1063) relating to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions under section 6112 of the Code.
Rev. Rul. 2007–15, page 687.
Announcement 2007–29, page 733.
This document provides notice of a public hearing on proposed regulations (REG–103038–05, 2006–49 I.R.B. 1049) relating to the disclosure of reportable transactions by taxpayers under section 6011 of the Code.
Notice 2007–19, page 689.
Announcement 2007–30, page 734.
This document provides notice of a public hearing on proposed regulations (REG–103039–05, 2006–49 I.R.B. 1057) relating to the disclosure of reportable transactions by material advisors under section 6111 of the Code.
Announcement 2007–32, page 734.
This document contains corrections to final regulations (T.D. 9298, 2007–6 I.R.B. 434) that governs the provisions prohibiting discrimination based on a health factor for group health plans and issuers of health insurance coverage offered in connection with a group health plan.
2007–11 I.R.B.
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of March 2007. See Rev. Rul. 2007-15, page 687.
LAW AND ANALYSIS Section 61 defines gross income as all income from whatever source derived, including gains derived from dealings in property. Section 101(a)(1) provides that, except as otherwise provided in §§ 101(a)(2), 101(d), and 101(f), gross income does not include amounts received under a life insurance contract if such amounts are received by reason of the death of the insured. Section 101(a)(2) provides, generally, that if a life insurance contract, or any interest therein, is transferred for a valuable consideration, the exclusion from gross income provided by § 101(a)(1) shall not exceed an amount equal to the sum of the actual value of the consideration and the premiums and other amounts subsequently paid by the transferee. The term “transfer for a valuable consideration” is defined for purposes of § 101(a)(2) in § 1.101–1(b)(4) of the Income Tax Regulations as any absolute transfer for value of a right to receive all or a part of the proceeds of a life insurance policy. Section 101(a)(2)(B) provides that § 101(a)(2) does not apply to a transfer of a life insurance contract or any interest therein to the insured, to a partner of the insured, to a partnership in which the insured is a partner, or to a corporation in which the insured is a shareholder or officer. In Rev. Rul. 85–13, 1985–1 C.B. 184, a grantor acquired the corpus of a trust in exchange for the grantor’s unsecured promissory note. The ruling concludes that the grantor is considered to have borrowed the corpus of the trust and, as a result, is treated as the owner of the trust under § 675(3). Because the grantor is treated as the owner of the trust, the grantor is deemed the owner of the trust assets for federal income tax purposes. In addition, because the grantor is therefore considered to own the purported consideration both before and after the transaction, the exchange of a promissory note for the trust assets is not recognized as a sale for federal income tax purposes.
Section 101.—Certain Death Benefits
26 CFR 1.101–1: Exclusion from gross income of proceeds of life insurance contracts payable by reason of death. (Also § 671.)
Rev. Rul. 2007–13
ISSUE Is the grantor who is treated for federal income tax purposes as the owner of a trust that owns a life insurance contract on the grantor’s life treated as the owner of the contract for purposes of determining whether a transfer of the contract (a) is a transfer for a valuable consideration within the meaning of § 101(a)(2) of the Internal Revenue Code, and (b) if so, is a transfer to the insured within the meaning of § 101(a)(2)(B)? FACTS Situation 1. TR1 and TR2 are grantor trusts, both of which are treated as wholly owned by G under subpart E of Part I of subchapter J of the Internal Revenue Code. TR2 owns a life insurance contract upon the life of G. TR2 transfers the life insurance contract to TR1 in exchange for cash. Situation 2. The facts are the same as in Situation 1, except that TR2 is not a grantor trust.
In Situation 1, because G is treated as the owner of both TR1 and TR2 for federal income tax purposes, G is treated as the owner of all the assets of both trusts, including both the life insurance contract and the cash received for it, both before and after the exchange. Accordingly, in Situation 1 there has been no transfer of the contract within the meaning of § 101(a)(2). In Situation 2, because G is treated as the owner of all the assets of TR1 but not of TR2 for federal income tax purposes, G is treated as the owner of the cash (but not the life insurance contract) before the exchange, and as the owner of the life insurance contract (but not the cash) after the exchange. Accordingly, in Situation 2 there has been a transfer of the life insurance contract for a valuable consideration within the meaning of § 101(a)(2). Nevertheless, the transfer for value limitations of § 101(a)(2) do not apply, because the transfer to TR1 is treated as a transfer to G, the insured, within the meaning of § 101(a)(2)(B). HOLDING The grantor who is treated for federal income tax purposes as the owner of a trust that owns a life insurance contract on the grantor’s life is treated as the owner of the contract for purposes of applying the transfer for value limitations of § 101(a)(2). Accordingly, in Situation 1, the transfer of a life insurance contract between two grantor trusts that are treated as wholly owned by the same grantor is not a transfer for a valuable consideration within the meaning of § 101(a)(2); in Situation 2, the transfer of a life insurance contract to a grantor trust that is treated as wholly owned by the insured is a transfer to the insured within the meaning of § 101(a)(2)(B) and is therefore excepted from the transfer for value limitations under § 101(a)(2). DRAFTING INFORMATION The principal author of this revenue ruling is Chris Lieu of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, con-
tact Chris Lieu at (202) 622–3970 (not a toll-free call).
Rev. Rul. 2007–12
Federal short-term, mid-term, and long-term rates are set forth for the month of March 2007. See Rev. Rul. 2007-15, page 687.
The adjusted applicable federal long-term rate is set forth for the month of March 2007. See Rev. Rul. 2007-15, page 687.
If the all events test and recurring item exception of § 461 of the Internal Revenue Code are otherwise met, may an accrual method taxpayer treat its Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) tax liability as incurred in Year 1 if the compensation to which the tax liability relates is deferred compensation that is deductible under § 404 in Year 2? FACTS X, a corporation, uses an accrual method of accounting and files its federal income tax returns on a calendar year basis. As of the end of Year 1, X has a fixed liability to pay compensation for services provided by X’s employees during Year 1. As of the end of Year 1, all events have occurred to establish the fact of X’s liability for the taxes (“payroll taxes”) owed under §§ 3111 (the employer’s share of FICA taxes) and 3301 (FUTA taxes) related to the compensation, and the amount of the payroll tax liability can be determined with reasonable accuracy. X properly adopted the recurring item exception under § 1.461–5 of the Income Tax Regulations as a method of accounting with respect to the payroll taxes. X pays the payroll taxes either (1) in Year 1 or (2) before the earlier of September 15 of Year 2 or the date X files a timely (including extensions) federal income tax return for Year 1. Therefore, under § 461, the payroll taxes generally would be treated as incurred by X in Year 1. However, the compensation to which the payroll taxes relate is deferred compensation that is properly deductible under § 404 in Year 2. LAW AND ANALYSIS Section 404(a) provides, in relevant part, that if compensation is paid or accrued by an employer on account of any employee under a plan deferring the receipt of such compensation, and is otherwise deductible under Chapter 1, the compensation is deductible pursuant to the rules, and subject to the limitations, of § 404. Section 404(a)(5) provides, in part, that if the plan of compensation is not
Section 404.—Deduction for Contributions of an Employer to an Employees’ Trust or Annuity Plan and Compensation Under a Deferred-Payment Plan
This revenue ruling provides guidance on when a taxpayer using an accrual method of accounting incurs a liability under section 461 for payroll taxes on deferred compensation. See Rev. Rul. 2007-12, page 685.
26 CFR 1.461–1: General rule for taxable year of deduction. (Also § 404.)
described in § 404(a)(1), (2), or (3), the compensation deductible under § 404 is deductible in the taxable year in which an amount attributable to the compensation is includible in the gross income of the employee participating in the plan. Furthermore, § 404(a)(5) provides that for purposes of § 404, any vacation pay that is treated as deferred compensation is deductible in the employer’s taxable year that it is paid to the employee. Section 1.404(b)–1T Q&A 2 provides, in part, that for purposes of § 404(a), a plan, or method or arrangement, defers the receipt of compensation or benefits to the extent it is one under which an employee receives compensation or benefits more than a brief period of time after the end of the employer’s taxable year in which the services creating the right to such compensation or benefits are performed. A plan, or method or arrangement shall be presumed to be one deferring the receipt of compensation for more than a brief period of time after the end of an employer’s taxable year to the extent that compensation is received after the 15th day of the 3rd calendar month after the end of the employer’s taxable year in which the related services are rendered. Section 461(a) provides that the amount of any deduction or credit must be taken for the taxable year that is the proper taxable year under the method of accounting used in computing taxable income. Section § 1.461–1(a)(2)(i) provides that, under an accrual method of accounting, a liability is incurred, and is generally taken into account for federal income tax purposes, in the taxable year in which (1) all the events have occurred that establish the fact of the liability, (2) the amount of the liability can be determined with reasonable accuracy, and (3) economic performance has occurred with respect to the liability (the “all events test”). See also § 1.446–1(c)(1)(ii)(A). Section 1.461–4(d)(2)(i) provides that in general, if the liability of a taxpayer arises out of the providing of services to the taxpayer by another person, economic performance occurs as the services are provided. Section 1.461–4(d)(2)(iii) provides that with respect to employee benefits which arise out of the provision of services to the taxpayer, the economic performance requirement is satisfied to the extent that any amount is otherwise deductible under § 404. Section 1.461–4(g)(6) provides
generally that, if a taxpayer is liable to pay a tax, economic performance occurs as the tax is paid to the governmental authority that imposed it. Section 1.461–5(b)(1) provides a recurring item exception to the general rule of economic performance. Under the recurring item exception, a liability is treated as incurred for a taxable year if: (i) at the end of the taxable year, all events have occurred that establish the fact of the liability and the amount can be determined with reasonable accuracy; (ii) economic performance occurs on or before the earlier of (a) the date that the taxpayer files a return (including extensions) for the taxable year, or (b) the 15th day of the 9th calendar month after the close of the taxable year; (iii) the liability is recurring in nature; and (iv) either the amount of the liability is not material or accrual of the liability in the taxable year results in better matching of the liability against the income to which it relates than would result from accrual of the liability in the taxable year in which economic performance occurs. Section 1.461–5(b)(5)(ii) provides that, in the case of a liability for taxes, the matching requirement of the recurring item exception is deemed satisfied. Rev. Rul. 69–587, 1969–2 C.B. 108, concludes that, under the all events test of § 461, an accrual method employer generally may not deduct payroll taxes payable with respect to bonuses and vacation pay accrued but unpaid at year-end until the taxable year in which the bonuses and vacation pay are paid. Rev. Rul. 96–51, 1996–2 C.B. 36, concludes that, under the all events test, an accrual method employer may deduct in Year 1 its otherwise deductible payroll taxes imposed on year-end wages properly accrued in Year 1 but paid in Year 2, provided the employer satisfies the requirements of the recurring item exception in § 1.461–5 with respect to those taxes. However, Rev. Rul. 96–51 does not address the application of § 404 because the year-end wages were paid before the 15th day of the 3rd calendar month after the end of Year 1. In general, § 404 applies to compensation paid or accrued by an employer on account of any employee under a plan deferring the receipt of such compensation. An employer’s liability for payroll taxes does not represent compensation paid or accrued by an employer on account of any
employee. Therefore, § 404 does not control the deductibility of an employer’s liability for payroll taxes, even if the payroll tax liability relates to a deferred compensation liability subject to the deduction rules of § 404. Accordingly, § 404 does not alter the timing of the accrual of X’s payroll tax liability under § 461. HOLDING If the all events test and recurring item exception of § 461 are otherwise met, an accrual basis taxpayer may treat its payroll tax liability as incurred in Year 1, regardless of whether the compensation to which the liability relates is deferred compensation that is deductible under § 404 in Year 2. EFFECT ON OTHER DOCUMENTS Rev. Rul. 96–51 is amplified. Rev. Rul. 69–587 is revoked. APPLICATION A change in treatment of payroll tax liabilities associated with deferred compensation to comply with this revenue ruling is a change in method of accounting within the meaning of §§ 446 and 481 and the regulations issued thereunder. Accordingly, a taxpayer that wants to change its treatment of payroll taxes associated with deferred compensation to comply with this revenue ruling must obtain the consent of the Commissioner under § 446(e) and § 1.446–1(e)(2)(i). DRAFTING INFORMATION The principal author of this revenue ruling is Martin L. Osborne of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Osborne at (202) 622–7900 (not a toll-free call).
A notice provides interim rules concerning the statute of limitations on assessment for individuals claiming to be bona fide residents of the U.S. Virgin Islands. See Notice 2007-19, page 689.
Rev. Rul. 2007–15 Section 1274.—Determination of Issue Price in the This revenue ruling provides various Case of Certain Debt Instruprescribed rates for federal income tax ments Issued for Property
purposes for March 2007 (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)(2) for buildings placed in service during the current month. 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. 2007–15 TABLE 1 Applicable Federal Rates (AFR) for March 2007 Period for Compounding Annual Short-term AFR 110% AFR 120% AFR 130% AFR Mid-term AFR 110% AFR 120% AFR 130% AFR 150% AFR 175% AFR Long-term AFR 110% AFR 120% AFR 130% AFR 5.01% 5.52% 6.03% 6.54% 4.95% 5.45% 5.94% 6.44% 4.92% 5.41% 5.90% 6.39% 4.90% 5.39% 5.87% 6.36% 4.86% 5.35% 5.84% 6.34% 7.33% 8.58% 4.80% 5.28% 5.76% 6.24% 7.20% 8.40% 4.77% 5.25% 5.72% 6.19% 7.14% 8.31% 4.75% 5.22% 5.69% 6.16% 7.09% 8.26% 5.06% 5.58% 6.09% 6.61% 5.00% 5.50% 6.00% 6.50% 4.97% 5.46% 5.96% 6.45% 4.95% 5.44% 5.93% 6.41% Semiannual Quarterly Monthly
Annual 3.58% 3.71% 4.18%
REV. RUL. 2007–15 TABLE 2 Adjusted AFR for March 2007 Period for Compounding Semiannual 3.55% 3.68% 4.14%
Quarterly 3.53% 3.66% 4.12%
Monthly 3.52% 3.65% 4.10%
REV. RUL. 2007–15 TABLE 3 Rates Under Section 382 for March 2007 Adjusted federal long-term rate for the current month 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.)
REV. RUL. 2007–15 TABLE 4 Appropriate Percentages Under Section 42(b)(2) for March 2007 Appropriate percentage for the 70% present value low-income housing credit Appropriate percentage for the 30% present value low-income housing credit
REV. RUL. 2007–15 TABLE 5 Rate Under Section 7520 for March 2007 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
Statute of Limitations on Assessment Concerning Certain Individuals Filing Income Tax Returns With the U.S. Virgin Islands Notice 2007–19
SECTION 1. PURPOSE This notice provides interim rules under sections 932(c) and 7654(e) concerning the statute of limitations on assessment of the U.S. income tax liability (if any) of a U.S. citizen or resident alien who takes the position that he or she is a bona fide resident of the U.S. Virgin Islands and the U.S. filing obligations of such an individual. This notice also announces that the Treasury Department and Internal Revenue Service (IRS) intend to issue regulations under sections 932(c) and 7654(e). Finally, this notice announces that the Treasury Department and the IRS are studying the feasibility of an automatic exchange of information program with the U.S. Virgin Islands Bureau of Internal Revenue concerning income tax information of individual taxpayers. Such a program for the timely exchange of equivalent data in a form compatible with IRS systems may eliminate the reporting requirements set forth in the interim rules. Until the regulations are issued, taxpayers may rely on this notice. SECTION 2. INTERIM RULES Under the authority of section 7654(e), an income tax return filed with the U.S. Virgin Islands by a U.S. citizen or resident alien (USVI Form 1040) will be deemed to be a U.S. income tax return of that individual for purposes of section 6501(a), provided that the individual is a covered person. The term “covered person” means a U.S. citizen or resident alien who takes the position that he or she is a bona fide resident of the U.S. Virgin Islands, files USVI Form 1040 with the U.S. Virgin Islands, and has less than $75,000 of gross income for the taxable year. For purposes of this notice, gross income means the total amount of income from whatever source derived, before any exclusions or deductions (for example, disregarding any applicable U.S. Virgin Islands tax benefits authorized under section 934(b)). Gross income does not include income of the individual’s spouse. For example, assume that C, a U.S. citizen and calendar year taxpayer who has less than $75,000 of gross income for 2006, takes the position that he is a bona fide resident of the U.S. Virgin Islands and files USVI Form 1040 for 2006 on March 12, 2007 with the U.S. Virgin Islands. C does not file Form 1040, U.S. Individual Income Tax Return (U.S. Form 1040), with the IRS. C is a covered person. Under these circumstances, the 3-year period of limitations under section 6501(a) will expire on April 15, 2010, and the IRS will make no further assessment of income tax for A’s 2006 taxable year after that date except as otherwise authorized by section 6501. With respect to a U.S. citizen or resident alien who takes the position that he or she is a bona fide resident of the U.S. Virgin Islands for a taxable year but who has gross income of $75,000 or more (referred to as a non-covered person), a U.S. Form 1040 filed by the non-covered person with the IRS, on which the non-covered person reports no gross income and no taxable income, will be treated as an income tax return described in section 6501(a). This notice imposes a new annual information reporting requirement under section 7654 for non-covered persons. The Treasury Department and the IRS intend to issue a new form titled Bona Fide Residence-Based Return Position for purposes of this new information reporting requirement. Until this form is issued, a non-covered person will meet the information reporting requirement by attaching a statement to U.S. Form 1040 reporting no gross income and no taxable income. The statement should be titled “Bona Fide Residence-Based Return Position” and must set forth the following information. 1. The non-covered person’s name, social security number, and address as reported on U.S. Form 1040. 2. A statement affirming the non-covered person’s bona fide residence in the U.S. Virgin Islands as defined in Treas. Reg. § 1.937–1(b) and a brief summary of the facts on which it is based. 3. An affirmation that the non-covered person has properly filed a U.S. Virgin Islands individual income tax return, a statement of the total tax liability reported on USVI Form 1040, and the amount of gross income reported on such return (adding back any applicable territorial tax benefits authorized under section 934(b)). 4. The following declaration signed and dated by the individual: “Under penalties of perjury, I declare that I have examined this statement and the accompanying attachments and to the best of my knowledge and belief, they are true, correct, and complete.” For example, assume that on March 12, 2007, N, a U.S. citizen and calendar year taxpayer with at least $75,000 of gross income for 2006, files U.S. Form 1040 (2006) with the IRS, taking the position that he does not have any gross income or taxable income for U.S. income tax purposes (as reported on lines 22 and 43, respectively) under section 932(c)(4). N attaches a Bona Fide Residence-Based Return Position statement. As a result of filing U.S. Form 1040, the 3-year period of limitations under section 6501(a) will expire on April 15, 2010, and the IRS will make no further assessment of income tax for N’s 2006 taxable year after that date except as otherwise authorized by section 6501. U.S. Forms 1040 with attached Bona Fide Residence-Based Return Position statements must be filed with the Internal Revenue Service Center, P.O. Box 331 Drop Point S–607, Bensalem, PA 19020–8517. Failure to file the Bona Fide Residence-Based Position statement is subject to a penalty under section 6688. If a non-covered person and his or her spouse filed a joint USVI Form 1040, then they may file a jointly executed U.S. Form 1040 but must attach a separate Bona Fide Residence-Based Return Position statement for each spouse who is a non-covered person. SECTION 3. EFFECTIVE DATE This notice applies for taxable years ending on or after December 31, 2006. Taxpayers also may choose to apply this notice to a taxable year ending before
December 31, 2006 as specified in this section 3. A non-covered person may choose to apply this notice to a taxable year ending before December 31, 2006 by filing U.S. Form 1040 with the IRS at the address provided in section 2, reporting no gross income and no taxable income for that taxable year. Although a Bona Fide Residence-Based Position statement need not be filed for a taxable year ending before December 31, 2006, the non-covered person should clearly note on the first page of U.S. Form 1040 the applicable taxable year and that U.S. Form 1040 is being filed in accordance with this notice. For example, assume that on March 16, 2007, J, a U.S. citizen and calendar year taxpayer with at least $75,000 of gross income for taxable year 2003, files U.S. Form 1040 with the IRS, taking the position that for taxable year 2003 she does not have any gross income or taxable income for U.S. income tax purposes under section 932(c)(4). J clearly marks U.S. Form 1040 as applying to her taxable year ending December 31, 2003 and as being filed in accordance with Notice 2007–19. Under these circumstances, the 3-year period of limitations under section 6501(a) for taxable year 2003 will expire on March 16, 2010, and the IRS will make no further assessment of income tax for J’s 2003 taxable year after that date except as otherwise authorized by section 6501. A covered person may choose to apply this notice to a taxable year ending before December 31, 2006 by providing documentation upon examination that establishes to the satisfaction of the Commissioner that the taxpayer is a covered person. Because the USVI Form 1040 filed with the U.S. Virgin Islands is deemed to be a covered person’s U.S. Form 1040, the covered person’s statute of limitations under section 6501(a) will begin to run on the date USVI Form 1040 is filed with the U.S. Virgin Islands. SECTION 4. PAPERWORK REDUCTION ACT The collection of information contained in this notice has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545–2063.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. The collection of information in this notice is in section 2. This information is required to determine if a taxpayer satisfies the requirements of bona fide residence in the U.S. Virgin Islands under section 937(a). The information will be used to determine if a taxpayer satisfies his or her U.S. income tax filing requirements. The collection of information is voluntary. The likely respondents are individuals. The estimated total annual reporting burden is 42,500 hours. The estimated annual burden per respondent varies from 4 to 6 hours, depending on individual circumstances, with an estimated average of 5 hours. The estimated number of respondents is 8,500. The estimated frequency of responses: annually. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. SECTION 5. DRAFTING INFORMATION The principal author of this notice is J. David Varley of the Office of Associate Chief Counsel (International). For further information regarding this notice, contact Mr. Varley at (202) 435–5262 (not a toll-free call).
2007 Calendar Year Resident Population Estimates Notice 2007–23
This notice informs (1) state and local housing credit agencies that allocate low-income housing tax credits under § 42 of the Internal Revenue Code and (2) states and other issuers of tax-exempt private activity bonds under § 141, of the proper population figures to be used for calculating the 2007 calendar year population-based component of the state housing credit ceiling (Credit Ceiling)
under § 42(h)(3)(C)(ii), the 2007 calendar year volume cap (Volume Cap) under § 146, and the 2007 volume limit (Volume Limit) under § 142(k)(5). The population figures both for the population-based component of the Credit Ceiling and for the Volume Cap are determined by reference to § 146(j). That section provides generally that determinations of population for any calendar year are made on the basis of the most recent census estimate of the resident population of a state (or issuing authority) released by the U.S. Census Bureau before the beginning of such calendar year. Section 142(k)(5) provides that the Volume Limit is based on the State population. The population-based component of the Credit Ceiling and the Volume Cap are adjusted for inflation pursuant to §§ 42(h)(3)(H) and 146(d)(2), respectively. The adjustments for the 2007 calendar year were published in Rev. Proc. 2006–53, 2006–48 I.R.B. 996. Section 3.08 of Rev. Proc. 2006–53 provides that, for calendar year 2007, the amounts used under § 42(h)(3)(C)(ii) to calculate the Credit Ceiling is the greater of $1.95 multiplied by the State population (see the resident population figures provided below) or $2,275,000. Further, section 3.16 of Rev. Proc. 2006–53 provides that the amounts used under § 146(d)(1) to calculate the Volume Cap for calendar year 2007 is the greater of $85 multiplied by the State population (see the resident population figures provided below) or $256,235,000. The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2007 calendar year are the estimates of the resident population of the 50 states, the District of Columbia, and Puerto Rico released by the U.S. Census Bureau on December 22, 2006, in Press Release CB06–187. The proper population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2007 calendar year for the insular areas (American Samoa, Guam, Northern Mariana Islands, and U.S. Virgin Islands) are the figures released electronically by the U.S. Census Bureau on July 17, 2003, and referenced in Census Bureau Tip Sheet TP03–16, dated August 8, 2003. For convenience, these estimates are reprinted below.
Resident Population Figures Alabama Alaska American Samoa Arizona Arkansas California Colorado Connecticut Delaware D.C. Florida Georgia Guam Hawai Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Northern Mariana Islands Ohio Oklahoma Oregon 4,599,030 670,053 57,794 6,166,318 2,810,872 36,457,549 4,753,377 3,504,809 853,476 581,530 18,089,888 9,363,941 171,019 1,285,498 1,466,465 12,831,970 6,313,520 2,982,085 2,764,075 4,206,074 4,287,768 1,321,574 5,615,727 6,437,193 10,095,643 5,167,101 2,910,540 5,842,713 944,632 1,768,331 2,495,529 1,314,895 8,724,560 1,954,599 19,306,183 8,856,505 635,867 82,459 11,478,006 3,579,212 3,700,758
Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas U.S. Virgin Islands Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming The principal authors of this notice are Christopher J. Wilson, Office of the Associate Chief Counsel (Passthroughs and Special Industries) and Timothy L. Jones, Office of the Division Counsel/Associate Chief Counsel (Tax-Exempt and Government Entities). For further information regarding this notice, contact Mr. Wilson at (202) 622–3040 (not a toll-free call).
12,440,621 3,927,776 1,067,610 4,321,249 781,919 6,038,803 23,507,783 108,605 2,550,063 623,908 7,642,884 6,395,798 1,818,470 5,556,506 515,004
NOTE: This revenue procedure will be reproduced as the next revision of IRS Publication 1167, General Rules and Specifications for Substitute Forms and Schedules.
SECTION 1.1 – OVERVIEW OF REVENUE PROCEDURE 2007–24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 SECTION 1.2 – IRS CONTACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 SECTION 1.3 – WHAT’S NEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 SECTION 1.4 – DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696 SECTION 1.5 – AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697
SECTION 2.1 – GENERAL SPECIFICATIONS FOR APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698 SECTION 2.2 – HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699 SECTION 2.3 – VOUCHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 SECTION 2.4 – RESTRICTIONS ON CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702 SECTION 2.5 – GUIDELINES FOR OBTAINING IRS APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
SECTION 2.6 – OFFICE OF MANAGEMENT AND BUDGET (OMB) REQUIREMENTS FOR ALL SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705
SECTION 3.1 – GENERAL GUIDELINES FOR SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 706 SECTION 3.2 – PAPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 SECTION 3.3 – PRINTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 709 SECTION 3.4 – MARGINS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 SECTION 3.5 – EXAMPLES OF APPROVED FORMATS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 SECTION 3.6 – MISCELLANEOUS INFORMATION FOR SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711
SECTION 4.1 – GUIDANCE FROM OTHER REVENUE PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712 SECTION 4.2 – ELECTRONIC TAX PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712 SECTION 4.3 – FEDERAL TAX FORMS ON CD-ROM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713
SECTION 5.1 – TAX RETURNS (FORMS 1040, 1040A, 1120, ETC.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713 SECTION 5.2 – CHANGES PERMITTED TO GRAPHICS (FORMS 1040A AND 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714 SECTION 5.3 – CHANGES PERMITTED TO FORM 1040A GRAPHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 SECTION 5.4 – CHANGES PERMITTED TO FORM 1040 GRAPHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716
SECTION 6.1 – ACCEPTABLE FORMATS FOR SUBSTITUTE FORMS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 SECTION 6.2 – ADDITIONAL INSTRUCTIONS FOR ALL FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718
SECTION 7.1 – SPECIFICATIONS FOR SUBSTITUTE SCHEDULES K-1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719 SECTION 7.2 – PROCEDURES FOR PRINTING IRS ENVELOPES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 SECTION 7.3 – GUIDELINES FOR SUBSTITUTE FORMS 8655 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
SECTION 8.1 – FORMS FOR ELECTRONICALLY FILED RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725 SECTION 8.2 – EFFECT ON OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726
Exhibit A-1 – Schedule A (Preferred Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 Exhibit A-2 – Schedule A (Acceptable Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 728 Exhibit B-1 – Form 2106-EZ (Preferred Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 Exhibit B-2 – Form 2106-EZ (Acceptable Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 730 Exhibit C – Software Developers Voucher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731
Exhibit D – Sample Check Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
W-2 and W-3 (see Publication 1141 for information on these forms), W-2c and W-3c (see Publication 1223 for information on these forms), 941 and Schedule B (Form 941) (see Publication 4436 for information on these forms), 1096, 1098 series, 1099 series, 5498 series, W-2G, and 1042-S (see Publication 1179 for information on these forms), Federal Tax Deposit (FTD) coupons, which may not be reproduced, Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced, Forms 5500, 5500-EZ, and associated schedules (see the Department of Labor website at www.dol.gov for information on these forms), Forms 8717 and 8905, bar-coded forms requiring separate approval, Requests for information or documentation initiated by the IRS, Forms used internally by the IRS,
State tax forms, Forms developed outside the IRS, and General Instructions and Specific Instructions (not reviewed by the Substitute Forms Program Unit).
Your submission should include all the forms you wish to submit in one attached pdf file. Do not email each form individually. An approval check sheet listing the forms you are submitting should always be included in the pdf file along with the forms. Small (fewer than 15 forms), rather than large, submissions should expedite processing. The optimal submission should contain 15 forms. Emailing pdf submissions will not expedite review and approval. The pdf submissions will be assigned a control number and put in queue along with mailed-in paper submissions. Optimize pdf files before submitting. The maximum allowable email attachment is 2.5 megabytes. The Substitute Forms Unit accepts zip files. To alleviate delays during the peak time of September through December, submit advance draft forms as early as possible. If the guidelines are not followed, you may need to resubmit. In addition to submitting forms via email, you may continue to send your submissions to: Internal Revenue Service SE:W:CAR:MP:T:T:SP Attn: Substitute Forms Program 1111 Constitution Avenue, NW Room 6406 Washington, DC 20224
NNNNNN F
Social Security Number/Employer Identification Number (SSN/EIN) has 9 numeric spaces. Check Digits have 2 alpha spaces. Name Control has 4 alphanumeric spaces. Master File Tax (MFT) Code has 2 numeric spaces (see below). Taxpayer Identification Number (TIN) Type has 1 numeric space (see below). Tax Period has 6 numeric spaces in year/month format (YYYYMM). Transaction Code has 3 numeric spaces.
The total depth must be 3.25 inches. The scan line must be .5 inches from the bottom edge and 1.75 inches from the left edge of the voucher and left-justified. Software developers vouchers must be 8.5 inches wide (instead of 8 inches with a cut line). Therefore, no vertical cut line is required. Scan line positioning must be exact. Do not use the over-the-counter format voucher and add the scan line to it. All scanned data must be in 12-point OCR A font. The 4-digt NACTP ID code should be placed under the payment indicator arrow. Windowed envelopes must not display the scan line in order to avoid disclosure and privacy issues.
Follow these line specifications for entering taxpayer data in the lockbox vouchers. Start Column End Column
Start Row Line Specifications for Taxpayer Data: Taxpayer Name Taxpayer Address, Apt. Taxpayer City, State, ZIP 56 57 58
Line Specifications for Mail To Data: Mail Address Mail City, State, ZIP 57 58 43 43 38 38 80 80
Internal Revenue Service Attn: Doris Bethea, C5-163 5000 Ellin Rd. Lanham, MD 20706 For further information, contact Doris Bethea, Doris.E.Bethea@irs.gov, at 202-283-0218.
You cannot, without prior IRS approval, change any IRS tax form or use your own (nonapproved) versions including graphics, unless specifically permitted by this revenue procedure. You cannot adjust any of the graphics on Forms 1040, 1040A, and 1040EZ (except in those areas specified in Part 5 of this revenue procedure) without prior approval from the IRS Substitute Forms Unit. You cannot use your own preprinted label on tax returns filed with the IRS unless you fully comply with the criteria specified in Section 3.6.3 on the use of pre-addressed IRS labels.
The IRS cannot grant final approval of your substitute form until the official form has been published. However, the IRS posts advance draft forms in the “Tax Professionals” area of its website at: www.irs.gov/taxpros/lists/0,,id=97782,00.html We encourage submission of proposed substitutes of these advance draft forms and will grant conditional approval based solely on these early drafts. These advance drafts are subject to significant change before forms are finalized. If these advance drafts are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official version. These revisions need not be submitted for further approval. Note. Approval of forms based on advance drafts will not be granted after the final version of an official form is published.
When specific approval of any substitute form (other than those specified in Part 1, Section 1.2 – IRS Contacts) is desired, a sample of the proposed substitute form should be forwarded for consideration via email or by letter to the Substitute Forms Unit at the address shown in Section 1.2. Schedules and forms (for example, Forms 3468, 4136, etc.) that can be used with more than one type of return (for example, 1040, 1041, 1120, etc.) should be submitted only once for approval, regardless of the number of different tax returns with which they may be associated. Also, all pages of multi-page forms or returns should be submitted in the same package.
Limited changes approved for one tax year may be allowed for the same form in the following tax year. Examples are the use of abbreviated words, revised form spacing, compressed text lines, and shortened captions, etc., which do not change the integrity of lines or text on the official forms. If substantial changes are made to the form, new substitutes must be submitted for approval. If only minor editorial changes are made to the form, it is not subject to review. It is the responsibility of each vendor who has been granted permission to use substitute forms to monitor and revise forms to mirror any revisions to official forms made by the Service. If there are any questions, please contact the Substitute Forms Unit.
If developing software or forms for use by others, please inform your customers/clients that the order in which the forms are arranged may affect the processing of the package. A return must be arranged in the order indicated below. IF the form is... 1040 Any other tax return (Form 1120, 1120S, 1065, 1041, etc.) THEN the sequence is... • Form 1040, and • Schedules and forms in attachment sequence number order. • The tax returns, • Directly associated schedules (Schedule D, etc.), • Directly associated forms, • Additional schedules in alphabetical order, and • Additional forms in numerical order.
Failing to preprint certain amounts in entry spaces. Shading areas incorrectly. Failing to include a reference to the location of the Paperwork Reduction Act Notice. Not including parentheses for losses. Not including “Attach Statement” when appropriate. Including line references or entry spaces that don’t match the official form.
Printing text that is different from the official form. Altering the jurat.
There are several kinds of paper prohibited for substitute forms. These are: 1. 2. Carbon-bonded paper, and Chemical transfer paper except when the following specifications are met: a. b. Each ply within the chemical transfer set of forms must be labeled, and Only the top ply (ply one and white in color), the one that contains chemical on the back only (coated back), may be filed with the IRS.
The same logic may be applied to any IRS form that is normally reproducible as a substitute form, with the exception of the tax return forms as discussed elsewhere. Note. These exhibits may be from a prior year and are not to be used as current substitute forms.
Use only the following label information format for single filers: JOHN Q. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000
Use only the following information for joint filers: JOHN Q. PUBLIC MARY I. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000
Anticipated print dates of annual returns. Anticipated print dates of quarterly returns. Last revision dates and target print dates for continuous-use forms.
For system requirements, contact the National Technical Information Service (NTIS) help desk at 703-487-4608. Prices are subject to change. The cost of the CD if purchased via the Internet at http://www.irs.gov/cdorders from NTIS, is $35 (with no handling fee). If purchased using the following methods, the cost for each CD is $35 (plus a $5 handling fee). These methods are:
5.4.7 Line 55 of Form 1040 – Other Credits
Example: 5 STATE & LOCAL INC. TAXES............... 6 REAL ESTATE TAXES............................ 7 PERSONAL PROPERTY TAXES............ or 5 STATE & LOCAL INC. TAXES............... 6 REAL ESTATE TAXES............................. 7 PERSONAL PROPERTY TAXES............. 5. 6. 7. (5) (6) (7) 495.00 198.00 495.00 198.00
671106 for Form 1120S. Please allow white space around the 6-digit code.
You will no longer be able to produce Schedules K-1 that contain only those lines or boxes that taxpayers are required to use. All lines must be included. The words “*See attached statement for additional information.” must be preprinted in the lower right hand side on Schedules K-1 of Forms 1041, 1065, and 1120S. All K-1s that are filed with the IRS should be printed on standard 8.5” x 11” paper (the international standard (A4) of 8.27” x 11.69” may be substituted). Each recipient’s information must be on a separate sheet of paper. Therefore, you must separate all continuously printed substitutes, by recipient, before filing with the IRS. No carbon copies or pressure-sensitive copies will be accepted. The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity (estate, trust, partnership, or S corporation) and the recipient (beneficiary, partner, or shareholder). The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the related form number (1041, 1065, 1065-B, or 1120S), and the official schedule name in substantially the same position and format as shown on the official IRS schedule. The Schedule K-1 must contain all the line items as shown on the official form, except for the instructions, if any are printed on the back of the official Schedule K-1. The line items or boxes must be in the same order and arrangement as those on the official form. The amount of each recipient’s share of each item must be shown. Furnishing a total amount of each item and a percentage (or decimal equivalent) to be applied to such total amount by the recipient does not satisfy the law and the specifications of this revenue procedure. State or local tax-related information may not be included on the Schedules K-1 filed with the IRS. The entity may have to pay a penalty if substitute Schedules K-1 are filed that do not conform to specifications. Additionally, the IRS may consider the Schedules K-1 that do not conform to specifications as not being able to process and may return Forms 1041, 1065, 1065-B, or 1120S to the entity to be filed correctly.
Include the 6-digit form ID code in the upper right of Schedules K-1 of Forms 1041, 1065, and 1120S. • 661106 for Form 1041, • 651106 for Form 1065, and • 671106 for Form 1120S. Please allow white space around the 6-digit code. You will no longer be able to produce Schedules K-1 that contain only those lines or boxes that taxpayers are required to use. All lines must be included. Both pages 1 and 2 of Schedules K-1 of Forms 1065 and 1120S must be provided to each recipient. The words “*See attached statement for additional information.” must be preprinted in the lower right hand side on Schedules K-1 of Forms 1041, 1065, and 1120S. The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity and recipient.
The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the related form number (1041, 1065, 1065-B, or 1120S), and the official schedule name in substantially the same position and format as shown on the official IRS schedule. All applicable amounts and information required to be reported must be titled and numbered in the same manner as shown on the official IRS schedule. The line items or boxes must be in the same order and arrangement and must be numbered like those on the official IRS schedule. The Schedule K-1 must contain all items required for use by the recipient. The instructions to the schedule must identify the line or box number and code, if any, for each item as shown in the official IRS schedule. The amount of each recipient’s share of each item must be shown. Furnishing a total amount of each line item and a percentage (or decimal equivalent) to be applied to such total amount by the recipient does not satisfy the law and the specifications of this revenue procedure. Instructions to the recipient that are substantially similar to those on or accompanying the official IRS schedule must be provided to aid in the proper reporting of the items on the recipient’s income tax return. Where items are not reported to a recipient because they do not apply, the related instructions may be omitted. The quality of the ink or other material used to generate recipients’ schedules must produce clearly legible documents. In general, black chemical transfer inks are preferred. In order to assure uniformity of substitute Schedules K-1, the paper size should be standard 8.5” x 11” (the international standard (A4) of 8.27” x 11.69” may be substituted.) The paper weight, paper color, font type, font size, font color, and page layout must be such that the average recipient can easily decipher the information on each page. State or local tax-related information may be included on recipient copies of substitute Schedules K-1. All non-tax-related information should be separated from the tax information on the substitute schedule to avoid confusion for the recipient. The legend “Important Tax Return Document Enclosed” must appear in a bold and conspicuous manner on the outside of the envelope that contains the substitute recipient copy of Schedule K-1. The entity may have to pay a penalty if a substitute Schedule K-1 furnished to any recipient does not conform to the specifications of this revenue procedure and results in impeding processing.
Organizations are permitted to produce substitute tax return envelopes. Use of substitute return envelopes that comply with the requirements set forth in this section will assist in delivery of mail by the U.S. Postal Service and facilitate internal sorting at the Internal Revenue Service Centers. Use the following 5-digit ZIP codes when mailing returns to the IRS Service Centers:
7.3.1 Increased Standardization for Forms 8655
7.3.2 Requirements for Substitute Forms 8655
The first line of the title must be “Reporting Agent Authorization.” If you want to include a reference to “State Limited Power of Attorney,” it can be in parentheses under the title. “State” must be the first word within the parentheses. You must include “Form 8655” on the form. While the line numbers do not have to match the official form, the sequence of the information must be in the same order. The size of any variable data must be printed in a font no smaller than 10-point. For adequate disclosure checks, the following must be included for each taxpayer: (a) Name, (b) EIN, and (c) Address. At this time, Form 944 will not be required if Form 941 is checked. Only those forms that the reporting agent company supports need to be listed. The jurat must be identical with the exception of references to line numbers. A contact name and number for the reporting agent is not required. Line 17, or the equivalent line, must include two checkboxes. Any state information included should be contained in a separate section of the substitute form. Preferably this information will be in the same area as line 19 of the official form. All substitute Forms 8655 must be approved by the Substitute Forms Unit as outlined in the Form 8655 specifications in Publication 1167. If you have not already been assigned a 3-letter source code, you will be given one when your substitute form is approved. This source code should be included in the lower left corner of the form.
AJCA Modifications to the Section 6112 Regulations Announcement 2007–27
AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of public hearing on proposed rulemaking. SUMMARY: This document provides notice of a public hearing on proposed rulemaking (REG–103043–05, 2006–49 I.R.B. 1063) relating to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions under section 6112. DATES: The public hearing is being held on Tuesday, March 20, 2007, at 10:00 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by March 6, 2007. ADDRESSES: The public hearing is being held in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue, NW, Washington, DC 20224. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Mail outlines to CC:PA:LPD:PR (REG–103043–05), room 5205, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG–103043–05), Couriers Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC or sent electronically via the Federal erulemaking Portal at www.regulations.gov (IRS-REG–103043–05). FOR FURTHER INFORMATION CONTACT: Concerning submissions of comments, the hearing and/or to be placed on the building access list to attend the hearing Kelly Banks at (202) 622–7180 (not a toll-free number). SUPPLEMENTARY INFORMATION: The subject of the public hearing is the notice of proposed rulemaking (REG–103043–05) that was published in the Federal Register on Thursday, November 2, 2006 (71 FR 64501). The notice also announced that a hearing will be scheduled if requested by the public in writing by January 31, 2007. The rules of 26 CFR 601.601 apply to the hearing. A period of 10 minutes is allotted to each person for presenting oral comments. After the deadline has passed, persons who have submitted written comments and wish to present oral comments at the hearing must submit an outline of the topics to be discussed and the amount of time to be devoted to each topic (a signed original and eight (8) copies) by March 6, 2007. The IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available free of charge, at the hearing. Because of access restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the “FOR FURTHER INFORMATION CONTACT” section of this document. LaNita Van Dyke, Branch Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
SUMMARY: This document provides notice of a public hearing on proposed rulemaking (REG–103038–05, 2006–49 I.R.B. 1049) relating to the disclosure of reportable transactions under section 6011. DATES: The public hearing is being held on Tuesday, March 20, 2007, at 10:00 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by March 6, 2007. ADDRESSES: The public hearing is being held in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue, NW, Washington, DC 20224. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Mail outlines to CC:PA:LPD:PR (REG–103038–05), room 5205, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG–103038–05), Couriers Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC or sent electronically via the Federal erulemaking Portal at www.regulations.gov (IRS-REG–103038–05). FOR FURTHER INFORMATION CONTACT: Concerning submissions of comments, the hearing and/or to be placed on the building access list to attend the hearing Kelly Banks at (202) 622–7180 (not a toll-free number). SUPPLEMENTARY INFORMATION:
AJCA Modifications to the Section 6011 Regulations Announcement 2007–29
AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of public hearing on proposed rulemaking.
The subject of the public hearing is the notice of proposed rulemaking (REG–103038–05) that was published in the Federal Register on Thursday, November 2, 2006 (71 FR 64488). The rules of 26 CFR 601.601(a)(3) apply to the hearing. A period of 10 minutes is allotted to each person for presenting oral comments. After the deadline has passed, persons
who have submitted written comments and wish to present oral comments at the hearing must submit an outline of the topics to be discussed and the amount of time to be devoted to each topic (a signed original and eight (8) copies) by March 6, 2007. The IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available free of charge at the hearing. Because of access restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the “FOR FURTHER INFORMATION CONTACT” section of this document. LaNita Van Dyke, Branch Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
ADDRESSES: The public hearing is being held in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue, NW, Washington, DC 20224. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Mail outlines to CC:PA:LPD:PR (REG–103039–05), room 5205, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG–103039–05), Couriers Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC or sent electronically via the Federal erulemaking Portal at www.regulations.gov (IRS-REG–103039–05). FOR FURTHER INFORMATION CONTACT: Concerning submissions of comments, the hearing and/or to be placed on the building access list to attend the hearing Kelly Banks at (202) 622–7180 (not a toll-free number). SUPPLEMENTARY INFORMATION: The subject of the public hearing is the notice of proposed rulemaking (REG–103039–05) that was published in the Federal Register on Thursday, November 2, 2006 (71 FR 64496). The notice also announced that a hearing will be scheduled if requested by the public in writing by January 31, 2007. The rules of 26 CFR 601.601 apply to the hearing. A period of 10 minutes is allotted to each person for presenting oral comments. After the deadline has passed, persons who have submitted written comments and wish to present oral comments at the hearing must submit an outline of the topics to be discussed and the amount of time to be devoted to each topic (a signed original and eight (8) copies) by March 6, 2007. The IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available free of charge at the hearing. Because of access
restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the “FOR FURTHER INFORMATION CONTACT” section of this document. LaNita Van Dyke, Branch Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
Nondiscrimination and Wellness Programs in Health Coverage in the Group Market; Correction Announcement 2007–32
AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correcting amendments. SUMMARY: This document contains correction to final regulations (T.D. 9298, 2007–6 I.R.B. 434) that were published in the Federal Register on Wednesday, December 13, 2006 (71 FR 75014) governing the provisions prohibiting discrimination based on a health factor for group health plans and issuers of health insurance coverage offered in connection with a group health plan. DATES: The correction is effective February 12, 2007. FOR FURTHER INFORMATION CONTACT: Russ Weinheimer, (202) 622–6080 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The correction notice that is the subject of this document is under section 9802 of the Internal Revenue Code.
AJCA Modifications to the Section 6111 Regulations Announcement 2007–30
AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of public hearing on proposed rulemaking. SUMMARY: This document provides notice of a public hearing on proposed rulemaking (REG–103039–05, 2006–49 I.R.B. 1057) relating to the disclosure of reportable transactions by material advisors under section 6111. DATES: The public hearing is being held on Tuesday, March 20, 2007, at 10:00 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by March 6, 2007.
Need for Correction As published, final regulations (T.D. 9298) contain errors that may prove to be misleading and are in need of clarification. ***** Correction of Publication Accordingly, 26 CFR part 54 is corrected by making the following correcting amendments: PART 54—PENSION EXCISE TAXES Paragraph 1. The authority citation for part 54 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 54.9802–1(b)(2)(i)(D) is amended by revising paragraph (ii) of Example 4. Par. 3. Section 54.9802–1(f)(1) is amended by revising the first sentence
of the paragraph. The revisions read as follows: § 54.9802–1 Prohibiting discrimination against participants and beneficiaries based on a health factor. ***** (b) * * * (2) * * * (i) * * * (D) * * * Example 4. * * *
(f) * * * (1) * * * If none of the conditions for obtaining a reward under a wellness program are based on an individual satisfying a standard that is related to a health factor (or if a wellness program does not provide a reward), the wellness program does not violate this section, if participation in the program is made available to all similarly situated individuals. * * * ***** LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
Bulletins 2007–1 through 2007–11 Announcements:
2007-1, 2007-1 I.R.B. 243 2007-2, 2007-2 I.R.B. 263 2007-3, 2007-4 I.R.B. 376 2007-4, 2007-7 I.R.B. 518 2007-5, 2007-4 I.R.B. 376 2007-6, 2007-4 I.R.B. 376 2007-7, 2007-4 I.R.B. 377 2007-8, 2007-5 I.R.B. 416 2007-9, 2007-5 I.R.B. 417 2007-10, 2007-6 I.R.B. 464 2007-11, 2007-6 I.R.B. 464 2007-12, 2007-6 I.R.B. 465 2007-13, 2007-7 I.R.B. 519 2007-14, 2007-7 I.R.B. 519 2007-15, 2007-8 I.R.B. 596 2007-16, 2007-8 I.R.B. 597 2007-17, 2007-8 I.R.B. 597 2007-18, 2007-9 I.R.B. 625 2007-19, 2007-7 I.R.B. 521 2007-20, 2007-8 I.R.B. 599 2007-21, 2007-9 I.R.B. 630 2007-22, 2007-9 I.R.B. 631 2007-23, 2007-10 I.R.B. 665 2007-24, 2007-10 I.R.B. 681 2007-25, 2007-10 I.R.B. 682 2007-26, 2007-10 I.R.B. 682 2007-27, 2007-11 I.R.B. 733 2007-28, 2007-10 I.R.B. 683 2007-29, 2007-11 I.R.B. 733 2007-30, 2007-11 I.R.B. 734 2007-32, 2007-11 I.R.B. 734
Notices— Continued: 2007-20, 2007-9 I.R.B. 610 2007-21, 2007-9 I.R.B. 611 2007-22, 2007-10 I.R.B. 670 2007-23, 2007-11 I.R.B. 690
9298, 2007-6 I.R.B. 434
REG-157711-02, 2007-8 I.R.B. 537 REG-159444-04, 2007-9 I.R.B. 618 REG-152043-05, 2007-2 I.R.B. 263 REG-161919-05, 2007-6 I.R.B. 463 REG-125632-06, 2007-5 I.R.B. 415 REG-147144-06, 2007-10 I.R.B. 680
9299, 2007-6 I.R.B. 460 9300, 2007-2 I.R.B. 246 9301, 2007-2 I.R.B. 244 9302, 2007-5 I.R.B. 382 9303, 2007-5 I.R.B. 379 9304, 2007-6 I.R.B. 423 9305, 2007-7 I.R.B. 479 9306, 2007-6 I.R.B. 420 9307, 2007-7 I.R.B. 470 9308, 2007-8 I.R.B. 523 9309, 2007-7 I.R.B. 497 9310, 2007-9 I.R.B. 601 9311, 2007-10 I.R.B. 635
2007-1, 2007-1 I.R.B. 1 2007-2, 2007-1 I.R.B. 88 2007-3, 2007-1 I.R.B. 108 2007-4, 2007-1 I.R.B. 118 2007-5, 2007-1 I.R.B. 161 2007-6, 2007-1 I.R.B. 189 2007-7, 2007-1 I.R.B. 227 2007-8, 2007-1 I.R.B. 230 2007-9, 2007-3 I.R.B. 278 2007-10, 2007-3 I.R.B. 289 2007-11, 2007-2 I.R.B. 261 2007-12, 2007-4 I.R.B. 354 2007-13, 2007-3 I.R.B. 295 2007-14, 2007-4 I.R.B. 357 2007-15, 2007-3 I.R.B. 300 2007-16, 2007-4 I.R.B. 358 2007-17, 2007-4 I.R.B. 368 2007-18, 2007-5 I.R.B. 413 2007-19, 2007-7 I.R.B. 515 2007-20, 2007-7 I.R.B. 517 2007-21, 2007-9 I.R.B. 613 2007-22, 2007-10 I.R.B. 675 2007-23, 2007-10 I.R.B. 675 2007-24, 2007-11 I.R.B. 692
2007-1, 2007-2 I.R.B. 254 2007-2, 2007-2 I.R.B. 254 2007-3, 2007-2 I.R.B. 255 2007-4, 2007-2 I.R.B. 260 2007-5, 2007-3 I.R.B. 269 2007-6, 2007-3 I.R.B. 272 2007-7, 2007-5 I.R.B. 395 2007-8, 2007-3 I.R.B. 276 2007-9, 2007-5 I.R.B. 401 2007-10, 2007-4 I.R.B. 354 2007-11, 2007-5 I.R.B. 405 2007-12, 2007-5 I.R.B. 409 2007-13, 2007-5 I.R.B. 410 2007-14, 2007-7 I.R.B. 501 2007-15, 2007-7 I.R.B. 503 2007-16, 2007-8 I.R.B. 536 2007-18, 2007-9 I.R.B. 608 2007-19, 2007-11 I.R.B. 689
2007-1, 2007-3 I.R.B. 265 2007-2, 2007-3 I.R.B. 266 2007-3, 2007-4 I.R.B. 350 2007-4, 2007-4 I.R.B. 351 2007-5, 2007-5 I.R.B. 378 2007-6, 2007-5 I.R.B. 393 2007-7, 2007-7 I.R.B. 468 2007-8, 2007-7 I.R.B. 469 2007-9, 2007-6 I.R.B. 422 2007-10, 2007-10 I.R.B. 660 2007-11, 2007-9 I.R.B. 606 2007-12, 2007-11 I.R.B. 685 2007-13, 2007-11 I.R.B. 684 2007-15, 2007-11 I.R.B. 687
Bulletins 2007–1 through 2007–11 Notices:
2002-45 Modified by Notice 2007-22, 2007-10 I.R.B. 670 2005-29 Modified and superseded by Notice 2007-4, 2007-2 I.R.B. 260 2005-86 Modified by Notice 2007-22, 2007-10 I.R.B. 670 2006-2 Modified and superseded by Notice 2007-4, 2007-2 I.R.B. 260 2006-50 Amplified, clarified, and modified by Notice 2007-11, 2007-5 I.R.B. 405
Revenue Procedures— Continued: 2000-38 Modified by Rev. Proc. 2007-16, 2007-4 I.R.B. 358 2000-50 Modified by Rev. Proc. 2007-16, 2007-4 I.R.B. 358 2001-42 Modified and amplified by Rev. Proc. 2007-19, 2007-7 I.R.B. 515 2002-9 Modified and amplified by Rev. Proc. 2007-14, 2007-4 I.R.B. 357 Modified by Rev. Proc. 2007-16, 2007-4 I.R.B. 358 2004-11 Superseded by Rev. Proc. 2007-16, 2007-4 I.R.B. 358 2004-65 Modified and superseded by Rev. Proc. 2007-20, 2007-7 I.R.B. 517 2005-12
Revenue Procedures— Continued: 2006-8 Superseded by Rev. Proc. 2007-8, 2007-1 I.R.B. 230 2006-35 Modified by Rev. Proc. 2007-22, 2007-10 I.R.B. 675
69-141 Modified by Notice 2007-22, 2007-10 I.R.B. 670 69-587 Revoked by Rev. Rul. 2007-12, 2007-11 I.R.B. 685 75-161 Obsoleted by Rev. Rul. 2007-8, 2007-7 I.R.B. 469 76-188 Obsoleted by Rev. Rul. 2007-8, 2007-7 I.R.B. 469 78-330 Modified by Rev. Rul. 2007-8, 2007-7 I.R.B. 469 81-225 Clarified and amplified by Rev. Rul. 2007-7, 2007-7 I.R.B. 468 92-19 Supplemented in part by Rev. Rul. 2007-10, 2007-10 I.R.B. 660 96-51 Amplified by Rev. Rul. 2007-12, 2007-11 I.R.B. 685 2002-41 Modified by Notice 2007-22, 2007-10 I.R.B. 670 2003-43 Modified by Notice 2007-2, 2007-2 I.R.B. 254 2003-92 Clarified and amplified by Rev. Rul. 2007-7, 2007-7 I.R.B. 468 2003-102 Modified by Notice 2007-22, 2007-10 I.R.B. 670 2005-24 Modified by Notice 2007-22, 2007-10 I.R.B. 670 2005-76 Supplemented and superseded by Rev. Rul. 2007-4, 2007-4 I.R.B. 351
Superseded by Rev. Proc. 2007-17, 2007-4 I.R.B. 368 2005-69 Superseded by Rev. Proc. 2007-15, 2007-3 I.R.B. 300 2005-74 Superseded by Rev. Proc. 2007-24, 2007-11 I.R.B. 692 2006-1 Superseded by Rev. Proc. 2007-1, 2007-1 I.R.B. 1 2006-2 Superseded by Rev. Proc. 2007-2, 2007-1 I.R.B. 88 2006-3 Superseded by Rev. Proc. 2007-3, 2007-1 I.R.B. 108 2006-4 Superseded by Rev. Proc. 2007-4, 2007-1 I.R.B. 118 2006-5 Superseded by Rev. Proc. 2007-5, 2007-1 I.R.B. 161 2006-6 Superseded by Rev. Proc. 2007-6, 2007-1 I.R.B. 189 2006-7 Superseded by Rev. Proc. 2007-7, 2007-1 I.R.B. 227
98-20 Superseded by Rev. Proc. 2007-12, 2007-4 I.R.B. 354
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