Source: https://www.irs.gov/irb/2012-45_IRB
Timestamp: 2019-07-23 03:16:44
Document Index: 428581171

Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 301', '§ 1', '§ 1', '§ 1', '§ 103', '§ 1', '§ 1', '§ 1', '§ 63', '§ 1', '§ 1', '§ 1', '§ 55', '§ 55', '§ 1', '§ 1', '§ 213', '§ 220', '§ 513', '§ 877', '§ 877', '§ 2032', '§ 2032', '§ 6323', '§ 6323', '§ 6601', '§ 6166']

Internal Revenue Bulletin: 2012-45 | Internal Revenue Service
Internal Revenue Bulletin: 2012-45
Rev. Rul. 2012-30
Notice 2012-2
Rev. Proc. 2012-41
Announcement 2012-37
Notice 2012-2 Notice 2012-2
This notice provides interim guidance under section 6050W of the Code to payment settlement entities (as defined in Regulations section 1.6050W-1(a)(4)(i)) (PSEs) that are United States payors or United States middlemen (each as defined in Regulations section 1.6049-5(c)(5)) regarding the circumstances under which the return of information required under Regulations section 1.6050W-1(a)(1) is required with respect to a payment to an offshore account. Treasury and the Service intend to amend the regulations under section 6050W to reflect the guidance provided in this notice and Notice 2011-71, 2011-37 I.R.B. 233. PSEs may rely on the interim guidance in this notice until the regulations are amended.
Rev. Rul. 2012-30 Rev. Rul. 2012-30
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2012.
Rev. Proc. 2012-41 Rev. Proc. 2012-41
This procedure sets forth the 2013 cost-of-living adjustments to certain items due to inflation as required under various provisions of the Code and Service guidance. This procedure does not include the following items: the tax rate tables under section 1 , the adoption credit under section 23, the child tax credit under section 24, the Hope Scholarship and Lifetime Learning Credits under section 25A, the earned income credit under section 32, the standard deduction under section 63, the overall limitation on itemized deductions under section 68, the adoption assistance exclusion under section 137, the personal exemption under section 151, the interest on education loans under section 221, and the unified credit against estate tax for estates of decedents under section 2010(c). Those items will be addressed in future guidance.
Announcement 2012-37 Announcement 2012-37
The IRS has revoked its determination that American Lithuanian Childcare Association of Chicago, IL; Angel Wings Foundation of Orem, UT; Concord International High School, Inc., of Los Angeles, CA; Contra Costa Amateur Cheerleading Association, Inc., of Concord, CA; Golden Rain Foundation of Laguna Woods of Laguna Woods, CA; Grandma's Child Care of Cassopolis, MI; Holy Cross Canoga Park of Canoga Park, CA; Innovation Treatment Centers, Inc., of Rialto, CA; Pacific Epilepsy Society of Puunene, HI; Play 4 Life, Inc., of New York, NY; Scruggs & Associates Family Counseling Center, Inc., of Stafford, TX; Social and Economic Rights Action Center of Gaithersburg, MD; Social and Economic Rights Action Center of Washington, DC; The Retired Enlisted Association Incorporated Auxiliary #47 of Fayetteville, NC; Treasures for the Kingdom of Allen, TX; World Health and Education Foundation of Danville, CA, qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Code.
This revenue ruling provides various prescribed rates for federal income tax purposes for November 2012 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, and before December 31, 2013, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.
REV. RUL. 2012-30 TABLE 1
Applicable Federal Rates (AFR) for November 2012
AFR .22% .22% .22% .22%
110% AFR .24% .24% .24% .24%
120% AFR .26% .26% .26% .26%
130% AFR .29% .29% .29% .29%
AFR .89% .89% .89% .89%
110% AFR .98% .98% .98% .98%
120% AFR 1.07% 1.07% 1.07% 1.07%
130% AFR 1.16% 1.16% 1.16% 1.16%
150% AFR 1.34% 1.34% 1.34% 1.34%
175% AFR 1.57% 1.56% 1.56% 1.55%
AFR 2.40% 2.39% 2.38% 2.38%
110% AFR 2.65% 2.63% 2.62% 2.62%
120% AFR 2.89% 2.87% 2.86% 2.85%
130% AFR 3.13% 3.11% 3.10% 3.09%
REV. RUL. 2012-30 TABLE 2
Adjusted AFR for November 2012
Short-term adjusted AFR .24% .24% .24% .24%
Mid-term adjusted AFR .98% .98% .98% .98%
Long-term adjusted AFR 2.84% 2.82% 2.81% 2.80%
REV. RUL. 2012-30 TABLE 3
Rates Under Section 382 for November 2012
Adjusted federal long-term rate for the current month 2.84%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 2.87%
REV. RUL. 2012-30 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for November 2012
Appropriate percentage for the 70% present value low-income housing credit 7.38%
Appropriate percentage for the 30% present value low-income housing credit 3.16%
REV. RUL. 2012-30 TABLE 5
Rate Under Section 7520 for November 2012
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 1.0%
Documentation Requirements Under Section 6050W
This notice provides interim guidance to payment settlement entities (as defined in § 1.6050W-1(a)(4)(i)) (PSEs) that are United States payors or United States middlemen (each as defined in § 1.6049-5(c)(5)) (U.S. payors) regarding the circumstances under which the return of information required under § 1.6050W-1(a)(1) is required with respect to a payment to an account maintained outside the United States. This notice supplements, but does not modify or supersede, the guidance provided in Notice 2011-71, 2011-37 I.R.B. 233. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to amend the regulations under section 6050W to reflect the guidance provided in this notice and Notice 2011-71. PSEs may rely on the interim guidance in this notice until the regulations are amended.
Section 6050W of the Internal Revenue Code was added by section 3091 of the Housing Assistance Tax Act of 2008, Div. C of Pub. L. No. 110-289, 122 Stat. 2653 (the Act), and requires information returns to be made by certain payors with respect to payments made to a participating payee (generally meaning a merchant that accepts a payment card or payment from a third party settlement organization) in settlement of payment card transactions and third party payment network transactions. Section 6050W(d)(1)(B) provides that, except as provided by the Secretary in regulations or other guidance, the term participating payee does not include any person with a foreign address. The final regulations prescribe the circumstances in which a PSE is required to report payments made to a participating payee that has a foreign address. Specifically, the final regulations provide that a PSE that is not a U.S. payor is not required to report payments made to a participating payee that does not have a U.S. address as long as the PSE neither knows nor has reason to know that the payee is a United States person (U.S. person). If the participating payee has any U.S. address, a PSE may treat the participating payee as a foreign person only if the PSE has in its files documentation upon which the PSE may rely to treat the payment as made to a foreign person in accordance with § 1.1441-1(e)(1)(ii).
The final regulations also provide that a PSE that is a U.S. payor is not required to report payments to payees with a foreign address as long as, prior to payment, the payee has provided the payor with documentation upon which the payor may rely to treat the payment as made to a foreign person in accordance with § 1.1441-1(e)(1)(ii). In addition, the final regulations provide a presumption under which a PSE that is a U.S. payor making a payment outside the United States (within the meaning of § 1.6049-5(e)) to an offshore account (as defined in § 1.6049-5(c)(1)) need not report payments to a participating payee with only a foreign address if the name of the participating payee indicates that it is a foreign per se corporation listed in § 301.7701-2(b)(8)(i) and the PSE neither knows nor has reason to know that the participating payee is a U.S. person. The final regulations also provide a grace period after account opening to collect documentation by applying the grace period rules of § 1.6049-5(d)(2)(ii) if the participating payee has only a foreign address.
The final regulations apply to returns for calendar years beginning after December 31, 2010. The final regulations also provide a transition rule, which provides that, for payments made pursuant to contractual obligations entered into before January 1, 2011, a PSE that is a U.S. payor is not required to report payments made to a participating payee with a foreign address as long as the U.S. payor neither knows nor has reason to know that the payee is a U.S. person. For this purpose, a renewal of such a contractual obligation will not result in a new contractual obligation unless there is a material modification of the contractual obligation.
Notice 2011-71 states that the Treasury Department and the IRS intend to amend the regulations under section 6050W to provide that a PSE that is a U.S. payor will only be required to make the return of information required under § 1.6050W-1(a)(1) with respect to a payment made outside the United States to an offshore account if any of the following applies: (i) there is a U.S. address associated with the participating payee (whether a residence address or correspondence address); (ii) the PSE has standing instructions to direct the payment to a bank account maintained in the United States; (iii) the participating payee submits for payment in U.S. dollars; or (iv) the PSE knows or has reason to know that the participating payee is a U.S. person.
The Treasury Department and the IRS have received a comment expressing uncertainty about the circumstances under which a payment is considered made outside the United States to an offshore account for purposes of section 6050W. In response, the Treasury Department and the IRS intend to amend the regulations under section 6050W to provide an alternative method for a PSE to determine whether it must make the return of information required under § 1.6050W-1(a)(1). The alternative method will apply only to a PSE that: (i) is a U.S. payor; (ii) makes a payment to an account maintained outside the United States by the PSE or, if the PSE does not maintain an account of the participating payee, makes a payment to an account maintained outside the United States by another financial institution (in either case without regard to whether the payment is made outside the United States); and (iii) has reasonably determined, based on all the information obtained or reviewed in connection with the establishment or maintenance of the contractual relationship with the participating payee (including information required to be obtained or reviewed under procedures required to be established under and compliant with 31 CFR § 103.121(b)), that the participating payee is doing business outside the United States. In such case, the PSE will only be required to make the return of information required under § 1.6050W-1(a)(1) if any of the following applies: (i) there is a U.S. address associated with the participating payee (whether a residence address or correspondence address); (ii) the PSE has standing instructions to direct the payment to a bank account maintained in the United States; (iii) the participating payee submits for payment in U.S. dollars; or (iv) the PSE knows or has reason to know that the participating payee is a U.S. person. Notwithstanding the preceding sentence, a PSE will not be required to make the return of information required under § 1.6050W-1(a)(1) if the PSE obtains from the participating payee a valid Form W-8 or documentary evidence establishing the payee’s non-U.S. status and the PSE does not know that the payee is a U.S. person. For purposes of section 6050W, an account is maintained outside the United States if it is maintained at an office or branch of a financial institution at any location outside the United States and outside the territories of the United States.
The principal author of this notice is Danielle Nishida of the Office of Associate Chief Counsel (International). For further information regarding this notice, please contact Ms. Nishida at (202) 622-5399 (not a toll-free call).
.01 Unearned Income of Minor Children Taxed as if Parent’s Income (“Kiddie Tax”) 1(g)
.02 Rehabilitation Expenditures Treated as Separate New Building 42(e)
.03 Low-Income Housing Credit 42(h)
.04 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie Tax” 59(j)
.05 Transportation Mainline Pipeline Construction Industry Optional Expense Substantiation Rules for Payments to Employees under Accountable Plans 62(c)
.06 Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expenses 135
.07 Private Activity Bonds Volume Cap 146(d)
.08 Loan Limits on Agricultural Bonds 147(c)(2)
.09 General Arbitrage Rebate Rules 148(f)
.10 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts or Investments Purchased for a Yield Restricted Defeasance Escrow 148
.11 Eligible Long-Term Care Premiums 213(d)(10)
.12 Medical Savings Accounts 220
.13 Treatment of Dues Paid to Agricultural or Horticultural Organizations 512(d)
.14 Insubstantial Benefit Limitations for Contributions Associated With Charitable Fund-Raising Campaigns 513(h)
.15 Expatriation to Avoid Tax 877
.16 Tax Responsibilities of Expatriation 877A
.17 Foreign Earned Income Exclusion 911
.18 Valuation of Qualified Real Property in Decedent’s Gross Estate 2032A
.19 Annual Exclusion for Gifts 2503; 2523
.20 Tax on Arrow Shafts 4161
.21 Passenger Air Transportation Excise Tax 4261
.22 Reporting Exception for Certain Exempt Organizations with Nondeductible Lobbying Expenditures 6033(e)(3)
.23 Notice of Large Gifts Received from Foreign Persons 6039F
.24 Persons Against Whom a Federal Tax Lien Is Not Valid 6323
.25 Property Exempt from Levy 6334
.26 Interest on a Certain Portion of the Estate Tax Payable in Installments 6601(j)
.27 Attorney Fee Awards 7430
.28 Periodic Payments Received under Qualified Long-Term Care Insurance Contracts or under Certain Life Insurance Contracts 7702B(d)
.01 Unearned Income of Minor Children Taxed as if Parent’s Income (the “Kiddie Tax”). For taxable years beginning in 2013, the amount in § 1(g)(4)(A)(ii)(I), which is used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,000. This $1,000 amount is the same as the amount provided in § 63(c)(5)(A), as adjusted for inflation. The same $1,000 amount is used for purposes of § 1(g)(7) (that is, to determine whether a parent may elect to include a child’s gross income in the parent’s gross income and to calculate the “kiddie tax”). For example, one of the requirements for the parental election is that a child’s gross income is more than the amount referenced in § 1(g)(4)(A)(ii)(I) but less than 10 times that amount; thus, a child’s gross income for 2013 must be more than $1,000 but less than $10,000.
.04 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie Tax.” For taxable years beginning in 2013, for a child to whom the § 1(g) “kiddie tax” applies, the exemption amount under §§ 55 and 59(j) for purposes of the alternative minimum tax under § 55 may not exceed the sum of (1) the child’s earned income for the taxable year, plus (2) $7,150.
.10 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts or Investments Purchased for a Yield Restricted Defeasance Escrow. For calendar year 2013, under § 1.148-5(e)(2)(iii)(B)(1), a broker’s commission or similar fee for the acquisition of a guaranteed investment contract or investments purchased for a yield restricted defeasance escrow is reasonable if (1) the amount of the fee that the issuer treats as a qualified administrative cost does not exceed the lesser of (A) $37,000, and (B) 0.2 percent of the computational base (as defined in § 1.148-5(e)(2)(iii)(B)(2)) or, if more, $4,000; and (2) the issuer does not treat more than $106,000 in brokers’ commissions or similar fees as qualified administrative costs for all guaranteed investment contracts and investments for yield restricted defeasance escrows purchased with gross proceeds of the issue.
.11 Eligible Long-Term Care Premiums. For taxable years beginning in 2013, the limitations under § 213(d)(10), regarding eligible long-term care premiums includible in the term “medical care,” are as follows:
(1) Self-only coverage. For taxable years beginning in 2013, the term “high deductible health plan” as defined in § 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,150 and not more than $3,200, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,300.
(2) Family coverage. For taxable years beginning in 2013, the term “high deductible health plan” means, for family coverage, a health plan that has an annual deductible that is not less than $4,300 and not more than $6,450, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $7,850.
(1) Low cost article. For taxable years beginning in 2013, for purposes of defining the term “unrelated trade or business” for certain exempt organizations under § 513(h)(2), “low cost articles” are articles costing $10.20 or less.
.15 Expatriation to Avoid Tax. For calendar year 2013, an individual with “average annual net income tax” of more than $155,000 for the five taxable years ending before the date of the loss of United States citizenship under § 877(a)(2)(A) is a covered expatriate for purposes of § 877A(g)(1).
.18 Valuation of Qualified Real Property in Decedent’s Gross Estate. For an estate of a decedent dying in calendar year 2013, if the executor elects to use the special use valuation method under § 2032A for qualified real property, the aggregate decrease in the value of qualified real property resulting from electing to use § 2032A for purposes of the estate tax cannot exceed $1,070,000.
.24 Persons Against Whom a Federal Tax Lien Is Not Valid. For calendar year 2013, a federal tax lien is not valid against (1) certain purchasers under § 6323(b)(4) who purchased personal property in a casual sale for less than $1,470, or (2) a mechanic’s lienor under § 6323(b)(7) who repaired or improved certain residential property if the contract price with the owner is not more than $7,350.
.26 Interest on a Certain Portion of the Estate Tax Payable in Installments. For an estate of a decedent dying in calendar year 2013, the dollar amount used to determine the “2-percent portion” (for purposes of calculating interest under § 6601(j)) of the estate tax extended as provided in § 6166 is $1,430,000.
.02 Calendar Year Rule. This revenue procedure applies to transactions or events occurring in calendar year 2013 for purposes of sections 3.02 (rehabilitation expenditures treated as separate new building), 3.03 (low-income housing credit), 3.05 (transportation mainline pipeline construction industry optional expense substantiation rules for payments to employees under accountable plans), 3.07 (private activity bonds volume cap), 3.08 (loan limits on agricultural bonds), 3.09 (general arbitrage rebate rules), 3.10 (safe harbor rules for broker commissions on guaranteed investment contracts or investments purchased for a yield restricted defeasance escrow), 3.15 (expatriation to avoid tax), 3.18 (valuation of qualified real property in decedent’s gross estate), 3.19 (annual exclusion for gifts), 3.20 (tax on arrow shafts), 3.21 (passenger air transportation excise tax), 3.24 (persons against whom a federal tax lien is not valid), 3.25 (property exempt from levy), 3.26 (interest on a certain portion of the estate tax payable in installments), 3.27 (attorney fee awards), and 3.28 (periodic payments received under qualified long-term care insurance contracts or under certain life insurance contracts).
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 November 5, 2012, 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.
American Lithuanian Childcare Association Chicago IL
Angel Wings Foundation Orem UT
Concord International High School, Inc. Los Angeles CA
Contra Costa Amateur Cheerleading Association, Inc. Concord CA
Golden Rain Foundation of Laguna Woods Laguna Woods CA
Grandma’s Child Care Cassopolis MI
Holy Cross Canoga Park Canoga Park CA
Innovation Treatment Centers, Inc. Rialto CA
Pacific Epilepsy Society Puunene HI
Play 4 Life, Inc. New York NY
Scruggs & Associates Family Counseling Center, Inc. Stafford TX
Social and Economic Rights Action Center Gaithersburg MD
Social and Economic Rights Action Center Washington DC
The Retired Enlisted Association Incorporated Auxiliary #47 Fayetteville NC
Treasures for the Kingdom Allen TX
World Health and Education Foundation Danville CA
Bulletins 2012-27 through 2012-45
2012-37 2012-45 I.R.B. 2012-45
2012-2 2012-45 I.R.B. 2012-45
2012-41 2012-45 I.R.B. 2012-45
2012-30 2012-45 I.R.B. 2012-45