Part III. — Internal Revenue Bulletin 1996-31

Any Form 8849 requesting a refund of insurance premium excise tax should be submitted to the following address:

DRAFTING INFORMATION

The principal author of this notice is Ed Williams of the Office of the Associate Chief Counsel (International). For further information regarding this notice, call Mr. Williams at (202) 874–1490 (not a toll-free number).

Weighted Average Interest Rate Update

Notice 96–38

Notice 88–73 provides guidelines for determining the weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability for the purpose of the full funding limitation of § 412(c)(7) of the Internal Revenue Code as amended by the Omnibus Budget Reconciliation Act of 1987 and as further amended by the Uruguay Round Agreements Act, Pub. L. 103–465 (GATT).

The average yield on the 30-year Treasury Constant Maturities for June 1996 is 7.06 percent. The following rates were determined for the plan years beginning in the month shown below.

Instructions for Filing Claims for Refund of Insurance Premium Excise Tax Based on the U.S. Supreme Court’s Opinion in United States v. IBM

Notice 96–37

PURPOSE

This notice provides instructions for filing claims for refund of insurance premium excise tax imposed by section 4371 of the Internal Revenue Code based on the Supreme Court’s opinion in United States v. International Business Machines Corp., 64 U.S.L.W. 4419 (June 10, 1996).

BACKGROUND

Section 4371(1) of the Code imposes a tax on each policy of insurance or reinsurance issued by any foreign insurer or reinsurer with respect to casualty insurance that is issued to or for, or in the name of, an insured as defined in section 4372(d) of the Code. The rate of tax is 4 percent of the premium paid on the policy.

In U.S. v. IBM, the Supreme Court held that the tax imposed by section 4371(1) of the Internal Revenue Code of 1986 may not be applied to premiums paid with respect to insurance covering risks associated with goods actually in export transit from the U.S. The Supreme Court’s decision was based on the Export Clause of the U.S. Constitution, Art. I, sec. 9, cl. 5.

PROCEDURE FOR CLAIMING REFUND OF INSURANCE PREMIUM EXCISE TAX

Any taxpayer requesting a refund of insurance premium excise tax based on the U.S. v. IBM opinion must file a Form 8849, Claim for Refund of Excise Taxes. Refunds relating to insurance premium excise tax based on the U.S. v. IBM opinion may not be claimed as a credit against any other tax liability, and this notice provides the only procedure for claiming a refund.

In addition to the information required by the Form 8849, a claim for refund must be accompanied by documentation establishing that the tax for which a refund is claimed was paid with respect to insurance covering only goods actually in export transit from the U.S. In the case of a policy covering risks in addition to goods in export transit, the claim for refund must be accompanied by documentation establishing the portion of the insurance excise tax attributable to premiums paid only for insuring goods in actual export transit from the U.S.

The following statement should be typed or clearly written at the top of the Form 8849:

CLAIM FOR REFUND OF INSURANCE PREMIUM EXCISE TAX AS A RESULT OF U.S. V. IBM.

Internal Revenue Service Center

P.O. Box 21086 Philadelphia, PA 19114

90% to 108% 90% to 110%

Month Year Weighted Average Permissible Range Permissible Range

July 1996 6.92 6.23 to 7.47 6.23 to 7.61

Month Year Weighted Average

90% to 108% Permissible Range

Drafting Information

The principal author of this notice is Donna Prestia of the Employee Plans Division. For further information regarding this notice, call (202) 622–6076 between 2:30 and 4:00 p.m. Eastern time (not a toll-free number). Ms. Prestia’s number is (202) 622–7377 (also not a toll-free number).