Part III. Administrative, Procedural, and Miscellaneous

month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

The rate of interest on 30-year Treasury Securities for October 2002 is 4.93 percent. Pursuant to Notice 2002–26, 2002–15 I.R.B. 743, the Service has determined this rate as the monthly average of the daily determination of yield on the 30-year Treasury bond maturing in February 2031.

Section 405 of the Job Creation and Worker Assistance Act of 2002 amended § 412(l)(7)(C) of the Code to provide that for plan years beginning in 2002 and 2003 the permissible range is extended to 120 percent.

The following rates were determined for the plan years beginning in the month shown below.

Weighted Average Interest Rate Update

Notice 2002–74

Sections 412(b)(5)(B) and 412(l)(7)(C)(i) of the Internal Revenue Code provide that the interest rates used to calculate current liability for purposes of determining the full funding limitation under § 412(c)(7) and the required contribution under § 412(l) must be within a permissible range around the weighted average of the rates of interest on 30-year Treasury securities during the fouryear period ending on the last day before the beginning of the plan year.

Notice 88–73, 1988–2 C.B. 383, provides guidelines for determining the

Month Year

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 Code.

Section 417(e)(3)(A)(ii)(II) of the Code defines the applicable interest rate, which must be used for purposes of determining the minimum present value of a participant’s benefit under § 417(e)(1) and (2), as the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. Section 1.417(e)–1(d)(3) of the Income Tax Regulations provides that the applicable interest rate for a month is the annual interest rate on 30-year Treasury securities as specified by the Commissioner for that

Weighted

Average

90% to 120% Permissible

Range

90% to 110% Permissible

Range

November 2002 5.58 5.02 to 6.14 5.02 to 6.70

Drafting Information

The principal author of this notice is Todd Newman of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans’ taxpayer assistance telephone service at 1–877–829–5500 (a toll-free number), between the hours of 8:00 a.m. and 6:30 p.m. Eastern time, Monday through Friday. Mr. Newman may be reached at 1–202–283– 9888 (not a toll-free number).

Changes in Accounting Periods

Notice 2002–75

This notice provides a proposed revenue procedure that, when finalized, will provide the exclusive procedures under § 442 of the Internal Revenue Code and the

regulations thereunder for individuals filing federal income tax returns on a fiscal year basis to obtain automatic approval of the Commissioner to change their annual accounting periods to a calendar year.

In general, the proposed revenue procedure incorporates several rules that are similar to those of Rev. Proc. 2002–37, 2002–22 I.R.B. 1030, and Rev. Proc. 2002– 38, 2002–22 I.R.B. 1037, which provide procedures for corporations and certain passthrough entities, respectively, to obtain automatic approval to change their annual accounting periods. For example, under the proposed revenue procedure, individuals with a majority interest or a de minimis interest in certain pass-through entities may qualify for automatic approval for their change.

The proposed revenue procedure would modify, amplify, and supersede Rev. Proc. 66–50, 1966–2 C.B. 1260. Rev. Proc. 66–50 provides an administrative procedure whereby certain individuals filing federal income tax returns on a fiscal year basis

may expeditiously obtain approval of a change in their annual accounting periods to a calendar year. The proposed revenue procedure also would modify and supersede Rev. Proc. 81–40, 1981–2 C.B. 604, which modifies Rev. Proc. 66–50 with respect to the time and place for filing applications thereunder.

The Service welcomes comments on the proposed revenue procedure provided in this notice. Comments should be submitted by January 6, 2003, either to:

Internal Revenue Service P.O. Box 7604 Ben Franklin Station Washington, DC 20044

Attn: Associate Chief Counsel (Income Tax & Accounting) CC:ITA, Room 5026

or electronically via:

Notice.Comments@m1.irscounsel.treas.gov (the Service comments e-mail address).

November 25, 2002 884 2002–47 I.R.B.

Rev. Proc. 2003–AA

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