Section — Internal Revenue Bulletin 2003-41

(Also sections 42, 280G, 382, 412, 467, 468, 482, 483, 642, 807, 846, 1288, 7520, 7872.)

Federal rates; adjusted federal rates; adjusted federal long-term rate and the

long-term exempt rate. For purposes of sections 382, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2003.

Rev. Rul. 2003–107

This revenue ruling provides various prescribed rates for federal income tax purposes for October 2003 (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

2003-41 I.R.B. 815 October 14, 2003

REV. RUL. 2003–107 TABLE 1

Applicable Federal Rates (AFR) for October 2003

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 1.68% 1.67% 1.67% 1.66%

110% AFR 1.85% 1.84% 1.84% 1.83%

120% AFR 2.01% 2.00% 2.00% 1.99%

130% AFR 2.18% 2.17% 2.16% 2.16%

Mid-Term

AFR 3.65% 3.62% 3.60% 3.59%

110% AFR 4.02% 3.98% 3.96% 3.95%

120% AFR 4.39% 4.34% 4.32% 4.30%

130% AFR 4.77% 4.71% 4.68% 4.66%

150% AFR 5.50% 5.43% 5.39% 5.37%

175% AFR 6.44% 6.34% 6.29% 6.26%

Long-Term

AFR 5.23% 5.16% 5.13% 5.11%

110% AFR 5.76% 5.68% 5.64% 5.61%

120% AFR 6.29% 6.19% 6.14% 6.11%

130% AFR 6.82% 6.71% 6.65% 6.62%

REV. RUL. 2003–107 TABLE 2

Adjusted AFR for October 2003

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjusted AFR

1.36% 1.36% 1.36% 1.36%

Mid-term adjusted AFR 2.98% 2.96% 2.95% 2.94%

Long-term adjusted AFR

4.74% 4.69% 4.66% 4.64%

REV. RUL. 2003–107 TABLE 3

Rates Under Section 382 for October 2003

Adjusted federal long-term rate for the current month 4.74%

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.) 4.74%

October 14, 2003 816 2003-41 I.R.B.

REV. RUL. 2003–107 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for October 2003

Appropriate percentage for the 70% present value low-income housing credit 8.03%

Appropriate percentage for the 30% present value low-income housing credit 3.44%

REV. RUL. 2003–107 TABLE 5

Rate Under Section 7520 for October 2003

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 4.4%

compromise any civil or criminal case arising under the internal revenue laws, prior to the referral of that case to the Department of Justice. Section 7122 also directs the IRS to prescribe guidelines for officers and employees of the IRS to determine whether an offer to compromise is adequate and should be accepted. Guidelines are contained in §301.7122–1. Pursuant to §301.7122–1(b), an offer may be accepted if there is doubt as to liability, if there is doubt as to collectibility, or if acceptance will promote effective tax administration. Pursuant to §301.7122–1(b)(3), offers may be accepted to promote effective tax administration if either: (1) the IRS determines that, although collection in full could be achieved, collection of the full liability would cause the taxpayer economic hardship within the meaning of §301.6343–1, or (2) there are no other grounds for compromise and there are compelling public policy or equity considerations.

When an offer to compromise is received, an initial determination is made as to whether the offer is processable. Currently, an offer is returned as nonprocessable if the taxpayer is in bankruptcy, has not filed required tax returns, or has not submitted the offer to compromise on the proper form. Absent these conditions, the offer is accepted for processing and cannot be rejected without an independent administrative review of the decision to reject and, if the taxpayer chooses to appeal the rejection, independent review by the Office of Appeals. Even though an offer accepted for processing may later be returned to the taxpayer if the taxpayer fails to provide requested information or the IRS determines that the offer was submitted solely to delay collection, such an