Part III. — Internal Revenue Bulletin 2005-47

Weighted Average Interest Rate Update

Notice 2005–72

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. In addition, it provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II), and the weighted average interest rate and permissible ranges of interest rates based on the 30-year Treasury securities rate.

CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004, provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 or 2005 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004–34, 2004–1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate

Corporate

and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices.

The composite corporate bond rate for October 2005 is 5.68 percent. Pursuant to Notice 2004–34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

For Plan Years Bond 90% to 110%

Beginning in: Weighted Permissible Month Year Average Range

November 2005 5.79 5.21 to 5.79

imum amount of the deduction allowed under § 404(a)(1).

The rate of interest on 30-year Treasury securities for October 2005 is 4.68 percent. Pursuant to Notice 2002–26, 2002–1 C.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.

The following 30-year Treasury rates were determined for the plan years beginning in the month shown below.

30-YEAR TREASURY SECURITIES WEIGHTED AVERAGE INTEREST RATE

Section 417(e)(3)(A)(ii)(II) 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 month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

Section 404(a)(1) of the Code, as amended by the Pension Funding Equity Act of 2004, permits an employer to elect to disregard subclause (II) of § 412(b)(5)(B)(ii) to determine the max

30-Year

For Plan Years Treasury 90% to 105% 90% to 110%

Beginning in: Weighted Permissible Permissible Month Year Average Range Range

November 2005 4.88 4.39 to 5.12 4.39 to 5.37

1–202–283–9703. Mr. Montanaro may be reached at 1–202–283–9714. The telephone numbers in the preceding sentences are not toll-free.

Drafting Information

The principal authors of this notice are Paul Stern and Tony Montanaro 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. Stern may be reached at

2005–47 I.R.B. 976 November 21, 2005

Katrina — Supplemental Government Acts Notice

Notice 2005–81

PURPOSE

This notice supplements Notice 2005–66, 2005–40 I.R.B. 620 (October 3, 2005), which postponed until January 3, 2006, deadlines for the Internal Revenue Service (IRS) to perform certain acts under section 7508A with respect to certain taxpayers affected by Hurricane Katrina. This Notice (1) expands the definition of “covered disaster area” to include additional counties and parishes that the Federal Emergency Management Agency (FEMA) determined were eligible for federal assistance after the IRS issued Notice 2005–66; (2) extends the deadlines for the IRS to perform certain acts to February 28, 2006, to match the deadlines for affected taxpayers to file, pay, and perform certain acts; (3) expands the definition of affected taxpayer to match the definition of affected taxpayers in Notice 2005–73, 2005–42 I.R.B. 723 (October 17, 2005); and (4) grants the IRS a postponement of time to perform an act not previously identified in Notice 2005–66 - issuing a Notice of Final Partnership Administrative Adjustment (FPAA) under section 6223.

ADDENDA TO NOTICE 2005–66

Covered disaster area

Notice 2005–66 specifically identified those counties and parishes FEMA had designated at that time as eligible for Public Assistance or Public Assistance and Individual Assistance as constituting a “covered disaster area” within the meaning of Treas. Reg. § 301.7508A–1(d)(2). After the IRS issued Notice 2005–66, FEMA designated eight additional counties in Florida, 16 additional counties in Alabama, and 30 additional counties in Mississippi as eligible for Public Assistance or Public Assistance and Individual Assistance. All counties and parishes so designated by FEMA constitute a “covered disaster area” within the meaning of section 301.7508A–1(d)(2). See Appendix to Notice 2005–73 (complete list of counties and parishes designated by FEMA). The postponement of time for the IRS to perform the acts listed in Notice 2005–66,

otherwise due on or after September 6, 2005, and on or before February 28, 2006, applies to all the counties and parishes listed in the Appendix to Notice 2005–73, and to counties and parishes that FEMA later designates as eligible for Individual Assistance and/or Public Assistance as a result of the devastation caused by Hurricane Katrina.

Extension of the postponement period

By news releases issued on August 30, 2005, September 2, 2005, September 8, 2005, and September 14, 2005, the IRS granted affected taxpayers until January 3, 2006, to file certain returns, to pay certain taxes, and to perform certain time-sensitive acts listed in section 301.7508A–1(c)(1) and Rev. Proc. 2005–27, 2005–20 I.R.B. 1050. See IR–2005–84; IR–2005–91; IR–2005–96; IR–2005–103. Notice 2005–73 and News Release IR–2005–109 summarize the relief granted and the definitions of affected taxpayers and covered disaster area.

On September 23, 2005, the President signed the Katrina Emergency Tax Relief Act of 2005, Pub. L. 109–73 (KETRA). Section 403(b) of KETRA provides that in the case of any taxpayer determined by the Secretary of the Treasury to be affected by the Presidentially declared disaster relating to Hurricane Katrina, any relief provided under section 7508A should be for a period ending not earlier than February 28, 2006. By News Release IR–2005–112 of September 28, 2005, the IRS informed affected taxpayers of the postponement of time to February 28, 2006, to file returns, pay taxes, and perform other time-sensitive acts under the tax laws. In consideration of the additional time Congress granted affected taxpayers to file, pay, and perform certain acts, this notice supplements Notice 2005–66 by extending the period for the IRS to perform certain acts otherwise due on or after September 6, 2005, and on or before February 28, 2006, to February 28, 2006.

Affected taxpayers

Under section 301.7508A–1(d)(1)(vii), the IRS may determine that any other person is affected by a Presidentially-declared disaster and therefore eligible for relief. Accordingly, the IRS has determined that the following persons are also affected by

Hurricane Katrina and its aftermath: (1) all workers assisting in the relief activities in the covered disaster area, regardless of whether they are affiliated with recognized government or philanthropic organizations; (2) any individual whose principal residence, and any business entity whose principal place of business, is not located in the covered disaster area, but whose tax professional/practitioner’s office is located in the covered disaster area; and (3) individuals, visiting the covered disaster areas, who were killed or injured as a result of Hurricane Katrina and its aftermath. For purposes of (3) above, the estate of an individual visiting the covered disaster who was killed as a result of the hurricane is also considered to be an affected taxpayer. See Notice 2005–73. Thus, this notice supplements Notice 2005–66 by extending the period for the IRS to perform certain acts related to affected taxpayers as defined in Notice 2005–73 otherwise due on or after September 6, 2005, and on or before February 28, 2006, to February 28, 2006.

Time for Issuing Notice of Final Partnership Administrative Adjustment

In addition to the acts listed in Notice 2005–66, for affected taxpayers described in Notice 2005–66 (including taxpayers whose documents maintained by the IRS within the covered disaster area may have been lost or destroyed as a result of Hurricane Katrina, or remain in buildings that are inaccessible) and this notice, a postponement until February 28, 2006, is provided under section 7508A for the IRS to issue an FPAA to the Tax Matters Partner under section 6223 with respect to the tax attributable to the partnership items of partners of any partnership that is an affected taxpayer if the last date for issuance of the FPAA is on or after November 7, 2005, and on or before February 28, 2006.

DRAFTING INFORMATION

The principal author of this notice is Dillon Taylor of the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this notice, you may call (202) 622–4940 (not a toll-free call).

November 21, 2005 977 2005–47 I.R.B.

Rita — Government Act Notice

Notice 2005–82

PURPOSE

This notice under section 7508A postpones the deadlines for certain acts performed by the Internal Revenue Service (IRS) with respect to certain taxpayers affected by Hurricane Rita. In response to Hurricane Rita, the President issued disaster declarations on September 23, 2005, covering Texas and Louisiana. The Presidential declarations authorized, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121–5206 (Stafford Act), the Federal Emergency Management Agency (FEMA) to provide Individual Assistance, Public Assistance, and assistance under the Hazard Mitigation Grant Program to counties and parishes in each state. Under that authority, FEMA determined that certain counties and parishes within those states were eligible for both Individual Assistance and Public Assistance, that all counties in Texas and all parishes in Louisiana were eligible for Public Assistance, and that all counties and parishes could apply for assistance under the Hazard Mitigation Grant Program.

By News Release IR–2005–110 of September 26, 2005, the IRS granted relief for taxpayers affected by Hurricane Rita. News Release IR–2005–110 provided that all counties and parishes in Texas and Louisiana constitute a “covered disaster area” within the meaning of § 301.7508A–1(d)(2), of the Procedure & Administration Regulations. Further, News Release IR–2005–110 provided that taxpayers affected by the disaster will have until February 28, 2006, to file tax returns and submit payments. In addition, News Release IR–2005–110 provided affected taxpayers until February 28, 2006, to perform the acts listed in section 301.7508A–1(c)(1) and Rev. Proc. 2005–27, 2005–20 I.R.B. 1050 (May 16, 2005).

BACKGROUND

Section 7508A provides the Secretary with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer affected by

a Presidentially declared disaster as defined in section 1033(h)(3). Pursuant to section 7508A(a), a period of up to one year may be disregarded in determining whether the performance of certain acts by affected taxpayers is timely under the internal revenue laws. Section 7508A(a)(1) includes the acts listed in section 7508(a) as those that may be postponed. See also § 301.7508A–1(c)(1). Section 7508(a) and § 301.7508A–1(c)(1) include a number of acts performed by taxpayers for which section 7508A relief may apply. These include, but are not limited to: the filing of certain tax returns; the payment of certain taxes; the filing of a Tax Court petition; the filing of a claim for credit or refund of tax; and the bringing of a lawsuit upon a claim for credit or refund of tax.

Section 301.7508A–1(d)(1) describes several types of “affected taxpayers” eligible for certain postponements of up to one year. These affected taxpayers include any individual whose principal residence, and any business entity whose principal place of business, is located in the covered disaster area; any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in the covered disaster area; any individual whose principal residence, and any business entity whose principal place of business, is not located in the covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in the covered disaster area; any estate or trust that has tax records necessary to meet a filing or payment deadline in the covered disaster area; and any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.

Additionally, under section 301.7508A–1(d)(1)(vii), the IRS may determine that any other person is affected by a Presidentially declared disaster and is therefore eligible for relief. Accordingly, as stated in News Release IR–2005–110, the IRS has determined that the following persons are also affected by Hurricane Rita and its aftermath: (1) all workers assisting in the relief activities in the covered disaster area, regardless of whether they are affiliated with recognized government or philanthropic organizations; (2) any individual whose principal residence, and any business entity whose principal place of business,

is not located in the covered disaster area, but whose tax professional/practitioner’s office is located in the covered disaster area; and (3) individuals, visiting the covered disaster area, who were killed or injured as a result of Hurricane Rita and its aftermath. For purposes of (3) above, the estate of an individual visiting the covered disaster area who was killed as a result of the hurricane is also considered to be an affected taxpayer. See IR–2005–110.

ACTS PERFORMED BY THE GOVERNMENT

In News Release IR–2005–110, the IRS granted affected taxpayers additional time until February 28, 2006, to file tax returns, to submit payments, and to perform certain time-sensitive acts listed in section 301.7508A–1(c)(1) and in Rev. Proc. 2005–27. In consideration of the additional time that affected taxpayers have been granted to perform certain acts, this notice extends the period for the government to take certain actions. Under the authority of section 7508A(a)(1) and section 301.7508A–1(c)(2), for affected taxpayers covered by News Release IR–2005–110, this notice provides a postponement until February 28, 2006, under section 7508A for the following government acts if the last date for performance of the act is on or after November 7, 2005, and on or before February 28, 2006: making an assessment of any tax; issuing a statutory notice of deficiency; allowing a credit or refund of any tax; collecting by the Secretary, by levy or otherwise, the amount of any liability in respect of any tax; bringing suit by the United States, or any officer on its behalf, in respect of any tax liability; returning property under section 6343; discharging an executor from personal liability for a decedent’s taxes under section 6905; and issuing a notice of Final Partnership Administrative Adjustment (FPAA) to the Tax Matters Partner under section 6223 with respect to the tax attributable to the partnership items of partners of any partnership subject to TEFRA proceedings that is an affected taxpayer.

Documents maintained by the IRS within the covered disaster area may have been lost or destroyed as a result of Hurricane Rita, or remain in buildings that are inaccessible. The destruction, loss or inaccessibility of these documents will

2005–47 I.R.B. 978 November 21, 2005

defined under this paragraph, of the government act or acts that will be postponed.

DRAFTING INFORMATION

materially interfere with the IRS’s ability to timely administer the internal revenue laws with respect to certain taxpayers. The taxpayers to whom these records relate are “affected taxpayers” for the limited purposes set forth in this paragraph. In these cases, a postponement until February 28, 2006, is provided under section 7508A for the following government acts if the last date for performance of the act is on or after November 7, 2005, and on or before February 28, 2006: making an assessment of any tax; issuing a statutory notice of deficiency; allowing a credit or refund of any

tax; collecting by the Secretary, by levy or otherwise, the amount of any liability in respect of any tax; bringing suit by the United States, or any office on its behalf, in respect of any tax liability; returning property under section 6343; the discharge of an executor from personal liability for a decedent’s taxes under section 6905, and issuing an FPAA under section 6223 as described above. The disregarding of time under section 7508A results in a deadline of February 28, 2006, not in a suspension of a period. The IRS will notify as soon as practicable any affected taxpayers, as

26 CFR 601.602: Tax forms and instructions. (Also Part I, §§ 1, 23, 24, 25A, 32, 42, 59, 62, 63, 68, 132, 135, 137, 146, 148, 151, 170, 179, 213, 220, 221, 223, 512, 513, 685, 877, 2032A, 2503, 2523, 4161, 4261, 6033, 6039F, 6323, 6334, 6601, 7430, 7702B; 1.148–5.)

Rev. Proc. 2005–70

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