Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 41.—Credit for Increasing Research Activities

A notice describes filing rules for certain claims arising under section 41 of the Code. See Notice 2008-39, page 684.

Section 72.—Annuities; Certain Proceeds of Endowment and Life Insurance Contracts

A revenue procedure supersedes the interim guidance provided in Notice 2003–51, 2003–2 C.B. 361, concerning the treatment under sections 1035 and 72 of the partial exchange of an annuity contract. Specifically, the revenue procedure makes those interim rules final, with clarifications concerning (i) the length of time a taxpayer must wait before withdrawing or annuitizing amounts from either of the contracts that were subject to the exchange, (ii) the status of the transactions in which the same insurance company issued both contracts involved in the exchange, and (iii) the treatment of transactions that fall outside of these rules. See Rev. Proc. 2008-24, page 684.

Section 368.—Definitions Relating to Corporate Reorganizations

A revenue ruling describes a reorganization that qualifies under § 368(a)(1)(F) that involves S corporations and QSubs. See Rev. Rul. 2008-18, page 674.

Section 446.—General Rule for Methods of Accounting

A revenue procedure provides a safe harbor method of accounting for accrual method taxpayers that incur payroll tax liabilities on compensation (including bonuses and vacation pay). It also provides procedures for taxpayers to obtain the automatic consent of the Commissioner of Internal Revenue to change to the safe harbor method of accounting. See Rev. Proc. 2008-25, page 686.

Section 461.—General Rule for Taxable Year of Deduction

A revenue procedure provides a safe harbor method of accounting for accrual method taxpayers that incur payroll tax liabilities on compensation (including bonuses and vacation pay). It also provides procedures for taxpayers to obtain the automatic consent of the Commissioner of Internal Revenue to change to the safe harbor method of accounting. See Rev. Proc. 2008-25, page 686.

Section 481.—Adjustments Required by Changes in Method of Accounting

A revenue procedure provides a safe harbor method of accounting for accrual method taxpayers that incur payroll tax liabilities on compensation (including bonuses and vacation pay). It also provides procedures for taxpayers to obtain the automatic consent of the Commissioner of Internal Revenue to change to the safe harbor method of accounting. See Rev. Proc. 2008-25, page 686.

Section 807.—Rules for Certain Reserves

Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2007 and 2008. Rev. Rul. 92–19 supplemented in part.

Rev. Rul. 2008–19

For purposes of § 807(d)(4) of the Internal Revenue Code, for taxable years beginning after December 31, 2006, this ruling supplements the schedules of prevailing state assumed interest rates set forth in Rev. Rul. 92–19, 1992–1 C.B. 227. This information is to be used by insurance companies in computing their reserves for (1) life insurance and supplementary total

and permanent disability benefits, (2) individual annuities and pure endowments, and (3) group annuities and pure endowments. As § 807(d)(2)(B) requires that the interest rate used to compute these reserves be the greater of (1) the applicable federal interest rate, or (2) the prevailing state assumed interest rate, the table of applicable federal interest rates in Rev. Rul. 92–19 is also supplemented.

Following are supplements to schedules A, B, C, and D to Part III of Rev. Rul. 92–19, providing prevailing state assumed interest rates for insurance products with different features issued in 2007 and 2008, and a supplement to the table in Part IV of Rev. Rul. 92–19, providing the applicable federal interest rates under § 807(d) for 2007 and 2008. This ruling does not supplement Parts I and II of Rev. Rul. 92–19.

This is the sixteenth supplement to the interest rates provided in Rev. Rul. 92–19. Earlier supplements were published in Rev. Rul. 93–58, 1993–2 C.B. 241 (interest rates for insurance products issued in 1992 and 1993); Rev. Rul. 94–11, 1994–1 C.B. 196 (1993 and 1994); Rev. Rul. 95–4, 1995–1 C.B. 141 (1994 and 1995); Rev. Rul. 96–2, 1996–1 C.B. 141 (1995 and 1996); Rev. Rul. 97–2, 1997–1 C.B. 134 (1996 and 1997); Rev. Rul. 98–2, 1998–1 C.B. 259 (1997 and 1998); Rev. Rul. 99–10, 1999–1 C.B. 671 (1998 and 1999); Rev. Rul. 2000–17, 2000–1 C.B. 842 (1999 and 2000); Rev. Rul. 2001–11, 2001–1 C.B. 780 (2000 and 2001); Rev. Rul. 2002–12, 2002–1 C.B. 624 (2001 and 2002); Rev. Rul. 2003–24, 2003–1 C.B. 557 (2002 and 2003); Rev. Rul. 2004–14, 2004–1 C.B. 511 (2003 and 2004); Rev. Rul. 2005–29, 2005–1 C.B. 1080 (2004 and 2005); Rev. Rul. 2006–25, 2006–1 C.B. 882 (May 15, 2006) (2005 and 2006); and Rev. Rul. 2007–10, 2007–10 I.R.B. 660 (Mar. 5, 2007) (2006 and 2007).

2008–13 I.R.B. 669 March 31, 2008