Bulletin No. 2008-15 April 14, 2008

or trust, to satisfy the requirements of section 817(h). The regulations also remove the sentence in regulations section 1.817–5(a)(2) that provides that the payment required to remedy an inadvertent diversification failure must be based on the tax that would have been owed by the policyholders if they were treated as receiving the income on the contract.

Notice 2008–41, page 742. This notice clarifies, amends, supplements, and supersedes Notice 2008–27, 2008–10 I.R.B. 543, which modified certain special reissuance standards for “qualified tender bonds” under IRS Notice 88–130, 1988–2 C.B. 543, and modified certain aspects of the application of regulations section 1.1001–3 as they apply to tax-exempt bonds. This notice retains the basic rule framework outlined in Notice 2008–27 except that it makes certain technical changes and extends, temporarily, the period of time, from 90 days to 180 days, during which an issuer may hold qualified tender bonds prior to their remarketing without causing such bonds to be treated as retired. This notice also introduces a temporary rule which allows a governmental issuer to purchase and hold its own tax-exempt auction rate bonds for 180 days without causing a retirement or extinguishment of the debt represented by the purchased tax-exempt bonds. Notice 2008–27 clarified, amended, supplemented, and superseded.

Notice 2008–42, page 747. This notice provides that a modification of a life insurance split-dollar arrangement that does not include any change to the life insurance contract underlying the arrangement will not be treated as a material change in the life insurance contract underlying the arrangement.

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