SECTION 7. DRAFTING

INFORMATION

The principal author of this notice is Jaime Park of the Office of Associate Chief

located from this pool. Accordingly, $133 million of credits is available for allocation from this pool in 2008–09.

.03 For the allocation round conducted in 2008–09, the application period begins on March 4, 2008 and ends on March 2, 2009, and any completed application for § 48A certification received by the Service after March 3, 2008, and before March 3, 2009, will be deemed to be submitted by the taxpayer on March 2, 2009. During the application period, an application for § 48A certification and a separate application for DOE certification must be submitted for each qualifying advanced coal project. See section 3.07 for the date by which the application for DOE certification must be submitted to the DOE. For purposes of this notice, an application that is submitted by U.S. mail will be treated as received by the Service on the date of the postmark and an application submitted by a private delivery service will be treated as received by the Service on the date recorded or the date marked in accordance with § 7502(f)(2)(C).

.04 For this allocation round, the Service will consider a project only if the application for § 48A certification for the project is submitted during the application period for this round and the DOE provides the DOE certification and the DOE ranking (if any) for the project before March 2, 2009. .05 If an application for DOE certification does not include all of the information required by section 5.02 of Notice 2007–52 and meet the requirements in sections 7.01 and 7.02 of Notice 2007–52, the DOE may decline to accept the application. If an application for § 48A certification does not include all of the information listed in section 5.03 of Notice 2007–52 and meet the requirements in sections 7.01 and 7.02 of Notice 2007–52, the application will not be accepted by the Service.

.06 An application for § 48A certification must be submitted in the manner provided in section 5.04 of Notice 2007–52.

.07 For this allocation round, the DOE will consider an application for DOE certification only if the application is postmarked on or before October 31, 2008. See section 5.02 of Notice 2007–52 and Appendix B to Notice 2007–52 for the information to be submitted to the DOE in an application for DOE certification. Appendix B to Notice 2007–52 also provides the

instructions and address for filing the application for DOE certification. The DOE will determine the feasibility of the project and, if the project is determined to be feasible, will provide a DOE certification for the project to the Service. If the DOE certifies two or more projects in a pool described in section 3.02 of this notice, the DOE also will rank each of the projects it certifies (for example, first, second, third, etc.) relative to other certified projects in the same pool. The DOE will provide the DOE certification for projects determined to be feasible and the DOE ranking (if any) to the Service by March 1, 2009.

.08 By April 30, 2009, the Service will accept or reject the taxpayer’s application for § 48A certification and will notify the taxpayer, by letter, of its decision.

.09 If the taxpayer’s application for § 48A certification is accepted, the acceptance letter will state the amount of the credit allocated to the project. If a credit is allocated to a taxpayer’s project, the taxpayer will be required to execute a closing agreement in the form set forth in Appendix A to Notice 2007–52. By June 30, 2009, the taxpayer must execute and return the closing agreement to the Service at the appropriate address listed in section 5.04 of Notice 2007–52 or listed in later guidance published in the Internal Revenue Bulletin. The Service will execute and return the closing agreement to the taxpayer by August 31, 2009. The executed closing agreement applies only to the accepted taxpayer.

.10 Section 48A(d)(2)(D) provides that a taxpayer shall have 2 years from the date of acceptance of the § 48A application during which to provide evidence that the criteria set forth in § 48A(e)(2) have been met. To satisfy this requirement, the taxpayer must submit to the Service before the end of the 2-year period both a paper copy and an electronic version on a floppy disc or a CD of the documentation establishing that the requirements of § 48A(e)(2) are satisfied. The electronic version of the documentation must be formatted in one of the following software applications: Microsoft Word ^tm 2002 or later edition; Microsoft Excel ^tm 2002 or later edition; or Adobe Acrobat ^tm PDF 6.0 or later edition. See section 6 of Notice 2007–52 for further information about the issuance of certification.

November 3, 2008 1079 2008–44 I.R.B.

Extension of Effective Date of Normal Retirement Age Regulations for Governmental Plans

Notice 2008–98

I. Purpose

The Service and Treasury intend to extend the date by which a governmental plan must comply with final regulations on distributions from a pension plan upon attainment of normal retirement age, which were published in the Federal Register as T.D. 9325, 2007–24 I.R.B. 1386 [72 FR 28604] on May 22, 2007 (“the 2007 final regulations”). Under the extension, the 2007 final regulations will be effective for a governmental plan (as defined in § 414(d) of the Internal Revenue Code) for plan years beginning on or after January 1, 2011. This notice does not change the effective date of the 2007 final regulations for a plan that is not a governmental plan or modify the relief previously provided in Notice 2007–69, 2007–35 I.R.B. 468.

II. Background

Section 411(a)(8) provides that the term “normal retirement age” means the earlier of (A) the time a plan participant attains normal retirement age under the plan or (B) the later of age 65 or the fifth anniversary of the time a plan participant commenced participation in the plan. A plan’s normal retirement age is relevant for a number of purposes, including for purposes of determining the date at which a participant is eligible to receive his or her normal retirement benefit and calculating the amount of the benefit received.

Prior to being amended by the 2007 final regulations, § 1.401(a)–1(b)(1)(i) of the Income Tax Regulations required a pension plan to be maintained primarily to provide systematically for the payment of definitely determinable benefits after retirement. The 2007 final regulations amended § 1.401(a)–1(b)(1)(i) to provide an exception to the rule that pension benefits be paid only after retirement by permitting a pension plan to commence payment of retirement benefits to a participant after the participant has attained normal retirement age even if the participant has not yet had a severance from

Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Park at (202) 622–3110 (not a toll-free call). For further information regarding the application for § 48A certification, the documentation to be submitted to the Service establishing that the requirements of § 48A(e)(2) are satisfied, and the issuance of the certification that the requirements of § 48A(e)(2) are satisfied, contact Kimberly Edwards, Executive Assistant, Office of the Industry Director, Natural Resources and Construction, at (713) 209–3615 (not a toll-free number).

Qualifying Gasification Project Program

Notice 2008–97

PURPOSE

This notice informs taxpayers that the entire amount of credit available under the qualifying gasification project program of § 48B of the Internal Revenue Code has been allocated in the allocation rounds conducted in 2006 and in 2007–08. Accordingly, no allocation of credits will be conducted in 2008–09 under the qualifying gasification project program. The purpose of the qualifying gasification project program is to consider and award certifications for qualified investment eligible for credits under § 48B to qualifying gasification project sponsors.

This notice does not reflect amendments made by the Energy Improvement and Extension Act of 2008, which expanded and modified the qualifying gasification project credit. The Service intends to issue guidance on these amendments in the near future.

BACKGROUND

Section 46 provides that the amount of the investment credit for any taxable year is the sum of the credits listed in § 46. That list includes the qualifying gasification project credit.

The qualifying gasification project credit is provided under § 48B. Section 48B(a) provides that the qualifying gasification project credit for a taxable year is an amount equal to 20 percent of the qualified

investment (as defined in § 48B(b)) for that taxable year in qualifying gasification projects.

Section 48B(d)(1) provides that the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying gasification project program to consider and award certifications for qualified investment eligible for credits under § 48B to qualifying gasification project sponsors. The Treasury Department and the Internal Revenue Service established this program in Notice 2006–25, 2006–1 C.B. 609, as modified and updated by Notice 2007–53, 2007–26 I.R.B. 1474.

QUALIFYING GASIFICATION PROJECT PROGRAM

Notice 2007–53 provides that the Service will consider a project under the qualifying gasification project program only if the DOE provides a certification and ranking (if any) for the project. Certifications will be issued and credits will be allocated to projects in annual allocation rounds. The initial allocation round was conducted in 2006. An additional allocation round was conducted in 2007–08.

Section 48B(d)(1) provides that the total amounts of credit that may be allocated under the program shall not exceed $350,000,000. In the 2006 allocation round, $349,663,000 of credit was allocated. In the 2007–08 allocation round, $337,000 of credit (the entire amount remaining) was allocated. Accordingly, no allocation round will be conducted in 2008–09 under the qualifying gasification project program.

EFFECT ON OTHER DOCUMENTS

Notice 2007–53 is updated.

DRAFTING INFORMATION

The principal author of this notice is Jaime C. Park of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, contact Jaime C. Park at (202) 622–3110 (not a toll-free call).

2008–44 I.R.B. 1080 November 3, 2008

employment with the employer maintaining the plan.

The 2007 final regulations require a pension plan’s normal retirement age to be an age that is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. The 2007 final regulations provide that a normal retirement age of 62 or later (or age 50 or later, in the case of a plan in which substantially all of the participants are qualified public safety employees (within the meaning of § 72(t)(10)(B))) is deemed to satisfy this requirement, and a normal retirement age lower than 55 is presumed not to satisfy the requirement unless the Commissioner determines otherwise on the basis of facts and circumstances. Whether a normal retirement age that is at least 55 but below 62 satisfies the requirement is based on facts and circumstances.

The 2007 final regulations are generally effective May 22, 2007, with a later effective date for governmental plans and certain collectively bargained plans. For governmental plans, the 2007 final regulations are effective for plan years beginning on or after January 1, 2009.

Notice 2007–69 provided temporary relief for certain plans that may have to change their definition of normal retirement age to satisfy the 2007 final regulations. The relief is available to certain plans that might otherwise be required to be amended to raise the plan’s normal retirement age effective before the first day of the first plan year beginning after June 30, 2008. Because the 2007 final regulations are not effective for governmental plans until 2009, the relief in Notice 2007–69 does not apply to governmental plans.

Notice 2007–69 pointed out that the 2007 final regulations do not contain a safe harbor or other guidance with respect to a normal retirement age conditioned on the completion of a stated number of years of service, stating that a plan under which a participant’s normal retirement age changes to an earlier date upon completion of a stated number of years of service typically will not satisfy the vesting or accrual rules of § 411. The notice asked for comments from sponsors of plans that are not subject to the requirements of § 411, such as governmental plans, on whether such a plan may

define normal retirement age based on years of service. Specifically, comments were requested on whether and how a pension plan with a normal retirement age conditioned on the completion of a stated number of years of service satisfies the requirement in § 1.401(a)–1(b)(1)(i) that a pension plan be maintained primarily to provide for the payment of definitely determinable benefits after retirement or attainment of normal retirement age and how such a plan satisfies the pre-ERISA vesting rules.

III. Extension of Effective Date of 2007 Final Regulations for Governmental Plans

The Service and Treasury intend to amend the 2007 final regulations to change the effective date for governmental plans to plan years beginning on or after January 1, 2011. Governmental plan sponsors may rely on this notice with respect to the extension until such time as the 2007 final regulations are so amended.

DRAFTING INFORMATION

The principal author of this notice is James P. Flannery of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact Mr. Flannery via e-mail at retirementplanquestions@irs.gov.

Application of Section 382 to Loss Corporations Whose Instruments Are Acquired by The Treasury Department Under The Capital Purchase Program Pursuant to The Emergency Economic Stabilization Act of 2008

Notice 2008–100

This notice provides guidance regarding the application of section 382 to loss corporations whose instruments are acquired by the Treasury Department (Treasury) under the Capital Purchase Program (CPP) pursuant to the Emergency Economic Stabilization Act of 2008, P.L. 110–343 (the “Act”).

I. PURPOSE

The Internal Revenue Service (Service) and Treasury intend to issue regulations regarding the application of section 382 with respect to the CPP pursuant to the Act. Pending the issuance of further guidance, taxpayers may rely on the rules set forth in this notice to the extent provided herein.

II. BACKGROUND

Section 382(a) of the Internal Revenue Code (Code) provides that the taxable income of a loss corporation for a year following an ownership change that may be offset by pre-change losses cannot exceed the section 382 limitation for such year. An ownership change occurs with respect to a corporation if it is a loss corporation on a testing date and, immediately after the close of the testing date, the percentage of stock of the corporation owned by one or more 5-percent shareholders has increased by more than 50 percentage points over the lowest percentage of stock of such corporation owned by such shareholders at any time during the testing period. See § 1.382–2T(a)(1) of the Income Tax Regulations.

Section 101(a)(1) of the Act authorizes the Secretary to establish the Troubled Asset Relief Program. Under the CPP, Treasury will acquire preferred stock and warrants from qualifying financial institutions.

Section 101(c)(5) of the Act provides that the Secretary is authorized to issue such regulations and other guidance as may be necessary or appropriate to carry out the purposes of the Act. Section 382(m) of the Code provides that the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of sections 382 and 383.

Except as otherwise provided, any definitions and terms used herein have the same meaning as they do in section 382 of the Code and the regulations thereunder or in the CPP.

III. GUIDANCE REGARDING THE APPLICATION OF SECTION 382 TO LOSS CORPORATIONS WHOSE INSTRUMENTS ARE ACQUIRED BY TREASURY PURSUANT TO THE CPP

The Service and Treasury intend to issue regulations that set forth rules described in this Section III. Taxpayers may

November 3, 2008 1081 2008–44 I.R.B.

rely on the rules described in this Section III to the extent provided below.

RULES:

A. General rule . With respect to any shares of stock of a loss corporation acquired by Treasury pursuant to the CPP (either directly or upon the exercise of an option), the ownership represented by such shares on any date on which they are held by Treasury shall not be considered to have caused Treasury’s ownership in the loss corporation to have increased over its lowest percentage owned on any earlier date. Except as provided in Sections III.B and III.C below, such shares are considered outstanding for purposes of determining the percentage of loss corporation stock owned by other 5-percent shareholders on a testing date.

B. Redemptions of stock owned by Trea- sury . For purposes of measuring shifts in ownership by any 5-percent shareholder on any testing date occurring on or after the date on which the loss corporation redeems shares of its stock held by Treasury that were acquired pursuant to the CPP, the shares so redeemed shall be treated as if they had never been outstanding.

C. Treatment of preferred stock ac- quired by Treasury pursuant to the CPP . For all Federal income tax purposes, any preferred stock of a loss corporation acquired by Treasury pursuant to the CPP, whether owned by Treasury or another person, shall be treated as stock described in section 1504(a)(4) of the Code.

D. Treatment of warrants acquired by Treasury pursuant to the CPP . For all Federal income tax purposes, any warrant to purchase stock of a loss corporation that is acquired by Treasury pursuant to the CPP, whether held by Treasury or another person, shall be treated as an option (and not as stock).

E. Options held by Treasury not deemed exercised . For purposes of § 1.382–4(d), any option (within the meaning of § 1.382–4(d)(9)) held by Treasury that is acquired pursuant to the CPP will not be deemed exercised under § 1.382–4(d)(2).

F. Section 382(l)(1) not applicable with respect to capital contributions made by Treasury to a loss corporation pursuant to the CPP . For purposes of section 382(l)(1) of the Code, any capital contribution made by Treasury to a loss corporation pursuant

to the CPP shall not be considered to have been made as part of a plan a principal purpose of which was to avoid or increase any section 382 limitation.

IV. RELIANCE ON NOTICE

The Service and Treasury intend to issue regulations that set forth rules described in Section III of this notice. Taxpayers may rely on the rules described in Section III for purposes of applying section 382 with respect to loss corporations whose instruments are acquired by Treasury pursuant to the CPP. These rules will continue to apply unless and until there is additional guidance. Any future contrary guidance will not apply to instruments (i) held by Treasury that were acquired pursuant to the CPP prior to the publication of that guidance, or (ii) issued to Treasury pursuant to the CPP under written binding contracts entered into prior to the publication of that guidance.

DRAFTING INFORMATION

The principal author of this notice is Keith E. Stanley of the Office of Associate Chief Counsel (Corporate). For further information regarding this notice, contact Keith E. Stanley at (202) 622–7700 (not a toll-free call).

Clarification of Troubled Asset Relief Program Funds Under Section 597

Notice 2008–101

The purpose of this notice is to provide clarification on the treatment under section 597 of the Internal Revenue Code (Code) of amounts furnished to a financial institution pursuant to the Troubled Asset Relief Program (TARP) of the Emergency Economic Stabilization Act of 2008, Div. A of Pub. Law No. 110–343 (EESA), which was enacted on October 3, 2008.

Unless and until guidance is issued by the Department of the Treasury and the Internal Revenue Service to the contrary, no amount furnished by the Department of the Treasury to a financial institution pursuant to the TARP established by the Secretary under EESA will be treated as the provision of Federal financial assistance within

the meaning of section 597 of the Code and the regulations thereunder. Any future contrary guidance will not apply to transactions with the Department of the Treasury, or to securities issued by financial institutions to the Department of the Treasury, prior to the publication of that guidance, or pursuant to written binding contracts entered into prior to that date.

Except with respect to the treatment of amounts furnished pursuant to TARP as expressly described in this notice, no inference should be drawn from this notice regarding the treatment under section 597 of the Code or the regulations thereunder of any other program or payments.

26 CFR 1.168(k)–1: Additional first year deprecia- tion deduction. (Also: §§ 38, 41, 52, 53, 168, 6401.)

Rev. Proc. 2008–65