Part III. Administrative, Procedural, and Miscellaneous

Transitional Relief for Determining Timeliness of Federal Tax Deposits

Notice 2010–87

PURPOSE

This notice provides transitional relief for determining the timeliness of Federal tax deposits (FTDs) under section 6302 of the Internal Revenue Code (“Code”). The notice provides that the Internal Revenue Service (“Service”) will not assert penalties under Code section 6656 for FTDs due in calendar year 2011 that are untimely solely because the depositor treated a statewide legal holiday as if it were a legal holiday in the District of Columbia.

BACKGROUND

Effective January 1, 2011, the Financial Management Service, a Bureau of the Treasury Department, is eliminating the system that allows FTDs to be made using paper coupons at government depositary banks. On August 23, 2010, the Treasury Department and the Service published a notice of proposed rulemaking (REG–153340–09, 2010–42 I.R.B. 469 (74 FR 51707)), to require electronic funds transfer for all FTDs and to eliminate the rules regarding FTD coupons. Since a taxpayer will no longer be able to make FTDs at a government depositary bank, the proposed regulations removed references to “banking days” and instead determined the timeliness of deposits by reference to “business days,” meaning every calendar day that is not a Saturday, Sunday, or legal holiday under section 7503. These changes were adopted in the final regulations published on December 7, 2010. T.D. 9507. Consistent with section 7503, the term “legal holiday” for FTD purposes includes only those legal holidays in the District of Columbia. Thus, a statewide legal holiday will no longer be considered a legal holiday unless the holiday coincides with a legal holiday in the District of Columbia. See Treas. Reg. §§ 31.6302–1(c)(2)(iii) and (d) Example 5.

TRANSITIONAL RELIEF FOR FEDERAL TAX DEPOSITS DUE IN 2011

Code section 6656 imposes a penalty if a taxpayer does not deposit tax in the correct amount, within the prescribed time period, and/or in the required manner. In order to provide transitional relief, the Service will not assert penalties under section 6656 for FTDs due during calendar year 2011 that are untimely solely because the depositor treated a statewide legal holiday as if it were a legal holiday in the District of Columbia.

DRAFTING INFORMATION

The principal author of this notice is Michael Hara of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, please contact Michael Hara at (202) 622–4910 (not a toll-free call).

Request for Comments Regarding the Excise Tax on Medical Devices

Notice 2010–89

PURPOSE

This notice invites public comments regarding issues that should be addressed in guidance implementing the new excise tax on medical devices imposed by section 4191 of the Internal Revenue Code (Code). Section 4191 was added by section 1405 of the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111–152, 124 Stat. 1029, 1064–1065 (the Act), in conjunction with the Patient Protection and Affordable Care Act, Pub. L. No. 111–148, 124 Stat. 119. The new excise tax applies to sales of taxable medical devices after December 31, 2012.

BACKGROUND

Under Chapter 32 (Manufacturers Excise Taxes) of Subtitle D of the Code, excise taxes are imposed on the sales of certain products by the manufacturer, producer, or importer. The Act amended Chapter 32 to add section 4191, which

imposes an excise tax on the sale of any “taxable medical device” by the manufacturer, producer, or importer of the device in an amount equal to 2.3 percent of the sale price.

Section 4191(b)(1) provides that, in general, a “taxable medical device” is any device, as defined in section 201(h) of the Federal Food, Drug, & Cosmetic Act (FFDCA), that is intended for humans. Section 201(h) of the FFDCA defines “device” as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is (1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them, (2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or (3) intended to affect the structure or any function of the body, and which does not achieve its primary intended purposes through chemical action within or on the body and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

Section 4191(b)(2) provides that the term “taxable medical device” does not include eyeglasses, contact lenses, hearing aids, or “any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.”

Section 4221 exempts certain sales from tax imposed under Chapter 32. The Act amended section 4221 to limit the exemptions for taxable medical device sales to sales by the manufacturer, producer, or importer (1) for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by such second purchaser in further manufacture; or (2) for export, or for resale by the purchaser to a second purchaser for export.

REQUEST FOR COMMENTS

The Internal Revenue Service and Treasury Department request comments on issues that should be addressed in guidance implementing the excise tax on medical devices. Comments are specifically

2010–52 I.R.B. 908 December 27, 2010

5.05 of Rev. Proc. 2007–44 provides the deadline for timely adoption of an interim amendment or discretionary amendment.

Under section 4 of Rev. Proc. 2007–44, the Internal Revenue Service announces its intention to annually publish a Cumulative List to identify statutory, regulatory, and guidance changes that must be taken into account in submissions by plan sponsors to the Service for opinion, advisory, and determination letters whose submission period begins on February 1st following issuance of the Cumulative List.

In Notice 2009–98, 2009–2 C.B. 974, the Service published the 2009 Cumulative List of Changes in Plan Qualification Requirements (2009 Cumulative List). ¹

III. APPLICATION OF 2010 CUMULATIVE LIST

This notice is being issued in conjunction with the determination letter program for individually designed plans eligible for Cycle A and the opinion and advisory letter programs for M&P and VS defined contribution pre-approved plans. In accordance with Rev. Proc. 2007–44, the Service will start accepting determination letter applications for Cycle A individually designed plans beginning on February 1, 2011. The 12-month submission period for Cycle A plans will end January 31, 2012. In addition, the Service will start accepting opinion and advisory letter applications for defined contribution pre-approved plans beginning on February 1, 2011. The 12-month submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end January 31, 2012. The 9-month submission period for mass submitters and national sponsors will end October 31, 2011, as provided in section 18.02(1) of Rev. Proc. 2007–44.

The 2010 Cumulative List, set forth in section IV of this notice, informs plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle A has been properly updated. Specifically, the 2010 Cumulative List reflects law changes under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA),

requested on the exemption in section 4191(b)(2)(D) for any medical device “determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.” In addition, comments are requested on issues pertaining to the application of existing Chapter 32 rules to section 4191. Comments must be submitted by March 28, 2011. Comments, identified by Notice 2010–89 may be sent by one of the following methods:

Internal Revenue Service CC:PA:LPD:PR (Notice 2010–89) Room 5203 P. O. Box 7604 Ben Franklin Station Washington, DC 20044

Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:

Courier’s Desk Internal Revenue Service 1111 Constitution Ave., N.W. Washington, DC 20224 Attn: CC:PA:LPD:PR (Notice 2010–89)

Alternatively, taxpayers may submit comments electronically to Notice.Comments@irscounsel.treas.gov . Please include “Notice 2010–89” in the subject line of any electronic communications.

All submissions will be available for public inspection and copying in room 1621, 1111 Constitution Avenue, NW, Washington, DC, from 9 a.m. to 4 p.m.

DRAFTING INFORMATION

The principal author of this notice is Natalie A. Payne of the Office of Associate Chief Counsel (Passthroughs & Special Industries Division). For further information regarding this notice, please con

tact Ms. Payne or Stephanie Bland at (202) 622–3130 (not a toll-free call).

2010 Cumulative List of Changes in Plan Qualification Requirements

Notice 2010–90

I. PURPOSE

This notice contains the 2010 Cumulative List of Changes in Plan Qualification Requirements (2010 Cumulative List) described in section 4 of Rev. Proc. 2007–44, 2007–2 C.B. 54. The 2010 Cumulative List is to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2011 and ending January 31, 2012. These plans will primarily be (1) single employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), and single employer individually designed defined benefit plans that are in Cycle A and (2) defined contribution pre-approved plans (that is, defined contribution plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle under Rev. Proc. 2007–44. Generally, an individually designed plan is in Cycle A if the last digit of the employer identification number of the plan sponsor is 1 or 6.

The list of changes in section IV of this notice does not extend the deadline by which a plan must be amended to comply with any statutory, regulatory, or guidance changes. The general deadline for timely adoption of an interim or discretionary amendment can be found in section 5.05 of Rev. Proc. 2007–44.

II. BACKGROUND

Rev. Proc. 2007–44 sets forth procedures for issuing opinion, advisory, and determination letters and describes the five-year remedial amendment cycle for individually designed plans and the six-year remedial amendment cycle for pre-approved plans. In addition, section

1 See Notice 2008–108, 2008–2 C.B. 1275; Notice 2007–94, 2007–2 C.B. 1179; Notice 2007–3, 2007–1 C.B. 255; Notice 2005–101, 2005–2 C.B. 1219, for the 2008, 2007, 2006, and 2005 Cumulative Lists, respectively.

December 27, 2010 909 2010–52 I.R.B.

Pub. L. 107–16 (with technical corrections made by the Job Creation and Worker Assistance Act of 2002 (JCWAA), Pub. L. 107–147), the Pension Funding Equity Act of 2004 (PFEA), Pub. L. 108–218, the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109–280, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. 110–28, the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110–245, the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110–458, and the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111–240.

The HEART Act provisions formerly appeared separately from the Cumulative List of Changes in Plan Qualification Requirements section of the 2008 and 2009 Cumulative Lists. The HEART Act provisions are now included in the Cumulative List of Changes in Plan Qualification Requirements (which is section IV of this notice) and are identified as “New.”

Section 201 of WRERA formerly appeared separately from the Cumulative List of Changes in Plan Qualification Requirements section of the 2009 Cumulative List. Section 201 is now included in the Cumulative List of Changes in Plan Qualification Requirements (which is section IV of this notice) and is identified as “New.”

If a plan, submitted between February 1, 2011 and January 31, 2012, is amended to reflect section 201 of WRERA, the Service will consider section 201 in issuing the determination letter, opinion, or advisory letter. If a noncalendar year plan, which does not have to adopt the WRERA section 201 amendment until after January 31, 2012, is submitted between February 1, 2011 and January 31, 2012 without being amended for section 201, then the Service will consider section 201, if applicable, during the next Cycle A or 6-year remedial amendment cycle submission period.

The Service will no longer include hurricane or disaster relief provisions, which formerly appeared in the Cumulative List of Changes in Plan Qualification Requirements. Although no longer listed

in this notice, hurricane and other disaster relief provisions continue to apply, if applicable, to individual plans. For information regarding tax relief provisions for taxpayers affected by disaster relief situations go to http://www.irs.gov/newsroom/ article/0,,id=108362,00.html .

Except as provided below, the Service will not consider in its review of any determination, opinion, or advisory letter application, for the submission period that begins February 1, 2011, any:

(1) guidance issued after October 1, 2010; (2) statutes enacted after October 1, 2010; (3) qualification requirements first effective in 2012 or later; or

(4) statutory provisions that are first effective in 2011, for which there is no guidance identified in this notice. ²

However, in order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2010 Cumulative List.

The 2010 Cumulative List includes the following guidance issued after October 1, 2010:

(item 14 in section IV of this notice). The Service will consider Notice 2010–84 in issuing an opinion, advisory, or determination letter in the case of a plan submitted between February 1, 2011 and January 31, 2012, if the plan has been amended to reflect section 2112 of SBJA, regarding in-plan Roth rollovers.

and § 411(b)(5) (75 Fed. Reg. 64123) (items 20 and 22 in section IV of this notice). The Service will consider the final regulations under § 411(a)(13) and § 411(b)(5) in issuing a determination letter in the case of an applicable defined benefit plan (within the meaning of § 411(a)(13)(C)) submitted between February 1, 2011 and January 31, 2012.

extends the deadline for amending cash balance and other applicable defined benefit plans, within the meaning

of § 411(a)(13)(C), to meet the requirements of § 411(a)(13) (other than § 411(a)(13)(A)) and § 411(b)(5) to the last day of the first plan year that begins on or after January 1, 2011. As provided in Notice 2010–77, the filing of a determination letter application in the Cycle A submission period may accelerate that deadline.

The Service will not consider § 414(x) (item 30 in section IV of this notice) in issuing opinion and advisory letters for pre-approved plans at this time.

With respect to matters addressed by proposed regulations identified in the footnotes of section IV of this notice, the Service’s review of the plan will be based on a reasonable interpretation of the statute, existing final regulations, or other published guidance. For this purpose, compliance with proposed regulations will be treated as meeting that standard. However, a determination, opinion, or advisory letter cannot be relied on with respect to whether the plan complies with the proposed regulations.

Terminating plans must include all law changes in effect at the time of termination. See section 8 of Rev. Proc. 2007–44 regarding plan termination.

IV. 2010 CUMULATIVE LIST OF CHANGES IN PLAN QUALIFICATION REQUIREMENTS

The following list consists of statutory provisions and associated guidance which reflect changes to plan qualification requirements. Miscellaneous guidance is also provided. The Service has identified below plan qualification requirements which were not on the 2009 or earlier Cumulative Lists as “(New).”

All items from the 2004 Cumulative List have been deleted from the 2010 Cumulative List. In addition, items from the 2005 Cumulative List that apply solely to defined benefit plans or ESOPs have been deleted from the 2010 Cumulative List. Thus, the 2010 Cumulative List contains those plan qualification requirements listed in the 2005 Cumulative List that are applicable to defined contribution pre

2 The Service will also not consider the requirements of § 436 or the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, Pub. L. 111–192, in its review of any determination, opinion, or advisory letter application submitted during the period beginning February 1, 2011 and ending January 31, 2012. See Notice 2010–77, 2010–51 I.R.B. 851, which extends the deadline for amending single-employer defined benefit plans to meet the requirements of §§ 401(a)(29) and 436 to the last day of the first plan year that begins on or after January 1, 2011.

2010–52 I.R.B. 910 December 27, 2010

pension of the required minimum distribution rules for 2009 applicable to defined contribution plans. (New).

491, provides guidance relating to the suspension of the required minimum distribution rules for 2009 applicable to defined contribution plans. (New).

5. 401(a)(26) : Section 401(a)(26)(G) of the Code was amended by PPA ’06 § 861(a)(1) with respect to governmental plans. (2008 C. L.).

6. 401(a)(35) : PPA ’06 § 901(a)(1) added § 401(a)(35) requiring that defined contribution plans provide employees with the freedom to divest publicly traded employer securities. (2008 C. L.).

tends certain transitional guidance and transitional relief provided to certain defined contribution plans holding publicly traded employer securities under Notice 2006–107. (2008 C. L.).

inition of one-participant retirement plan under § 401(a)(35)(E)(iv). (2009 C. L.).

extends the deadline to amend for § 401(a)(35) to the last day of the first plan year that begins on or after January 1, 2010. (New).

were published on May 19, 2010 (75 Fed. Reg. 27927). (New).

7. 401(a)(36) : PPA ’06 § 905(b) added § 401(a)(36) regarding distributions to a participant who has attained age 62 and who has not separated from employment at the time of the distribution. (2008 C. L.).

8. 401(a)(37) : Section 104(a) of the HEART Act added Code § 401(a)(37) with respect to benefits payable on the death of a plan participant while performing qualified military service. (New).

provides guidance regarding HEART Act § 104(a). (New).

9. 401(k) & 401(m) ³ :

approved plans, the plan qualification requirements listed in the 2006, 2007, 2008, and 2009 Cumulative Lists, as well as additional 2010 plan qualification requirements. These deletions have been made to enhance the utility of the cumulative list, by removing items that would have been previously reviewed in the case of a plan that was submitted during the initial Cycle A submission period (February 1, 2006 — January 31, 2007). However, if a plan has not been previously reviewed for items on earlier cumulative lists, it must still take those items into account. For example, a new plan that was established after the Cycle A submission period would be reviewed for items on the 2004 Cumulative List. Similarly, defined contribution pre-approved plans have not yet been reviewed for items on the 2005 Cumulative List and those items have been retained in this notice in order to facilitate review of those plans.

1. 401(a) :

the Code regarding permissible normal retirement ages were published on May 22, 2007 (72 Fed. Reg. 28604). (2006 C. L.).

provides temporary relief for certain pension plans under which the definition of normal retirement age may be required to be changed to comply with the regulations, but only until the first day of the first plan year that begins after June 30, 2008. (2007 C. L.).

1080, provides that the Service and Treasury intend to amend the normal retirement age regulations to change the effective date for governmental plans to plan years beginning on or after January 1, 2011. (2009 C. L.).

629, provides that the Service and Treasury intend to amend the normal retirement age regulations to change the effective date for governmental plans to plan years beginning on or after January 1, 2013. (New).

provides that the transfer of amounts from a trust under a plan qualified under § 401(a) to a nonqualified foreign trust is treated as a distribution from the transferor plan and that transfer of assets and liabilities from a qualified plan to a plan that satisfies § 1165 of the Puerto Rico Code is also treated as a distribution from the transferor plan. (2008 C. L.).

provides that the exclusive benefit rule of § 401(a) is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer is not in connection with a transfer of business assets or operations from the employer to the unrelated taxpayer. (2008 C. L.).

2. 401(a)(4) :

Regulations relating to new comparability plans were published on June 29, 2001 (66 Fed. Reg. 34535). (2005 C. L.).

(2005 C. L.).

3. 401(a)(5) : Section 401(a)(5)(G) of the Code was amended by PPA ’06 § 861(a)(1) with respect to governmental plans. (2008 C. L.).

4. 401(a)(9) :

of the Treasury to issue regulations under which, for all years to which § 401(a)(9) applies, a § 414(d) governmental plan shall be treated as having complied with § 401(a)(9) if it complies with a reasonable good faith interpretation of § 401(a)(9). (New).

were published on September 8, 2009 (74 Fed. Reg. 45993), which permit a governmental plan to comply with the required minimum distribution rules of § 401(a)(9) by using a reasonable and good faith interpretation of the statute. (2009 C. L.).

§ 401(a)(9)(H) which provides a sus

3 Proposed amendments to the regulations under § 401(k) and § 401(m) were published on May 18, 2009 (74 Fed. Reg. 23134) and may be relied upon until final regulations are issued.

December 27, 2010 911 2010–52 I.R.B.

1448, provides that a plan will not fail to satisfy the requirements of a § 401(k) safe harbor plan because of a mid-year change to implement a designated Roth contribution program. (2007 C. L.).

lating to distributions from a § 401(k) plan on account of a participant’s hardship to permit the plan to treat a participant’s beneficiary under the plan the same as the participant’s spouse or dependent. (2008 C. L.).

395, provides guidance regarding PPA ’06 § 826. (2008 C. L.).

C.B. 1448, provides that a plan will not fail to satisfy the requirements of a § 401(k) safe harbor plan because of a mid-year change to implement the PPA ’06 § 826 hardship withdrawals. (2008 C. L.).

§ 401(k)(2)(B)(i)(V) which permits reservists called to active duty after September 11, 2001 and before 2008 to take in-service distributions from a § 401(k) plan. (2008 C. L.).

tends the applicability of the qualified reservist distribution to individuals ordered or called to active duty after December 31, 2007. (2009 C. L.).

390, provides guidance regarding HEART Act § 107. (New).

§ 401(k)(3)(G) with respect to governmental plans. (2008 C. L.).

period income rule for excess contributions in § 401(k)(8)(A)(i). (2008 C. L.).

respect to qualified automatic contribution arrangements. (2008 C. L.).

with respect to qualified automatic contribution arrangements were published on February 24, 2009 (74 Fed. Reg. 8200). (2009 C. L.).

I.R.B. 391, provides information with respect to automatic contri

bution increases under automatic contribution arrangements. (2009 C. L.).

413, provides sample amendments that plan sponsors can use to add automatic contribution features to their plans. (2009 C. L.).

period income rule for excess aggregate contributions in § 401(m)(6)(A). (2008 C. L.).

with respect to qualified automatic contribution arrangements. (2008 C. L.).

with respect to qualified automatic contribution arrangements were published on February 24, 2009 (74 Fed. Reg. 8200). (2009 C. L.).

10. 402(c)(2)(A) : PPA ’06 § 822(a) amended § 402(c)(2)(A) to permit nontaxable distributions from a qualified plan to be directly rolled over tax-free to either another qualified plan or a § 403(b) plan if the separate accounting requirements are met. (2008 C. L.).

11. 402(c)(11) : PPA ’06 § 829(a)(1) added § 402(c)(11) to allow nonspouse beneficiaries to directly roll over distributions from a qualified plan to an individual retirement plan. (2008 C. L.).

vides guidance regarding § 402(c)(11). (2008 C. L.).

provide for nonspouse beneficiary rollovers under § 402(c)(11), effective for plan years beginning after December 31, 2009. (2009 C. L.).

12. 402(f) : PPA ’06 § 1102(a) provides that notice required to be provided under § 402(f) may be provided as much as 180 days before the annuity starting date. ⁴ (2008 C. L.).

provides guidance regarding PPA ’06 § 1102. (2008 C. L.).

provides two safe harbor explanations that may be provided to recipients of eligible rollover distributions from an

employer to satisfy § 402(f). (2009 C. L.).

§ 402(f)(2)(A) with respect to the definition of eligible rollover distribution. (2009 C. L.).

13. 402(g)(2) : WRERA § 109(b)(3) amended § 402(g)(2)(A)(ii) to eliminate the distribution of gap period earnings with excess deferrals. (2009 C. L.).

14. 402A :

§ 401(m) of the Code relating to designated Roth contributions were published on January 3, 2006 (71 Fed. Reg. 6). (2005 C. L.).

provides a sample amendment for Roth § 401(k) plans. (2006 C. L.).

Code were published on April 30, 2007 (72 Fed. Reg. 21103). (2006 C. L.).

which permits rollovers from a plan account other than a designated Roth account to the plan’s designated Roth account. (New).

872, provides guidance regarding § 402A(c)(4). (New).

15. 408A(e) : PPA ‘06 § 824 added § 408A(e) which permits rollovers to Roth IRAs from accounts that are not designated Roth accounts that are part of qualified plans, § 403(b) plans, and § 457 plans. (2008 C. L.).

638, provides guidance regarding § 408A(e). (2008 C. L.).

16. 409 :

December 20, 2006 (71 Fed. Reg. 76134) that provide guidance concerning requirements under § 409(p) for ESOPs holding stock of S corporations. (2006 C. L.).

17. 410(b) : Final Regulations were published on July 21, 2006 (71 Fed. Reg.

41357. permitting some employees of taxexempt organizations to be excluded when

4 Proposed regulations under § 402(f) were published on October 9, 2008 (73 Fed. Reg. 59575) and may be relied upon until final regulations are issued.

2010–52 I.R.B. 912 December 27, 2010

determining whether a § 401(k) plan meets the § 410(b) minimum coverage requirements. (2006 C. L.).

18. 411(a) :

nal Regulations were published on August 9, 2006 (71 Fed. Reg. 45379) with respect to the interaction between the anti-cutback rules of § 411(d)(6) and the nonforfeitability requirements of § 411(a). (2006 C. L.).

amended by § 904 of PPA ’06 to provide for faster vesting of employer nonelective contributions. (2008 C. L.).

395, provides guidance regarding § 411(a), as amended by § 904 of PPA ’06. (2008 C. L.).

19. 411(a)(11) :

tice required to be provided under § 411(a)(11) may be provided as much as 180 days before the annuity starting date. Section 1102(b) of PPA ’06 requires that the notice under § 411(a)(11) also include a description of the consequences of failing to defer receipt of a distribution. ⁵ (2008 C. L.).

395, provides guidance regarding PPA ’06 § 1102. (2008 C. L.).

20. 411(a)(13) : PPA ’06 § 701(b)(2) added § 411(a)(13) with respect to special vesting rules for applicable defined benefit plans, such as cash balance plans. (2008 C. L.).

vides guidance regarding cash balance plans and other hybrid defined benefit plans. (2008 C. L.).

extends the deadline for amending cash balance and other applicable defined benefit plans, within the meaning of § 411(a)(13)(C), to meet the requirements of § 411(a)(13) (other than § 411(a)(13)(A)) to the last day of the first plan year that begins on or after January 1, 2010. (New).

were published on October 19, 2010 (75 Fed. Reg. 64123). ⁶ (New).

extends the deadline for amending cash balance and other applicable defined benefit plans, within the meaning of § 411(a)(13)(C), to meet the requirements of § 411(a)(13) (other than § 411(a)(13)(A)) to the last day of the first plan year that begins on or after January 1, 2011. (New).

21. 411(b)(1) ⁷ :

419, addresses (1) the application of the backloading provisions of § 411(b)(1)(A), (B), and (C) to defined benefit cash balance plans and (2) the use of a “greater of” formula in the instance of a conversion of a defined benefit pension plan to a cash balance plan, including limited § 7805(b) relief. (2008 C. L.).

22. 411(b)(5) : PPA ’06 § 701(b)(1) added § 411(b)(5) with respect to applicable defined benefit plans, such as cash balance plans, and special rules relating to age. (2008 C. L.).

vides guidance regarding cash balance plans and other hybrid defined benefit plans. (2008 C. L.).

extends the deadline for amending cash balance and other applicable defined benefit plans, within the meaning

of § 411(a)(13)(C), to meet the requirements of § 411(b)(5) to the last day of the first plan year that begins on or after January 1, 2010. (New).

were published on October 19, 2010 (75 Fed. Reg. 64123). ⁸ (New).

extends the deadline for amending cash balance and other applicable defined benefit plans, within the meaning of § 411(a)(13)(C), to meet the requirements of § 411(b)(5) to the last day of the first plan year that begins on or after January 1, 2011. (New).

23. 411(d)(3) :

provides guidance regarding the partial termination of a defined contribution plan. (2007 C. L.).

24. 411(d)(6) :

nal Regulations were published on August 9, 2006 (71 Fed. Reg. 45379) with respect to the interaction between the anti-cutback rules of § 411(d)(6) and the nonforfeitability requirements of § 411(a). (2006 C. L.).

rected the Secretary of the Treasury to issue regulations under § 411(d)(6)(B). (2005 C. L.).

tions was published on August 12, 2005 (70 Fed. Reg. 47109). (2005 C. L.).

the Final Regulations were published on August 9, 2006 (71 Fed. Reg. 45379) with respect to a utilization test. (2006 C. L.).

§ 411(d)(6)(E) of the Code were added by § 645 of EGTRRA to permit the elimination of certain optional forms of benefit under certain conditions. (2005 C. L.).

5 Proposed regulations under § 411(a)(11) were published on October 9, 2008 (73 Fed. Reg. 59575). Until final regulations are issued, a plan will be treated as complying with § 411(a)(11) if (1) the plan complies with either the proposed regulations or Q&A-32 and Q&A-33 in Notice 2007–7; or (2) if the plan administrator makes a reasonable attempt to comply with § 411(a)(11).

6 Proposed regulations under § 411(a)(13) were published on October 19, 2010 (75 Fed. Reg. 64197) and may be relied upon until final regulations are issued.

7 Proposed regulations under § 411(b)(1) were published on October 19, 2010 (75 Fed. Reg. 64197) with respect to a variable interest crediting rate that can potentially be negative in any given year. Proposed regulations under § 411(b)(1) were published on June 18, 2008 (73 Fed. Reg. 34665) with respect to the application of the accrual rule where plan benefits are determined on the basis of the greater of two or more separate formulas.

8 Proposed regulations under § 411(b)(5) were published on October 19, 2010 (75 Fed. Reg. 64197) and may be relied upon until final regulations are issued.

December 27, 2010 913 2010–52 I.R.B.

of the Regulations was published on January 25, 2005 (70 Fed. Reg. 3475) to implement § 411(d)(6)(E). (2005 C. L.).

25. 412 :

546, provides guidance with respect to whether a qualified pension plan can be a § 412(i) plan if the plan holds life insurance contracts and annuity contracts for benefits at normal retirement age in excess of a participant’s benefits at normal retirement age under the plan. (2005 C. L.).

provides guidance with respect to restrictions placed on plan amendments following an employer’s election of an alternative deficit reduction contribution. (2005 C. L.).

26. 414(d) : PPA ’06 § 906(a)(1) added language to the definition of governmental plan in § 414(d) with respect to Indian tribal governments. (2008 C. L.).

provides transition relief for plans subject to PPA ‘06 § 906. (2008 C. L.).

tends the transition relief provided in Notice 2006–89. (2008 C. L.).

27. 414(f)(6) : PPA ’06 § 1106(b) added § 414(f)(6) with respect to a multiemployer status election. Section 6611(a)(2) and (b)(2) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 amends § 414(f)(6). (2008 C. L.).
28. 414(u) :

amended § 414(u) of the Code by adding § 414(u)(9) regarding how a plan may provide benefit accruals for a person who dies or becomes disabled while performing qualified military service. (New).

390, provides guidance regarding HEART Act § 104(b). (New).

added § 414(u)(12) with respect to

the treatment of differential wage payments during the period a person, while on active duty, is performing service in the uniformed services. (New).

390, provides guidance regarding HEART Act § 105(b)(1). (New).

29. 414(w) : PPA ’06 § 902(d)(1) added § 414(w) with respect to eligible automatic contribution arrangements. (2008 C. L.).

amended § 414(w)(3), (5), and (6) respectively. (2009 C. L.).

respect to eligible automatic contribution arrangements were published on February 24, 2009 (74 Fed. Reg. 8200). (2009 C. L.).

391, provides information with respect to automatic contribution increases under automatic contribution arrangements. (2009 C. L.).

provides sample amendments that plan sponsors can use to add automatic contribution features to their plans. (2009 C. L.).

30. 414(x) : PPA ’06 § 903(a) added § 414(x) with respect to special rules for eligible combined plans that consist of a defined benefit plan and a qualified cash or deferred arrangement. (New).

31. 415 :

line to adopt PFEA amendments from the end of the 2008 plan year to the end of the 2009 plan year. (2009 C. L.).

was amended by § 303 of PPA ‘06 regarding the interest rate assumption for applying benefit limitations to lump sum distributions. (2008 C. L.).

to eliminate the active participant restriction from the “average compensation for high 3 years” definition. (2008 C. L.).

fied §§ 415(b)(2)(H) and 415(b)(10), respectively, regarding Indian tribal governments. (2008 C. L.).

§ 415(b)(11) to remove the 100% of compensation limitation for a church plan participant if the participant has never been a highly compensated employee of the church. (2008 C. L.).

published on April 5, 2007 (72 Fed. Reg. 16878). (2006 C. L.).

§ 415(b)(2)(E)(v) to change the mortality table to the applicable mortality table within the meaning of § 417(e)(3)(B). (2009 C. L.).

32. 416 :

§ 416(g)(4)(H)(i) by inserting § 401(k)(13) of the Code . (2008 C. L.).

§ 416(g)(4)(H)(ii) by inserting § 401(m)(12) of the Code. (2008 C. L.).

33. 417 :

were published on March 24, 2006 (71 Fed. Reg. 14798) regarding the disclosure of the relative value of optional forms of benefit. (2006 C. L.).

required to be provided under § 417 may be provided as much as 180 days before the annuity starting date. ⁹ (2008 C. L.).

395, provides guidance regarding PPA ’06 § 1102. (2008 C. L.).

cable interest rate and mortality table to be used for determining the present value of lump sum distributions in § 417(e)(3). (2008 C. L.).

1047, addresses the mortality tables required by § 417(e)(3). (2008 C. L.).

638, provides guidance regarding PPA ’06 § 302. (2008 C. L.).

§ 417(e)(3)(D)(i) by striking “clause (ii)” and inserting “subparagraph (C)”. (2009 C. L.).

9 Proposed regulations under § 417 were published on October 9, 2008 (73 Fed. Reg. 59575) and may be relied upon until final regulations are issued.

2010–52 I.R.B. 914 December 27, 2010

fied optional survivor annuity benefit to § 417. (2008 C. L.).

provides guidance regarding PPA ’06 § 1004. (2008 C. L.).

34. 420 :

Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, amends § 420(c)(3)(A) regarding minimum cost requirements for transfers of excess pension assets to retiree health accounts. (2007 C. L.).

inition of the term “excess pension assets” in § 420(e)(2). Section 6612(b) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, amends § 420(e)(2)(B). (2007 C. L.).

35. 432 : PPA ’06 § 212(a) added § 432 which requires that a funding improvement plan or a rehabilitation plan be adopted for multiemployer plans in endangered or critical status and provides for certain benefit reductions. ¹⁰ (2008 C. L.).

delay of designation of multiemployer plans in endangered or critical status. (2009 C. L.).

856, as modified by Notice provides election and notice procedures for multiemployer plans under WRERA § 204. (2009 C. L.).

I.R.B. 460, provides procedures with respect to the revocation of elections by multiemployer plans to freeze funded status under WRERA § 204. (2009 C. L.).

extension of the funding improvement or rehabilitation periods for multiemployer plans in endangered or critical status for 2008 or 2009. (2009 C. L.).

856, as modified by Notice provides election and notice procedures for multiemployer plans under WRERA § 205. (2009 C. L.).

36. Miscellaneous :

provides guidance with respect to medical reimbursement accounts under a profit sharing plan. (2005 C. L.).

was published on October 20, 2006 (71 Fed. Reg. 61877) setting forth standards for the use of an electronic medium to provide applicable notices to recipients or to make participant elections. (2006 C. L.).

provides transitional guidance for 2008 under § 436 for small plans with end-of-year valuation dates. (2008 C. L.).

expands transition relief of Notice 2008–21. (2008 C. L.).

395, provides guidance with respect to annual paid time off contributions. (2009 C. L.).

398, provides guidance with respect to paid time off contributions at termination of employment. (2009 C. L.).

The following guidance contains sample or model amendments: Notice 2006–44, 2006–1 C.B. 889 (Roth § 401(k) plans); Notice 2009–65, 2009–39 I.R.B. 413 (automatic contribution features); and Notice 2009–82, 2009–41 I.R.B. 491 (suspension of the minimum distribution requirement for 2009).

DRAFTING INFORMATION

The principal author of this notice is Angelique Carrington of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans taxpayer assistance answering service at 1–877–829–5500 (a toll-free number) or e-mail Ms. Carrington at RetirementPlanQuestions@irs.gov .

Interim Guidance on the Application of Section 3402(t) to Payment Card Transactions

Notice 2010–91

This notice provides interim guidance on the application of § 3402(t) of the Internal Revenue Code to payments made by credit, debit, stored value, and other payment cards. Commenters on the proposed regulations (REG–158747–06, 2009–4 I.R.B. 362 [73 FR 74082 (Dec. 5, 2008)]) raised significant implementation concerns regarding the contracting, processing, and systems changes necessary to apply § 3402(t) withholding and related reporting to payment card transactions. The Treasury Department and the IRS anticipate that the final regulations will reserve for future guidance the issue of applying § 3402(t) to payment card transactions. Consistent with this anticipated reservation of the issue, this notice provides that the withholding requirements under § 3402(t) and the related reporting requirements will not apply to payments made by payment card until further guidance is issued; and will not apply for any calendar year beginning earlier than at least 18 months from the date such guidance is finalized (and thus will not apply for the 2012 calendar year). Finally, this notice requests comments on all aspects of the potential application of § 3402(t) to payment card transactions, and in particular on approaches that will help implement these requirements.

BACKGROUND

Section 3402(t) was added by § 511 of the Tax Increase Prevention and Reconciliation Act of 2005, Pub. L. No. 109–222, 120 Stat. 345 (TIPRA), which was enacted on May 17, 2006. Section 3402(t)(1) provides that the Government of the United States, every State, every political subdivision thereof, and every instrumentality of the foregoing (including multi-State agencies) making any payment to any person providing any property or services (including any payment made in connection with a government voucher or certificate program which functions as a payment

10 Proposed regulations under § 432 were published on March 18, 2008 (73 Fed. Reg. 14417) and may be relied upon until final regulations are issued.

December 27, 2010 915 2010–52 I.R.B.

REQUEST FOR COMMENTS

Comments are requested on all aspects of the potential application of the withholding requirements under § 3402(t) and the related reporting requirements to payment card transactions. Comments must be submitted by March 28, 2011. All materials submitted will be available for public inspection and copying. Comments should be submitted to Internal Revenue Service, CC:PA:LPD:RU (Notice 2010–91), Room 5203, PO Box 7604, Ben Franklin Station, Washington, DC 20224. Submissions may also be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to the Courier’s Desk, 1111 Constitution Avenue, NW, Washington, DC 20224, Attn: CC:PA:LPD:RU (Notice 2010–91), Room 5203. Submissions may also be sent electronically via the internet to the following email address: Notice.comments@irscounsel.treas.gov . Include the notice number (Notice 2010–91) in the subject line.

DRAFTING INFORMATION

The principal author of this notice is A. G. Kelley of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) though other Treasury Department and IRS officials participated in its development. For further information on the submission of comments or the comments submitted, please contact Richard Hurst at (202) 622–7180 (not a toll-free number). For further information on all other provisions of this notice, please contact A. G. Kelley at (202) 622–6040 (not a toll-free number).

Foreign Tax Credit Guidance Under Section 909

Notice 2010–92