Part III. Administrative, Procedural, and Miscellaneous

“Notice 2011–48” should be in the subject line of the e-mail. All comments will be available for public inspection and copying. Comments are requested by July 7, 2011.

Drafting Information

The principal author of this notice is Matthew D. Lucey of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, contact Matthew D. Lucey at (202) 622–4940 (not a toll-free call).

Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Notice 2011–49

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 as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

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 and by the Pension Protection Act of 2006 (PPA), 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 through 2007 must be within a permissible range

Registered Tax Return Preparer Competency Examination

Notice 2011–48

Purpose

This notice invites public comments on the content and administration of the registered tax return preparer competency examination (competency examination). The Treasury Department and the Internal Revenue Service have published final regulations (T.D. 9527, 76 FR 32286) under 31 CFR Part 10 that require certain individuals to pass a competency examination to become a registered tax return preparer. The IRS has selected a vendor to support the IRS in developing and administering the competency examination for the Form 1040 series tax returns and accompanying schedules. The IRS and the vendor will soon begin developing the Form 1040 competency examination.

Prior to developing the competency examination, however, the IRS seeks the input of tax return preparers, the associated industry and consumer groups, and taxpayers. Thus, comments regarding the Form 1040 series competency examination are requested. The information collected will assist the IRS in developing the competency examination.

Request for Public Comment

The IRS requests comments on the content and administration of the Form 1040 series competency examination. The IRS is particularly interested in any comments regarding:

amination that should be dedicated to each area of tax law identified above;

multiple choice, short-answer questions, written tax computations problems, or a combination thereof);

mation reported to the applicant ( e.g ., pass/fail, numeric scores);

annually update the examination to reflect the most current law;

should be administered ( e.g., annually, semi-annually, quarterly, monthly, weekly, or daily);

other than those individuals who obtain a preparer tax identification number prior to the examination being offered, should be required to wait before retaking the examination if the applicant does not pass;

in languages other than English and the other languages that should be considered;

examination (content or test administration) for either enrolled agents or enrolled retirement plan agents that the competency examination should attempt to utilize or should not attempt to reproduce; and

IRS should consider when developing the content of, and the procedures for administering, the competency examination.

Written comments should be sent to:

Internal Revenue Service Attn: CC:PA:LPD:PR

(Notice 2011–48) Room 5205 P.O. Box 7604 Ben Franklin Station Washington, D.C. 20044

or hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:

Courier’s Desk Internal Revenue Service Attn: CC:PA:LPD:PR

(Notice 2011–48) 1111 Constitution Avenue, N.W. Washington, D.C. 20224

Alternatively, comments may be submitted electronically via e-mail to the following address: Notice.Comments@irscounsel.treas.gov.

2011–26 I.R.B. 927 June 27, 2011

The composite corporate bond rate for May 2011 is 5.37 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.

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 and the resulting permissible range of in

For Plan Years

terest 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 methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004–34 continues to apply in determining that rate. See Notice 2006–75, 2006–2 C.B. 366.

Corporate Bond Weighted

Beginning in Permissible Range

Month Year

Average 90% to 100%

June 2011 6.00 5.40 6.00

monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007–81, the monthly corporate bond yield curve derived from May 2011 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of May 2011 are, respectively, 1.72, 5.00, and 6.21. The three 24-month average corporate bond segment rates applicable for June 2011 under the election of § 430(h)(2)(G)(iv) are as follows:

Third Segment

YIELD CURVE AND SEGMENT RATES

Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 430 of the Code specifies the minimum funding requirements that apply to single employer plans pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates

First Segment

(“segment rates”), each of which applies to cash flows during specified periods. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. Section 430(h)(2)G) set forth a transitional rule applicable to plan years beginning in 2008 and 2009 under which the segment rates were blended with the corporate bond weighted average described above, including an election under § 430(h)(2)(G)(iv) for an employer to use the segment rates without the transitional rule.

Notice 2007–81, 2007–2 C.B. 899, provides guidelines for determining the

Second Segment

2.27 5.43 6.34

maturing in May 2041 determined each day for the balance of the month.

Generally for plan years beginning after 2007, § 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in section 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88–73, 1988–2 C.B. 383, provides

The transitional rule of § 430(h)(2)(G) does not apply to plan years beginning after December 31, 2009. Therefore, for a plan year beginning after 2009 with a lookback month to June 2011, the funding segment rates are the three 24-month average corporate bond segment rates applicable for June 2011, listed above without blending for any transitional period.

30-YEAR TREASURY SECURITIES INTEREST RATES

Section 417(e)(3)(A)(ii)(II) (prior to amendment by PPA) 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 rate of interest 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.

The rate of interest on 30-year Treasury securities for May 2011 is 4.29 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in February 2041 determined each day through May 11, 2011, and the yield on the 30-year Treasury bond

June 27, 2011 928 2011–26 I.R.B.

guidelines for determining the weighted average interest rate. The following rates

For Plan Years

were determined for plan years beginning in the month shown below.

30-Year Treasury Weighted

Beginning in Permissible Range

Month Year

Average 90% to 105%

June 2011 4.28 3.85 4.49

ing the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for May 2011, taking into account the May 2011 30-year Treasury rate of 4.29 stated above, are as follows:

Third Segment

MINIMUM PRESENT VALUE SEGMENT RATES

Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a

For Plan Years

Beginning in

24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007–81 provides guidelines for determin

First Segment

Second Segment

2010 2.75 4.72 5.44 2011 2.23 4.86 5.83

DRAFTING INFORMATION

The principal author of this notice is Tony Montanaro of the Employee Plans,

Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov .

2011–26 I.R.B. 929 June 27, 2011

Table I

Monthly Yield Curve for May 2011

Derived from May 2011 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

June 27, 2011 930 2011–26 I.R.B.

for the United States, the states, and statistical areas within the states. The income information was released to the HUD regional offices on May 31, 2011, and may be obtained by calling the HUD reference service at 1–800–245–2691. The income information is also available at HUD’s World Wide Web site, http://www.huduser.org/portal/datasets/il.html, which provides a menu from which you may select the year and type of data of interest. The Internal Revenue Service annually publishes the median gross income for the United States.

.07 The most recent nationwide average purchase prices and average area purchase price safe harbor limitations were published on April 11, 2011, in Rev. Proc. 2011–23, 2011–15 I.R.B. 626.