Part III. Administrative, Procedural, and Miscellaneous

Sample Plan Amendment for Section 436

Notice 2011–96

I. Purpose

This notice provides a sample plan amendment that plan sponsors may adopt to satisfy § 436 of the Internal Revenue Code regarding limitations on the accrual and payment of benefits under certain underfunded single employer defined benefit plans. This notice also extends both the deadline to amend a plan to satisfy § 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of § 411(d)(6).

II. Background

A. Section 436

Section 412 provides minimum funding requirements that generally apply to pension plans qualified under § 401(a) or 403(a), other than governmental plans within the meaning of § 414(d), church plans within the meaning of § 414(e) with respect to which the election provided by § 410(d) has not been made, and certain insurance contract plans described in § 412(e)(3). Section 430, which was added by the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109–280, specifies the minimum funding requirements that apply to single employer defined benefit pension plans (including multiple employer plans) pursuant to § 412. Section 401(a)(29) requires single employer defined benefit plans (including multiple employer plans) that are subject to the minimum funding requirements of § 412 to meet the requirements of § 436.

Section 436, which was also added by PPA ’06, sets forth a series of limitations on the accrual and payment of benefits under an underfunded plan. In general, when a plan’s adjusted funding target attainment percentage (as defined in § 436(j) (AFTAP)) for the plan year is less than 60 percent, § 436(d)(1) prohibits the payment of prohibited payments (as defined in § 436(d)(5)), including single sum distributions, and § 436(e)(1) requires benefit accruals under the plan to cease. Section

436(b)(1) prohibits the payment of an unpredictable contingent event benefit if the plan’s AFTAP for the plan year is less than 60 percent or would be less than 60 percent taking into account the occurrence of the event.

When a plan’s AFTAP for the plan year is less than 80 percent, but not less than 60 percent, § 436(d)(3) generally limits the portion of a benefit that may be paid in a single sum or other prohibited payment. Section 436(c)(1) generally prohibits a plan amendment from taking effect if the amendment increases the liabilities of the plan by increasing benefits and the plan’s AFTAP for the plan year is less than 80 percent or would be less than 80 percent taking into account the amendment. Section 436(d)(2) generally prohibits the payment of prohibited payments from a plan while the plan’s sponsor is in bankruptcy unless the plan’s AFTAP is certified to be at least 100 percent.

The limitations under § 436 (other than the limitations on prohibited payments under § 436(d)) do not apply to a plan for the first 5 plan years of the plan, taking into account any predecessor plan.

The requirement to apply a limitation under § 436(b), (c), or (e) to a plan ceases if the plan sponsor makes a contribution, in the amount specified in the relevant subsection, that is not counted toward satisfaction of the minimum contribution requirement under § 430. Section 436(f) sets forth rules relating to those contributions and other methods that a plan sponsor may use to avoid the limitations under § 436.

Sections 436(h)(1) and 436(h)(3) set forth certain presumptions regarding a plan’s AFTAP for a plan year that apply before the plan’s enrolled actuary issues a certification of the plan’s AFTAP for the plan year. Section 436(h)(2) sets forth a presumption regarding a plan’s AFTAP for a plan year that applies if the plan’s enrolled actuary issues a certification of the plan’s AFTAP for the plan year on or after the first day of the 10 ^th month of the plan year. For any period during which a presumption under § 436(h) applies to a plan, the limitations under § 436 are applied to the plan as if the AFTAP for the plan year were the presumed AFTAP under § 436(h).

Section 101(c)(2)(F) of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA ’08), Pub. L. 110–458, added § 436(k), which gives the Secretary authority to issue special rules for the application of § 436 in the case of a plan that uses a valuation date other than the first day of the plan year.

Section 203 of WRERA ’08 provides that, for the first plan year beginning during the period beginning on October 1, 2008, and ending on September 30, 2009, the limitation on benefit accruals under § 436(e) is applied using the plan’s AFTAP for the preceding plan year if that year’s AFTAP is greater than the AFTAP for the plan year.

Section 203(a)(2) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. 111–192, amended § 436(j) to provide that, for purposes of (i) the limitation on benefit accruals under § 436(e) and (ii) the application of the limitations on prohibited payments under § 436(d) to payments under a social security leveling option, the AFTAP for a plan year beginning on or after October 1, 2008, and before October 1, 2010, is the greater of the AFTAP for that plan year, determined without regard to section 203(a)(2) of PRA 2010, or the AFTAP for the plan year beginning after October 1, 2007, and before October 1, 2008, as determined under rules prescribed by the Secretary. In the case of a plan with a valuation date other than the first day of the plan year, the amendment made by section 203(a)(2) of PRA 2010 applies to plan years beginning after December 31, 2007, and before January 1, 2010, and the AFTAP for any such plan year is the greater of the AFTAP for that plan year, determined without regard to section 203(a)(2) of PRA 2010, or the AFTAP based on the last plan year beginning before November 1, 2007, determined under rules prescribed by the Secretary. For purposes of § 436(j) as amended by PRA 2010, a social security leveling option is a form of benefit distribution that accelerates payments before, and reduces payments after, a participant starts to receive social security benefits in order to provide similar aggregate benefits both before and

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Final regulations under §§ 430(d), (f), (g), (h)(2), and (i) and 436 were published in the Federal Register on October 15, 2009, 74 FR 53004. For plan years beginning before January 1, 2010, plans are permitted to rely on either the final regulations or the proposed regulations for purposes of satisfying the requirements of §§ 430 and 436. The final regulations do not include rules interpreting the amendments with respect to § 436 made by sections 101(c)(2) and 203 of WRERA ’08 or the amendments with respect to § 436 made by PRA 2010. The Treasury Department and the Service anticipate issuing guidance regarding these amendments in the future.

B. Sections 401(b) and 411(d)(6)

Section 401(b) provides a period during which a plan may be amended retroactively to comply with the Code’s qualification requirements. Section 1.401(b)–1 and Rev. Proc. 2007–44, 2007–2 C.B. 54, describe the disqualifying provisions that may be amended retroactively and the remedial amendment period during which retroactive amendments may be adopted. The regulations also grant the Commissioner the discretion to extend the remedial amendment period.

Section 5.05 of Rev. Proc. 2007–44 provides that when there are statutory or regulatory changes to the plan qualification requirements that will impact provisions of the written plan document, the adoption of an “interim amendment” will generally be required by the later of the end of the plan year in which the change is first effective or the due date of the employer’s tax return for the tax year that includes the date the change is first effective. An interim amendment is an amendment with respect to a plan provision that is a disqualifying provision because the provision (1) causes the plan to fail to satisfy the qualification requirements of the Code by reason of a change in those requirements, or (2) is integral to a changed qualification requirement, but only if the provision is also integral to a plan provision that is a disqualifying provision under (1).

The filing of a determination letter application for an individually designed plan generally requires the plan to be restated to take into account changes in qualification requirements and guid

after social security benefits begin. The payment of a social security supplement, as defined in § 1.411(a)–7(c)(4)(ii) of the Income Tax Regulations, does not cause a form of distribution of a participant’s accrued benefit to be a social security leveling option. Section 203(b) of PRA 2010 coordinates with WRERA ’08 by providing that, for purposes of the limitation on accruals under § 436(e), the AFTAP for any plan year to which the amendments made by section 203 of PRA 2010 apply is determined under section 203 of WRERA ’08 if it results in a higher percentage than the AFTAP under § 436(j) as amended by PRA 2010.

Section 436 is generally effective for plan years that begin on or after January 1, 2008. In the case of a collectively bargained plan that is maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before January 1, 2008, § 436 does not apply to plan years beginning before the earlier of January 1, 2010, or the later of the date on which the last of such collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after August 17, 2006), or the first day of the first plan year to which § 436 would otherwise apply. Under sections 104 through 106 of PPA ’06, later effective dates for § 436 also apply to eligible cooperative plans, within the meaning of section 104(c) of PPA ’06, that were in existence on July 26, 2005, and certain other plans.

Section 202(b) of PRA 2010 amended section 104 of PPA ’06 to provide that, in the case of an eligible charity plan (within the meaning of section 104(d) of PPA ’06, as amended) that was in existence on July 26, 2005, § 436 is not effective in plan years beginning before the earlier of January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. The amendment made by section 202(b) of PRA 2010 applies to plan years beginning after December 31, 2007. However, under section 202(c)(2) of PRA 2010, a plan sponsor may instead elect to apply the amendment made by section 202(b) of PRA 2010 to plan years beginning after December 31, 2008. If the plan sponsor makes such an election,

§ 436 applies to the eligible charity plan for a plan year beginning after December 31, 2007, and before January 1, 2009, but does not apply to the plan for plan years beginning after December 31, 2008, and before the earlier of January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Such an election must be made at such time and in such form and manner as prescribed by the Secretary and may be revoked only with the consent of the Secretary.

Section 101(j) of the Employee Retirement Income Security Act of 1974, Pub. L. 93–406, as amended (ERISA), requires that written notice be provided to participants and beneficiaries when a plan becomes subject to the limitations of paragraph (1), (3), or (4) of section 206(g) of ERISA (which parallel the provisions of § 436(b), (d), and (e), respectively). Section 101(j) of ERISA also authorizes the Secretary of the Treasury, in consultation with the Secretary of Labor, to prescribe rules applicable to notices required under this section of ERISA.

Proposed regulations under §§ 430(f) and 436 were published in the Federal Register on August 31, 2007, 72 FR 50544. Additional proposed regulations under § 430(d), (g), (h)(2), and (i) were published in the Federal Register on December 31, 2007, 72 FR 74215. Notice 2008–21, 2008–1 C.B. 431, provides that when the proposed regulations under §§ 430 and 436 are finalized, the final regulations will not apply to plan years beginning before January 1, 2009. Notice 2008–21 further provides that, for plan years beginning during 2008, taxpayers must follow applicable statutory provisions and can rely on the proposed regulations for compliance with those statutory provisions. Finally, Notice 2008–21 provides transition guidance regarding the application of the statutory provisions of §§ 430 and 436 for plan years beginning during 2008, including transition relief for small plans with end-of-year valuation dates, and states that the Service will not challenge a reasonable interpretation of an applicable statutory provision under § 430 or § 436 for plan years beginning during 2008. Notice 2008–73, 2008–2 C.B. 717, expands the scope of the transition relief for small plans with end-of-year valuation dates that is provided in Notice 2008–21.

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line described in this section III and the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of § 436. To the extent that the adoption of the sample amendment in the appendix to this notice by the deadline described in this section III causes the elimination or reduction of a § 411(d)(6) protected benefit under a plan, the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of § 436 and therefore does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6).

IV. Sample Amendment

The sample amendment included in the appendix to this notice satisfies the requirements of § 436, as amended by WRERA ’08 and PRA 2010, and the requirements of the final regulations under § 436. Thus, if a plan is amended by adoption of the sample amendment, the terms of the plan will satisfy the requirements of § 436 and the regulations thereunder. The sample amendment may be adopted by sponsors of individually designed plans and by sponsors of pre-approved plans (that is, master and prototype (M&P) and volume submitter plans) on behalf of the pre-approved plans’ adopting employers.

The sample amendment has three parts. The first part contains provisions that are applicable to all plans. This part includes the limitations on benefits and accruals under § 436(b) through (e) that apply when (i) the plan’s AFTAP for the plan year is less than 80 percent (or, in the case of the limitation on certain plan amendments under § 436(c), would be less than 80 percent taking into account the amendment) but not less than 60 percent; (ii) the plan’s AFTAP for the plan year is less than 60 percent (or, in the case of the limitation on unpredictable contingent event benefits under § 436(b), would be less than 60 percent taking into account the occurrence of the event); or (iii) the plan sponsor is in bankruptcy and the plan’s enrolled actuary has not certified the plan’s AFTAP for the plan year to be at least 100 percent. The first part also includes provisions regarding: resumption of accruals and payments and the treatment of amendments that were not allowed to take effect on their

ance that are listed in the Cumulative List of Changes in the Plan Qualification Requirements in effect at the time the application is filed. (See sections 4 and 12.03 of Rev. Proc. 2007–44.) Thus, as noted in section 12.03 of Rev. Proc. 2007–44, a determination letter filing for an individually designed plan may accelerate to an earlier date one or more of the interim amendment deadlines that would otherwise apply to a plan.

Section 411(d)(6) provides generally that a plan will not satisfy § 401(a) if an amendment to the plan decreases a participant’s accrued benefit. For this purpose, a plan amendment that has the effect of eliminating or reducing an early retirement benefit or a retirement-type subsidy or eliminating an optional form of benefit with respect to benefits attributable to service before the amendment is treated as reducing accrued benefits. Section 401(b) does not relieve a plan of the requirement to satisfy § 411(d)(6) with respect to any amendment.

Section 1.411(d)–4, A–2(b)(2)(i), provides that a plan may be amended to eliminate or reduce a § 411(d)(6) protected benefit, within the meaning of § 1.411(d)–4, A–1, if the following requirements are met: the amendment constitutes timely compliance with a change in law affecting plan qualification; there is an exercise of § 7805(b) relief by the Commissioner; and the elimination or reduction is made only to the extent necessary to enable the plan to continue to satisfy the requirements for qualified plans.

C. Notice 2010–77

Notice 2010–77, 2010–51 I.R.B. 851, extends the deadline for adopting an interim amendment with respect to § 436 to the last day of the first plan year that begins on or after January 1, 2011, provided that the amendment is effective as of the effective date of § 436 with respect to the plan and the plan is operated in accordance with the amendment as of the effective date of the amendment.

Notice 2010–77 also provides that a plan amendment that eliminates or reduces a § 411(d)(6) protected benefit within the meaning of § 1.411(d)–4, A–1, will not cause a plan to fail to meet the anti-cutback requirements of § 411(d)(6) if the amendment is adopted by the last day of the first

plan year that begins on or after January 1, 2011, and the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of § 436.

III. Extension of Amendment Deadline and Associated Relief Under § 411(d)(6)

The deadline for adopting an interim amendment with respect to § 436 is extended to the latest of:

(1) the last day of the first plan year that begins on or after January 1, 2012,

(2) the last day of the plan year for which § 436 is first effective for the plan, or

(3) the due date (including extensions) of the employer’s tax return for the tax year (determined in accordance with section 5.06(2) of Rev. Proc. 2007–44, in the case of a tax-exempt employer) that contains the first day of the plan year for which § 436 is first effective for the plan.

As noted in section II.B. of this notice, the filing of a determination letter application for an individually designed plan may accelerate one or more interim amendment deadlines that would otherwise apply to the plan. In the case of an application for a determination letter for an individually designed plan that is filed on or after February 1, 2012 (or, in the case of a plan described in section 104 or 105 of PPA ’06, as amended, the first day of the plan year for which § 436 is first effective for the plan, if later), the restated plan that is submitted with the application must incorporate an interim amendment with respect to § 436 and, therefore, the filing of the application before the interim amendment deadline that would otherwise apply to the plan under this section III will accelerate the interim amendment deadline for § 436.

The extension under this section III is conditioned on the amendment being effective as of the effective date of § 436 with respect to the plan and operation of the plan in accordance with the amendment from and after the effective date of the amendment.

Pursuant to § 7805(b) and § 1.411(d)–4, A–2(b)(2)(i), a plan amendment adopted with respect to § 436 that eliminates or reduces a § 411(d)(6) protected benefit within the meaning of § 1.411(d)–4, A–1, does not cause a plan to fail to meet the anti-cutback requirements of § 411(d)(6) if the amendment is adopted by the dead

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sonable interpretation of § 436, the effective date (section 9) of the sample amendment should be changed to plan years beginning after December 31, 2009, and the requirements of § 436 may be incorporated by reference in the terms of the plan for the earlier plan years. This change will not affect the plan sponsor’s ability to rely on the sample amendment.

Plan sponsors of eligible charity plans and other plans affected by the amendments to § 436 and PPA ’06 that were made by PRA 2010 may have operated their plans in a manner that would satisfy § 436 as in effect prior to the enactment of PRA 2010, but that does not satisfy § 401(a) when the amendments made by PRA 2010 are taken into account. The Treasury Department and the Service anticipate issuing guidance that will allow these plan sponsors to correct their plans to take into account the PRA 2010 amendments. These sponsors are not precluded from adopting or relying on the sample amendment for periods during which § 436 applies to their plans.

In the case of certain collectively bargained plans and plans described in sections 104 through 106 of PPA ’06, as amended, the plan sponsor may rely on the sample amendment provided that the effective date of the amendment is changed to the actual effective date of § 436 with respect to the plan. Thus, for example, in the case of an eligible charity plan in existence on July 26, 2005, the effective date of the amendment should be changed to the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Alternatively, the effective date of the sample amendment may be changed to provide that the amendment applies to the plan for a plan year beginning after December 31, 2007, and before January 1, 2009, but does not apply to the plan for plan years beginning after December 31, 2008, and before the earlier of January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan.

Example X, a tax-exempt employer, sponsors an eligible charity plan within the meaning of section 104(d) of PPA ’06, as amended, that was in existence on July 26, 2005. The plan year is the calendar year. Pursuant to section 202(b) of PRA 2010, § 436 is not effective with respect to X ’s plan until the earlier of the first plan year beginning on or after

effective dates after a relevant limitation ceases to apply; presumptions regarding the plan’s AFTAP that apply before and after the plan’s enrolled actuary issues a certification of the plan’s AFTAP for the plan year; and special rules that apply within the first 5 plan years of a new plan or to a terminating plan or to certain frozen plans. This part also references the requirement in section 101(j) of ERISA to provide participants and beneficiaries written notice when a plan becomes subject to § 436 limitations as well as the rules in § 436(f) and § 1.436–1(f) regarding employer contributions and other methods to avoid or terminate the application of the § 436 limitations to a plan.

The second part of the sample amendment contains two alternative provisions, one of which must be adopted with the first part of the sample amendment in the case of a multiple employer plan. Which of the two provisions must be adopted depends on whether the plan is a multiple employer plan described in § 413(c)(4)(A) or a multiple employer plan described in § 413(c)(4)(B).

The third part of the sample amendment consists of four optional provisions that may be used to modify the first part of the sample amendment. The first two optional provisions allow a participant or beneficiary who is prohibited by § 436(d)(1) or § 436(d)(3), respectively, from electing certain accelerated distribution options to make a new election of a previously prohibited optional form of benefit distribution after the relevant limitation ceases to apply to the plan. The third optional provision expands the choices of timing and form of distribution available to participants and beneficiaries under a plan during a period when accelerated distribution options are limited by § 436(d)(3). The fourth optional provision allows the automatic restoration of benefit accruals that were not permitted to accrue as a result of the application to the plan of § 436(e), provided that certain conditions are satisfied. A plan sponsor may choose to incorporate any or all of these optional provisions by adding them to the appropriate section of the first part of the sample amendment.

V. Reliance

A plan sponsor that adopts the sample amendment (or an adopting employer

on whose behalf the sample amendment is adopted by the sponsor of a pre-approved plan) has reliance that the form of the amended plan satisfies the requirements of § 436 and that the amendment does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6), provided that the sample amendment is adopted by the deadline described in section III of this notice, the terms of the sample amendment are not modified, except as permitted or required below, and the plan is operated in accordance with the amendment from and after the effective date of the amendment. Adoption of the sample amendment will not cause a pre-approved plan adopted by an employer to be treated as individually designed or to fail to be identical to the approved M&P or volume submitter specimen plan.

A plan sponsor’s reliance on the sample amendment is not adversely affected by changes to the sample amendment that are made to conform to a plan’s terminology or organization, provided that the changes do not materially modify the sample amendment by altering the meaning of any provision of the amendment. The sample amendment may be modified without adversely affecting reliance to specify effective dates for any of the optional provisions that are later than the general effective date of the sample amendment, provided that the plan’s operations are consistent with the modified effective date. In the case of a pre-approved plan, the optional provisions of the sample amendment may be incorporated in an amendment to an adoption agreement so that each employer adopting the pre-approved plan may elect whether to include the optional provisions in its plan and may specify when such provisions are effective.

The sample amendment is effective for plan years beginning after December 31, 2007. However, adoption of the sample amendment does not alter a plan sponsor’s ability to rely on the proposed regulations for plan years beginning prior to January 1, 2010, or on Notices 2008–21 and 2008–73, with respect to the operation of a plan. Therefore, if a plan’s operation in plan years beginning after December 31, 2007, and before January 1, 2010, was not consistent with the terms of the sample amendment but satisfies the rules in either the proposed regulations or the final regulations under § 436, or another rea

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Internal Revenue Code may be immediately distributed without the consent of the participant. If an optional form of benefit that is otherwise available under the terms of the plan is not available to a participant or beneficiary as of the annuity starting date because of the application of the requirements of this Section 1(a), the participant or beneficiary is permitted to elect to bifurcate the benefit into unrestricted and restricted portions (as described in § 1.436–1(d)(3)(iii)(D) of the Treasury Regulations). The participant or beneficiary may also elect any other optional form of benefit otherwise available under the plan at that annuity starting date that would satisfy the 50 percent/PBGC maximum benefit guarantee amount limitation described in this Section 1(a), or may elect to defer the benefit in accordance with any general right to defer commencement of benefits under the plan.

(b) Plan Amendments Increasing Lia- bility for Benefits . No amendment to the plan that has the effect of increasing liabilities of the plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable shall take effect in a plan year if the adjusted funding target attainment percentage for the plan year is:

(i) Less than 80 percent; or

(ii) 80 percent or more, but would be less than 80 percent if the benefits attributable to the amendment were taken into account in determining the adjusted funding target attainment percentage.

The limitation set forth in this Section 1(b) does not apply to any amendment to the plan that provides a benefit increase under a plan formula that is not based on compensation, provided that the rate of such increase does not exceed the contemporaneous rate of increase in the average wages of participants covered by the amendment.

2. Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Per- centage Is Less Than 60 Percent . Notwithstanding any other provisions of the plan, if the plan’s adjusted funding target attainment percentage for a plan year is less than 60 percent (or would be less than 60 percent to the extent described in Section 2(b)

January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Section 202(c) of PRA 2010, however, allows X to elect to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, in which case § 436 would be effective with respect to X ’s plan for 2008 but not for any subsequent year until the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan.

Assume that X elects to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, thereby making § 436 effective with respect to the plan for 2008, and that the plan continues to be an eligible charity plan. Because § 436 is first effective with respect to X ’s plan in 2008, X must adopt an interim amendment to satisfy § 436 by December 31, 2012. If X amends its plan by this deadline by adopting the sample amendment in this notice, X will have reliance that the form of its amended plan satisfies the requirements of § 436 and that the amendment does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6), provided that: (1) X modifies the sample amendment to make it effective with respect to the 2008 plan year and with respect to plan years beginning on or after January 1, 2017, or, if earlier, plan years beginning with the first plan year the plan ceases to be an eligible charity plan; and (2) X operates the plan in accordance with the amendment during the periods the amendment is effective.

Alternatively, assume that X does not elect to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, so that § 436 is not effective with respect to X ’s plan until the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Assuming that the plan continues to be an eligible charity plan, an interim amendment to X ’s plan to satisfy § 436 is not required before the later of December 31, 2017, or the due date (including extensions) of X ’s tax return for the tax year (determined in accordance with section 5.06(2) of Rev. Proc. 2007–44 (or the successor thereto)) that includes January 1, 2017.

Drafting Information

The principal author of this notice is James P. Flannery of the Employee Plans, Tax Exempt and Government Entities Division. Questions regarding this notice may be sent via e-mail to retirementplanquestions@irs.gov .

Appendix

Sample Plan Amendment for a Single Employer Defined Benefit Plan to Satisfy Benefit Limitations

Required Under § 436 of the

Internal Revenue Code

(Part I)

Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Percentage Is Less Than 80 Percent or

If the Plan Sponsor Is In Bankruptcy

1. Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Per- centage Is Less Than 80 Percent, But Not Less Than 60 Percent . Notwithstanding any other provisions of the plan, if the plan’s adjusted funding target attainment percentage for a plan year is less than 80 percent (or would be less than 80 percent to the extent described in Section 1(b) below) but is not less than 60 percent, then the limitations set forth in this Section 1 apply.

(a) 50 Percent Limitation on Single Sum Payments, Other Accelerated Forms of Distribution, and Other Prohibited Payments . A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, unless the present value of the portion of the benefit that is being paid in a prohibited payment does not exceed the lesser of:

(i) 50 percent of the present value of the benefit payable in the optional form of benefit that includes the prohibited payment; or

(ii) 100 percent of the PBGC maximum benefit guarantee amount (as defined in § 1.436–1(d)(3)(iii)(C) of the Treasury Regulations).

The limitation set forth in this Section 1(a) does not apply to any payment of a benefit which under § 411(a)(11) of the

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(c) Shutdown and Other Unpredictable Contingent Event Benefits . If an unpredictable contingent event benefit with respect to an unpredictable contingent event that occurs during the plan year is not permitted to be paid after the occurrence of the event because of the limitation of Section 2(b), but is permitted to be paid later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the plan year that meets the requirements of § 1.436–1(g)(5)(ii)(B) of the Treasury Regulations), then that unpredictable contingent event benefit shall be paid, retroactive to the period that benefit would have been payable under the terms of the plan (determined without regard to Section 2(b)). If the unpredictable contingent event benefit does not become payable during the plan year in accordance with the preceding sentence, then the plan is treated as if it does not provide for that benefit.

(d) Treatment of Plan Amendments That Do Not Take Effect . If a plan amendment does not take effect as of the effective date of the amendment because of the limitation of Section 1(b) or Section 2(c), but is permitted to take effect later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the plan year that meets the requirements of § 1.436–1(g)(5)(ii)(C) of the Treasury Regulations), then the plan amendment must automatically take effect as of the first day of the plan year (or, if later, the original effective date of the amendment). If the plan amendment cannot take effect during the same plan year, then it shall be treated as if it were never adopted, unless the plan amendment provides otherwise.

5. Notice Requirement . See section 101(j) of ERISA for rules requiring the plan administrator of a single employer defined benefit pension plan to provide a written notice to participants and beneficiaries within 30 days after certain specified dates if the plan has become subject to a limitation described in Section 1(a), Section 2, or Section 3.

6. Methods to Avoid or Terminate Ben- efit Limitations . See § 436(b)(2), (c)(2),

below), then the limitations in this Section 2 apply.

(a) Single Sums, Other Accelerated Forms of Distribution, and Other Prohib- ited Payments Not Permitted . A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment. The limitation set forth in this Section 2(a) does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.

(b) Shutdown Benefits and Other Un- predictable Contingent Event Benefits Not Permitted to Be Paid . An unpredictable contingent event benefit with respect to an unpredictable contingent event occurring during a plan year shall not be paid if the adjusted funding target attainment percentage for the plan year is:

(i) Less than 60 percent; or

(ii) 60 percent or more, but would be less than 60 percent if the adjusted funding target attainment percentage were redetermined applying an actuarial assumption that the likelihood of occurrence of the unpredictable contingent event during the plan year is 100 percent.

(c) Benefit Accruals Frozen . Benefit accruals under the plan shall cease as of the applicable section 436 measurement date. In addition, if the plan is required to cease benefit accruals under this Section 2(c), then the plan is not permitted to be amended in a manner that would increase the liabilities of the plan by reason of an increase in benefits or establishment of new benefits.

3. Limitations Applicable If the Plan Sponsor Is In Bankruptcy . Notwithstanding any other provisions of the plan, a participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form

of benefit that includes a prohibited payment with an annuity starting date that occurs during any period in which the plan sponsor is a debtor in a case under title 11, United States Code, or similar Federal or State law, except for payments made within a plan year with an annuity starting date that occurs on or after the date on which the plan’s enrolled actuary certifies that the plan’s adjusted funding target attainment percentage for that plan year is not less than 100 percent. In addition, during such period in which the plan sponsor is a debtor, the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that occur on a date within a plan year that is on or after the date on which the plan’s enrolled actuary certifies that the plan’s adjusted funding target attainment percentage for that plan year is not less than 100 percent. The limitation set forth in this Section 3 does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.

4. Provisions Applicable After Limita- tions Cease to Apply . (a) Resumption of Prohibited Payments . If a limitation on prohibited payments under Section 1(a), Section 2(a), or Section 3 applied to the plan as of a section 436 measurement date, but that limit no longer applies to the plan as of a later section 436 measurement date, then that limitation does not apply to benefits with annuity starting dates that are on or after that later section 436 measurement date.

(b) Resumption of Benefit Accruals . If a limitation on benefit accruals under Section 2(c) applied to the plan as of a section 436 measurement date, but that limitation no longer applies to the plan as of a later section 436 measurement date, then benefit accruals shall resume prospectively and that limitation does not apply to benefit accruals that are based on service on or after that later section 436 measurement date, except as otherwise provided under the plan. The plan shall comply with the rules relating to partial years of participation and the prohibition on double proration under Department of Labor regulation 29 CFR § 2530.204–2(c) and (d).

2011–52 I.R.B. 920 December 27, 2011

(e)(2), and (f) of the Internal Revenue Code and § 1.436–1(f) of the Treasury Regulations for rules relating to employer contributions and other methods to avoid or terminate the application of the limitations set forth in Sections 1 through 3 for a plan year. In general, the methods a plan sponsor may use to avoid or terminate one or more of the benefit limitations under Sections 1 through 3 for a plan year include employer contributions and elections to increase the amount of plan assets which are taken into account in determining the adjusted funding target attainment percentage, making an employer contribution that is specifically designated as a current year contribution that is made to avoid or terminate application of certain of the benefit limitations, or providing security to the plan.

7. Special Rules . (a) Rules of Operation for Periods Prior to and After Certification of Plan’s Adjusted Funding Target Attain- ment Percentage . (i) In General . Section 436(h) of the Internal Revenue Code and § 1.436–1(h) of the Treasury Regulations set forth a series of presumptions that apply (1) before the plan’s enrolled actuary issues a certification of the plan’s adjusted funding target attainment percentage for the plan year and (2) if the plan’s enrolled actuary does not issue a certification of the plan’s adjusted funding target attainment percentage for the plan year before the first day of the 10 ^th month of the plan year (or if the plan’s enrolled actuary issues a range certification for the plan year pursuant to § 1.436–1(h)(4)(ii) of the Treasury Regulations but does not issue a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year). For any period during which a presumption under § 436(h) of the Internal Revenue Code and § 1.436–1(h) of the Treasury Regulations applies to the plan, the limitations under Sections 1 through 3 are applied to the plan as if the adjusted funding target attainment percentage for the plan year were the presumed adjusted funding target attainment percentage determined under the rules of § 436(h) of the Internal Revenue Code and § 1.436–1(h)(1), (2), or (3) of the Treasury Regulations. These presumptions are set forth in Section 7(a)(ii) though (iv).

(ii) Presumption of Continued Under- funding Beginning First Day of Plan Year .

If a limitation under Section 1, 2, or 3 applied to the plan on the last day of the preceding plan year, then, commencing on the first day of the current plan year and continuing until the plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section 7(a)(iii) or Section 7(a)(iv) applies to the plan:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the adjusted funding target attainment percentage in effect on the last day of the preceding plan year; and

(2) The first day of the current plan year is a section 436 measurement date.

(iii) Presumption of Underfunding Be- ginning First Day of 4 ^th Month . If the plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 4 ^th month of the plan year and the plan’s adjusted funding target attainment percentage for the preceding plan year was either at least 60 percent but less than 70 percent or at least 80 percent but less than 90 percent, or is described in § 1.436–1(h)(2)(ii) of the Treasury Regulations, then, commencing on the first day of the 4 ^th month of the current plan year and continuing until the plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section 7(a)(iv) applies to the plan:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the plan’s adjusted funding target attainment percentage for the preceding plan year reduced by 10 percentage points; and

(2) The first day of the 4 ^th month of the current plan year is a section 436 measurement date.

(iv) Presumption of Underfunding On and After First Day of 10 ^th Month . If the plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 10 ^th month of the plan year (or if the plan’s enrolled actuary has issued a range certification for the

plan year pursuant to § 1.436–1(h)(4)(ii) of the Treasury Regulations but has not issued a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year), then, commencing on the first day of the 10 ^th month of the current plan year and continuing through the end of the plan year:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be less than 60 percent; and

(2) The first day of the 10 ^th month of the current plan year is a section 436 measurement date.

(b) New Plans, Plan Termination, Cer- tain Frozen Plans, and Other Special Rules . (i) First 5 Plan Years . The limitations in Section 1(b), Section 2(b), and Section 2(c) do not apply to a new plan for the first 5 plan years of the plan, determined under the rules of § 436(i) of the Internal Revenue Code and § 1.436–1(a)(3)(i) of the Treasury Regulations.

(ii) Plan Termination . The limitations on prohibited payments in Section 1(a), Section 2(a), and Section 3 do not apply to prohibited payments that are made to carry out the termination of the plan in accordance with applicable law. Any other limitations under this section of the plan do not cease to apply as a result of termination of the plan.

(iii) Exception to Limitations on Pro- hibited Payments Under Certain Frozen Plans . The limitations on prohibited payments set forth in Sections 1(a), 2(a), and 3 do not apply for a plan year if the terms of the plan, as in effect for the period beginning on September 1, 2005, and continuing through the end of the plan year, provide for no benefit accruals with respect to any participants. This Section 7(b)(iii) shall cease to apply as of the date any benefits accrue under the plan or the date on which a plan amendment that increases benefits takes effect.

(iv) Special Rules Relating to Unpre- dictable Contingent Event Benefits and Plan Amendments Increasing Benefit Lia- bility . During any period in which none of the presumptions under Section 7(a) apply to the plan and the plan’s enrolled actuary

December 27, 2011 921 2011–52 I.R.B.

modified at a new annuity starting date to be changed to a single sum payment for the remaining value of the participant or beneficiary’s benefit under the plan, subject to the other rules in this section of the plan and applicable requirements of § 401(a) of the Internal Revenue Code, including spousal consent.

Optional Provision to Allow Half Single Sum Payments for Participants and Bene- ficiaries Who Could Not Elect Single Sums (to be added to Section 4(a)) :

In addition, after the section 436 measurement date on which the limitation on prohibited payments under Section 2(a) ceases to apply to the plan, any participant or beneficiary who had an annuity starting date within the period during which that limitation applied to the plan is permitted to make a new election (within 90 days after the section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new annuity starting date to be changed to a single sum payment for the remaining value of the participant’s or beneficiary’s benefit under the plan, subject to the other rules in this section of the plan (including Section 1(a)) and applicable requirements of § 401(a) of the Internal Revenue Code, including spousal consent.

Optional Provision to Allow Special Optional Forms of Benefit When Only Half Single Sum Payments Are Permitted to be Paid (to be added to Section 1(a)) :

During a period when Section 1(a) applies to the plan, participants and beneficiaries are permitted to elect payment in any optional form of benefit otherwise available under the plan that provides for the current payment of the unrestricted portion of the benefit (as described in § 1.436–1(d)(3)(iii)(D) of the Treasury Regulations), with a delayed commencement for the restricted portion of the benefit (subject to other applicable qualification requirements, such as §§ 411(a)(11) and 401(a)(9) of the Internal Revenue Code).

Optional Provision to Restore Accruals (to be added to Section 4(b)) :

In addition, benefit accruals that were not permitted to accrue because of the application of Section 2(c) shall be restored when that limitation ceases to apply if the

has not yet issued a certification of the plan’s adjusted funding target attainment percentage for the plan year, the limitations under Section 1(b) and Section 2(b) shall be based on the inclusive presumed adjusted funding target attainment percentage for the plan, calculated in accordance with the rules of § 1.436–1(g)(2)(iii) of the Treasury Regulations.

(c) Special Rules Under PRA 2010 . (i) Payments Under Social Security Leveling Options . For purposes of determining whether the limitations under Section 1(a) or 2(a) apply to payments under a social security leveling option, within the meaning of § 436(j)(3)(C)(i) of the Internal Revenue Code, the adjusted funding target attainment percentage for a plan year shall be determined in accordance with the “Special Rule for Certain Years” under § 436(j)(3) of the Internal Revenue Code and any Treasury Regulations or other published guidance thereunder issued by the Internal Revenue Service.

(ii) Limitation on Benefit Accruals . For purposes of determining whether the accrual limitation under Section 2(c) applies to the plan, the adjusted funding target attainment percentage for a plan year shall be determined in accordance with the “Special Rule for Certain Years” under § 436(j)(3) of the Internal Revenue Code (except as provided under section 203(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, if applicable).

(d) Interpretation of Provisions . The limitations imposed by this section of the plan shall be interpreted and administered in accordance with § 436 of the Internal Revenue Code and § 1.436–1 of the Treasury Regulations.

8. Definitions . The definitions in the following Treasury Regulations apply for purposes of Sections 1 through 7: § 1.436–1(j)(1) defining adjusted funding target attainment percentage; § 1.436–1(j)(2) defining annuity starting date; § 1.436–1(j)(6) defining prohibited payment; § 1.436–1(j)(8) defining section 436 measurement date; and § 1.436–1(j)(9) defining an unpredictable contingent event and an unpredictable contingent event benefit.

9. Effective Date . The rules in Sections 1 through 8 are effective for plan years beginning after December 31, 2007.

---

(Part II)

If the plan is a multiple employer plan, one of the following two provisions must be added to Part I of the sample plan amendment, depending on whether § 413(c)(4)(A) of the Internal Revenue Code applies to the plan.

A multiple employer plan to which § 413(c)(4)(A) of the Internal Revenue Code applies, including a plan for which the election described in § 413(c)(4)(B) has been made, must add the following provision to Part I of the sample amend- ment :

The rules in Sections 1 through 8 apply separately to each employer under the plan, as if each such employer maintained a separate plan.

A multiple employer plan to which § 413(c)(4)(A) of the Internal Revenue Code does not apply must add the fol- lowing provision to Part I of the sample amendment :

The rules in Sections 1 through 8 apply as if all participants in the plan are employed by a single employer.

---

(Part III)

The following are optional provisions that may be added to Part I of the sample amendment:

Optional Provision to Allow Full Single Sum Payments for Participants and Bene- ficiaries Who Previously Could Only Elect Half Single Sums (to be added to Section 4(a)) : In addition, after the section 436 measurement date on which the limitation on prohibited payments under Section 1(a) ceases to apply to the plan, any participant or beneficiary who had an annuity starting date within the period during which that limitation applied to the plan is permitted to make a new election (within 90 days after the section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is

2011–52 I.R.B. 922 December 27, 2011

for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111–192.

Except as provided below, the Service will not consider in its review of any determination letter application for the submission period that begins February 1, 2012, any:

1. guidance issued after October 1, 2011;
2. statutes enacted after October 1, 2011;
3. qualification requirements first effective in 2013 or later; or
4. statutory provisions that are first effective in 2012, 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 2011 Cumulative List.

The 2011 Cumulative List includes the following guidance issued after October 1, 2011: Notice 2011–85, 2011–44 I.R.B. 605, announced that the Treasury Department and the Service intend to amend the 2010 final hybrid plan regulations to postpone the effective/applicability date of § 1.411(b)(5)–1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i) to plan years that begin on or after a date to be specified in those regulations that is not earlier than January 1, 2013. Notice 2011–85 also extends the deadline for adopting an interim or discretionary plan amendment under § 411(a)(13) (other than § 411(a)(13)(A)) and § 411(b)(5).

The Service’s review of a determination letter application filed in the Cycle B submission period will not consider the 2010 final hybrid plan regulations (other than with respect to § 411(a)(13)(A)) unless the plan has been amended to satisfy those regulations. For this purpose, the Service will only consider those provisions of the regulations that are effective for plan years beginning on or after January 1, 2011.

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

continuous period of the limitation was 12 months or less and the plan’s enrolled actuary certifies that the adjusted funding target attainment percentage for the plan year would not be less than 60 percent taking into account any restored benefit accruals for the prior plan year.

2011 Cumulative List of Changes in Plan Qualification Requirements

Notice 2011–97

I. PURPOSE

This notice contains the 2011 Cumulative List of Changes in Plan Qualification Requirements (2011 Cumulative List) described in section 4 of Rev. Proc. 2007–44, 2007–2 C.B. 54. The 2011 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2012 and ending January 31, 2013. These plans will primarily be single employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), single employer individually designed defined benefit plans, and multiple employer individually designed plans that are in Cycle B. Generally, an individually designed plan is in Cycle B if the last digit of the employer identification number of the plan sponsor is 2 or 7.

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 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 announced 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 requesting opinion, advisory, and determination letters whose submission period begins on February 1st following issuance of the Cumulative List.

In Notice 2010–90, 2010–52 I.R.B. 909, the Service published the 2010 Cumulative List of Changes in Plan Qualification Requirements (2010 Cumulative List). ¹

III. APPLICATION OF 2011 CUMULATIVE LIST

This notice is being issued in conjunction with the determination letter program for individually designed plans eligible for Cycle B. In accordance with Rev. Proc. 2007–44, the Service will start accepting determination letter applications for Cycle B individually designed plans beginning on February 1, 2012. The 12-month submission period for Cycle B plans will end January 31, 2013.

The 2011 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 B has been properly updated. Specifically, the 2011 Cumulative List reflects law changes under 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, the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111–240, and the Preservation of Access to Care

1 For previous cumulative lists, see Notice 2009–98, 2009–52 I.R.B. 974, 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, Notice 2004–84, 2004–2 C.B. 1030 for the 2009, 2008, 2007, 2006, 2005, and 2004 Cumulative Lists, respectively.

2 The Service will also not consider the requirements of § 436 in its review of any determination letter application submitted during the period beginning February 1, 2012 and ending January 31, 2013. See Notice 2011–96, 2011–52 I.R.B. 915, which extends the deadline for amending single-employer defined benefit plans to meet the requirements of §§ 401(a)(29) and 436.

December 27, 2011 923 2011–52 I.R.B.

guidance. For this purpose, compliance with proposed regulations will be treated as meeting that standard. However, a determination 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. 2011 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 2010 or earlier Cumulative Lists as “(New).”

All items from the 2005 and 2006 Cumulative Lists have been deleted from the 2011 Cumulative List. Thus, the 2011 Cumulative List contains those plan qualification requirements listed in the 2007, 2008, 2009, and 2010 Cumulative Lists, as well as additional 2011 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 B submission period (February 1, 2007 - January 31, 2008). However, if a plan has not been previously reviewed for items on earlier cumulative lists, the items from the earlier cumulative lists must be taken into account. For example, a new plan that was established after the Cycle B submission period would be reviewed for items on the 2004 Cumulative List.

1. 401(a) :

468, 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. (2010 C. L.)

166, 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.)

403, 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.)

251, revises the generally applicable rules for group trusts and, if certain requirements are met, permits the participation in group trusts of custodial accounts under § 403(b)(7), retirement income accounts under § 403(b)(9), and governmental retiree benefit plans under § 401(a)(24). This revenue ruling also modifies the transition relief provided in Rev. Rul. 2008–40. (New)

2. 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.)

3. 401(a)(9) :

nal regulations under § 401(a)(9) 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 suspension of the required minimum distribution rules for 2009 applicable to defined contribution plans. (2010 C. L.)

I.R.B. 491, provides guidance relating to the suspension of the required minimum distribution rules for 2009 applicable to defined contribution plans. (2010 C. L.)

4. 401(a)(22) :

550, provides that the terms readily tradable on an established securities market and readily tradable on an established market mean employer securities that are readily tradable on an established securities market within the meaning of § 1.401(a)(35)–1(f)(5) for purposes of § 401(a)(22). Notice 2011–19 is effective for plan years that begin on or after January 1, 2012, except for certain plans that have a delayed effective date. (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)(28)(C):

550, provides that the terms readily tradable on an established securities market and readily tradable on an established market mean employer securities that are readily tradable on an established securities market within the mean

2011–52 I.R.B. 924 December 27, 2011

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

§ 401(k) 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 contribution increases under automatic contribution arrangements. (2009 C. L.)

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

the gap 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.)

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

11. 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.)
12. 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.)

395, provides guidance regarding § 402(c)(11). (2008 C. L.)

ing of § 1.401(a)(35)–1(f)(5) for purposes of § 401(a)(28)(C). Notice 2011–19 is effective for plan years that begin on or after January 1, 2012, except for certain plans that have a delayed effective date. (New)

7. 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.)

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

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

972, 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. (2010 C. L.)

§ 401(a)(35) were published on May 19, 2010 (75 Fed. Reg. 27927). (2010 C. L.)

8. 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.)

9. 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. (2010 C. L.)

390, provides guidance regarding HEART Act § 104(a). (2010 C. L.)

10. 401(k) & 401(m) ³ :

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 a designated Roth contribution program. (2007 C. L.)

relating 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.)

2007–1 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.)

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

I.R.B. 390, provides guidance regarding HEART Act § 107. (2010 C. L.)

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

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

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, 2011 925 2011–52 I.R.B.

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

13. 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.)

423, 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.)

14. 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.)

15. 402A :

which permits rollovers from a plan account other than a designated Roth account to the plan’s designated Roth account. (2010 C. L.)

I.R.B. 872, provides guidance regarding § 402A(c)(4). (2010 C. L.)

16. 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.)

17. 409 :

550, provides that the terms readily tradable on an established securities market and readily tradable on an established market mean employer securities that are readily tradable on an established securities market within the meaning of § 1.401(a)(35)–1(f)(5) for purposes of § 409(h)(1)(B) and § 409(l). Notice 2011–19 is effective for plan years that begin on or after January 1, 2012, except for certain plans that have a delayed effective date. (New)

18. 411(a) :

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) :

notice 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.)

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

972, 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. (2010 C. L.)

§ 411(a)(13) were published on October 19, 2010 (75 Fed. Reg. 64123). ⁶ (2010 C. L.)

851, 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. (2010 C. L.)

605, extends the deadline for adopting an interim or discretionary amendment under § 411(a)(13) (other than § 411(a)(13)(A)). (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

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.

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) 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.

2011–52 I.R.B. 926 December 27, 2011

I.R.B. 390, provides guidance regarding HEART Act § 105(b)(1). (2010 C. L.)

27. 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.)

with respect to eligible 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 contribution 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.)

28. 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. (2010 C. L.)

29. 415 :

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

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

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

modified §§ 415(b)(2)(H) and

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.)

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

972, 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. (2010 C. L.)

§ 411(b)(5) were published on October 19, 2010 (75 Fed. Reg. 64123). ⁸ (2010 C. L.)

851, 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. (2010 C. L.)

605, announces that the Treasury Department and the Service intend to amend the 2010 final hybrid plan regulations to postpone the effective/applicability date of § 1.411(b)(5)–1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i) to plan years that begin on or after a date to be specified in those regulations that is not earlier than January 1, 2013. This notice also extends the deadline for adopting an interim

or discretionary amendment under § 411(b)(5). (New)

23. 411(d)(3) :

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

24. 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.)

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

467, extends the transition relief provided in Notice 2006–89. (2008 C. L.)

25. 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.)

26. 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. (2010 C. L.)

390, provides guidance regarding HEART Act § 104(b). (2010 C. L.)

Act 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. (2010 C. L.)

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

December 27, 2011 927 2011–52 I.R.B.

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.)

amended § 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.)

30. 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.)

31. 417 :

notice 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.)

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

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

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

amended § 417(e)(3)(D)(i) by striking “clause (ii)” and in

serting “subparagraph (C)”. (2009 C. L.)

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

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

32. 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.)

the definition 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.)

33. 431(b)(8) :

§ 431(b)(8) to the Code, which provides two special funding rules available to multiemployer plans. (New)

I.R.B. 862, provides guidance with respect to the special funding rules under § 431(b)(8). (New)

34. 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.)

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

I.R.B. 856, as modified by Notice 2009–42, 2009–20 I.R.B. 1011, 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.)

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

I.R.B. 856, as modified by Notice 2009–42, 2009–20 I.R.B. 1011, provides election and notice procedures for multiemployer plans under WRERA § 205. (2009 C. L.)

35. Miscellaneous :

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

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

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

I.R.B. 399, 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 2009–65, 2009–39 I.R.B. 413 (automatic contribution features); Notice 2009–82, 2009–41 I.R.B. 491 (suspension of the minimum distribution requirement for

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.

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.

2011–52 I.R.B. 928 December 27, 2011

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 interest 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. The composite corporate bond rate for November 2011 is 4.70 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.

2009); and Rev. Rul. 2011–1, 2011–2 I.R.B. 251 (group trusts).

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 .

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

Notice 2011–100

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

For Plan Years

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 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

Corporate Bond Weighted

Beginning in Permissible Range

Month Year

Average 90% to 100%

December 2011 5.76 5.19 5.76

monthly corporate bond yield curve, and the 24-month average corporate bond 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 November 2011 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of November 2011 are, respectively, 1.99, 4.47, and 5.26. The three 24-month average corporate bond segment rates applicable for December 2011 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

1.99 5.12 6.24

December 27, 2011 929 2011–52 I.R.B.

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 guidelines for determining the weighted average interest rate. The following rates were determined for plan years beginning in the month shown below.

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 December 2011, the funding segment rates are the three 24-month average corporate bond segment rates applicable for December 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 se

For Plan Years

curities 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 November 2011 is 3.02 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in August 2041 determined each day through November 9, 2011, and the yield on the 30-year Treasury bond maturing in November 2041 determined each day for the balance of the month.

30-Year Treasury Weighted

Beginning in Permissible Range

Month Year

Average 90% to 105%

December 2011 4.12 3.71 4.32

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 de

First Segment

Second Segment

termining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for November 2011, taking into account the November 2011 30-year Treasury rate of 3.02 stated above, are as follows:

Third Segment

2010 2.40 3.89 4.36 2011 2.20 4.18 4.81 2012 1.99 4.47 5.26

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 .

2011–52 I.R.B. 930 December 27, 2011

Table I

Monthly Yield Curve for November 2011

Derived from November 2011 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

December 27, 2011 931 2011–52 I.R.B.

Transfers by a Trustee From an Irrevocable Trust to Another Irrevocable Trust (Sometimes called “Decanting”); Requests for Comments

Notice 2011–101

PURPOSE

This notice requests comments regarding when (and under what circumstances) transfers by a trustee of all or a portion of the principal of an irrevocable trust (Distributing Trust) to another irrevocable trust (Receiving Trust), sometimes called “decanting,” that result in a change in the beneficial interests in the trust are not subject to income, gift, estate, and/or generation-skipping transfer (GST) taxes. In these transfers, the interests of one or more of the beneficiaries may be changed and, in some cases, the interest of a beneficiary may be terminated and/or another beneficiary who did not have an interest in Distributing Trust may receive an interest in Receiving Trust.

BACKGROUND

The Treasury Department and the Internal Revenue Service (IRS) are studying the tax implications of such transfers when there is a change in the beneficial interests in the trust and are considering approaches to addressing some or all of the relevant tax issues in published guidance. While these issues are under study, the IRS will not issue private letter rulings (PLRs) with respect to such transfers that result in a change in beneficial interests. See Sections 5.09, 5.16, and 5.17 of Rev. Proc. 2011–3, 2011–1 I.R.B. 111. The IRS generally will continue to issue PLRs with respect to such transfers that do not result in a change to any beneficial interests and do not result in a change in the applicable rule against perpetuities period.

REQUEST FOR COMMENTS

The Treasury Department and the IRS invite comments from the public regarding the income, gift, estate and GST tax issues and consequences arising from transfers by a trustee of all or a portion of the principal of a Distributing Trust to a Receiving Trust that change beneficial inter

ests. The Treasury Department and IRS also invite comments as to the relevance and effect of the various facts and circumstances listed below and the identification of other factors that may affect the tax consequences. The facts and circumstances that the Treasury Department and the IRS have identified as potentially affecting one or more tax consequences include the following:

1. A beneficiary’s right to or interest in trust principal or income is changed (including the right or interest of a charitable beneficiary);

2. Trust principal and/or income may be used to benefit new (additional) beneficiaries;

3. A beneficial interest (including any power to appoint income or corpus, whether general or limited, or other power) is added, deleted, or changed;

4. The transfer takes place from a trust treated as partially or wholly owned by a person under §§ 671 through 678 of the Internal Revenue Code (a “grantor trust”) to one which is not a grantor trust, or vice versa;

5. The situs or governing law of the Receiving Trust differs from that of the Distributing Trust, resulting in a termination date of the Receiving Trust that is subsequent to the termination date of the Distributing Trust;

6. A court order and/or approval of the state Attorney General is required for the transfer by the terms of the Distributing Trust and/or applicable law;

7. The beneficiaries are required to consent to the transfer by the terms of the Distributing Trust and/or applicable local law;

8. The beneficiaries are not required to consent to the transfer by the terms of the Distributing Trust and/or applicable local law;

9. Consent of the beneficiaries and/or a court order (or approval of the state Attorney General) is not required but is obtained;

10. The effect of state law or the silence of state law on any of the above scenarios;

11. A change in the identity of a donor or transferor for gift and/or GST tax purposes;

12. The Distributing Trust is exempt from GST tax under § 26.2601–1, has an inclusion ratio of zero under § 2632, or is exempt from GST under § 2663; and

13. None of the changes described above are made, but a future power to make any such changes is created.

The Treasury Department and the IRS encourage the public to suggest a definition for the type of transfer (“decanting”) this guidance is intended to address. Additionally, the public is encouraged to comment on the tax consequences of such transfers in the context of domestic trusts, the domestication of foreign trusts, transfers to foreign trusts, and on any other relevant facts or combination of facts not included in the above list.

Written comments are encouraged to be submitted by April 25, 2012. All comments will be available for public inspection and copying and should include a reference to this Notice 2011–101. Comments may be submitted in one of three ways:

(1) By mail to CC:PA:LPD:PR (Notice 2011–101), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

(2) Electronically to Notice.Comments@irscounsel.treas.gov. Please include “Notice 2011–101” in the subject line of any electronic communications.

(3) By hand-delivery Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2011–101), Courier’s Desk, Internal Revenue Service, 1111 Constitution Ave., NW, Washington, DC 20224.

DRAFTING INFORMATION

The principal author of this notice is Juli Ro Kim of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, contact Juli Ro Kim at (202) 622–3090 (not a toll-free call).

Social Security Contribution and Benefit Base for 2012

Notice 2011–102

Under authority contained in the Social Security Act (Act), the Commissioner, Social Security Administration, has determined and announced (76 F.R. 66111, dated October 25, 2011) that the contribution and benefit base for renumeration

2011–52 I.R.B. 932 December 27, 2011

erage wage index for 2010 ($41,673.83) to that for 1993 ($23,132.67) produces the amount of $1,801.51. We then round this amount to $1,800. Accordingly, the domestic employee coverage threshold amount is $1,800 for 2012.

(Filed by the Office of the Federal Register on October 24, 2011, 8:45 a.m., and published in the issue of the Federal Register for October 25, 2011, 76 F.R. 66111)

paid in 2012, and self-employment income earned in taxable years beginning in 2012 is $110,100.

“Old-Law” Contribution and Benefit Base

General

The “old-law” contribution and benefit base for 2012 is $81,900. This is the base that would have been effective under the Act without the enactment of the 1977 amendments.

Domestic Employee Coverage Threshold

General

The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medi

care is the domestic employee coverage threshold. For 2012, this threshold is $1,500. Section 218(c)(8)(B) of the Internal Revenue Code provides the formula for increasing the threshold.

Computation

Under the formula, the domestic employee coverage threshold amount for 2012 shall be equal to the 1999 amount of $1,000 multiplied by the ratio of the national average wage index for 2010 to that for 1997. If the resulting amount is not a multiple of $100, it shall be rounded to the next lower multiple of $100.

Domestic Employee Coverage Threshold Amount

Multiplying the 1995 domestic employee coverage threshold amount ($1,000) by the ratio of the national av

December 27, 2011 933 2011–52 I.R.B.

Note. This revenue procedure will be reproduced as the next revision of IRS Publication 1179, General Rules and Specifications for

Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.

26 CFR 601.602: Forms and instructions. (Also Part 1, Sections 220, 408, 408A, 529, 530(h), 853A, 1441, 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S, 6050W, 1.408–5, 1.408–7, 1.408A–7, 1.1441–1 through 1.1441–5, 1.6041–1, 7.6041–1, 1.6042–2, 1.6042–4, 1.6044–2, 1.6044–5, 1.6045–1, 5f.6045–1, 1.6045–2, 1.6045–4, 1.6047–1, 1.6049–4, 1.6049–6, 1.6049–7, 1.6050A–1, 1.6050B–1, 1.6050D–1, 1.6050E–1, 1.6050H–1, 1.6050H–2, 1.6050J–1T, 1.6050N–1, 1.6050P–1, 1.6050W–1.)

Rev. Proc. 2011–60

TABLE OF CONTENTS

PART 1 – GENERAL INFORMATION

SECTION 1.1 — OVERVIEW OF REVENUE PROCEDURE 2011-60/ WHAT’S NEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935

SECTION 1.2 — DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937

SECTION 1.3 — GENERAL REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1097-BTC,

1098, 1099, 3921, 3922, 5498, W-2G, 1042-S, AND 8935 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938

PART 2 – SPECIFICATIONS FOR SUBSTITUTE FORMS 1096

SECTION 2.1 — SPECIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941

SECTION 2.2 — INSTRUCTIONS FOR PREPARING PAPER FORMS THAT WILL BE FILED WITH THE

IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 944

PART 3 – SPECIFICATIONS FOR SUBSTITUTE FORM W-2G (FILED WITH THE IRS)

SECTION 3.1 — GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

SECTION 3.2 — SPECIFICATIONS FOR COPY A OF FORM W-2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

PART 4 – SUBSTITUTE STATEMENTS TO FORM RECIPIENTS

SECTION 4.1 — SPECIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946

SECTION 4.2 — COMPOSITE STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950

SECTION 4.3 - ADDITIONAL INFORMATION FOR SUBSTITUTE AND COMPOSITE FORMS 1099-B . . . . . . . . . . . . . . . . . . . . . . 951

SECTION 4.4 — REQUIRED LEGENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952

SECTION 4.5 — MISCELLANEOUS INSTRUCTIONS FOR COPIES B, C, D, 1, AND 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 953

SECTION 4.6 — ELECTRONIC DELIVERY OF RECIPIENT STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954

PART 5 – ADDITIONAL INSTRUCTIONS FOR SUBSTITUTE FORMS 1098, 1097-BTC, 1099, 5498, W2G,

AND 1042-S

SECTION 5.1 — PAPER SUBSTITUTES FOR FORM 1042-S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 956

SECTION 5.2 — OMB REQUIREMENTS FOR ALL FORMS IN THIS REVENUE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958

SECTION 5.3 — REPRODUCIBLE COPIES OF FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958

SECTION 5.4 — EFFECT ON OTHER REVENUE PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959

PART 6 – EXHIBTS

SECTION 6.1 — EXHIBITS OF FORMS IN THE REVENUE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959

2011–52 I.R.B. 934 December 27, 2011

Part 1 General Information

Section 1.1 — Overview of Revenue Procedure 2011-60/ What’s New

1.1.1 Purpose

1.1.2 Which Forms Are Covered?

The purpose of this revenue procedure is to set forth the 2011 requirements for:

This revenue procedure contains specifications for these information returns:

December 27, 2011 935 2011–52 I.R.B.

1.1.3 Scope

1.1.4 For More Information

For purposes of this revenue procedure, a substitute form or statement is one that is not published by the IRS. For a substitute form or statement to be acceptable to the IRS, it must conform to the official form or the specifications outlined in this revenue procedure. Do not submit any substitute forms or statements listed above to the IRS for approval. Privately published forms may not state, “This is an IRS approved form.”

Filers making payments to certain recipients during a calendar year are required by the Internal Revenue Code (the Code) to file information returns with the IRS for these payments. These filers must also provide this information to their recipients. In some cases, this also applies to payments received. See Part 4 for specifications that apply to recipient statements (generally Copy B).

In general, section 6011 of the Code contains requirements for filers of information returns. A filer must file information returns electronically or on paper. A filer who is required to file 250 or more information returns of any one type during a calendar year must file those returns electronically.

Although not required, small volume filers (fewer than 250 returns during a calendar year) may file the forms electronically. See the legal requirements for filing information returns (and providing a copy to a payee) in the 2011 General Instructions for Certain Information Returns and the 2011 Instructions for Form 1042-S. In addition, see the most recent revision of Publication 1220, Specifications for Filing Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically.

The IRS prints and provides the forms on which various payments must be reported. Alternatively, filers may prepare substitute copies of these IRS forms and use such forms to report payments to the IRS.

number at 1-800-TAX-FORM (1-800-829-3676).

ized customer service call site to answer questions related to information returns (Forms W-2, W-3, W-2c, W-3c, 1099 series, 1096, etc.). You can reach the call site at 1-866-4557438 (toll-free) or 304-263-8700 (not a toll-free number). The Telecommunication Device for the Deaf (TDD) number is 304-579-4827 (not a toll-free number). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m. Eastern time. You may also send questions to the call site via the Internet at mccirp@irs.gov . IRS/IRB does not process information returns which are filed on paper forms. See Publication 1220, Specifications for Filing Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically, for information on waivers and extensions of time.

you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax account questions or to order forms and publications.

2011–52 I.R.B. 936 December 27, 2011

1.1.5 What’s New

Section 1.2 — Definitions

1.2.1 Form Recipient

The following changes have been made to this year’s revenue procedure:

enue procedure has changed to General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.

been changed to General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3922, 5498, and W-2G).

tional information for reporting cost basis on substitute recipient copies of Form 1099-B.

sition (box 1b), cost or other basis (box 3), amount of loss disallowed due to a wash sale (box 5), whether the property sold is a noncovered security (box 6), and whether the gain or loss is short-term or long-term (box 8). Other boxes on the form have been moved or renumbered.

Health Coverage Tax Credit (HCTC) Transaction Center. Copy B must be provided to recipients by all other filers.

section 6050W. At the time of posting, the final 2011 form is not available.

tively. The blank box formerly to the left of former box 10 has been numbered and labeled “10 Amount allocable to IRR within 5 years” and a dollar sign ($) has been added. The box “1st year of desig. Roth contrib.” has been numbered 11. Distribution Code D has been eliminated.

3921 to report a corporation’s transfer of stock pursuant to an employee’s exercise of an incentive stock option described in Internal Revenue Code section 422(b). Use Form 3922 to report a transfer of stock by an employee where the stock was acquired pursuant to the exercise of an option described in Internal Revenue Code section 423(c).

the 2011 Form 1042-S for income paid during 2010.

advertising on information returns and payee copies reporting amounts paid during the 2010 calendar year announced in Rev. Proc. 2008-36 was postponed to the 2011 calendar year to provide further advance notice. The IRS has determined, with some exceptions, that logos, slogans and advertising will not be allowed on Forms 1096 or Copy A of Forms 1097-BTC, 1098, 1099, 5498, W-2G, 1042-S, or any payee copies reporting amounts paid during the 2011 calendar year, and thereafter. Logos, slogans, and advertising may be used on any permissible enclosure, other than information returns and payee copies. See the general instructions of the information return for a list of permissible enclosures. See Section 1.3.2 for updated and additional guidance.

possible.

Form recipient means the person to whom you are required by law to furnish a copy of the official form or information statement. The form recipient may be referred to by different names on various Forms 1099 and related forms (“payer,” “borrower,” “student,” “debtor,” “policyholder,” “insured,” “transferor,” “recipient,” “participant,” “donor,” or, in the case of Form W-2G, the “winner”). See Section 1.3.4 .

December 27, 2011 937 2011–52 I.R.B.

1.2.2 Filer

1.2.3 Substitute Form

1.2.4 Substitute Form Recipient Statement

1.2.5 Composite Substitute Statement

Filer means the person or organization required by law to file a form listed in Section 1.1.2 with the IRS. As outlined earlier, a filer may be a payer, creditor, recipient of mortgage or student loan interest payments, educational institution, broker, barter exchange, person reporting real estate transactions, trustee or issuer of any individual retirement arrangement or medical savings account, lender who acquires an interest in secured property or who has reason to know that the property has been abandoned, or certain donees of motor vehicles, boats, and airplanes.

Substitute form means a paper substitute of Copy A of an official form listed in Section 1.1.2 that totally conforms to the provisions in this revenue procedure.

Substitute form recipient statement means a paper statement of the information reported on a form listed in Section 1.1.2 . This statement must be furnished to a person (form recipient), as defined under the applicable provisions of the Code and the applicable regulations.

Composite substitute statement means one in which two or more required statements (for example, Forms 1099-INT and 1099-DIV) are furnished to the recipient on one document. However, each statement must be designated separately and must contain all the requisite Form 1099 information except as provided under Section 4.2 . A composite statement may not be filed with the IRS.

Section 1.3 — General Requirements for Acceptable Substitute Forms 1096, 1097-BTC, 1098, 1099,

3921, 3922, 5498, W-2G, 1042-S, and 8935

1.3.1 Introduction Paper substitutes for Form 1096 and Copy A of Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, 1042-S, and 8935 that totally conform to the specifications listed in this revenue procedure may be privately printed and filed as returns with the IRS. The reference to the Department of the Treasury — Internal Revenue Service should be included on all such forms.

If you are uncertain of any specification and want it clarified, you may submit a letter citing the specification, stating your understanding and interpretation of the specification, and enclosing an example of the form (if appropriate) to:

Internal Revenue Service Attn: Substitute Forms Program SE:W:CAR:MP:T:M:S 1111 Constitution Avenue, NW Room 6526 Washington, DC 20224

Note. Allow at least 30 days for the IRS to respond.

You may also contact the Substitute Forms Program via e-mail at substituteforms@irs.gov . Please enter “Substitute Forms” on the Subject Line.

Forms 1096, 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, 1042-S, and 8935 are subject to annual review and possible change. Therefore, filers are cautioned against overstocking supplies of privately printed substitutes.

1.3.2 Logos, Slogans, and Advertisements

Some Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, and 1042-S that include logos, slogans, and advertisements (including advertisements for tax preparation software) may be confused with questionable forms. A payee may not recognize the importance of the payee copy for tax reporting purposes due to the use of logos, slogans, and advertisements. Thus, the IRS has determined that logos, slogans and advertising will not be allowed on Forms 1096 or Copy A of Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, 1042-S, 8935, or any

2011–52 I.R.B. 938 December 27, 2011

1.3.3 Copy A Specifications

1.3.4 Copy B and Copy C Specifications

payee copies reporting amounts paid during the 2011 calendar year, and thereafter, with the following exceptions:

mark, or symbol of the payer, broker, or agent, an embossment or watermark on the information return and payee copies that is a representation of the name, a primary trade name, trademark, service mark, or symbol of the payer, broker, or agent,

broker, or agent, and used in a non-intrusive manner, and

nize, understand, and use the tax information on the payee copies.

In addition, logos, slogans, and advertising will be allowed on corrected information returns and payee copies for amounts paid before January 1, 2011.

The IRS e-file logo on the IRS official payee copies may be included, but it is not required, on any of the substitute form copies.

The information return and payee copies must clearly identify the payer’s name associated with its employer identification number.

Logos, slogans, and advertising may be used on any permissible enclosure, such as a check or account statement, other than information returns and payee copies. See the general instructions of the information return for a list of permissible enclosures.

As indicated in Sections 1.3.1 and 5.1.3, of this revenue procedure, Forms 1096, 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, 1042-S, and 8935 are subject to annual review and possible change. If you have comments about the prohibition against including logos, slogans, and advertising on information returns and payee copies, send or email your comments to: Internal Revenue Service, Attn: Substitute Forms Program, SE:W:CAR:MP:T:M:S, 1111 Constitution Avenue, NW, Room 6526, Washington, DC 20224 or substituteforms@irs.gov .

Proposed substitutes of Copy A must be exact replicas of the official IRS form with respect to layout and content. Proposed substitutes for Copy A that do not conform to the specifications in this revenue procedure are not acceptable. Further, if you file such forms with the IRS, you may be subject to a penalty for failure to file a correct information return under section 6721 of the Code. Generally, the penalty is $100 for each return where such failure occurs (up to $1,500,000) per year. No IRS office is authorized to allow deviations from this revenue procedure.

Caution: Overuse of proportional fonts may cause you to be subject to penalties and delays in processing.

Copy B and Copy C of the following forms must contain the information in Part 4 to be considered a “statement” or “official form” under the applicable provisions of the Code. The format of this information is at the discretion of the filer with the exception of the location of the tax year, form number, form name, and the information for composite Form 1099 statements as outlined under Section 4.2.

December 27, 2011 939 2011–52 I.R.B.

Copy B, of the forms below, are for the following recipients.

Copy C of the following forms are:

Note. On Copy C, Form 1099-LTC, you may reverse the locations of the policyholder’s and the insured’s name, street address, city, state, and ZIP code for easier mailing.

2011–52 I.R.B. 940 December 27, 2011

Section 2.1 — Specifications

2.1.1 General Requirements

2.1.2 Color and Paper Quality

Part 2 Specifications for Substitute Forms 1096

and Copies A of Forms 1097-BTC,

1098, 1099, 3921, 3922, 5498, and 8935 (All Filed with the IRS)

Form identifying numbers (for example, 9191 for Form 1099-DIV) must be printed in nonreflective black carbon-based ink in print positions 15 through 19 using an OCR A font. The check boxes to the right of the form identifying numbers must be 10-point boxes. The “VOID” checkbox is in print position 25. The “CORRECTED” check box is in position 33. Measurements are from the left edge of the paper, not including the perforated strip. See Exhibits F and O .

The substitute form must be an exact replica of the official IRS form with respect to layout and content. To determine the correct form measurements, see Exhibits A through DD at the end of this publication.

Hot wax and cold carbon spots are not permitted on any of the internal form plies. These spots are permitted on the back of a mailer top envelope ply.

Use of chemical transfer paper for Copy A is acceptable.

The Government Printing Office (GPO) symbol must be deleted.

Color and paper quality for Copy A (cut sheets and continuous pinfeed forms) as specified by JCP Code 0–25, dated November 29, 1978, must be white 100% bleached chemical wood, optical character recognition (OCR) bond produced in accordance with the following specifications.

Note. Reclaimed fiber in any percentage is permitted provided the requirements of this standard are met.

• Acidity: Ph value, average, not less than. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5

• Basis Weight: 17 x 22-500 cut sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-20

• Metric equivalent–g/m ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

A tolerance of ±5 pct. is allowed.

• Stiffness: Average, each direction, not less than-milligrams . . . . . . . . . . . . 50

• Tearing strength: Average, each direction, not less than-grams . . . . . . . . . 40

• Opacity: Average, not less than-percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

• Thickness: Average-inch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0038

• Metric equivalent-mm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.097

A tolerance of +0.0005 inch (0.0127 mm) is allowed. Paper cannot vary more than 0.0004 inch (0.0102 mm) from one edge to the other.

• Porosity: Average, not less than-seconds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

• Finish (smoothness): Average, each side-seconds. . . . . . . . . . . . . . . . . . . . . 20-55

• For information only, the Sheffield equivalent-units. . . . . . . . . . . . . . . . . . . 170-100

• Dirt: Average, each side, not to exceed-parts per million. . . . . . . . . . . . . . . 8

December 27, 2011 941 2011–52 I.R.B.

2.1.3 Chemical Transfer Paper

2.1.4 Printing

2.1.5 OCR Specifications

Chemical transfer paper is permitted for Copy A only if the following standards are met:

paper cannot be processed properly by machine.

All copies must be clearly legible. Fading must be minimized to assure legibility.

All print on Copy A of Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, and the print on Form 1096 above the statement, “Return this entire page to the Internal Revenue Service. Photocopies are not acceptable.” must be in Flint J-6983 red OCR dropout ink or an exact match. However, the four-digit form identifying number must be in nonreflective carbon-based black ink in OCR A font.

The shaded areas of any substitute form should generally correspond to the format of the official form.

The printing for the Form 1096 statement and the following text may be in any shade or tone of black ink. Black ink should only appear on the lower part of the reverse side of Form 1096, where it will not bleed through and interfere with scanning.

Note. The instructions on the front and back of Form 1096, which include filing addresses, must be printed.

Separation between fields must be 0.1 inch.

Except for Forms 1097-BTC, 1099-R, and 1099-MISC, the numbered captions are printed as solid with no shaded background.

Other printing requirements are discussed below.

You must initiate or have a quality control program to assure OCR ink density. Readings will be made when printed on approved 20 lb. white OCR bond with a reflectance of not less than 80%. Black ink must not have a reflectance greater than 15%. These readings are based on requirements of the “Scan-Optics Series 9000” Optical Scanner using Flint J-6983 red OCR dropout ink or an exact match.

The following testers and ranges are acceptable:

Important information: The forms produced under these specifications must be guaranteed to function properly when processed through High Speed Scan-Optics 9000 mm scanners. Forms require precision spacing, printing, and trimming.

Density readings on the solid J-6983 (red) must be between the ranges of 0.95 to 0.90. The optimal scanning range is 0.93. Density readings on the solid black must be between the ranges of 112 to 108. The optimal scanning range is 110.

Note. The readings are taken using an Ex-Rite 500 series densitometer, in Status T with Obsolute or – paper setting under an Illuminate 5000 Calvin Watt Light. You must maintain print contrast specification of ink and densitometer reflectivity reading throughout entire production run.

PCM-II tester on the “C” scale must range from .01 minimum to .06 maximum.

(IR) scale must range from .12 minimum to .21 maximum. White calibration disc must be 100%. Sensitivity must be set at one (1).

values. You may obtain approval by writing to the following address:

2011–52 I.R.B. 942 December 27, 2011

2.1.6 Typography

Commissioner of Internal Revenue Attn: SE:W:CAR:MP:P:B:T Business Publishing – Tax Products 1111 Constitution Avenue, NW Washington, DC 20224

Type must be substantially identical in size and shape to the official form. All rules are either ¹ /2-point or ³ /4-point. Rules must be identical to those on the official IRS form.

Note. The form identifying number must be nonreflective carbon-based black ink in OCR A font.

2.1.7 Dimensions Generally, three copies A of Forms 1098, 1099, 3921, and 3922 are contained on a single page, 8 inches wide (without any snap-stubs and/or pinfeed holes) by 11 inches deep.

Exceptions. Forms 1097-BTC, 1099-B, 1099-DIV, 1099-K, 1099-MISC, 1099-R, 5498, and 1042-S contain two documents per page. Form 1098-C is a single page document.

There is a .33 inch top margin from the top of the corrected box, and a .25 inch right margin. There is a ¹ /32 (0.0313) inch tolerance for the right margin. If the right and top margins are properly aligned, the left margin for all forms will be correct. All margins must be free of print. See Exhibits A through DD in this publication for correct form measurements.

These measurements are constant for certain Forms 1098, 1099, and 5498. These measurements are shown only once in this publication, on Form 1098 (Exhibit C) . Exceptions to these measurements are shown on the rest of the exhibits.

The depth of the individual trim size of each form on a page must be 3 ² /3 inches, the same depth as the official form.

Exceptions. The depth of Forms 1097-BTC, 1099-B, 1099-DIV, 1099-MISC, 1099-R, 5498, and 1042-S is 5 ¹ /2 inches.

2.1.8 Perforation

2.1.9 What To Include

Copy A (three per page; two per page for Forms 1097-BTC, 1099-B, 1099-DIV, 1099-MISC, 1099-R, 3921, 3922, 5498, or 1042-S) of privately printed continuous substitute forms must be perforated at each 11" page depth. No perforations are allowed between the 3 ² /3" forms or 5 ¹ /2" forms on a single copy page of Copies A.

The words “Do Not Cut or Separate Forms on This Page” must be printed in red dropout ink (as required by form specifications) between the three forms or two forms per page.

Note. Perforations are recommended between all the other individual copies (Copies B and C, and Copies 1 and 2 of Forms 1099-R and 1099-MISC, and Copy D for Forms 1099-LTC and 1099-R) in the set. Any recipient copies printed on a single sheet of paper must be easily separated. The best method of separation is to provide perforations between the individual copies. Each copy should be easily distinguished whatever method of separation is used. See Section 4.6.1 for information on electronically furnishing forms to recipients.

You must include the OMB Number on Copies A and Form 1096 in the same location as on the official form.

The words “For Privacy Act and Paperwork Reduction Act Notice, see the most current version of the General Instructions for Certain Information Returns” must be printed on Copy A; “For more information and the Privacy Act and Paperwork Reduction Act Notice, see the 2011 General Instructions for Certain Information Returns” must be printed on Form 1096.

A postal indicia may be used if it meets the following criteria:

December 27, 2011 943 2011–52 I.R.B.

The printer’s symbol (GPO) must not be printed on substitute Copy A. Instead, the employer identification number (EIN) of the forms printer must be entered in the bottom margin on the face of each individual form of Copy A, or on the bottom margin on the back of each Form 1096.

The Catalog Number (Cat. No.) shown on the forms is used for IRS distribution purposes and should not be printed on any substitute forms.

The form must not contain the statement “IRS approved” or any similar statement.

Section 2.2 — Instructions for Preparing Paper Forms That Will Be Filed with the IRS

2.2.1 Recipient Information

2.2.2 Account Number Box

2.2.3 Specifications and Restrictions

The form recipient’s name, street address, city, state, ZIP code, and telephone number (if required) should be typed or machine printed in black ink in the same format as shown on the official IRS form. The city, state, and ZIP code must be on the same line.

The following rules apply to the form recipient’s name(s):

in the area provided for the form recipient’s name.

the recipient name that corresponds to the recipient taxpayer identification number (TIN) shown on the form. Place the other form recipients’ names on the second name line (only 2 name lines are allowable).

Because certain states require that trust accounts be provided in a different format, filers generally should provide information returns reflecting payments to trust accounts with the:

Although handwritten forms will be accepted, the IRS prefers that filers type or machine print data entries. Also, filers should insert data in the middle of blocks well separated from other printing and guidelines, and take measures to guarantee clear, dark black, sharp images. Photocopies are not acceptable.

Use the account number box on all Forms 1098, 1099, 3921, 3922, 5498, and W-2G for an account number designation when required by the official IRS form. The account number is required if you have multiple accounts for a recipient for whom you are filing more than one information return of the same type. Additionally, the IRS encourages you to include the recipients’ account numbers on paper forms if your system of records uses the account number rather than the name or TIN for identification purposes. Also, the IRS will include the account number in future notices to you about backup withholding. If you use window envelopes and a reduced rate to mail statements to recipients, be sure the account number does not appear in the window. Otherwise, the Postal Service may not accept them for mailing.

Exception. Form 1098-T can have third party provider information.

Machine-printed forms should be printed using a 6 lines/inch option, and should be printed in 10 pitch pica (10 print positions per inch) or 12 pitch elite (12 print positions per inch). Proportional spaced fonts are unacceptable.

2011–52 I.R.B. 944 December 27, 2011

2.2.4 Where To File

Section 3.1 — General

3.1.1 Purpose

Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single sheet before they are filed with the IRS. The size specified does not include pin feed holes. Pin feed holes must not be present on forms filed with the IRS.

Do not:

in the numbered money boxes.

Exception. Use decimal points to indicate dollars and cents (for example, 2000.00 is acceptable).

appropriately sized envelope or box. Folded documents cannot be readily moved through the machine used in IRS processing.

may impair the IRS’s ability to machine scan the type of documents.

Mail completed paper forms to the IRS service center shown in the Instructions for Form 1096 and in the 2011 General Instructions for Certain Information Returns. Specific information needed to complete the forms mentioned in this revenue procedure are given in the specific form instructions. A chart, showing which form must be filed to report a particular payment, is included in the 2011 General Instructions for Certain Information Returns.

Part 3 Specifications for Substitute Form

W-2G (Filed with the IRS)

The following specifications give the format requirements for substitute Form W-2G (Copy A only), which is filed with the IRS.

A filer may use a substitute Form W-2G to file with the IRS (referred to as “substitute Copy A”). The substitute form must be an exact replica of the official form with respect to layout and content.

Section 3.2 — Specifications for Copy A of Form W-2G

3.2.1 Substitute Form W-2G (Copy A)

You must follow these specifications when printing substitute Copy A of the Form W-2G.

December 27, 2011 945 2011–52 I.R.B.

Part 4 Substitute Statements to Form Recipients and

Form Recipient Copies

Section 4.1 — Specifications

4.1.1 Introduction

If you do not use the official IRS form to furnish statements to recipients, you must furnish an acceptable substitute statement. To be acceptable, your substitute statement must comply with the rules in this section. If you are furnishing a substitute form, see Regulations sections 1.6042-4, 1.6044-5, 1.6049-6, and 1.6050N-1 to determine how the following statements must be provided to recipients for most Forms 1099-DIV and 1099-INT, all Forms 1099-OID and 1099-PATR, and Form 1099-MISC or 1099-S for royalties. Generally, information returns may be furnished electronically with the consent of the recipient. See Section 4.6.1 .

Note. A trustee of a grantor-type trust may choose to file Forms 1099 and furnish a statement to the grantor under Regulations sections 1.671-4(b)(2)(iii) and (b)(3)(ii). The statement required by those regulations is not subject to the requirements outlined in this section.

2011–52 I.R.B. 946 December 27, 2011

4.1.2 Substitute Statements to Recipients for Certain Forms 1099-B, 1099-INT, and 1099-DIV, and for Forms 1099-OID and 1099-PATR

The rules in this section apply to Form 1099-B, 1099-INT (except for interest reportable under section 6041), 1099-DIV (except for section 404(k) dividends), 1099-OID, and 1099PATR only. You may furnish form recipients with Copy B of the official Form 1099 or a substitute Form 1099 (form recipient statement) if it contains the same language as the official IRS form (such as aggregate amounts paid to the form recipient, any backup withholding, the name, address, and TIN of the person making the return, and any other information required by the official form). Except for state income tax withholding information, information not required by the official form should not be included on the substitute form.

Exception. A filer may include Form 1099-B information on a composite form with the forms listed in this section. Therefore supporting, explanatory, or comparable relevant information for covered and noncovered lots on the 1099-B portion of the composite substitute statement can be included. This information includes display on the payee statement of data elements such as basis for noncovered lots, explanatory remarks on permissible basis adjustments for covered lots, descriptions of the type of transaction (merger, buy to close, redemption, etc.), identification of contingent payment debt obligations, and lot relief methods.

Brokers that use substitute statements should segregate dispositions of noncovered securities from covered securities, and further segregate long-term and short-term dispositions of covered securities (for 2011 these segregations are not required; they are required for 2012 dispositions). They may also segregate long-term from short-term dispositions of noncovered securities, to the extent that date acquired is known. For 2012 dispositions and 2011 dispositions for which aggregation is done, the substitute Forms 1099-B would have up to five separate sections, each with a heading identifying which securities are included in the list, and each separately totaled. Each section, after totaling or within the heading for the section, should indicate how to report the transactions on Form 8949, as indicated.

(1) Short-Term Transactions for Which Basis Was Reported to the IRS; Report on Form 8949, Part I, with Box A checked. (2) Short-Term Transactions for Which Basis Is Not Reported to the IRS; Report on Form 8949, Part I, with Box B checked. (3) Long-Term Transactions for Which Basis Is Reported to the IRS; Report on Form 8949, Part II, with Box A checked.

(4) Long-Term Transactions for Which Basis Is Not Reported to the IRS; Report on Form 8949, Part II, with Box B checked. (5) Transactions for Which Basis Is Not Reported to the IRS and for Which Short- or LongTerm Determination is Unknown (to Broker); Report on Form 8949, in either Part I or Part II as appropriate, with Box B checked.

As long as transactions are clearly distinguished as to whether basis was or was not reported to the IRS and any information not reported to the IRS is clearly identified, each transaction may include information not reported to the IRS, including basis, date acquired, and gain or loss, with each transaction. That is, it is no longer necessary to report this information separately. Therefore, for short-term dispositions where basis was not reported to the IRS, basis and date acquired may be shown just as it would be shown for short-term dispositions where basis was reported to the IRS.

For 2012 dispositions, each of the applicable sections must have Sales Price and Cost or Other Basis separately totaled. Net gain or loss, if included for any of the sections, may also be totaled.

A draft of the 2012 Form 1099-B was available on the IRS.gov draft forms page, at www.IRS.gov/draftforms, at the time this publication was released (the draft will be removed after the final form posts). The 2012 Form 1099-B will have boxes for stock or other symbol (box 1d) and quantity sold (box 1e) (if applicable). It will also have a checkbox to indicate if basis was reported to the IRS (box 6b) (for 2011 substitute Forms 1099-B, brokers may generate this indicator and reflect it). Columns will be added to Form 8949 for 2012 for stock or other symbol and quantity sold, and transactions will continue to be required to be

December 27, 2011 947 2011–52 I.R.B.

segregated on Form 8949 based on whether or not basis was reported to the IRS. We also plan to add a gain/loss column to the 2012 Form 8949.

Further information impacting Publication 1179, such as issues arising after its final release, will be posted on IRS.gov at www.IRS.gov/pub1179 .

See Section 4.3 .

You may enter a total of the individual accounts listed on the form only if they have been paid by the same payer. For example, if you are listing interest paid on several accounts by one financial institution on Form 1099-INT, you may also enter the total interest amount. You may also enter a date next to the corrected box if that box is checked.

A substitute form recipient statement for Forms 1099-INT, 1099-DIV, 1099-OID, or 1099-PATR must comply with the following requirements:

(1) Box captions and numbers that are applicable must be clearly identified, using the same wording and numbering as on the official form.

(2) The form recipient statement (Copy B) must contain all applicable form recipient instructions provided on the front and back of the official IRS form. You may provide those instructions on a separate sheet of paper.

(3) The form recipient statement must contain the following in bold and conspicuous type: This is important tax information and is being furnished to the Internal Revenue Ser- vice (except as indicated). If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported. (4) The box caption “Federal income tax withheld” must be in boldface type or otherwise highlighted on the form recipient statement.

(5) The form recipient statement must contain the Office of Management and Budget (OMB) number as shown on the official IRS form. See Part 5.

(6) The form recipient statement must contain the tax year (for example, 2011), form number (for example, Form 1099-INT), and form name (for example, Interest Income) of the official IRS Form 1099. This information must be displayed prominently together in one area of the statement. For example, the tax year, form number, and form name could be shown in the upper right part of the statement. Each copy must be appropriately labeled (such as Copy B, For Recipient). See Section 4.5 for applicable labels and arrangement of assembly of forms. Note. Do not include the words “Substitute for” or “In lieu of” on the form recipient statement.

(7) Layout and format of the form is at the discretion of the filer. However, the IRS encourages the use of boxes so that the statement has the appearance of a form and can be easily distinguished from other non-tax statements.

(8) Each recipient statement of Forms 1099-DIV, 1099-INT, 1099-OID, and 1099-PATR must include the direct access telephone number of an individual who can answer questions about the statement. Include that telephone number conspicuously anywhere on the recipient statement.

(9) A mutual fund family may state separately on one document (for example, one piece of paper) the dividend income earned by a recipient from each fund within the family of funds as required by Form 1099-DIV. However, each fund and its earnings must be stated separately. The form must contain an instruction to the recipient that each fund’s dividends and name, not the name of the mutual fund family, must be reported on the recipient’s tax return. The form cannot contain an aggregate total of all funds. In addition, a mutual fund family may furnish a single statement (as a single filer) for Forms 1099-INT, 1099-DIV, and 1099-OID information. Each fund and its earnings must be stated separately. The form must contain an instruction to the recipient that each fund’s earnings and name, not the name of the mutual fund family, must be reported on the recipient’s tax return. The form cannot contain an aggregate total of all funds.

2011–52 I.R.B. 948 December 27, 2011

4.1.3 Substitute Statements to Recipients for Certain Forms 1098, 1099, 5498, and W-2G

Statements to form recipients for Forms 1097-BTC, 1098, 1098-C, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-CAP, 1099-G, 1099-H, 1099-K, 1099-LTC, 1099-MISC, 1099-Q, 1099-R, 1099-S, 1099-SA, 3921, 3922, 5498, 5498-ESA, 5498-SA, 8935, W-2G, 1099-DIV (only for section 404(k) dividends reportable under section 6047), and 1099-INT (only for interest of $600 or more made in the course of a trade or business reportable under section 6041) can be copies of the official forms or an acceptable substitute.

Caution. The IRS does not require a donee to use Form 1098-C as the written acknowledgment for contributions of motor vehicles, boats, and airplanes. However, if you choose to use copies of Form 1098-C or an acceptable substitute as the written acknowledgment, then you must follow the requirements of this Section 4.1.3 .

To be acceptable, a substitute form recipient statement must meet the following requirements.

(1) The tax year, form number, and form name must be the same as the official form and must be displayed prominently together in one area on the statement. For example, they may be shown in the upper right part of the statement.

(2) The filer’s and the form recipient’s identifying information required on the official IRS form must be included.

(3) Each substitute recipient statement for Forms W-2G, 1097-BTC, 1098, 1098-C, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-CAP, 1099-DIV, 1099-G (excluding state and local income tax refunds), 1099-H, 1099-K, 1099-INT, 1099-LTC, 1099-MISC (excluding fishing boat proceeds), 1099-OID, 1099-PATR, 1099-Q, 1099-S, and 8935 must include the direct access telephone number of an individual who can answer questions about the statement. Include the telephone number conspicuously anywhere on the recipient statement. Although not required, payers reporting on Forms 1099-R, 1099-SA, 3921, 3922, 5498, 5498-ESA, and 5498-SA are encouraged to furnish telephone numbers. (4) All applicable money amounts and information, including box numbers, required to be reported to the form recipient must be titled on the form recipient statement in substantially the same manner as those on the official IRS form. The box caption “Federal income tax withheld” must be in boldface type on the form recipient statement. Exception. If you are reporting a payment as “Other income” in box 3 of Form 1099-MISC, you may substitute appropriate language for the box title. For example, for payments of accrued wages and leave to a beneficiary of a deceased employee, you might change the title of box 3 to “Beneficiary payments” or something similar. Note. You cannot make this change on Copy A. Note. If federal income tax is withheld and shown on Form 1099-R or W-2G, Copy B and Copy C must be furnished to the recipient. If federal income tax is not withheld, only Copy C of Form 1099-R and W-2G must be furnished. However, for Form 1099-R, instructions similar to those on the back of the official Copy B and Copy C of Form 1099-R must be furnished to the recipient. For convenience, you may choose to provide both Copies B and C of Form 1099-R to the recipient.

(5) You must provide appropriate instructions to the form recipient similar to those on the official IRS form, to aid in the proper reporting on the form recipient’s income tax return. For payments reported on Forms 1099-B, and 1099-CAP, the requirement to include instructions substantially similar to those on the official IRS form may be satisfied by providing form recipients with a single set of instructions for all Forms 1099-B and 1099-CAP statements required to be furnished in a calendar year.

(6) If you use carbonless sets to produce recipient statements, the quality of each copy in the set must meet the following standards:

In general, black chemical transfer inks are preferred, but other colors are permitted if the above standards are met. Hot wax and cold carbon spots are not permitted on any of the internal form plies. The back of a mailer top envelope ply may contain these spots.

December 27, 2011 949 2011–52 I.R.B.

(7) A mutual fund family may state separately on one document (for example, one piece of paper) the Form 1099-B information for a recipient from each fund as required by Form 1099-B. However, the gross proceeds, etc., from each transaction within a fund must be stated separately. The form must contain an instruction to the recipient that each fund’s (not the mutual fund family’s) name and amount must be reported on the recipient’s tax return. The form cannot contain an aggregate total of all funds.

(8) You may use a Uniform Settlement Statement (under the Real Estate Settlement Procedures Act of 1974 (RESPA)) for Form 1099-S. The Uniform Settlement Statement is acceptable as the written statement to the transferor if you include the legend for Form 1099-S found in Section 4.4.2 and indicate which information on the Uniform Settlement Statement is being reported to the IRS on Form 1099-S.

(9) For reporting state income tax withholding and state payments, you may add an additional box(es) to recipient copies as appropriate. Note. You cannot make this change on Copy A.

(10) On Copy C of Form 1099-LTC, you may reverse the location of the policyholder’s and the insured’s name, street address, city, state, and ZIP code for easier mailing.

(11) If an institution insurer uses a third party service provider to file Form 1098-T, then in addition to the institution or insurers name, address, and telephone number, the same information may be included for the third party service provider in the space provided on the form.

Section 4.2 — Composite Statements

4.2.1 Composite Substitute Statements for Certain Forms 1099-B, 1099-INT, 1099-DIV, 1099-MISC, and 1099-S, and for Forms 1099-OID and 1099-PATR

A composite form recipient statement is permitted for reportable payments of interest, dividends, original issue discount, patronage dividends, and royalties (Forms 1099-INT (except for interest reportable under section 6041), 1099-DIV (except for section 404(k) dividends), 1099-MISC or 1099-S (for royalties only), 1099-OID, or 1099-PATR) when one payer is reporting more than one of these payments during a calendar year to the same form recipient. Generally, do not include any other Form 1099 information (for example, 1098 or 1099-A) on a composite statement with the information required on the forms listed in the preceding sentence.

Exception. A filer may include Form 1099-B information on a composite form with the forms listed above. Therefore supporting, explanatory, or comparable relevant information for covered and noncovered lots on the 1099-B portion of the composite substitute statement can be included as long as the statement clearly indicates such information is not being provided to the IRS. This information includes display on the payee statement of data elements such as basis for noncovered lots, explanatory remarks on permissible basis adjustments for covered lots, descriptions of the type of gain or loss (merger, buy to close, redemption, etc.), identification of contingent payment debt obligations, and lot relief methods.

Information required by the official Form 1099-B that would be repeated in a composite statement can be stated a single time as long as the statement clearly shows and delineates the information required by the official form.

Brokers that use substitute statements may segregate long-term from short-term sales on the same statement. And as long as they clearly distinguish information that is reported to the IRS from that not being reported to the IRS, brokers may include similar and other relevant tax information for covered and noncovered shares on the same statement. See Section 4.3 .

Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the following requirements in addition to the requirements listed earlier in Section 4.1.2 .

together on the form and separate from any information covering other types of payments included on the form. For example, if you are reporting interest and dividends, the Form 1099-INT information must be presented separately from the Form 1099-DIV information.

2011–52 I.R.B. 950 December 27, 2011

4.2.2 Composite Substitute Statements to Recipients for Forms Specified in Section 4.1.3

ber, and form name of the official IRS form together in one area at the beginning of each appropriate block of information.

each information block is required to be listed only once in the first information block on the composite form. For example, there is no requirement to report the name of the filer in each information block. This rule does not apply to any money amounts (for example, federal income tax withheld) or to any other information that applies to money amounts.

ient’s tax obligation with respect to the payment are as clear as if each required statement were furnished separately on an official form.

A composite form recipient statement for the forms specified in Section 4.1.3 is permitted when one filer is reporting more than one type of payment during a calendar year to the same form recipient. A composite statement is not allowed for a combination of forms listed in Section 4.1.3 and forms listed in Section 4.1.2 .

Exceptions:

may be reported on a composite substitute statement with Form 1099-DIV.

in Section 4.1.2 as described in Section 4.2.1 .

only with the forms specified in Section 4.1.2 .

Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the requirements listed in Section 4.2.1 as well as the requirements in Section 4.1.3 . A composite statement of Forms 1098 and 1099-INT (for interest reportable under section 6049) is not allowed.

Section 4.3 - Additional Information for Substitute and Composite Forms 1099-B

4.3.1 Design Layout for Presenting Additional 1099-B Information

4.3.2 Added Legend for Providing Additional 1099-B Information

If you wish to provide additional information to the investor on the same substitute recipient Form 1099-B, the form must follow the rules set forth in “Exception” in Section 4.1.2 and should clearly delineate how the information is presented. You should present the information in the same numerical order as on the official IRS form as much as possible. Any information presented should make reference to its corresponding number on the official form as appropriate. You should clearly categorize each type of information you are reporting. The substitute form should clearly explain which pieces of information are and which are not reported to the IRS. See Exhibit H for an example of a substitute recipient Form 1099-B that includes additional information.

If you wish to provide additional information to the investor on the same substitute recipient Form 1099-B, an additional separate legend is required that explains exactly which pieces of information are and which are not reported to the IRS to the extent, if any, the information is not already identified as not being reported to the IRS as described in Section 4.1.2 under “Exception.” It should clearly explain how the information is presented. You may present this legend in a way that is consistent with your design as long as it clearly indicates which information is being provided to the IRS. Additionally, a reminder to taxpayers that they are ultimately responsible for the accuracy of their tax returns is also required.

December 27, 2011 951 2011–52 I.R.B.

Section 4.4 — Required Legends

4.4.1 Required Legends for Forms Form 1098 recipient statements (Copy B) must contain the following legends: 1098

(1) “The information in boxes 1, 2, 3, and 4 is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points or because you did not report this refund of interest on your return.”

(2) “ Caution. The amount shown may not be fully deductible by you. Limits based on the loan amount and the cost and value of the secured property may apply. Also, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person.”

Copy B - “In order to take a deduction of more than $500 for this contribution, you must attach this copy to your federal tax return.”

Copy C — “This information is being furnished to the Internal Revenue Service unless box 7 is checked.”

Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for student loan interest.”

Revenue Service.”

4.4.2 Required Legends for Forms 1099 and W-2G

Copy B — “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported.”

1099-PATR, and 1099-Q: Copy B - “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.”

Copy B - “This is important tax information and is being furnished to the Internal Revenue Service.”

Copy B - “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.”

Copy C — “Copy C is provided to you for information only. Only the policyholder is required to report this information on a tax return.”

Copy B - “Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return.”

Copy C — “This information is being furnished to the Internal Revenue Service.”

Copy B - “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.”

2011–52 I.R.B. 952 December 27, 2011

4.4.3 Required Legends for Forms 1097-BTC, 3921, 3922, 5498, and 8935

Copy B — “This information is being furnished to the Internal Revenue Service.”

Copy B — “This information is being furnished to the Internal Revenue Service. Report this income on your federal tax return. If this form shows federal income tax withheld in box 2, attach this copy to your return.”

Copy C - “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.”

Recipient statements (Copy B) for these forms must contain the following legends:

Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if an amount of tax credit exceeding the amount reported on this form is claimed on your income tax return.”

Copy B - “This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.”

Copy C — “This copy should be retained by the corporation whose stock has been transferred under Section 422(b).”

Copy B - “This is important tax information and is being furnished to the Internal Revenue Service.”

Copy C — “This copy should be retained by the corporation.”

Note. If you do not provide another statement to the participant because no contributions were made for the year, the statement of the fair market value and any required minimum distribution, of the account must contain this legend and a designation of which information is being provided to the IRS.

Revenue Service.”

Section 4.5 — Miscellaneous Instructions for Copies B, C, D, 1, and 2

4.5.1 Copies

4.5.2 Arrangement of Assembly

Copies B, C, and in some cases, D, 1, and 2 are included in the official assembly for the convenience of the filer. You are not legally required to include all these copies with the privately printed substitute forms. Furnishing Copies B and, in some cases, C will satisfy the legal requirement to provide statements of information to form recipients.

Note. If an amount of federal income tax withheld is shown on Form 1099-R or W-2G, Copy B (to be attached to the tax return) and Copy C must be furnished to the recipient. Copy D (Forms 1099-R and W-2G) may be used for Payer records. Only Copy A should be filed with the IRS.

Copy A (“For Internal Revenue Service Center”) of all forms must be on top. The rest of the assembly must be arranged, from top to bottom, as follows. For:

December 27, 2011 953 2011–52 I.R.B.

4.5.3 Perforations

1099-Q, and 8935— Copy B “For Recipient”; Copy C “For Payer.”

2 “To be filed with recipient’s state income tax return, when required”; and Copy C “For Payer.”

income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return”; Copy C “For Recipient’s Records”; Copy 2 “File this copy with your state, city, or local income tax return, when required”; Copy D “For Payer.”

federal tax return. If this form shows federal income tax withheld in box 2, attach this copy to your return”; Copy C “For Winner’s Records”; Copy 2 “Attach this copy to your state income tax return, if required.”; Copy D “For Payer.”

Perforations are recommended between forms on all copies except Copy A to make separating the forms easier. Recipient copies, including those that are printed on a single sheet of paper, must be easily separated. The best method of separation is to provide perforations between the individual copies. Each copy should be easily distinguished whatever method of separation is used.

Perforations or other means of separation are required between forms on all copies except Copy A to make separating the forms easier. Exception: Copy A of Form W-2G may be perforated.

Note. Perforation does not apply to printouts of copies that are furnished electronically to recipients (as described in Regulations section 31.6051–1(j)). However, these recipients should be cautioned to carefully separate any copies. See Section 4.6 .

Section 4.6 — Electronic Delivery of Recipient Statements

4.6.1 Electronic Recipient Statements

If you are required to furnish a written statement (Copy B or an acceptable substitute) to a recipient, then you may furnish the statement electronically instead of on paper. This includes furnishing the statement to recipients of Forms 1098, 1098-E, 1098-T, 1099-A, B, C, CAP, DIV, G, H, INT, K, LTC, MISC, OID, PATR, Q, R, S, SA, 3921, 3922, 5498, 5498-ESA, 5498-SA,

2011–52 I.R.B. 954 December 27, 2011

and 8935. It also includes Form W-2G (except for horse and dog racing, jai alai, sweepstakes, wagering pools, and lotteries).

Note. Until further guidance is issued, you can not furnish Form 1098-C electronically. Perforation (see Section 2.1.8 ) does not apply to printouts of copies of forms that are furnished electronically to recipients. However, recipients should be cautioned to carefully separate the copies.

If you meet the requirements listed below, you are treated as furnishing the statement timely.

Consent The recipient must consent in the affirmative and not have withdrawn the consent before the statement is furnished. The consent by the recipient must be made electronically in a way that shows that he or she can access the statement in the electronic format in which it will be furnished.

You must notify the recipient of any hardware or software changes prior to furnishing the statement. A new consent to receive the statement electronically is required after the new hardware or software is put into service.

Prior to furnishing the statements electronically, you must provide the recipient a statement with the following statements prominently displayed:

year the statement is furnished or only for the January 31 immediately following the date of the consent.

the withdrawal in writing (electronically or on paper) to the person whose name appears on the statement. Confirmation of the withdrawal also will be in writing (electronically or on paper).

and a date the statement will no longer be available on the website.

Format, Posting, and Notification Additionally, you must:

to the recipient through October 15 of that year.

the statement.

For more information, see Regulations section 31.6051-1. For electronic furnishing of Forms 1098-E and 1098-T, see Regulations sections 1.6050S-2 and 1.6050S-4. For electronic furnishing of Forms 1099-R, 1099-SA, 1099-Q, 5498, 5498-ESA, and 5498-SA, see Notice 2004-10, 2004-1 C.B. 433.

December 27, 2011 955 2011–52 I.R.B.

Part 5 Additional Instructions for Substitute Forms 1098, 1097-BTC, 1099, 5498, W-2G, and 1042-S

Section 5.1 — Paper Substitutes for Form 1042-S

5.1.1 Paper Substitutes

5.1.2 Time Frame For Submission of Form 1042-S

5.1.3 Revisions

5.1.4 Obtaining Copies

5.1.5 Instructions For Withholding Agents

Paper substitutes of Copy A for Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, that totally conform to the specifications contained in this procedure may be privately printed without prior approval from the Internal Revenue Service. Proposed substitutes not conforming to these specifications must be submitted for consideration.

Note. Copies B, C, D, and E of Form 1042-S may contain multiple income entries for the same recipient, that is multiple rows of the top boxes 1-10 of the form.

The request should be submitted by November 15 of the year prior to the year the form is to be used. This is to allow the Service adequate time to respond and the submitter adequate time to make any corrections. These requests should contain a copy of the proposed form, the need for the specific deviation(s), and the number of information returns to be printed.

Form 1042-S is subject to annual review and possible change. Withholding agents and form suppliers are cautioned against overstocking supplies of the privately printed substitutes.

Copies of the official form for the reporting year may be obtained from most Service offices. The Service provides only cut sheets of these forms. Continuous fan-fold/pin-fed forms are not provided.

Instructions for withholding agents:

or IRS individual taxpayer identification number (ITIN), consisting of nine digits separated by hyphens as follows: 000-00-0000. For all other recipients, the term means employer identification number (EIN) or qualified intermediary employer identification number (QI-EIN). The QI-EIN designation includes a withholding foreign partnership employer identification number (WP-EIN) and a withholding foreign trust employer identification number (WT-EIN). The EIN and QI-EIN consist of nine digits separated by a hyphen as follows: 00-0000000. The taxpayer identification number (TIN) must be in one of these formats.

ity data entries on the forms (that is, use black ink and insert data in the middle of blocks well separated from other printing and guidelines), and take other measures to guarantee a clear, sharp image. Withholding agents are not required, however, to acquire special equipment solely for the purpose of preparing these forms.

top center of the form under the title and checked, if applicable.

to the size specified for a single form before they are filed with the Service. The dimensions are found below. Computer cards are acceptable provided they meet all requirements regarding layout, content, and size.

2011–52 I.R.B. 956 December 27, 2011

5.1.6 Substitute Form 1042-S Format Requirements

December 27, 2011 957 2011–52 I.R.B.

Section 5.2 — OMB Requirements for All Forms in This Revenue Procedure

5.2.1 OMB Requirements

5.2.2 Substitute Form Requirements

5.2.3 Required Explanation to Users

The Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires that:

(in or near the upper right corner) the OMB approval number, if any. (The official OMB numbers may be found on the official IRS printed forms and are also shown on the forms in the exhibits in Part 6 .)

(1) Why the IRS needs the information, (2) How it will be used, and (3) Whether or not the information is required to be furnished to the IRS.

This information must be provided to any users of official or substitute IRS forms or instructions.

The OMB requirements for substitute IRS forms are:

(1) OMB No. XXXX-XXXX (preferred) or (2) OMB # XXXX-XXXX (acceptable).

All substitute forms (Copy A only) must state “For Privacy Act and Paperwork Reduction Act Notice, see the 2011 General Instructions for Certain Information Returns.” (or “For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.” for Copy A of Form 1042-S).

If no instructions are provided to users of your forms, you must furnish them with the exact text of the Privacy Act and Paperwork Reduction Act Notice.

Section 5.3 — Reproducible Copies of Forms

5.3.1 Introduction

5.3.2 Internet

You can order official IRS forms and information copies of federal tax materials at local IRS offices or by calling the IRS National Distribution Center at 1-800-829-3676. Other ways to get federal tax material include the following.

The DVD contains approximately 2,500 tax forms and publications for small businesses, return preparers, and others who frequently need current or prior year tax products. Most current tax forms on the DVD may be filled in electronically, then printed out for submission and saved for recordkeeping. Other products on the DVD include the Internal Revenue Bulletins, Tax Supplements, and Internet resources and links for the tax professional. For system requirements, contact the National Technical Information Service (NTIS) at http://www.ntis.gov .

Prices are subject to change. The cost of the DVD if purchased from NTIS at http://www.irs.gov/formspubs/article/0,,id=108660,00.html is $30 (with no handling fee). If purchased using the following methods, the cost for each DVD is $30 (plus a $6 handling fee). These methods are:

2011–52 I.R.B. 958 December 27, 2011

VA 22312

Note. Some forms on the DVD are intended as information only and may not be submitted as an official IRS form (for example, Forms 1099, W-2, and W-3). Additionally, Publication 1796 does not permit electronic filing. Several IRS forms are provided electronically on the IRS home page and on the IRS Tax Products DVD. But, for instance, Form 1096 and Copy A of 1098 series, 1099 series, and 5498 series cannot be used for filing with the IRS when printed from a conventional printer. These forms contain drop-out ink requirements as described in Part 2 of this publication.

Section 5.4 — Effect on Other Revenue Procedures

5.4.1 Other Revenue Procedures

Revenue Procedure 2009-49, 2009-51 I.R.B. 879, dated December 21, 2009, is superseded.

Part 6 Exhibits

Section 6.1 — Exhibits of Forms in the Revenue Procedure

6.1.1 Purpose

6.1.2 Guidelines

Exhibits A through DD illustrate some of the specifications that were discussed earlier in this revenue procedure. The dimensions apply to the actual size forms, but the exhibits have been reduced in size.

Generally, the illustrated dimensions apply to all like forms. For example, Exhibit C shows 11.00" from the top edge to the bottom edge of Form 1098 and .85" between the bottom rule of the top form and the top rule of the second form on the page. These dimensions apply to all forms that are printed three to a page.

Keep in mind the following guidelines when printing substitute forms.

This will be inconsistent with the specifications.

December 27, 2011 959 2011–52 I.R.B.

2011–52 I.R.B. 960 December 27, 2011

December 27, 2011 961 2011–52 I.R.B.

2011–52 I.R.B. 962 December 27, 2011

December 27, 2011 963 2011–52 I.R.B.

2011–52 I.R.B. 964 December 27, 2011

December 27, 2011 965 2011–52 I.R.B.

2011–52 I.R.B. 966 December 27, 2011

December 27, 2011 967 2011–52 I.R.B.

2011–52 I.R.B. 968 December 27, 2011

December 27, 2011 969 2011–52 I.R.B.

2011–52 I.R.B. 970 December 27, 2011

December 27, 2011 971 2011–52 I.R.B.

2011–52 I.R.B. 972 December 27, 2011

December 27, 2011 973 2011–52 I.R.B.

2011–52 I.R.B. 974 December 27, 2011

December 27, 2011 975 2011–52 I.R.B.

2011–52 I.R.B. 976 December 27, 2011

December 27, 2011 977 2011–52 I.R.B.

2011–52 I.R.B. 978 December 27, 2011

December 27, 2011 979 2011–52 I.R.B.

2011–52 I.R.B. 980 December 27, 2011

December 27, 2011 981 2011–52 I.R.B.

2011–52 I.R.B. 982 December 27, 2011

December 27, 2011 983 2011–52 I.R.B.

2011–52 I.R.B. 984 December 27, 2011

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2011–52 I.R.B. 986 December 27, 2011

December 27, 2011 987 2011–52 I.R.B.

2011–52 I.R.B. 988 December 27, 2011

December 27, 2011 989 2011–52 I.R.B.

Note. This revenue procedure will be reproduced as the next revision of IRS Publication 1167, General Rules and Specifications for

Substitute Forms and Schedules.

Rev. Proc. 2011–61

TABLE OF CONTENTS

PART 1 - INTRODUCTION TO SUBSTITUTE FORMS

SECTION 1.1 – OVERVIEW OF REVENUE PROCEDURE 2011-61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991

SECTION 1.2 – IRS CONTACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 992

SECTION 1.3 – WHAT’S NEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993

SECTION 1.4 – DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 994

SECTION 1.5 – AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996

PART 2 - GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS

SECTION 2.1 – GENERAL SPECIFICATIONS FOR APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997

SECTION 2.2 – HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 998

SECTION 2.3 – VOUCHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999

SECTION 2.4 – RESTRICTIONS ON CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001

SECTION 2.5 – GUIDELINES FOR OBTAINING IRS APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001

SECTION 2.6 – OFFICE OF MANAGEMENT AND BUDGET (OMB) REQUIREMENTS FOR ALL

SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004

PART 3 - PHYSICAL ASPECTS AND REQUIREMENTS

SECTION 3.1 – GENERAL GUIDELINES FOR SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1005

SECTION 3.2 – PAPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1007

SECTION 3.3 – PRINTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1008

SECTION 3.4 – MARGINS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1009

SECTION 3.5 – EXAMPLES OF APPROVED FORMATS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010

SECTION 3.6 – MISCELLANEOUS INFORMATION FOR SUBSTITUTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010

PART 4 - ADDITIONAL RESOURCES

SECTION 4.1 – GUIDANCE FROM OTHER REVENUE PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011

SECTION 4.2 – ELECTRONIC TAX PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011

SECTION 4.3 – IRS TAX PRODUCTS ON DVD (PUBLICATION 1796) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011

PART 5 - REQUIREMENTS FOR SPECIFIC TAX RETURNS

SECTION 5.1 – TAX RETURNS (FORMS 1040, 1040A, 1120, ETC.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1012

SECTION 5.2 – CHANGES PERMITTED TO GRAPHICS (FORMS 1040A AND 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013

SECTION 5.3 – CHANGES PERMITTED TO FORM 1040A GRAPHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1014

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SECTION 5.4 – CHANGES PERMITTED TO FORM 1040 GRAPHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1015

PART 6 - FORMAT AND CONTENT OF SUBSTITUTE RETURNS

SECTION 6.1 – ACCEPTABLE FORMATS FOR SUBSTITUTE FORMS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1016

SECTION 6.2 – ADDITIONAL INSTRUCTIONS FOR ALL FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

PART 7 - MISCELLANEOUS FORMS AND PROGRAMS

SECTION 7.1 – SPECIFICATIONS FOR SUBSTITUTE SCHEDULES K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018

SECTION 7.2 – GUIDELINES FOR SUBSTITUTE FORMS 8655 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1023

PART 8 - ADDITIONAL INFORMATION

SECTION 8.1 – FORMS FOR ELECTRONICALLY FILED RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1024

SECTION 8.2 – EFFECT ON OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1025

Exhibit A-1 – Schedule A (Preferred Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026

Exhibit A-2 – Schedule A (Acceptable Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1027

Exhibit B-1 – Form 2106-EZ (Preferred Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1028

Exhibit B-2 – Form 2106-EZ (Acceptable Format) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1029

Exhibit C – Software Developers Voucher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1030

Exhibit D – Sample Check Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031