Section 1. PURPOSE

This notice provides interim guidance relating to the excise tax on medical devices imposed by § 4191 (the “medical device excise tax”) of the Internal Revenue Code (the “Code”). Specifically, this notice provides interim guidance for determining price under § 4216(b). This no

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.)

MAP–21 amend § 420 to extend the provisions relating to transfers of excess pension assets to retiree health accounts and to expand those provisions to allow transfers to retiree group term life insurance accounts. (New)

33. 431(b)(8) :

§ 431(b)(8), which provides two special funding rules available to multiemployer plans. (2011 C. L.)

I.R.B. 862, provides guidance with respect to the special funding rules under § 431(b)(8). (2011 C. L.)

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. ⁹ (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 peri

ods 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. 436 :

the application of § 436, which provides a series of limitations on the accrual and payment of benefits under underfunded single employer defined benefit plans. (New)

263, provides guidance on the special rules relating to the relaxation of § 436 rules that were included in the funding relief for single employer defined benefit pension plans under PRA 2010. (New)

915, provides a sample plan amendment that plan sponsors may adopt to satisfy § 436 regarding limitations on the accrual and payment of benefits. The 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). (New)

712. This notice extends the deadline, as set forth in Notice to amend a defined benefit plan to satisfy the requirements of § 436 and provides associated relief from the requirements of § 411(d)(6). (New)

713. Miscellaneous :

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

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

December 27, 2012 781 2012–52 I.R.B.

(b) Interim Rules . This section provides interim rules for how taxpayers may apply the constructive sale price rules to certain model distribution chains employed by some manufacturers in the medical device industry. The IRS and the Treasury Department identified the distribution chains addressed in these interim rules through written comments on the proposed regulations on taxable medical devices and informal taxpayer inquiries.

If a taxpayer uses one of the distribution chains described in this section, the taxpayer may apply the rules provided in this section to determine its medical device excise tax liability. A taxpayer does not need to make any additional or special filing, or notation on any filing, to apply these rules. If a taxpayer does not apply the rules provided in this notice, and does not use the actual sale price of the article to calculate its medical device excise tax liability, then the taxpayer bears the burden of demonstrating that it used the fair market price of the article to calculate its tax liability. This approach is consistent with the general rule under which a manufacturer may rebut the constructive sale price if the manufacturer demonstrates that it sold the article at a fair market price. Rev. Rul. 89–47, 1989–1 C.B. 295. Taxpayers may apply the rules provided in this section until the IRS and the Treasury Department issue further guidance.

For purposes of these rules, a “related party” means that one of the parties is controlled (in law or fact) by the other, or there is common control of the parties (regardless of whether such control is actually exercised to influence the sale price). See § 48.4216(b)–2(e)(1). Further, for purposes of these rules, a “reseller” means a sales company, a leasing company, a distributor, or a retailer. Finally, the application of constructive sale price rules to calculate the tax base does not shift the liability for excise tax from the manufacturer to any other person.

The interim rules are as follows: (1) Sales at retail; no regular sales to independent wholesale distributors.

(A) Description . In this distribution chain, the manufacturer sells taxable articles directly to unrelated end-users. The manufacturer does not regularly sell its taxable articles to independent wholesale distributors.

tice also provides interim guidance relating to donated taxable medical devices, the licensing of taxable medical devices, and the tax treatment of medical convenience kits. In addition, this notice provides transition relief to medical device manufacturers from the failure to deposit penalties imposed by § 6656. Finally, this notice requests comments from taxpayers about the rules described in this notice.