Part IV. Items — Internal Revenue Bulletin 2013-17

Revised Exhibit: Acknowledgement Letter Employee Plans Voluntary Correction Program (VCP) Submissions

Announcement 2013–21

The telephone number that taxpayers use to inquire about the status of a

Voluntary Correction Program (“VCP”) submission that has been sent to the IRS has changed as of March 27, 2013. The new number is 626–927–2011. Accordingly, this requires a revision to the Acknowledgement Letter, attached to Rev. Proc. 2013–12, 2013–4 I.R.B. 313. The Acknowledgement Letter is revised to include the updated telephone number. The previous number shown on the Acknowledgement Letter, including submissions

APPENDIX D ACKNOWLEDGEMENT LETTER

made under Rev. Proc. 2008–50, 2008–2 C.B. 464, will no longer be in service as of such date.

[ ] [INSERT NAME AND

[ ] ADDRESS OF PLAN

[ ] SPONSOR OR

[ ] AUTHORIZED REPRESENTATIVE

[ ] AT LEFT]

Applicant’s Name:

Plan Name:

[insert plan name]

Plan No.

[insert plan number]

Control No.:

(to be completed by IRS)

Received Date:

(to be completed by IRS)

The Internal Revenue Service, Employee Plans Voluntary Compliance, has received your VCP submission for the above-captioned plan. Your request has been assigned the control number listed above. This number should be referred to in any communication to us concerning your submission. If a determination letter application was included with your VCP submission, any acknowledgement letter issued by the Service with regard to such application will be mailed to you under separate cover.

You will be contacted when the VCP case is assigned to an agent. If you need to inquire about the status of your case prior to that date, please call (626) 927–2011 (not a toll-free number). Please leave a message with the name of the plan, the Control Number, your name, and a phone number where you can be reached.

Thank you.

April 22, 2013 980 2013–17 I.R.B.

Notice and Request for Comments About the Internal Revenue Bulletin Index System

Announcement 2013–22

SUMMARY: The IRS is soliciting comments from the public on the proposal to eliminate the Bulletin Index from the IRB.

DATE: Written comments should be received on or before August 3, 2013 to be assured consideration.

ADDRESS: If you have comments concerning this issue, direct all written comments to Gerald J. Shields, LL.M., Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:M:S, 1111 Constitution Avenue NW, IR–6526, Washington, DC 20224. Do not send any tax forms to this address.

SUPPLEMENTARY INFORMATION:

Background

The IRS provides a method for researching tax laws, regulations, and other tax matters published in the IRB called the ’’Bulletin Index.’’ Generally, the Bulletin Index appears in the IRB issue at the end of the month. Due to budgetary restraints, the IRS proposes to eliminate the Bulletin Index. The IRS invites the general public and other Federal agencies to take this opportunity to comment on the proposed elimination of the Bulletin Index.

The Bulletin Index provides a method for researching matters published in the IRB (which is the authoritative instrument of the Commissioner for announcing official rulings and procedures of the Internal Revenue Service and for publishing Public Laws, Treasury Decisions, and other items of general interest). The indexes are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. The IRS proposes to eliminate the Bulletin Index because of the excessive costs incurred to produce this section of the IRB.

As a cost cutting measure, the IRS is no longer printing paper copies of the IRB. Also, the IRS will not create the Cumulative Bulletin after the 2008–2 edition. See Announcement 2013–12, 2013–11 I.R.B.

651, for more information about the paper copies of the IRB.

Effect on other Documents:

Announcement 2013–12 is supplemented.

Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage; Correction

Announcement 2013–27

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking and notice of public hearing.

SUMMARY: This document contains corrections to a notice of proposed rulemaking and notice of public hearing (REG–148500–12, 2013–13 I.R.B. 716) that was published in the Federal Regis- ter on Friday, February 1, 2013 (78 FR 7314). The proposed regulations relate to the requirement to maintain minimum essential coverage enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended by the TRICARE Affirmation Act and Public Law 111–173. These proposed regulations provide guidance on the liability for the shared responsibility payment for not maintaining minimum essential coverage.

FOR FURTHER INFORMATION CONTACT: Sue-Jean Kim or John B. Lovelace, (202) 622–4960 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The notice of proposed rulemaking and notice of public hearing (REG–148500–12) that is the subject of these corrections are under Section 5000A of the Internal Revenue Code.

Need for Correction

As published, the notice of proposed rulemaking and notice of public hearing

(REG–148500–12) contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the notice of proposed rulemaking and notice of public hearing (REG–148500–12), that was the subject of FR Doc. 2013–02141, is corrected as follows:

On page 7316, in the preamble, column 1, under the paragraph heading “ Ex- empt Individuals ”, line 7 of the third full paragraph, the language “consultation with the Secretary of ” is corrected to read “consultation with the Secretary of the”.
On page 7316, in the preamble, column 3, under the paragraph heading “ Computation of Shared Responsibility Payment ”, lines 5 and 6 from the top of the column, the language “the following amounts: (1) The flat dollar amount, or (2) the percentage of” is corrected to read “the following amounts: (1) the flat dollar amount, or (2) the percentage of”.
On page 7316, in the preamble, column 3, under the paragraph heading “ Min- imum Essential Coverage ”, lines 3 through 32 of the third and fourth full paragraph of the column, the language “following: (1) Coverage under a specified government sponsored program, (2) coverage under an eligible employer-sponsored plan, (3) coverage under a health plan offered in the individual market within a State, (4) coverage under a grandfathered health plan, and (5) other health benefits coverage that the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of section 5000A(f).

Under section 5000A(f)(1)(A), specified government sponsored programs include the following: (1) The Medicare program under part A of title XVIII of the Social Security Act, (2) the Medicaid program under title XIX of the Social Security Act, (3) the Children’s Health Insurance Program (CHIP) under title XXI of the Social Security Act, (4) medical coverage under chapter 55 of title 10, United States Code, including the TRICARE program, (5) veterans health care programs under chapter 17 or 18 of title 38, as determined by the Secretary of Veterans Affairs, in coordination with the Secretary of Health and Human Services and the Secretary of Treasury, (6) a health plan” is cor

2013–17 I.R.B. 981 April 22, 2013

the language “$2,600. Under paragraph (f)(2) of this section,” is corrected to read “$2,600. Under paragraph (e)(1) of this section,”.

LaNita VanDyke, Chief, Publications and

Regulations Branch, Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(Filed by the Office of the Federal Register on March 22, 2013, 8:45 a.m., and published in the issue of the Federal Register for March 25, 2013, 78 F.R. 17900)

Noncompensatory Partnership Options; Correction

Announcement 2013–28

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

SUMMARY: This document contains corrections to final regulations (T.D. 9612, 2013–13 I.R.B. 678) that were published in the Federal Register on Tuesday, February 5, 2013 (78 FR 7997) relating to the tax treatment of noncompensatory options and convertible instruments issued by a partnership. The final regulations generally provide that the exercise of a noncompensatory option does not cause the recognition of immediate income or loss by either the issuing partnership or the option holder. The final regulations also modify the regulations under section 704(b) regarding the maintenance of the partners’ capital accounts and the determination of the partners’ distributive shares of partnership items. The final regulations also contain a characterization rule providing that the holder of a noncompensatory option is treated as a partner under certain circumstances. DATES: This correction is effective on March 25, 2013, and is applicable on or after February 5, 2013.

FOR FURTHER INFORMATION CONTACT: Benjamin Weaver, at (202) 622–3050 (not a toll-free number).

rected to read “following: (1) coverage under a specified government sponsored program; (2) coverage under an eligible employer-sponsored plan; (3) coverage under a health plan offered in the individual market within a State; (4) coverage under a grandfathered health plan; and (5) other health benefits coverage that the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of section 5000A(f).

Under section 5000A(f)(1)(A), specified government sponsored programs include the following: (1) the Medicare program under part A of title XVIII of the Social Security Act; (2) the Medicaid program under title XIX of the Social Security Act; (3) the Children’s Health Insurance Program (CHIP) under title XXI of the Social Security Act; (4) medical coverage under chapter 55 of title 10, United States Code, including the TRICARE program; (5) veterans health care programs under chapter 17 or 18 of title 38, as determined by the Secretary of Veterans Affairs, in coordination with the Secretary of Health and Human Services and the Secretary of Treasury; (6) a health plan”.

On page 7317, in the preamble, column 1, under the paragraph heading “ Min- imum Essential Coverage ”, line 1 from the top of the column, the language “to Peace Corps volunteers, and (7) the” is corrected to read “to Peace Corps volunteers; and (7) the”.
On page 7317, in the preamble, column 2, under the paragraph heading “ Min- imum Essential Coverage ”, line 6 of the first full paragraph of the column, the language “possession for the month or (2) if the” is corrected to read “possession for the month, or (2) if the”.
On page 7318, in the preamble, column 2, under the paragraph heading “i. In General”, lines 6 through 10 of the first full paragraph of the column, the language “either of the following: (1) A governmental plan (within the meaning of section 2791(d)(8) of the Public Health Service Act (PHSA) (42 U.S.C. 300gg–91(d)(8)) or (2) any other plan or” is corrected to read “either of the following: (1) a governmental plan (within the meaning of section 2791(d)(8) of the Public Health Service Act (PHSA) (42 U.S.C. 300gg–91(d)(8)), or (2) any other plan or”.
On page 7321, in the preamble, column 1, under the paragraph heading

“B. Credit Allowable Under Section 36B”, lines 9 through 14 of the second full paragraph of the column, the language “The monthly premiums for the month for one or more qualified health plans in which the taxpayers or a member of the taxpayers family (coverage family) is enrolled through the Exchange serving the rating area where they reside” is corrected to read “the monthly premiums for the month for one or more qualified health plans in which the taxpayers or a member of the taxpayers family (coverage family) is enrolled through the Exchange serving the rating area where they reside,”.

On page 7321, in the preamble, column 2, under the paragraph heading “f. Household Income Below Return Filing Threshold”, line 9 of the second full paragraph of the column, the language “as a dependent also is exempt as well” is corrected to “as a dependent also is exempt”.

§ 1.5000A–1 [Corrected]

On page 7325, column 1, paragraph (d)(4), the language “ Rating area . Rating area has the same meaning as in § 1.38B–1(n).” is corrected to read “ Rating area . Rating area has the same meaning as in § 1.36B–1(n).”.

§ 1.5000A–2 [Corrected]

On page 7325, column 2, line 4 of paragraph (b)(7), the language “of the National Defense authorization” is corrected to read “of the National Defense Authorization”.
On page 7325, column 3, line 7 of paragraph (c)(1), the language “by an employer to the employee, which” is corrected to read “by an employer to the employee that”.

§ 1.5000A–3 [Corrected]

On page 7326, column 3, line 8 of paragraph (e)(3)(ii)(A), the language “(whether though salary reduction or” is corrected to read “(whether through salary reduction or”.
On page 7327, column 3, line 9 of paragraph (e)(4)(ii)(B)( 1 ), the language “plan though the Exchange) that would” is corrected to read “plan through the Exchange) that would”.
On page 7328, column 2, line 16 of paragraph (e)(4)(iii) Example 2 .(ii),

April 22, 2013 982 2013–17 I.R.B.

Example 35 (ii), and the first sentence of paragraph (b)(5) Example 35 (iii) to read as follows:

§1.704–1 Partner’s distributive share.

- - - (b) - - (5) - - Example 35 . - * * (ii) - -

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of this document are under sections 171, 704, 721, 761, 1272, 1273, and 1275 of the Internal Revenue Code.

Need for Correction

As published, the final regulations (T.D. 9612) contain errors that may prove to be misleading and are in need of clarification.

- - - -

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.704–1 is amended by revising the table in paragraph (b)(5)

ers or partners are related persons, and that general principles of law do not apply to treat the noncompensatory option as a partnership interest. The example reads as follows:

Example . - - - In exchange for a premium of $10x, PRS issues a noncompensatory option to A to acquire a 10 percent interest in PRS for $110x at any time during a 3-year period commencing on the date on which the option is issued. - * *

LaNita VanDyke,

Chief, Publications and Regulations Branch,

Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(iii) At the beginning of Year 4, at a time when property D, LLC’s only asset, has a value of $33,000 and basis of $24,000 ($30,000 original basis less $6,000 depreciation in Years 1 through 3), and LLC has accumulated undistributed cash of $12,000 ($15,000 gross income less $3,000 of interest payments) in LLC, M converts the debt into a 1/3 interest in LLC. * -

- - - Par. 3. Section 1.761–3 is amended by: a. Revising the second sentence of paragraph (b)(3);

b. Revising paragraph (f) introductory text;

c. Removing “1” from paragraph (f) Example heading; and

d. Revising the second sentence in the paragraph (f) Example.

The revisions read as follows:

§1.761–3 Certain option holders treated as partners.

- - - (b) - - (3) - - - In addition, an option includes convertible debt (as defined in §1.721–2(g)(2)) and convertible equity (as defined in §1.721–2(g)(3)). - * *
- - - (f) Example . The following example illustrates the provisions of this section. For purposes of the example, assume that PRS is a partnership for Federal tax purposes, none of the noncompensatory option hold

2013–17 I.R.B. 983 April 22, 2013