SECTION 2. BACKGROUND

Section 4261(a) of the Code imposes a tax on the amount paid for the taxable transportation of any person.

Section 4262(a) defines “taxable transportation” to generally include transportation by air that begins and ends in the United States.

Section 4261(d) provides that the tax is paid by the person making the payment subject to tax, and § 4291 provides that the tax is collected by the person receiving the payment.

Section 4261(e)(3)(A) provides that for purposes of § 4261(a) any amount paid (and the value of any other benefit provided) to an air carrier (or any related person) for the right to provide mileage awards for (or other reductions in the cost of) any transportation of persons by air is treated as an amount paid for taxable transportation.

Section 4261(e)(3)(C) provides that the Secretary may prescribe rules that exclude amounts attributable to mileage awards that are used other than for the transportation of persons by air from the tax imposed by § 4261(a).

Congress enacted § 4261(e) as part of the Taxpayer Relief Act of 1997 (Public Law 105–34, 111 Stat. 788). The General Explanation of Tax Legislation Enacted in 1997 (General Explanation), prepared by the Joint Committee on Taxation, JCS–23–97 at 230–231, explains that § 4261(e)(3)(C) authorizes the Treasury Department to develop regulations excluding from the § 4261(a) tax base a portion of otherwise

The applicable dollar amount under § 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants in a qualified plan (or another retirement plan specified in § 219(g) (5)) filing a joint return or as a qualifying widow(er) remains unchanged at $98,000. The applicable dollar amount under § 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) remains unchanged at $61,000. The applicable dollar amount under § 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0. The applicable dollar amount under § 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $183,000 to $184,000.

Accordingly, under § 219(g)(2)(A), the deduction for taxpayers making contributions to a traditional IRA is phased out for single individuals and heads of household who are active participants in a qualified plan (or another retirement plan specified in § 219(g)(5)) and have adjusted gross incomes (as defined in § 219(g)(3)(A)) between $61,000 and $71,000. This income phase-out range remains unchanged. For married couples filing jointly, if the spouse who makes the IRA contribution is an active participant, the income phase-out range remains unchanged at $98,000 to $118,000. For an IRA contributor who is not an active participant and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $184,000 and $194,000, increased from between $183,000 and $193,000. For a married individual filing a separate return who is an active participant, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The adjusted gross income limitation under § 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $183,000 to $184,000. The adjusted gross income limitation under

§ 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $116,000 to $117,000. The applicable dollar amount under § 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-ofliving adjustment and remains $0.

Accordingly, under § 408A(c)(3)(A), the adjusted gross income phase-out range for taxpayers making contributions to a Roth IRA is $184,000 to $194,000 for married couples filing jointly, increased from $183,000 to $193,000. For singles and heads of household, the income phase-out range is $117,000 to $132,000, increased from $116,000 to $131,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The dollar amount under § 430(c)(7)(D) (i)(II) used to determine excess employee compensation with respect to a singleemployer defined benefit pension plan for which the special election under § 430(c)(2)(D) has been made is increased from $1,101,000 to $1,106,000.

Drafting Information

The principal author of this notice is Tom Morgan of the Office of the Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Mr. Morgan at 202-317-6700 or John Heil at 443-853-5519 (not toll-free numbers).

REQUEST FOR COMMENTS REGARDING THE EXCISE TAX ON AMOUNTS PAID FOR THE RIGHT TO PROVIDE MILEAGE AWARDS

Notice 2015–76