Part III. — Internal Revenue Bulletin 2016-48

Per Capita Payments from Proceeds of Settlements of Indian Tribal Trust Cases

Notice 2016–65

BACKGROUND

Notice 2013–1, 2013–3 IRB 281, provides guidance on the federal tax treatment of per capita payments that members of Indian tribes receive from proceeds of certain settlements of tribal trust cases

between the United States and those Indian tribes. Additional tribes have settled tribal trust cases against the United States since publication of Notice 2013–1. This notice provides an updated Appendix that reflects the additional settlement agreements.

EFFECT ON OTHER DOCUMENTS

Notice 2013–1 Appendix is modified and superseded.

FURTHER INFORMATION

For further information regarding this notice, please contact Jon Damm at phone number (202) 317-8493 (not a toll-free number).

Appendix

Tribes That Have Entered into Settlement Agreements of Tribal Trust Cases

Assiniboine and Sioux Tribes of the Fort Peck Reservation
Bad River Band of Lake Superior Chippewa Indians
Blackfeet Tribe of the Blackfeet Indian Reservation
Bois Forte Band of Chippewa
Cachil Dehe Band of Wintun Indians of the Colusa Rancheria
Chippewa Cree Tribe of the Rocky Boy’s Reservation
Coeur d’Alene Tribe
Confederated Salish and Kootenai Tribes
Confederated Tribes of Siletz Indians
Confederated Tribes of the Colville Reservation
Confederated Tribes of the Goshute Reservation
Crow Creek Sioux Tribe
Eastern Shawnee Tribe of Oklahoma
Hualapai Indian Tribe
Iowa Tribe of Kansas and Nebraska
Kaibab Band of Paiute Indians of Arizona
Kickapoo Tribe of Kansas
Lac Courte Oreilles Band of Lake Superior Chippewa Indians
Lac du Flambeau Band of Lake Superior Chippewa Indians
Leech Lake Band of Ojibwe
Lower Brule Sioux Tribe
Makah Indian Tribe of the Makah Reservation
Mescalero Apache Tribe
Minnesota Chippewa Tribe
Nez Perce Tribe
Nooksack Indian Tribe
Northern Cheyenne Tribe of Indians
Omaha Tribe of Nebraska
Passamaquoddy Tribe of Maine
Pawnee Nation
Prairie Band of Potawatomi Nation
Pueblo of Zia
Quechan Tribe of the Fort Yuma Reservation

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Appendix

Tribes That Have Entered into Settlement Agreements of Tribal Trust Cases

Red Cliff Band of Lake Superior Chippewa Indians
Rincon Luiseño Band of Indians
Rosebud Sioux Tribe
Round Valley Indian Tribes
Salt River Pima-Maricopa Indian Community
Santee Sioux Tribe of Nebraska
Sault Ste. Marie Tribe
Shoshone-Bannock Tribes of the Fort Hall Reservation
Soboba Band of Luiseno Indians
Spirit Lake Dakotah Nation
Spokane Tribe of Indians
Standing Rock Sioux Tribe
Stillaguamish Tribe of Indians
Summit Lake Paiute Tribe
Swinomish Indian Tribal Community
Te-Moak Tribe of Western Shoshone Indians
Tohono O’odham Nation
Tulalip Tribes
Tule River Indian Tribe
Ute Indian Tribe of the Uintah and Ouray Reservation
Ute Mountain Ute Tribe
Winnebago Tribe of Nebraska
Qawalangin Tribe of Unalaska
Tlingit & Haida Tribes of Alaska
Northwestern Band of Shoshone Indians
Hoopa Valley Tribe
Ak-Chin Indian Community
Oglala Sioux Tribe
Yoruk Tribe
Cheyenne River Sioux Tribe
Paiute-Shoshone Indians of the Bishop Community of the Bishop Colony
Seminole Nation of Oklahoma
Otoe-Missouria Tribe of Oklahoma
Samish Indian Nation
Tonkawa Tribe of Indians of Oklahoma
Yakama Nation
Miami Tribe of Oklahoma
Shoshone Indian Tribe and the Northern Arapahoe Indian Tribe of the Wind River Reservation
Pueblo of Laguna
Navajo Nation
Caddo Nation of Oklahoma
Gros Ventre and Assiniboine Tribes of the Fort Belknap Indian Reservation
Chickasaw Nation
Choctaw Nation
Klamath Tribe

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Appendix

Tribes That Have Entered into Settlement Agreements of Tribal Trust Cases

Skokomish Indian Tribe
Quinault Indian Nation
Southern Utah Indian Tribe
Confederated Tribes of the Umatilla Indian Reservation
White Earth Nation
Kickapoo Tribe of Oklahoma
Sisseton Wahpeton Oyate of the Lake Traverse Reservation
Grand Traverse Band of Ottawa and Chippewa Indians
Muscogee (Creek) Nation of Oklahoma
Gila River Indian Community
Aleut Community of St. Paul Island
San Carlos Apache Tribe
Comanche Nation
Colorado River Indian Tribes
Jicarilla Apache Nation
Pueblo of Acoma
Penobscot Indian Nation
Seminole Tribe of Florida

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

Notice 2016–68

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code. 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 and the 30year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I).

YIELD CURVE AND SEGMENT RATES

Generally, except for certain plans under sections 104 and 105 of the Pension Protection Act of 2006 and CSEC plans under § 414(y), § 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 (“segment rates”), each of which applies to cash flows during specified periods. To the extent provided under § 430(h)(2)(C) (iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins. ¹

However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Notice 2007–81, 2007–44 I.R.B. 899, provides guidelines for determining the 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. Consistent with the methodology specified in Notice 2007–81, the monthly corporate bond yield curve derived from October 2016 data is in Table I at the end of this

notice. The spot first, second, and third segment rates for the month of October 2016 are, respectively, 1.57, 3.45, and 4.39. The 24-month average segment rates determined under § 430(h)(2)(C)(i) through (iii) must be adjusted pursuant to § 430(h) (2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates. For plan years beginning before 2021, the applicable minimum percentage is 90% and the applicable maximum percentage is 110%. The 25-year average segment rates for plan years beginning in 2015, 2016, and 2017 were published in Notice 2014–50, 2014–40 I.R.B. 590, Notice 2015–61, 2015–39 I.R.B. 408, and Notice 2016–54, 2016–40 I.R.B. 429, respectively.

24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate bond segment rates applicable for November 2016 without adjustment for the 25year average segment rate limits are as follows:

1Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount of the full funding limitation under § 433(c)(7)(C)).

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Applicable

Month

First Segment

Second Segment

Third Segment

November 2016 1.53 3.76 4.74

Based on § 430(h)(2)(C)(iv), the 24month averages applicable for November

2016 adjusted to be within the applicable minimum and maximum percentages of

the corresponding 25-year average segment rates, are as follows:

For Plan

Years Beginning

Segment Rates

Applicable First Second

Adjusted 24-Month Average

Applicable First Second Third

In Month Segment Segment Segment

2015 November 2016 4.72 6.11 6.81

2016 November 2016 4.43 5.91 6.65

2017 November 2016 4.16 5.72 6.48

Second Segment

Month

First Segment

on 30-year Treasury securities for October 2016 is 2.50 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in August 2046. For plan years beginning in the month shown below, the weighted average of the rates of interest on 30-year Treasury securities and the permissible range of rate used to calculate current liability are as follows:

Permissible Range

30-YEAR TREASURY SECURITIES INTEREST RATES

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 § 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)

For Plan Years

Beginning in

(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 rate of interest

30-Year Treasury Weighted

Month Year Average 90% to 105%

November 2016 2.92 2.62 3.06

MINIMUM PRESENT VALUE SEGMENT RATES

In general, the applicable interest rates under § 417(e)(3)(D) are segment rates

First Segment

computed without regard to a 24-month average. Notice 2007–81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value seg

Second Segment

ment rates determined for October 2016 are as follows:

Third Segment

1.57 3.45 4.39

DRAFTING INFORMATION

The principal author of this notice is Tom Morgan of the Office of the Associ

ate 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 Tony Montanaro at 202-317-8698 (not toll-free calls).

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Table I Monthly Yield Curve for October 2016

Derived from October 2016 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

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