Notice 2022-16

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

Section 430 specifies the minimum funding requirements that apply to single-employer plans (except for CSEC plans under § 414(y)) 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

of July 2022, is due by July 29, 2022. As noted in section 2(b) of this notice, § 40.6302(c)-1(b)(2) provides a deposit safe harbor for calculating the amount of semimonthly deposits. Because the deposit safe harbor rules require a second preceding calendar quarter (look-back quarter) in which the same taxes are imposed to determine deposit amounts in the current quarter, a person liable for any Superfund chemical taxes will be ineligible to use the deposit safe harbor to calculate semimonthly deposits of Superfund chemical taxes until the first calendar quarter of 2023. See § 40.6302(c)-1(b)(2)(ii) and (iii). For purposes of the deposit safe harbor, the third calendar quarter of 2022 is the look-back quarter for the semimonthly periods during the first calendar quarter of 2023. The Treasury Department and the IRS recognize the short time frame between the reinstatement of the Superfund chemical taxes and the due date of the first deposit, the unavailability of the § 40.6302(c)-1(b)(2) deposit safe harbor in 2022, the possible difficulties of computing the correct amount of tax during the third calendar quarter of 2022 (which is both the first calendar quarter the taxes are in effect and the look-back quarter for the first calendar quarter of 2023), and the number of new taxpayers owing Superfund chemical taxes that have not previously had to comply with the deposit requirements of section 6302. In consideration of these issues, the Treasury Department and the IRS have determined that it is in the interest of sound tax administration to provide relief regarding the section 6656 penalty with respect to deposits of Superfund chemical taxes for the last two calendar quarters of 2022, and the first calendar quarter of 2023, as described in section 3 of this notice. For the foregoing reasons, the Treasury Department and the IRS have also determined that during the first, second, and third calendar quarters of 2023, the IRS will not withdraw the taxpayer’s right to use the deposit safe harbor of § 40.6302(c)-1(b)(2) for failure to make required deposits of Superfund chemical taxes if certain requirements are met.