SECTION 3. AREAS IN WHICH

RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED

.01 Specific Questions and Problems. (1) Sections 40, 40A, 40B, 4041, 4081, 4083(a), and 6426.—Alcohol, etc., Used as Fuel; Biodiesel and Renewable Diesel

Used as Fuel; Sustainable Aviation Fuel; Imposition of Tax (§§ 4041 and 4081); Taxable Fuel; Credit for Alcohol Fuel, Biodiesel, and Alternative Fuel Mixtures.—Whether a particular fuel or fuel mixture is subject to excise tax or whether a particular fuel or fuel mixture qualifies for an excise tax credit or payment, or a related income tax credit, under the Internal Revenue Code.

(2) Section 42.—Low-Income Housing Credit.—Whether under § 42(j)(4)(E) a casualty loss has been restored by reconstruction or replacement within a reasonable period of time. The Service may issue a determination letter in this case. See section 12 of Rev. Proc. 2024-1, this Bulletin.

(3) Section 45.—Electricity Produced from Certain Renewable Resources, Etc.—The allocation by a partnership of the § 45 credit, the validity of the partnership, or whether any taxpayer is a valid partner in the partnership.

(4) Section 45.—Electricity Produced from Certain Renewable Resources, Etc.—Whether the taxpayer meets the requirements of § 45 or Notice 2010-54, 2010-40 I.R.B. 403, for refined coal. (5) Sections 45.—Electricity Produced from Certain Renewable Resources, Etc.—The application of the beginning of construction requirement under § 45.

(6) Section 45Q.—Credit for Carbon Oxide Sequestration.—The application of the beginning of construction requirement under § 45Q.

(7) Section 45Q.—Credit for Carbon Oxide Sequestration.—The allocation by a partnership of the § 45Q credit, the validity of the partnership, or whether any partner is a valid partner in the partnership.

(8) Section 47.—Rehabilitation Credit.—The allocation by a partnership of the § 47 rehabilitation credit, the validity of the partnership, or whether any taxpayer is a valid partner in the partnership.

(9) Section 48.—Energy Credit.—The application of the beginning of construction requirement under § 48, including to a qualified investment credit facility for which a taxpayer makes an election under § 48(a)(5) to claim a credit under § 48 in lieu of a credit under § 45.

(10) Section 61.—Gross Income Defined.—Whether an amount is not included in a taxpayer’s gross income under

January 2, 2024 144 Bulletin No. 2024–1

section 61 because the taxpayer receives the amount subject to an unconditional obligation to repay the amount.

(11) Section 61.—Gross Income Defined.—Whether amounts voluntarily deferred by a taxpayer under a deferred-compensation plan maintained by an organization described in § 501 (other than an eligible plan maintained by an eligible employer pursuant to the provisions of § 457(b)) are currently includible in the taxpayer’s gross income.

(12) Section 61.—Gross Income Defined.—Whether a split-dollar life insurance arrangement is “materially modified” within the meaning of § 1.61-22(j)(2) of the Income Tax Regulations. (Also §§ 83, 301, 1401, 2501, 3121, 3231, 3306, 3401, and 7872.)

(13) Sections 61, 111, and 1001.— Gross Income Defined; Recovery of Tax Benefit Items; Determination of Amount of and Recognition of Gain or Loss.— Whether, in connection with a transaction involving the establishment or amendment of a welfare benefit fund (including Voluntary Employees’ Beneficiary Associations (VEBAs)), a transfer of assets between welfare benefit funds (including VEBAs), or a new or different use of assets of a welfare benefit fund (including a VEBA), (i) the employer, plan sponsor, welfare benefit fund (including a VEBA), or covered individuals must include any amount in gross income under § 61 or the tax benefit rule, or (ii) the employer or welfare benefit fund (including a VEBA) have engaged in a sale or exchange of assets under § 1001.

(14) Sections 61, 451, and 1001.— Gross Income Defined; General Rule for Taxable Year of Inclusion; Determination of Amount of and Recognition of Gain or Loss.—Whether, under authorization by an appropriate state agency to recover certain costs pursuant to state specified cost recovery legislations, any investor-owned utility company realizes income upon: (i) the creation of an intangible property right; (ii) the transfer of that intangible property right; or (iii) the securitization of the intangible property right.

(15) Section 79.—Group-Term Life Insurance Purchased for Employees.— Whether a group insurance plan for 10 or more employees qualifies as group-term insurance, if the amount of insurance is

not computed under a formula that would meet the requirements of § 1.79-1(c)(2) (ii) of the Income Tax Regulations had the group consisted of fewer than 10 employees.

(16) Section 83.—Property Transferred in Connection with Performance of Services.—Whether a restriction constitutes a substantial risk of forfeiture if the employee is a controlling shareholder. Also, whether a transfer has occurred, if the amount paid for the property involves a nonrecourse obligation.

(17) Section 83.—Property Transferred in Connection with Performance of Services.—Which corporation is entitled to the deduction under § 83(h) in cases in which a corporation undergoes a corporate division, if the facts are not similar to those described in Rev. Rul. 2002-1, 2002-1 C.B. 268. (18) Section 101.—Certain Death Benefits.—Whether there has been a transfer for value for purposes of § 101(a) in situations involving a grantor and a trust when (i) substantially all of the trust corpus consists or will consist of insurance policies on the life of the grantor or the grantor’s spouse, (ii) the trustee or any other person has a power to apply the trust’s income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse, (iii) the trustee or any other person has a power to use the trust’s assets to make loans to the grantor’s estate or to purchase assets from the grantor’s estate, and (iv) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under §§ 673 to 677.

(19) Sections 101, 761, and 7701.— Certain Death Benefits; Terms Defined; Definitions.—Whether, in connection with the transfer of a life insurance policy to an unincorporated organization, (i) the organization will be treated as a partnership under §§ 761 and 7701, or (ii) the transfer of the life insurance policy to the organization will be exempt from the transfer for value rules of § 101, when substantially all of the organization’s assets consist or will consist of life insurance policies on the lives of the members.

(20) Section 102.—Gifts and Inheritances.—Whether a transfer is a gift within the meaning of § 102(a).

(21) Section 105(h).—Amount Paid to Highly Compensated Individuals Under a Discriminatory Self-Insured Medical Expense Reimbursement Plan.—Whether a self-insured medical reimbursement plan satisfies the requirements of § 105(h) for a plan year.

(22) Section 107.—Rental Value of Parsonages.—Whether amounts distributed to a retired minister from a pension or annuity plan should be excludible from the minister’s gross income as a parsonage allowance under § 107.

(23) Section 107.—Rental Value of Parsonages.—Whether an individual is a “minister of the gospel” for Federal tax purposes. (Also §§ 1402(a)(8), (c)(4), and (e), 3121(b)(8)(A), and 3401(a)(9).)

(24) Section 111.—See section 3.01(13), above. (25) Section 115.—Income of States, Municipalities, Etc.—Whether the income of membership organizations established by states exclusively to reimburse members for losses arising from workmen’s compensation claims is excluded from gross income under § 115.

(26) Section 115.—Income of States, Municipalities, Etc.—Whether some, but not all, income of an entity is from the exercise of an essential government function in order to be excluded from gross income under § 115.

(27) Section 115.—Income of States, Municipalities, Etc.—Whether income accruing to a trust, or other entity, relating to or associated with a qualified retirement plan described in § 401(a) is excluded from gross income under § 115.

(28) Section 117.—Qualified Scholarships.—Whether amounts paid to research fellows and research associates are scholarships or fellowships excluded from wages for FICA tax purposes.

(29) Section 117.—Qualified Scholarships.—Whether an employer-related scholarship or fellowship grant is excludible from the employee’s gross income, if there is no intermediary private foundation distributing the grants, as described in Rev. Proc. 76-47, 1976-2 C.B. 670.

(30) Section 118.—Contributions to the Capital of a Corporation.—Whether a transfer of an intertie as defined in section III. B. 2. of Notice 2016-36, 2016-25 I.R.B. 1029, meets all of the requirements under the safe harbor provided by Notice 2016-36.

Bulletin No. 2024–1 145 January 2, 2024

(31) Section 119.—Meals or Lodging Furnished for the Convenience of the Employer.—Whether the value of meals or lodging is excludible from gross income by an employee who is a controlling shareholder of the employer.

(32) Section 121.—Exclusion of Gain from Sale of Principal Residence.— Whether property qualifies as the taxpayer’s principal residence.

(33) Section 125.—Cafeteria Plans.— Whether amounts used to provide groupterm life insurance under § 79, accident and health benefits under §§ 105 and 106, and dependent care assistance programs under § 129 are includible in the gross income of participants and considered “wages” for purposes of §§ 3401, 3121, and 3306 when the benefits are offered through a cafeteria plan.

(34) Section 162.—Trade or Business Expenses.—Whether compensation is reasonable in amount.

(35) Section 162.—Trade or Business Expenses.—Whether a taxpayer is engaged in a trade or business. This area does not include a request for a ruling that relies on a representation from a taxpayer that the taxpayer is or is not engaged in a trade or business, or a request for a ruling that relies on factual information provided by the taxpayer evidencing the active conduct of a trade or business (for example, a request that relies on the taxpayer’s active conduct of a trade or business as evidenced by financial statements provided by the taxpayer).

(36) Section 163.—Interest.—The income tax consequences of transactions involving “shared appreciation mortgage” (SAM) loans in which a taxpayer, borrowing money to purchase real property, pays a fixed rate of interest on the mortgage loan below the prevailing market rate and will also pay the lender a percentage of the appreciation in value of the real property upon termination of the mortgage. This applies to all SAM arrangements in which the loan proceeds are used for commercial or business activities, or to finance a personal residence, if the facts are not similar to those described in Rev. Rul. 83-51, 1983-1 C.B. 48. (Also §§ 61, 451, 461, 856, 1001, and 7701.) (37) Sections 165, 381, and 1502.— Losses; Carryovers in Certain Corporate Acquisitions; Regulations.—In determin

ing whether a loss for worthless securities is subject to § 165(g)(3), (i) whether the source of any gross receipts may be determined by reference to the source of gross receipts of a counter party to an intercompany transaction, as defined in § 1.150213(b)(1) (e.g., an intercompany distribution to which § 1.1502-13(f)(2) applies), other than an intercompany transaction to which § 381(a) applies, and (ii) in an intercompany transaction to which § 381(a) applies, whether the acquiring corporation takes into account historic gross receipts of the distributor or transferor corporation, if the intercompany transaction is part of a plan to claim a deduction for worthless securities under § 165(g)(3).

(38) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a charitable contribution deduction under § 170 is allowed for a transfer of an interest in a limited partnership or a limited liability company taxed as a partnership to an organization described in § 170(c).

(39) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a taxpayer who advances funds to a charitable organization and receives therefor a promissory note may deduct as contributions, in one taxable year or in each of several years, amounts forgiven by the taxpayer in each of several years by endorsement on the note.

(40) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether an organization is or continues to be described in § 170(b)(1)(A) (other than clause (v)) or § 170(c)(2) - (5), including, for example, whether changes in an organization’s activities or operations will affect or jeopardize the organization’s status as an organization described in those sections. The Associate Chief Counsel (EEE) will rule, however, on specific legal questions related to §§ 170(b)(1)(A) or 170(c) that are not otherwise described in this revenue procedure. See Rev. Proc. 2024-5, this Bulletin, for the procedures for obtaining determination letters on public charity status under § 170.

(41) Section 181.—Treatment of Certain Qualified Film and Television Productions.—The determination under § 1.181-1(a)(1) and (2) as to who is the owner of a qualified film or television production.

(42) Section 199.—Income Attributable to Domestic Production Activities.—

The determination under § 1.199-3(f) (1) as to who is the taxpayer that has the benefits and burdens of ownership under Federal income tax principles of any qualifying production property (as defined in § 1.199-3(j)(1)), qualified film (as defined in § 1.199-3(k)), or utilities (as defined in § 1.199-3(l)) during the period in which a qualifying activity under § 199 occurs.

(43) Section 213.—Medical, Dental, Etc., Expenses.—Whether a capital expenditure for an item that is ordinarily used for personal, living, or family purposes, such as a swimming pool, has as its primary purpose the medical care of the taxpayer or the taxpayer’s spouse or dependent, or is related directly to such medical care.

(44) Section 216.—Deduction of Taxes, Interest, and Business Depreciation by Cooperative Housing Corporation Tenant-Stockholder.—Whether a unit constitutes an “apartment in a building” under § 216(b)(1)(B).

(45) Section 264.—Certain Amounts Paid in Connection with Insurance Contracts.—Whether § 264(d)(1) applies.

(46) Section 264(c)(1).—Contracts Treated as Single Premium Contracts.— Whether “substantially all” the premiums of a contract of insurance are paid within a period of 4 years from the date on which the contract is purchased. Also, whether an amount deposited is in payment of a “substantial number” of future premiums on such a contract.

(47) Sections 267, 304, 331, 332, 351, and 1502.—Losses, Expenses, and Interest with Respect to Transactions Between Related Taxpayers; Redemption Through Use of Related Corporations; Gain or Loss to Shareholders in Corporate Liquidations; Complete Liquidations of Subsidiaries; Transfer to Corporation Controlled by Transferor; Regulations.—The treatment of transactions in which stock of a corporation is transferred with a plan or intention that the corporation be liquidated in a transaction intended to qualify under § 331.

(48) Section 269.—Acquisitions Made to Evade or Avoid Income Tax.—Whether an acquisition is within the meaning of § 269.

(49) Section 274.—Disallowance of Certain Entertainment, Etc., Expenses.— Whether a taxpayer who is traveling away

January 2, 2024 146 Bulletin No. 2024–1

from home on business may, in lieu of substantiating the actual cost of meals, deduct a fixed per-day amount for meal expenses that differs from the amount authorized by the revenue procedure providing optional rules for substantiating the amount of travel expenses for the period in which the expense was paid or incurred.

(50) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies when the consideration given in redemption by a corporation consists entirely or partly of its notes payable, and the shareholder’s stock is held in escrow or as security for payment of the notes with the possibility that the stock may or will be returned to the shareholder in the future, upon the happening of specific defaults by the corporation.

(51) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies when the consideration given in redemption by a corporation in exchange for a shareholder’s stock consists entirely or partly of the corporation’s promise to pay an amount based on, or contingent on, future earnings of the corporation, when the promise to pay is contingent on working capital being maintained at a certain level, or any other similar contingency.

(52) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies to a redemption of stock, if, after the redemption, the distributing corporation uses property that is owned by the shareholder from whom the stock is redeemed and the payments by the corporation for the use of the property are dependent upon the corporation’s future earnings or are subordinate to the claims of the corporation’s general creditors. Payments for the use of property will not be considered to be dependent upon future earnings merely because they are based on a fixed percentage of receipts or sales.

(53) Section 302.—Distributions in Redemption of Stock.—Whether the acquisition or disposition of stock described in § 302(c)(2)(B) has, or does not have, as one of its principal purposes the avoidance of Federal income taxes within the meaning of that section, unless the facts and circumstances are materially identical to those set forth in Rev. Rul. 85-19, 19851 C.B. 94; Rev. Rul. 79-67, 1979-1 C.B. 128; Rev. Rul. 77-293, 1977-2 C.B. 91;