Bulletin No. 2021–45

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HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2021–45

November 8, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

EXEMPT ORGANIZATIONS

Notice 2021-60, page 719.

Notice 2021-56, page 716.

This notice sets forth updates on the corporate bond monthly

yield curve, the corresponding spot segment rates for October 2021 used under § 417(e)(3)(D), the 24-month average

segment rates applicable for October 2021, and the 30-year

Treasury rates, as reflected by the application of § 430(h)(2)

(C)(iv).

Finding Lists begin on page ii.

This notice sets forth current standards that a limited liability

company (LLC) must satisfy to receive a determination letter

recognizing it as tax-exempt under section 501(a) of the Internal Revenue Code and described in section 501(c)(3). This

notice also requests public comments on these standards as

well as specific issues relating to tax-exempt status for LLCs.

This notice does not affect the status of organizations currently recognized as described in section 501(c)(3).

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

November 8, 2021

Bulletin No. 2021–45

Part III

Standards for Section

501(c)(3) Status of Limited

Liability Companies

Notice 2021-56

SECTION 1. PURPOSE

This notice sets forth current standards

that a limited liability company (LLC)

must satisfy to receive a determination

letter recognizing it as tax-exempt under

section 501(a)1 and described in section 501(c)(3). This notice also requests

public comments on these standards as

well as specific issues relating to tax-exempt status for LLCs to assist the Department of the Treasury (Treasury Department) and the Internal Revenue Service

(IRS) in determining whether additional

guidance is needed concerning the standards that an LLC must satisfy to be

exempt from taxation by reason of being

described in section 501(c). This notice

does not affect the status of organizations

currently recognized as described in section 501(c)(3).

SECTION 2. BACKGROUND

.01 General Requirements under Section 501(c)(3)

Section 501(a) generally provides

that an organization described in section 501(c) shall be exempt from federal

income taxation.

Section 501(c)(3) refers, in part, to corporations, and any community chest, fund,

or foundation organized and operated

exclusively for certain purposes (referred

to collectively in this notice as “charitable

purposes” or “exempt purposes”), no part

of the net earnings of which inures to the

benefit of any private shareholder or individual.

Section 508(e) generally provides that

a private foundation will not be exempt

from taxation under section 501(a) unless

its governing instrument includes provisions requiring the foundation to comply

with sections 4941, 4942, 4943, 4944, and

4945.

Section 7701(a)(3) generally provides

that the term “corporation” includes associations for purposes of the Code.

Section 1.501(c)(3)-1(b)(1) of the

Income Tax Regulations provides that an

organization is organized and operated

exclusively for one or more exempt purposes only if its articles of organization

limit the purposes of the organization

to one or more exempt purposes and do

not expressly empower the organization

to engage, other than as an insubstantial

part of its activities, in activities that are

not in furtherance of one or more exempt

purposes. Section 1.501(c)(3)-1(b)(2)

provides that the term “articles of organization” or “articles” includes the trust

instrument, the corporate charter, the

articles of association, or any other written instrument by which an organization

is created.

Under § 1.501(c)(3)-1(b)(4), an organization is not organized exclusively for

one or more exempt purposes unless its

assets are dedicated to an exempt purpose.

An organization’s assets will be considered dedicated to an exempt purpose, for

example, if, upon dissolution of the organization, such assets would, by reason of a

provision in the organization’s articles or

by operation of law, be distributed for one

or more exempt purposes, or to the federal

government, or to a state or local government, for a public purpose, or would be

distributed by a court to another organization to be used in such manner as in the

judgment of the court will best accomplish the general purposes for which the

dissolved organization was organized.

However, an organization will not be

considered to satisfy the organizational

test if its articles or the law of the state in

which it was created provide that its assets

would, upon dissolution, be distributed to

its members or shareholders.

Section 1.501(c)(3)-1(b)(5) provides

that the law of the state in which an organization is created is controlling when

construing the terms of the organization’s

articles. Any organization contending

that the terms of its articles have a different meaning under state law than their

generally accepted meaning must establish such special meaning by clear and

convincing reference to relevant court

decisions, opinions of the state attorney

general, or other evidence of applicable

state law.

Section 1.508-3(d) describes circumstances in which a private foundation’s

governing instrument will be deemed to

comply with the requirements of section

508(e) based on provisions of applicable

state law.

.02 Entity classification

Entity classification regulations under

§§ 301.7701-1 through -3 of the Procedure and Administration Regulations

(commonly known as check-the-box regulations) were first issued in 1996 and provide federal tax rules for the treatment of

business entities. Under § 301.7701-1(a)

(1), whether an organization is an entity

separate from its owners for federal tax

purposes is a matter of federal tax law and

does not depend on whether the organization is recognized as an entity under local

law. Similarly, under § 301.7701-1(a)(3),

an entity formed under local law is not

always recognized as a separate entity for

federal tax purposes.

Under § 301.7701-2(a), a business

entity is any entity recognized for federal

tax purposes (including an entity with a

single owner that may be disregarded as

an entity separate from its owner under

§ 301.7701-3 (disregarded entity)) that

is not properly classified as a trust under

§ 301.7701-4 or otherwise subject to special treatment under the Code. A business

entity with two or more members is classified for federal tax purposes as either a

corporation or a partnership. A business

entity with only one owner is classified

as a corporation or a disregarded entity.

If the entity is a disregarded entity, its

activities are treated in the same manner as a sole proprietorship, branch, or

division of the owner. Section 301.77013(a) generally provides that a business

entity that is not classified as a corporation under § 301.7701-2(b)(1), (3), (4),

All Code, section, and “§” references are to the Internal Revenue Code of 1986, as amended, or regulations thereunder, unless otherwise specified.

November 8, 2021

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Bulletin No. 2021–45

(5), (6), (7), or (8) is an eligible entity.

An eligible entity with at least two members can elect to be classified as either an

association (and thus a corporation) or a

partnership, and an eligible entity with

a single owner can elect to be classified

as an association or a disregarded entity.

In general, a domestic eligible entity that

does not file an election is treated as a

partnership or a disregarded entity. See

§ 301.7701-3(b)(1). Section 301.77013(c)(1)(v)(A) provides, however, that an

eligible entity that has been determined

to be, or claims to be, exempt from taxation under section 501(a) is treated as

having made an election to be classified

as an association (and thus as a corporation under § 301.7701-2(b)(2)).

.03 Treatment of LLCs under Section 501(c)(3)

Section 1.501(c)(3)-1(b), which sets

forth the organizational test, was issued

in 1959, prior to the enactment of the first

LLC statute in the United States.2 As a

result, the regulations under section 501(c)

(3) do not specifically address LLCs and

the Treasury Department and the IRS have

not issued other formal guidance addressing the requirements for recognition of

LLCs as organizations described in section 501(c)(3). Historically, the standards

that the IRS has applied for purposes of

issuing determination letters have generally included a requirement that all the

members of an LLC must themselves be

section 501(c)(3) organizations, governmental units, or wholly-owned instrumentalities of a state or political subdivision

thereof.

.04 State LLC Statutes

In considering the requirements that

an LLC must satisfy to qualify as an

organization described in section 501(c)

(3), the Treasury Department and the IRS

reviewed state laws governing LLCs and

the ways in which those laws may differ

from the state laws governing not-forprofit (or nonstock) corporations and

charitable trusts. It appears that, in a few

states, the LLC law may not allow an

LLC to be organized and operated exclusively for charitable purposes. See section 4.01(3) of this notice. It also appears

that most state LLC laws include default

provisions granting the members of an

LLC certain economic rights that would

be inconsistent with section 501(c)(3)

requirements if the members were “private shareholders or individuals” within

the meaning of § 1.501(a)-1(c). See section 4.01(4) of this notice. A few states

do not permit a statement of the LLC’s

purposes in the articles of organization,

but only in the operating agreement,

which is not filed with the state. See section 4.01(6) of this notice.

SECTION 3. STANDARDS FOR AN

LLC SUBMITTING FORM 1023

.01 In general

The Treasury Department and the IRS

construe section 501(c)(3) and § 1.501(c)

(3)-1 to permit the IRS to issue a favorable determination letter to an LLC that

submits Form 1023, Application for

Recognition of Exemption under Section 501(c)(3) of the Internal Revenue

Code, after October 21, 2021, only if the

LLC satisfies the requirements set forth

in sections 3.02 and 3.03 of this notice

in addition to the general requirements

under section 501(c)(3). The requirements in sections 3.02 and 3.03 of this

notice are intended to ensure that the LLC

is organized and operated exclusively for

exempt purposes, including that its assets

are dedicated to an exempt purpose and

do not inure to private interests.

.02 Required provisions of LLC articles

of organization and operating agreement

Except as set forth in section 3.04 of

this notice, the IRS will issue a determination letter recognizing an LLC as exempt

from tax and described in section 501(c)

(3) only if both the LLC’s articles of organization and its operating agreement each

include:

(1) Provisions requiring that each member of the LLC be either (i) an organization described in section 501(c)

(3) and exempt from taxation under

section 501(a) or (ii) a governmental

unit described in section 170(c)(1)

(or wholly-owned instrumentality of

such a governmental unit).

(2) Express charitable purposes and charitable dissolution provisions in compliance with § 1.501(c)(3)-1(b)(1)

and (4).

(3) The express chapter 42 compliance

provisions described in section 508(e)

(1), if the LLC is a private foundation.

(4) An acceptable contingency plan

(such as suspension of its membership rights until a member regains

recognition of its section 501(c)(3)

status) in the event that one or more

members cease to be section 501(c)

(3) organizations or governmental

units (or wholly-owned instrumentalities thereof).

.03 Representation on enforceability

The LLC must represent that all provisions in its articles of organization and

operating agreement are consistent with

applicable state LLC law and are legally

enforceable.

.04 States with limitations on articles

provisions

If an LLC is formed under a state LLC

law that prohibits the addition of provisions to articles of organization other

than certain specific provisions required

by the state LLC law, the requirements

of section 3.02 of this notice will be

deemed satisfied if the LLC’s operating

agreement includes the provisions set

forth in section 3.02 of this notice and if

the articles of organization and operating

agreement do not include any inconsistent provisions.

SECTION 4. REQUEST FOR PUBLIC

COMMENTS

.01 Section 501(c)(3)

The Treasury Department and the IRS

request comments on the standards in section 3 of this notice. Comments supporting recognition of section 501(c)(3) status

for LLCs whose membership includes

individuals and/or organizations other

than section 501(c)(3) organizations,

governmental units, or instrumentalities

of a state or political subdivision thereof

should recommend specific safeguards to

ensure the LLC would be able to satisfy

the existing federal statutory and regula-

The IRS first addressed the tax classification of LLCs, in the context of the Wyoming LLC Act, in Rev. Rul. 88-76, 1988-2 C.B. 360 (obsoleted in Rev. Rul. 98-37, 1998-2 C.B. 133). Since

then, every other state has enacted laws providing for the creation and regulation of LLCs. Many states have adopted some version of the Uniform Limited Liability Company Act (ULLCA),

generally with some modifications. Several states have adopted nonprofit LLC statutes (as discussed in section 4.01(7) of this notice).

Bulletin No. 2021–45

717

November 8, 2021

tory requirements, including the requirement for assets to remain dedicated to

an exempt purpose and the prohibition

against private inurement. Additionally,

comments are requested from state attorneys general and charity officials, as well

as from the general public, with respect to

interpretation of state LLC laws, reference

to other pertinent laws, and applicability

of state charity laws to LLCs formed for

charitable purposes (charitable LLCs).

In particular, the Treasury Department and the IRS request comments with

respect to the following:

(1) What are the potential advantages and

disadvantages of forming an entity for

exclusively charitable purposes under

a state LLC law rather than under a

state not-for-profit (or non-stock) corporation or charitable trust law?

(2) Do state laws regulating charitable

assets apply to assets held by charitable LLCs to the same degree as such

laws apply to assets held by trusts

or state-law corporations formed for

charitable purposes?

(3) Most state LLC statutes specify that

an LLC may be formed for any lawful

purpose. In a few states, however, the

LLC statute appears to require that an

LLC be a profit-seeking enterprise.

In those states, is it permissible as a

matter of state law for an LLC to be

formed exclusively for section 501(c)

(3) purposes?

(4) Most state LLC statutes appear to

provide that, upon dissolution and

after payment of creditors, an LLC

may dispose of its remaining assets

among its members or otherwise in

whatever manner specified in its articles of organization (also referred

to as a certificate of organization or

certificate of formation) or operating

agreement (also referred to as a limited liability company agreement).

In those states, the state LLC statute

merely provides default rules that

apply in the absence of any provision

in the articles or operating agreement.

Other state LLC statutes, however,

appear to require distributions of net

assets only to members upon dissolution, as immutable rules.

a. In a state in which the LLC statute appears to require distributions of net assets only to LLC

November 8, 2021

members on dissolution, could

LLC members at the time of

creation of an LLC effectively

disclaim their financial interests

in the LLC or assign or transfer

their financial interests to the

LLC or to another section 501(c)

(3) charity as a means of satisfying the dissolution clause

requirement under § 1.501(c)(3)1(b)(4), notwithstanding the state

dissolution requirements?

b. Would such a disclaimer be

enforceable against the LLC

members?

c. Would such a disclaimer be

enforceable against creditors of

the members?

(5) The organizational test regulations

under § 1.501(c)(3)-1(b) generally

require certain language (in particular, stated charitable purposes and

charitable distribution of assets upon

dissolution) to appear in the articles

of organization, defined as the written instrument by which the organization is created. Private foundations

also must include certain language in

their articles of organization to be in

compliance with section 508(e). See

§ 1.508-3. In many cases, state law

satisfies the dissolution requirements

and section 508(e) requirements for

charitable trusts and corporations if

there is no contrary provision in the

articles of organization. State LLC

statutes generally provide that an

LLC is created upon filing its articles of organization with the state. In

addition to the articles of organization, an operating agreement governs

the affairs and activities of an LLC.

Unlike the articles of organization,

the operating agreement is not filed

with the state. State laws differ as

to which document is controlling. In

some states, the articles control. In

other states, the articles control as to

outside parties to the extent they reasonably rely on the public record, but

the operating agreement governs relations among the LLC’s members and

between the members and the LLC.

a. Are there state laws that satisfy

the dissolution requirements and

section 508(e) requirements for

charitable LLCs?

718

Is there any reason why an LLC

should not be required (except

as provided in section 4.01(6))

to include appropriate charitable

purpose and dissolution language

(and section 508(e) language, if

applicable) in both its articles of

organization and its operating

agreement?

(6) Most state LLC statutes do not restrict

the ability of an LLC to include the

language required under § 1.501(c)

(3)-1(b) (and section 508(e), if applicable) in its articles of organization.

However, a few states appear to

strictly limit what provisions may be

included in an LLC’s articles of organization.

a. Should the regulations for the

section 501(c)(3) organizational

test and section 508(e) requirements be revised to accommodate LLCs organized in states

that limit what provisions may be

included in an LLC’s articles of

organization if the LLC includes

the appropriate language in the

LLC’s operating agreement?

b. Should it matter that the operating agreement (unlike the articles

of organization) is not filed with

the state, and therefore may not

be readily available to the IRS

and the public?

(7) Several states have enacted special

statutory provisions for nonprofit

LLCs (beyond a mere provision in

the statute that allows an LLC to be

formed for a nonprofit purpose), subjecting them to regulation as nonprofit

organizations and, in some cases,

limiting membership. In such states,

must a charitable LLC form under the

state’s nonprofit LLC law, or are charitable LLCs permitted to form under

the state’s general LLC law?

(8) State laws generally provide an LLC’s

members with management authority

unless the articles of organization (or

in some states, the operating agreement) delegate management authority

to one or more managers.

a. With respect to qualification for

section 501(c)(3) status, should

LLCs managed by managers be

treated the same as LLCs managed by members?

Bulletin No. 2021–45

Should LLC managers be treated

as officers for federal exempt

organization tax purposes generally, including, for example, the

compliance provisions of chapter

42?

(9) Are there any other provisions of the

LLC law in one or more states that

may affect the ability of an LLC to

qualify under section 501(c)(3)?

(10) Are there any specific provisions that

should be included in an LLC’s articles of organization and operating

agreement in addition to, or in lieu

of, those discussed in section 3.02 of

this notice, to address particular provisions of state LLC law?

(11) Are there circumstances in which an

LLC seeking recognition under section 501(c)(3) should be permitted to

have members that are not themselves

section 501(c)(3) organizations, governmental units, or wholly-owned

instrumentalities of governmental

units?

.02 Other exemption provisions

The Treasury Department and the IRS

also request comments as to whether there

should be special requirements or considerations for recognition of tax-exempt

status for LLCs under paragraphs of section 501(c) other than section 501(c)(3).

SECTION 5: WHEN AND WHERE TO

SEND COMMENTS

Written comments may be submitted

by February 6, 2022. Comments should

include a reference to Notice 2021-56.

Comments may be submitted in one of

two ways:

(1) Electronically via the Federal

eRulemaking Portal at www.regulations.gov (type IRS-2020-0042 in the

search field on the regulations.gov

homepage to find this notice and submit comments).

(2) Alternatively, by mail to: Internal

Revenue Service, CC:PA:LPD:PR

(Notice 2021-56), Room 5203, P.O.

Box 7604, Ben Franklin Station,

Washington, DC 20044.

All commenters are strongly encouraged to submit comments electronically,

as access to mail may be limited. The IRS

expects to have limited personnel available to process public comments that are

submitted on paper through mail. Until

further notice, any comments submitted

on paper will be considered to the extent

practicable. The Treasury Department and

the IRS will publish for public availability any comment submitted electronically,

and to the extent practicable on paper, to

its public docket.

SECTION 6. PAPERWORK

REDUCTION ACT

Section 3 of this notice sets forth a

collection of information (required provisions of articles of organization and

operating agreement and representation

on enforceability, to be provided to the

IRS with Form 1023). This collection of

information is reflected in the collection

of information for Form 1023 that has

been reviewed and approved by the Office

of Management and Budget in accordance

with the Paperwork Reduction Act (44

U.S.C. 3507(c)) under control number

1545-0047.

An agency may not conduct or sponsor,

and a person is not required to respond

to, a collection of information unless the

collection of information displays a valid

OMB control number.

Books or records relating to a collection of information must be retained as

long as their contents may become material in the administration of any internal

revenue law. Generally, tax returns and

tax return information are confidential, as

required by section 6103.

SECTION 7. DRAFTING

INFORMATION

The principal authors of this notice are

Christopher A. Hyde and Ward L. Thomas

of the Office of Associate Chief Counsel

(Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this notice,

contact Mr. Hyde at (202) 317-6171 or

Mr. Thomas at (202) 317-6173 (not tollfree numbers).

Update for Weighted

Average Interest Rates,

Yield Curves, and Segment

Rates

Notice 2021-60

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 30-year

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 yield curve derived from September

Pursuant 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)).

Bulletin No. 2021–45

719

November 8, 2021

2021 data is in Table 2021-9 at the end

of this notice. The spot first, second, and

third segment rates for the month of September 2021 are, respectively, 0.70, 2.55,

and 3.06

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 appli-

24-MONTH AVERAGE CORPORATE

BOND SEGMENT RATES

The three 24-month average corporate bond segment rates applicable for

October 2021 without adjustment for the

25-year average segment rate limits are

as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment

First Segment

Second Segment

1.01

2.65

Applicable Month

October 2021

25-YEAR AVERAGE SEGMENT

RATES

Section 9706(a) of the American Rescue Plan Act of 2021, Pub. L. No. 117-2

(ARP), which was enacted on March 11,

2021, changes the 25-year average segment rates and the applicable minimum

and maximum percentages used under

§ 430(h)(3)(C)(iv) of the Code to adjust

the 24-month average segment rates.

Prior to this change, the applicable minimum and maximum percentages were

90% and 110% for a plan year beginning

in 2020, and 85% and 115% for a plan

For Plan Years

Beginning In

cable minimum and maximum percentages of the corresponding 25-year average

segment rates.

The 25-year average segment rates

for plan years beginning in 2020, 2021

and 2022 were published in Notice 201951, 2019-41 I.R.B. 866, Notice 2020-72,

2020-40 I.R.B. 789, and Notice 2021-54,

2021-41 I.R.B. 457, respectively.

year beginning in 2021, respectively.

After this change, the applicable minimum and maximum percentages are 95%

and 105% for a plan year beginning in

2020, 2021, or 2022. In addition, pursuant to this change, any 25-year average segment rate that is less than 5% is

deemed to be 5%.2

Pursuant to § 9706(c)(1) of ARP, these

changes apply with respect to plan years

beginning on or after January 1, 2020.

However, § 9706(c)(2) of ARP provides

that a plan sponsor may elect not to have

these changes apply to any plan year

beginning before January 1, 2022.3

Third Segment

3.34

The adjusted 24-month average segment rates set forth in the chart below

reflect § 430(h)(2)(C)(iv) of the Code

as amended by § 9706(a) of ARP. These

adjusted 24-month average segment rates

apply only for plan years for which an

election under § 9706(c)(2) of ARP is not

in effect. For a plan year for which such

an election does not apply, the 24-month

averages applicable for October 2021,

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

corresponding 25-year average segment

rates in accordance with § 430(h)(2)(C)

(iv) of the Code, are as follows:

Adjusted 24-Month Average Segment Rates

Applicable

First

Second

Month

Segment

Third

Segment

2020

October 2021

4.75

5.50

6.27

2021

October 2021

4.75

5.36

6.11

2022

October 2021

4.75

5.18

5.92

The adjusted 24-month average segment rates set forth in the chart below do

not reflect the changes to § 430(h)(2)(C)

(iv) of the Code made by § 9706(a) of

ARP. These adjusted 24-month average

For Plan Years

Beginning In

segment rates apply only for plan years for

which an election under § 9706(c)(2) of

ARP is in effect. For a plan year for which

such an election applies, the 24-month

averages applicable for October 2021,

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

corresponding 25-year average segment

rates in accordance with § 430(h)(2)(C)

(iv) of the Code, are as follows:

Pre-ARP Adjusted 24-Month Average Segment Rates

Applicable

First

Second

Month

Segment

Third

Segment

2020

October 2021

3.64

5.21

5.94

2021

October 2021

3.32

4.79

5.47

Pursuant to this change, the 25-year averages of the first segment rate for 2020, 2021, and 2022 are increased to 5.00% because those 25-year averages as originally published are below

5.00%.

This election may be made either for all purposes for which the amendments under § 9706 of ARP apply or solely for purposes of determining the adjusted funding target attainment percentage under § 436 of the Code for the plan year.

November 8, 2021

720

Bulletin No. 2021–45

30-YEAR TREASURY SECURITIES

INTEREST RATES

Section 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)(E)(ii)(I) pro-

vides 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 on 30-year Treasury securities

for September 2021 is 1.94 percent. The

Service determined this rate as the average

of the daily determinations of yield on the

30-year Treasury bond maturing in August

2051. For plan years beginning in October

2021, the weighted average of the rates of

interest on 30-year Treasury securities and

the permissible range of rates used to calculate current liability are as follows:

For Plan Years

Beginning In

Treasury Weighted Average Rates

30-Year Treasury

Weighted Average

Permissible Range

90% to 105%

October 2021

2.17

1.95 to 2.28

under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month

average. Notice 2007-81 provides guidelines for determining the minimum pres-

ent value segment rates. Pursuant to that

notice, the minimum present value segment rates determined for September

2021 are as follows:

MINIMUM PRESENT VALUE

SEGMENT RATES

In general, the applicable interest rates

Month

September 2021

Minimum Present Value Segment Rates

First Segment

Second Segment

0.70

2.55

DRAFTING INFORMATION

The principal author of this notice is

Tom Morgan of the Office of the Asso-

Bulletin No. 2021–45

ciate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

721

Third Segment

3.06

of this guidance. For further information

regarding this notice, contact Mr. Morgan

at 202-317-6700 or Paul Stern at 202-3178702 (not toll-free numbers).

November 8, 2021

Table 2021-9

Monthly Yield Curve for September 2021

Derived from September 2021 Data

Maturity

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

Yield

0.13

0.26

0.39

0.51

0.63

0.75

0.88

1.00

1.13

1.27

1.40

1.53

1.66

1.79

1.92

2.03

2.14

2.25

2.34

2.43

2.51

2.58

2.64

2.70

2.75

2.79

2.83

2.86

2.88

2.91

2.92

2.94

2.95

2.96

2.97

2.98

2.99

3.00

November 8, 2021

Maturity

20.5

21.0

21.5

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

33.5

34.0

34.5

35.0

35.5

36.0

36.5

37.0

37.5

38.0

38.5

39.0

39.5

40.0

Yield

3.00

3.01

3.02

3.03

3.04

3.05

3.06

3.07

Maturity

40.5

41.0

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

47.0

47.5

48.0

48.5

49.0

49.5

50.0

50.5

51.0

51.5

52.0

52.5

53.0

53.5

54.0

54.5

55.0

55.5

56.0

56.5

57.0

57.5

58.0

58.5

59.0

59.5

60.0

Yield

3.07

3.08

3.09

3.10

722

Maturity

60.5

61.0

61.5

62.0

62.5

63.0

63.5

64.0

64.5

65.0

65.5

66.0

66.5

67.0

67.5

68.0

68.5

69.0

69.5

70.0

70.5

71.0

71.5

72.0

72.5

73.0

73.5

74.0

74.5

75.0

75.5

76.0

76.5

77.0

77.5

78.0

78.5

79.0

79.5

80.0

Yield

3.11

3.12

Maturity

80.5

81.0

81.5

82.0

82.5

83.0

83.5

84.0

84.5

85.0

85.5

86.0

86.5

87.0

87.5

88.0

88.5

89.0

89.5

90.0

90.5

91.0

91.5

92.0

92.5

93.0

93.5

94.0

94.5

95.0

95.5

96.0

96.5

97.0

97.5

98.0

98.5

99.0

99.5

100.0

Yield

3.12

3.13

Bulletin No. 2021–45

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus,

if an earlier ruling held that a principle

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously

published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations

to show that the previous published rulings will not be applied pending some

future action such as the issuance of new

or amended regulations, the outcome of

cases in litigation, or the outcome of a

Service study.

Abbreviations

The following abbreviations in current use

and formerly used will appear in material

published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2021–45

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

November 8, 2021

Numerical Finding List1

Bulletin 2021–45

Announcements:

2021-12, 2021-31 I.R.B. 267

2021-13, 2021-33 I.R.B. 314

2021-14, 2021-33 I.R.B. 315

Notices:

2021-39, 2021-27 I.R.B. 3

2021-40, 2021-28 I.R.B. 15

2021-41, 2021-29 I.R.B. 17

2021-42, 2021-29 I.R.B. 19

2021-38, 2021-30 I.R.B. 155

2021-44, 2021-31 I.R.B. 166

2021-45, 2021-31 I.R.B. 170

2021-47, 2021-32 I.R.B. 269

2021-46, 2021-33 I.R.B. 303

2021-48, 2021-33 I.R.B. 305

2021-49, 2021-34 I.R.B. 316

2021-43, 2021-35 I.R.B. 332

2021-50, 2021-35 I.R.B. 333

2021-51, 2021-36 I.R.B. 361

2021-52, 2021-38 I.R.B. 381

2021-53, 2021-39 I.R.B. 438

2021-54, 2021-41 I.R.B. 457

2021-55, 2021-41 I.R.B. 461

2021-58, 2021-43 I.R.B. 660

2021-59, 2021-43 I.R.B. 664

2021-57, 2021-44 I.R.B. 706

2021-56, 2021-45 I.R.B. 716

2021-60, 2021-45 I.R.B. 719

Revenue Procedures:—Continued

2021-41, 2021-39 I.R.B. 443

2021-32, 2021-42 I.R.B. 465

2021-44, 2021-42 I.R.B. 469

2021-42, 2021-43 I.R.B. 666

Revenue Rulings:

2021-12, 2021-27 I.R.B. 1

2021-13, 2021-30 I.R.B. 152

2021-14, 2021-31 I.R.B. 164

2021-19, 2021-42 I.R.B. 470

2021-15, 2021-35 I.R.B. 331

2021-16, 2021-36 I.R.B. 359

2021-17, 2021-37 I.R.B. 362

2021-18, 2021-40 I.R.B. 447

2021-21, 2021-44 I.R.B. 704

Treasury Decisions:

9951, 2021-30 I.R.B. 25

9952, 2021-39 I.R.B. 428

9953, 2021-39 I.R.B. 430

9956, 2021-41 I.R.B. 449

9957, 2021-41 I.R.B. 452

9955, 2021-42 I.R.B. 471

Proposed Regulations:

REG-107705-21, 2021-30 I.R.B. 162

REG-102951-16, 2021-32 I.R.B. 272

REG-109077-21, 2021-39 I.R.B. 445

REG-100718-21, 2021-42 I.R.B. 653

REG-107707-21, 2021-42 I.R.B. 657

Revenue Procedures:

2021-28, 2021-27 I.R.B. 5

2021-29, 2021-27 I.R.B. 12

2021-24, 2021-29 I.R.B. 19

2021-14, 2021-30 I.R.B. 158

2021-30, 2021-31 I.R.B. 172

2021-31, 2021-33 I.R.B. 324

2021-33, 2021-34 I.R.B. 327

2021-34, 2021-35 I.R.B. 337

2021-35, 2021-35 I.R.B. 355

2021-36, 2021-35 I.R.B. 357

2021-37, 2021-38 I.R.B. 385

2021-38, 2021-38 I.R.B. 425

2021-39, 2021-38 I.R.B. 426

2021-40, 2021-38 I.R.B. 426

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

November 8, 2021

Bulletin No. 2021–45

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–45

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

Bulletin No. 2021–45

iii

November 8, 2021

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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Bulletins are available at www.irs.gov/irb/.

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If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,

we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.