These synopses are intended only as aids to the reader in

HIGHLIGHTS

OF THIS ISSUE

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.

INCOME TAX

Announcement 2024-10, page 711.

This announcement addresses the Federal income tax treatment of certain lead service line replacement programs for

residential property owners. The replacement of lead service

lines under the programs described in the announcement

does not result in income. Water systems and state governments are not required to file information returns or furnish

payee statements with respect to the replacement of lead

service lines under these programs.

Finding Lists begin on page ii.





Bulletin No. 2024–11

March 11, 2024

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 Unpublished rulings will not be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.

March 11, 2024 

Bulletin No. 2024–11

Part IV

Replacement of Lead

Service Lines under

Certain Governmental

Programs

Announcement 2024-10

This announcement addresses the Federal income tax treatment of certain lead

service line replacement programs for residential property owners.

The Environmental Protection Agency

(EPA) has determined that lead has no

safe exposure level. In drinking water, it

causes serious and long-term health problems. Lead enters the drinking water when

lead pipes and plumbing fixtures corrode.

Given the health risks, many governmental entities have adopted programs for

replacing lead service lines. The 2021

Infrastructure Investment and Jobs Act

appropriated approximately $15 billion to

governmental entities, as administered by

the EPA, for the identification and replacement of lead service lines, almost half of

which will be provided to disadvantaged

communities as grants or principal forgiveness. See Pub. L. No. 117-58, 135

Stat. 429, div. J, tit. VI.

A lead service line is defined in 40

CFR 141.2 as a pipe and its fittings, which

are not lead free, that connect a drinking

water main to a building inlet. A lead service line can be owned by a public water

system, owned by a property owner, or

jointly owned. Typically, a lead service

line is part-owned by the public water

system and part-owned by the property

owner. The portion of the lead service line

on public property (public portion) runs

from the water main to the boundary of

the residential property. The portion on

the residential property (privately-owned

1

portion) runs from the residential property’s boundary to the house or building.

The Federal government and many

state governments require that the privately-owned portion of the lead service line

be replaced simultaneously with the other

relevant parts of the water system that

contain lead. Digging and cutting during

partial replacement is known to release

more lead into the drinking water. New

materials from partial lead service line

replacement activities can also increase

corrosion.

Generally,

governmental

entities

replace lead service lines at no cost to

property owners in two ways. In many

cases, the public water system, using its

own workers and contractors, replaces

the public portion and private portion

simultaneously and controls the timing

and scope of the work performed by its

employees and its approved contractors.

The public water system typically obtains

the owner’s explicit consent to enter the

residential property to replace the privately-owned portion. In some municipalities,

however, consent is deemed granted under

local laws. See, for example, N.J.S.A.

C.58:12A-39 (2020).

In other cases, the public water system

reimburses residential property owners, or

directly pays contractors on the residential

property owners’ behalf, to replace the

privately owned portions of lead service

lines. For jurisdictions that choose this

method, replacement of the private and

public portions typically occurs simultaneously in order to prevent further lead

contamination in the system. In these

cases, the public water system generally

controls the quality and reliability of the

contractors either by providing a pre-approved list for the local area or by individually approving a contractor before work

may be started.

The Department of the Treasury (Treasury Department) and Internal Revenue

Service (IRS) have considered the Federal

income tax treatment of the lead service line

replacement programs described above. In

both scenarios, the public water system

controls all or virtually all aspects of the

replacement work. While there are factual

variations, the Treasury Department and

the IRS have determined that these variations do not warrant a different outcome

under the Federal tax laws. Accordingly,

the replacement of lead service lines under

the programs described above does not

result in income to the residential property

owners under § 61 of the Internal Revenue

Code.1 See Bailey v. Commissioner, 88 T.C.

1293 (1987), acq. 1989-1 C.B. 1 (recipient

of a rehabilitation grant from municipality

lacked dominion and control where city

controlled the rehabilitation work). The

rules under § 6041 and § 1.6041–1(a) and

(f)(1) requiring information reporting (such

as on a Form 1099-Misc., Miscellaneous

Information or Form 1099-G, Certain

Government Payments) do not apply to the

cost or value of replacing lead service lines

under the programs described above, based

on the determination that such replacement

does not give rise to gross income to the

property owner under § 61. Accordingly,

water systems and state governments are

not required to file information returns or

furnish payee statements with respect to

the replacement of lead service lines under

these programs.

The principal author of this announcement is Alina Lewandowski of the Office

of Associate Chief Counsel (Income Tax

& Accounting). Other personnel from the

Treasury Department and IRS participated

in its development. For further information regarding this announcement, please

contact Ms. Lewandowski at (202) 3177006 (not a toll-free number).

Unless otherwise specified, all “§” references are to sections of the Internal Revenue Code or to the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2024–11

711

March 11, 2024

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. 2024–11

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.

i

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.

March 11, 2024

Numerical Finding List1

Bulletin 2024–11

Announcements:

2024-1, 2024-02 I.R.B. 363

2024-3, 2024-02 I.R.B. 364

2024-5, 2024-05 I.R.B. 635

2024-6, 2024-05 I.R.B. 635

2024-4, 2024-06 I.R.B. 665

2024-7, 2024-07 I.R.B. 673

2024-8, 2024-07 I.R.B. 674

2024-9, 2024-07 I.R.B. 675

2024-12, 2024-08 I.R.B. 676

2024-11, 2024-08 I.R.B. 683

2024-13, 2024-10 I.R.B. 710

2024-10, 2024-11 I.R.B. 711

Notices:

Revenue Procedures:—Continued

2024-12, 2024-09 I.R.B. 677

2024-13, 2024-09 I.R.B. 678

2024-14, 2024-09 I.R.B. 682

Revenue Rulings:

2024-1, 2024-02 I.R.B. 307

2024-2, 2024-02 I.R.B. 311

2024-3, 2024-06 I.R.B. 646

2024-5, 2024-07 I.R.B. 666

2024-4, 2024-10 I.R.B. 686

2024-6, 2024-10 I.R.B. 688

Treasury Decisions:

9984, 2024-03 I.R.B. 386

9985, 2024-05 I.R.B. 573

9986, 2024-05 I.R.B. 610

9987, 2024-06 I.R.B. 648

2024-1, 2024-02 I.R.B. 314

2024-2, 2024-02 I.R.B. 316

2024-3, 2024-02 I.R.B. 338

2024-4, 2024-02 I.R.B. 343

2024-5, 2024-02 I.R.B. 347

2024-6, 2024-02 I.R.B. 348

2024-7, 2024-02 I.R.B. 355

2024-8, 2024-02 I.R.B. 356

2024-9, 2024-02 I.R.B. 358

2024-11, 2024-02 I.R.B. 360

2024-10, 2024-03 I.R.B. 406

2024-12, 2024-05 I.R.B. 616

2024-13, 2024-05 I.R.B. 618

2024-16, 2024-05 I.R.B. 622

2024-18, 2024-05 I.R.B. 625

2024-19, 2024-05 I.R.B. 627

2024-21, 2024-06 I.R.B. 659

2024-22, 2024-06 I.R.B. 662

2024-20, 2024-07 I.R.B. 668

2024-23, 2024-07 I.R.B. 672

2024-24, 2024-10 I.R.B. 707

Proposed Regulations:

REG-118492-23, 2024-02 I.R.B. 366

REG-107423-23, 2024-03 I.R.B. 411

REG-121010-17, 2024-05 I.R.B. 636

Revenue Procedures:

2024-1, 2024-01 I.R.B. 1

2024-2, 2024-01 I.R.B. 119

2024-3, 2024-01 I.R.B. 143

2024-4, 2024-01 I.R.B. 160

2024-5, 2024-01 I.R.B. 262

2024-7, 2024-01 I.R.B. 303

2024-8, 2024-04 I.R.B. 479

2024-9, 2024-05 I.R.B. 628

1

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin

2023–52, dated December 26, 2023.

March 11, 2024

ii

Bulletin No. 2024–11

Finding List of Current Actions on

Previously Published Items1

Bulletin 2024–11

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin

2023–52, dated December 26, 2023.

1

Bulletin No. 2024–11

iii

March 11, 2024

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

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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