Bulletin No. 2021–41

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–41

October 12, 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

INCOME TAX

Notice 2021-54, page 457.

Notice 2021-55, page 461.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for

September 2021 used under § 417(e)(3)(D), the 24-month

average segment rates applicable for September 2021,

and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

ESTATE TAX

T.D. 9957, page 452.

This guidance contains final regulations establishing a new

user fee for persons requesting the issuance of IRS Letter

627, also referred to as an estate tax closing letter. Pursuant to the guidelines in OMB Circular A-25, the IRS has

calculated its cost of providing the estate tax closing letter

to be $67.

Finding Lists begin on page ii.

This notice explains the circumstances under which the

four-year replacement period under section 1033(e)(2) is

extended for livestock sold on account of drought. The Appendix to this notice contains a list of counties that experienced exceptional, extreme, or severe drought conditions

during the 12-month period ending August 31, 2021. Taxpayers may use this list to determine if any extension is

available.

T.D. 9956, page 449.

These final regulations under sections 250 and 951A address the calculation of qualified business asset investment

for qualified improvement property under the alternative depreciation system. These final regulations also contain transition rules relating to the impact on loss accounts of net operating loss carrybacks allowed by reason of the Coronavirus

Aid, Relief, and Economic Security Act (the “CARES Act”).

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.

October 12, 2021 

Bulletin No. 2021–41

Part I

T.D. 9956

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 1

Guidance on the Treatment

of Qualified Improvement

Property under Sections

250(b) and 951A(d) and

Guidance Related to the

Foreign Tax Credit

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains

final regulations under sections 250 and

951A addressing the calculation of qualified business asset investment (“QBAI”)

for qualified improvement property

(“QIP”) under the alternative depreciation

system (“ADS”). This document also contains final regulations with transition rules

relating to the impact on loss accounts of

net operating loss (NOL) carrybacks allowed by reason of the Coronavirus Aid,

Relief, and Economic Security Act (the

“CARES Act”). The final regulations affect United States shareholders of controlled foreign corporations, domestic

corporations eligible for the section 250

deduction, and taxpayers that claim credits or deductions for foreign income taxes.

DATES: Effective date: These regulations

are effective on September 24, 2021.

Applicability dates: For dates of applicability, see §§1.250-1(b), 1.904(f)-12(j)(7),

and 1.951A-7(a).

FOR FURTHER INFORMATION

CONTACT: Concerning §§1.250(b)-1(b)

(2) and 1.250(b)-2(e)(2), Lorraine Rodriguez at (202) 317-6726; concerning

§1.904(f)-12, Jeffrey L. Parry at (202)

317-4916; concerning §1.951A-3(e)(2),

Bulletin No. 2021–41

Jorge M. Oben at (202) 317-6934 (not

toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

I. Treatment of QIP Under Sections 250

and 951A

On January 15, 2021, the Department of the Treasury (“Treasury Department”) and the IRS published proposed

regulations (REG-111950-20) under

sections 250, 951A, 1297, and 1298 in

the Federal Register (86 FR 4582, as

corrected at 86 FR 12886) (the “2021

proposed regulations”). The provisions

in the 2021 proposed regulations under

sections 250 and 951A, which were added to the Code in the Tax Cuts and Jobs

Act, Public Law 115-97, 131 Stat. 2234

(2017), addressed the treatment of QIP

under the ADS for purposes of calculating QBAI.

The Treasury Department and the

IRS received no written comments with

respect to the proposed rules under sections 250 and 951A. A public hearing on

the 2021 proposed regulations was not

held because there were no requests to

speak.

This rulemaking finalizes the portion of

the 2021 proposed regulations under sections 250 and 951A, but does not finalize

the portions of the 2021 proposed regulations under sections 1297 and 1298 (determining whether a foreign corporation

is treated as a passive foreign investment

company and the treatment of income and

assets of a qualifying insurance corporation that is engaged in the active conduct

of an insurance business). The Treasury

Department and the IRS intend to finalize

those portions of the 2021 proposed regulations separately.

II. Treatment of Net Operating Losses

Incurred in Post-2017 Taxable Years that

are Carried Back to Pre-2018 Taxable

Years

On November 12, 2020, the Treasury

Department and the IRS published pro-

449

posed regulations (REG-101657-20) in

the Federal Register (85 FR 72078) (the

“2020 FTC proposed regulations”), which

included revisions to the transition rules

for post-2017 NOL carrybacks to pre2018 taxable years.

The Treasury Department and the IRS

received no written comments with respect to the proposed revisions to the transition rules that address post-2017 NOL

carrybacks to pre-2018 taxable years. A

public hearing on the 2020 FTC proposed

regulations was held on April 7, 2021.

This rulemaking finalizes the portion

of the 2020 FTC proposed regulations

that addresses the transition rules for post2017 NOL carrybacks to pre-2018 taxable

years. This rulemaking does not finalize

any other portions of the 2020 FTC proposed regulations. The Treasury Department and the IRS intend to finalize those

portions of the 2020 FTC proposed regulations separately.

Summary of Comments and

Explanation of Revisions

The Treasury Department and the IRS

received no written comments with respect to the proposed rules under sections

250 and 951A or the transition rules that

address post-2017 NOL carrybacks to

pre-2018 taxable years. Therefore, those

portions of the proposed regulations

are being finalized without substantive

change.

Special Analyses

I. Regulatory Planning and Review –

Economic Analysis

These regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum

of Agreement (April 11, 2018) between

the Treasury Department and the Office

of Management and Budget regarding review of tax regulations.

II. Paperwork Reduction Act

The Paperwork Reduction Act of 1995

(44 U.S.C. 3501–3520) generally requires

October 12, 2021

that a federal agency obtain the approval

of the OMB before collecting information

from the public, whether such collection

of information is mandatory, voluntary, or

required to obtain or retain a benefit.

There are no information collection

requirements associated with these final

regulations.

III. Regulatory Flexibility Act

It is hereby certified that these final

regulations will not have a significant economic impact on a substantial number of

small entities within the meaning of section 601(6) of the Regulatory Flexibility

Act (5 U.S.C. chapter 6).

A. Regulations regarding the treatment of

QIP under sections 250 and 951A

The economic impact of the regulations regarding the treatment of QIP

under sections 250 and 951A is not

likely to be significant because these

regulations merely clarify that the technical amendment to section 168 enacted

in section 2307(a) of the CARES Act

applies to determine the adjusted basis of property under section 951A(d)

(3) as if it had originally been part of

section 13204 of the Act. The clarification resolves an ambiguity and adopts

the interpretation that does not require

duplicative recordkeeping for the basis in this property. Therefore, this rule

should reduce recordkeeping and compliance burdens that might otherwise

apply. In addition, the regulations do

not impose a collection of information

burden on any person, including small

entities. Accordingly, it is hereby certified that the regulations regarding the

treatment of QIP under sections 250 and

951A will not have a significant economic impact on a substantial number

of small entities.

B. Foreign tax credit transition rules

addressing post-2017 NOL carrybacks to

pre-2018 taxable years

The foreign tax credit transition rules

addressing post-2017 NOL carrybacks to

pre-2018 taxable years provide guidance

needed to comply with statutory changes

and affect individuals and corporations

claiming foreign tax credits. Adequate

data are not available at this time to certify that a substantial number of small entities would be unaffected. However, the

Treasury Department and the IRS have

determined that the regulations will not

have a significant economic impact on domestic small business entities. Based on

information from the Statistics of Income

2017 Corporate File, foreign tax credits as

a percentage of three different tax-related

measures of annual receipts (see Table for

variables) by corporations are substantially less than the 3 to 5 percent threshold for

significant economic impact.

Size (by

$500,000 $1,000,000 $5,000,000 $10,000,000 $50,000,000 $100,000,000 $250,000,000

Business

under

under

under

under

under

under

under

or

Receipts)

$500,000 $1,000,000 $5,000,000 $10,000,000 $50,000,000 $100,000,000 $250,000,000

more

FTC/Total

Receipts

0.12%

0.00%

0.00%

0.00%

0.01%

0.01%

0.02%

0.28%

FTC/(Total

Receipts-Total

Deductions)

0.61%

0.03%

0.09%

0.05%

0.35%

0.71%

1.38%

9.89%

FTC/Business

Receipts

0.84%

0.00%

0.00%

0.00%

0.01%

0.01%

0.02%

0.05%

Source: Statistics of Income (2017) Form 1120

In addition, these final regulations do

not impose a collection of information

burden on any person, including small

entities. Accordingly, it is hereby certified

that the foreign tax credit transition rules

addressing post-2017 NOL carrybacks to

pre-2018 taxable years will not have a significant economic impact on a substantial

number of small entities.

Pursuant to section 7805(f) of the Internal Revenue Code, the notices of proposed

rulemaking preceding these final regulations

were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comments on their impact on small

business, and no comments were received.

October 12, 2021

IV. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that

agencies assess anticipated costs and

benefits and take certain other actions

before issuing a final rule that includes

any Federal mandate that may result

in expenditures in any one year by a

state, local, or tribal government, in the

aggregate, or by the private sector, of

$100 million in 1995 dollars, updated

annually for inflation. These regulations do not include any Federal mandate that may result in expenditures by

state, local, or tribal governments, or

450

by the private sector in excess of that

threshold.

V. Executive Order 13132: Federalism

Executive Order 13132 (entitled

“Federalism”) prohibits an agency from

publishing any rule that has federalism

implications if the rule either imposes substantial, direct compliance costs on state

and local governments, and is not required

by statute, or preempts state law, unless the

agency meets the consultation and funding

requirements of section 6 of the Executive

Order. These regulations do not have federalism implications and do not impose

Bulletin No. 2021–41

substantial direct compliance costs on state

and local governments or preempt state law

within the meaning of the Executive Order.

Par. 3. Section 1.250(b)-2 is amended

by adding a sentence at the end of paragraph (e)(2) to read as follows:

Drafting Information

§1.250(b)-2 Qualified business asset

investment (QBAI).

The principal authors of these regulations are Jorge M. Oben, Jeffrey L. Parry, and Larry R. Pounders of the Office of

Associate Chief Counsel (International).

However, other personnel from the Treasury Department and the IRS participated

in their development.

Statement of Availability of IRS

Documents

IRS Revenue Procedures, Revenue

Rulings, Notices, and other guidance cited

in this document are published in the Internal Revenue Bulletin and are available

from the Superintendent of Documents,

U.S. Government Publishing Office,

Washington, DC 20402, or by visiting the

IRS website at https://www.irs.gov.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 1 is amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for

part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805.

Par. 2. Section 1.250-1 is amended by

revising the first sentence of paragraph (b)

and adding a sentence at the end of the

paragraph to read as follows:

§1.250-1 Introduction.

*****

(b) * * * Except as otherwise provided in this paragraph (b), §§1.250(a)-1 and

1.250(b)-1 through 1.250(b)-6 apply to

taxable years beginning on or after January 1, 2021. * * * The last sentence in

§1.250(b)-2(e)(2) applies to taxable years

beginning after December 31, 2017.

Bulletin No. 2021–41

*****

(e) * * *

(2) * * * For purposes of applying section 250(b)(2)(B) and this paragraph (e),

the technical amendment to section 168(g)

(to provide a recovery period of 20 years

for qualified improvement property for

purposes of the alternative depreciation

system) enacted in section 2307(a) of the

Coronavirus Aid, Relief, and Economic

Security Act, Pub. L. 116-136 (2020) is

treated as enacted on December 22, 2017.

*****

§1.904-2 [Amended]

Par. 4. Section 1.904-2(j)(1)(iii)(D)

is amended by removing the language

“§1.904(f)-12(j)(5)” and adding the language “§1.904(f)-12(j)(6)” in its place.

Par. 5. Section 1.904(f)-12 is amended

by:

1. Removing paragraph (j)(6);

2. Redesignating paragraph (j)(5) as

paragraph (j)(6); and

3. Adding a new paragraph (j)(5) and

paragraph (j)(7);

The additions read as follows:

§1.904(f)-12 Transition rules.

*****

(j) * * *

(5) Treatment of net operating losses incurred in post-2017 taxable years

that are carried back to pre-2018 taxable

years—(i) In general. Except as provided in paragraph (j)(5)(ii) of this section,

a net operating loss incurred in a taxable

year beginning after December 31, 2017

(a “post-2017 taxable year”), which is

carried back, pursuant to section 172, to

a taxable year beginning before January

1, 2018 (a “pre-2018 carryback year”),

will be carried back under the rules of

§1.904(g)-3(b). For purposes of applying

the rules of §1.904(g)-3(b), income in a

pre-2018 separate category in the taxable

year to which the net operating loss is carried back is treated as if it included only

451

income that would be assigned to the post2017 general category. Therefore, any

separate limitation loss created by reason

of a passive category component of a net

operating loss from a post-2017 taxable

year that is carried back to offset general

category income in a pre-2018 carryback

year will be recaptured in post-2017 taxable years as general category income,

and not as a combination of general, foreign branch, and section 951A category

income.

(ii) Foreign source losses in the post2017 separate categories for foreign

branch category income and section 951A

category income. Net operating losses attributable to a foreign source loss in the

post-2017 separate categories for foreign

branch category income and section 951A

category income are treated as first offsetting general category income in a pre-2018

carryback year to the extent available to be

offset by the net operating loss carryback.

If the sum of foreign source losses in the

taxpayer’s separate categories for foreign

branch category income and section 951A

category income in the year the net operating loss is incurred exceeds the amount of

general category income that is available

to be offset in the carryback year, then the

amount of foreign source loss in each of

the foreign branch and section 951A categories that is treated as offsetting general

category income under this paragraph (j)

(5)(ii), is determined on a proportionate

basis. General category income in the

pre-2018 carryback year is first offset by

foreign source loss in the taxpayer’s post2017 separate category for general category income in the year the net operating

loss is incurred before any foreign source

loss in that year in the separate categories

for foreign branch category income and

section 951A category income is carried

back to reduce general category income.

To the extent a foreign source loss in a

post-2017 separate category for foreign

branch category income or section 951A

category income offsets general category

income in a pre-2018 taxable year under

the rules of this paragraph (j)(5)(ii), no

separate limitation loss account is created.

*****

(7) Applicability date. Except as otherwise provided in this paragraph (j)(7), this

paragraph (j) applies to taxable years ending on or after December 31, 2017. Para-

October 12, 2021

graph (j)(5) of this section applies to carrybacks of net operating losses incurred in

taxable years beginning on or after January 1, 2018.

Par. 6. Section 1.951A-3 is amended by

adding a sentence at the end of paragraph

(e)(2) to read as follows:

§1.951A-3 Qualified business asset

investment.

*****

(e) * * *

(2) * * * For purposes of applying section 951A(d)(3) and this paragraph (e), the

technical amendment to section 168(g)

(to provide a recovery period of 20 years

for qualified improvement property for

purposes of the alternative depreciation

system) enacted in section 2307(a) of the

Coronavirus Aid, Relief, and Economic

Security Act, Pub. L. 116-136 (2020) is

treated as enacted on December 22, 2017.

*****

Douglas W. O’Donnell

Deputy Commissioner for Services

and Enforcement.

Approved: September 10, 2021.

Mark J. Mazur

Acting Assistant Secretary of the

Treasury (Tax Policy).

(Filed by the Office of the Federal Register on September 21, 2021, 4:15 p.m., and published in the issue of the Federal Register for September 24, 2021,

86 FR 52971)

T.D. 9957

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 300

User Fee for Estate Tax

Closing Letter

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulation.

B. Notice of Proposed Rulemaking

SUMMARY: This document contains final regulations that establish a new user

fee of $67 for persons requesting the issuance of IRS Letter 627, also referred to as

an estate tax closing letter. The final regulations affect persons who may request an

estate tax closing letter.

On December 31, 2020, the Department of the Treasury (Treasury Department) and the IRS published in the Federal Register (85 FR 86871) a notice of

proposed rulemaking (REG-114615-16)

proposing amendments to the User Fee

Regulations in part 300 of title 26 of the

Code of Federal Regulations (proposed

regulations). Specifically, the proposed

regulations proposed the addition of new

§300.13 to the User Fee Regulations to establish a $67 user fee for issuing an estate

tax closing letter for an estate.

The preamble to the proposed regulations identifies the issuance of an estate

tax closing letter as the provision of a service that confers special benefits, beyond

those accruing to the general public, to an

estate or other person properly authorized

under section 6103 of the Internal Revenue Code (Code) to receive an estate tax

closing letter. Accordingly, the preamble

to the proposed regulations concludes

that the IRS is authorized, pursuant to the

IOAA and the OMB Circular, to charge a

user fee for the issuance of an estate tax

closing letter that reflects the full cost of

providing this service. Additionally, the

preamble to the proposed regulations explains the special benefits conferred by

the issuance of estate tax closing letters

and analyzes how the IRS has computed

that the full cost of issuing an estate tax

closing letter is $67. Finally, the preamble

to the proposed regulations states that the

Treasury Department and the IRS expect

to implement a web-based procedure that

will improve convenience and reduce burden for persons requesting estate tax closing letters as compared to the current procedure in place for making such requests.1

DATES: Effective Date: These regulations are effective October 28, 2021.

Applicability Date: For date of applicability, see §300.13(d).

FOR FURTHER INFORMATION

CONTACT: Juli Ro Kim at (202) 3176859 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document amends the User Fee

Regulations (26 CFR part 300) to establish a user fee applicable to requests for

estate tax closing letters issued by the IRS

(currently, IRS Letter 627).

A. Authority to Charge User Fees

The Independent Offices Appropriations Act of 1952 (IOAA) (31 U.S.C.

9701) authorizes each agency to promulgate regulations establishing the charge

for services provided by the agency

(user fees). The IOAA provides that

these user fee regulations are subject to

policies prescribed by the President. The

policies currently are set forth in the Office of Management and Budget (OMB)

Circular A-25, 58 FR 38142 (July 15,

1993; OMB Circular). The OMB Circular requires agencies providing services

that confer special benefits on identifiable recipients beyond those accruing

to the general public to identify those

services, to determine whether user fees

should be assessed for those services,

and if so, to establish user fees that recover the full cost of providing those

services, unless the agency requests, and

the OMB grants, an exception to the full

cost requirement.

Summary of Comments

A. Overview

The IRS received a total of five written

public comments in response to the proposed regulations, some addressing multiple

aspects of the proposed regulations. These

comments are available at https://www.

regulations.gov or upon request. No public

For an overview of the procedure applicable to a request for an estate tax closing letter before October 28, 2021, see part D of the Background and Explanation of Provisions of the

proposed regulations.

1

October 12, 2021

452

Bulletin No. 2021–41

hearing on the proposed regulations was requested and accordingly no public hearing

was held. After careful consideration of the

comments received, the Treasury Department and the IRS adopt the proposed regulations without significant change. Accordingly, new §300.13 establishes a $67 user fee

for issuing an estate tax closing letter.

B. Comments Regarding the Imposition

of a User Fee

1. Establishment and Amount of User Fee

One commenter opposed the establishment of a user fee to request an estate tax

closing letter and suggested that the IRS

return to issuing estate tax closing letters

for every estate tax return filed, without

the need for making a request or paying a

user fee, as was the practice prior to June

2015.2 Another commenter suggested that

the user fee be reduced so that all estates

desiring an estate tax closing letter can

afford to pay the user fee and request the

estate tax closing letter. A third commenter stated that the proposed $67 user fee

is both reasonable and appropriate given

the impact of returns filed solely to elect

portability under section 2010 of the Code

and the fact that estate tax returns are most

often filed in the context of decedents with

substantial gross estates.

As described in the preamble to the

proposed regulations, the issuance of an

estate tax closing letter, and the return information and procedural and substantive

explanations such letters provide, constitutes the provision of a service that confers

special benefits on identifiable recipients

beyond those accruing to the general public. Because of these special benefits, the

IOAA and the OMB Circular require the

imposition of a user fee for the issuance

of an estate tax closing letter to reflect the

full cost of providing the service unless

the IRS requests, and the OMB grants,

an exception to the full cost requirement.

The IRS has not requested an exception to

the full cost requirement, for the following reasons. First, the IRS views the $67

user fee as not onerous or excessive, but

reasonable in relation to the service provided. Second, as also discussed in the

preamble to the proposed regulations, an

account transcript is a free alternative to

the estate tax closing letter that provides

certain return information comparable to

that found in an estate tax closing letter.

Account transcripts can be used to confirm that the examination of an estate tax

return has been completed and the IRS file

has been closed, which most often is identified as the primary purpose for requesting an estate tax closing letter. See Notice

2017-12, I.R.B. 2017-5 742 (describing

the utility of the account transcript in lieu

of the estate tax closing letter and its availability at no charge). Thus, if affording the

user fee for the issuance of an estate tax

closing letter presents a challenge, an estate instead can request an account transcript free of charge. The suggestions of

the commenters to reduce or eliminate the

user fee, therefore, are not adopted.

2. Comments Regarding a Single User

Fee When Multiple Letters Are Issued

The Treasury Department and the IRS

note that the preamble to the proposed regulations incorrectly states that the estate

tax closing letter is issued to each executor. Instead, regardless of who requests an

estate tax closing letter, the letter generally is issued to only one of multiple executors. Generally, the executor to whom

the estate tax closing letter is issued is the

executor identified on line 6a of Part 1 of

the Form 706, United States Estate (and

Generation-Skipping Transfer) Tax Return;

the address of such executor that is entered

on line 6b becomes the estate’s address of

record (unless subsequently updated using

Form 8822, Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns). Currently, estate tax closing letters also are sent to the

recognized representative identified in Part

4 of the Form 706 and up to two representatives listed on Form 2848, Power of Attorney and Declaration of Representative.

Therefore, in almost all cases, each request

and corresponding $67 user fee will generate the issuance of an estate tax closing

letter to three or four persons.

One commenter referred to the costing

analysis in the preamble of the proposed

regulations and sought an explanation of

the decision to charge the same user fee

per request, regardless of the number of

estate tax closing letters to be issued in

response to that single request. The commenter noted the incremental cost impact

that occurs with the need to issue multiple

letters in response to a single request, and

contended that requests requiring the issuance of only one letter will subsidize the

user fee cost of such requests requiring the

issuance of multiple letters.

The costing analysis described in part

H of the Background and Explanation

of Provisions of the proposed regulations

is based in large part on the number of requests for estate tax closing letters, rather

than the total number of letters issued. The

fact that one request generates, on average, three issued letters has only a marginal impact on the calculated user fee. The

number of letters factors into the costing

analysis in two places: request processing

and quality assurance review.

For request processing costs, the costing analysis in the proposed regulations

provides for 0.65 staff hours to review the

return, create the estate tax closing letters,

and prepare the letters for mailing. Although a detailed description of what each

of these tasks entails and a breakdown

of the time required for each task is not

provided in the proposed regulations, the

bulk of the time in processing the request

is attributable to the research and analysis

of IRS records by qualified personnel and

not to the issuance of additional letters to

additional persons. Thus, the incremental request processing cost of issuing the

same estate tax closing letter at the same

time to multiple persons is minimal.

For quality assurance review costs, the

costing analysis in the proposed regulations

provides that five out of every 100 estate tax

closing letters are reviewed for quality assurance. While the issuance of multiple letters

per request increases the number of letters reviewed for quality assurance and, therefore,

increases the cost estimate for quality assurance review, the impact on the full costing is

relatively small, only $3 per letter.

Notwithstanding the marginal impact

of issuing multiple letters per request on

the calculation of the user fee, a variable

See part B of the Background and Explanation of Provisions of the preamble of the proposed regulations for a full discussion of the June 2015 change to the prior IRS practice of issuing

estate tax closing letters for every estate tax return filed.

2

Bulletin No. 2021–41

453

October 12, 2021

user fee structure raises significant administrability concerns. Incorrect payments of the user fee are likely to occur

in the event of a variable fee because

persons that request the issuance of an

estate tax closing letter may not have

sufficient information regarding the estate’s account to accurately identify the

number of persons currently authorized

under IRS procedures to receive an estate

tax closing letter; the determination of

the number of letters to be issued sometimes depends on more information than

is shown on the estate tax return. Thus,

varying the user fee based on the number of letters to be issued would require

the IRS to modify the request processing

procedures to add procedures for overpayments and underpayments of the user

fee and likely would cause administrative

delays as the personnel processing the requests take necessary steps and wait for

correction of the payment before issuing

letters. The changes to the request processing procedures necessary to accommodate a variable fee in place of a fixed

fee would increase the request processing

costs that factor into the overall cost estimate for the user fee; it is possible that

the increase caused by the changes to

the request processing procedures could

exceed the marginal increase of issuing

multiple letters per request under a fixed

fee.

Based on all of these considerations,

and recognizing that most requests for

estate tax closing letters will require the

issuance of multiple letters, the Treasury

Department and the IRS have determined

that the most economical and least complex

approach is to have a fixed user fee based

on the average number of letters issued per

request. Thus, no change to the costing

analysis is required and the proposed user

fee of $67 is adopted without change.

C. Comments Regarding Procedural

Aspects of Requesting Estate Tax Closing

Letters and Paying the User Fee

1. Making the Request and Paying the

User Fee with the Estate Tax Return

Two commenters suggested amending the estate tax return or using a separate form to allow an estate to request the

estate tax closing letter and pay the user

October 12, 2021

fee with the filing of the estate tax return.

The commenters sought to further reduce

or eliminate the administrative burden on

both the estate and the IRS by removing

the need for a separate web-based process.

Under this suggestion, an estate would

not be required to make a separate request

subsequent to filing the estate tax return.

The commenters stated that this suggestion would allow for efficient administration of the estate and provide the IRS with

immediate notice of the request.

The Treasury Department and the IRS

concur that the ability to pay the user fee

and make the request for an estate tax closing letter at the time of filing the estate tax

return would reduce or eliminate the burden on estates intending to make such requests. However, estate tax closing letters

are not issued by the same IRS personnel

who are involved in the examination of,

and the decision to close the IRS file on,

the estate tax return. Personnel issuing estate tax closing letters are alerted to begin

that process only after the examination of

the estate tax return has been completed

and the IRS file has been closed. Thus,

implementing such a change to current

IRS procedures and return processing

systems would substantially increase the

burden on the IRS and would require increases in budget, staffing, and resources

not currently available. In addition, as

discussed elsewhere in this preamble, the

procedure to be put in place for paying the

user fee and requesting the estate tax closing letter is a convenient and not unduly

burdensome alternative that balances the

administrability concerns of both the IRS

and the estates making requests for estate

tax closing letters. For these reasons, this

suggestion is not adopted.

2. Additional User Fee for Requests

Related to Supplemental Estate Tax

Returns

One commenter requested further clarification of whether an additional user fee

is required for estate tax closing letters

after the filing of a supplemental estate

tax return. Specifically, the commenter

references Rev. Proc. 81-27, 1981-2 C.B.

547, and identifies supplemental estate tax

returns filed in relation to elections made

under section 6166 of the Code as creating an undue burden on such estates if an

454

additional user fee is required for a new

estate tax closing letter after each subsequent filing of a supplemental estate tax

return. The commenter suggests that only

one user fee should be imposed per estate,

regardless of how many estate tax returns

are filed.

As directed by the OMB Circular, the

cost analysis described in the proposed

regulations is based on the number of estate tax closing letters requested over a

specified period of time, whether related

to an initial estate tax return or to a supplemental estate tax return, and the labor

and benefits costs of campus employees

required to process the requests. Each

request requires the same amount of IRS

resources to issue the estate tax closing

letter, whether the request is related to

the initial estate tax return or a supplemental estate tax return. In particular,

each such request necessitates research

and analysis of IRS records, which

makes up a significant part of the cost of

the user fee. Therefore, accommodating

the commenter’s suggestion likely would

increase the cost of a single request, and

such increase would be borne equally by

all estates requesting estate tax closing

letters, including simpler estates filing

only an initial estate tax return. Further,

an estate filing a supplemental estate tax

return is not required to request an estate

tax closing letter in relation to both the

initial estate tax return and the supplemental estate tax return, and presumably

will request multiple estate tax closing

letters only if the estate determines that

the benefits of receiving a second estate

tax closing letter merit the payment of

the additional user fee. Accordingly, the

suggestion is not adopted and each request for an estate tax closing letter will

require a separate user fee.

3. Procedures for the Request and

Issuance of Estate Tax Closing Letters

Several commenters requested clarification on some of the procedural aspects

of requesting estate tax closing letters. For

example, commenters sought information

on who is permitted to make the request,

when the request can be made, how many

letters will be issued in response to a single request, and who will be the recipients

of the estate tax closing letters.

Bulletin No. 2021–41

The procedure for requesting the estate

tax closing letter and paying the user fee

utilizes https://www.pay.gov. In this webbased procedure, a request for the estate

tax closing letter and the payment of the

user fee will be accomplished by a single request, thus eliminating the potential

under the current procedure for multiple

requests and necessary duplicative follow-up.

As noted in the preamble to the proposed regulations, specific procedures

for requesting an estate tax closing letter

and paying the associated user fee for that

request are not provided in these regulations. Such procedures change from time

to time and therefore are best addressed

and kept current in subregulatory guidance. It is clear that, while any person

with sufficient information about the estate may request the issuance of a closing

letter and pay the user fee, the closing

letter will be provided only to certain authorized persons, a category that might not

include the person making the request (for

example, an employee of the attorney, certified public accountant, or enrolled agent

for the estate). Information about who

will receive an estate tax closing letter in

response to a request, together with specific instructions for requesting the estate

tax closing letter and paying the user fee,

will be available on https://www.pay.gov

(and on the IRS website at https://www.

irs.gov) on or before October 28, 2021.

To the extent possible, the procedures will

reflect the comments and questions from

these commenters, and the instructions

and information are expected to address

the issues these commenters raised.

In identifying the person liable for

the fee for the estate tax closing letter,

§300.13(c) of the proposed regulations includes persons properly authorized under

section 6103 of the Code to request and

receive the estate tax closing letter with

respect to the estate. Consistent with the

decision to exclude the relevant procedural guidance for requesting estate tax closing letters from these regulations, §300.13

is revised in the final regulations by removing the reference to section 6103,

which governs the disclosure of return information but does not necessarily govern

who would be liable for payment of the

user fee for requesting the estate tax closing letter.

Bulletin No. 2021–41

4. Recommended Changes to Account

Transcripts

One commenter stated that, although

the account transcript is a free alternative

to the estate tax closing letter, the account

transcript does not provide all of the information needed by an estate, including

potentially the amount of net estate tax

and the amount of generation-skipping

transfer tax (information that an estate tax

closing letter provides). The commenter

suggested that the IRS should modify the

account transcript to include additional

detailed information.

As discussed in Notice 2017-12, an

account transcript may be an acceptable

substitute for an estate tax closing letter,

even though the information provided by

each is not identical. As discussed earlier

in this preamble, both documents can be

relied upon for confirmation that the IRS

examination of the estate tax return has

been closed, which most often is identified

as the primary purpose for requesting an

estate tax closing letter. The commenter’s

suggestion to change the information provided in the account transcript to include

additional information also included in the

estate tax closing letter is consistent with

the determination that the issuance of an

estate tax closing letter confers special

benefits on identifiable recipients. Making

changes to the account transcript as the

commenter suggests would require costly

programming changes and, moreover, is

beyond the scope of this rulemaking. Accordingly, the commenter’s suggestion is

not adopted.

Special Analyses

These regulations are not subject to

review under section 6(b) of Executive

Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the

Office of Management and Budget regarding review of tax regulations. Pursuant to the Regulatory Flexibility Act (5

U.S.C. chapter 6), it is hereby certified

that these regulations will not have a significant economic impact on a substantial

number of small entities. The regulations, which prescribe a fee to obtain a

particular service, affect decedents’ estates, which generally are not “small en-

455

tities” as defined under 5 U.S.C. 601(6).

In addition, the dollar amount of the

fee ($67 as currently determined) is not

substantial enough to have a significant

economic impact on any entities (including small entities) that could be affected

by establishing such a fee. Accordingly,

the Secretary of the Treasury’s delegate

certifies that the rule will not have a significant economic impact on a substantial

number of small entities.

Pursuant to section 7805(f) of the

Code, the proposed regulations (85 FR

86871) preceding these regulations were

submitted to the Chief Counsel for the

Office of Advocacy of the Small Business

Administration for comment on their impact on small business. No comments on

the proposed regulations were received

from the Chief Counsel for the Office of

Advocacy of the Small Business Administration.

Statement of Availability of IRS

Documents

IRS Revenue Procedures, Revenue

Rulings, Notices, and other guidance cited in this document are published in the

Internal Revenue Bulletin (or Cumulative

Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC

20402, or by visiting the IRS website at

https://www.irs.gov.

Drafting Information

The principal author of these regulations is Juli Ro Kim of the Office of Associate Chief Counsel (Passthroughs and

Special Industries). Other personnel from

the Treasury Department and the IRS participated in the development of the regulations.

List of Subjects in 26 CFR Part 300

Estate taxes, Excise taxes, Gift taxes,

Income taxes, Reporting and recordkeeping requirements, User fees.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 300 is

amended as follows:

October 12, 2021

PART 300—USER FEES

§300.13 Fee for estate tax closing letter.

Paragraph 1. The authority citation for

part 300 continues to read as follows:

Authority: 31 U.S.C. 9701.

Par. 2. Section 300.0 is amended by adding paragraph (b)(13) to read as follows:

(a) Applicability. This section applies

to the request by a person described in

paragraph (c) of this section for an estate

tax closing letter from the IRS.

(b) Fee. The fee for issuing an estate

tax closing letter is $67.

(c) Person liable for the fee. The person liable for the fee is the estate of the

decedent or other person requesting, in accordance with applicable procedures and

policies, an estate tax closing letter to be

issued with respect to the estate.

(d) Applicability date. This section

applies to requests for estate tax closing

§300.0 User fees; in general.

*****

(b) * * *

(13) Requesting an estate tax closing

letter.

Par. 3. Section 300.13 is added to read

as follows:

October 12, 2021

456

letters received by the IRS on or after October 28, 2021.

Douglas W. O’Donnell,

Deputy Commissioner for

Services and Enforcement.

Approved: September 22, 2021

Mark J. Mazur,

Acting Assistant Secretary of the

Treasury (Tax Policy).

(Filed by the Office of the Federal Register on September 27, 2021, 8:45 a.m., and published in the

­issue of the Federal Register for September 28, 2021,

86 FR 53539)

Bulletin No. 2021–41

Part III

Update for Weighted

Average Interest Rates,

Yield Curves, and Segment

Rates

Notice 2021-54

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.

Applicable Month

September 2021

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 August

2021 data is in Table 2021-8 at the end

of this notice. The spot first, second, and

third segment rates for the month of Au-

gust 2021 are, respectively, 0.66, 2.50, and

3.12.

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.

The 25-year average segment rates for

plan years beginning in 2020 and 2021

were published Notice 2019-51, 2019-41

I.R.B. 866, and Notice 2020-72, 2020-40

I.R.B. 789, respectively. For plan years

beginning in 2022, based on the segment

rates applicable for October 1996 to September 2021, the 25-year averages for the

period ending September 30, 2021, of the

first, second, and third segment rates are

3.69, 5.45, and 6.23 percent, respectively.

24-MONTH AVERAGE CORPORATE

BOND SEGMENT RATES

The three 24-month average corporate

bond segment rates applicable for September 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

1.07

2.68

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 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

Third Segment

3.36

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

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

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)).

2

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%.

3

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.

1

Bulletin No. 2021–41

457

October 12, 2021

in effect. For a plan year for which such an

election does not apply, the 24-month averages applicable for August 2021, adjust-

ed 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

Segment

For Plan Years

Beginning In

Third

Segment

2020

September 2021

4.75

5.50

6.27

2021

September 2021

4.75

5.36

6.11

2022

September 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

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 September 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

Segment

For Plan Years

Beginning In

Third

Segment

2020

September 2021

3.64

5.21

5.94

2021

September 2021

3.32

4.79

5.47

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) 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 on 30-year Treasury securities for August 2021 is 1.92

percent. The Service determined this rate

as the average of the daily determinations

For Plan Years

Beginning In

Treasury Weighted Average Rates

30-Year Treasury

Weighted Average

Permissible Range

90% to 105%

September 2021

2.19

1.97 to 2.30

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 August 2021

are as follows:

MINIMUM PRESENT VALUE

SEGMENT RATES

In general, the applicable interest rates

of yield on the 30-year Treasury bond maturing in May 2051 determined each day

through August 11, 2021 and the yield on

the 30-year Treasury bond maturing in

August 2051 determined each day for the

balance of the month. For plan years beginning in September 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:

Month

August 2021

Minimum Present Value Segment Rates

First Segment

Second Segment

0.66

2.50

October 12, 2021

458

Third Segment

3.12

Bulletin No. 2021–41

DRAFTING INFORMATION

The principal author of this notice is

Tom Morgan of the Office of the Asso-

Bulletin No. 2021–41

ciate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

459

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).

October 12, 2021

Table 2021-8

Monthly Yield Curve for August 2021

Derived from August 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

0.38

0.50

0.61

0.72

0.83

0.94

1.06

1.18

1.31

1.44

1.57

1.70

1.82

1.94

2.06

2.16

2.26

2.35

2.43

2.51

2.58

2.64

2.69

2.74

2.78

2.81

2.85

2.87

2.90

2.91

2.93

2.95

2.96

2.97

2.98

2.99

2.99

3.00

October 12, 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

3.01

3.01

3.02

3.02

3.02

3.03

3.03

3.04

3.04

3.04

3.05

3.05

3.05

3.06

3.06

3.07

3.07

3.07

3.08

3.08

3.08

3.09

3.09

3.09

3.10

3.10

3.10

3.10

3.11

3.11

3.11

3.11

3.12

3.12

3.12

3.12

3.13

3.13

3.13

3.13

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

3.13

3.14

3.14

3.14

3.14

3.14

3.14

3.15

3.15

3.15

3.15

3.15

3.15

3.15

3.16

3.16

3.16

3.16

3.16

3.16

3.16

3.17

3.17

3.17

3.17

3.17

3.17

3.17

3.17

3.17

3.18

3.18

3.18

3.18

3.18

3.18

3.18

3.18

3.18

3.18

460

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

3.18

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.19

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.20

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

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

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.21

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

3.22

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Bulletin No. 2021–41

Extension of Replacement

Period for Livestock Sold

on Account of Drought

Notice 2021-55

SECTION 1. PURPOSE

This notice provides guidance regarding an extension of the replacement period

under § 1033(e) of the Internal Revenue

Code for livestock sold on account of

drought in specified counties.

SECTION 2. BACKGROUND

.01 Nonrecognition of Gain on Involuntary Conversion of Livestock. Section

1033(a) generally provides for nonrecognition of gain when property is involuntarily converted and replaced with property that is similar or related in service

or use. Section 1033(e)(1) provides that

a sale or exchange of livestock (other

than poultry) held by a taxpayer for draft,

breeding, or dairy purposes in excess of

the number that would be sold following

the taxpayer’s usual business practices is

treated as an involuntary conversion if the

livestock is sold or exchanged solely on

account of drought, flood, or other weather-related conditions.

.02 Replacement Period. Section

1033(a)(2)(A) generally provides that

gain from an involuntary conversion is

recognized only to the extent the amount

realized on the conversion exceeds the

cost of replacement property purchased

during the replacement period. If a sale or

exchange of livestock is treated as an involuntary conversion under § 1033(e)(1)

and is solely on account of drought, flood,

or other weather-related conditions that

result in the area being designated as eligible for assistance by the federal government, § 1033(e)(2)(A) provides that the

replacement period ends four years after

the close of the first taxable year in which

any part of the gain from the conversion

is realized. Section 1033(e)(2)(B) provides that the Secretary may extend this

replacement period on a regional basis for

1

such additional time as the Secretary determines appropriate if the weather-related conditions that resulted in the area being designated as eligible for assistance by

the federal government continue for more

than three years. Section 1033(e)(2) is effective for any taxable year with respect

to which the due date (without regard to

extensions) for a taxpayer’s return is after

December 31, 2002.

SECTION 3. EXTENSION OF

REPLACEMENT PERIOD UNDER §

1033(e)(2)(B)

Notice 2006-82, 2006-2 C.B. 529,

provides for extensions of the replacement period under § 1033(e)(2)(B). If a

sale or exchange of livestock is treated as

an involuntary conversion on account of

drought and the taxpayer’s replacement

period is determined under § 1033(e)(2)

(A), the replacement period will be extended under § 1033(e)(2)(B) and Notice

2006-82 until the end of the taxpayer’s

first taxable year ending after the first

drought-free year for the applicable region. For this purpose, the first droughtfree year for the applicable region is the

first 12-month period that (1) ends August

31; (2) ends in or after the last year of the

taxpayer’s four-year replacement period

determined under § 1033(e)(2)(A); and

(3) does not include any weekly period

for which exceptional, extreme, or severe

drought is reported for any location in the

applicable region. The applicable region

is the county that experienced the drought

conditions on account of which the livestock was sold or exchanged and all counties that are contiguous to that county.

A taxpayer may determine whether exceptional, extreme, or severe drought is

reported for any location in the applicable

region by reference to U.S. Drought Monitor maps that are produced on a weekly

basis by the National Drought Mitigation

Center. U.S. Drought Monitor maps are

archived at http://droughtmonitor.unl.edu/

Maps/MapArchive.aspx.

In addition, Notice 2006-82 provides

that the Internal Revenue Service will

publish in September of each year a list of

counties1 for which exceptional, extreme,

or severe drought was reported during the

preceding 12 months. Taxpayers may use

this list instead of U.S. Drought Monitor

maps to determine whether exceptional,

extreme, or severe drought has been reported for any location in the applicable

region.

The Appendix to this notice contains

the list of counties for which exceptional,

extreme, or severe drought was reported

during the 12-month period ending August 31, 2021. Under Notice 2006-82,

the 12-month period ended on August 31,

2021, is not a drought-free year for an applicable region that includes any county

on this list. Accordingly, for a taxpayer

who qualified for a four-year replacement

period for livestock sold or exchanged on

account of drought and whose replacement period is scheduled to expire at the

end of 2021 (or, in the case of a fiscal

year taxpayer, at the end of the taxable

year that includes August 31, 2021), the

replacement period will be extended under § 1033(e)(2) and Notice 2006-82 if the

applicable region includes any county on

this list. This extension will continue until

the end of the taxpayer’s first taxable year

ending after a drought-free year for the applicable region.

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice is

Lewis Saideman of the Office of Associate

Chief Counsel (Income Tax & Accounting). For further information regarding

this notice, please contact Mr. Saideman

at (202) 317-7006 (not a toll-free number).

APPENDIX

Arizona

Counties of Apache, Cochise, Coconino,

Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa

Cruz, Yavapai, and Yuma.

Arkansas

Counties of Benton, Carroll, Madison,

and Washington.

The term “counties” in this notice includes boroughs, census areas, counties, islands, municipalities, or parishes.

Bulletin No. 2021–41

461

October 12, 2021

California

Counties of Alameda, Alpine, Amador,

Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn,

Humboldt, Imperial, Inyo, Kern, Kings,

Lake, Lassen, Los Angeles, Madera,

Marin, Mariposa, Mendocino, Merced,

Modoc, Mono, Monterey, Napa, Nevada,

Orange, Placer, Plumas, Riverside, Sacramento, San Benito, San Bernardino, San

Diego, San Francisco, San Joaquin, San

Luis Obispo, San Mateo, Santa Barbara,

Santa Clara, Santa Cruz, Shasta, Sierra,

Siskiyou, Solano, Sonoma, Stanislaus,

Sutter, Tehama, Trinity, Tulare, Tuolumne,

Ventura, Yolo, and Yuba.

Colorado

Counties of Adams, Alamosa, Arapahoe,

Archuleta, Baca, Bent, Boulder, Broomfield, Chaffee, Cheyenne, Clear Creek,

Conejos, Costilla, Crowley, Custer, Delta,

Denver, Dolores, Douglas, Eagle, Elbert,

El Paso, Fremont, Garfield, Gilpin, Grand,

Gunnison, Hinsdale, Huerfano, Jackson,

Jefferson, Kiowa, Kit Carson, Lake, La

Plata, Larimer, Las Animas, Lincoln, Logan, Mesa, Mineral, Moffat, Montezuma,

Montrose, Morgan, Otero, Ouray, Park,

Phillips, Pitkin, Prowers, Pueblo, Rio

Blanco, Rio Grande, Routt, Saguache,

San Juan, San Miguel, Sedgwick, Summit, Teller, Washington, Weld, and Yuma.

Connecticut

Counties of Hartford, Litchfield, Middlesex, New Haven, New London, Tolland,

and Windham.

Hawaii

Counties of Hawaii, Honolulu, Kalawao,

Kauai, and Maui.

Idaho

Counties of Ada, Adams, Bannock, Bear

Lake, Benewah, Bingham, Blaine, Boise, Bonner, Bonneville, Boundary, Butte,

Camas, Canyon, Caribou, Cassia, Clark,

Clearwater, Custer, Elmore, Franklin, Fremont, Gem, Gooding, Idaho, Jefferson,

Jerome, Kootenai, Latah, Lemhi, Lewis,

October 12, 2021

Lincoln, Minidoka, Nez Perce, Oneida, Owyhee, Payette, Power, Shoshone,

Teton, Twin Falls, Valley, and Washington.

Illinois

Counties of Boone, Christian, Cook,

DeKalb, De Witt, DuPage, Jo Daviess,

Kane, Lake, Logan, McHenry, Macon,

Menard, Ogle, Piatt, Sangamon, Stephenson, and Winnebago.

Iowa

Counties of Adair, Adams, Allamakee,

Audubon, Benton, Black Hawk, Boone,

Bremer, Buchanan, Buena Vista, Butler, Calhoun, Carroll, Cass, Cerro Gordo, Cherokee, Chickasaw, Clay, Clayton,

Crawford, Dallas, Delaware, Dickinson,

Dubuque, Emmet, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie,

Hamilton, Hancock, Hardin, Harrison,

Howard, Humboldt, Ida, Iowa, Jasper,

Johnson, Keokuk, Kossuth, Linn, Lyon,

Madison, Mahaska, Marshall, Mills,

Mitchell, Monona, Montgomery, O’Brien,

Osceola, Page, Palo Alto, Plymouth, Pocahontas, Polk, Pottawattamie, Poweshiek,

Sac, Shelby, Sioux, Story, Tama, Warren,

Webster, Winnebago, Winneshiek, Woodbury, Worth, and Wright.

Kansas

Counties of Brown, Cheyenne, Clark,

Clay, Cloud, Comanche, Decatur, Dickinson, Geary, Gove, Graham, Grant,

Greeley, Hamilton, Jackson, Jewell, Kearny, Lincoln, Logan, Marshall, Meade,

Mitchell, Morton, Nemaha, Norton, Ottawa, Phillips, Pottawatomie, Rawlins,

Republic, Riley, Scott, Seward, Sheridan,

Sherman, Smith, Stanton, Stevens, Thomas, Wabaunsee, Wallace, Washington, and

Wichita.

Maine

Counties of Androscoggin, Aroostook,

Cumberland, Franklin, Hancock, Kennebec, Knox, Lincoln, Oxford, Penobscot,

Piscataquis, Sagadahoc, Somerset, Waldo,

Washington, and York.

462

Massachusetts

Counties of Barnstable, Berkshire, Bristol, Dukes, Essex, Franklin, Hampden,

Hampshire, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk, and Worcester.

Michigan

County of Alcona, Allegan, Arenac, Barry,

Bay, Benzie, Berrien, Branch, Calhoun,

Cass, Clinton, Eaton, Genesee, Gladwin,

Grand Traverse, Gratiot, Hillsdale, Huron,

Ingham, Ionia, Iosco, Isabella, Jackson,

Kalamazoo, Kent, Lapeer, Leelanau, Livingston, Manistee, Mason, Mecosta, Midland, Montcalm, Muskegon, Newaygo,

Ogemaw, Ottawa, Saginaw, Saint Clair,

Saint Joseph, Sanilac, Shiawassee, Tuscola, Van Buren, Washtenaw, and Wexford.

Minnesota

County of Aitkin, Anoka, Becker, Beltrami, Benton, Big Stone, Blue Earth, Brown,

Carlton, Carver, Cass, Chippewa, Chisago, Clay, Clearwater, Cook, Cottonwood,

Crow Wing, Dakota, Douglas, Faribault,

Fillmore, Freeborn, Goodhue, Grant, Hennepin, Houston, Hubbard, Isanti, Itasca,

Jackson, Kanabec, Kandiyohi, Kittson,

Koochiching, Lac qui Parle, Lake, Lake

of the Woods, Le Sueur, Lincoln, Lyon,

McLeod, Mahnomen, Marshall, Martin,

Meeker, Mille Lacs, Morrison, Mower,

Murray, Nicollet, Nobles, Norman, Otter

Tail, Pennington, Pine, Pipestone, Polk,

Pope, Ramsey, Red Lake, Redwood, Renville, Rice, Rock, Roseau, Saint Louis,

Scott, Sherburne, Sibley, Stearns, Steele,

Stevens, Swift, Todd, Traverse, Wadena,

Waseca, Washington, Watonwan, Wilkin,

Wright, and Yellow Medicine.

Mississippi

Counties of Grenada, Leflore, Quitman,

Tallahatchie, and Yalobusha.

Missouri

Counties of Atchison, Barry, Barton, Cedar, Christian, Dade, Douglas, Greene,

Holt, Jasper, Lawrence, McDonald, Newton, Polk, Stone, Taney, Vernon, and Webster.

Bulletin No. 2021–41

Montana

Counties of Beaverhead, Big Horn, Blaine,

Broadwater, Carbon, Carter, Cascade,

Chouteau, Custer, Daniels, Dawson, Deer

Lodge, Fallon, Fergus, Flathead, Gallatin,

Garfield, Glacier, Golden Valley, Granite,

Hill, Jefferson, Judith Basin, Lake, Lewis and Clark, Liberty, Lincoln, McCone,

Madison, Meagher, Mineral, Missoula,

Musselshell, Park, Petroleum, Phillips,

Pondera, Powder River, Powell, Prairie,

Ravalli, Richland, Roosevelt, Rosebud,

Sanders, Sheridan, Silver Bow, Stillwater,

Sweet Grass, Teton, Toole, Treasure, Valley, Wheatland, Wibaux, and Yellowstone.

Nebraska

Counties of Adams, Antelope, Arthur,

Banner, Box Butte, Boyd, Buffalo, Burt,

Butler, Cass, Cedar, Chase, Cherry, Cheyenne, Clay, Colfax, Cuming, Custer,

Dakota, Dawes, Dawson, Deuel, Dixon, Dodge, Douglas, Dundy, Franklin,

Frontier, Furnas, Gage, Garden, Garfield,

Gosper, Grant, Greeley, Hall, Hamilton,

Harlan, Hayes, Hitchcock, Holt, Howard,

Jefferson, Johnson, Kearney, Keith, Keya

Paha, Kimball, Knox, Lancaster, Lincoln,

McPherson, Madison, Merrick, Morrill,

Nance, Nemaha, Nuckolls, Otoe, Pawnee, Perkins, Phelps, Pierce, Platte, Red

Willow, Richardson, Rock, Saline, Sarpy,

Saunders, Scotts Bluff, Sheridan, Sherman, Sioux, Stanton, Thayer, Thurston,

Valley, Washington, Wayne, Webster, and

Wheeler.

Nevada

City of Carson City. Counties of Churchill,

Clark, Douglas, Elko, Esmeralda, Eureka,

Humboldt, Lander, Lincoln, Lyon, Mineral, Nye, Pershing, Storey, Washoe, and

White Pine.

New Hampshire

Counties of Belknap, Carroll, Cheshire,

Coos, Grafton, Hillsborough, Merrimack,

Rockingham, Strafford, and Sullivan.

New Mexico

Counties of Bernalillo, Catron, Chaves,

Cibola, Colfax, Curry, DeBaca, Dona

Bulletin No. 2021–41

Pennsylvania

Ana, Eddy, Grant, Guadalupe, Harding,

Hidalgo, Lea, Lincoln, Los Alamos, Luna,

McKinley, Mora, Otero, Quay, Rio Arriba, Roosevelt, Sandoval, San Juan, San

Miguel, Santa Fe, Sierra, Socorro, Taos,

Torrance, Union, and Valencia.

Counties of Blair, Cambria, Cameron,

Centre, Clearfield, Clinton, Huntingdon,

Lycoming, McKean, Potter, Tioga, and

Union.

New York

Rhode Island

Counties of Allegany, Cattaraugus, Hamilton, Herkimer, Jefferson, Lewis, Oneida,

Saint Lawrence, and Suffolk.

Counties of Bristol, Kent, Newport, Providence, and Washington.

North Carolina

Counties of Bladen, Brunswick, Columbus, Duplin, New Hanover, Onslow,

Pender, Robeson, Sampson, and Scotland.

North Dakota

Counties of Adams, Barnes, Benson,

Billings, Bottineau, Bowman, Burke,

Burleigh, Cass, Cavalier, Dickey, Divide,

Dunn, Eddy, Emmons, Foster, Golden

Valley, Grand Forks, Grant, Griggs, Hettinger, Kidder, LaMoure, Logan, McHenry, McIntosh, McKenzie, McLean, Mercer, Morton, Mountrail, Nelson, Oliver,

Pembina, Pierce, Ramsey, Ransom, Renville, Richland, Rolette, Sargent, Sheridan, Sioux, Slope, Stark, Steele, Stutsman, Towner, Traill, Walsh, Ward, Wells,

and Williams.

Oklahoma

Counties of Atoka, Beaver, Beckham,

Blaine, Bryan, Caddo, Canadian, Carter,

Choctaw, Cimarron, Coal, Custer, Dewey, Ellis, Grady, Greer, Harmon, Harper, Jackson, Jefferson, Johnston, Kiowa,

Love, Major, Marshall, Murray, Roger

Mills, Texas, Tillman, Washita, Woods,

and Woodward.

Oregon

Counties of Baker, Benton, Clackamas,

Clatsop, Columbia, Coos, Crook, Curry, Deschutes, Douglas, Gilliam, Grant,

Harney, Hood River, Jackson, Jefferson,

Josephine, Klamath, Lake, Lane, Lincoln,

Linn, Malheur, Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Umatilla, Union, Wallowa, Wasco, Washington, Wheeler, and Yamhill.

463

South Carolina

Counties of Calhoun, Chesterfield, Clarendon, Darlington, Dillon, Florence,

Georgetown, Horry, Kershaw, Lee, Lexington, Marion, Marlboro, Orangeburg,

Richland, Sumter, and Williamsburg.

South Dakota

Counties of Aurora, Beadle, Bennett, Bon

Homme, Brookings, Brown, Brule, Buffalo, Butte, Campbell, Charles Mix, Clark,

Clay, Codington, Corson, Custer, Davison, Day, Deuel, Dewey, Douglas, Edmunds, Fall River, Faulk, Grant, Gregory,

Haakon, Hamlin, Hand, Hanson, Harding,

Hughes, Hutchinson, Hyde, Jackson, Jerauld, Jones, Kingsbury, Lake, Lawrence,

Lincoln, Lyman, McCook, McPherson,

Marshall, Meade, Mellette, Miner, Minnehaha, Moody, Oglala Lakota, Pennington, Perkins, Potter, Roberts, Sanborn,

Spink, Stanley, Sully, Todd, Tripp, Turner,

Union, Walworth, Yankton, and Ziebach.

Texas

Counties of Andrews, Angelina, Aransas,

Armstrong, Atascosa, Austin, Bailey, Bandera, Bastrop, Baylor, Bee, Bell, Bexar,

Blanco, Borden, Bosque, Brazoria, Brazos, Brewster, Briscoe, Brooks, Brown,

Burleson, Burnet, Caldwell, Calhoun,

Callahan, Cameron, Carson, Castro, Cherokee, Childress, Clay, Cochran, Coke,

Coleman, Collin, Collingsworth, Colorado, Comal, Comanche, Concho, Cooke,

Coryell, Cottle, Crane, Crockett, Crosby,

Culberson, Dallam, Dallas, Dawson, Deaf

Smith, Denton, DeWitt, Dickens, Dimmit,

Donley, Duval, Eastland, Ector, Edwards,

Ellis, El Paso, Erath, Falls, Fayette, Fisher, Floyd, Foard, Frio, Gaines, Galveston,

Garza, Gillespie, Glasscock, Goliad, Gon-

October 12, 2021

zales, Gray, Grayson, Grimes, Guadalupe,

Hale, Hall, Hamilton, Hardeman, Hardin,

Harris, Hartley, Haskell, Hays, Hemphill,

Henderson, Hidalgo, Hill, Hockley, Houston, Howard, Hudspeth, Hunt, Hutchinson, Irion, Jack, Jackson, Jeff Davis, Jim

Hogg, Jim Wells, Johnson, Jones, Karnes,

Kaufman, Kendall, Kenedy, Kent, Kerr,

Kimble, King, Kinney, Kleberg, Knox,

Lamb, Lampasas, La Salle, Lavaca, Lee,

Leon, Liberty, Lipscomb, Live Oak, Llano, Loving, Lubbock, Lynn, McCulloch,

McLennan, McMullen, Madison, Martin,

Mason, Matagorda, Maverick, Medina,

Menard, Midland, Milam, Mills, Mitchell, Montague, Montgomery, Motley,

Nacogdoches, Navarro, Nolan, Nueces, Ochiltree, Oldham, Parker, Parmer,

Pecos, Polk, Potter, Presidio, Randall,

Reagan, Real, Reeves, Refugio, Roberts,

Robertson, Rockwall, Runnels, San Jacinto, San Patricio, San Saba, Schleicher,

Scurry, Somervell, Starr, Stephens, Sterling, Stonewall, Sutton, Swisher, Tarrant,

Taylor, Terrell, Terry, Throckmorton,

Tom Green, Travis, Trinity, Tyler, Upton, Uvalde, Val Verde, Victoria, Walk-

October 12, 2021

er, Ward, Washington, Webb, Wheeler,

Wilbarger, Willacy, Williamson, Wilson,

Winkler, Wise, Yoakum, Young, Zapata,

and ­Zavala.

Utah

Counties of Beaver, Box Elder, Cache,

Carbon, Daggett, Davis, Duchesne, Emery, Garfield, Grand, Iron, Juab, Kane,

Millard, Morgan, Piute, Rich, Salt Lake,

San Juan, Sanpete, Sevier, Summit,

Tooele, Uintah, Utah, Wasatch, Washington, Wayne, and Weber.

Vermont

Counties of Addison, Caledonia, Essex,

Orange, Orleans, Rutland, Washington,

Windham, and Windsor.

Washington

Counties of Adams, Asotin, Benton, Chelan, Clark, Columbia, Cowlitz, Douglas,

Ferry, Franklin, Garfield, Grant, Island,

Kittitas, Klickitat, Lincoln, Okanogan,

464

Pend Oreille, San Juan, Skagit, Skamania, Spokane, Stevens, Wahkiakum, Walla

Walla, Whatcom, Whitman, and Yakima.

Wisconsin

Counties of Burnett, Crawford, Dane,

Dodge, Grant, Green, Jefferson, Kenosha,

La Crosse, Lafayette, Milwaukee, Monroe, Ozaukee, Pierce, Polk, Racine, Richland, Rock, Saint Croix, Vernon, Walworth, Washington, and Waukesha.

Wyoming

Counties of Albany, Big Horn, Campbell, Carbon, Converse, Crook, Fremont,

Goshen, Hot Springs, Johnson, Laramie,

Lincoln, Natrona, Niobrara, Park, Platte,

Sheridan, Sublette, Sweetwater, Teton,

Uinta, Washakie, and Weston.

United States Virgin Islands

Islands of Saint Croix, Saint John, and

Saint Thomas.

Bulletin No. 2021–41

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. 2021–41

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.

October 12, 2021

Numerical Finding List1

Bulletin 2021–41

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

Revenue Rulings:—Continued

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

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

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

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

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

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

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.

1

October 12, 2021

ii

Bulletin No. 2021–41

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–41

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.

1

Bulletin No. 2021–41

iii

October 12, 2021

Internal Revenue Service

Washington, DC 20224

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INTERNAL REVENUE BULLETIN

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