Bulletin No. 2021–22

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–22

June 1, 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.

ADMINISTRATIVE; INCOME TAX

Rev. Proc. 2021-26, page 1163.

This procedure expands, for a limited period, the availability of automatic consent for controlled foreign corporations

(“CFCs”) to change their methods of accounting for depreciation to the alternative depreciation system under section

168(g) in order to ease the burden on CFCs of conforming

their income and earnings and profits computations with their

qualified business asset investment computations. This procedure also prescribes terms and conditions for accounting

method changes made on behalf of CFCs, to ensure that section 481(a) adjustments resulting from CFCs’ method chang-

Finding Lists begin on page ii.

es are properly included in computations of tested income

and tested loss. Finally, this procedure clarifies the audit

protection rule in section 8.02(5) of Rev. Proc. 2015-13.

SPECIAL ANNOUNCEMENT

Announcement 2021-10, page 1170.

This Announcement announces that the new or updated census tract boundaries and numbers adopted by the U.S. Census Bureau for purposes of the 2020 decennial census have

no effect on the boundaries or tract numbers of any qualified

opportunity zone listed in Notice 2018-48, 2018-28 I.R.B. 9,

or Notice 2019-42, 2019-29 I.R.B. 352.

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.

June 1, 2021 

Bulletin No. 2021–22

Part III

26 CFR 601.204: Changes in accounting periods

and in methods of accounting.

(Also Part I, §§ 167, 168, 446, 481, 951A, 954, 964,

986; 1.446-1, 1.481-1, 1.951A-3, 1.952-2, 1.964-1.)

Rev. Proc. 2021-26

SECTION 1. PURPOSES

This revenue procedure modifies Rev.

Proc. 2019-43, 2019-48 I.R.B. 1107, to

provide procedures under section 446(e)

of the Internal Revenue Code (“Code”)

and §1.446-1(e) of the Income Tax Regulations for certain foreign corporations to

obtain the automatic consent of the Commissioner of Internal Revenue (“Commissioner”) to change their methods of

accounting for depreciation to the alternative depreciation system under section

168(g) (“ADS”). This revenue procedure also updates and revises Rev. Proc.

2015-13, 2015-5 I.R.B. 419, to provide

additional terms and conditions applicable with respect to section 481(a) adjustments arising from accounting method

changes of certain foreign corporations.

Finally, this revenue procedure modifies

Rev. Proc. 2015-13, 2015-5 I.R.B. 419,

to clarify an existing rule that limits audit

protection with respect to certain foreign

corporations.

SECTION 2. BACKGROUND

.01 Section 951A and ADS.

(1) Section 951A requires a United

States shareholder (as defined in section

951(b)) (“U.S. shareholder”) of any controlled foreign corporation (as defined in

section 957(a)) (“CFC”) that owns the

CFC’s stock within the meaning of section 958(a) for any taxable year to include

the shareholder’s global intangible lowtaxed income (“GILTI”) in gross income

for such taxable year. Section 951A applies to taxable years of foreign corporations beginning after December 31, 2017,

and to taxable years of U.S. sharehold-

ers in which or with which such taxable

years of foreign corporations end. A U.S.

shareholder’s GILTI is determined by a

formula based on certain items of each

CFC that the shareholder owns, including tested income, tested loss, and qualified business asset investment (“QBAI”),

if any. See section 951A(b) and (c), and

§1.951A-1(c).

(2) QBAI is the average of a tested

income CFC’s aggregate adjusted bases, as of the close of each quarter of a

CFC inclusion year, in specified tangible

property that is used in the tested income

CFC’s trade or business and of a type with

respect to which a deduction is allowable

under section 167. See section 951A(d)(1)

and §1.951A-3(b). A tested income CFC

is a CFC with tested income for a CFC inclusion year. See §1.951A-2(b)(1). A CFC

inclusion year is any taxable year of a foreign corporation beginning after December 31, 2017, at any time during which the

corporation is a CFC. See §1.951A-1(f)

(1). Specified tangible property is, with

respect to a tested income CFC and a CFC

inclusion year, tangible property of the

tested income CFC used in the production

of gross tested income for the CFC inclusion year. See section 951A(d)(2) and

§1.951A-3(c)(1). For purposes of section

951A, tangible property is property for

which the depreciation deduction provided by section 167(a) is eligible to be determined under section 168, without regard

to section 168(f)(1), (2), or (5), section

168(k)(2)(A)(i)(II), (IV), or (V), and the

date placed in service. See §1.951A-3(c)

(2).

(3) Section 951A(d)(3)1 provides that

the adjusted basis in any property for purposes of calculating QBAI shall be determined by using ADS under section 168(g)

and by allocating the depreciation deduction with respect to such property ratably

to each day during the period in the taxable year to which such depreciation relates. Except as provided in §1.951A-3(e)

(3)(ii),2 ADS applies for purposes of de-

termining QBAI irrespective of when the

property was placed in service or whether

the basis of the property is determined using another method for computing depreciation for other purposes of the Code. See

§1.951A-3(e)(1) and (3).

(4) Section 168(g)(1)(A) generally requires the use of ADS to depreciate tangible property predominantly used outside

of the United States during the taxable

year. However, a foreign corporation (including a CFC) computing its income and

earnings and profits (“E&P”) may instead

apply a depreciation method used in keeping the books of account that it regularly

maintains for accounting to its shareholders or a method consistent with U.S. generally accepted accounting principles (a

“non-ADS method”), provided the adjustments required to conform to ADS are not

material. See §§1.952-2(c)(2) and 1.9641(a)(2). Whether an adjustment is material

depends on the facts and circumstances of

the particular case, including the amount

of the adjustment, its size relative to the

general level of the corporation’s total

assets and annual profit or loss, the consistency with which the practice has been

applied, and whether the item to which

the adjustment relates is of a recurring or

merely a nonrecurring nature. See §1.9641(a)(2). Given the requirement in section

951A(d)(3) that the adjusted basis in any

property for purposes of calculating QBAI

be determined by using ADS, CFCs not

otherwise required to use ADS for purposes of computing their income and E&P

may want to change to ADS with respect

to such property to conform their income,

E&P, and QBAI computations.

.02 Changes in methods of accounting

for depreciation.

(1) Pursuant to section 168(g)(2), depreciation under ADS is determined by

using the straight-line method of depreciation (without regard to salvage value), the

applicable convention determined under

section 168(d), and a recovery period determined under the table in section 168(g)

1

As enacted, section 951A(d) contains two paragraphs designated as paragraph (3). The section 951A(d)(3) discussed in this procedure relates to the determination of the adjusted basis in

property for purposes of calculating QBAI.

2

Under § 1.951A-3(e)(3)(ii), a CFC that is not required to use ADS for purposes of computing income and E&P may elect, for purposes of calculating QBAI, to use its non-ADS depreciation

method to determine the adjusted basis in specified tangible property placed in service before the first taxable year beginning after December 22, 2017, subject to a special rule related to

salvage value.

Bulletin No. 2021–22

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June 1, 2021

(2)(C). Except as provided in §1.446-1(e)

(2)(ii)(d)(3), the depreciation method,

convention, and recovery period used by

a taxpayer to determine the depreciation

for each asset are methods of accounting under section 446; thus, a change in

the depreciation method, convention, or

recovery period of a depreciable asset is

a change in method of accounting. See

§1.446-1(e)(2)(ii)(d)(2)(i). A taxpayer

must secure the consent of the Commissioner before changing the depreciation

method, convention, or recovery period

for any asset for federal income tax purposes, whether or not the taxpayer’s present method of accounting is proper under

the Code or the regulations thereunder.

See section 446(e) and §1.446-1(e)(2)(i).

The determination of the adjusted basis in

property for purposes of computing QBAI

is not a method of accounting subject to

the consent requirement of section 446(e).

See §1.446-1(e)(2)(ii)(a) and (e)(2)(ii)(b).

(2) The Commissioner may prescribe

the administrative procedures setting forth

the limitations, terms, and conditions

necessary to permit a taxpayer to obtain

consent to change a method of accounting. See §1.446-1(e)(3)(ii). Except as

otherwise provided in §1.446-1(e)(3)(ii),

a taxpayer must file a Form 3115, Application for Change in Accounting Method,

in order to request the Commissioner’s

consent to change a method of accounting.

Rev. Proc. 2015-13, 2015-5 I.R.B. 419, as

clarified and modified by Rev. Proc. 201533, 2015-24 I.R.B. 1067, and as modified

by Rev. Proc. 2016-1, 2016-1 I.R.B. 1,

and Rev. Proc. 2017-59, 2017-48 I.R.B.

543, sets forth the general procedures by

which a taxpayer may obtain the automatic consent of the Commissioner to change

a method of accounting described in the

“List of Automatic Changes.” Rev. Proc.

2019-43, as modified by Rev. Proc. 202013, 2020-11 I.R.B. 515, Rev. Proc. 202025, 2020-19 I.R.B. 785, and Rev. Proc.

2020-50, 2020-48 I.R.B. 1122, contains

the current List of Automatic Changes.

(3) Pursuant to Rev. Proc. 2015-13

and Rev. Proc. 2019-43, subject to certain

restrictions, a CFC on an impermissible

non-ADS method of accounting for depreciation for purposes of computing its income and E&P may request to change its

method to the straight-line method, the applicable convention, and the applicable re-

June 1, 2021

covery period under ADS using automatic

change procedures. However, a CFC on a

permissible non-ADS method of accounting is ineligible for an automatic change to

use ADS. The Department of the Treasury

(“Treasury Department”) and the Internal

Revenue Service (“IRS”) announced their

intention to expand the availability of automatic consent for depreciation changes

in Treasury Decision 9866, 84 FR 29288,

29304 (June 21, 2019). To that end, section 3 of this revenue procedure modifies

Rev. Proc. 2019-43 to provide procedures,

for a limited period, for a CFC on an impermissible non-ADS method as well as

a CFC on a permissible non-ADS method to obtain the automatic consent of the

Commissioner to change its method of

accounting for depreciation of property

described in section 168(g)(1)(A) (except

for property excluded from the application of section 168 as a result of section

168(f)) to ADS in determining the CFC’s

gross and taxable income under §1.9522 as well as its E&P under sections 964

and 986(b) and the regulations thereunder.

These procedures also temporarily waive

certain eligibility restrictions set forth in

section 5.01(1) of Rev. Proc. 2015-13 to

make it easier for such CFCs to obtain automatic consent to change their methods

of accounting for depreciation to ADS.

Furthermore, since these procedures apply

to CFCs on permissible and impermissible

non-ADS methods, they will ease the burden on all such CFCs in conforming their

income and E&P computations with their

QBAI computations. However, this revenue procedure does not waive any of the

limitations on audit protection in section

8 of Rev. Proc. 2015-13, as modified by

Rev. Proc. 2015-33, 2015-24 I.R.B. 1067.

(4) The procedures in section 3 of this

revenue procedure provide that a section

481(a) adjustment is required with respect

to any change in method of accounting

made thereunder. The imposition of a

section 481(a) adjustment for all changes

made under the procedures in section 3 of

this revenue procedure is in accordance

with §1.446-1(e)(2)(ii)(d)(5)(iii), which

allows, with respect to a change from one

permissible method of computing depreciation to another permissible method of

computing depreciation, the IRS to require

a section 481(a) adjustment if expressly

provided by guidance published in the In-

1164

ternal Revenue Bulletin, and states that a

section 481(a) adjustment is required for a

change from an impermissible method of

computing depreciation to a permissible

method of computing depreciation.

.03 Section 951A and treatment of a

section 481(a) adjustment.

(1) When there is a change in a CFC’s

method of accounting, to prevent amounts

from being duplicated or omitted, the

difference between the CFC’s income

and E&P pursuant to the old and the new

methods must generally be taken into account as a section 481(a) adjustment. See

section 481(a) and §1.481-1(d); see also

section 2.06 of Rev. Proc. 2015-13 (or its

successor). The section 481(a) adjustment

must be taken into account for purposes

of computing the CFC’s income and E&P

in accordance with the terms and conditions prescribed by the Commissioner. See

section 481(c) and §§1.446-1(e)(3)(ii) and

1.481-4; see also section 2.06(1) of Rev.

Proc. 2015-13 (or its successor).

(2) Section 7.07 of Rev. Proc. 201513, which predates the enactment of section 951A, sets forth the applicable terms

and conditions for a change in method of

accounting on behalf of a CFC. Section

7.07(2) of Rev. Proc. 2015-13 generally

requires a section 481(a) adjustment (or

a component thereof) to take, or be allocated to the class of gross income that

has, the same source, separate limitation

classification, character, and treatment for

subpart F purposes as the CFC’s income

to which the adjustment or component relates had or would have had in the prior

year or years.

(3) In Treasury Decision 9866, 84 FR

at 29304, in addition to declaring their intent to expand automatic accounting method changes for depreciation, the Treasury

Department and the IRS announced their

intention to update the terms and conditions in section 7.07 of Rev. Proc. 2015-13

to take section 951A into account. Accordingly, section 4 of this revenue procedure

updates and revises section 7.07 of that

revenue procedure to account for both the

enactment of section 951A and the repeal

of section 954(g), which eliminated foreign base company oil related income as

a category of foreign base company income, by the Tax Cuts and Jobs Act, Pub.

Law 115-97, 131 Stat. 2054, 2208, 2216

(2017).

Bulletin No. 2021–22

(4) Specifically, section 4 of this revenue procedure modifies section 7.07

of Rev. Proc. 2015-13 to clarify that a

CFC’s section 481(a) adjustment must

be taken into account in determining the

CFC’s tested income or tested loss (either as gross tested income within the

meaning of section 951A(c)(2)(A)(i) and

§1.951A-2(c)(1), if the section 481(a)

adjustment is positive, or as a deduction

properly allocable to the CFC’s gross tested income within the meaning of section

951A(c)(2)(A)(ii) and §1.951A-2(c)(3),

if the section 481(a) adjustment is negative), except to the extent the adjustment

prevents the duplication or omission of

an item of gross income that is described

in, or that is a deduction properly allocable to an item of gross income described

in, section 951A(c)(2)(A)(i)(I) through

(V). Section 4 of this revenue procedure

further amends section 7.07 of Rev. Proc.

2015-13 to require that a CFC’s section

481(a) adjustment relating to foreign base

company oil related income be taken into

account as an adjustment in determining

the CFC’s tested income or tested loss.

(5) Under section 481(a) and §1.4811(d), section 481(a) adjustments must

be properly taken into account for purposes of computing gross income, adjusted gross income, or taxable income.

Section 951A(c)(2) and §1.951A-2(c)(1)

require tested income and tested loss to

be determined by excluding from gross

tested income certain items of gross income enumerated in section 951A(c)(2)

(A)(i)(I) through (V). Specifically, the

determination of a CFC’s tested income

starts with the CFC’s gross income and

excludes the following items of income

to determine “gross tested income”: (I)

any item of income described in section

952(b), (II) any gross income taken into

account in determining the CFC’s subpart

F income (as defined in section 952(a)),

(III) any gross income excluded from

foreign base company income (as defined in section 954) or insurance income

(as defined in section 953) of the CFC

by reason of section 954(b)(4), (IV) any

dividend received from a related person

(as defined in section 954(d)(3), and (V)

any foreign oil and gas extraction income

(as defined in section 907(c)(1)) of the

CFC. See section 951A(c)(2)(A)(i) and

§1.951A-2(c)(1). The CFC has tested in-

Bulletin No. 2021–22

come if the gross tested income exceeds

deductions properly allocable to it under

rules similar to those set forth in section

954(b)(5). See section 951A(c)(2)(A).

The CFC has a tested loss if the properly allocable deductions exceed the gross

tested income, or if it does not have any

gross tested income but has deductions

that would be properly allocable to gross

tested income. See section 951A(c)(2)

(B)(i) and §1.951A-2(b)(1). Therefore, a

CFC’s section 481(a) adjustment will adjust its tested income or tested loss unless

the adjustment constitutes one of the excluded items of gross income specified in

section 951A(c)(2)(A)(i) or a deduction

properly allocable to such an item of gross

income. Furthermore, a section 481(a) adjustment of a CFC that relates to an item

of income or expense arising before the

effective date of section 951A and does

not relate to subpart F income generally

prevents the duplication or omission of

an item that affected the CFC’s E&P relevant for purposes of the transition tax

under section 965, which generally no

longer applies. Therefore, excluding such

a section 481(a) adjustment from the determination of a CFC’s tested income or

tested loss could, in the case of a positive

section 481(a) adjustment, permit income

to escape U.S. taxation because it would

not be subject to tax under subpart F but

could generate E&P that would obtain the

benefit of tax-free repatriation by reason

of section 245A. Similarly, excluding a

positive section 481(a) adjustment that

relates to foreign base company oil related income from determining a CFC’s

tested income is inappropriate because

the income attributable to the adjustment

would not be subject to tax under subpart

F due to the repeal of section 954(g) but

could generate E&P potentially eligible

for tax-free repatriation by reason of section 245A, thereby escaping U.S. taxation.

Furthermore, excluding negative section

481(a) adjustments that are attributable to

amounts arising in years in which section

965 and repealed section 954(g) applied

from the computation of a CFC’s tested

income or tested loss could result in double counting of income.

(6) Section 4 of this revenue procedure

retains the approach set forth in section

7.07 of Rev. Proc. 2015-13 of assigning

source, character, separate limitation clas-

1165

sification, and treatment to each component of a section 481(a) adjustment.

This component-by-component approach

ensures that, for example, a CFC’s net

positive section 481(a) adjustment that is

composed of a positive component that

prevents the duplication of an item of

expense properly allocable to gross tested income and a positive component that

prevents the duplication of an item of expense properly allocable to gross foreign

base company sales income is treated as

such and allocated to the appropriate separate limitation categories. An example in

section 4 of this revenue procedure illustrates the application of this approach and

the new terms and conditions discussed in

sections 2.03(4) and 2.03(5) of this revenue procedure.

.04 Audit protection exceptions.

(1) Section 8.01 of Rev. Proc. 2015-13

provides that, with certain exceptions, a

taxpayer generally will receive audit protection with respect to an item that is subject to an accounting method change when

it timely files a Form 3115 under the procedures of Rev. Proc. 2015-13. For an accounting method change made on behalf

of a CFC or a 10/50 corporation, however,

section 8.02(5) of Rev. Proc. 2015-13 denies audit protection for a taxable year before the requested year of change in which

one or more of the CFC’s or 10/50 corporation’s domestic corporate shareholders computes an amount of foreign taxes

deemed paid under sections 902 and 960

with respect to the CFC or 10/50 corporation that exceeds 150 percent of the average amount of foreign taxes deemed paid

under sections 902 and 960 by the shareholder with respect to the CFC or 10/50

corporation in the shareholder’s three prior taxable years (“150 percent threshold”).

(2) The Treasury Department and the

IRS are aware that questions have arisen

whether the effect of various limitations

on a domestic corporate shareholder’s

ability to claim a current tax benefit for

foreign taxes deemed paid should affect

the application of the 150 percent threshold. Under sections 960(a) and 960(d),

foreign income taxes of a foreign corporation that are properly attributable to

amounts included in a domestic corporate

shareholder’s income are deemed paid regardless of whether the shareholder elects

to deduct or credit foreign income taxes in

June 1, 2021

the year of the inclusion, and regardless of

the extent to which section 904(d) or other

limitations limit the allowable amount of

the foreign tax credit in the inclusion year

or other years. The purpose of the 150 percent threshold is to deny audit protection

for an improper method of accounting

that affects the calculation of the foreign

corporation’s income for United States

tax purposes and so may improperly inflate the amount of foreign taxes deemed

paid with respect to an income inclusion

from that corporation. Particularly in view

of the fact that under sections 901(a) and

904(c) taxpayers are allowed ten years to

elect to credit foreign income taxes, and

to carry excess foreign tax credits with

respect to subpart F income to other taxable years, the 150 percent threshold is

appropriately applied on the basis of the

amount of foreign taxes deemed paid and

not on the allowable amount of the associated foreign tax credit. For the avoidance

of doubt, section 5 of this revenue procedure modifies section 8.02(5) of Rev.

Proc. 2015-13 to clarify that the 150 percent threshold is computed with respect

to the amount of the foreign corporation’s

foreign taxes deemed paid, regardless of

the extent to which a foreign tax credit is

allowed.

SECTION 3. AUTOMATIC METHOD

CHANGE

.01 Section 6.01(1)(c) of Rev. Proc.

2019-43, as modified by Rev. Proc. 202025 and Rev. Proc. 2020-50, is modified by:

(1) At the end of section 6.01(1)(c)

(xviii), deleting “or”;

(2) At the end of section 6.01(1)(c)

(xix), deleting the period and adding “;

or” in its place;

(3) Adding new section 6.01(1)(c)(xx)

to read as follows:

(xx) the change specified in section

6.22 of this revenue procedure. However,

an original Form 3115 for such change in

method of accounting may be filed under

this section 6.01 instead of section 6.22

of this revenue procedure if the duplicate

Form 3115 was filed under this section

6.01 before May 11, 2021.

.02 Section 6 of Rev. Proc. 2019-43, as

modified by Rev. Proc. 2020-25 and Rev.

Proc. 2020-50, is modified to add new section 6.22 to read as follows:

June 1, 2021

.22 Depreciation of tangible property

under section 168(g) by controlled foreign

corporations.

(1) Description of change. This change

is applicable to a controlled foreign corporation (as defined in section 957(a))

(“CFC”) that seeks to change its method of

accounting for depreciation for an item of

property that is described in section 168(g)

(1)(A) (except for property excluded from

the application of section 168 as a result

of section 168(f)) and owned by the CFC

at the beginning of the year of change to

the permissible depreciation method, convention, and recovery period prescribed

under the alternative depreciation system

(“ADS”) in section 168(g) for such property in determining the CFC’s gross and

taxable income under §1.952-2 as well as

its earnings and profits (“E&P”) under sections 964 and 986(b) and the regulations

thereunder. This change applies regardless

of whether the method of accounting for

depreciation that the CFC wants to change

pursuant to this section 6.22 is impermissible or permissible under the Internal Revenue Code and the regulations thereunder.

(2) CFC has not adopted a method of

accounting for the item of property. If a

CFC placed in service an item of property

described in section 6.22(1) of this revenue procedure in the taxable year immediately preceding the year of change (“1year property”), the CFC may change its

method of determining depreciation for

the 1-year property to ADS if the designated shareholder files a Form 3115 for

this change, provided the section 481(a)

adjustment attributable to the 1-year

property is included on the Form 3115.

Alternatively, the CFC may change its impermissible method of determining depreciation for the 1-year property to ADS if

each U.S. shareholder of the CFC (or the

agent described in §1.1502-77(a), if applicable) files an amended federal income

tax return for the taxable year in which

or with which the property’s placed-inservice year ends prior to the date the

shareholder files its federal income tax return for the taxable year in which or with

which the CFC’s taxable year succeeding

the placed-in-service year ends.

(3) Applicability. This change is effective for a Form 3115 filed on or after May

11, 2021 for a taxable year of a CFC ending before January 1, 2024.

1166

(4) Limited period to convert a Form

3115 filed under the non-automatic

change procedures in Rev. Proc. 2015-13.

(a) Eligibility. The designated shareholder may convert a Form 3115 that was

properly filed on behalf of a CFC under

the non-automatic change procedures in

Rev. Proc. 2015-13 requesting the Commissioner’s consent for a change in method of accounting described in this section

6.22 if:

(i) the CFC is otherwise eligible to use

the automatic change procedures in this

section 6.22 and Rev. Proc. 2015-13 (to

the extent the eligibility requirements in

Rev. Proc. 2015-13 are not waived by this

section 6.22), and

(ii) the Form 3115 was filed before

May 11, 2021 and is pending with the national office on May 11, 2021.

(b) Notification procedures. The designated shareholder must notify the national

office contact person for the Form 3115

(if contact person is unknown, fax the

notification to 855-576-2341 or send the

notification to the address specified in section 9.08(6) of Rev. Proc. 2021-1, 2021-1

I.R.B. 1 (or its successor)) of the CFC’s

intent to make the change in method of

accounting under the automatic change

procedures in this section 6.22 and Rev.

Proc. 2015-13 before the later of (i) June

10, 2021, or (ii) the issuance of a letter

ruling granting or denying consent for the

change. The notification must indicate that

the designated shareholder chooses on behalf of the CFC to convert the Form 3115

to the automatic change procedures in this

section 6.22 and Rev. Proc. 2015-13. If the

national office is timely and properly notified in accordance with the requirements

in this paragraph, the national office will

send a letter to the designated shareholder

acknowledging its request and will return

the user fee submitted with the Form 3115.

(c) Resubmission procedures. A designated shareholder converting a Form 3115

to the automatic change procedures in this

section 6.22 and Rev. Proc. 2015-13 for a

change in method of accounting described

in this section 6.22 must resubmit a Form

3115 that conforms to the automatic

change procedures, with a copy of the national office letter sent acknowledging the

request to convert attached, by the earlier

of (i) the 30th calendar day after the date

of the national office’s letter acknowledg-

Bulletin No. 2021–22

ing the request to convert, or (ii) the date

the designated shareholder is required to

file the original Form 3115 under section

6.03(1)(a) of Rev. Proc. 2015-13. See section 6.22(7)(b) of this revenue procedure

and section 6.03(3) of Rev. Proc. 2015-13

regarding required copies of Form 3115.

For purposes of the eligibility rules in

section 5 of Rev. Proc. 2015-13, the duplicate copy of the timely resubmitted Form

3115 will be considered filed as of the

date the designated shareholder originally

filed the converted Form 3115 under the

non-automatic change procedures in Rev.

Proc. 2015-13. This paragraph (4) does

not extend the date the designated shareholder must file the original (converted)

Form 3115 under section 6.03(1)(a) of

Rev. Proc. 2015-13.

(d) Agent treated as designated shareholder. For purposes of this section 6.22,

in the case of a designated shareholder

that is a member of a consolidated group,

a reference to a designated shareholder

refers to the agent described in §1.150277(a) with respect to the consolidated

group of which the designated shareholder

is a member.

(5) Section 481(a) adjustment. A section 481(a) adjustment is required with respect to a change made under this section

6.22 for any CFC.

(6) Certain eligibility rules inapplicable. The eligibility rules in section 5.01(1)

(c), (d), (e), and (f) of Rev. Proc. 201513, 2015-5 I.R.B. 419, as clarified and

modified by Rev. Proc. 2015-33, 2015-24

I.R.B. 1067, do not apply to this change.

(7) Manner of making change.

(a) Short Form 3115 in lieu of standard

Form 3115. In accordance with §1.4461(e)(3)(ii), the requirement in §1.4461(e)(3)(i) to file a standard Form 3115 is

waived and, pursuant to section 6.02(2) of

Rev. Proc. 2015-13, a short Form 3115 is

authorized with respect to any CFC making a change under this section 6.22. The

short Form 3115 must include the following information:

(i) The identification section of page 1

(above Part I);

(ii) The signature section at the bottom

of page 1;

(iii) Part I;

(iv) Part II, all lines except lines 10, 13,

16, and 19;

(v) Part IV; and

Bulletin No. 2021–22

(vi) Schedule E.

(b) Duplicate copy. In accordance with

section 6.03(1)(a) of Rev. Proc. 2015-13,

a signed copy of the original completed

short Form 3115 must be filed with the

IRS in Ogden, UT, at the applicable address set forth in section 9.06 of Rev. Proc.

2021-1, 2021-1 I.R.B. 1 (or its successor),

no earlier than the first day of the requested year of change and no later than the

date the designated shareholder files the

original short Form 3115 with its federal

income tax return for its taxable year in

which or with which the CFC’s requested year of change ends. In lieu of being

mailed to Ogden, UT, the duplicate copy

may be transmitted by fax in accordance

with the temporary procedure at http://

www.irs.gov/newsroom/temporary-procedure-to-fax-automatic-consent-forms3115-due-to-covid-19, if applicable.

(8) Concurrent automatic changes.

A designated shareholder making an accounting method change on behalf of a

CFC under this section 6.22 with respect

to more than one item of property for the

same year of change may file a single short

Form 3115 for the change with respect to

all such items of property. Notwithstanding this rule, the filer must separately

provide the section 481(a) adjustment required for the change with respect to each

item of property. Therefore, the filer may

not provide a single net section 481(a)

adjustment for the change with respect to

all of the items of property on the short

Form 3115. See section 6.03(1)(b) of Rev.

Proc. 2015-13 for further information on

and requirements for making concurrent

changes.

(9) Designated automatic accounting

method change number. The designated automatic accounting method change

number for a change under this section

6.22 is “248.”

(10) Contact information. For further

information regarding a change under this

section, contact Natalie Punchak at (202)

317-6934 (not a toll-free call).

SECTION 4. TERMS AND

CONDITIONS OF CHANGE

FOR CERTAIN FOREIGN

CORPORATIONS

Section 7.07 of Rev. Proc. 2015-13 is

updated and revised to read as follows:

1167

.07 Certain foreign corporations. If

the change in method of accounting is on

behalf of a controlled foreign corporation

(as defined in section 957(a)) (“CFC”) or

a noncontrolled 10-percent owned foreign

corporation (as defined in section 904(d)

(2)(E)) (“10/50 corporation”), the following additional terms and conditions apply:

(1) If the functional currency of the foreign corporation is not the U.S. dollar, the

section 481(a) adjustment must be stated

in the functional currency of the foreign

corporation and not in U.S. dollars.

(2) Section 954(b)(3)(A) (de minimis

rule) or section 954(b)(3)(B) (full inclusion rule) applies after the characterization of positive or negative section 481(a)

adjustments described under this section

7.07(2). Thus, for example, the de minimis rule in section 954(b)(3)(A) may (if

applicable) cause a positive section 481(a)

adjustment to not be treated as gross foreign base company income or gross insurance income, and the full inclusion rule in

section 954(b)(3)(B) may (if applicable)

cause a positive section 481(a) adjustment

to not be treated as gross tested income.

Subject to the preceding two sentences,

for the taxable year in the section 481(a)

adjustment period, a section 481(a) adjustment (or any component thereof) shall

be taken into account as follows:

(a) A positive section 481(a) adjustment (or any positive component of a

section 481(a) adjustment) necessary to

prevent the duplication of amounts of an

expense item must take the same source,

separate limitation classification, character, and treatment for purposes of subpart

F as the foreign corporation’s gross income that was offset by the expense in the

prior year or years. Notwithstanding the

preceding sentence, to the extent the section 481(a) adjustment (or the component)

of a CFC prevents the duplication of an

expense item that is not properly allocable

to an item of income described in section

951A(c)(2)(A)(i)(I) through (V), the section 481(a) adjustment (or the component)

must be treated as gross tested income of

the CFC (as defined in section 951A(c)(2)

(A)(i) and §1.951A-2(c)(1)) and take the

corresponding separate limitation classification.

(b) A positive section 481(a) adjustment (or any positive component of a

section 481(a) adjustment) necessary to

June 1, 2021

prevent the omission of amounts of an

income item must take the same source,

separate limitation classification, character, and treatment for purposes of subpart F as the foreign corporation’s income

would have had in the prior year or years.

Notwithstanding the preceding sentence,

to the extent the section 481(a) adjustment

(or the component) of a CFC prevents the

omission of an income item that would not

be described in section 951A(c)(2)(A)(i)

(I) through (V), the section 481(a) adjustment (or the component) must be treated

as gross tested income of the CFC (as

defined in section 951A(c)(2)(A)(i) and

§1.951A-2(c)(1)) and take the corresponding separate limitation classification.

(c) A negative section 481(a) adjustment (or any negative component of a

section 481(a) adjustment) necessary to

prevent the omission of amounts of an expense item is allocated to the class of gross

income that has the same source, separate

limitation classification, character, and

treatment for purposes of subpart F as the

foreign corporation’s income that would

have been offset by the expense in the prior year or years. Notwithstanding the preceding sentence, to the extent the section

481(a) adjustment (or the component) of a

CFC prevents the omission of an expense

item that would not be properly allocable

to an item of income described in section

951A(c)(2)(A)(i)(I) through (V), the section 481(a) adjustment (or the component)

must be treated as a deduction properly

allocable to the CFC’s gross tested income (as defined in section 951A(c)(2)

(A)(ii) and §1.951A-2(c)(3)) and take the

corresponding separate limitation classification.

(d) A negative section 481(a) adjustment (or any negative component of a

section 481(a) adjustment) necessary to

prevent the duplication of amounts of an

income item offsets gross income that

has the same source, separate limitation

classification, character, and treatment for

purposes of subpart F as the foreign corporation’s income had in the prior year

or years. Notwithstanding the preceding

sentence, to the extent the section 481(a)

adjustment (or the component) of a CFC

prevents the duplication of an income item

that is not described in section 951A(c)(2)

(A)(i)(I) through (V), the section 481(a)

adjustment (or the component) must be

June 1, 2021

treated as a deduction properly allocable to the CFC’s gross tested income (as

defined in section 951A(c)(2)(A)(ii) and

§1.951A-2(c)(3)) and take the corresponding separate limitation classification.

(e) For purposes of separate classification limitation and treatment, to the

extent a section 481(a) adjustment (or

a component thereof) relates to a CFC’s

foreign base company oil related income

(as defined in section 954(g) before its

repeal by section 14211 of the Tax Cuts

and Jobs Act, Pub. Law 115-97, 131 Stat.

2054, 2216 (2017)) in the CFC’s taxable

year beginning before January 1, 2018,

the section 481(a) adjustment (or the component) must be taken into account as an

adjustment in determining the CFC’s tested income or tested loss (either as gross

tested income within the meaning of section 951A(c)(2)(A)(i) and §1.951A-2(c)

(1), if the section 481(a) adjustment (or

the component) is positive, or as a deduction properly allocable to the CFC’s gross

tested income within the meaning of section 951A(c)(2)(A)(ii) and §1.951A-2(c)

(3), if the section 481(a) adjustment or the

component is negative).

(3) For each taxable year of the section 481(a) adjustment period beginning

with the year of change, the appropriate

amount of the section 481(a) adjustment

must be taken into account in computing

the foreign corporation’s gross and taxable income under §1.952-2 as well as its

E&P under sections 964 and 986(b) and

the regulations thereunder, subject to the

requirements in section 7.07(2) of this

revenue procedure.

(4) The following example illustrates the application of sections 7.07(1),

7.07(2), and 7.07(3) of this revenue procedure where a change in a CFC’s method

of accounting results in a section 481(a)

adjustment with multiple components.

Example. (i) Facts. CFC, a foreign corporation

organized in Country X, is wholly owned by USP,

a domestic corporation and the controlling domestic

shareholder of CFC as described in §1.964-1(c)(5).

USP and CFC use the calendar year as their taxable

year and are not under examination. CFC maintains

a “u” functional currency. CFC purchases Product

manufactured in Country Y for resale and owns a

machine that packages only Product. The machine is

placed in service by CFC on January 1, 2015. CFC

sells Product to related persons located in Country

Z, giving rise to gross foreign base company sales

income. CFC also sells Product to unrelated persons,

giving rise to gross tested income. Although CFC is

1168

required to depreciate the machine pursuant to the

alternative depreciation system (“ADS”) of section

168(g), under its present method of accounting,

CFC depreciates the machine pursuant to the general depreciation system of section 168(a). Assume

all depreciation on the machine is capitalized under

section 263A to Product. USP files a Form 3115 under the automatic change procedures in section 6.22

of the List of Automatic Changes and section 6 of

this revenue procedure to change CFC’s method of

accounting for depreciation for the machine to the

depreciation method, convention, and recovery period prescribed under ADS in section 168(g), beginning with CFC’s taxable year ended December 31,

2021 (the year of change). The net positive section

481(a) adjustment for this change is 5,000u, and

the section 481(a) adjustment period is four taxable

years. The net positive section 481(a) adjustment is

composed of two components: (1) a positive component of 2,000u that prevents the omission of CFC’s

gross foreign base company sales income in the prior

years, and (2) a positive component of 3,000u that

prevents the omission of an income item in the prior

years that would not be described in section 951A(c)

(2)(A)(i)(I) through (V). Neither section 954(b)(3)

(A) nor (B) applies for any taxable year in the section

481(a) adjustment period.

(ii) Analysis. Pursuant to section 7.07(2)(b) of

this revenue procedure, the positive component of

2,000u is foreign source income from the sale of personal property, must be treated as CFC’s gross foreign base company sales income, and is required to

be allocated to the income group for the foreign base

company sales income within the general category.

Under this same section, the positive component of

3,000u is foreign source income from the sale of personal property, must be treated as CFC’s gross tested

income, and is required to be allocated to the tested

income group within the general category. Pursuant

to sections 7.03(1) and 7.07(3) of this revenue procedure, the CFC must take each component of the

adjustment into account ratably over four taxable

years, beginning with CFC’s 2021 taxable year, as

follows: (1) with respect to the positive component

of 2,000u, 500u in 2021, 500u in 2022, 500u in 2023,

and 500u in 2024, and (2) with respect to the positive

component of 3,000u, 750u in 2021, 750u in 2022,

750u in 2023, and 750u in 2024.

(5) The written statement required by

§1.964-1(c)(3)(i) and (ii) must be filed by

each controlling domestic shareholder (as

defined in §1.964-1(c)(5), or, if applicable, the agent described in §1.1502-77(a)

with respect to the consolidated group of

which the controlling domestic shareholder is a member) with its federal income tax

return for its taxable year with or within

which ends the foreign corporation’s year

of change.

(6) The shareholders of the foreign

corporation must maintain records and accounts with respect to the foreign corporation for the year of change and for subsequent taxable years, in conformity with

the requirements of sections 905(b) and

Bulletin No. 2021–22

964(c). This condition is satisfied if the

shareholders reconcile the results obtained

under the method used in keeping the foreign corporation’s books and records and

the method used for federal income tax

purposes and maintain sufficient records

to support such reconciliation.

(7) If a foreign corporation loses its status as a CFC or 10/50 corporation, as applicable, at any time before the expiration

of the section 481(a) adjustment period,

then the foreign corporation must, subject

to the requirements in section 7.07(2) of

this revenue procedure, take into account

the balance of the section 481(a) adjustment not previously taken into account in

computing its gross and taxable income

under §1.952-2 as well as its E&P under

sections 964 and 986(b) and the regulations thereunder, on the final day on which

it is a CFC or 10/50 corporation, as applicable.

(8) Each U.S. shareholder of a CFC (or

the agent described in §1.1502-77(a), if

applicable) must comply with its obligations to report changes in the ownership

of the CFC on Form 5471, Information

Return of U.S. Persons With Respect To

Certain Foreign Corporations, during the

section 481(a) adjustment period.

(9) In the case of any disposition of

stock of the foreign corporation that is

owned directly or indirectly by a United

States person, if the disposition (a) represents ten percent or more of the total

value of the stock of the foreign corporation, or (b) results in the person no longer

meeting the stock ownership requirements

of section 6046(a)(2) with respect to the

foreign corporation, then the foreign corporation must, subject to the requirements

in section 7.07(2) of this revenue procedure, take into account before the disposition the remaining balance of the section

481(a) adjustment in computing its gross

Bulletin No. 2021–22

and taxable income under §1.952-2 as well

as its E&P under sections 964 and 986(b)

and the regulations thereunder. This condition also applies if the foreign corporation issues stock, or the United States

person’s ownership is otherwise diluted,

so that either of the situations described in

the preceding sentence applies to the United States person. This condition does not

apply to any change in ownership of the

foreign corporation if the stock disposed

of continues to be owned, directly or indirectly, by the shareholder or a member of

the U.S. consolidated group of which the

shareholder is a member.

SECTION 5. AUDIT PROTECTION

FOR TAXABLE YEARS

OF CERTAIN FOREIGN

CORPORATIONS BEFORE THE

YEAR OF CHANGE

Section 8.02(5) of Rev. Proc. 2015-13

is modified to read as follows:

(5) CFC or 10/50 corporation. In the

case of a change in method of accounting

made on behalf of a CFC or 10/50 corporation, the IRS may change the method of

accounting for the same item that is the

subject of a Form 3115 filed under this

revenue procedure for taxable years prior

to the requested year of change in which

any of the CFC’s or 10/50 corporation’s

domestic corporate shareholders computed an amount of foreign taxes deemed paid

under sections 902 and 960 with respect

to the CFC or 10/50 corporation that exceeds 150 percent of the average amount

of foreign taxes deemed paid under sections 902 and 960 by the domestic corporate shareholder with respect to the CFC

or 10/50 corporation in the shareholder’s

three prior taxable years. This determination is made without regard to the amount

of the domestic corporate shareholder’s

1169

allowable foreign tax credit in the taxable

year the foreign taxes are deemed paid or

in any other taxable year.

SECTION 6. EFFECTIVE DATES

.01 Section 3 of this revenue procedure is effective for a Form 3115 filed on

or after May 11, 2021 for a taxable year

of a CFC ending before January 1, 2024.

See section 3 of this revenue procedure

for procedures to convert certain Forms

3115 filed before May 11, 2021 that are

pending with the national office on May

11, 2021.

.02 Sections 4 and 5 of this revenue

procedure are effective for a Form 3115

filed on or after May 11, 2021.

SECTION 7. EFFECT ON OTHER

DOCUMENTS

.01 Section 6 of Rev. Proc. 2019-43 is

modified to include the modifications described in section 3.01 of this revenue procedure and the accounting method change

set forth in section 3.02 of this revenue

procedure.

.02 Section 7.07 of Rev. Proc. 2015-13

is updated and revised as provided in section 4 of this revenue procedure.

.03 Section 8.02(5) of Rev. Proc. 201513 is modified as provided in section 5 of

this revenue procedure.

SECTION 8. DRAFTING

INFORMATION

The principal author of this revenue

procedure is Natalie Punchak of the Office

of the Associate Chief Counsel (International). For further information regarding

this revenue procedure, contact Ms. Punchak at (202) 317-6934 (not a toll-free

number).

June 1, 2021

Part IV

Qualified Opportunity Zone

Boundaries Unaffected by

2020 Decennial Census

Changes

Announcement 2021-10

In response to questions from the public on the effect, if any, of the 2020 decennial census, recently released by the U.S.

Census Bureau, on boundaries of qualified

opportunity zones (each, a QOZ) listed in

Notice 2018-48, 2018-28 I.R.B. 9, or Notice 2019-42, 2019-29 I.R.B. 352 (each,

a Designated QOZ), this announcement

confirms that the boundaries of the Designated QOZs were established at the time

they were designated and are not subject

to change.1

Section 13823 of Public Law 115-97

(December 22, 2017), commonly referred to as the Tax Cuts and Jobs Act,

amended the Internal Revenue Code

(Code) by adding sections 1400Z-1 and

1400Z-2 to the Code. Section 1400Z-1

provides the rules under which popula-

tion census tracts located in one of the

50 States, the District of Columbia, or

the U.S. territories were required to be

nominated by the chief executive officer

(CEO) of a State, the District of Columbia, or a U.S. territory and designated as

QOZs by the Secretary of the Treasury or

his delegate (Secretary). Section 1400Z1 contains limited timeframes that ended in 2018 by which all nominations by

CEOs and designations by the Secretary

of QOZs were required to be made. That

section also provides special rules for

population census tracts located in Puerto Rico.

Notice 2018-48 and Notice 2019-42 set

forth lists of the Designated QOZs based

on census tract numbers and census tract

boundaries that existed as of the respective 2018 and 2019 publication dates of

those notices. These census tract numbers and boundaries, as incorporated by

reference into Notice 2018-48 and Notice

2019-42, are based on the 2010 decennial census and those boundaries define the

boundaries of the Designated QOZs.2

Section 1400Z-1 does not permit

QOZs to be nominated or designated af-

ter the statutory deadlines; nor does it

permit any post-designation changes to

the boundaries of the Designated QOZs.

The boundaries of the Designated QOZs

were established at the time they were

designated and are not subject to change.

Accordingly, boundaries of a Designated

QOZ do not shrink or expand if the 2020

decennial census results in a change to the

boundaries of a census tract. Similarly,

if the 2020 decennial census results in a

change to a 2010 census tract number listed in Notice 2018-48 and Notice 2019-42

and associated with a Designated QOZ,

the 2010 census tract number continues to

apply for purposes of identifying the Designated QOZ.

DRAFTING INFORMATION

The principal authors of this announcement are Dominic DiMattia and Kyle

Griffin of the Office of Associate Chief

Counsel (Income Tax & Accounting).

For further information regarding this announcement, please contact Mr. Griffin

or Mr. DiMattia at (202) 317-4718 (not a

toll-free number).

The Department of the Treasury Community Development Financial Institutions Fund (CDFI Fund), which together with the IRS compiled data to identify each census tract eligible to be

nominated and designated as a Designated QOZ to implement section 1400Z-1, has stated on its Opportunity Zones Resources webpage since 2018 that boundaries of Designated QOZs “are

based upon the boundaries of the tract at the time of the designation in 2018, and do not change over the period of the designation, even if the boundaries of an individual census tract are

redefined in future Census releases.” See www.cdfifund.gov/opportunity-zones.

2

The CDFI Fund continues to assist the IRS with the administration of section 1400Z-1 by maintaining a database and map of the Designated QOZs that stakeholders may use to assist with

determining whether an address is located within a Designated QOZ. See www.cdfifund.gov/opportunity-zones for additional information.

1

June 1, 2021

1170

Bulletin No. 2021–22

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. 2021–22

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.

June 1, 2021

Numerical Finding List1

Proposed Regulations:—Continued

Bulletin 2021–22

REG-115057-20, 2021-05 I.R.B. 714

REG-121095-19, 2021-18 I.R.B. 1131

AOD:

2021-1, 2021-15 I.R.B. 985

2021-2, 2021-21 I.R.B. 1156

Announcements:

2021-01, 2021-04 I.R.B. 506

2021-02, 2021-08 I.R.B. 892

2021-03, 2021-08 I.R.B. 892

2021-04, 2021-09 I.R.B. 895

2021-05, 2021-13 I.R.B. 965

2021-06, 2021-15 I.R.B. 1011

2021-07, 2021-15 I.R.B. 1061

2021-08, 2021-18 I.R.B. 1146

2021-09, 2021-20 I.R.B. 1155

2021-10, 2021-22 I.R.B. 1170

Notices:

2021-01, 2021-02 I.R.B. 315

2021-03, 2021-02 I.R.B. 316

2021-04, 2021-02 I.R.B. 319

2021-02, 2021-03 I.R.B. 478

2021-05, 2021-03 I.R.B. 479

2021-07, 2021-03 I.R.B. 482

2021-09, 2021-05 I.R.B. 678

2021-06, 2021-06 I.R.B. 822

2021-08, 2021-06 I.R.B. 823

2021-11, 2021-06 I.R.B. 827

2021-12, 2021-06 I.R.B. 828

2021-13, 2021-06 I.R.B. 832

2021-10, 2021-07 I.R.B. 888

2021-15, 2021-10 I.R.B. 898

2021-16, 2021-10 I.R.B. 907

2021-18, 2021-11 I.R.B. 911

2021-19, 2021-11 I.R.B. 920

2021-20, 2021-11 I.R.B. 922

2021-17, 2021-14 I.R.B. 984

2021-21, 2021-15 I.R.B. 986

2021-22, 2021-15 I.R.B. 987

2021-23, 2021-16 I.R.B. 1113

2021-25, 2021-17 I.R.B. 1118

2021-24, 2021-18 I.R.B. 1122

2021-27, 2021-18 I.R.B. 1125

2021-28, 2021-18 I.R.B. 1130

2021-29, 2021-19 I.R.B. 1149

2021-30, 2021-19 I.R.B. 1149

2021-26, 2021-21 I.R.B. 1157

2021-32, 2021-21 I.R.B. 1159

Proposed Regulations:

Revenue Procedures:

2021-01, 2021-01 I.R.B. 1

2021-02, 2021-01 I.R.B. 116

2021-03, 2021-01 I.R.B. 140

2021-04, 2021-01 I.R.B. 157

2021-05, 2021-01 I.R.B. 250

2021-07, 2021-01 I.R.B. 290

2021-09, 2021-03 I.R.B. 485

2021-08, 2021-04 I.R.B. 502

2021-10, 2021-04 I.R.B. 503

2021-12, 2021-05 I.R.B. 681

2021-11, 2021-06 I.R.B. 833

2021-15, 2021-08 I.R.B. 891

2021-17, 2021-15 I.R.B. 991

2021-18, 2021-15 I.R.B. 1007

2021-19, 2021-15 I.R.B. 1008

2021-21, 2021-17 I.R.B. 1118

2021-20, 2021-19 I.R.B. 1150

2021-23, 2021-20 I.R.B. 1153

2021-25, 2021-21 I.R.B. 1161

2021-26, 2021-22 I.R.B. 1163

Revenue Rulings:

2021-01, 2021-02 I.R.B. 294

2021-02, 2021-04 I.R.B. 495

2021-03, 2021-05 I.R.B. 674

2021-04, 2021-06 I.R.B. 724

2021-05, 2021-10 I.R.B. 896

2021-06, 2021-12 I.R.B. 946

2021-07, 2021-14 I.R.B. 982

2021-08, 2021-18 I.R.B. 1120

Treasury Decisions:

9925, 2021-02 I.R.B. 296

9940, 2021-02 I.R.B. 311

9932, 2021-03 I.R.B. 345

9939, 2021-03 I.R.B. 376

9941, 2021-03 I.R.B. 396

9942, 2021-03 I.R.B. 450

9937, 2021-04 I.R.B. 495

9936, 2021-05 I.R.B. 508

9943, 2021-05 I.R.B. 577

9945, 2021-05 I.R.B. 627

9946, 2021-06 I.R.B. 726

9947, 2021-06 I.R.B. 748

9948, 2021-06 I.R.B. 801

9938, 2021-07 I.R.B. 838

9944, 2021-16 I.R.B. 1062

REG-130081-19, 2021-02 I.R.B. 321

REG-114615-16, 2021-03 I.R.B. 489

REG-111950-20, 2021-05 I.R.B. 683

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2020.

1

June 1, 2021

ii

Bulletin No. 2021–22

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–22

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2020.

1

Bulletin No. 2021–22

iii

June 1, 2021

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/.

We Welcome Comments About the Internal Revenue Bulletin

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

www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.

NW, IR-6230 Washington, DC 20224.