Bulletin No. 2023–23

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HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2023–23

June 5, 2023

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

Rev. Rul. 2023-11, page 886.

Interest rates: underpayments and overpayments. The rates

for interest determined under Section 6621 of the code for

the calendar quarter beginning July 1, 2023, will be 7 percent for overpayments (6 percent in the case of a corporation), 7 percent for underpayments, and 9 percent for large

corporate underpayments. The rate of interest paid on the

portion of a corporate overpayment exceeding $10,000 will

be 4.5 percent.

INCOME TAX

Notice 2023-41, page 905.

The notice provides the applicable reference price for qualified natural gas production from qualified marginal wells

during taxable years beginning in calendar year 2022 for the

purpose of determining the marginal well production credit

under § 45I. The applicable reference price for taxable years

beginning in calendar year 2022 is $3.43 per 1,000 cubic

feet. The notice also provides the credit amount used for the

Finding Lists begin on page ii.

purpose of determining the marginal well production credit.

The credit amount for taxable years beginning in calendar

year 2022 is $0.00 per 1,000 cubic feet.

REG-108054-21, page 907.

This document contains proposed regulations providing guidance on the application of the transfer for valuable consideration rules under section 101 and associated information

reporting requirements for reportable policy sales of interests in life insurance contracts under section 6050Y. The

proposed regulations would amend the rules for exchanges

of life insurance contracts qualifying for nonrecognition of

gain or loss, as well as for certain acquisitions of interests in

life insurance contracts in transactions that qualify as corporate reorganizations. The proposed regulations affect parties

involved in these life insurance contract transactions, including with respect to payments of reportable death benefits.

Rev. Rul. 2023-10, page 884.

Federal rates; adjusted federal rates; adjusted federal longterm rate, and the long-term tax exempt rate. For purposes

of sections 382, 1274, 1288, 7872 and other sections of

the Code, tables set forth the rates for June 2023.

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 5, 2023

Bulletin No. 2023–23

Part I

Section 1274.—

Determination of Issue

Price in the Case of Certain

Debt Instruments Issued for

Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483,

1288, 7520, 7872.)

Rev. Rul. 2023-10

This revenue ruling provides various prescribed rates for federal income

Annual

AFR

110% AFR

120% AFR

130% AFR

4.43%

4.88%

5.33%

5.77%

AFR

110% AFR

120% AFR

130% AFR

150% AFR

175% AFR

3.56%

3.92%

4.28%

4.64%

5.37%

6.28%

AFR

110% AFR

120% AFR

130% AFR

3.79%

4.17%

4.55%

4.94%

Short-term adjusted AFR

Mid-term adjusted AFR

Long-term adjusted AFR

June 5, 2023

tax purposes for June 2023 (the current

month). Table 1 contains the shortterm, mid-term, and long-term applicable federal rates (AFR) for the current

month for purposes of section 1274(d)

of the Internal Revenue Code. Table 2

contains the short-term, mid-term, and

long-term adjusted applicable federal

rates (adjusted AFR) for the current

month for purposes of section 1288(b).

Table 3 sets forth the adjusted federal long-term rate and the long-term

tax-exempt rate described in section

382(f). Table 4 contains the appropriate

percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed

in service during the current month.

However, under section 42(b)(2), the

applicable percentage for non-federally

subsidized new buildings placed in service after July 30, 2008, shall not be

less than 9%. Finally, Table 5 contains

the federal rate for determining the

present value of an annuity, an interest for life or for a term of years, or a

remainder or a reversionary interest for

purposes of section 7520.

REV. RUL. 2023-10 TABLE 1

Applicable Federal Rates (AFR) for June 2023

Period for Compounding

Semiannual

Quarterly

Short-term

4.38%

4.36%

4.82%

4.79%

5.26%

5.23%

5.69%

5.65%

Mid-term

3.53%

3.51%

3.88%

3.86%

4.24%

4.22%

4.59%

4.56%

5.30%

5.27%

6.18%

6.13%

Long-term

3.75%

3.73%

4.13%

4.11%

4.50%

4.47%

4.88%

4.85%

Annual

3.36%

2.70%

2.87%

REV. RUL. 2023-10 TABLE 2

Adjusted AFR for June 2023

Period for Compounding

Semiannual

3.33%

2.68%

2.85%

884

Monthly

4.34%

4.77%

5.20%

5.62%

3.50%

3.85%

4.20%

4.55%

5.24%

6.10%

3.72%

4.09%

4.46%

4.83%

Quarterly

3.32%

2.67%

2.84%

Monthly

3.31%

2.67%

2.83%

Bulletin No. 2023–23

REV. RUL. 2023-10 TABLE 3

Rates Under Section 382 for June 2023

Adjusted federal long-term rate for the current month

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal

long-term rates for the current month and the prior two months.)

2.87%

3.04%

REV. RUL. 2023-10 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for June 2023

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July

30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit

7.85%

Appropriate percentage for the 30% present value low-income housing credit

3.36%

REV. RUL. 2023-10 TABLE 5

Rate Under Section 7520 for June 2023

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a

remainder or reversionary interest

Section 42.—Low-Income

Housing Credit

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 280G.—Golden

Parachute Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 382.—Limitation

on Net Operating Loss

Carryforwards and

Certain Built-In Losses

Following Ownership

Change

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 467.—Certain

Payments for the Use of

Property or Services

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 468.—Special

Rules for Mining and Solid

Waste Reclamation and

Closing Costs

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 482.—Allocation

of Income and Deductions

Among Taxpayers

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

4.20%

Section 483.—Interest on

Certain Deferred Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Section 1288.—Treatment

of Original Issue Discount

on Tax-Exempt Obligations

The adjusted applicable federal short-term,

mid-term, and long-term rates are set forth for the

month of June 2023. See Rev. Rul. 2023-10, page

884.

Section 7520.—Valuation

Tables

The applicable federal mid-term rates are set

forth for the month of June 2023. See Rev. Rul.

2023-10, page 884.

Section 7872.—Treatment

of Loans With BelowMarket Interest Rates

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

June 2023. See Rev. Rul. 2023-10, page 884.

Bulletin No. 2023–23

885

June 5, 2023

Section 6621.—

Determination of Rate of

Interest

26 CFR 301.6621-1: Interest rate.

Rev. Rul. 2023-11

Section 6621 of the Internal Revenue

Code establishes the interest rates on

overpayments and underpayments of

tax. Under section 6621(a)(1), the overpayment rate is the sum of the federal

short-term rate plus 3 percentage points

(2 percentage points in the case of a corporation), except the rate for the portion of

a corporate overpayment of tax exceeding

$10,000 for a taxable period is the sum

of the federal short-term rate plus 0.5 of

a percentage point. Under section 6621(a)

(2), the underpayment rate is the sum of

the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for

purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under

section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and

section 301.6621-3 of the Regulations

on Procedure and Administration for the

definition of a large corporate underpayment and for the rules for determining the

applicable date. Section 6621(c) and section 301.6621-3 are generally effective for

periods after December 31, 1990.

Section 6621(b)(1) provides that the

Secretary will determine the federal

June 5, 2023

short-term rate for the first month in

each calendar quarter. Section 6621(b)

(2)(A) provides that the federal shortterm rate determined under section

6621(b)(1) for any month applies during

the first calendar quarter beginning after

that month. Section 6621(b)(3) provides

that the federal short-term rate for any

month is the federal short-term rate

determined during that month by the

Secretary in accordance with section

1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent,

the rate is increased to the next highest

full percent).

Notice 88-59, 1988-1 C.B. 546,

announced that in determining the quarterly interest rates to be used for overpayments and underpayments of tax

under section 6621, the Internal Revenue

Service will use the federal short-term rate

based on daily compounding because that

rate is most consistent with section 6621

which, pursuant to section 6622, is subject

to daily compounding.

The federal short-term rate determined in accordance with section 1274(d)

during April 2023 is the rate published

in Revenue Ruling 2023-9, 2023-19 IRB

835, to take effect beginning May 1, 2023.

The federal short-term rate, rounded to the

nearest full percent, based on daily compounding determined during the month

of April 2023 is 4 percent. Accordingly,

an overpayment rate of 7 percent (6 percent in the case of a corporation) and an

underpayment rate of 7 percent are established for the calendar quarter beginning

July 1, 2023. The overpayment rate for

the portion of a corporate overpayment

886

exceeding $10,000 for the calendar quarter beginning July 1, 2023, is 4.5 percent.

The underpayment rate for large corporate

underpayments for the calendar quarter

beginning July 1, 2023, is 9 percent. These

rates apply to amounts bearing interest

during that calendar quarter.

Sections 6654(a)(1) and 6655(a)

(1) provide that the underpayment rate

established under section 6621 applies

in determining the addition to tax under

sections 6654 and 6655 for failure to pay

estimated tax for any taxable year. Thus,

the 7 percent rate also applies to estimated

tax underpayments for the third calendar

quarter beginning July 1, 2023. In addition, pursuant to section 6603(d)(4), the

rate of interest on section 6603 deposits is

4 percent for the third calendar quarter in

2023.

Interest factors for daily compound

interest for annual rates of 4.5 percent, 6

percent, 7 percent and 9 percent are published in Tables 14, 17, 19 and 23 of Rev.

Proc. 95-17, 1995-1 C.B. 568, 571, 573,

and 577.

Annual interest rates to be compounded

daily pursuant to section 6622 that apply

for prior periods are set forth in the tables

accompanying this revenue ruling.

DRAFTING INFORMATION

The principal author of this revenue

ruling is Casey R. Conrad of the Office of

the Associate Chief Counsel (Procedure

and Administration). For further information regarding this revenue ruling, contact

Mr. Conrad at (202) 317-6844 (not a tollfree number).

Bulletin No. 2023–23

APPENDIX A

Days

Factor

0.000013699

0.000027397

0.000041096

0.000054796

0.000068495

0.000082195

0.000095894

0.000109594

0.000123294

0.000136995

0.000150695

0.000164396

0.000178097

0.000191798

0.000205499

0.000219201

0.000232902

0.000246604

0.000260306

0.000274008

0.000287711

0.000301413

0.000315116

0.000328819

0.000342522

0.000356225

0.000369929

0.000383633

0.000397336

0.000411041

0.000424745

0.000438449

0.000452154

0.000465859

0.000479564

0.000493269

0.000506974

0.000520680

0.000534386

0.000548092

0.000561798

Bulletin No. 2023–23

365 Day Year

0.5% Compound Rate 184 Days

Days

Factor

0.000863380

0.000877091

0.000890801

0.000904512

0.000918223

0.000931934

0.000945646

0.000959357

0.000973069

0.000986781

0.001000493

0.001014206

0.001027918

0.001041631

0.001055344

0.001069057

0.001082770

0.001096484

0.001110197

0.001123911

0.001137625

0.001151339

0.001165054

0.001178768

0.001192483

0.001206198

0.001219913

0.001233629

0.001247344

0.001261060

0.001274776

0.001288492

0.001302208

0.001315925

0.001329641

0.001343358

0.001357075

100

0.001370792

101

0.001384510

102

0.001398227

103

0.001411945

887

Days

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

Factor

0.001713784

0.001727506

0.001741228

0.001754951

0.001768673

0.001782396

0.001796119

0.001809843

0.001823566

0.001837290

0.001851013

0.001864737

0.001878462

0.001892186

0.001905910

0.001919635

0.001933360

0.001947085

0.001960811

0.001974536

0.001988262

0.002001988

0.002015714

0.002029440

0.002043166

0.002056893

0.002070620

0.002084347

0.002098074

0.002111801

0.002125529

0.002139257

0.002152985

0.002166713

0.002180441

0.002194169

0.002207898

0.002221627

0.002235356

0.002249085

0.002262815

June 5, 2023

0.000575504

0.000589211

0.000602917

0.000616624

0.000630331

0.000644039

0.000657746

0.000671454

0.000685161

0.000698869

0.000712578

0.000726286

0.000739995

0.000753703

0.000767412

0.000781121

0.000794831

0.000808540

0.000822250

0.000835960

0.000849670

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

0.001425663

0.001439381

0.001453100

0.001466818

0.001480537

0.001494256

0.001507975

0.001521694

0.001535414

0.001549133

0.001562853

0.001576573

0.001590293

0.001604014

0.001617734

0.001631455

0.001645176

0.001658897

0.001672619

0.001686340

0.001700062

888

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

0.002276544

0.002290274

0.002304004

0.002317734

0.002331465

0.002345195

0.002358926

0.002372657

0.002386388

0.002400120

0.002413851

0.002427583

0.002441315

0.002455047

0.002468779

0.002482511

0.002496244

0.002509977

0.002523710

Bulletin No. 2023–23

Days

Factor

0.000013661

0.000027323

0.000040984

0.000054646

0.000068308

0.000081970

0.000095632

0.000109295

0.000122958

0.000136620

0.000150283

0.000163947

0.000177610

0.000191274

0.000204938

0.000218602

0.000232266

0.000245930

0.000259595

0.000273260

0.000286924

0.000300590

0.000314255

0.000327920

0.000341586

0.000355252

0.000368918

0.000382584

0.000396251

0.000409917

0.000423584

0.000437251

0.000450918

0.000464586

0.000478253

0.000491921

0.000505589

0.000519257

0.000532925

0.000546594

0.000560262

0.000573931

Bulletin No. 2023–23

366 Day Year

0.5% Compound Rate 184 Days

Days

Factor

0.000861020

0.000874693

0.000888366

0.000902040

0.000915713

0.000929387

0.000943061

0.000956735

0.000970409

0.000984084

0.000997758

0.001011433

0.001025108

0.001038783

0.001052459

0.001066134

0.001079810

0.001093486

0.001107162

0.001120839

0.001134515

0.001148192

0.001161869

0.001175546

0.001189223

0.001202900

0.001216578

0.001230256

0.001243934

0.001257612

0.001271291

0.001284969

0.001298648

0.001312327

0.001326006

0.001339685

0.001353365

100

0.001367044

101

0.001380724

102

0.001394404

103

0.001408085

104

0.001421765

889

Days

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

Factor

0.001709097

0.001722782

0.001736467

0.001750152

0.001763837

0.001777522

0.001791208

0.001804893

0.001818579

0.001832265

0.001845951

0.001859638

0.001873324

0.001887011

0.001900698

0.001914385

0.001928073

0.001941760

0.001955448

0.001969136

0.001982824

0.001996512

0.002010201

0.002023889

0.002037578

0.002051267

0.002064957

0.002078646

0.002092336

0.002106025

0.002119715

0.002133405

0.002147096

0.002160786

0.002174477

0.002188168

0.002201859

0.002215550

0.002229242

0.002242933

0.002256625

0.002270317

June 5, 2023

0.000587600

0.000601269

0.000614939

0.000628608

0.000642278

0.000655948

0.000669618

0.000683289

0.000696959

0.000710630

0.000724301

0.000737972

0.000751643

0.000765315

0.000778986

0.000792658

0.000806330

0.000820003

0.000833675

0.000847348

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

0.001435446

0.001449127

0.001462808

0.001476489

0.001490170

0.001503852

0.001517533

0.001531215

0.001544897

0.001558580

0.001572262

0.001585945

0.001599628

0.001613311

0.001626994

0.001640678

0.001654361

0.001668045

0.001681729

0.001695413

890

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

0.002284010

0.002297702

0.002311395

0.002325087

0.002338780

0.002352473

0.002366167

0.002379860

0.002393554

0.002407248

0.002420942

0.002434636

0.002448331

0.002462025

0.002475720

0.002489415

0.002503110

0.002516806

Bulletin No. 2023–23

TABLE OF INTEREST RATES

PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986

OVERPAYMENTS AND UNDERPAYMENTS

PERIOD

RATE

Before Jul. 1, 1975

Jul. 1, 1975–Jan. 31, 1976

Feb. 1, 1976–Jan. 31, 1978

Feb. 1, 1978–Jan. 31, 1980

Feb. 1, 1980–Jan. 31, 1982

Feb. 1, 1982–Dec. 31, 1982

Jan. 1, 1983–Jun. 30, 1983

Jul. 1, 1983–Dec. 31, 1983

Jan. 1, 1984–Jun. 30, 1984

Jul. 1, 1984–Dec. 31, 1984

Jan. 1, 1985–Dec. 31, 1985

Jul. 1, 1985–Dec. 31, 1985

Jan. 1, 1986–Jun. 30, 1986

Jul. 1, 1986–Dec. 31, 1986

12%

20%

16%

11%

13%

11%

10%

Table

In 1995-1 C.B.

DAILY RATE TABLE

pg.

37,

pg.

27,

pg.

75,

pg.

75,

pg.

31,

pg.

27,

pg.

25,

pg.

23,

pg.

557

559

558

557

560

591

581

629

585

581

579

577

TABLE OF INTEREST RATES

FROM JAN. 1, 1987 – Dec. 31, 1998

Jan. 1, 1987–Mar. 31, 1987

Apr. 1, 1987–Jun. 30, 1987

Jul. 1, 1987–Sep. 30, 1987

Oct. 1, 1987–Dec. 31, 1987

Jan. 1, 1988–Mar. 31, 1988

Apr. 1, 1988–Jun. 30, 1988

Jul. 1, 1988–Sep. 30, 1988

Oct. 1, 1988–Dec. 31, 1988

Jan. 1, 1989–Mar. 31, 1989

Apr. 1, 1989–Jun. 30, 1989

Jul. 1, 1989–Sep. 30, 1989

Oct. 1, 1989–Dec. 31, 1989

Jan. 1, 1990–Mar. 31, 1990

Apr. 1, 1990–Jun. 30, 1990

Jul. 1, 1990–Sep. 30, 1990

Oct. 1, 1990–Dec. 31, 1990

Jan. 1, 1991–Mar. 31, 1991

Bulletin No. 2023–23

RATE

10%

11%

10%

OVERPAYMENTS

1995-1 C.B.

TABLE

575

577

627

625

627

579

581

579

891

UNDERPAYMENTS

1995-1 C.B. RATE

RATE

TABLE

577

10%

579

11%

629

10%

627

10%

627

11%

629

11%

581

12%

583

12%

583

11%

581

11%

581

11%

581

11%

581

11%

581

11%

581

June 5, 2023

Apr. 1, 1991–Jun. 30, 1991

Jul. 1, 1991–Sep. 30, 1991

Oct. 1, 1991–Dec. 31, 1991

Jan. 1, 1992–Mar. 31, 1992

Apr. 1, 1992–Jun. 30, 1992

Jul. 1, 1992–Sep. 30, 1992

Oct. 1, 1992–Dec. 31, 1992

Jan. 1, 1993–Mar. 31, 1993

Apr. 1, 1993–Jun. 30, 1993

Jul. 1, 1993–Sep. 30, 1993

Oct. 1, 1993–Dec. 31, 1993

Jan. 1, 1994–Mar. 31, 1994

Apr. 1, 1994–Jun. 30, 1994

Jul. 1, 1994–Sep. 30, 1994

Oct. 1, 1994–Dec. 31, 1994

Jan. 1, 1995–Mar. 31, 1995

Apr. 1, 1995–Jun. 30, 1995

Jul. 1, 1995–Sep. 30, 1995

Oct. 1, 1995–Dec. 31, 1995

Jan. 1, 1996–Mar. 31, 1996

Apr. 1, 1996–Jun. 30, 1996

Jul. 1, 1996–Sep. 30, 1996

Oct. 1, 1996–Dec. 31, 1996

Jan. 1, 1997–Mar. 31, 1997

Apr. 1, 1997–Jun. 30, 1997

Jul. 1, 1997–Sep. 30, 1997

Oct. 1, 1997–Dec. 31, 1997

Jan. 1, 1998–Mar. 31, 1998

Apr. 1, 1998–Jun. 30, 1998

Jul. 1, 1998–Sep. 30, 1998

Oct. 1, 1998–Dec. 31, 1998

June 5, 2023

892

577

623

621

619

571

573

575

577

575

623

621

623

575

573

10%

579

625

623

621

573

575

577

579

577

625

623

625

577

575

Bulletin No. 2023–23

TABLE OF INTEREST RATES

FROM JANUARY 1, 1999 - PRESENT

NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS

1995-1 C.B.

Jan. 1, 1999–Mar. 31, 1999

Apr. 1, 1999–Jun. 30, 1999

Jul. 1, 1999–Sep. 30, 1999

Oct. 1, 1999–Dec. 31, 1999

Jan. 1, 2000–Mar. 31, 2000

Apr. 1, 2000–Jun. 30, 2000

Jul. 1, 2000–Sep. 30, 2000

Oct. 1, 2000–Dec. 31, 2000

Jan. 1, 2001–Mar. 31, 2001

Apr. 1, 2001–Jun. 30, 2001

Jul. 1, 2001–Sep. 30, 2001

Oct. 1, 2001–Dec. 31, 2001

Jan. 1, 2002–Mar. 31, 2002

Apr. 1, 2002–Jun. 30, 2002

Jul. 1, 2002–Sep. 30, 2002

Oct. 1, 2002–Dec. 31, 2002

Jan. 1, 2003–Mar. 31, 2003

Apr. 1, 2003–Jun. 30, 2003

Jul. 1, 2003–Sep. 30, 2003

Oct. 1, 2003–Dec. 31, 2003

Jan. 1, 2004–Mar. 31, 2004

Apr. 1, 2004–Jun. 30, 2004

Jul. 1, 2004–Sep. 30, 2004

Oct. 1, 2004–Dec. 31, 2004

Jan. 1, 2005–Mar. 31, 2005

Apr. 1, 2005–Jun. 30, 2005

Jul. 1, 2005–Sep. 30, 2005

Oct. 1, 2005–Dec. 31, 2005

Jan. 1, 2006–Mar. 31, 2006

Apr. 1, 2006–Jun. 30, 2006

Jul. 1, 2006–Sep. 30, 2006

Oct. 1, 2006–Dec. 31, 2006

Jan. 1, 2007–Mar. 31, 2007

Apr. 1, 2007–Jun. 30, 2007

Jul. 1, 2007–Sep. 30, 2007

Oct. 1, 2007–Dec. 31, 2007

Jan. 1, 2008–Mar. 31, 2008

Apr. 1, 2008–Jun. 30, 2008

Jul. 1, 2008–Sep. 30, 2008

Oct. 1, 2008–Dec. 31, 2008

Bulletin No. 2023–23

RATE

893

TABLE

PAGE

573

575

623

625

577

575

573

571

569

567

615

617

615

617

569

571

573

575

621

619

617

619

June 5, 2023

Jan. 1, 2009–Mar. 31, 2009

Apr. 1, 2009–Jun. 30, 2009

Jul. 1, 2009–Sep. 30, 2009

Oct. 1, 2009–Dec. 31, 2009

Jan. 1, 2010–Mar. 31, 2010

Apr. 1, 2010–Jun. 30, 2010

Jul. 1, 2010–Sep. 30, 2010

Oct. 1, 2010–Dec. 31, 2010

Jan. 1, 2011–Mar. 31, 2011

Apr. 1, 2011–Jun. 30, 2011

Jul. 1, 2011–Sep. 30, 2011

Oct. 1, 2011–Dec. 31, 2011

Jan. 1, 2012–Mar. 31, 2012

Apr. 1, 2012–Jun. 30, 2012

Jul. 1, 2012–Sep. 30, 2012

Oct. 1, 2012–Dec. 31, 2012

Jan. 1, 2013–Mar. 31, 2013

Apr. 1, 2013–Jun. 30, 2013

Jul. 1, 2013–Sep. 30, 2013

Oct. 1, 2013–Dec. 31, 2013

Jan. 1, 2014–Mar. 31, 2014

Apr. 1, 2014–Jun. 30, 2014

Jul. 1, 2014–Sep. 30, 2014

Oct. 1, 2014–Dec. 31, 2014

Jan. 1, 2015–Mar. 31, 2015

Apr. 1, 2015–Jun. 30, 2015

Jul. 1, 2015–Sep. 30, 2015

Oct. 1, 2015–Dec. 31, 2015

Jan. 1, 2016–Mar. 31, 2016

Apr. 1, 2016–Jun. 30, 2016

Jul. 1, 2016–Sep. 30, 2016

Oct. 1, 2016–Dec. 31, 2016

Jan. 1, 2017–Mar. 31, 2017

Apr. 1, 2017–Jun. 30, 2017

Jul. 1, 2017–Sep. 30, 2017

Oct. 1, 2017–Dec. 31, 2017

Jan. 1, 2018–Mar. 31, 2018

Apr. 1, 2018–Jun. 30, 2018

Jul. 1, 2018–Sep. 30, 2018

Oct. 1, 2018–Dec. 31, 2018

Jan. 1, 2019–Mar. 31, 2019

Apr. 1, 2019–Jun. 30, 2019

Jul. 1, 2019–Sep. 30, 2019

Oct. 1, 2019–Dec. 31, 2019

Jan. 1, 2020–Mar. 31, 2020

June 5, 2023

894

569

567

565

567

565

613

565

613

615

567

569

571

569

617

Bulletin No. 2023–23

Apr. 1, 2020–Jun. 30, 2020

Jul. 1, 2020–Sep. 30, 2020

Oct. 1, 2020–Dec. 31, 2020

Jan. 1, 2021–Mar. 31, 2021

Apr. 1, 2021–Jun. 30, 2021

Jul. 1, 2021–Sep. 30, 2021

Oct. 1, 2021–Dec. 31, 2021

Jan. 1, 2022–Mar. 31, 2022

Apr. 1, 2022–Jun. 30, 2022

Jul. 1, 2022–Sep. 30, 2022

Oct. 1, 2022–Dec. 31, 2022

Jan. 1, 2023–Mar. 31, 2023

Apr. 1, 2023–Jun. 30, 2023

Jul. 1, 2023–Sep. 30, 2023

Bulletin No. 2023–23

895

617

613

565

567

569

571

573

June 5, 2023

TABLE OF INTEREST RATES

FROM JANUARY 1, 1999 - PRESENT

CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

Jan. 1, 1999–Mar. 31, 1999

Apr. 1, 1999–Jun. 30, 1999

Jul. 1, 1999–Sep. 30, 1999

Oct. 1, 1999–Dec. 31, 1999

Jan. 1, 2000–Mar. 30, 2000

Apr. 1, 2000–Jun. 30, 2000

Jul. 1, 2000–Sep. 30, 2000

Oct. 1, 2000–Dec. 31, 2000

Jan. 1, 2001–Mar. 31, 2001

Apr. 1, 2001–Jun. 30, 2001

Jul. 1, 2001–Sep. 30, 2001

Oct. 1, 2001–Dec. 31, 2001

Jan. 1, 2002–Mar. 31, 2002

Apr. 1, 2002–Jun. 30, 2002

Jul. 1, 2002–Sep. 30, 2002

Oct. 1, 2002–Dec. 31, 2002

Jan. 1, 2003–Mar. 31, 2003

Apr. 1, 2003–Jun. 30, 2003

Jul. 1, 2003–Sep. 30, 2003

Oct. 1, 2003–Dec. 31, 2003

Jan. 1, 2004–Mar. 31, 2004

Apr. 1, 2004–Jun. 30, 2004

Jul. 1, 2004–Sep. 30, 2004

Oct. 1, 2004–Dec. 31, 2004

Jan. 1, 2005–Mar. 31, 2005

Apr. 1, 2005–Jun. 30, 2005

Jul. 1, 2005–Sep. 30, 2005

Oct. 1, 2005–Dec. 31, 2005

Jan. 1, 2006–Mar. 31, 2006

Apr. 1, 2006–Jun. 30, 2006

Jul. 1, 2006–Sep. 30, 2006

Oct. 1, 2006–Dec. 31, 2006

Jan. 1, 2007–Mar. 31, 2007

Apr. 1, 2007–Jun. 30, 2007

Jul. 1, 2007–Sep. 30, 2007

Oct. 1, 2007–Dec. 31, 2007

Jan. 1, 2008–Mar. 31, 2008

Apr. 1, 2008–Jun. 30, 2008

Jul. 1, 2008–Sep. 30, 2008

Oct. 1, 2008–Dec. 31, 2008

June 5, 2023

OVERPAYMENTS

1995-1 C.B.

RATE

TABLE

896

571

573

621

623

575

573

571

569

567

565

613

615

613

615

567

569

571

573

619

617

615

617

UNDERPAYMENTS

1995-1 C.B.

RATE

TABLE

573

575

623

625

577

575

573

571

569

567

615

617

615

617

569

571

573

575

621

619

617

619

Bulletin No. 2023–23

Jan. 1, 2009–Mar. 31, 2009

Apr. 1, 2009–Jun. 30, 2009

Jul. 1, 2009–Sep. 30, 2009

Oct. 1, 2009–Dec. 31, 2009

Jan. 1, 2010–Mar. 31, 2010

Apr. 1, 2010–Jun. 30, 2010

Jul. 1, 2010–Sep. 30, 2010

Oct. 1, 2010–Dec. 31, 2010

Jan. 1, 2011–Mar. 31, 2011

Apr. 1, 2011–Jun. 30, 2011

Jul. 1, 2011–Sep. 30, 2011

Oct. 1, 2011–Dec. 31, 2011

Jan. 1, 2012–Mar. 31, 2012

Apr. 1, 2012–Jun. 30, 2012

Jul. 1, 2012–Sep. 30, 2012

Oct. 1, 2012–Dec. 31, 2012

Jan. 1, 2013–Mar. 31, 2013

Apr. 1, 2013–Jun. 30, 2013

Jul. 1, 2013–Sep. 30, 2013

Oct. 1, 2013–Dec. 31, 2013

Jan. 1, 2014–Mar. 31, 2014

Apr. 1, 2014–Jun. 30, 2014

Jul. 1, 2014–Sep. 30, 2014

Oct. 1, 2014–Dec. 31, 2014

Jan. 1, 2015–Mar. 31, 2015

Apr. 1, 2015–Jun. 30, 2015

Jul. 1, 2015–Sep. 30, 2015

Oct. 1, 2015–Dec. 31, 2015

Jan. 1, 2016–Mar. 31, 2016

Apr. 1, 2016–Jun. 30, 2016

Jul. 1, 2016–Sep. 30, 2016

Oct. 1, 2016–Dec. 31, 2016

Jan. 1, 2017–Mar. 31, 2017

Apr. 1, 2017–Jun. 30, 2017

Jul. 1, 2017–Sep. 30, 2017

Oct. 1, 2017–Dec. 31, 2017

Jan. 1, 2018–Mar. 31, 2018

Apr. 1, 2018–Jun. 30, 2018

Jul. 1, 2018–Sep. 30, 2018

Oct. 1, 2018–Dec. 31, 2018

Jan. 1, 2019–Mar. 31, 2019

Apr. 1, 2019–Jun. 30, 2019

Jul. 1, 2019–Sep. 30, 2019

Oct. 1, 2019–Dec. 31, 2019

Jan. 1, 2020–Mar. 31, 2020

Bulletin No. 2023–23

897

567

565

563

565

563

611

563

611

613

565

567

569

567

615

569

567

565

567

565

613

565

613

615

567

569

571

569

617

June 5, 2023

Apr. 1, 2020–Jun. 30, 2020

Jul. 1, 2020–Sep. 30, 2020

Oct. 1, 2020–Dec. 31, 2020

Jan. 1, 2021–Mar. 31, 2021

Apr. 1, 2021–Jun. 30, 2021

Jul. 1, 2021–Sep. 30, 2021

Oct. 1, 2021–Dec. 31, 2021

Jan. 1, 2022–Mar. 31, 2022

Apr. 1, 2022–Jun. 30, 2022

Jul. 1, 2022–Sep. 30, 2022

Oct. 1, 2022–Dec. 31, 2022

Jan. 1, 2023–Mar. 31, 2023

Apr. 1, 2023–Jun. 30, 2023

Jul. 1, 2023–Sep. 30, 2023

June 5, 2023

898

615

611

563

565

567

569

571

617

613

565

567

569

571

573

Bulletin No. 2023–23

TABLE OF INTEREST RATES

FOR LARGE CORPORATE UNDERPAYMENTS

FROM JANUARY 1, 1991 - PRESENT

Jan. 1, 1991–Mar. 31, 1991

Apr. 1, 1991–Jun. 30, 1991

Jul. 1, 1991–Sep. 30, 1991

Oct. 1, 1991–Dec. 31, 1991

Jan. 1, 1992–Mar. 31, 1992

Apr. 1, 1992–Jun. 30, 1992

Jul. 1, 1992–Sep. 30, 1992

Oct. 1, 1992–Dec. 31, 1992

Jan. 1, 1993–Mar. 31, 1993

Apr. 1, 1993–Jun. 30, 1993

Jul. 1, 1993–Sep. 30, 1993

Oct. 1, 1993–Dec. 31, 1993

Jan. 1, 1994–Mar. 31, 1994

Apr. 1, 1994–Jun. 30, 1994

Jul. 1, 1994–Sep. 30, 1994

Oct. 1, 1994–Dec. 31, 1994

Jan. 1, 1995–Jun. 30, 1995

Apr. 1, 1995–Jun. 30, 1995

Jul. 1, 1995–Sep. 30, 1995

Oct. 1, 1995–Dec. 31, 1995

Jan. 1, 1996–Mar. 31, 1996

Apr. 1, 1996–Jun. 30, 1996

Jul. 1, 1996–Sep. 30, 1996

Oct. 1, 1996–Dec. 31, 1996

Jan. 1, 1997–Mar. 31, 1997

Apr. 1, 1997–Jun. 30, 1997

Jul. 1, 1997–Sep. 30, 1997

Oct. 1, 1997–Dec. 31, 1997

Jan. 1, 1998–Mar. 31, 1998

Apr. 1, 1998–Jun. 30, 1998

Jul. 1, 1998–Sep. 30, 1998

Oct. 1, 1998–Dec. 31, 1998

Jan. 1, 1999–Mar. 31, 1999

Apr. 1, 1999–Jun. 30, 1999

Jul. 1, 1999–Sep. 30, 1999

Oct. 1, 1999–Dec. 31, 1999

Jan. 1, 2000–Mar. 31, 2000

Apr. 1, 2000–Jun. 30, 2000

Jul. 1, 2000–Sep. 30, 2000

Oct. 1, 2000–Dec. 31, 2000

Jan. 1, 2001–Mar. 31, 2001

Bulletin No. 2023–23

RATE

13%

12%

11%

10%

11%

12%

11%

10%

11%

10%

11%

899

1995-1 C.B.

TABLE

585

583

629

627

625

577

579

581

583

581

629

627

629

581

579

577

579

627

629

581

June 5, 2023

Apr. 1, 2001–Jun. 30, 2001

Jul. 1, 2001–Sep. 30, 2001

Oct. 1, 2001–Dec. 31, 2001

Jan. 1, 2002–Mar. 31, 2002

Apr. 1, 2002–Sep. 30, 2002

Jul. 1, 2002–Sep. 30, 2002

Oct. 1, 2002–Dec. 31, 2002

Jan. 1, 2003–Mar. 31, 2003

Apr. 1, 2003–Jun. 30, 2003

Jul. 1, 2003–Sep. 30, 2003

Oct. 1, 2003–Dec. 31, 2003

Jan. 1, 2004–Mar. 31, 2004

Apr. 1, 2004–Jun. 30, 2004

Jul. 1, 2004–Sep. 30, 2004

Oct. 1, 2004–Dec. 31, 2004

Jan. 1, 2005–Mar. 31, 2005

Apr. 1, 2005–Jun. 30, 2005

Jul. 1, 2005–Sep. 30, 2005

Oct. 1, 2005–Dec. 31, 2005

Jan. 1, 2006–Mar. 31, 2006

Apr. 1, 2006–Jun. 30, 2006

Jul. 1, 2006–Sep. 30, 2006

Oct. 1, 2006–Dec. 31, 2006

Jan. 1, 2007–Mar. 31, 2007

Apr. 1, 2007–Jun. 30, 2007

Jul. 1, 2007–Sep. 30, 2007

Oct. 1, 2007–Dec. 31, 2007

Jan. 1, 2008–Mar. 31, 2008

Apr. 1, 2008–Sep. 30, 2008

Jul. 1, 2008–Sep. 30, 2008

Oct. 1, 2008–Dec. 31, 2008

Jan. 1, 2009–Mar. 31, 2009

Apr. 1, 2009–Jun. 30, 2009

Jul. 1, 2009–Sep. 30, 2009

Oct. 1, 2009–Dec. 31, 2009

Jan. 1, 2010–Mar. 31, 2010

Apr. 1, 2010–Jun. 30, 2010

Jul. 1, 2010–Sep. 30, 2010

Oct. 1, 2010–Dec. 31, 2010

Jan. 1, 2011–Mar. 31, 2011

Apr. 1, 2011–Jun. 30, 2011

Jul. 1, 2011–Sep. 30, 2011

Oct. 1, 2011–Dec. 31, 2011

Jan. 1, 2012–Mar. 31, 2012

Apr. 1, 2012–Jun. 30, 2012

June 5, 2023

10%

900

579

577

575

573

571

619

621

619

621

573

575

577

579

625

623

621

623

573

571

569

571

569

617

Bulletin No. 2023–23

Jul. 1, 2012–Sep. 30, 2012

Oct. 1, 2012–Dec. 31, 2012

Jan. 1, 2013–Mar. 31, 2013

Apr. 1, 2013–Jun. 30, 2013

Jul. 1, 2013–Sep. 30, 2013

Oct. 1, 2013–Dec. 31, 2013

Jan. 1, 2014–Mar. 31, 2014

Apr. 1, 2014–Jun. 30, 2014

Jul. 1, 2014–Sep. 30, 2014

Oct. 1, 2014–Dec. 31, 2014

Jan. 1, 2015–Mar. 31, 2015

Apr. 1, 2015–Jun. 30, 2015

Jul. 1, 2015–Sep. 30, 2015

Oct. 1, 2015–Dec. 31, 2015

Jan. 1, 2016–Mar. 31, 2016

Apr. 1, 2016–Jun. 30, 2016

Jul. 1, 2016–Sep. 30, 2016

Oct. 1, 2016–Dec. 31, 2016

Jan. 1, 2017–Mar. 31, 2017

Apr. 1, 2017–Jun. 30, 2017

Jul. 1, 2017–Sep. 30, 2017

Oct. 1, 2017–Dec. 31, 2017

Jan. 1, 2018–Mar. 31, 2018

Apr. 1, 2018–Jun. 30, 2018

Jul. 1, 2018–Sep. 30, 2018

Oct. 1, 2018–Dec. 31, 2018

Jan. 1, 2019–Mar. 31, 2019

Apr. 1, 2019–Jun. 30, 2019

Jul. 1, 2019–Sep. 30, 2019

Oct. 1, 2019–Dec. 31, 2019

Jan. 1, 2020–Mar. 31, 2020

Apr. 1, 2020–Jun. 30, 2020

Jul. 1, 2020–Sep. 30, 2020

Oct. 1, 2020–Dec. 31, 2020

Jan. 1, 2021–Mar. 31, 2021

Apr. 1, 2021–Jun. 30, 2021

Jul. 1, 2021–Sep. 30, 2021

Oct. 1, 2021–Dec. 31, 2021

Jan. 1, 2022–Mar. 31, 2022

Apr. 1, 2022–Jun. 30, 2022

Jul. 1, 2022–Sep. 30, 2022

Oct. 1, 2022–Dec. 31, 2022

Jan. 1, 2023–Mar. 31, 2023

Apr. 1, 2023–Jun. 30, 2023

Jul. 1, 2023–Sep. 30, 2023

Bulletin No. 2023–23

901

617

569

617

619

571

573

575

573

621

617

569

571

573

575

577

June 5, 2023

TABLE OF INTEREST RATES FOR CORPORATE

OVERPAYMENTS EXCEEDING $10,000

FROM JANUARY 1, 1995 – PRESENT

1995-1 C.B.

RATE

TABLE

Jan. 1, 1995–Mar. 31, 1995

6.5%

572

Apr. 1, 1995–Jun. 30, 1995

7.5%

574

Jul. 1, 1995–Sep. 30, 1995

6.5%

572

Oct. 1, 1995–Dec. 31, 1995

6.5%

572

Jan. 1, 1996–Mar. 31, 1996

6.5%

620

Apr. 1, 1996–Jun. 30, 1996

5.5%

618

Jul. 1, 1996–Sep. 30, 1996

6.5%

620

Oct. 1, 1996–Dec. 31, 1996

6.5%

620

Jan. 1, 1997–Mar. 31, 1997

6.5%

572

Apr. 1, 1997–Jun. 30, 1997

6.5%

572

Jul. 1, 1997–Sep. 30, 1997

6.5%

572

Oct. 1, 1997–Dec. 31, 1997

6.5%

572

Jan. 1, 1998–Mar. 31, 1998

6.5%

572

Apr. 1, 1998–Jun. 30, 1998

5.5%

570

Jul. 1, 1998–Sep. 30, 1998

5.5%

570

Oct. 1, 1998–Dec. 31, 1998

5.5%

570

Jan. 1, 1999–Mar. 31, 1999

4.5%

568

Apr. 1, 1999–Sep. 30, 1999

5.5%

570

Jul. 1, 1999–Sep. 30, 1999

5.5%

570

Oct. 1, 1999–Dec. 31, 1999

5.5%

570

Jan. 1, 2000–Mar. 31, 2000

5.5%

618

Apr. 1, 2000–Jun. 30, 2000

6.5%

620

Jul. 1, 2000–Sep. 30, 2000

6.5%

620

Oct. 1, 2000–Dec. 31, 2000

6.5%

620

Jan. 1, 2001–Mar. 31, 2001

6.5%

572

Apr. 1, 2001–Jun. 30, 2001

5.5%

570

Jul. 1, 2001–Sep. 30, 2001

4.5%

568

Oct. 1, 2001–Dec. 31, 2001

4.5%

568

Jan. 1, 2002–Mar. 31, 2002

3.5%

566

Apr. 1, 2002–Jun. 30, 2002

3.5%

566

Jul. 1, 2002–Sep. 30, 2002

3.5%

566

Oct. 1, 2002–Dec. 31, 2002

3.5%

566

Jan. 1, 2003–Mar. 31, 2003

2.5%

564

Apr. 1, 2003–Jun. 30, 2003

2.5%

564

Jul. 1, 2003–Sep. 30, 2003

2.5%

564

Oct. 1, 2003–Dec. 31, 2003

1.5%

562

Jan. 1, 2004–Mar. 31, 2004

1.5%

610

Apr. 1, 2004–Jun. 30, 2004

2.5%

612

June 5, 2023

902

Bulletin No. 2023–23

Jul. 1, 2004–Sep. 30, 2004

1.5%

610

Oct. 1, 2004–Dec. 31, 2004

2.5%

612

Jan. 1, 2005–Mar. 31, 2005

2.5%

564

Apr. 1, 2005–Jun. 30, 2005

3.5%

566

Jul. 1, 2005–Sep. 30, 2005

3.5%

566

Oct. 1, 2005–Dec. 31, 2005

4.5%

568

Jan. 1, 2006–Mar. 31, 2006

4.5%

568

Apr. 1, 2006–Jun. 30, 2006

4.5%

568

Jul. 1, 2006–Sep. 30, 2006

5.5%

570

Oct. 1, 2006–Dec. 31, 2006

5.5%

570

Jan. 1, 2007–Mar. 31, 2007

5.5%

570

Apr. 1, 2007–Jun. 30, 2007

5.5%

570

Jul. 1, 2007–Sep. 30, 2007

5.5%

570

Oct. 1, 2007–Dec. 31, 2007

5.5%

570

Jan. 1, 2008–Mar. 31, 2008

4.5%

616

Apr. 1, 2008–Jun. 30, 2008

3.5%

614

Jul. 1, 2008–Sep. 30, 2008

2.5%

612

Oct. 1, 2008–Dec. 31, 2008

3.5%

614

Jan. 1, 2009–Mar. 31, 2009

2.5%

564

Apr. 1, 2009–Jun. 30, 2009

1.5%

562

Jul. 1, 2009–Sep. 30, 2009

1.5%

562

Oct. 1, 2009–Dec. 31, 2009

1.5%

562

Jan. 1, 2010–Mar. 31, 2010

1.5%

562

Apr. 1, 2010–Jun. 30, 2010

1.5%

562

Jul. 1, 2010–Sep. 30, 2010

1.5%

562

Oct. 1, 2010–Dec. 31, 2010

1.5%

562

Jan. 1, 2011–Mar. 31, 2011

0.5%*

Apr. 1, 2011–Jun. 30, 2011

1.5%

562

Jul. 1, 2011–Sep. 30, 2011

1.5%

562

Oct. 1, 2011–Dec. 31, 2011

0.5%*

Jan. 1, 2012–Mar. 31, 2012

0.5%*

Apr. 1, 2012–Jun. 30, 2012

0.5%*

Jul. 1, 2012–Sep. 30, 2012

0.5%*

Oct. 1, 2012–Dec. 31, 2012

0.5%*

Jan. 1, 2013–Mar. 31, 2013

0.5%*

Apr. 1, 2013–Jun. 30, 2013

0.5%*

Jul. 1, 2013–Sep. 30, 2013

0.5%*

Oct. 1, 2013–Dec. 31, 2013

0.5%*

Jan. 1, 2014–Mar. 31, 2014

0.5%*

Apr. 1, 2014–Jun. 30, 2014

0.5%*

Jul. 1, 2014–Sep. 30, 2014

0.5%*

Oct. 1, 2014–Dec. 31, 2014

0.5%*

Bulletin No. 2023–23

903

June 5, 2023

Jan. 1, 2015–Mar. 31, 2015

0.5%*

Apr. 1, 2015–Jun. 30, 2015

0.5%*

Jul. 1, 2015–Sep. 30, 2015

0.5%*

Oct. 1, 2015–Dec. 31, 2015

0.5%*

Jan. 1, 2016–Mar. 31, 2016

0.5%*

Apr. 1, 2016–Jun. 30, 2016

1.5%

610

Jul. 1, 2016–Sep. 30, 2016

1.5%

610

Oct. 1, 2016–Dec. 31, 2016

1.5%

610

Jan. 1, 2017–Mar. 31, 2017

1.5%

562

Apr. 1, 2017–Jun. 30, 2017

1.5%

562

Jul. 1, 2017–Sep. 30, 2017

1.5%

562

Oct. 1, 2017–Dec. 31, 2017

1.5%

562

Jan. 1, 2018–Mar. 31, 2018

1.5%

562

Apr. 1, 2018–Jun. 30, 2018

2.5%

564

Jul. 1, 2018–Sep. 30, 2018

2.5%

564

Oct. 1, 2018–Dec. 31, 2018

2.5%

564

Jan. 1, 2019–Mar. 31, 2019

3.5%

566

Apr. 1, 2019–Jun. 30, 2019

3.5%

566

Jul. 1, 2019–Sep. 30, 2019

2.5%

564

Oct. 1, 2019–Dec. 31, 2019

2.5%

564

Jan. 1, 2020–Mar. 31, 2020

2.5%

612

Apr. 1, 2020–Jun. 30, 2020

2.5%

612

Jul. 1, 2020–Sep. 30, 2020

0.5%*

Oct. 1, 2020–Dec. 31, 2020

0.5%*

Jan. 1, 2021–Mar. 31, 2021

0.5%*

Apr. 1, 2021–Jun. 30, 2021

0.5%*

Jul. 1, 2021–Sep. 30, 2021

0.5%*

Oct. 1, 2021–Dec. 31, 2021

0.5%*

Jan. 1, 2022–Mar. 31, 2022

0.5%*

Apr. 1, 2022–Jun. 30, 2022

1.5%

562

Jul. 1, 2022–Sep. 30, 2022

2.5%

564

Oct. 1, 2022–Dec. 31, 2022

3.5%

566

Jan. 1, 2023–Mar. 31, 2023

4.5%

568

Apr. 1, 2023–Jun. 30, 2023

4.5%

568

Jul. 1, 2023–Sep. 30, 2023

4.5%

568

* The asterisk reflects the interest factors for daily compound interest for annual rates of 0.5 percent published in Appendix A of

this Revenue Ruling.

June 5, 2023

904

Bulletin No. 2023–23

Part III

Reference Price for Section

45I Credit for Production of

Natural Gas from Marginal

Wells During Taxable Years

Beginning in Calendar Year

2022

Notice 2023-41

SECTION 1. PURPOSE

This notice provides the applicable

reference price for qualified natural gas

production from qualified marginal wells

during taxable years beginning in calendar year 2022 for the purpose of determining the marginal well production

credit (MWC) under § 45I of the Internal

Revenue Code. The applicable reference

price for taxable years beginning in calendar year 2022 is $3.43 per 1,000 cubic

feet (Mcf).

This notice also provides the credit

amount used for the purpose of determining the MWC for taxable years beginning in calendar year 2022. The credit

amount is determined using the 2022

inflation adjustment factor of 1.3950 and

the applicable reference price of $3.43 per

Mcf. The credit amount for taxable years

beginning in calendar year 2022 is $0.00

per Mcf.

SECTION 2. BACKGROUND

Section 45I(a), as it relates to qualified natural gas production, provides that,

for purposes of § 38, the MWC for any

taxable year is an amount equal to the

product of (1) the credit amount and (2)

the qualified natural gas production that is

attributable to the taxpayer.

Section 45I(c)(1) provides that “qualified natural gas production” means

domestic natural gas produced from a

qualified marginal well. Section 45I(c)(3)

(A) provides that a qualified marginal well

is a domestic well (i) the production from

which during the taxable year is treated as

marginal production under § 613A(c)(6),

or (ii) which, during the taxable year (I)

Bulletin No. 2023–23

has average production of not more than

25 barrel-of-oil equivalents per day, and

(II) produces water at a rate not less than

95 percent of total well effluent.

Section 613A(c)(6)(D) and (E) provide that “marginal production” means

domestic natural gas produced during

any taxable year from a property which

is a stripper well property for the calendar

year in which the taxable year begins. A

“stripper well property” is, with respect to

any calendar year, any property producing

not more than 15 barrel equivalents per

day, determined by dividing the average

daily production of domestic crude oil

and domestic natural gas from producing

wells on the property for such calendar

year by the number of such wells.

Section 45I(c)(2)(A) provides that

generally only the first 1,095 barrels or

barrel-of-oil equivalents (as defined in §

45K(d)(5)) produced during the taxable

year qualify for the MWC. This limitation

is proportionately reduced in the case of a

short taxable year or in the case of a well

that is not capable of production each day

of a taxable year. See § 45I(c)(2)(B). The

number of wells on which a taxpayer may

claim the MWC is not limited.

Section 45I(d)(2) provides that to claim

the credit a taxpayer must hold an operating interest in the qualified marginal well

producing the natural gas to which the

credit relates. Under § 45I(d)(1) if a well

is owned by more than one owner and the

natural gas production exceeds the limitation under § 45I(c)(2), the qualifying

natural gas production attributable to the

taxpayer is determined on the basis of the

ratio which taxpayer’s revenue interest in

the production bears to the aggregate of the

revenue interests of all operating interest

owners in the production. Finally, § 45I(d)

(3) provides that the MWC is not allowable

if the taxpayer is also eligible to claim the §

45K nonconventional sources credit for the

taxable year, unless the taxpayer elects not

to claim the credit under § 45K for the well.

For purposes of § 45I(a)(1), the credit

amount is 50 cents (adjusted for inflation)

per Mcf of qualified natural gas production (tentative credit amount). See § 45I(b)

(1)(B) and (b)(2)(B).

905

Section 45I(b)(2)(A) and (B) provide

that the tentative credit amount (adjusted

for inflation) is reduced (but not below

zero) to the extent that the applicable

reference price exceeds $1.67 (adjusted

for inflation). More specifically, § 45I(b)

(2)(A) provides that the tentative credit

amount (adjusted for inflation) is reduced

by an amount which bears the same ratio

to the tentative credit amount (adjusted

for inflation) as the excess (if any) of

the applicable reference price over $1.67

(adjusted for inflation), bears to $0.33

(adjusted for inflation). As a result, the

MWC is not available if the applicable

reference price for qualified natural gas

production is $2.00 (adjusted for inflation)

or more.

Section 45I(b)(2)(A) also provides that

the applicable reference price for a taxable

year is the reference price for the calendar

year preceding the calendar year in which

the taxable year begins. Section 45I(b)(2)

(C)(ii) provides that the term “reference

price” means, with respect to any calendar

year, in the case of qualified natural gas

production, the Secretary’s estimate of the

annual average wellhead price per Mcf for

all domestic natural gas.

Section 45I(b)(2)(B) provides that in

the case of any taxable year beginning in a

calendar year after 2005, each of the dollar

amounts contained in § 45I(b)(2)(A) will

be increased to an amount equal to such

dollar amount multiplied by the inflation

adjustment factor for such calendar year

(determined under § 43(b)(3)(B) by substituting “2004” for “1990”).

SECTION 3. INFLATION

ADJUSTMENT FACTOR AND

REFERENCE PRICE

.1 Inflation Adjustment. The inflation

adjustment factor under § 45I(b)(2)(B) for

calendar year 2022 is 1.3950.

.2 Reference Price. The Secretary’s

estimate of the calendar year 2021 annual

average wellhead price per Mcf for all

domestic natural gas under § 45I(b)(2)

(C)(ii) was calculated by applying the

Producer Price Index commodity index

for “Natural Gas from the Wellhead”

June 5, 2023

(WPU053101051)1 published by the

Bureau of Labor Statistics (BLS) as part

of its Producer Price Index program, to

the 2020 annual average wellhead price

($1.52) published in Notice 2022-18,

2022-18 I.R.B. 1048. The annual Producer

Price Index commodity index for natural gas published by the BLS was 47.4 in

2020 and 106.8 in 2021, which implies a

ratio of 2021 to 2020 average wellhead

prices of 2.253 (106.8/47.4). Therefore,

the Secretary’s estimate of the calendar

year 2021 annual average wellhead price

per Mcf for all domestic natural gas is

$3.43 per Mcf (2.253 x $1.52 per Mcf).

For years after 2021, the Secretary

intends to continue calculating the reference price by application of the Producer

Price Index commodity index for “Natural

Gas from the Wellhead” (WPU053101051)

published by the BLS to the previous year’s

reference price.

SECTION 4. CALCULATION OF

CREDIT AMOUNT

Under § 45I(b)(1)(B) and (2)(B), the

tentative credit amount used to calculate

the MWC for taxable years beginning

in calendar year 2022 is $0.70 per Mcf

($0.50 x 1.3950 inflation adjustment factor). Pursuant to the reduction specified in

§ 45I(b)(2)(A), the tentative credit amount

for taxable years beginning in calendar

year 2022 is reduced to zero.

Specifically, pursuant § 45I(b)(2)(A), the

tentative credit amount is reduced (but not

below zero) by an amount (the Reduction

Amount) which bears the same ratio to such

amount as (i) the excess (if any) of the applicable reference price over $2.33 ($1.67 x

1.3950 inflation adjustment factor), bears to

(ii) $0.46 ($0.33 x 1.3950 inflation adjustment factor). The Reduction Amount (as

adjusted for inflation) is computed as follows:

Reduction Amount

Applicable Reference Price − $2.33

$0.46

Tentative Credit Amount

Reduction Amount $3.43 − $2.33

$0.70

$0.46

The Reduction Amount is $1.67 ($1.10

÷ $0.46 x $0.70) and it exceeds the tentative credit amount ($0.70). Therefore, the

credit amount used to calculate the MWC

for taxable years beginning in calendar

year 2022 is $0.00 per Mcf.

SECTION 5. EFFECTIVE DATE

This notice is effective for qualified

natural gas production during taxable

years beginning in calendar year 2022.

SECTION 6. DRAFTING AND

CONTACT INFORMATION

The principal author of this notice is

Boris Kukso of the Office of Associate

Chief Counsel (Passthroughs & Special

Industries). For further information

regarding this notice contact Mr. Kukso at

(202) 317-6853 (not a toll-free number).

https://data.bls.gov/cgi-bin/srgate. The BLS publishes indexes and not actual or average prices.

June 5, 2023

906

Bulletin No. 2023–23

Part IV

Notice of Proposed

Rulemaking

Information Reporting

and Transfer for Valuable

Consideration Rules for

Section 1035 Exchanges of

Life Insurance and Certain

Other Life Insurance

Contract Transactions

REG-108054-21

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains

proposed regulations providing guidance on the application of the transfer for

valuable consideration rules and associated information reporting requirements

for reportable policy sales of interests

in life insurance contracts to exchanges

of life insurance contracts qualifying for

nonrecognition of gain or loss, as well

as to certain acquisitions of interests in

life insurance contracts in transactions

that qualify as corporate reorganizations.

The proposed regulations affect parties

involved in these life insurance contract

transactions, including with respect to

payments of reportable death benefits.

This document also invites comments on

these proposed regulations.

DATES: Written or electronic comments

and requests for a public hearing must be

received by July 10, 2023. Requests for a

public hearing must be submitted as prescribed in the “Comments and Requests

for a Public Hearing” section.

ADDRESSES: Commenters are strongly

encouraged to submit public comments

electronically. Submit electronic submissions via the Federal eRulemaking Portal

at www.regulations.gov (indicate IRS

and REG-108054-21) by following the

online instructions for submitting comments. Once submitted to the Federal

eRulemaking Portal, comments cannot be

edited or withdrawn. The Department of

the Treasury (Treasury Department) and

the IRS will publish for public availability any comments submitted to the IRS’s

public docket. Send paper submissions

to: CC:PA:LPD:PR (REG-108054-21),

Room 5203, Internal Revenue Service,

P.O. Box 7604, Ben Franklin Station,

Washington, DC 20044.

FOR FURTHER INFORMATION

CONTACT: Concerning the proposed

regulations, Kathryn M. Sneade, (202)

317-6995 (not a toll-free number); concerning submissions of comments or

requests for a public hearing, Vivian

Hayes, (202) 317-6902 (not a toll-free

number) or by email to publichearings@

irs.gov (preferred).

SUPPLEMENTARY INFORMATION:

Background

This

document

contains

proposed amendments to the Income Tax

Regulations (26 CFR part 1) under sections 101 and 6050Y of the Internal

Revenue Code (Code). The proposed regulations under sections 101 and 6050Y

(proposed regulations) would provide

guidance on the application of the rules

for determining the amount of death benefits excluded from gross income following reportable policy sales of interests in

life insurance contracts under section 101

and the associated information reporting

requirements for reportable policy sales

under section 6050Y to the exchange of

a life insurance contract for another life

insurance contract qualifying for nonrecognition of gain or loss under section

1035 (section 1035 exchange), as well as

to certain acquisitions of interests in life

insurance contracts in transactions that

qualify as reorganizations under section

368(a) (reorganizations). The proposed

regulations would amend final regulations

under sections 101 and 6050Y (T.D. 9879)

published in the Federal Register (84 FR

58460) on October 31, 2019, as corrected

(84 FR 68042) on December 13, 2019

(final regulations). Following the publication of the final regulations in the Federal

the IRS received letters relating to the

application of sections 101 and 6050Y

to section 1035 exchanges and reorganizations. The proposed regulations would

modify the final regulations to address the

issues raised in these letters.

Development of the Final Regulations

The Treasury Department and the IRS

published the final regulations to implement legislative changes to the Code

made by sections 13520 and 13522 of

Public Law 115-97, 131 Stat. 2054, 2148,

2151 (2017), commonly known as the Tax

Cuts and Jobs Act (TCJA).

Section 13522 of the TCJA amended

section 101 by adding new section 101(a)

(3) to the Code, which defines the term

“reportable policy sale” and provides

rules for determining the amount of death

benefits excluded from gross income following a reportable policy sale.1 The final

regulations under section 101 provide

definitions applicable under sections 101

and 6050Y and guidance for determining

the amount of death benefits excluded

from gross income. For example, §1.1011(c)(1) of the final regulations defines

“reportable policy sale” to mean, subject

Generally, under section 101(a)(1), gross income does not include amounts received (whether in a single sum or otherwise) under a life insurance contract if such amounts are paid by reason

of the death of the insured. However, the first sentence of section 101(a)(2) (the transfer for value rule) provides that, in the case of a transfer for a valuable consideration, by assignment or

otherwise, of a life insurance contract or any interest therein, the amount excluded from gross income by section 101(a)(1) cannot exceed an amount equal to the sum of the actual value of such

consideration and the premiums and other amounts subsequently paid by the transferee. The second sentence of section 101(a)(2) provides that the transfer for value rule does not apply in the

case of transfers described in section 101(a)(2)(A) or (B). Section 101(a)(2)(A) (the carryover basis exception) applies if the contract or interest therein has a basis for determining gain or loss

in the hands of a transferee determined in whole or in part by reference to such basis of such contract or interest therein in the hands of the transferor. Section 101(a)(2)(B) applies if the transfer

is to the insured, to a partner of the insured, to a partnership in which the insured is a partner, or to a corporation in which the insured is a shareholder or officer. However, section 101(a)(3)(A)

provides that the exceptions in the second sentence of section 101(a)(2) do not apply in the case of a transfer of a life insurance contract, or any interest therein, that is a reportable policy sale.

Bulletin No. 2023–23

907

June 5, 2023

to certain exceptions, any direct or indirect acquisition of an interest in a life

insurance contract if the acquirer has, at

the time of the acquisition, no substantial

family, business, or financial relationship

with the insured apart from the acquirer’s

interest in the life insurance contract.

Section 13520 of the TCJA added section 6050Y to chapter 61 (Information and

Returns) in subtitle F of the Code. Section

6050Y(a) requires a person who acquires

a life insurance contract or any interest in

a life insurance contract in a reportable

policy sale to report certain information

about payments made in the sale. Section

6050Y(b) requires issuers of life insurance contracts to report certain information upon notice of a reportable policy sale

or a transfer of a life insurance contract

to a foreign person. Section 6050Y(c)

requires a payor of reportable death benefits (defined by section 6050Y(d)(4) as

amounts paid by reason of the death of the

insured under a life insurance contract that

has been transferred in a reportable policy

sale) to report certain information about

such payments. Section 6050Y provides

that each of the returns required by section

6050Y is to be made “at such time and in

such manner as the Secretary shall prescribe.”2 The final regulations under section 6050Y implement section 6050Y by

specifying the manner in which and time

at which the information reporting obligations imposed by section 6050Y must be

satisfied. The final regulations also provide definitions and rules that govern the

application of the information reporting

obligations.

The final regulations were adopted

after consideration of public comments

received on proposed regulations under

sections 101 and 6050Y (REG-10308318) published in the Federal Register

(84 FR 11009) on March 25, 2019 (2019

proposed regulations), and a public hearing held on June 5, 2019. Additionally, the

Treasury Department and the IRS received

comments in response to Notice 2018-41,

2018-20 I.R.B. 584, which described the

regulations the Treasury Department and

the IRS expected to propose under sections 101 and 6050Y, and considered these

comments in developing the rules in the

2019 proposed regulations.

Development of the Section 1035

Exchange Provisions of the Final

Regulations

Prior to amendment in 2019, the regulations under section 101 did not explicitly address section 1035 exchanges.

Comments received on Notice 2018-41

suggested that the person to whom a life

insurance contract is issued (that is, the

original policyholder) should not be considered an “acquirer” for purposes of section 6050Y(a), which imposes reporting

obligations on any person who acquires

a life insurance contract or any interest

in a life insurance contract in a reportable policy sale. See 84 FR 11009, 11016.

In response, §1.101-1(e)(2) of the 2019

proposed regulations clarified that the

issuance of a life insurance contract to a

policyholder, other than the issuance of a

policy in an exchange pursuant to section

1035, is not a transfer of an interest in a

life insurance contract.

The preamble to the 2019 proposed

regulations requested comments on

whether the regulations should include

additional provisions regarding the treatment of section 1035 exchanges of life

insurance contracts. See 84 FR 11009,

11019. As described in the preamble to the

final regulations, one commenter on the

2019 proposed regulations recommended

that no additional provisions be added

to the regulations for this circumstance,

stating that the acquirer of a life insurance contract in a reportable policy sale

would be unlikely to meet the state law

requirements for an insurable interest in

the insured and, consequently, would not

be able to make a section 1035 exchange.

See 84 FR 58460, 58465. Another commenter recommended that the statement in

§1.101-1(e)(2) of the 2019 proposed regulations regarding section 1035 exchanges

be deleted or amended to eliminate any

suggestion that such transactions, by

themselves, can be reportable policy sales.

The commenter acknowledged that in a

section 1035 exchange, the new carrier

acquires an interest in the old policy, but

advocated against treating that acquisition

as a reportable policy sale.

As explained in the preamble to

the final regulations, the reference in

§1.101-1(e)(2) to section 1035 exchanges

was not intended to imply that the transfer

of a policy to an insurance company in a

section 1035 exchange would be a reportable policy sale. See 84 FR 58460, 58465.

Rather, the concern prompting the reference to section 1035 exchanges related

to the possibility that a policy transferred

in a reportable policy sale subsequently

could be exchanged for a new policy in

an exchange pursuant to section 1035 and

that, absent the reference in §1.101-1(e)

(2), the death benefits paid under the new

policy might not be reported under section

6050Y(c).

Section 1.101-1(e)(2) of the 2019 proposed regulations was adopted as proposed

in the final regulations, but in response to

the comments received on section 1035

exchanges, §1.101-1(c)(2)(iv) of the final

regulations provides that the acquisition

of a life insurance contract by an insurance company in an exchange pursuant

to section 1035 is not a reportable policy sale. Additionally, §1.101-1(c)(2)(v)

of the final regulations provides that the

acquisition of a life insurance contract by

a policyholder in an exchange pursuant to

section 1035 is not a reportable policy sale

if the policyholder has a substantial family, business, or financial relationship with

the insured, apart from its interest in the

life insurance contract, at the time of the

exchange. Based on a comment received

on the 2019 proposed regulations, a situation in which the policyholder making

a section 1035 exchange does not have a

substantial family, business, or financial

relationship with the insured should rarely

arise due to state law insurable interest

requirements. Should this situation arise,

however, the final regulations provide certain exceptions to the reporting requirements that generally apply to reportable

policy sales. See §1.6050Y-2(f)(3) of the

final regulations (providing that, with

respect to the issuance of a life insurance

contract in a section 1035 exchange, the

acquirer is not required to file the information return required by section 6050Y(a)

(1) and §1.6050Y-2(a) of the final regulations); §1.6050Y-3(f)(3) of the final regulations (providing that the issuer of a new

life insurance contract in a section 1035

exchange is not required to file a return or

Section 7701(a)(11)(B) provides that when used in the Code, the term “Secretary” means the Secretary of the Treasury or her delegate.

June 5, 2023

908

Bulletin No. 2023–23

furnish a statement to the seller under section 6050Y(b) and §1.6050Y-3 of the final

regulations). Additionally, the final regulations provide certain rules applicable

to section 1035 exchanges to clarify the

reporting required with respect to section

1035 exchanges that are reportable policy

sales. See §1.6050Y-1(a)(8)(ii) (providing

that, in the case of the issuance of a life

insurance contract to a policyholder in an

exchange pursuant to section 1035, the

issuer of the new contract is the 6050Y(a)

issuer with respect to whom the acquirer

has reporting obligations under section

6050Y(a) and §1.6050Y-2 of the final

regulations).

Letters Received on the Section 1035

Exchange Provisions of the Final

Regulations

Following the publication of the final

regulations in the Federal Register,

the Treasury Department and the IRS

received letters relating to the application

of sections 101 and 6050Y to section 1035

exchanges under the final regulations.

One letter indicated that, in at least

some cases, the final regulations under

section 101 regarding reportable policy sales appear to treat a section 1035

exchange as a transfer for value that can

cause the death benefits to become taxable.

The letter said that this treatment appears

to arise even when neither the contract

given in the exchange nor any predecessor contract has been involved in a reportable policy sale. The author of the letter

requested guidance that the issuance of a

life insurance contract in a section 1035

exchange is not a transfer of an interest

in the contract to the owner for purposes

of the transfer for value rule and provided

support for the position that treating a section 1035 exchange as a transfer for value

is inconsistent with the relevant statutes,

congressional intent, sound tax policy, and

long-standing interpretations of the law.

The author of another letter took a contrary position, stating that a section 1035

exchange has always (before the TCJA

was enacted, as well as after) constituted a

transfer of a life insurance contract for purposes of section 101(a)(2) that qualifies for

the exception set forth in section 101(a)(2)

(A) to the transfer for value rule for contracts held with a transferred basis, commonly referred to as the “carryover basis”

exception. This author advocated against

guidance concluding that the issuance of

a life insurance contract in a section 1035

exchange is not a transfer of an interest in

the contract to the owner for purposes of

the transfer for value rule, suggesting that

to do so would be to adopt a policy choice

that was specifically rejected by Congress

with the enactment of section 101(j).3

The author remarked that section 101(j)

was enacted in response to concerns that

despite state insurable interest rules, companies were acquiring insurance on persons whose relationship with the company

was too attenuated and were doing so

without the consent (or even knowledge)

of such persons.

Development of Exceptions Related to

Ordinary Course Trade or Business

Acquisitions in the Final Regulations

Several commenters on Notice 201841 suggested that acquisitions of life

insurance contracts, or interests therein,

in ordinary course business transactions

in which one trade or business acquires

another trade or business that owns life

insurance on the lives of former employees or directors should not be reportable

policy sales. The 2019 proposed regulations included provisions that exclude

certain of these transactions from the definition of reportable policy sales. Public

comments remarked favorably on these

provisions, which were adopted by the

final regulations. See §1.101-1(d)(2) of the

final regulations (defining the term “substantial business relationship” to include

the relationship between an insured and an

acquirer in certain circumstances involving the acquirer’s acquisition of an active

trade or business with respect to which the

insured is an employee within the meaning

of section 101(j)(5)4 or was a director,

highly compensated employee, or highly

compensated individual); §1.101-1(d)(4)

(i) of the final regulations (providing a

special rule for indirect acquisitions that

deems the acquirer of an interest in a life

insurance contract to have a substantial

business or financial relationship with the

insured if the direct holder of the interest

in the life insurance contract has such a

relationship); and §1.101-1(e)(3)(ii) of

the final regulations (defining the term

“indirect acquisition of an interest in a life

insurance contract” to exclude an acquisition through ownership of stock in a C

corporation provided that no more than

50 percent of the gross value of the assets

of the C corporation consists of life insurance contracts).

As described in the preamble to the

final regulations, one commenter on the

2019 proposed regulations remarked that

§1.101-1(e)(3)(ii) results in the disparate

treatment of policies transferred directly

in asset reorganizations and indirectly in

stock reorganizations. See 84 FR 58460,

58466-58468. That is, with respect to policies held by a C corporation, not more

than 50 percent of the gross value of the

assets of which consists of life insurance

contracts, an indirect acquisition of the

policies, such as through a stock reorganization under section 368(a)(1)(B), would

not result in a reportable policy sale, but

a direct acquisition of the policies, such

as through an asset reorganization under

section 368(a)(1)(A), could result in a

reportable policy sale. The commenter

asserted that this disparate treatment is

inappropriate and not warranted as a matter of good tax policy and requested that

the 2019 proposed regulations be revised

to provide that any transfer of an interest in a life insurance contract as part of

a reorganization of a C corporation conducted in the ordinary course of business

is eligible for an exception to being treated

as a reportable policy sale under section

101(a)(3)(B), regardless of whether the

target C corporation survives the reorganization transaction unless, immediately

Section 101(j) generally provides that in the case of an employer-owned life insurance contract, the amount of death benefits excluded from gross income under section 101(a) is limited,

unless certain notice and consent requirements are met and either an exception based on the insured’s status applies (because the insured was an employee in the twelve months preceding

death or the insured was, at the time the life insurance contract was issued, a director, highly compensated employee, or highly compensated individual) or an exception for amounts paid to

the insured’s heirs applies.

Section 101(j)(5) defines the term “employee” to include an officer, director, and highly compensated employee (within the meaning of section 414(q)).

Bulletin No. 2023–23

909

June 5, 2023

prior to the acquisition, more than 50 percent of the gross value of the assets of the

C corporation consists of life insurance

contracts.

The commenter acknowledged that the

2019 proposed regulations provide certain

exceptions that could apply to mergers

qualifying as reorganizations in which

the target goes out of existence and the

surviving corporation continues to hold

the life insurance contract, but asserted

that having to determine in these types of

mergers whether a particular exception

applies on a contract-by-contract basis is

unduly complex and a trap for the unwary.

The commenter further asserted that this

burdensome exercise does not serve the

purpose of the change in the statute.

The commenter’s recommendation

was not adopted in the final regulations

for reasons further described in the preamble to the final regulations. Briefly, the

final regulations preserve the different

results for stock and asset reorganizations

because the Treasury Department and the

IRS concluded that significant differences

between the two types of reorganization

justify different treatment for purposes of

sections 101 and 6050Y. For instance, an

acquirer of an interest in an entity may

have limited ability to determine what

types of assets an entity owns, or to obtain

from the entity information necessary to

report on the entity’s assets. Further, the

Treasury Department and the IRS had not

identified any clear policy reason why

the complete exclusion of death benefits

from policies held by a corporation should

carry over when ownership of the insurance policy is transferred but a substantial

business or financial relationship does not

exist between the acquirer and insured.

Regarding the commenter’s remark on the

burden of a case-by-case review of policies

in certain types of transactions, the preamble to the final regulations noted that,

in asset reorganizations, it would in any

case be necessary to review the life insurance contracts directly acquired on a contract-by-contract basis in order to update

insurance contract ownership and beneficiary information with the relevant insurance company.

Explanation of Provisions

Letter Received on Exceptions Related

to Ordinary Course Trade or Business

Acquisitions in the Final Regulations

As stated in the preamble to the final

regulations, the concern prompting the references to section 1035 exchanges in the

2019 proposed regulations and the final

regulations related to the possibility that

a policy transferred in a reportable policy sale subsequently could be exchanged

for a new policy in an exchange pursuant

to section 1035 and that the death benefits paid under the new policy might not

be reported under section 6050Y(c). See

84 FR 58460, 58465. The section 1035

exchange provisions were not intended to

change the treatment under section 101 of

the policyholder’s new contract if the policyholder’s old contract was never transferred in a reportable policy sale.

However, the Treasury Department

and the IRS have determined that such a

change was inadvertently effected by the

final regulations. Prior to the issuance of

the final regulations, the transfer for value

rule of section 101(a)(2) did not apply as

the result of a section 1035 exchange of a

life insurance contract by the original policyholder of the contract. However, under

§1.101-1(e)(2) of the final regulations, the

issuance of a new policy in a section 1035

exchange is a transfer of an interest in a

life insurance contract. Because the new

policy is issued in exchange for an old

policy, the exchange is a transfer for valuable consideration under §1.101-1(f)(5) of

the final regulations. Therefore, the new

policy is subject to the transfer for value

rule of section 101(a)(2), unless one of

the exceptions in section 101(a)(2)(A) and

(B) applies. For either exception to apply,

there must be a substantial business, family, or financial relationship between the

insured and the acquirer of the new policy. The Treasury Department and the

IRS have determined that the carryover

basis exception of section 101(a)(2)(A)

would not apply in this case.5 Therefore,

the application of the transfer for value

Following the publication of the final

regulations in the Federal Register, the

Treasury Department and the IRS received

a letter relating to the disparate treatment

of different types of ordinary course trade

or business acquisitions under the final

regulations.

The author noted that, since the issuance

of the final regulations, the life insurance

industry has seen a number of circumstances

in which transactions that are wholly unrelated to the transfer of life insurance are

nevertheless subject to negative outcomes

under the reportable policy sale rules as a

result of the transactions’ legal form, even

though transactions with identical or nearly

identical economic substance but a different

legal form would be treated more favorably.

The author noted that the ordinary course

acquisitive transactions of concern do not

in any way turn on tax outcomes pertaining

to the meagre amounts of life insurance that

are commonly at issue, and asserted that

there are a number of legal, economic, and

business practice reasons why it is highly

unlikely that these same transactions can

simply be restructured to meet the formdriven rules of the final regulations. The

author suggested the addition of an exception from the reportable policy sale rules

for acquisitive transactions involving entities that own a de minimis amount of life

insurance (for example, as a proportion of

the total value of the transaction). More

specifically, the author proposed that the

Treasury Department and the IRS consider

a further exception for transactions in which

the amount of life insurance acquired as a

result of the acquisitive transaction (and

any related acquisitions) is five percent or

less of the value of the stock, assets, or both

acquired.

Section 1035 Exchanges

The Code recognizes two categories of substituted basis property: transferred basis property and exchanged basis property. See section 7701(a)(42). Property has a “transferred basis” for

Federal tax purposes when the same property is transferred from one person to another but keeps the same basis. See section 7701(a)(43). Property has an “exchanged basis” for Federal

tax purposes when a person’s basis in new property is determined by reference to other property held by that same person. See section 7701(a)(44). The section 101(a)(2) “carryover basis”

exception applies to a transfer if the transferred life insurance contract or interest therein has a basis for determining gain or loss in the hands of a transferee determined in whole or in part by

reference to such basis of such contract or interest therein in the hands of the transferor. That is, the exception applies if the contract is transferred basis property. However, the basis of a new

policy issued in a section 1035 exchange to the same taxpayer is the same as the basis of the old policy held by that taxpayer, decreased in the amount of any money received by the taxpayer

and increased in the amount of gain or decreased in the amount of loss to the taxpayer that was recognized on such exchange. See sections 1035(d)(2) and 1031(d). The new policy is thus

exchanged basis property, not transferred basis property. It is therefore ineligible for the carryover basis exception of section 101(a)(2)(A).

June 5, 2023

910

Bulletin No. 2023–23

rule would generally limit the amount of

death benefits excludable under section

101(a)(1), even in the absence of a reportable policy sale, unless one of the section

101(a)(2)(B) exceptions applies (that is,

the transfer is to the insured, to a partner

of the insured, to a partnership in which

the insured is a partner, or to a corporation in which the insured is a shareholder

or officer). The Treasury Department and

the IRS have determined that this result

is inconsistent with the prior treatment

of new policies issued in section 1035

exchanges.

Accordingly, the proposed regulations

are intended to correct the unintended

change effected by the final regulations

to the treatment under section 101 of a

life insurance contract issued to a policyholder in a section 1035 exchange,

while continuing to address the concern

that the reporting of death benefits paid

under section 6050Y(c) could be avoided

by exchanging a policy transferred in a

reportable policy sale for a new policy in

a section 1035 exchange, as well as the

concern that a policyholder could attempt

to avoid the limitation on the excludability of death benefits resulting from the

application of the transfer for value rule

through a section 1035 exchange. The

proposed regulations would accomplish

these objectives by revising the final regulations in four ways.

1. Modify definition of a transfer of an

interest in a life insurance contract

First, proposed §1.101-1(e)(2) would

revise the definition of a transfer of an

interest in a life insurance contract in

§1.101-1(e)(2) of the final regulations

to exclude the issuance of a life insurance contract to a policyholder, without

qualification. As such, any issuance of a

life insurance contract to a policyholder,

including in a section 1035 exchange, is

not a transfer of an interest in a life insurance contract and therefore cannot be a

reportable policy sale under §1.101-1(c)

(1) of the final regulations. The Treasury

Department and the IRS do not view this

position as inconsistent with the purpose

of section 101(j). See Public Law 109280, §863(d), 120 Stat. 780, 1024 (2006)

(providing that section 101(j) generally

applies to life insurance contracts issued

Bulletin No. 2023–23

after August 17, 2006, “except for a contract issued after such date pursuant to an

exchange described in section 1035…for

a contract issued on or prior to that date”);

Notice 2009-48, 2009-1 C.B. 1085 (providing that further notice and consent is

not required by section 101(j) with regard

to a contract received in a section 1035

exchange for an employer-owned life

insurance contract issued after August 17,

2006, for which the notice and consent

requirements were previously satisfied

if either (1) the existing consent remains

valid, or (2) the exchange does not result

in a material change in the death benefit

or other material change in the contract).

The proposed regulations make conforming changes to remove the exception

in §1.101-1(c)(2)(v) of the final regulations (providing that the acquisition of a

life insurance contract by a policyholder

in a section 1035 exchange is not a reportable policy sale if the policyholder has a

substantial family, business, or financial

relationship with the insured, apart from

its interest in the life insurance contract,

at the time of the exchange); to remove

§§1.6050Y-2(f)(3) and 1.6050Y-3(f)(3)

of the final regulations (providing certain reporting requirement exceptions

related to section 1035 exchanges that

are no longer necessary); and to remove

§1.6050Y-1(a)(8)(ii) of the final regulations (providing a definitional rule related

to section 1035 exchanges that is no longer necessary).

2. New rule addressing section 1035

exchanges

Second, proposed §1.101-1(b)(2)(iv)

provides a new rule that would apply to the

exchange of an interest in a life insurance

contract (old interest) in a section 1035

exchange for an interest in a newly issued

life insurance contract (new interest) and

provides guidance on how to determine the

amount of the proceeds attributable to the

new interest that is excludable from gross

income under section 101(a), provided

the new interest is not subsequently transferred or exchanged. If the new interest is

subsequently transferred or exchanged,

the amount excludable from gross income

under section 101(a) would be determined

under the rule in §1.101-1(b) applicable to

the type of transfer or exchange involved.

911

The limitation (or lack of any limitation)

on the amount of the proceeds attributable to the old interest that is excludable

from gross income applies under proposed

§1.101-1(b)(2)(iv) to the new interest for

which it is exchanged, just as the basis of

the old interest applies to the new interest.

See sections 1031(d) and 1035(d)(2) (providing that a contract acquired in a section

1035 exchange has the same basis as the

contract for which it was exchanged).

The IRS has previously treated certain

attributes of contracts exchanged in section 1035 exchanges as applying to the

new contracts acquired. See, e.g., Rev.

Rul. 92-95, 1992-2 C.B. 43 (for purposes

of section 72(q)(2)(I) and 72(u)(4), the

“date of purchase” of an annuity contract

acquired in a section 1035 exchange for

another annuity contract is the date of

purchase of the annuity contract that was

exchanged for the new contract). See also

section 7702A(a)(2) (defining a modified

endowment contract to include any contract exchanged for a contract that is a

modified endowment contract under section 7702A(a)(1)).

Proposed §1.101-1(b)(2)(iv) ensures

that the acquirer of an interest in a life

insurance contract in a reportable policy

sale cannot avoid any limit imposed by

section 101(a)(2) and (a)(3) on the amount

of the proceeds attributable to the interest

that is excludable from gross income under

section 101(a)(1) by simply exchanging

the interest for a new life insurance contract. Under proposed §1.101-1(b)(2)(iv)

(A), if the entire amount of the proceeds

attributable to the old interest would have

been excludable from gross income under

section 101(a) at the time of the section

1035 exchange, the entire amount of the

proceeds attributable to the new interest

is excludable from gross income. Under

proposed §1.101-1(b)(2)(iv)(B), if less

than the entire amount of the proceeds

attributable to the old interest would have

been excludable from gross income under

section 101(a) at the time of the section

1035 exchange, the amount of the proceeds attributable to the new interest that

is excludable from gross income is limited

to the sum of the amount of the proceeds

attributable to the old interest that would

have been excludable at the time of the

section 1035 exchange, and the premiums

and other amounts subsequently paid with

June 5, 2023

respect to the new interest by the policyholder. Proposed §1.101-1(b)(2)(iv)(B)

also provides that, when determining the

premiums and other amounts subsequently

paid by the policyholder with respect to

the new interest, the amounts paid by the

policyholder are reduced, but not below

zero, by amounts received by the policyholder under the new life insurance contract that are not received as an annuity, to

the extent excludable from gross income

under section 72(e). The proposed regulations also make conforming changes to

§1.101-1(a)(1) of the final regulations and

the headings of §1.101-1(b) and (b)(2) of

the final regulations to reflect the addition

of proposed §1.101-1(b)(2)(iv). The proposed regulations also add two examples

to illustrate the application of the rules set

forth in proposed §1.101-1(b)(2)(iv). See

proposed §1.101-1(g)(17) and (18).

3. Modification to definition of reportable

policy sale

Third, the proposed regulations would

modify the definition of “reportable policy

sale” to address section 1035 exchanges.

Specifically, proposed §1.101-1(c)(3)

addresses situations in which an old

interest is exchanged in a section 1035

exchange for a new interest, and the old

interest was previously transferred for

valuable consideration in a reportable

policy sale or is treated, under proposed

§1.101-1(c)(3), as an interest in a life

insurance contract that was previously

transferred for valuable consideration in a

reportable policy sale. In such cases, the

new interest is treated, for purposes of

§1.101-1, as an interest in a life insurance

contract that was previously transferred

for valuable consideration in a reportable

policy sale.

Under the proposed rule, the old interest’s attribute of having been previously

transferred for valuable consideration

in a reportable policy sale applies to the

new interest acquired in a section 1035

exchange. Whether or not an interest in a

life insurance policy was previously transferred in a reportable policy sale is relevant for the purpose of determining the

applicability of certain provisions in the

final regulations. See, e.g., §1.101-1(b)(1)

(ii)(B)(1) of the final regulations (applies

only if the interest was not previously

June 5, 2023

transferred for valuable consideration

in a reportable policy sale); §1.101-1(b)

(1)(ii)(B)(2) and (3) of the final regulations (apply if the interest was previously

transferred for valuable consideration in a

reportable policy sale); §1.101-1(b)(2)(i)

of the final regulations (includes a special

rule for interests that have not previously

been transferred for value in a reportable

policy sale). The Treasury Department and

the IRS have previously treated (and continue to treat) other attributes of contracts

exchanged in section 1035 exchanges as

applying to the new contracts acquired, so

the new contract is treated the same as the

old contract. See, e.g., Rev. Rul. 92-95.

Similarly, the proposed rule ensures that

the new interest is treated the same as the

old interest when applying rules that consider whether an interest in a life insurance contract was previously transferred

in a reportable policy sale. See proposed

§1.101-1(c)(3).

Proposed §1.101-1(c)(3) also provides

that, for purposes of §§1.6050Y-3 and

1.6050Y-4, the section 1035 exchange is

treated as the transfer of an interest in the

life insurance contract in a reportable policy sale if the old interest previously was

transferred for valuable consideration in a

reportable policy sale (or is treated, under

proposed §1.101-1(c)(3), as an interest in a

life insurance contract that previously was

transferred for valuable consideration in a

reportable policy sale). Accordingly, the

designation of death benefits as reportable

death benefits is an attribute that transfers

from the old interest to the new interest

in a section 1035 exchange. See also proposed §1.6050Y-1(a)(12). The Treasury

Department and the IRS previously

have treated other attributes of contracts

exchanged in section 1035 exchanges as

transferring to the new contracts acquired.

In this case, the proposed rule ensures that

death benefits under the new interest are

treated the same as under the old interest

for purposes of reporting under section

6050Y(c) and §1.6050Y-4. These rules

are necessary to ensure that the acquirer

of an interest in a life insurance contract in

a reportable policy sale cannot avoid the

designation of the death benefits as reportable death benefits and the associated

reporting of the payment of the reportable

death benefits by simply exchanging the

interest for a new life insurance contract.

912

The proposed regulations also make conforming changes to §1.101-1(c)(1) of the

final regulations to reflect the addition of

proposed §1.101-1(c)(3).

4. Conforming modifications to

§§1.6050Y-1 through 1.6050Y-4

Finally, consistent with proposed

§1.101-1(c)(3), the proposed regulations would modify several definitions

in §1.6050Y-1 of the final regulations

and modify the reporting rules under

§§1.6050Y-3 and 1.6050Y-4 of the final

regulations to ensure proper reporting of

reportable death benefits paid under contracts issued in section 1035 exchanges.

Notably, however, the section 1035

exchange rules of proposed §1.101-1(c)(3)

do not apply for purposes of §1.6050Y-2

of the final regulations, and no reporting is required under §1.6050Y-2 of the

final regulations at the time of a section

1035 exchange, even if the new interest is

exchanged for an old interest that was previously transferred for valuable consideration in a reportable policy sale.

Proposed §1.6050Y-1(a)(14) provides

that the term “reportable policy sale”

has the meaning given to it in §1.1011(c)(1), except as otherwise provided in

§1.6050Y-1. Proposed §1.6050Y-1(a)

(12) provides that the term “reportable

death benefits” means amounts paid by

reason of the death of the insured under

a life insurance contract that are attributable to an interest in the contract that

was transferred in a reportable policy sale

described in §1.101-1(c)(1) of the final

regulations or proposed §1.101-1(c)(3).

Accordingly, payors of such amounts are

subject to the reporting requirements of

section 6050Y(c) and §1.6050Y-4 of the

final regulations. Proposed §1.6050Y1(a)(1) and (2) modify the definitions of

“acquirer” and “buyer,” respectively, to

treat as a buyer for purposes of reporting

under section 6050Y(c) and §1.6050Y-4

a person to whom an interest in a life

insurance contract is issued in a section

1035 exchange treated as the transfer of

an interest in the life insurance contract

in a reportable policy sale under proposed

§1.101-1(c)(3). See §1.6050Y-4(a)(5) of

the final regulations (requiring a payor of

reportable death benefits to report the payor’s estimate of investment in the contract

Bulletin No. 2023–23

with respect to the buyer, limited to the

payor’s estimate of the buyer’s investment

in the contract with respect to the interest

for which the reportable death benefits

payment recipient was paid).

To ensure proper reporting of reportable death benefits paid under contracts

issued in section 1035 exchanges, proposed §1.6050Y-3(a) requires reporting by each “6050Y(b) issuer” that is

a “section 1035 issuer” with respect to

each “seller” at the time of the exchange.

Proposed §1.6050Y-1(a)(8)(iii)(C) provides that the term “6050Y(b) issuer”

includes any person that is a section 1035

issuer or the designee of a section 1035

issuer. Proposed §1.6050Y-1(a)(8)(v)

defines the term “section 1035 issuer” to

include the issuer of the old interest (old

issuer) and the issuer of the new interest

(new issuer) in a section 1035 exchange

that is treated as the transfer of an interest

in the life insurance contract in a reportable policy sale under proposed §1.1011(c)(3). The old issuer is a section 1035

issuer described in proposed §1.6050Y1(a)(8)(v)(A), and the new issuer is a

section 1035 issuer described in proposed

§1.6050Y-1(a)(8)(v)(B). However, an

issuer is not considered a section 1035

issuer if it never received information

indicating that the interest in a life insurance contract with respect to which it is

an issuer was transferred in a reportable

policy sale under §1.101-1(c)(1) or (3).

See proposed §1.6050Y-1(a)(8)(v)(A) and

(B). Proposed §1.6050Y-1(a)(18) provides

that, for purposes of reporting by both the

old issuer and the new issuer, the term

“seller” includes any person that holds an

interest in a life insurance contract that has

been transferred in a reportable policy sale

under §1.101-1(c)(1) or (3) and exchanges

that interest for an interest in a new life

insurance contract in an exchange pursuant to section 1035. The information to be

provided by a section 1035 issuer includes

the name, address, and taxpayer identification number of the seller, the investment

in the contract with respect to the seller,

and any other information that is required

by the form or its instructions. It is anticipated that this reporting will be completed

on Form 1099-SB, “Seller’s Investment in

Life Insurance Contract”, and the information to be provided will also include the

policy number (old or new, as applicable)

Bulletin No. 2023–23

and identification of the transaction as a

section 1035 exchange. Under proposed

§1.6050Y-3(a)(3), section 1035 issuers are

not required to report the amount the seller

would have received if the seller had surrendered the life insurance contract.

The proposed regulations make conforming changes to §1.6050Y-3(c) of the

final regulations to provide the time and

place for filing returns required to be

made by section 1035 issuers. See proposed §1.6050Y-3(c) (section 1035 issuers file returns at the same time and place

as other 6050Y(b) issuers). Proposed

§1.6050Y-3(d)(1) provides that each section 1035 issuer must furnish a statement

to each seller who makes a section 1035

exchange, just as other 6050Y(b) issuers are required to furnish a statement to

sellers, and proposed §1.6050Y-3(d)(2)

imposes the same deadline for doing so.

Additionally, proposed §1.6050Y-3(d)(1)

requires the old issuer to furnish a statement to the new issuer in a section 1035

exchange providing information about

the interest being exchanged. This statement serves to provide notice to the new

issuer that the old interest was transferred

in a reportable policy sale and, therefore,

that the new interest will be treated as an

interest in a life insurance contract that

has been transferred in a reportable policy

sale and that death benefits paid under the

new interest are reportable death benefits.

Proposed §1.6050Y-3(d)(2) provides that

this statement must be furnished within 30

days of the section 1035 exchange.

The proposed regulations also modify the exception to reporting set forth

in §1.6050Y-4(e)(3) of the final regulations. Section 1.6050Y-4(e)(3) of the

final regulations provides an exception

from reporting under §1.6050Y-4 of

the final regulations if the payor never

received, and has no knowledge of any

issuer having received, a reportable policy sale statement (RPSS) with respect

to the interest in a life insurance contract

with respect to which the reportable death

benefits are paid. However, death benefits

paid with respect to the new interest may

be reportable death benefits even though

an RPSS was never furnished with respect

to the new interest. Accordingly, the existing exception would apply too broadly in

the context of section 1035 exchanges.

Proposed §1.6050Y-4(e)(3) therefore

913

imposes an additional requirement if the

reportable death benefits are paid with

respect to an interest in a life insurance

contract issued in a section 1035 exchange.

In that case, the exception applies only if

the payor also never received, and has no

knowledge of any issuer having received,

a statement described in §1.6050Y-3(d)(1)

from a section 1035 issuer or other information indicating that the issuance of the

contract is treated as a transfer of an interest in the contract in a reportable policy

sale under §1.101-1(c)(3).

Ordinary Course Trade or Business

Acquisitions

As noted in the preamble to the final

regulations, C corporations are not frequently used as vehicles for investing in

life insurance contracts covering insureds

with respect to which the corporation does

not have a substantial business, financial,

or family relationship at the time the contract is issued because a corporate level

income tax applies to corporate earnings in addition to income tax on distributions at the shareholder level. See 84

FR 58460, 58467. After consideration of

the comments and letter received on the

2019 proposed regulations and the final

regulations, respectively, regarding ordinary course trade or business acquisitions,

the Treasury Department and the IRS are

proposing an exception for certain direct

acquisitions of interests in life insurance

contracts from a C corporation.

Proposed §1.101-1(c)(2)(v) provides

that the direct acquisition of an interest in a life insurance contract from

a C corporation by a C corporation is

not a reportable policy sale if (1) the

acquisition results from a transaction

that qualifies as a reorganization under

section 368(a); (2) immediately before

the acquisition, (i) the interest is held by

a C corporation that conducts an active

trade or business within the meaning

of §1.367(a)-2(d)(2) and (3), (ii) the C

corporation does not engage in a trade

or business of investing in interests in

life insurance contracts, and (iii) no

more than 5 percent of the gross value

of the assets of the C corporation consists of life insurance contracts; and (3)

immediately after the acquisition, (i)

the acquiring C corporation does not

June 5, 2023

engage in a trade or business of investing in interests in life insurance contracts, and (ii) not more than 5 percent

of the gross value of the assets of the

C corporation consists of life insurance

contracts. This exception would provide relief from the reportable policy

sale rules for acquisitions of interests in

life insurance contracts through certain

ordinary course trade or business acquisitions while preserving different treatment for direct and indirect acquisitions

of interests in life insurance contracts in

other cases. The proposed regulations

modify Example 11 in §1.101-1(g)

(11) of the final regulations to reflect

the addition of the exception in proposed §1.101-1(c)(2)(v). See proposed

§1.101-1(g)(11).

Applicability Dates

Proposed §§1.101-1(b)(2)(iv) and (c)

(3) are proposed to apply to section 1035

exchanges occurring on or after the date

the Treasury decision adopting these regulations as final regulations is published

in the Federal Register, and proposed

§1.101-1(c)(2)(v) is proposed to apply

to any acquisition of an interest in a life

insurance contract occurring on or after

the date the Treasury decision adopting

these regulations as final regulations is

published in the Federal Register. See

proposed §1.101-6(c). However, it is proposed that a taxpayer may choose to apply

§1.101-1(b)(2)(iv), (c)(2)(v), and (c)(3) of

the regulations set forth in the Treasury

decision adopting these regulations as

final regulations to all section 1035

exchanges and acquisitions occurring after

December 31, 2017, and before the date

of publication of the Treasury decision

adopting these rules as final regulations in

the Federal Register. See section 7805(b)

(7) of the Code. Alternatively, a taxpayer

may rely on proposed §1.101-1(b)(2)(iv),

(c)(2)(v), and (c)(3) for all section 1035

exchanges and acquisitions occurring

after December 31, 2017, and before the

date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register.

The reporting obligations under proposed §1.6050Y-3 are proposed to apply

to any section 1035 exchange treated as

a reportable policy sale under proposed

June 5, 2023

§1.101-1(c)(3) if the exchange occurs

on or after the date the Treasury decision adopting these regulations as final

regulations is published in the Federal

(2). The reporting obligations under

proposed §1.6050Y-4 are proposed to

apply to reportable death benefits paid

with respect to an interest in a life insurance contract issued in a section 1035

exchange treated as a reportable policy

sale under proposed §1.101-1(c)(3) if the

exchange occurs on or after the date the

Treasury decision adopting these regulations as final regulations is published

in the Federal Register. See proposed

§1.6050Y-1(b)(2). Any person with a

reporting obligation under proposed

§1.6050Y-3 or proposed §1.6050Y-4

may, however, rely on the proposed

regulations with respect to all section

1035 exchanges occurring after May 10,

2023, and before the date of publication

of the Treasury decision adopting these

rules as final regulations in the Federal

Special Analyses

I. Regulatory Planning and Review

The proposed regulations are not subject

to review under section 6(b) of Executive

Order 12866, as amended 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 additional collection of information relating to this notice of proposed

rulemaking will be submitted to the Office

of Management and Budget for review

under OMB Control Number 1545-2281 in

accordance with the Paperwork Reduction

Act of 1995 (44 U.S.C. 3507(d)). In general, the additional collection of information is required under section 6050Y.

When an interest in a life insurance contract that was previously transferred in or

is treated as having been previously transferred in a reportable policy sale (original

contract) is exchanged by a policyholder

under section 1035 for a new life insurance contract (new contract), proposed

914

§1.6050Y-3(a) would require the issuer

of the original contract (original issuer) to

notify the issuer of the new contract (new

issuer), the policyholder, and the IRS of

the status of the original contract as a contract transferred in or treated as having

been transferred in a reportable policy sale

and to provide the investment in the contract for the original contract. Proposed

§1.6050Y-3(a) would also require any

new issuer receiving such notification

with respect to a section 1035 exchange to

provide the policyholder and the IRS with

the policy number of the new contract and

the investment in the contract. This information is necessary to carry out the purpose of section 6050Y(c), which requires

a payor of reportable death benefits to

report certain information about payments

of reportable death benefits.

The likely respondents to the collection of information are life insurance

companies.

The burden for the additional collection of information contained in proposed

§1.6050Y-3 will be reflected in the burden

on Form 1099-SB, “Seller’s Investment

in Life Insurance Contract”, when the

burden is revised to reflect the additional

collection of information in proposed

§1.6050Y-3. The OMB Control Number

for this form is 1545-2281.

Comments on the collection of information should be sent to the Office of

Management and Budget, Attn: Desk

Officer for the Department of the Treasury,

Office of Information and Regulatory

Affairs, Washington, DC 20503, with

copies to the Internal Revenue Service,

Attn: IRS Reports Clearance Officer,

SE:CAR:MP:T:T:SP, Washington, DC

20224. Comments on the collection of

information should be received by July

10, 2023.

Comments are specifically requested

concerning:

Whether the proposed collection of

information is necessary for the proper

performance of the functions of the IRS,

including whether the information will

have practical utility;

The accuracy of the estimated burden

associated with the proposed collection of

information;

How the quality, utility, and clarity of

the information to be collected may be

enhanced;

Bulletin No. 2023–23

How the burden of complying with

the proposed collection of information

may be minimized, including through the

application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs

and costs of operation, maintenance,

and purchase of services to provide

information.

An agency may not conduct or sponsor,

and a person is not required to respond to,

a collection of information unless it displays a valid control number assigned by

the Office of Management and Budget.

III. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA)

requires agencies to “prepare and make

available for public comment an initial

regulatory flexibility analysis,” which

will “describe the impact of the proposed

rule on small entities.” 5 U.S.C. 603(a).

Section 605(b) of the RFA allows an

agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant

economic impact on a substantial number

of small entities.

Pursuant to the RFA, it is hereby certified that the proposed regulations will

not have a significant economic impact

on a substantial number of small entities,

because any effect on small entities by

the rules proposed in this document flows

directly from section 13520 of the TCJA.

In addition, it is anticipated that requirements in the proposed regulations, which

implement the statutory requirements

under section 13520 of the TCJA, will fall

primarily on financial and insurance firms

with annual receipts greater than $41.5

million and, therefore, on no small entities.

Therefore, the Commissioner of the IRS

hereby certifies that the proposed regulations will not have a significant economic

impact on a substantial number of small

entities. The Treasury Department and the

IRS request comments on the impacts of

this proposed rule on small entities.

Pursuant to section 7805(f) of the

Code, this notice of proposed rulemaking

will be submitted to the Chief Counsel

for the Office of Advocacy of the Small

Business Administration for comment on

its impact on small entities.

Bulletin No. 2023–23

IV. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 (UMRA) 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. This proposed rule does not

include any Federal mandate that may

result in expenditures by state, local, or

tribal governments, or by the private sector in excess of that threshold.

V. Executive Order 13132: Federalism

Executive Order 13132 (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 proposed regulations do

not have federalism implications and do

not impose substantial direct compliance

costs on state and local governments or

preempt state law within the meaning of

the Executive Order.

Comments and Requests for a Public

Hearing

Before these proposed amendments to

the final regulations are adopted as final

regulations, consideration will be given to

comments that are submitted timely to the

IRS as prescribed in this preamble under

the ADDRESSES heading. The Treasury

Department and the IRS request comments

on all aspects of the proposed regulations.

Any electronic comments submitted, and

to the extent practicable any paper comments submitted, will be made available

at www.regulations.gov or upon request.

A public hearing will be scheduled if

requested in writing by any person who

timely submits electronic or written comments. Requests for a public hearing are

also encouraged to be made electronically.

If a public hearing is scheduled, notice of

915

the date and time for the public hearing

will be published in the Federal Register.

Drafting Information

The principal author of these regulations is Kathryn M. Sneade, Office

of Associate Chief Counsel (Financial

Institutions and Products), IRS. However,

other personnel from the Treasury

Department and the IRS participated in

their development.

Availability of IRS Documents

The 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 www.irs.gov.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the

Regulations

Accordingly, the Treasury Department

and the IRS propose to amend 26 CFR

part 1 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 1.101-1 is amended by:

1. Adding a heading for paragraph (a)

introductory text.

2. In paragraph (a)(1), adding a sentence

after the fourth sentence.

3. In paragraphs (b) introductory text

and (b)(2), revising the headings.

4. Adding paragraph (b)(2)(iv).

5. Adding a sentence at the end of paragraph (c)(1).

6. Revising paragraph (c)(2)(v).

7. Adding paragraph (c)(3).

8. In paragraph (e)(2), removing “, other

than the issuance of a policy in an

exchange pursuant to section 1035”

in the last sentence.

June 5, 2023

In paragraph (g)(11), adding two sentences after the fourth sentence.

10. Adding paragraphs (g)(17) through

(g)(19).

The additions and revisions read as

follows:

§1.101-1 Exclusion from gross income

of proceeds of life insurance contracts

payable by reason of death.

(a) Exclusion from gross income—(1)

In general. * * * The extent to which this

exclusion applies in cases where life insurance policies have been gratuitously transferred or issued in an exchange pursuant

to section 1035 (section 1035 exchange) is

stated in paragraph (b)(2) of this section.

***

*****

(b) Transfers and exchanges of life

insurance policies.

*****

(2) Other transfers and exchanges—*

*****

(iv) Section 1035 exchanges. When an

interest in a life insurance contract (old

interest) is exchanged in a section 1035

exchange for an interest in a newly issued

life insurance contract (new interest),

except as otherwise provided by this section with respect to any portion of the new

interest that is transferred or exchanged

subsequent to the section 1035 exchange,

the amount of the proceeds attributable to

the new interest that is excludable from

gross income under section 101(a) is

determined as follows:

(A) If, at the time of the exchange, the

entire amount of the proceeds attributable to the old interest would have been

excludable from gross income under section 101(a), the entire amount of the proceeds attributable to the new interest is

excludable from gross income; and

(B) If, at the time of the exchange, less

than the entire amount of the proceeds

attributable to the old interest would have

been excludable from gross income under

section 101(a), the amount of the proceeds

attributable to the new interest that is

excludable from gross income is limited

to the sum of the amount of the proceeds

attributable to the old interest that would

have been excludable at the time of the

exchange and the premiums and other

June 5, 2023

amounts subsequently paid with respect

to the new interest by the policyholder,

reduced (but not below zero) by amounts

received by the policyholder under the life

insurance contract that are not received as

an annuity, to the extent excludable from

gross income under section 72(e).

*****

(1) * * * See paragraph (c)(3) of this

section for special rules applicable to section 1035 exchanges.

(2) * * *

(v) The direct acquisition of an interest

in a life insurance contract by a C corporation if:

(A) Immediately before the acquisition,

the interest is held by another C corporation (target C corporation) that actively

conducts a trade or business within the

meaning of §1.367(a)-2(d)(2) and (3);

(B) Immediately before the acquisition,

the target C corporation does not engage

in a trade or business of investing in interests in life insurance contracts;

value of the assets (as determined under

paragraph (f)(4) of this section) of the

target C corporation consists of life insurance contracts;

(D) The acquisition results from a

transaction that qualifies as a reorganization under section 368(a) with respect to

which the target C corporation and the

acquiring C corporation each is a party to

the reorganization (within the meaning of

section 368(b));

(E) Immediately after the acquisition,

the acquiring C corporation does not

engage in a trade or business of investing

in interests in life insurance contracts, and

(F) Immediately after the acquisition, no more than 5 percent of the gross

value of the assets (as determined under

paragraph (f)(4) of this section) of the

acquiring C corporation consists of life

insurance contracts.

(3) Section 1035 exchanges. This

paragraph (c)(3) applies if an interest in

a life insurance contract (old interest) is

exchanged in a section 1035 exchange for

an interest in a newly issued life insurance

contract (new interest), and the old interest previously was transferred for valuable

consideration in a reportable policy sale

under paragraph (c)(1) of this section or

916

is treated as an interest in a life insurance

contract that previously was transferred

for valuable consideration in a reportable policy sale under this paragraph (c)

(3). For purposes of this section, the new

interest is treated as an interest in a life

insurance contract that previously was

transferred for valuable consideration in

a reportable policy sale. For purposes of

§§1.6050Y-3 and 1.6050Y-4, the section

1035 exchange is treated as the transfer of

an interest in the life insurance contract in

a reportable policy sale.

*****

(g) * * *

(11) * * * Also, the exception in paragraph (c)(2)(v) of this section applies,

provided Corporation X satisfies the

requirements of paragraph (c)(2)(v)(A)

through (C) of this section immediately

before the acquisition by Corporation Y,

and Corporation Y satisfies the requirements of paragraph (c)(2)(v)(E) and (F) of

this section immediately after the acquisition. This would be the case even if A

were no longer employed by Corporation

X at the time of the transfer. * * *

*****

(17) Example 17. The facts are the same as in

Example 4 in paragraph (g)(4) of this section except

that, before A’s death, C exchanges the policy on

A’s life for a new policy on A’s life in a section

1035 exchange. The amount of the proceeds C may

exclude from C’s gross income under this section is

limited under paragraph (b)(2)(iv)(B) of this section

to $6,000 plus any premiums and other amounts paid

by C with respect to the original policy subsequent

to the transfer and any premiums and other amounts

paid by C with respect to the new policy subsequent

to the exchange.

(18) Example 18. The facts are the same as in

Example 17 in paragraph (g)(17) of this section

except that, before A’s death, C sells the new policy to A for fair market value. A’s estate receives the

proceeds of $100,000 on A’s death. Under paragraph

(b)(1)(ii)(B)(3)(i) of this section, the amount of the

proceeds A’s estate may exclude from gross income

is not limited by paragraph (b) of this section.

(19) Example 19. A is the initial policyholder of a

$100,000 insurance policy on A’s life. A transfers the

policy for $6,000, its fair market value, to an individual, C, who does not have a substantial family,

business, or financial relationship with A at the time

of the transfer. The transfer from A to C is a reportable policy sale. C also is the initial policyholder

of a $200,000 insurance policy on A’s life. Before

A’s death, C exchanges the two policies on A’s life

for a single new policy on A’s life in a section 1035

exchange. C receives the proceeds from the new policy on A’s death. The entire amount of the proceeds

attributable to the interest in the new policy that was

issued in exchange for the policy originally issued to

C is excludable from gross income under paragraph

Bulletin No. 2023–23

(b)(2)(iv)(A) of this section. The amount of the proceeds attributable to the interest in the new policy

that was issued in exchange for the policy originally

issued to A that is excludable from gross income is

limited under paragraph (b)(2)(iv)(B) of this section

to $6,000 plus any premiums and other amounts paid

by C with respect to the policy originally issued to

A subsequent to the transfer and any premiums and

other amounts paid by C with respect to the interest

in the new policy that was issued in exchange for the

policy originally issued to A.

Par. 3. Section 1.101-6 is amended by

adding paragraph (c) to read as follows:

§1.101-6 Effective date.

*****

and (b) of this section, §1.101-1(b)(2)

(iv) and (c)(3) apply to any interest in a

life insurance contract issued in a section

1035 exchange occurring on or after the

date these regulations are published as

final regulations in the Federal Register,

and §1.101-1(c)(2)(v) applies to any

acquisition of an interest in a life insurance contract occurring on or after the

date these regulations are published as

final regulations in the Federal Register.

However, under section 7805(b)(7), a

taxpayer may choose to apply the rules

in §1.101-1(b)(2)(iv), (c)(2)(v), and (c)

(3) to all exchanges and acquisitions

occurring after December 31, 2017, and

before the date these regulations are published as final regulations in the Federal

Par. 4. Section 1.6050Y-1 is amended

by:

1. In paragraph (a)(1), adding a sentence

at the end of the paragraph.

2. In paragraph (a)(2), adding “under

§1.101-1(c)(1) or treated as such an

interest under §1.101-1(c)(3)” before

the second comma.

3. In paragraph (a)(8)(ii), removing the

last sentence.

4. In paragraph (a)(8)(iii)(A), removing

“or” at the end.

5. In paragraph (a)(8)(iii)(B)(2), removing the period at the end of the paragraph and adding in its place “; or”.

6. Adding paragraph (a)(8)(iii)(C).

7. Adding paragraph (a)(8)(v).

8. In paragraph (a)(12), adding “under

§1.101-1(c)(1) or (3)” before the

period at the end of the paragraph.

9. In paragraph (a)(14), removing

“§1.101-1(c)” before the period at the

Bulletin No. 2023–23

end of the paragraph, and adding in

its place “§1.101-1(c), except as otherwise provided in this section”.

10. In paragraph (a)(18)(i), removing

“or” at the end of the paragraph.

11. In paragraph (a)(18)(ii), removing the

period at the end of the paragraph and

adding in its place “; or”.

12. Adding paragraph (a)(18)(iii).

13. Redesignating paragraphs (b)(1)

through (5) as paragraphs (b)(1)(i)

through (v); redesignating paragraph

(b) introductory text as paragraph (b)

(1); adding a heading to paragraph (b)

introductory text; revising the heading

for the newly redesignated paragraph

(b)(1); revising the first two sentences

of newly redesignated paragraph (b)

(1); and adding paragraph (b)(2).

The additions and revisions read as

follows:

§1.6050Y-1 Information reporting for

reportable policy sales, transfers of life

insurance contracts to foreign persons,

and reportable death benefits.

(a) * * *

(1) * * * For purposes of determining the buyer under paragraph (a)(2)

of this section, the term acquirer also

includes any person to whom an interest

in a life insurance contract is issued in an

exchange pursuant to section 1035 (section 1035 exchange) that is treated as the

transfer of an interest in the life insurance

contract in a reportable policy sale under

§1.101-1(c)(3).

*****

(8) * * *

(iii) * * *

issuer or the designee of a section 1035

issuer.

*****

(v) Section 1035 issuer. A section 1035

issuer is any person that, on the date of a

section 1035 exchange of an interest in

an existing life insurance contract for an

interest in a newly issued life insurance

contract that is treated as the transfer of

an interest in a life insurance contract in

a reportable policy sale under §1.101-1(c)

(3), is:

(A) An issuer with respect to the existing life insurance contract, provided the

issuer received an RPSS, a statement

917

required by §1.6050Y-3(d)(1), or other

information indicating that the existing

life insurance contract or interest therein

was transferred in a reportable policy sale

under §1.101-1(c)(1) or (3); or

(B) An issuer with respect to the newly

issued life insurance contract, provided

the issuer receives the statement required

by §1.6050Y-3(d)(1) or other information

indicating that existing life insurance contract or interest therein was transferred in

a reportable policy sale under §1.101-1(c)

(1) or (3).

*****

(18) * * *

(iii) For purposes of reporting under

§1.6050Y-3 by both the section 1035

issuer described in paragraph (a)(8)(v)(A)

of this section and the section 1035 issuer

described in paragraph (a)(8)(v)(B) of this

section, holds an interest in a life insurance contract that has been transferred in

a reportable policy sale under §1.101-1(c)

(1) or (3) and exchanges that interest for

an interest in a new life insurance contract

in a section 1035 exchange.

(b) Applicability date—(1) In general.

Except as otherwise provided in paragraph (b)(2) of this section, this section

and §§1.6050Y-2 through 1.6050Y-3

apply to reportable policy sales made after

December 31, 2018. Except as otherwise

provided in paragraph (b)(2) of this section, this section and §1.6050Y-4 apply

to reportable death benefits paid after

December 31, 2018. * * *

*****

(2) Section 1035 exchanges. Section

1.6050Y-3 applies to a section 1035

exchange treated as a reportable policy

sale under §1.101-1(c)(3) if the exchange

occurs on or after the date these regulations are published as final regulations in

the Federal Register. Section 1.6050Y-4

applies to reportable death benefits paid

with respect to an interest in a life insurance contract issued in a section 1035

exchange treated as a reportable policy

sale under §1.101-1(c)(3) if the exchange

occurs on or after the date these regulations are published as final regulations in

the Federal Register.

§1.6050Y-2 [Amended]

Par. 5. Section 1.6050Y-2 is amended

by removing paragraph (f)(3).

June 5, 2023

Par. 6. Section 1.6050Y-3 is amended

by:

1. In paragraph (a) introductory text,

removing “that receives an RPPS or

any notice of a transfer to a foreign

person” in the first sentence and

adding in its place “that receives an

RPSS, receives any notice of a transfer to a foreign person, or is a section

1035 issuer”.

2. In paragraph (a)(3), removing “The”

at the beginning of the paragraph and

adding in its place “For 6050Y(b)

issuers other than section 1035 issuers, the”.

3. In paragraph (c), removing “reportable policy sale or the transfer to a

foreign person occurred” before the

period at the end of the first sentence

and adding in its place “reportable

policy sale, transfer to a foreign

person, or section 1035 exchange

occurred”.

4. In paragraph (d)(1), removing “is a

reportable policy sale payment recipient or makes a transfer to a foreign

person” in the first sentence and adding in its place “is a reportable policy sale payment recipient, makes a

transfer to a foreign person, or makes

a section 1035 exchange”, and adding

a sentence at the end of the paragraph.

5. In paragraph (d)(2), removing

“reportable policy sale or transfer to

a foreign person occurred” before the

period at the end of the first sentence

June 5, 2023

and adding in its place “reportable

policy sale, transfer to a foreign

person, or section 1035 exchange

occurred”, and adding a sentence

after the second sentence.

6. In paragraph (f), removing “paragraph (f)(1), (2), or (3) of this section

applies” before the period at the end

of the paragraph and adding in its

place “paragraph (f)(1) or (2) of this

section applies”.

7. Removing paragraph (f)(3).

The additions read as follows:

§1.6050Y-3 Information reporting by

6050Y(b) issuers for reportable policy

sales and transfers of life insurance

contracts to foreign persons.

*****

(d) * * *

(1) * * * In addition, every section

1035 issuer described in §1.6050Y-1(a)

(8)(v)(A) filing a return required by paragraph (a) of this section with respect to

a section 1035 exchange must furnish

to each section 1035 issuer described in

§1.6050Y-1(a)(8)(v)(B) with respect to

that exchange a written statement showing

the information required by paragraph (a)

of this section with respect to the seller in

the exchange and the name, address, and

phone number of the information contact

of the person filing the return.

(2) Time for furnishing statement. * *

* Each statement required by paragraph

918

(d)(1) of this section to be furnished to

any section 1035 issuer described in

§1.6050Y-1(a)(8)(v)(B) must be furnished

within 30 days of the date of the section

1035 exchange. * * *

*****

Par. 7. Section 1.6050Y-4 is amended

by adding a sentence at the end of paragraph (e)(3) to read as follows:

§1.6050Y-4 Information reporting by

payors for reportable death benefits.

*****

(e) * * *

(3) * * * Additionally, if the reportable

death benefits are paid with respect to an

interest in a life insurance contract issued

in a section 1035 exchange, the payor

never received, and has no knowledge of

any issuer having received, a statement

described in §1.6050Y-3(d)(1) from a section 1035 issuer or other information indicating that the issuance of the contract is

treated as a transfer of an interest in the

contract in a reportable policy sale under

§1.101-1(c)(3).

*****

Douglas W. O’Donnell,

Deputy Commissioner for Services

and Enforcement.

(Filed by the Office of the Federal Register May 9,

2023, 8:45a.m., and published in the issue of the

Federal Register for May 10, 2023, 88 FR 30058)

Bulletin No. 2023–23

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. 2023–23

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

June 5, 2023

Numerical Finding List1

Bulletin 2023–23

Announcements:

2023-2, 2023-2 I.R.B. 344

2023-1, 2023-3 I.R.B. 422

2023-3, 2023-5 I.R.B. 447

2023-4, 2023-7 I.R.B. 470

2023-5, 2023-9 I.R.B. 499

2023-6, 2023-9 I.R.B. 501

2023-8, 2023-14 I.R.B. 632

2023-9, 2023-15 I.R.B. 639

2023-10, 2023-16 I.R.B. 663

2023-7, 2023-17 I.R.B. 797

2023-11, 2023-17 I.R.B. 798

2023-12, 2023-17 I.R.B. 799

2023-13, 2023-18 I.R.B. 833

2023-14, 2023-19 I.R.B. 853

2023-16, 2023-20 I.R.B. 854

2023-15, 2023-21 I.R.B. 856

AOD:

2023-1, 2023-10 I.R.B. 502

2023-2, 2023-11 I.R.B. 529

Notices:

2023-4, 2023-2 I.R.B. 321

2023-5, 2023-2 I.R.B. 324

2023-6, 2023-2 I.R.B. 328

2023-8, 2023-2 I.R.B. 341

2023-1, 2023-3 I.R.B. 373

2023-2, 2023-3 I.R.B. 374

2023-3, 2023-3 I.R.B. 388

2023-7, 2023-3 I.R.B. 390

2023-9, 2023-3 I.R.B. 402

2023-10, 2023-3 I.R.B. 403

2023-11, 2023-3 I.R.B. 404

2023-12, 2023-6 I.R.B. 450

2023-13, 2023-6 I.R.B. 454

2023-16, 2023-8 I.R.B. 479

2023-17, 2023-10 I.R.B. 505

2023-18, 2023-10 I.R.B. 508

2023-20, 2023-10 I.R.B. 523

2023-19, 2023-11 I.R.B. 560

2023-21, 2023-11 I.R.B. 563

2023-22, 2023-12 I.R.B. 569

2023-23, 2023-13 I.R.B. 571

2023-24, 2023-13 I.R.B. 571

2023-26, 2023-13 I.R.B. 577

2023-25, 2023-14 I.R.B. 629

2023-27, 2023-15 I.R.B. 634

2023-28, 2023-15 I.R.B. 635

2023-31, 2023-16 I.R.B. 661

2023-30, 2023-17 I.R.B. 766

2023-33, 2023-18 I.R.B. 803

Notices:—Continued

Treasury Decisions:

2023-34, 2023-19 I.R.B. 837

2023-38, 2023-22 I.R.B. 872

2023-39, 2023-22 I.R.B. 877

2023-40, 2023-22 I.R.B. 879

2023-41, 2023-23 I.R.B. 905

9970, 2023-2 I.R.B. 311

9771, 2023-3 I.R.B. 346

9772, 2023-11 I.R.B. 530

9773, 2023-11 I.R.B. 557

Proposed Regulations:

REG-100442-22, 2023-3 I.R.B. 423

REG-146537-06, 2023-3 I.R.B. 436

REG-114666-22, 2023-4 I.R.B. 437

REG 122286-18, 2023-11 I.R.B. 565

REG-120653-22, 2023-15 I.R.B. 640

REG-105954-22, 2023-16 I.R.B. 713

REG-120080-22, 2023-16 I.R.B. 746

REG 109309-22, 2023-17 I.R.B. 770

REG 121709-19, 2023-17 I.R.B. 789

REG-124064-19, 2023-17 I.R.B. 789

REG-108054-21, 2023-23 I.R.B. 907

Revenue Procedures:

2023-1, 2023-1 I.R.B. 1

2023-2, 2023-1 I.R.B. 120

2023-3, 2023-1 I.R.B. 144

2023-4, 2023-1 I.R.B. 162

2023-5, 2023-1 I.R.B. 265

2023-7, 2023-1 I.R.B. 305

2023-8, 2023-3 I.R.B. 407

2023-10, 2023-3 I.R.B. 411

2023-11, 2023-3 I.R.B. 417

2023-14, 2023-6 I.R.B. 466

2023-9, 2023-7 I.R.B. 471

2023-13, 2023-13 I.R.B. 581

2023-17, 2023-13 I.R.B. 604

2023-18, 2023-13 I.R.B. 605

2023-19, 2023-13 I.R.B. 626

2023-20, 2023-15 I.R.B. 636

2023-12, 2023-17 I.R.B. 768

2023-15, 2023-18 I.R.B. 806

2023-21, 2023-19 I.R.B. 837

2023-22, 2023-19 I.R.B. 838

2023-23, 2023-22 I.R.B. 883

Revenue Rulings:

2023-1, 2023-2 I.R.B. 309

2023-3, 2023-6 I.R.B. 448

2023-4, 2023-9 I.R.B. 480

2023-5, 2023-10 I.R.B. 503

2023-6, 2023-14 I.R.B. 627

2023-7, 2023-15 I.R.B. 633

2023-2, 2023-16 I.R.B. 658

2023-8, 2023-18 I.R.B. 801

2023-9, 2023-19 I.R.B. 835

2023-10, 2023-23 I.R.B. 884

2023-11, 2023-23 I.R.B. 886

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin

2022–52, dated December 27, 2022.

June 5, 2023

Bulletin No. 2023–23

Finding List of Current Actions on

Previously Published Items1

Bulletin 2023–23

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin

2022–52, dated December 27, 2022.

Bulletin No. 2023–23

iii

June 5, 2023

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

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