# Bulletin No. 2023–23

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A7b7fa36872d05b4f

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41

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
63
0.000863380
64
0.000877091
65
0.000890801
66
0.000904512
67
0.000918223
68
0.000931934
69
0.000945646
70
0.000959357
71
0.000973069
72
0.000986781
73
0.001000493
74
0.001014206
75
0.001027918
76
0.001041631
77
0.001055344
78
0.001069057
79
0.001082770
80
0.001096484
81
0.001110197
82
0.001123911
83
0.001137625
84
0.001151339
85
0.001165054
86
0.001178768
87
0.001192483
88
0.001206198
89
0.001219913
90
0.001233629
91
0.001247344
92
0.001261060
93
0.001274776
94
0.001288492
95
0.001302208
96
0.001315925
97
0.001329641
98
0.001343358
99
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

42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62

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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

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
63
0.000861020
64
0.000874693
65
0.000888366
66
0.000902040
67
0.000915713
68
0.000929387
69
0.000943061
70
0.000956735
71
0.000970409
72
0.000984084
73
0.000997758
74
0.001011433
75
0.001025108
76
0.001038783
77
0.001052459
78
0.001066134
79
0.001079810
80
0.001093486
81
0.001107162
82
0.001120839
83
0.001134515
84
0.001148192
85
0.001161869
86
0.001175546
87
0.001189223
88
0.001202900
89
0.001216578
90
0.001230256
91
0.001243934
92
0.001257612
93
0.001271291
94
0.001284969
95
0.001298648
96
0.001312327
97
0.001326006
98
0.001339685
99
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

43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62

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

6%
9%
7%
6%
12%
20%
16%
11%
11%
11%
13%
11%
10%
9%

Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table

In 1995-1 C.B.
DAILY RATE TABLE
2,
pg.
4,
pg.
3,
pg.
2,
pg.
5,
pg.
6,
pg.
37,
pg.
27,
pg.
75,
pg.
75,
pg.
31,
pg.
27,
pg.
25,
pg.
23,
pg.

557
559
558
557
560
560
591
581
629
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
8%
8%
8%
9%
10%
9%
9%
10%
10%
11%
11%
10%
10%
10%
10%
10%
10%

OVERPAYMENTS
1995-1 C.B.
TABLE
PG
21
575
21
575
21
575
23
577
73
627
71
625
71
625
73
627
25
579
27
581
27
581
25
579
25
579
25
579
25
579
25
579
25
579

891

UNDERPAYMENTS
1995-1 C.B. RATE
RATE
TABLE
PG
9%
23
577
9%
23
577
9%
23
577
10%
25
579
11%
75
629
10%
73
627
10%
73
627
11%
75
629
11%
27
581
12%
29
583
12%
29
583
11%
27
581
11%
27
581
11%
27
581
11%
27
581
11%
27
581
11%
27
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

9%
9%
9%
8%
7%
7%
6%
6%
6%
6%
6%
6%
6%
7%
8%
8%
9%
8%
8%
8%
7%
8%
8%
8%
8%
8%
8%
8%
7%
7%
7%

23
23
23
69
67
67
65
17
17
17
17
17
17
19
21
21
23
21
21
69
67
69
69
21
21
21
21
21
19
19
19

892

577
577
577
623
621
621
619
571
571
571
571
571
571
573
575
575
577
575
575
623
621
623
623
575
575
575
575
575
573
573
573

10%
10%
10%
9%
8%
8%
7%
7%
7%
7%
7%
7%
7%
8%
9%
9%
10%
9%
9%
9%
8%
9%
9%
9%
9%
9%
9%
9%
8%
8%
8%

25
25
25
71
69
69
67
19
19
19
19
19
19
21
23
23
25
23
23
71
69
71
71
23
23
23
23
23
21
21
21

579
579
579
625
623
623
621
573
573
573
573
573
573
575
577
577
579
577
577
625
623
625
625
577
577
577
577
577
575
575
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
7%
8%
8%
8%
8%
9%
9%
9%
9%
8%
7%
7%
6%
6%
6%
6%
5%
5%
5%
4%
4%
5%
4%
5%
5%
6%
6%
7%
7%
7%
8%
8%
8%
8%
8%
8%
7%
6%
5%
6%

893

TABLE
19
21
21
21
69
71
71
71
23
21
19
19
17
17
17
17
15
15
15
13
61
63
61
63
15
17
17
19
19
19
21
21
21
21
21
21
67
65
63
65

PAGE
573
575
575
575
623
625
625
625
577
575
573
573
571
571
571
571
569
569
569
567
615
617
615
617
569
571
571
573
573
573
575
575
575
575
575
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

5%
4%
4%
4%
4%
4%
4%
4%
3%
4%
4%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
4%
4%
4%
4%
4%
5%
5%
5%
6%
6%
5%
5%
5%

June 5, 2023

894

15
13
13
13
13
13
13
13
11
13
13
11
59
59
59
59
11
11
11
11
11
11
11
11
11
11
11
11
59
61
61
61
13
13
13
13
13
15
15
15
17
17
15
15
63

569
567
567
567
567
567
567
567
565
567
567
565
613
613
613
613
565
565
565
565
565
565
565
565
565
565
565
565
613
615
615
615
567
567
567
567
567
569
569
569
571
571
569
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

5%
3%
3%
3%
3%
3%
3%
3%
4%
5%
6%
7%
7%
7%

Bulletin No. 2023–23

895

63
59
59
11
11
11
11
11
13
15
17
19
19
19

617
613
613
565
565
565
565
565
567
569
571
573
573
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
6%
17
7%
19
7%
19
7%
19
7%
67
8%
69
8%
69
8%
69
8%
21
7%
19
6%
17
6%
17
5%
15
5%
15
5%
15
5%
15
4%
13
4%
13
4%
13
3%
11
3%
59
4%
61
3%
59
4%
61
4%
13
5%
15
5%
15
6%
17
6%
17
6%
17
7%
19
7%
19
7%
19
7%
19
7%
19
7%
19
6%
65
5%
63
4%
61
5%
63

896

PG
571
573
573
573
621
623
623
623
575
573
571
571
569
569
569
569
567
567
567
565
613
615
613
615
567
569
569
571
571
571
573
573
573
573
573
573
619
617
615
617

UNDERPAYMENTS
1995-1 C.B.
RATE
TABLE
PG
7%
19
573
8%
21
575
8%
21
575
8%
21
575
8%
69
623
9%
71
625
9%
71
625
9%
71
625
9%
23
577
8%
21
575
7%
19
573
7%
19
573
6%
17
571
6%
17
571
6%
17
571
6%
17
571
5%
15
569
5%
15
569
5%
15
569
4%
13
567
4%
61
615
5%
63
617
4%
61
615
5%
63
617
5%
15
569
6%
17
571
6%
17
571
7%
19
573
7%
19
573
7%
19
573
8%
21
575
8%
21
575
8%
21
575
8%
21
575
8%
21
575
8%
21
575
7%
67
621
6%
65
619
5%
63
617
6%
65
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

4%
3%
3%
3%
3%
3%
3%
3%
2%
3%
3%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
5%
5%
4%
4%
4%

13
11
11
11
11
11
11
11
9
11
11
9
57
57
57
57
9
9
9
9
9
9
9
9
9
9
9
9
57
59
59
59
11
11
11
11
11
13
13
13
15
15
13
13
61

897

567
565
565
565
565
565
565
565
563
565
565
563
611
611
611
611
563
563
563
563
563
563
563
563
563
563
563
563
611
613
613
613
565
565
565
565
565
567
567
567
569
569
567
567
615

5%
4%
4%
4%
4%
4%
4%
4%
3%
4%
4%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
4%
4%
4%
4%
4%
5%
5%
5%
6%
6%
5%
5%
5%

15
13
13
13
13
13
13
13
11
13
13
11
59
59
59
59
11
11
11
11
11
11
11
11
11
11
11
11
59
61
61
61
13
13
13
13
13
15
15
15
17
17
15
15
63

569
567
567
567
567
567
567
567
565
567
567
565
613
613
613
613
565
565
565
565
565
565
565
565
565
565
565
565
613
615
615
615
567
567
567
567
567
569
569
569
571
571
569
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

4%
2%
2%
2%
2%
2%
2%
2%
3%
4%
5%
6%
6%
6%

61
57
57
9
9
9
9
9
11
13
15
17
17
17

898

615
611
611
563
563
563
563
563
565
567
569
571
571
571

5%
3%
3%
3%
3%
3%
3%
3%
4%
5%
6%
7%
7%
7%

63
59
59
11
11
11
11
11
13
15
17
19
19
19

617
613
613
565
565
565
565
565
567
569
571
573
573
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%
12%
12%
11%
10%
10%
9%
9%
9%
9%
9%
9%
9%
10%
11%
11%
12%
11%
11%
11%
10%
11%
11%
11%
11%
11%
11%
11%
10%
10%
10%
9%
10%
10%
10%
10%
11%
11%
11%
11%

899

1995-1 C.B.
TABLE
31
29
29
29
75
73
73
71
23
23
23
23
23
23
25
27
27
29
27
27
75
73
75
75
27
27
27
27
27
25
25
25
23
25
25
25
73
75
75
75
27

PG
585
583
583
583
629
627
627
625
577
577
577
577
577
577
579
581
581
583
581
581
629
627
629
629
581
581
581
581
581
579
579
579
577
579
579
579
627
629
629
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%
9%
9%
8%
8%
8%
8%
7%
7%
7%
6%
6%
7%
6%
7%
7%
8%
8%
9%
9%
9%
10%
10%
10%
10%
10%
10%
9%
8%
7%
8%
7%
6%
6%
6%
6%
6%
6%
6%
5%
6%
6%
5%
5%
5%

900

25
23
23
21
21
21
21
19
19
19
17
65
67
65
67
19
21
21
23
23
23
25
25
25
25
25
25
71
69
67
69
19
17
17
17
17
17
17
17
15
17
17
15
63
63

579
577
577
575
575
575
575
573
573
573
571
619
621
619
621
573
575
575
577
577
577
579
579
579
579
579
579
625
623
621
623
573
571
571
571
571
571
571
571
569
571
571
569
617
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

5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
6%
6%
6%
6%
6%
6%
6%
6%
7%
7%
7%
8%
8%
7%
7%
7%
7%
5%
5%
5%
5%
5%
5%
5%
6%
7%
8%
9%
9%
9%

Bulletin No. 2023–23

901

63
63
15
15
15
15
15
15
15
15
15
15
15
15
63
65
65
65
17
17
17
17
17
19
19
19
21
21
19
19
67
67
63
63
15
15
15
15
15
17
19
21
23
23
23

617
617
569
569
569
569
569
569
569
569
569
569
569
569
617
619
619
619
571
571
571
571
571
573
573
573
575
575
573
573
621
621
617
617
569
569
569
569
569
571
573
575
577
577
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

PG

Jan. 1, 1995–Mar. 31, 1995

6.5%

18

572

Apr. 1, 1995–Jun. 30, 1995

7.5%

20

574

Jul. 1, 1995–Sep. 30, 1995

6.5%

18

572

Oct. 1, 1995–Dec. 31, 1995

6.5%

18

572

Jan. 1, 1996–Mar. 31, 1996

6.5%

66

620

Apr. 1, 1996–Jun. 30, 1996

5.5%

64

618

Jul. 1, 1996–Sep. 30, 1996

6.5%

66

620

Oct. 1, 1996–Dec. 31, 1996

6.5%

66

620

Jan. 1, 1997–Mar. 31, 1997

6.5%

18

572

Apr. 1, 1997–Jun. 30, 1997

6.5%

18

572

Jul. 1, 1997–Sep. 30, 1997

6.5%

18

572

Oct. 1, 1997–Dec. 31, 1997

6.5%

18

572

Jan. 1, 1998–Mar. 31, 1998

6.5%

18

572

Apr. 1, 1998–Jun. 30, 1998

5.5%

16

570

Jul. 1, 1998–Sep. 30, 1998

5.5%

16

570

Oct. 1, 1998–Dec. 31, 1998

5.5%

16

570

Jan. 1, 1999–Mar. 31, 1999

4.5%

14

568

Apr. 1, 1999–Sep. 30, 1999

5.5%

16

570

Jul. 1, 1999–Sep. 30, 1999

5.5%

16

570

Oct. 1, 1999–Dec. 31, 1999

5.5%

16

570

Jan. 1, 2000–Mar. 31, 2000

5.5%

64

618

Apr. 1, 2000–Jun. 30, 2000

6.5%

66

620

Jul. 1, 2000–Sep. 30, 2000

6.5%

66

620

Oct. 1, 2000–Dec. 31, 2000

6.5%

66

620

Jan. 1, 2001–Mar. 31, 2001

6.5%

18

572

Apr. 1, 2001–Jun. 30, 2001

5.5%

16

570

Jul. 1, 2001–Sep. 30, 2001

4.5%

14

568

Oct. 1, 2001–Dec. 31, 2001

4.5%

14

568

Jan. 1, 2002–Mar. 31, 2002

3.5%

12

566

Apr. 1, 2002–Jun. 30, 2002

3.5%

12

566

Jul. 1, 2002–Sep. 30, 2002

3.5%

12

566

Oct. 1, 2002–Dec. 31, 2002

3.5%

12

566

Jan. 1, 2003–Mar. 31, 2003

2.5%

10

564

Apr. 1, 2003–Jun. 30, 2003

2.5%

10

564

Jul. 1, 2003–Sep. 30, 2003

2.5%

10

564

Oct. 1, 2003–Dec. 31, 2003

1.5%

8

562

Jan. 1, 2004–Mar. 31, 2004

1.5%

56

610

Apr. 1, 2004–Jun. 30, 2004

2.5%

58

612

June 5, 2023

902

Bulletin No. 2023–23

Jul. 1, 2004–Sep. 30, 2004

1.5%

56

610

Oct. 1, 2004–Dec. 31, 2004

2.5%

58

612

Jan. 1, 2005–Mar. 31, 2005

2.5%

10

564

Apr. 1, 2005–Jun. 30, 2005

3.5%

12

566

Jul. 1, 2005–Sep. 30, 2005

3.5%

12

566

Oct. 1, 2005–Dec. 31, 2005

4.5%

14

568

Jan. 1, 2006–Mar. 31, 2006

4.5%

14

568

Apr. 1, 2006–Jun. 30, 2006

4.5%

14

568

Jul. 1, 2006–Sep. 30, 2006

5.5%

16

570

Oct. 1, 2006–Dec. 31, 2006

5.5%

16

570

Jan. 1, 2007–Mar. 31, 2007

5.5%

16

570

Apr. 1, 2007–Jun. 30, 2007

5.5%

16

570

Jul. 1, 2007–Sep. 30, 2007

5.5%

16

570

Oct. 1, 2007–Dec. 31, 2007

5.5%

16

570

Jan. 1, 2008–Mar. 31, 2008

4.5%

62

616

Apr. 1, 2008–Jun. 30, 2008

3.5%

60

614

Jul. 1, 2008–Sep. 30, 2008

2.5%

58

612

Oct. 1, 2008–Dec. 31, 2008

3.5%

60

614

Jan. 1, 2009–Mar. 31, 2009

2.5%

10

564

Apr. 1, 2009–Jun. 30, 2009

1.5%

8

562

Jul. 1, 2009–Sep. 30, 2009

1.5%

8

562

Oct. 1, 2009–Dec. 31, 2009

1.5%

8

562

Jan. 1, 2010–Mar. 31, 2010

1.5%

8

562

Apr. 1, 2010–Jun. 30, 2010

1.5%

8

562

Jul. 1, 2010–Sep. 30, 2010

1.5%

8

562

Oct. 1, 2010–Dec. 31, 2010

1.5%

8

562

Jan. 1, 2011–Mar. 31, 2011

0.5%*

Apr. 1, 2011–Jun. 30, 2011

1.5%

8

562

Jul. 1, 2011–Sep. 30, 2011

1.5%

8

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%

56

610

Jul. 1, 2016–Sep. 30, 2016

1.5%

56

610

Oct. 1, 2016–Dec. 31, 2016

1.5%

56

610

Jan. 1, 2017–Mar. 31, 2017

1.5%

8

562

Apr. 1, 2017–Jun. 30, 2017

1.5%

8

562

Jul. 1, 2017–Sep. 30, 2017

1.5%

8

562

Oct. 1, 2017–Dec. 31, 2017

1.5%

8

562

Jan. 1, 2018–Mar. 31, 2018

1.5%

8

562

Apr. 1, 2018–Jun. 30, 2018

2.5%

10

564

Jul. 1, 2018–Sep. 30, 2018

2.5%

10

564

Oct. 1, 2018–Dec. 31, 2018

2.5%

10

564

Jan. 1, 2019–Mar. 31, 2019

3.5%

12

566

Apr. 1, 2019–Jun. 30, 2019

3.5%

12

566

Jul. 1, 2019–Sep. 30, 2019

2.5%

10

564

Oct. 1, 2019–Dec. 31, 2019

2.5%

10

564

Jan. 1, 2020–Mar. 31, 2020

2.5%

58

612

Apr. 1, 2020–Jun. 30, 2020

2.5%

58

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%

8

562

Jul. 1, 2022–Sep. 30, 2022

2.5%

10

564

Oct. 1, 2022–Dec. 31, 2022

3.5%

12

566

Jan. 1, 2023–Mar. 31, 2023

4.5%

14

568

Apr. 1, 2023–Jun. 30, 2023

4.5%

14

568

Jul. 1, 2023–Sep. 30, 2023

4.5%

14

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.

1

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
Register, the Treasury Department and
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.
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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.
2

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.
4
Section 101(j)(5) defines the term “employee” to include an officer, director, and highly compensated employee (within the meaning of section 414(q)).
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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).
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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
Register. See proposed §1.6050Y-1(b)
(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
Register.
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

9.

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).
*****
(c) * * *
(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;
(C) Immediately before 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
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.

*****
(c) Notwithstanding paragraphs (a)
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 t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A7b7fa36872d05b4f. Public record. Not legal advice.