Bulletin No. 2024–39

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2024–39

September 23, 2024

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

This notice requests comments from the public regarding all

aspects of sections 103 and 104 of the SECURE 2.0 Act of

2022. Section 103 of the SECURE 2.0 Act of 2022, in part,

added section 6433 to the Internal Revenue Code, which

provides for matching contributions (Saver’s Match contributions) paid by the Secretary of the Treasury to applicable

retirement savings vehicles on behalf of eligible individuals

who make qualified retirement savings contributions. Section

104 of the SECURE 2.0 Act of 2022 requires the Department

of the Treasury to take steps to increase public awareness of

the availability of Saver’s Match contributions and to provide

a report to Congress on anticipated promotion efforts by the

Department of the Treasury.

intent to propose regulations for the credit. Section 5.01

of Notice 2024-20 refers taxpayers to appendices with lists

of eligible census tracts based on either the 2015 census

tract boundaries or the 2020 census tract boundaries, as

relevant, using a unique identifier called an 11-digit census

tract GEOID. Section 5.02 of Notice 2024-20 provides website addresses for mapping tools that taxpayers can use to

identify the 11-digit census tract GEOID for a location where

a property is placed in service. Section 5.03 of Notice 202420 provides that until the issuance of the forthcoming proposed regulations, taxpayers may rely on Notice 2024-20

and its appendices for purposes of determining whether

qualified alternative fuel vehicle refueling property has been

placed in service in an eligible census tract. This notice modifies sections 5.02 and 5.03 of Notice 2024-20 by updating

the mapping tools referenced in Notice 2024-20 and extending section 5.03 in Notice 2024-20.

EXEMPT ORGNIZATION

REG-111629-23, page 640.

Notice 2024-65, page 633.

Announcement 2024-39, page 639.

Revocation of IRC 501(c)(3) Organizations for failure to meet

the code section requirements. Contributions made to the

organizations by individual donors are no longer deductible

under IRC 170(b)(1)(A).

INCOME TAX

Notice 2024-64, page 632.

On February 12, 2024, the Treasury Department and the

IRS published Notice 2024-20, 2024-7 I.R.B. 668, to provide guidance on eligible census tracts for the § 30C credit

in advance of the 2023 filing season and to announce the

Finding Lists begin on page ii.

This document contains proposed regulations that, in general, modify the time and manner for making and revoking

elections relating to certain foreign currency gains and losses

under §1.954-2(g) and proposed §§1.954-2(g) and 1.988-7.

Rev. Proc. 2024-35, page 638.

This revenue procedure provides the applicable percentage

table in section 36B(b)(3)(A) for taxable years beginning

in calendar year 2025 that is used to calculate an individual’s premium tax credit under section 36B. This revenue

procedure also provides the indexing adjustment for the

required contribution percentage in section 36B(c)(2)(C)(i)

(II) that is used to determine whether an individual is eligible

for employer-sponsored minimum essential coverage under

section 36B.

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.

September 23, 2024 

Bulletin No. 2024–39

Part III

Modification of Notice

2024-20

Notice 2024-64

SECTION 1. PURPOSE

This notice modifies Notice 2024-20,

2024-7 I.R.B. 668, relating to the alternative fuel vehicle refueling property

credit under § 30C of the Internal Revenue Code (§ 30C credit) by updating the

mapping tools referenced in sections 5.02

and 5.03 of Notice 2024-20 and extending

the period to which section 5.03 of Notice

2024-20 applies.

SECTION 2. BACKGROUND1

On February 12, 2024, the Department

of the Treasury (Treasury Department)

and the Internal Revenue Service (IRS)

published Notice 2024-20, 2024-7 I.R.B.

668, to provide guidance on eligible census tracts for the § 30C credit in advance of

the 2023 filing season and to announce the

intent to propose regulations regrading the

§ 30C credit (forthcoming proposed regulations). Section 5.01 of Notice 2024-20

refers taxpayers to appendices with lists of

eligible census tracts based on either the

2015 census tract boundaries or the 2020

census tract boundaries, as relevant, using

a unique identifier called an 11-digit census tract geographic identifiers (GEOID).

Section 5.02 of Notice 2024-20 provides

website addresses for mapping tools that

taxpayers can use to identify the 11-digit

census tract GEOID for a location where a

property is placed in service.

Section 5.03 of Notice 2024-20 provides that until the issuance of the forthcoming proposed regulations, taxpayers

may rely on Notice 2024-20 and its appendices for purposes of determining whether

qualified alternative fuel vehicle refueling

property has been placed in service in an

eligible census tract. In addition, Section

1

5.03 of Notice 2024-20 provides that until

the issuance of the forthcoming proposed

regulations, the IRS will administer § 30C

in a manner consistent with the appendices

and related rules described in the notice.

This notice modifies sections 5.02 and

5.03 of Notice 2024-20 as described in

section 3 of this notice.

SECTION 3. MODIFICATION TO

NOTICE 2024-20

.01 Change in Websites Used to Identify Census Tracts. Following publication

of Notice 2024-20, the Treasury Department and the IRS identified certain technical issues related to the use of the mapping

tools identified in section 5.02 of Notice

2024-20, which in rare circumstances

may provide inaccurate results. To direct

taxpayers to accurate tools provided by

the Census Bureau for purposes of the §

30C credit, this section 3.01 updates the

mapping tools that taxpayers may use to

identify the relevant 11-digit census tract

GEOID of an eligible census tract. The

Census Bureau will provide continued

access to the updated information.

A taxpayer who files or filed a tax return

including a claim for a § 30C credit on or

before November 15, 2024, may use the

mapping tools identified in section 5.02

of Notice 2024-20 as published on February 20, 2024, or the mapping tools identified in section 5.02 of Notice 2024-20

as revised by this notice. A taxpayer who

files a tax return including a claim for a §

30C credit after November 15, 2024, may

use the mapping tools identified in section

5.02 of Notice 2024-20 as revised by this

notice, but may not use the mapping tools

identified in section 5.02 of Notice 202420 as published on February 20, 2024.

Accordingly, sections 5.02(2) and 5.02(3)

of Notice 2024-20 are modified as follows:

(1) Section 5.02(2) of Notice 2024-20

is modified to read:

(2) Taxpayers can determine the

11-digit census tract GEOID of a location

under the 2015 census tract boundaries

by using the Census Bureau mapping tool

available via https://www.census.gov/

data/data-tools/2015-census-tract.html.

(2) Section 5.02(3) of Notice 2024-20

is modified to read:

(3) Taxpayers can determine the

11-digit census tract GEOID of a location

under the 2020 census tract boundaries

by using the Census Bureau mapping tool

available via https://www.census.gov/

data/data-tools/2020-census-tract.html.

.02 Extension of the period to which

section 5.03 applies. Section 5.03 of

Notice 2024-20 is modified by replacing

“issuance of the forthcoming proposed

regulations” with “forthcoming proposed

regulations are issued as final regulations”

in each place the phrase occurs.

SECTION 4. EFFECTIVE DATE

This notice is effective September 18,

2024.

SECTION 5. EFFECT ON OTHER

DOCUMENTS

Sections 5.02(2), 5.02(3), and 5.03

of Notice 2024-20 are modified as provided in section 3 of this notice. Except

as explicitly provided in section 3 of this

notice, this notice does not otherwise

affect the guidance provided in Notice

2024-20.

SECTION 6. DRAFTING

INFORMATION

The principal author of this notice

is the Office of Associate Chief Counsel (Passthroughs & Special Industries).

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

in its development. For further information regarding this notice, call the energy

security guidance contact number at (202)

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

Terms used in this notice have the meanings provided in Notice 2024-20.

September 23, 2024

632

Bulletin No. 2024–39

Request for Comments

Regarding Implementation

of Saver’s Match

Contributions

Notice 2024-65

I. PURPOSE

This document requests comments on

issues related to sections 103 and 104 of

Division T of the Consolidated Appropriations Act, 2023, Public Law 117-328, 136

Stat. 4459 (2022), known as the SECURE

2.0 Act of 2022 (SECURE 2.0 Act). Section 103 of the SECURE 2.0 Act, in part,

added section 6433 to the Internal Revenue Code (Code), which provides for

matching contributions (Saver’s Match

contributions) paid by the Secretary of the

Treasury (Secretary) to applicable retirement savings vehicles on behalf of eligible

individuals who make qualified retirement

savings contributions. Section 104 of the

SECURE 2.0 Act requires the Department

of the Treasury (Treasury Department) to

take steps to increase public awareness

of the availability of Saver’s Match contributions and to provide a report to Congress on anticipated promotion efforts by

the Treasury Department. The Treasury

Department and the Internal Revenue

Service (IRS) are soliciting comments

to gather input from the public regarding all aspects of sections 103 (including

section 6433 of the Code) and 104 of the

SECURE 2.0 Act.

II. BACKGROUND

Under section 6433 of the Code, for

taxable years beginning after December

31, 2026, an eligible individual is allowed

a Saver’s Match contribution equal to an

applicable percentage of up to $2,000 of

qualified retirement savings contributions

to a retirement account. A Saver’s Match

contribution is generally allowable as a tax

credit that is payable by the Secretary as a

contribution of up to $1,000 to an eligible

individual’s applicable retirement savings

vehicle designated by the eligible individual. Section 6433(a)(2)(A) provides that a

Saver’s Match contribution must be made

as soon as practicable after an eligible

Bulletin No. 2024–39

individual files a tax return making a claim

for a Saver’s Match contribution. Section

6433(a)(2)(B) provides that an individual who is eligible for a Saver’s Match

contribution of greater than zero but less

than $100 for the taxable year may elect

for the amount claimed to be treated as a

refundable income tax credit (rather than

contributed to the individual’s applicable

retirement savings vehicle).

Section 6433(b) provides that the maximum percentage of qualified retirement

savings contributions eligible for Saver’s

Match contributions is 50 percent and is

reduced over a phaseout range based on

an eligible individual’s modified adjusted

gross income. While the $2,000 maximum

amount of qualified retirement savings

contributions under section 6433(a)(1)

is not indexed for inflation, the modified

adjusted gross income levels in the phaseout range are indexed for inflation. In

determining the phaseout range, the modified adjusted gross income is determined

based on the eligible individual’s taxpayer filing status. For example, for most

married filers, the phaseout range begins

at $41,000 and ends at $71,000, and for

most unmarried filers, the phaseout range

begins at $20,500 and ends at $35,500.

Section 6433(c) provides that an eligible individual is an individual who has

attained the age of 18 as of the close of

the taxable year, other than an individual

who is (1) a full-time student as defined

in section 152(f)(2), (2) claimed as a

dependent on another taxpayer’s return

for a taxable year beginning in the calendar year in which the individual’s taxable

year begins, or (3) a nonresident alien who

meets certain conditions.

Section 6433(d)(1) provides that an

eligible individual’s qualified retirement

savings contributions for a year are the

sum of any of the following: (1) contributions to traditional and Roth individual

retirement accounts and annuities (IRAs);

(2) elective deferrals to a section 401(k)

plan, a section 403(b) plan, a governmental section 457(b) plan, a SIMPLE IRA,

or a Simplified Employee Pension (SEP)

plan; (3) voluntary after-tax employee

contributions to a qualified retirement

plan or annuity or a section 403(b) plan;

and (4) contributions to a section 501(c)

(18) plan. Section 6433(d)(2)(A) provides

that qualified retirement savings contribu-

633

tions for a taxable year are reduced (but

not below zero) by the aggregate distributions received by the individual during

a testing period from any IRA, plan, or

annuity of a type to which qualified retirement savings contributions may be made.

Section 6433(d)(2)(B) provides that the

testing period is the period that includes

(1) the taxable year during which qualified retirement savings contributions are

made, (2) the two preceding taxable years,

and (3) the period after the taxable year

during which qualified retirement savings

contributions are made and before the due

date (including extensions) for filing the

tax return for that taxable year. Section

6433(d)(2)(C) provides that certain distributions made during the testing period

are not taken into account for purposes of

the reduction, including any portion of a

distribution that is rolled over to another

retirement plan or IRA. Section 6433(d)

(2)(D) provides that, for purposes of the

reduction, any distribution received by the

spouse of an eligible individual is treated

as received by that eligible individual if

the eligible individual and spouse file a

joint return for the taxable year for which

the Saver’s Match contribution is claimed

and for the taxable year during which the

spouse receives the distribution.

Under section 6433(e)(2), an applicable

retirement savings vehicle is an account

or plan that (1) is a traditional (non-Roth)

IRA or the non-Roth portion of a section

401(k) plan, a section 403(b) plan, or a

governmental section 457(b) plan, (2) is

for the benefit of an eligible individual, (3)

accepts Saver’s Match contributions, and

(4) is designated by the eligible individual

in such form and manner as the Secretary

may provide.

Section 6433(f)(2)(A) provides that a

Saver’s Match contribution is treated as an

elective deferral made by an eligible individual or as an IRA contribution (as applicable), except as provided by the Secretary under regulations. Section 6433(f)

(2)(B) provides that the Saver’s Match

contribution is generally not taken into

account with respect to retirement plan

and IRA limitations. In addition, under

section 6433(f)(2)(C), the Saver’s Match

contribution is not treated as an amount

that may be paid, made available, or distributable to the eligible individual under

section 401(k)(2)(B)(i)(IV) or 403(b)(7)

September 23, 2024

(A)(i)(V) (hardships), or section 457(d)(1)

(A)(iii) (unforeseeable emergencies).

Section 6433(f)(3) provides that any

applicable retirement savings vehicle

to which a Saver’s Match contribution

is made is not treated as violating any

requirements under section 401, 403, 408,

or 457, as applicable, solely by reason of

accepting that contribution.

Section 6433(f)(4)(A) provides that

any Saver’s Match contribution that was

erroneously paid, including a payment

that is not made to an applicable retirement savings vehicle, is treated as an

underpayment of tax for the taxable year

in which the Secretary determines that the

payment was erroneous. Section 6433(f)

(4)(B)(i) provides that, in the case of an

erroneously paid Saver’s Match contribution, the distribution of that contribution is

excluded from income, and the 10 percent

additional tax on early distributions does

not apply to the distribution of that contribution or income attributable to such

contribution, if the distribution of such

amounts is received no later than the due

date (including extensions) for filing the

individual’s tax return for such taxable

year. Section 6433(f)(4)(B)(ii) provides

that any plan or arrangement that makes

a distribution of Saver’s Match contributions that were erroneously paid is not

treated as violating section 401, 403, or

457 solely by reason of making the distribution.

Section 6433(f)(5) provides that the

Saver’s Match contribution is not subject

to certain reductions or offsets under section 6402 and is not reduced or offset by

other assessed Federal taxes that would

otherwise be subject to levy or collection.

Section 6433(f)(6) provides that in the

case of an applicable retirement savings

vehicle to which contributions have been

made under section 6433(a)(2) and from

which a specified early distribution under

section 6433(f)(6)(B) has been made

during the taxable year, if the aggregate

amount of those contributions exceeds the

account balance of that savings vehicle at

the end of the taxable year, an additional

tax applies (Saver’s Match Recovery

tax). Section 6433(f)(6)(A) and (D) provide that this Saver’s Match Recovery

tax is equal to the amount of the excess

described in the prior sentence, reduced

by (1) the amount of the 10 percent addi-

September 23, 2024

tional tax on early distributions imposed

by section 72(t)(1) that applies to such

distribution and (2) allocable investment

losses (pursuant to such rules prescribed

by the Secretary as may be appropriate).

Section 6433(f)(6)(B) provides that a

specified early distribution is any portion

of a distribution that is (1) made from the

applicable retirement savings vehicle to

which Saver’s Match contributions have

been made, (2) includible in gross income,

and (3) subject to the 10 percent additional

tax on early distributions imposed by section 72(t)(1).

Section 6433(f)(6)(C) provides that

an eligible individual may also reduce

the Saver’s Match Recovery tax (but not

below zero) for a taxable year during

which a specified early distribution has

been made by making additional contributions not in excess of the amount of the

specified early distribution to an applicable retirement savings vehicle to which

rollover contributions may be made. The

Saver’s Match Recovery tax is reduced

to the extent of the additional contributions. The additional contributions

must be made by the due date (including

extensions) of the eligible individual’s

tax return for the taxable year in which

the Saver’s Match Recovery tax would

otherwise be owed. In addition, an eligible individual’s additional contributions to an applicable retirement savings

vehicle that is not an IRA may only be

made to the vehicle if the individual is

otherwise eligible to make contributions

to the vehicle. Under section 6433(f)(6)

(C)(iv) and (v), these additional contributions are treated as having been transferred in a direct trustee-to-trustee transfer within 60 days of the specified early

distribution.

Section 103(c)(2) of the SECURE

2.0 Act provides for the amendment of

forms to require separate reporting of the

aggregate amount of Saver’s Match contributions received by an applicable retirement savings vehicle. Section 103(c)(2)

(A) provides for the amendment of forms

required under section 6058 of the Code

for reporting the aggregate amount of

Saver’s Match contributions received by

a retirement plan during a plan year. Section 103(c)(2)(B) of the SECURE 2.0 Act

provides for similar reporting with respect

to IRAs.

634

Section 104 of the SECURE 2.0 Act

requires the Treasury Department to take

steps to increase public awareness of Saver’s Match contributions, and to provide

a report to Congress no later than July 1,

2026, summarizing the anticipated promotional efforts. The report must include

a description of plans for: (1) the development and distribution of digital and

print materials, including the distribution

of such materials to states for participants in state facilitated retirement savings programs; (2) the translation of such

materials into the 10 most commonly spoken languages in the United States after

English (as determined by reference to the

most recent American Community Survey of the Bureau of the Census); and (3)

communicating the adverse consequences

of early withdrawal from an applicable

retirement savings vehicle to which a

matching contribution has been paid under

section 6433(a)(2) of the Code, including

the operation of the Saver’s Match Recovery tax under section 6433(f)(6) and associated early withdrawal taxes. The report

must also include such other information

as the Secretary determines is necessary.

III. REQUEST FOR COMMENTS

Saver’s Match contributions represent

a new approach to promoting retirement

savings and an important opportunity to

improve the long-term financial security

for millions of low- to moderate-income

Americans. Thoughtful and strategic

preparation by the Treasury Department

and the IRS, as well as other stakeholders,

will be necessary for the program to reach

its full potential in improving the retirement readiness of low- to moderate-income Americans. The Treasury Department and the IRS seek to implement

Saver’s Match contributions in a manner

that will minimize costs and administrative burdens for all stakeholders, streamline the process for eligible individuals to

claim Saver’s Match contributions, and

encourage retirement plans and IRAs to

accept Saver’s Match contributions so that

Saver’s Match contributions are consolidated with other retirement assets. Comments are requested from the perspective

of all interested stakeholders, including

eligible individuals, volunteer and forprofit tax preparers, organizations that

Bulletin No. 2024–39

serve and advise eligible individuals, IRA

custodians and trustees, and retirement

plan administrators, recordkeepers, and

sponsors, to gain a better understanding

of the issues related to the implementation

of, and compliance with, this provision.

Specifically, the Treasury Department and

the IRS request comments that address the

following questions:

A. Eligibility for Saver’s Match

Contributions

Question 1: What practical considerations should the Treasury Department

and the IRS take into account in guidance regarding an individual’s eligibility

for Saver’s Match contributions? In particular, what guidance would be helpful

to explain the exclusion from eligibility

for certain nonresident aliens under section 6433(c)(3) (an exclusion that does

not apply under the Saver’s Credit under

section 25B), application of the modified

adjusted gross income limit under section 6433(b), and the determination of

qualified retirement savings contributions

under section 6433(d) (taking into account

the effect of certain distributions under

section 6433(d)(2))?

Question 2: In order to be eligible for

a Saver’s Match contribution, an eligible

individual must make qualified retirement

savings contributions. What are the relevant barriers individuals face in making

qualified retirement savings contributions,

including any unique barriers faced by

specific underserved communities? For

example, do individuals face barriers in

learning about or becoming aware of available retirement savings opportunities and

are there platforms and forums that could

be used to inform individuals of opportunities and encourage retirement savings?

How can the Treasury Department and the

IRS help individuals overcome these barriers and encourage individuals to make

qualified retirement savings contributions

and claim Saver’s Match contributions?

B. How Saver’s Match Contributions Are

Claimed

Question 3: What considerations should

the Treasury Department and the IRS take

into account regarding the method (such

as an IRS form or other means) by which

Bulletin No. 2024–39

an eligible individual must claim Saver’s

Match contributions (including ways in

which the method used should differ from

the existing Form 8880, Credit for Qualified Retirement Savings Contributions,

used to claim the Saver’s Credit under section 25B)? If a form for claiming Saver’s

Match contributions is based on the Form

8880, how should that form be modified?

Question 4: Taking into account that

eligibility for the Saver’s Match contribution is based, in part, on an eligible individual’s modified adjusted gross income

and filing status, should eligible individuals be required to file a Form 1040, U.S.

Individual Income Tax Return, in order

to claim a Saver’s Match contribution,

or should a standalone form that requires

relevant information be provided that

does not require an accompanying Form

1040 be used (for individuals who are not

required to file a Form 1040 due to income

level)?

Question 5: What methods should the

Treasury Department and the IRS consider

in order to simplify, from the perspective

of eligible individuals, the procedure for

an eligible individual to claim Saver’s

Match contributions and designate an

applicable retirement savings vehicle?

Question 6: For an eligible individual

whose Saver’s Match contribution amount

for a year would be less than $100, what

considerations should the Treasury

Department and the IRS take into account

regarding the eligible individual’s option

to have that amount be treated as a refundable income tax credit? For example, what

should the default election be if an eligible

individual claims a Saver’s Match contribution amount for a year that is less than

$100, but fails to affirmatively elect an

applicable retirement savings vehicle to

receive the Saver’s Match contribution?

C. How to Designate the Destination for

Saver’s Match Contributions

Question 7: How should eligible individuals designate an IRA as an applicable retirement savings vehicle to receive

Saver’s Match contributions? What would

be the best method for IRA trustees and

custodians to communicate to eligible

individuals (including through existing

procedures such as using a password-protected website) the information (including

635

account and routing information) needed

to claim Saver’s Match contributions?

For example, should the IRS use the same

method for designating an IRA to which

tax refunds are paid via direct deposit

(using a form similar to Form 8888, Allocation of Refund (Including Savings Bond

Purchases)), which requires identification

of account and routing numbers? Alternatively, should a method be provided

for IRA trustees and custodians (or other

service providers) to provide to the IRS

information identifying account and routing numbers without requiring the eligible

individual to provide that information,

and if so, what method should the Treasury Department and the IRS consider?

Question 8: How should eligible individuals designate a retirement plan as

an applicable retirement savings vehicle

to receive Saver’s Match contributions?

What would be the best method for retirement plans to communicate to eligible

individuals the information (including

account and routing information) needed

to claim Saver’s Match contributions? For

example, should a method be provided for

plan service providers to provide to the

IRS information identifying a trustee’s (or

other service provider’s) account and routing numbers without requiring the eligible

individual to provide that information?

Question 9: Should the IRS provide to

the trustee or other service provider allocation directions in an addenda record

associated with an Automated Clearing

House (ACH) transaction? Are there other

approaches to providing allocation directions that the IRS should consider, such

as a participating service provider registration process in which service providers

access allocation instructions in another

format? What information would the IRS

need to provide as part of an addenda

record or other similar approach to facilitate Saver’s Match contributions? Would

the information required differ between

retirement plans and IRAs?

Question 10: What steps could be

taken to ensure that a Saver’s Match contribution is correctly made to an eligible

individual’s applicable retirement savings

vehicle? What steps could be taken to prevent the disbursement of Saver’s Match

contributions to an ineligible account,

such as a Roth IRA (which, under section

6433(e)(2)(A)(ii), may not receive Sav-

September 23, 2024

er’s Match contributions and is, thus, not

an applicable retirement savings vehicle),

particularly if the eligible individual provides account and routing information to

designate the retirement account?

Question 11: If a payment is erroneously made to an account that is not an

applicable retirement savings vehicle,

section 6433(f)(4) requires the amount to

be treated as an underpayment of tax for

the taxable year in which the Secretary

determines the payment was erroneous.

What considerations should the Treasury

Department and the IRS take into account

regarding the treatment of erroneous Saver’s Match contributions, including if an

applicable retirement savings vehicle

returns a Saver’s Match contribution to

the Treasury Department?

D. How the Treasury Department

Completes Saver’s Match Contributions

Question 12: How can the Treasury

Department and the IRS assist eligible

individuals who make qualified retirement

savings contributions to a Roth IRA and

who do not otherwise participate in an

IRA or retirement plan that accepts Saver’s Match contributions? For example,

certain states require employers to provide automatic Roth IRA contributions for

individuals who do not otherwise participate in an employer-sponsored retirement

plan and do not elect out of the automatic

contributions. Would there be significant

cost savings in facilitating a streamlined

approach for opening up a traditional IRA

in state automatic Roth IRA programs

and, if so, what IRS guidance would be

helpful for these programs to realize these

cost savings?

Question 13: In connection with Form

8888 (which permits a taxpayer to designate an IRA as a recipient of tax refunds),

a Treasury Department website includes

Frequently Asked Questions (https://

www.fiscal.treasury.gov/eft/faq-tax-refund.html) relating to the process for paying tax refunds via direct deposit, including to IRAs. For example, the Frequently

Asked Questions relating to the process

for paying tax refunds to IRAs include

information on procedures that apply if

a refund is transmitted into an incorrect

account, fraud is suspected, or the refund

is returned. Should similar information be

September 23, 2024

provided with respect to the payment of

Saver’s Match contributions to a designated IRA or retirement plan or is different or additional information needed?

Question 14: What practical or administrative considerations should be taken

into account with regard to the process for

contributing Saver’s Match contributions

to a designated IRA or retirement plan?

For example, each tax refund paid electronically is currently sent via a separate

ACH transaction, even if there are millions of separate ACH transactions sent to

the same financial institution. Would any

issues arise if each Saver’s Match contribution was also sent via a separate ACH

transaction? In the alternative, should a

procedure be developed by which Saver’s

Match contributions for multiple eligible individuals are batched together with

respect to payments made to a particular

retirement savings vehicle or with respect

to payments made to a particular trustee,

custodian, or recordkeeper?

Question 15: What considerations

should the Treasury Department and the

IRS take into account if the Saver’s Match

contribution cannot be completed (for

example, if an eligible individual makes a

claim for a Saver’s Match contribution, but

does not properly designate an applicable

retirement savings vehicle to receive the

Saver’s Match contribution, makes a mistake in entering information relating to the

designated vehicle, or ceases to participate

in the designated vehicle prior to the payment of the Saver’s Match contribution)?

For example, should a default destination

be developed (perhaps modeled after rules

for automatic portability transactions with

respect to automatic cash-outs of small

retirement plan benefits, as described in

the preamble of the Department of Labor

proposed Automatic Portability Transaction Regulations, 89 FR 5624, 5625, Jan.

29, 2024)?

Question 16: Should the Treasury

Department and the IRS consider developing a process by which the IRS sends

information in advance to an applicable

retirement savings vehicle about anticipated Saver’s Match contributions,

similar to the process by which payroll

providers preview contributions to retirement plans so that the plans can identify

any issues before remittance? If so, how

should this process work, and can this pro-

636

cess be implemented to minimize burdens

on stakeholders and address privacy risks?

E. Saver’s Match Recovery Tax on

Specified Early Distributions

Question 17: If an individual receives

a specified early distribution before reaching age 59½ (and no exception to the

additional tax under section 72(t) applies),

that distribution may be subject to a Saver’s Match Recovery tax under section

6433(f)(6) in addition to income tax. The

Saver’s Match Recovery tax is reduced by

the 10% additional tax liability under section 72(t) applicable to the specified early

distribution. How can the IRS facilitate

calculating and reporting of the Saver’s

Match Recovery tax? For example, Form

5329, Additional Taxes on Qualified Plans

(Including IRAs) and Other Tax-Favored

Accounts, is used by taxpayers to claim

exceptions to the section 72(t) additional

tax and to pay additional taxes on retirement plans, IRAs, and other tax-favored

accounts. Should a similar method be

used with respect to reporting the Saver’s

Match Recovery tax?

Question 18: For purposes of calculating the Saver’s Match Recovery tax, what

guidance would be helpful regarding the

treatment of rollovers and transfers from

an applicable retirement savings vehicle

that has received Saver’s Match contributions (for example, with respect to the

possible application of the Saver’s Match

Recovery tax to subsequent distributions)?

Question 19: Section 6433(f)(6)(D)

provides that the Secretary may provide

rules for reducing the amount of the Saver’s Match Recovery tax by the allocable investment losses in an applicable

retirement savings vehicle. What guidance would be helpful with respect to the

determination of investment losses in a

particular applicable retirement savings

vehicle? For example, as an alternative to

allocating investment losses in the applicable retirement savings vehicle, would it

be burdensome for retirement plans and

IRAs to have a method of accounting for

separate sources (such as maintaining a

subaccount) for Saver’s Match contributions?

Question 20: Section 6433(f)(6)(C)

provides rules for a reduction in the Saver’s Match Recovery tax on account of

Bulletin No. 2024–39

a recontribution by an eligible individual

of a specified early distribution. What

guidance would be helpful with respect

to these recontributions? For example,

does the method of reporting recontributions of qualified disaster distributions on Form 8915-F, Qualified Disaster Retirement Plan Distributions and

Repayments, provide a model that could

be used for recontributions of specified

early distributions?

F. Reporting and Disclosure

Question 21: Section 103(c)(2) of the

SECURE 2.0 Act directs the Secretary to

amend forms relating to reports required

under section 6058 of the Code for retirement plans (for example, Form 5500

series)0 to require reporting of aggregate

amounts of Saver’s Match contributions

received by an applicable retirement savings vehicle during a year and to require

similar reporting relating to IRAs (for

example, Form 5498, IRA Contribution

Information). How can these forms be

amended in a manner that reduces administrative burdens for retirement plans and

IRA trustees and custodians?

Question 22: What information should

be required to be available to assist eligible individuals in determining whether

a particular IRA or retirement plan will

accept Saver’s Match contributions, and

where should that information be located?

Should plan administrators and IRA trustees and custodians be required to provide

an annual written notification to retirement plan participants and IRA owners

describing the availability of Saver’s

Match contributions with respect to qualified retirement savings contributions to

the retirement plan or IRA (and, if Saver’s

Match contributions are not accepted, that

the eligible individual can claim Saver’s

Match contributions by identifying another

applicable retirement savings vehicle)?

For example, under § 1.401(k)-3(d)(2)(ii)

(B), a safe harbor notice must describe any

contributions under a safe harbor plan for

matching contributions to another retirement plan on account of elective contributions or employee contributions under

the retirement plan. If an annual written

notification is required, what information

should be included to encourage eligible

individuals to claim Saver’s Match contributions?

G. Miscellaneous Issues

Question 23: Other than issues under

the Code, are there any issues under applicable Federal, state, or local law that are a

cause for concern regarding the operation

of the rules for Saver’s Match contributions?

Question 24: Are there any methods or

procedures not previously discussed that

would minimize costs and administrative

burdens across stakeholders implementing Saver’s Match contributions, encourage retirement plans and IRA custodians

to accept Saver’s Match contributions,

and streamline the process for eligible

individuals to claim Saver’s Match contributions?

Question 25: Retirement plans and

IRAs that accept Saver’s Match contributions will need to be amended to provide

for those contributions. What considerations should the Treasury Department

and the IRS take into account regarding

the content and timing of these amendments, including with respect to pre-approved retirement plans and IRAs? What

guidance would be helpful with respect to

these amendments?

Question 26: The Treasury Department

and the IRS anticipate issuing written

guidance, publications, and updated forms

and instructions. What additional efforts

would be helpful to promote and increase

public awareness for Saver’s Match contributions (including with respect to different demographic groups, such as individuals for whom English is not their primary

language)? Are there any online tools (for

example, calculators or social mediabased tools) that the Treasury Department

and the IRS should utilize or develop to

encourage contributions to applicable

retirement savings vehicles, promote the

claiming of Saver’s Match contributions,

and facilitate the administration of Saver’s

Match contributions?

Question 27: Are there ways that the

Treasury Department and the IRS can use

innovative technology, such as blockchain

technology, to facilitate Saver’s Match

contributions?

Question 28: What guidance, if any,

would be helpful relating to the transition

from the Saver’s Credit under section 25B

to Saver’s Match contributions under section 6433?

Question 29: Although Saver’s Match

contributions generally are treated as elective deferrals, including for purposes of

applying distribution limitations, section

6433(f)(2)(C) provides that Saver’s Match

contributions are not treated as amounts

that may be paid, made available, or distributable to an eligible individual in the

case of a hardship distribution under section 401(k)(2)(B)(i)(IV) or 403(b)(7)(A)

(i)(V), or an unforeseeable emergency distribution under section 457(d)(1)(A)(iii).

What guidance, if any, would be helpful

regarding implementation of this provision by plan administrators, for example,

regarding separate accounting of Saver’s

Match contributions?

IV. SUBMISSION OF COMMENTS

Written comments should be submitted

on or before November 4, 2024. Consideration will be given, however, to any written comment submitted after November 4,

2024, if such consideration will not delay

the issuance of guidance. The subject line

for the comments should include a reference to Notice 2024-65. Comments may

be submitted in one of two ways:

(1) Electronically via the Federal

eRulemaking Portal at www.regulations.

gov (type IRS-2024-0034 in the search

field on the regulations.gov homepage to

find this notice and submit comments).

(2) Alternatively, by mail to: Internal

Revenue Service, CC:PA:01:PR (Notice

2024-65), Room 5203, P.O. Box 7604,

Ben Franklin Station, Washington, DC

20044.

All commenters are strongly encouraged to submit comments electronically.

The Treasury Department and the IRS

will publish for public availability any

Form 5500 series returns include Form 5500, Annual Return/Report of Employee Benefit Plan, Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, and Form

5500-EZ, Annual Return of A One Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan.

1

Bulletin No. 2024–39

637

September 23, 2024

comment submitted electronically, or on

paper, to its public docket on regulations.

gov.

V. DRAFTING INFORMATION

The principal author of this notice is

Tom Morgan of the Office of Associate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the Treasury Department and the IRS participated in its development. For further

information regarding this notice, please

contact Mr. Morgan at (202) 317-6700

(not a toll-free number).

26 CFR 601.105: Examination of returns and claims

for refund, credit, or abatement; determination of

correct tax liability.

(Also Part 1, §§ 36B, 1.36B-2, 1.36B-3.)

Rev. Proc. 2024-35

SECTION 1. PURPOSE

This revenue procedure provides the

applicable percentage table (Applicable Percentage Table) in § 36B(b)(3)(A)

of the Internal Revenue Code (Code)1

for taxable years beginning in calendar

year 2025.2 This table is used to calculate an individual’s premium tax credit

under § 36B. This revenue procedure

Household income percentage of Federal poverty line:

Less than 150%

At least 150% but less than 200%

At least 200% but less than 250%

At least 250% but less than 300%

At least 300% but less than 400%

At least 400% and higher

.02 Required Contribution Percentage

for 2025.

(1) Section 9661 of the ARPA and §

12001(a) of the IRA did not amend the

rules under § 36B(c)(2)(C)(iv) relating

to the Required Contribution Percentage, including the rules relating to the

indexing of the Required Contribution

Percentage. See § 36B(b)(3)(A)(iii)(I).

The Required Contribution Percentage

for plan years beginning in calendar year

2025 is indexed based on the rates of

premium growth relative to the rates of

income growth in guidance issued by the

Department of Health and Human Services (HHS).3 In addition, the additional

adjustment provided in § 36B(b)(3)(A)(ii)

also provides the indexing adjustment

for the required contribution percentage (Required Contribution Percentage)

in § 36B(c)(2)(C)(i)(II) for plan years

beginning in calendar year 2025. This

percentage is used to determine whether

an individual is eligible for affordable

employer-sponsored minimum essential

coverage under § 36B.

SECTION 2. ADJUSTED ITEMS

.01 Applicable Percentage Table for

2025. For taxable years beginning in calendar year 2025, the Applicable Percentage Table for purposes of § 36B(b)(3)(A)

and § 1.36B-3(g) is:

Initial percentage

0.00%

0.00%

2.00%

4.00%

6.00%

8.50%

(II) is not required for plan years beginning in 2025 because the Department of

the Treasury and the Internal Revenue

Service have determined that the failsafe

exception described in § 36B(b)(3)(A)(ii)

(III) applies for plan years beginning in

calendar year 2025.

(2) For plan years beginning in calendar year 2025, the Required Contribution

Percentage for purposes of § 36B(c)(2)(C)

(i)(II) and § 1.36B-2(c)(3)(v)(C) is 9.02%.

SECTION 3. EFFECT ON OTHER

DOCUMENTS

Rev. Proc. 2014-37, 2014-2 C.B. 363,

is supplemented.

Final percentage

0.00%

2.00%

4.00%

6.00%

8.50%

8.50%

SECTION 4. EFFECTIVE DATE

This revenue procedure is effective for

taxable years and plan years beginning in

calendar year 2025.

SECTION 5. DRAFTING

INFORMATION

The principal author of this revenue procedure is Clara L. Raymond of

the Office of Associate Chief Counsel

(Income Tax and Accounting). For further

information regarding this revenue procedure, contact Ms. Raymond at (202) 3174718 (not a toll-free number).

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

Section 9661 of the American Rescue Plan Act of 2021, Public Law 117-2, 135 Stat. 4, 182 (2021) (ARPA), added § 36B(b)(3)(A)(iii) to the Code to provide an Applicable Percentage Table

that applies for taxable years beginning in calendar years 2021 and 2022. Section 12001(a) of the Inflation Reduction Act of 2022, Public Law 117-169, 136 Stat. 1818, 1905 (2022) (IRA)

extended to taxable years beginning in calendar years 2023-2025 the Applicable Percentage Table enacted by the ARPA. Section 36B(b)(3)(A)(iii) also suspends indexing of the Applicable

Percentage Table for taxable years 2021-2025.

3

The rate of premium growth and the rate of income growth for calendar year 2025 are calculated using the NHEA Projections, 2022-2031, available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected, which reflect the most recent projections, and the methodology used

to calculate the same rates of growth in the Premium Adjustment Percentage guidance for the 2025 benefit year published by the Center for Medicare and Medicaid Services on November

15, 2023, available at: https://www.cms.gov/files/document/2025-papi-parameters-guidance-2023-11-15.pdf.

1

2

September 23, 2024

638

Bulletin No. 2024–39

Part IV

Deletions From Cumulative

List of Organizations,

Contributions to Which are

Deductible Under Section

170 of the Code

Announcement 2024-39

Table of Contents

The Internal Revenue Service has

revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and

170(c)(2) of the Internal Revenue Code of

1986.

Name Of Organization

Muse Foundation of New York Inc

Ina Haynes Foundation, Inc.

Bulletin No. 2024–39

Generally, the IRS will not disallow

deductions for contributions made to a

listed organization on or before the date

of announcement in the Internal Revenue

Bulletin that an organization no longer

qualifies. However, the IRS is not precluded from disallowing a deduction for

any contributions made after an organization ceases to qualify under section 170(c)

(2) if the organization has not timely filed

a suit for declaratory judgment under section 7428 and if the contributor (1) had

knowledge of the revocation of the ruling

or determination letter, (2) was aware that

such revocation was imminent, or (3) was

in part responsible for or was aware of the

activities or omissions of the organization

that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed,

contributions from individuals and organizations described in section 170(c)(2)

that are otherwise allowable will continue

to be deductible. Protection under section

7428(c) would begin on July 15, 2024, and

would end on the date the court first determines the organization is not described in

section 170(c)(2) as more particularly set

for in section 7428(c)(1). For individual

contributors, the maximum deduction protected is $1,000, with a husband and wife

treated as one contributor. This benefit is

not extended to any individual, in whole

or in part, for the acts or omissions of the

organization that were the basis for revocation.

Effective Date of Revocation

1/1/2020

1/1/2020

639

Location

New York, NY

Tempe, AZ

September 23, 2024

Notice of Proposed

Rulemaking

REG-111629-23

Guidance Regarding

Elections Relating to

Foreign Currency Gains

and Losses

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Notice of proposed rulemaking; partial withdrawal of proposed

rulemaking.

SUMMARY: This document contains

proposed regulations regarding the time

for making and revoking certain elections

relating to foreign currency gain or loss.

DATES: Written or electronic comments

and requests for a public hearing must

be received by October 21, 2024. As of

August 19, 2024, proposed §1.954-2(g)(3)

(iii) and (g)(4)(iii) and proposed §1.9887(c) through (e), contained in the notice

of proposed rulemaking published in the

Federal Register of December 19, 2017

(82 FR 60135), are withdrawn.

ADDRESSES: Commenters are strongly

encouraged to submit public comments

electronically via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG-111629-23) 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 hard copy submissions to:

CC:PA:01:PR (REG-111629-23), Room

5203, Internal Revenue Service, P.O. Box

7604, Ben Franklin Station, Washington,

DC 20044.

FOR FURTHER INFORMATION

CONTACT:

Concerning

proposed

§1.954-2(g)(3)(ii) and (iii) and (g)(4)

(iii), Edward Tracy at (202) 317-6934;

September 23, 2024

concerning proposed §1.988-7(c) and (d),

Shane Ward at (202) 317-6938; concerning submissions of comments or requests

for a public hearing, Vivian Hayes at (202)

317-6901 (not toll free numbers) or publichearings@irs.gov.

SUPPLEMENTARY INFORMATION:

Background

I. Elections Under §1.954-2(g)

In general, section 954(c)(1)(D) of

the Internal Revenue Code and §1.9542(g) provide that foreign personal

holding company income (“FPHCI”)

includes the excess of foreign currency

gains over foreign currency losses

attributable to any section 988 transactions. Under §1.954-2(g)(3) and (4),

two different elections are available to

United States shareholders (“U.S. shareholders”) that are controlling United

States shareholders (“controlling U.S.

shareholders”) of a controlled foreign

corporation (“CFC”) with respect to

the CFC’s computation of its FPHCI.

First, under §1.954-2(g)(3), controlling

U.S. shareholders may elect to exclude

foreign currency gain or loss otherwise

includible in the CFC’s FPHCI computation under §1.954-2(g) and instead

include such foreign currency gain or

loss in the category (or categories) of

subpart F income to which such gain or

loss relates (the “§1.954-2(g)(3) election”). Second, §1.954-2(g)(4) provides

that controlling U.S. shareholders may

elect to treat as FPHCI all foreign currency gains or losses attributable to any

section 988 transaction (except those

described in §1.954-2(g)(5)) and any

section 1256 contract that would be a

section 988 transaction but for section

988(c)(1)(D) (the “§1.954-2(g)(4) election” and, together with the §1.954-2(g)

(3) election, the “§1.954-2(g) elections”). A §1.954-2(g)(4) election supersedes a §1.954-2(g)(3) election. Under

§1.954-2(g)(3)(ii) and (g)(4)(ii), controlling U.S. shareholders make either

of the §1.954-2(g) elections on behalf of

the CFC by filing a statement with their

original income tax return for the “taxable year of [the U.S. shareholders] ending with or within the taxable year of the

640

[CFC]” for which the election is made,

clearly indicating that the election has

been made.

II. Revocations Under §1.954-2(g)(3)(iii)

and (g)(4)(iii) and Proposed §1.954-2(g)

(3)(iii) and (g)(4)(iii)

Under §1.954-2(g)(3)(iii) and (g)(4)

(iii), a CFC’s controlling U.S. shareholders may revoke a §1.954-2(g) election by

or with the consent of the Commissioner.

As part of the 2017 notice of proposed

rulemaking in respect of §1.988-7 (the

“2017 proposed regulations”) (described

further in sections III and IV of this

Background section of the preamble),

revisions were proposed to the rules for

revoking §1.954-2(g) elections. 82 FR

60135, 60142-60143. Under the 2017

proposed regulations, a CFC’s controlling

U.S. shareholders would be permitted to

revoke the CFC’s §1.954-2(g) election

at any time. Proposed §1.954-2(g)(3)(iii)

and (g)(4)(iii). Further, the 2017 proposed

regulations would provide that if the election is revoked, a new election cannot be

made until the sixth taxable year following the year in which the previous election

was revoked, and the subsequent election

cannot be revoked until the sixth taxable

year following the year in which the subsequent election was made. Id. Similar

to the procedure for making §1.954-2(g)

elections, a CFC’s controlling U.S. shareholders would revoke §1.954-2(g) elections on behalf of the CFC under the 2017

proposed regulations by filing a statement

that clearly indicates that the election

has been revoked with their original or

amended income tax returns for “the taxable year of [the U.S. shareholders] ending with or within the taxable year of the

[CFC] for which the election is revoked.”

Id. The 2017 proposed regulations permitted taxpayers to rely on proposed §1.9542(g)(3)(iii) and (g)(4)(iii) to revoke

§1.954-2(g) elections for taxable years

ending on or after December 19, 2017,

subject to a consistency requirement. 82

FR 60135, 60141.

III. Election Under Proposed §1.988-7(c)

Under the 2017 proposed regulations,

a taxpayer, including a CFC, would be

permitted to elect to use a mark-to-market

Bulletin No. 2024–39

method of accounting for section 988 gain

or loss with respect to certain section 988

transactions (the “proposed §1.988-7 election”). Proposed §1.988-7(a). Under proposed §1.988-7(c) of the 2017 proposed

regulations, a taxpayer makes a proposed

§1.988-7 election by filing a statement that

clearly indicates that the election has been

made with its timely-filed original Federal

income tax return for the taxable year for

which the election is made. In the case of

a CFC, the controlling U.S. shareholders

make the proposed §1.988-7 election on

behalf of the CFC by filing a statement

that clearly indicates that the election has

been made with their timely-filed, original Federal income tax returns for the

“taxable year of [the U.S. shareholders]

ending with or within the taxable year of

the [CFC] for which the election is made.”

The preamble to the 2017 proposed regulations stated that taxpayers are permitted

to rely on proposed §1.988-7(c) to make

a proposed §1.988-7 election for taxable

years ending on or after December 19,

2017, subject to a consistency requirement. 82 FR 60135, 60141.

IV. Revocation Under Proposed

§1.988-7(d)

Under the 2017 proposed regulations,

a taxpayer, including a CFC, would be

permitted to revoke its proposed §1.988-7

election at any time. Proposed §1.9887(d). Further, the 2017 proposed regulations provided that if a proposed §1.988-7

election has been revoked, a new proposed §1.988-7 election cannot be made

until the sixth taxable year following the

year in which the previous election was

revoked, and a subsequent election cannot

be revoked until the sixth taxable year following the year in which the subsequent

election was made. Id. Under the 2017

proposed regulations, a taxpayer would

revoke a proposed §1.988-7 election by

filing a statement that clearly indicates

that the election has been revoked with its

original or amended Federal income tax

return for the taxable year for which the

election is revoked. Id. The preamble to

the 2017 proposed regulations stated that

taxpayers are permitted to rely on proposed §1.988-7(d) to revoke a proposed

§1.988-7 election for taxable years ending

on or after December 19, 2017, subject to

Bulletin No. 2024–39

a consistency requirement. 82 FR 60135,

60141.

Explanation of Provisions

I. Proposed Modification to §1.954-2(g)

(3)(ii) and Withdrawal and Re-Proposal

of Proposed §1.954-2(g)(3)(iii) and (g)

(4)(iii)

The Treasury Department and the IRS

have received several inquiries regarding

the procedure for making §1.954-2(g)

elections. Specifically, practitioners have

noted that the language of §1.954-2(g)

(3)(ii) is inconsistent with other filing

requirements with respect to CFCs, which

generally must be filed by U.S. shareholders for the taxable year of a CFC that ends

with or within the taxable year of the U.S.

shareholders. See, e.g., §§1.964-1(c)(3)(ii)

and 1.951A-2(c)(7)(viii)(A)(1)(i). Additionally, the practitioners noted that under

§1.954-2(g)(3)(ii), inconsistencies in

treatment can arise between a controlling

U.S. shareholder that owns a CFC with a

matching taxable year and a controlling

U.S. shareholder that owns a CFC with a

short year or whose taxable year differs

from the controlling U.S. shareholder’s

taxable year. With respect to CFCs with

short years, a controlling U.S. shareholder

will be prevented from making §1.9542(g) elections for those years if no year of

the controlling U.S. shareholder ends with

or within the CFC’s short year.

To address the issues raised by practitioners’ inquiries, and to promote consistency with other filing requirements

with respect to CFCs, these proposed

regulations would revise §1.954-2(g)

(3)(ii) to provide that controlling U.S.

shareholders make a §1.954-2(g) election

on behalf of a CFC by filing a statement

with their original income tax returns for

the taxable years of the controlling U.S.

shareholders in which or with which the

taxable year of the CFC for which the

election is made ends, clearly indicating

that the election has been made. Additionally, these proposed regulations withdraw

proposed §1.954-2(g)(3)(iii) and (g)(4)

(iii) as included in the 2017 proposed regulations and re-propose them to provide

that controlling U.S. shareholders revoke

a §1.954-2(g) election on behalf of a CFC

by filing a statement with their original

641

income tax returns for the taxable years of

the controlling U.S. shareholders in which

or with which the taxable year of the CFC

for which the revocation is made ends,

clearly indicating that the §1.954-2(g)

election has been revoked.

Under newly proposed §1.954-2(g)(3)

(iii) and (g)(4)(iii), however, controlling

U.S. shareholders would be precluded

from revoking a §1.954-2(g) election

made on behalf of a CFC (including an

initial election) until the sixth taxable year

following the year in which the election

was made. Further, proposed §1.954-2(g)

(3)(iii) and (g)(4)(iii) would provide that

if a CFC’s controlling U.S. shareholders

revoke a §1.954-2(g) election, they may

not make a new §1.954-2(g) election on

behalf of the CFC until the sixth taxable

year following the year in which the previous election was revoked. This change

to the revocation rules under proposed

§1.954-2(g)(3)(iii) and (g)(4)(iii) would

limit taxpayers from opportunistically

making or revoking a §1.954-2(g) election; for example, this change would limit

taxpayers’ ability to selectively recognize

certain foreign currency losses. The Treasury Department and the IRS request comments on this aspect of proposed §1.9542(g)(3)(iii) and (g)(4)(iii).

II. Proposed Amendments to Proposed

§1.988-7(c) and (d)

The Treasury Department and the IRS

are of the view that the rules for making

and revoking a proposed §1.988-7 election under the 2017 proposed regulations

provided an excessive amount of flexibility. The 2017 proposed regulations would

have permitted a taxpayer to make a proposed §1.988-7 election after the end of

the year to which the election would apply,

which would give the taxpayer the ability

to determine with certainty whether the

election would be beneficial for that year.

For example, and as one comment noted,

the ability to make and revoke an initial

election without restriction would provide

a one-time opportunity to selectively recognize foreign currency losses by making

an initial election for a particular year

after the taxpayer has determined that it

has net foreign currency losses on section

988 transactions for a taxable year and

then immediately revoking the election.

September 23, 2024

Upon further consideration of the 2017

proposed regulations and the comments

received, the Treasury Department and

the IRS are of the view that the time for

making and revoking a proposed §1.988-7

election (permitting a taxpayer to use a

mark-to-market method of accounting

for section 988 gain or loss with respect

to section 988 transactions) should accord

with the time for making and revoking

an election under section 475(e) or (f)

(a “section 475 election”) (permitting a

dealer in commodities or a trader in securities or commodities to use the mark-tomarket method of accounting). The Treasury Department and the IRS are of the

view that aligning proposed §1.988-7 with

the rules for making a section 475 election

will deter selectively recognizing losses.

The rules for making or revoking a section

475 election deter taxpayers from selectively recognizing losses by requiring that

taxpayers generally make an election on

the tax return for the year immediately

preceding the year to which the election

applies, see section 5.03 of Rev. Proc.

99-17, 1999-1 C.B. 503, 504–505, and

then by requiring taxpayers to apply that

election to all subsequent years unless the

taxpayers obtain the consent of the Commissioner. See section 475(e)(3) and (f)

(3). The Treasury Department and the IRS

expect that implementing similar rules

for making a proposed §1.988-7 election

would also prevent selective recognition

of losses. The Treasury Department and

the IRS also expect that aligning the rules

for making a proposed §1.988-7 election

with the rules for making a section 475

election will foster compliance, especially for those taxpayers already making

a section 475 election, by providing the

same procedures for making or revoking

these elections to adopt a mark-to-market

method of accounting. As a result, these

proposed regulations would permit taxpayers to make and revoke a proposed

§1.988-7 election under rules similar to

the rules for making and revoking a section 475 election.

Proposed §1.988-7(d) would provide

that the election made pursuant to proposed §1.988-7(c) is subject to rules similar to those imposed on section 475 elections. The election would be effective for

the taxable year for which it is made and

all subsequent years. Proposed §1.988-

September 23, 2024

7(d) also would provide that a taxpayer

may revoke the election only with the consent of the Commissioner.

To adopt a method of accounting as

described in proposed §1.988-7, a taxpayer must receive the consent of the

Commissioner to implement that change

of accounting method in accordance with

the applicable administrative procedures

provided in the Internal Revenue Bulletin. Section 446(e); §1.446-1(e)(2); see

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

419; Rev. Proc. 2024-1, 2024-1 I.R.B.

1. When these proposed regulations are

finalized, the Treasury Department and

the IRS expect to issue a revenue procedure setting forth the terms and conditions under which a change of method of

accounting with respect to the mark-tomarket method under §1.988-7 will be

granted. The Treasury Department and the

IRS anticipate that these terms and conditions will address: whether this change

should be subject to a cutoff method

or another method requiring a section

481(a) adjustment; the appropriate circumstances under which a taxpayer must

establish a substantial business reason for

the change; whether there are appropriate

circumstances under which an automatic

change in method of accounting should be

permitted; and the extent to which these

terms and conditions should incorporate

or deviate from the terms and conditions

for changing a mark-to-market method of

accounting under section 475(e) or (f), see

section 24 of Rev. Proc. 2024-23.

The Treasury Department and the IRS

solicit comments regarding all aspects

of the rules for making and revoking the

proposed §1.988-7 election, including the

terms and conditions under which a change

of method of accounting with respect to the

mark-to-market method under §1.988-7

will be granted and whether to require that

related parties apply a proposed §1.988-7

election in a consistent manner, such as in

the case of a section 987 election under

proposed §1.987-1(g)(2) (88 FR 78134,

78164­­–78165). Comments submitted pursuant to the 2017 proposed regulations

will also be considered.

III. Other Nonsubstantive Changes

These proposed regulations would

make nonsubstantive changes to §1.954-

642

2(g)(3)(ii) and re-proposed §1.954-2(g)

(3)(iii) and (g)(4)(iii). These changes

are intended to improve the clarity of

those regulations, including by updating the cross-references to the definition

of controlling U.S. shareholders from

“§1.964-1(c)(5)” to “§1.964-1(c)(5)(i)”

to more precisely reference the definition

with respect to CFCs and not other foreign corporations, and by providing that

a §1.954-2(g) election must be made on

a timely-filed, original Federal income

tax return for consistency with proposed

§1.988-7 elections.

IV. Applicability Dates

These proposed regulations generally

are proposed to apply to taxable years

ending on or after the date of publication

of the Treasury decision adopting these

rules as final regulations in the Federal

Register (the “finalization date”). See proposed §§1.954-2(i)(3) and 1.988-7(e). The

remainder of this section of the preamble

discusses taxpayers’ ability to rely on the

proposed regulations and the treatment of

certain elections, or revocation of elections, made in earlier periods.

A. Section 954 regulations

For taxable years ending before the

finalization date, taxpayers may rely on

proposed §1.954-2(g)(3)(ii) and re-proposed §1.954-2(g)(3)(iii) and (g)(4)(iii)

in making and revoking §1.954-2(g)

elections, provided that they consistently

apply proposed §1.954-2(g)(3)(ii) and

(iii) and (g)(4)(iii) to such taxable years.

Furthermore, with respect to any taxpayer

that made a §1.954-2(g) election in the

manner set forth in proposed §1.954-2(g)

(3)(ii) of these proposed regulations for

a taxable year beginning after November

6, 1995 (as provided in TD 8618, 60 FR

46517, 46527), and ending before August

19, 2024, and any taxpayer that revoked

a §1.954-2(g) election in the manner set

forth in proposed §1.954-2(g)(3)(iii) or (g)

(4)(iii) of these proposed regulations for a

taxable year ending on or after December

19, 2017, and before August 19, 2024, the

IRS will respect such election or revocation as having been timely made for the

relevant taxable year. Taxpayers may no

longer rely on proposed §1.954-2(g)(3)

Bulletin No. 2024–39

(iii) and (g)(4)(iii) included in the 2017

proposed regulations for taxable years

ending after August 19, 2024.

B. Section 988 regulations

For taxable years ending before the

finalization date, taxpayers may rely on

proposed §1.988-7(c) and (d) in making

and revoking the proposed §1.988-7 election, provided that they consistently apply

proposed §1.988-7(c) and (d) to such

taxable years. Furthermore, if a taxpayer

made or revoked a proposed §1.988-7

election on behalf of a CFC pursuant to the

reliance provided by 82 FR 60135, 60141,

but filed the election or revocation in the

manner set forth in proposed §1.988-7(c)

(3)(ii), the IRS will respect such election

or revocation as having been timely made

for the relevant taxable year. However,

as of August 19, 2024, taxpayers may no

longer rely on proposed §1.988-7(c) and

(d) included in the 2017 proposed regulations, except to make elections for taxable

years beginning on or before August 19,

2024.

Special Analyses

I. Regulatory Planning and Review –

Economic Analysis

Pursuant to the Memorandum of

Agreement, Review of Treasury Regulations under Executive Order 12866 (June

9, 2023), tax regulatory actions issued by

the IRS are not subject to the requirements

of section 6 of Executive Order 12866, as

amended. Therefore, a regulatory impact

assessment is not required.

II. Paperwork Reduction Act

The Paperwork Reduction Act of 1995

(44 U.S.C. 3501–3520) (‘‘PRA’’) generally requires that a Federal agency obtain

the approval of the Office of Management

and Budget (“OMB”) before collecting

information from the public, whether the

collection of information is mandatory,

voluntary, or required to obtain or retain

a benefit. 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 OMB.

Bulletin No. 2024–39

The collections of information included

in these proposed regulations are in proposed §1.954-2(g)(3)(ii) and (iii) and (g)

(4)(iii) and proposed §1.988-7(c). The

information provided will generally be

used by the IRS for tax compliance purposes or by taxpayers to report making or

revoking elections.

The collection of information in these

proposed regulations is for taxpayers to

make or revoke an election as detailed

in proposed §1.954-2(g)(3)(ii) and (iii)

and (g)(4)(iii) and proposed §1.988-7(c).

Taxpayers must inform the IRS of these

elections and revocations by attaching a

statement to their tax return. The information is required to be provided by

taxpayers that are U.S. shareholders of

CFCs and shareholders of certain foreign corporations that make or revoke an

election with respect to the treatment of

a foreign corporation’s foreign currency

gains and losses. The likely respondents

are individual, business, and trust and

estate filers.

For purposes of the PRA, the reporting and recordkeeping burden associated

with the collections of information in proposed §1.954-2(g)(3)(ii) and (iii) and (g)

(4)(iii) and proposed §1.988-7(c) will be

accounted for in OMB control number

1545-0074 for individual filers and 15450123 for business filers.

The IRS will seek OMB approval

under a new OMB Control Number (1545NEW) for trust and estate filers.

Estimated total annual reporting and

recordkeeping burden for trusts and

estates filers: 61 hours.

Estimated average annual burden per

respondent: 1 hour.

Estimated number of respondents: 61.

Estimated frequency of responses: onetime election or revocation.

The collections of information contained

in these proposed regulations have been

submitted to OMB for review in accordance with the PRA. Commenters are

strongly encouraged to submit public comments electronically. Written comments

and recommendations for the proposed

information collection should be sent to

www.reginfo.gov/public/do/PRAMain,

with copies to the IRS. Find this particular information collection by selecting

“Currently under Review - Open for Public Comments,” then by using the search

643

function. Submit electronic submissions

for the proposed information collection

to the IRS via email at pra.comments@

irs.gov (indicate REG-111629-23 on the

Subject line). Comments on the collection

of information should be received by September 19, 2024. 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; 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.

III. Regulatory Flexibility Act

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6) (“RFA”), it

is hereby certified that these proposed

regulations would not have a significant

economic impact on a substantial number of small entities within the meaning

of section 601(6) of the RFA (“small

entities”).

Generally, the proposed regulations

affect certain U.S. taxpayers that have

foreign operations. Specifically, the proposed regulations affect U.S. shareholders that make or revoke certain elections

with respect to the computation of their

CFCs’ foreign currency gains and losses.

The number of small entities potentially

affected by the proposed regulations is

unknown and cannot be reliably estimated; however, it is unlikely to be a substantial number because taxpayers with

foreign operations are typically larger

businesses. Due to the low expected number of potentially affected taxpayers, and

the fact that the proposed regulations only

amend the timing of these elections and

revocations that taxpayers may already

be making, the Treasury Department and

the IRS believe the proposed regulations

September 23, 2024

should not materially impact a substantial

number of small entities within the meaning of the RFA.

Accordingly, the Secretary certifies that

the proposed regulations will not have a

significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required.

IV. Section 7805(f)

Pursuant to section 7805(f), these proposed regulations have been submitted to

the Chief Counsel for Advocacy of the

Small Business Administration for comment on their impact on small businesses.

The Treasury Department and the IRS

also request comments from the public

on the analysis in part III of the Special

Analyses.

V. 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.

VI. Executive Order 13132: Federalism

Executive Order 13132 (entitled

“Federalism”) prohibits an agency from

publishing any rule that has federalism

implications if the rule either imposes

substantial, direct compliance costs on

State and local governments, and is not

required by statute, or preempts State

law, unless the agency meets the consultation and funding requirements of

section 6 of the Executive order. These

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.

September 23, 2024

Comments and Requests for Public

Hearing

Before these proposed regulations are

adopted as final regulations, consideration

will be given to any comments that are

submitted timely to the IRS as prescribed

in this preamble under the ADDRESSES

section. The Treasury Department and

the IRS request comments on all aspects

of these proposed regulations, including

the procedures for making and revoking

a proposed §1.988-7 election. Any 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 written comments.

Requests for a public hearing are also

encouraged to be made electronically. If a

public hearing is scheduled, notice of the

date and time for the public hearing will

be published in the Federal Register.

Drafting Information

The principal authors of these regulations are Edward Tracy and Shane Ward

of the Office of Associate Chief Counsel

(International). However, other personnel

from the Treasury Department and the

IRS participated in their development.

Statement of Availability of IRS

Documents

IRS Revenue Procedures, Revenue

Rulings, Notices, and other guidance

cited in this document are published in the

Internal Revenue Bulletin 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.

Partial Withdrawal of Proposed

Regulations

Under the authority of 26 U.S.C. 7805:

(1) proposed §1.954-2(g)(3)(iii) and (g)(4)

(iii), contained in the notice of proposed

rulemaking that was published in the Federal Register on December 19, 2017 (82

FR 60135), are withdrawn for taxable

years ending after August 19, 2024; (2)

proposed §1.988-7(d) and (e), contained

644

in the notice of proposed rulemaking that

was published in the Federal Register on

December 19, 2017 (82 FR 60135), are

withdrawn as of August 19, 2024; and

(3) proposed §1.988-7(c) contained in

the notice of proposed rulemaking that

was published in the Federal Register on

December 19, 2017 (82 FR 60135), is

withdrawn for taxable years beginning

after August 19, 2024.

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 1.954-2 is amended by:

1. Revising the first sentence of paragraph (g)(3)(ii) introductory text;

2. Revising paragraphs (g)(3)(iii) and

(g)(4)(iii); and

3. Adding two sentences to the end of

paragraph (i)(3).

The revisions and additions read as follows:

§1.954-2 Foreign personal holding

company income.

*****

(g) * * *

(3) * * *

(ii) * * * The controlling United States

shareholders, as defined in §1.964-1(c)

(5)(i), make the election on behalf of the

controlled foreign corporation by filing a

statement with their timely-filed, original

Federal income tax returns for the taxable

year of the United States shareholders

in which or with which the taxable year

of the controlled foreign corporation for

which the election is made ends, clearly

indicating that the election has been made.

***

Bulletin No. 2024–39

(iii) Revocation of election. An election

under this paragraph (g)(3) is effective for

the taxable year of the controlled foreign

corporation for which it is made and all

subsequent taxable years of such corporation unless revoked by the Commissioner

or as provided in this paragraph (g)(3)(iii)

by the controlling United States shareholders (as defined in §1.964-1(c)(5)(i)) of

the controlled foreign corporation. Once

made, an election under this paragraph (g)

(3) cannot be revoked by the controlled

foreign corporation’s controlling United

States shareholders (as defined in §1.9641(c)(5)(i)) until the sixth taxable year

following the year in which the previous

election was made. Further, if an election

has been revoked under this paragraph (g)

(3)(iii), a new election may not be made

until the sixth taxable year following the

year in which the previous election was

revoked. The controlling United States

shareholders revoke an election on behalf

of a controlled foreign corporation by filing a statement that clearly indicates such

election has been revoked with their original or amended income tax returns for the

taxable year of such United States shareholders in which or with which the taxable

year of the controlled foreign corporation

for which the election is revoked ends.

*****

(4) * * *

(iii) Revocation of election. An election

under this paragraph (g)(4) is effective for

the taxable year of the controlled foreign

corporation for which it is made and all

subsequent taxable years of such corporation unless revoked by the Commissioner

or as provided in this paragraph (g)(4)(iii)

by the controlling United States shareholders (as defined in §1.964-1(c)(5)(i)) of

the controlled foreign corporation. Once

made, an election under this paragraph (g)

(4) cannot be revoked by the controlled

foreign corporation’s controlling United

States shareholders (as defined in §1.9641(c)(5)(i)) until the sixth taxable year

following the year in which the previous

election was made. Further, if an election

has been revoked under this paragraph (g)

(4)(iii), a new election may not be made

until the sixth taxable year following the

year in which the previous election was

Bulletin No. 2024–39

revoked. The controlling United States

shareholders revoke an election on behalf

of a controlled foreign corporation by filing a statement that clearly indicates such

election has been revoked with their original or amended income tax returns for the

taxable year of such United States shareholders in which or with which the taxable

year of the controlled foreign corporation

for which the election is revoked ends.

*****

(i) * * *

(3) * * * Paragraphs (g)(3)(ii) and (iii)

and (g)(4)(iii) of this section apply to

taxable years of controlled foreign corporations ending on or after [DATE OF

PUBLICATION OF FINAL RULE]. For

taxable years of controlled foreign corporations ending before [DATE OF PUBLICATION OF FINAL RULE], see §1.9542(g)(3)(ii) and (iii) and (g)(4)(iii) as in

effect and contained in 26 CFR part 1, as

revised April 1, 2024.

Par. 3. Section 1.988-7, as proposed to

be added at 82 FR 60143 (December 19,

2017), is amended by adding paragraphs

(c) through (e) to read as follows:

§1.988-7 Election to mark-to-market

foreign currency gain or loss on section

988 transactions.

*****

(c) Time and manner of election--(1) In

general. Except as otherwise provided in

this paragraph (c), a taxpayer makes the

election under paragraph (a) of this section by filing a statement that clearly indicates that the election has been made with

the taxpayer’s timely-filed (excluding

extensions) original Federal income tax

return for the taxable year immediately

preceding the year for which the election

is made, or if applicable, with a request for

an extension of time to file that return.

(2) New taxpayers. In the case of a taxpayer for which no Federal income tax

return was required to be filed for the taxable year immediately preceding the year

for which the election is made, the taxpayer makes the election under paragraph

(a) of this section by preparing a statement

that clearly indicates the election has been

made and:

645

(i) Placing the statement in the taxpayer’s books and records by no later than 2

months and 15 days after the first day of

the year for which the election is made;

and

(ii) Filing the statement with the taxpayer’s original Federal income tax return

for the taxable year for which the election

is made.

(3) Elections on behalf of CFCs. In the

case of a controlled foreign corporation,

the controlling United States shareholders

(as defined in §1.964-1(c)(5)(i)) make the

election under paragraph (a) of this section on behalf of the controlled foreign

corporation by preparing a statement that

clearly indicates the election has been

made and:

(i) Placing the statement in the controlled foreign corporation’s books and

records by no later than 2 months and 15

days after the first day of the year of the

controlled foreign corporation for which

the election is made; and

(ii) Filing the statement with their original Federal income tax returns for the

taxable year of the United States shareholders in which or with which the taxable

year of the controlled foreign corporation

for which the election is made ends.

(d) Revocation. An election under paragraph (a) of this section is effective for the

taxable year for which it is made and all

subsequent taxable years unless the election is revoked with the consent of the

Commissioner.

(e) Applicability dates. This section

applies to taxable years of taxpayers ending on or after [DATE OF PUBLICATION OF FINAL RULE]. Paragraph (c)

(3) of this section applies to taxable years

of controlled foreign corporations ending

on or after [DATE OF PUBLICATION

OF FINAL RULE], and to taxable years

of United States shareholders in which or

with which the taxable years of those controlled foreign corporations end.

Heather C. Maloy,

Acting Deputy Commissioner.

(Filed by the Office of the Federal Register August

19, 2024, 8:45 a.m., and published in the issue of the

Federal Register for August 20, 2024, 89 FR 67336)

September 23, 2024

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus,

if an earlier ruling held that a principle

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously

published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations

to show that the previous published rulings will not be applied pending some

future action such as the issuance of new

or amended regulations, the outcome of

cases in litigation, or the outcome of a

Service study.

Abbreviations

The following abbreviations in current

use and formerly used will appear in

material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2024–39

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

September 23, 2024

Numerical Finding List1

Bulletin 2024–39

Announcements:

2024-26, 2024-27 I.R.B. 14

2024-27, 2024-27 I.R.B. 14

2024-28, 2024-28 I.R.B. 39

2024-29, 2024-29 I.R.B. 71

2024-31, 2024-34 I.R.B. 533

2024-32, 2024-35 I.R.B. 535

2024-30, 2024-36 I.R.B. 581

2024-39, 2024-39 I.R.B. 639

Notices:

2024-47, 2024-27 I.R.B. 1

2024-52, 2024-27 I.R.B. 2

2024-53, 2024-27 I.R.B. 4

2024-54, 2024-28 I.R.B. 24

2024-55, 2024-28 I.R.B. 31

2024-56, 2024-29 I.R.B. 64

2024-57, 2024-29 I.R.B. 67

2024-58, 2024-30 I.R.B. 120

2024-59, 2024-32 I.R.B. 348

2024-60, 2024-34 I.R.B. 515

2024-61, 2024-34 I.R.B. 520

2024-62, 2024-36 I.R.B. 570

2024-63, 2024-36 I.R.B. 573

2024-64, 2024-39 I.R.B. 632

2024-65, 2024-39 I.R.B. 633

Revenue Rulings:

2024-13, 2024-28 I.R.B. 18

2024-14, 2024-28 I.R.B. 18

2024-15, 2024-32 I.R.B. 340

2024-16, 2024-35 I.R.B. 534

2024-17, 2024-36 I.R.B. 568

2024-18, 2024-37 I.R.B. 584

Treasury Decisions:

10002, 2024-29 I.R.B. 56

9999, 2024-30 I.R.B. 72

10000, 2024-31 I.R.B. 185

10003, 2024-32 I.R.B. 342

10001 2024-33 I.R.B. 412

10004 2024-33 I.R.B. 489

9998 2024-34 I.R.B. 412

10005 2024-34 I.R.B. 510

Proposed Regulations:

REG-124593-23, 2024-28 I.R.B. 40

REG-109032-23, 2024-31 I.R.B. 332

REG-120137-19, 2024-31 I.R.B. 336

REG-119283-23, 2024-32 I.R.B. 351

REG-102161-23 2024-33 I.R.B. 502

REG-103529-23, 2024-33 I.R.B. 512

REG-105128-23, 2024-35 I.R.B. 536

REG-108920-24, 2024-38 I.R.B. 607

REG-111629-23, 2024-39 I.R.B. 640

Revenue Procedures:

2024-26, 2024-27 I.R.B. 7

2024-29, 2024-30 I.R.B. 121

2024-30, 2024-30 I.R.B. 183

2024-27, 2024-31 I.R.B. 300

2024-28, 2024-31 I.R.B. 326

2024-32, 2024-34 I.R.B. 523

2024-34, 2024-38 I.R.B. 604

2024-35, 2024-39 I.R.B. 638

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin

2024–52, dated December 30, 2024.

1

September 23, 2024

ii

Bulletin No. 2024–39

Finding List of Current Actions on

Previously Published Items1

Bulletin 2024–39

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin

2024–52, dated December 30, 2024.

1

Bulletin No. 2024–39

iii

September 23, 2024

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

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