# Bulletin No. 2024–44

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## Record

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

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2024–44
October 28, 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.

ADMINISTRATIVE
Rev. Proc. 2024-33, page 1030.

General Rules and Specifications for Substitute Forms and
Schedules
This procedure provides guidelines and general requirements for the development, printing, and approval of the
2024 substitute tax forms. This procedure will be reproduced as the next revision of Publication 1167. Rev. Proc.
2023-28 is superseded.

ADMINISTRATIVE, EXEMPT
ORGANIZATIONS, INCOME TAX
REG-113628-21, page 1074.

This document contains proposed regulations regarding the
Federal tax classification of entities wholly owned by Indian
Tribal governments (Tribes). The proposed regulations would
provide that entities that are wholly owned by Tribes and
organized or incorporated exclusively under the laws of the
Tribes that own them generally are not recognized as separate
entities for Federal tax purposes. The proposed regulations
would also provide that, for purposes of making certain elective payment elections (including determining eligibility for and
the consequences of such elections) for certain energy credits
under the Inflation Reduction Act of 2022, these entities and
certain Tribal corporations chartered by the Department of the
Interior (DOI) are treated as an instrumentality of one or more
Indian Tribal governments or subdivisions thereof. This document also requests comments and provides notice of a public
hearing on the proposed regulations that will be in addition to
Tribal consultation on the proposed regulations.

EMPLOYEE PLANS
Notice 2024-75, page 1026.

This notice expands the list of preventive care benefits
permitted to be provided by a high deductible health plan
Finding Lists begin on page ii.

(HDHP) under section 223(c)(2)(C) of the Internal Revenue
Code without a deductible, or with a deductible below the
applicable minimum deductible for the HDHP, to include
over-the-counter oral contraceptives (including emergency
contraceptives) and male condoms. This notice also clarifies that (1) all types of breast cancer screening for individuals who have not been diagnosed with breast cancer are
treated as preventive care under section 223(c)(2)(C), (2)
continuous glucose monitors for individuals diagnosed with
diabetes are generally treated as preventive care under section 223(c)(2)(C), and (3) the new safe harbor for absence of
a deductible for certain insulin products in section 223(c)(2)
(G) applies without regard to whether the insulin product is
prescribed to treat an individual diagnosed with diabetes or
prescribed for the purpose of preventing the exacerbation
of diabetes or the development of a secondary condition.

EXEMPT ORGANIZATIONS
Announcement 2024-36, page 1073.

Revocation of IRC 501(c)(3) Organizations for failure to
meet the code section requirements. Contributions made to
the organizations by individual donors are nolonger deductible under IRC 170(b)(1)(A).

INCOME TAX
Notice 2024-71, page 1026.

This notice provides a safe harbor under section 213 of the
Internal Revenue Code for amounts paid for condoms.

T.D. 9994, page 1014.

This document contains final regulations that terminate
the continued application of certain tax provisions arising
from a previous transfer of intangible property to a foreign
corporation when the intangible property is repatriated to
certain United States persons. The final regulations affect
certain United States persons that previously transferred
intangible property to a foreign corporation.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

October 28, 2024 

Bulletin No. 2024–44

Part I
Sections 1.367(a)-1, 1.367(d)-1, 1.367(d)-1T, 1.367(e)2, 1.904-4, 1.951A-2, 1.951A-7, and 1.6038B-1

T.D. 9994
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Section 367(d) Rules for
Certain Repatriations of
Intangible Property
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final rule.
SUMMARY: This document contains
final regulations that terminate the continued application of certain tax provisions
arising from a previous transfer of intangible property to a foreign corporation
when the intangible property is repatriated
to certain United States persons. The final
regulations affect certain United States
persons that previously transferred intangible property to a foreign corporation.
DATES: Effective date: These regulations
are effective on October 10, 2024.
Applicability date: For dates of applicability, see §§1.367(d)-1(j)(2), 1.904-(q)(3),
1.951A-7(e), and 1.6038B-1(g)(8).
FOR FURTHER INFORMATION
CONTACT: Concerning the final regulations other than §1.904-4, Brittany N.
Dobi (202) 317-6937; concerning §1.9044, Jeffrey L. Parry, (202) 317-6936 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Authority
This document contains final additions
and amendments to 26 CFR part 1 (final
regulations) under section 367(d) of the
Internal Revenue Code (Code) regarding

October 28, 2024

the termination of the continued application of certain tax provisions arising from
a previous transfer of intangible property
to a foreign corporation when the intangible property is repatriated to certain
United States persons. The primary provisions of the final regulations are issued
pursuant to the express delegations of
authority to the Secretary of the Treasury
(or her delegate) provided under sections
367(d) and 6038B. The provisions of the
final regulations related to foreign branch
income are issued pursuant to the express
delegations of authority provided under
sections 904(d)(2)(J) and (d)(7). The
final regulations are also issued under the
express delegation of authority under section 7805(a).
Background
On May 3, 2023, the Department of
the Treasury (Treasury Department) and
the IRS published a notice of proposed
rulemaking (REG-124064-19) in the Federal Register (88 FR 27819) under section
367 (the proposed regulations). The proposed regulations were intended to address
simple, common fact patterns involving
repatriations of intangible property by
terminating the continued application of
section 367(d) when a transferee foreign
corporation repatriates intangible property
subject to section 367(d) to a qualified
domestic person when certain reporting
requirements are satisfied. The proposed
regulations also included a rule coordinating the application of section 367(d) and
the provisions in §1.904-4(f)(2)(vi)(D) that
apply the principles of section 367(d) to
determine the appropriate amount of gross
income attributable to a foreign branch. A
“repatriation” denotes a subsequent transfer of intangible property to the U.S. transferor or a United States person (U.S. person) related to the U.S. transferor.
Summary of Comments and
Explanation of Revisions
I. In General
Five comments were submitted on the
proposed regulations, which are available
at https://www.regulations.gov or upon

1014

request. No public hearing on the proposed regulations was requested or held.
This Summary of Comments and
Explanation of Revisions describes those
comments and the revisions made in
response to those comments. The comments also made various requests for
future guidance, which the Treasury
Department and the IRS will consider
as part of a potential future rulemaking
addressing, among other things, general
issues under section 367(d).
II. Definition of Qualified Domestic
Person
A. In general
To terminate the continued application
of section 367(d) upon a repatriation of
intangible property, the proposed regulations required the recipient of the intangible property to be a qualified domestic
person. The proposed regulations defined
a qualified domestic person by reference
to an “initial U.S. transferor,” a “qualified
successor,” or a U.S. person that is either
an individual or “qualified corporation”
related to either the initial U.S. transferor or qualified successor. See proposed
§1.367(d)-1(f)(4)(iii).
As the preamble to the proposed regulations explained in part I.C of the Explanation of Provisions, the definition of
qualified domestic person was based on
the principle that it is generally appropriate to terminate the continued application
of section 367(d) only when all the income
produced by the intangible property during
its useful life, and all gain recognized on
a disposition of the intangible property,
will be subject to current tax in the United
States as to the qualified domestic person
while that person holds the property. See
88 FR 27819, 27824. The proposed regulations further described how, in the case
of a repatriation to an initial U.S. transferor, the repatriation restored the circumstances that existed at the time of the original section 367(d) transfer. See Id.
B. Partnerships
The proposed regulations neither
treated a domestic partnership as a qual-

Bulletin No. 2024–44

ified domestic person, nor adopted an
approach that would treat a partnership
as an aggregate of its partners (aggregate
approach) for purposes of determining
qualified domestic person status. One comment suggested that the Treasury Department and the IRS modify the definition
of qualified domestic person to include
partnerships in which all of the partners
in the partnership would themselves be
qualified domestic persons, or partnerships that made the original outbound
transfer of the intangible property subject
to section 367(d) when there is substantial
continuity of ownership of that partnership during the period beginning on the
date of the initial section 367(d) transfer
and ending on the date of the repatriation
of the intangible property. As part of the
modification, the comment also described
various approaches for addressing the
concerns identified in the proposed regulations regarding, for example, the potential for post-repatriation changes to partnership allocations or liquidation rights
to frustrate the purposes of the proposed
regulations if a partnership, or a partner in
the partnership, were permitted as a qualified domestic person in certain cases. See
88 FR 27819, 27824 for a discussion of
those concerns. Specifically, the comment
suggested that the final regulations, in
adopting the modification, could limit its
application by requiring a specific period
after the repatriation during which the
ownership or interests in the partnership
could not change. Additionally, the comment suggested that, to provide flexibility while protecting against the concerns
outlined in the proposed regulations, the
final regulations could allow the Commissioner to exercise discretion at a taxpayer’s request to determine that a post-distribution change in the ownership of the
partnership, or in the economic rights of
the partners with respect to the intangible property, would not taint the partnership’s status as a qualified domestic person. Finally, the comment also described
more general, long-standing issues under
section 367(d) related to the treatment
of partnerships within the section 367(d)
regime, and ultimately suggested that resolution of those issues should not impede
finalizing the proposed regulations.
The final regulations do not adopt this
comment and therefore adopt the defini-

Bulletin No. 2024–44

tion of qualified domestic person from the
proposed regulations without change. The
issues identified by the comment, along
with potential solutions to those issues,
were acknowledged in the preamble to the
proposed regulations, and the Treasury
Department and the IRS have determined
that the approach outlined in the proposed
regulations continues to strike the appropriate balance between implementing the
general purpose and scope of the proposed
regulations (ensuring that only appropriate repatriations terminate the continued
application of section 367(d)) and concerns regarding administrability and compliance. The solutions described in the
comment, like the alternatives described
in the proposed regulations, would not
achieve this balance because the solutions
would either expand the scope of the proposed regulations in an inappropriate manner (that is, by expanding the basic principle upon which the proposed regulations
rests), or the solutions would, given the
relatively narrow scope of the proposed
regulations, impose an undue burden on
taxpayers and the IRS. See 88 FR 27819,
27824 (describing, with respect to the latter, an approach modeled off of the rules
in §§1.367(a)-3 and 1.367(a)-8 regarding
gain recognition agreements and noting
that approach would be “unworkable due
to the compliance and administrative burden.”).
Another comment described general, long-standing issues under section 367(d) related to the treatment of
partnerships. These issues were generally identified in the proposed regulations. See id. For example, the comment
pointed to §§1.367(a)-1T(c)(3)(i) and
1.367(d)-1T(a), which apply an aggregate approach upon an initial outbound
transfer. The comment did not include any
explicit suggestion for change regarding
the proposed regulations, but the Treasury
Department and the IRS may consider
these issues as part of future rulemaking.
C. S corporations
As described in part I.A of this Summary of Comments and Explanation of
Revisions, the proposed regulations limited qualified domestic person status to
“qualified corporations” in the case of
a qualified successor or in the case of a

1015

U.S. person related to either the initial
U.S. transferor or qualified successor. See
proposed §1.367(d)-1(f)(4)(iii). A qualified corporation, in relevant part, did not
include an S corporation (as defined in
section 1361(a)). See Id.
One comment suggested that the final
regulations allow S corporations as qualified corporations. The comment noted that
the shareholders of an S corporation must
generally be U.S. individuals subject to
U.S. taxation, which ensures that income
attributable to intangible property held by
an S corporation would be subject to U.S.
taxation (though the comment noted that
the limitation is not absolute, as certain
plans described in section 401(a) may be
shareholders of an S corporation).
Section 512(e)(3) excludes a non-individual shareholder that is an employee
stock ownership plan (ESOP) (as defined
in section 4975(e)(7) from the scope of
section 512(e)(1), which provides that, in
the case of certain non-individual shareholders of the S corporation, any item of
income, gain, loss, or deduction, and any
gain or loss on the disposition of stock in
the S corporation, is taken into account by
such non-individual shareholders as unrelated business taxable income (UBTI). As
a result, the pro rata share of an S corporation’s items of income taken into account
by an ESOP shareholder is not subject to
current taxation as UBTI. As noted in part
I.A of this Summary of Comments and
Explanation of Revisions, a principle for
the definition of qualified domestic person is that termination of the continued
application of section 367(d) should occur
only when all the income produced by the
intangible property, as well as gain recognized on a disposition of the intangible
property, is subject to current tax in the
United States. In the case of an S corporation, that result is not guaranteed.
The final regulations, therefore, do not
adopt this comment and retain the definition of qualified domestic person from the
proposed regulations without change. The
Treasury Department and the IRS considered alternative approaches to address this
comment – such as an aggregate approach,
with prohibitions applicable to S corporation shareholders that are ESOPs – but
determined that such approaches were
effectively unworkable due to the compliance and administrative burden discussed

October 28, 2024

in part II.B of this Summary of Comment
and Explanation of Revisions in connection with the comment on partnerships.
III. Qualified Domestic Person’s Adjusted
Basis in Repatriated Intangible Property
Proposed §1.367(d)-1(f)(4)(iv) provided rules regarding a qualified domestic
person’s adjusted basis in the intangible
property it receives in a repatriation. The
proposed regulations described how these
rules were intended to achieve an appropriate result regarding a qualified domestic person’s adjusted basis in intangible
property upon a repatriation, but that general rules regarding adjusted basis under
section 367(d) (and not in the context of
a repatriation of intangible property to
a qualified domestic person) would be
addressed in future rulemaking. See 88 FR
27819, 27824, and 27825.
One comment described how existing
uncertainty regarding the treatment of
adjusted basis of intangible property subject to section 367(d) may be implicated
when that intangible property is repatriated. The comment noted that any solution would necessarily represent a broad
solution to existing section 367(d) issues,
instead of one limited to the proposed regulations, so the comment recommended
the Treasury Department and the IRS
address this issue in future rulemaking.
Another comment suggested that, when
a transferee foreign corporation incurs
expenditures with respect to repatriated
intangible property after the initial outbound transfer, proposed §1.367(d)-1(f)
(4)(iv) should be modified to allow a qualified domestic person’s adjusted basis in
repatriated intangible property to reflect
those expenditures, reduced by any attributable amortization allowed or allowable
to the transferee foreign corporation.
As noted in the proposed regulations,
proposed §1.367(d)-1(f)(4)(iv) operated
“in a manner intended to reach an appropriate result regarding a qualified domestic person’s basis in repatriated intangible property” until future rulemaking is
issued that can address general basis rules
under section 367(d). See id. The Treasury
Department and the IRS, in agreement
with the first comment, continue to believe
that any resolution of these issues necessarily implicates broader issues under

October 28, 2024

section 367(d) and, as such, is beyond
the scope of this rulemaking. Proposed
§1.367(d)-1(f)(4)(iv) is therefore finalized without change, though the Treasury
Department and the IRS may revisit these
issues as part of future rulemaking.
IV. Required Adjustments Related to an
Annual Section 367(d) Inclusion
The proposed regulations provided that
the deemed annual payment under section
367(d) by the transferee foreign corporation is treated as an allowable deduction
that must be allocated and apportioned
to the transferee foreign corporation’s
classes of gross income in accordance with
§§1.882-4(b)(1), 1.954-1(c), and 1.9601(c) and (d) (as applicable). See proposed
§1.367(d)-1(c)(2)(ii) and (e)(2)(ii). These
provisions, described as “minor clarifications” in the preamble to the proposed
regulations, clarified “that the allowable
deduction is allocated and apportioned
under the provisions cited in the previous sentence potentially to any class (or
classes) of gross income (as appropriate)
rather than solely to gross income subject
to subpart F in all circumstances.” See 88
FR 27819, 27822, and 27825.
One comment suggested that the
proposed regulations were unclear as
to whether the allowable deduction
described in proposed §1.367(d)-1(c)(2)
(ii) and (e)(2)(ii) was limited to the listed
provisions (§§1.882-4(b)(1), 1.954-1(c),
and 1.960-1(c) and (d)) or whether such
deduction was more generally available
(for example, as a deduction under section 162). The comment posited that the
latter approach was more appropriate and
requested that the final regulations clarify that the allowable deduction may be
allowed as a deduction under section 162.
In support, the comment described how,
in the case of certain transfers of intangible property to a U.S. person that is not
a qualified domestic person, “excessive
U.S. taxation” could result if the allowable deduction were limited to the listed
provisions, which are provisions relevant
to determinations with respect to foreign
corporations.
The final regulations do not adopt this
comment. The proposed regulations terminated the continued application of section 367(d) upon certain, rather than all,

1016

subsequent transfers of intangible property to a U.S. person (that is, upon a repatriation to a qualified domestic person if
certain reporting requirements are met).
See 88 FR 27819,27821, and 27822. The
comment, if adopted, would effectively
terminate the continued application of
section 367(d) by, for example, providing
a deduction under section 162 corresponding to each annual inclusion under section
367(d). Indeed, as the proposed regulations explained, the solution contained in
the proposed regulations was premised, in
relevant part, on the fact that “the deemed
(substituted) transferee foreign corporation is not allowed a deduction that could
reduce taxable income, even though that
deemed transferee foreign corporation is
the U.S. transferor or a related U.S. person.” See id. Thus, a fundamental premise
underlying the proposed regulations, and
the existing section 367(d) regulations,
is that an allowable deduction, instead
of being generally available, is limited
to the provisions listed in the proposed
regulations (§§1.882-4(b)(1), 1.954-1(c),
and 1.960-1(c) and (d)). To adopt the
comment’s suggestion would therefore be
inconsistent with the proposed regulations
and section 367(d) generally.
The comment also suggested that,
when a subsequent transfer of intangible
property results in treating the same entity
as U.S. transferor and transferee foreign
corporation under the section 367(d)
regulations, the continued application of
section 367(d) should terminate by reason of that convergence. As support, the
comment cited to a case and guidance
involving circumstances in which a taxpayer acquired its own debt. The Treasury
Department and the IRS do not agree with
this suggestion for the reasons described
in the preceding paragraph, and references
to cases or guidance involving a taxpayer
acquiring its own debt are not instructive
for, nor consistent with, the statutory and
regulatory framework of section 367(d).
Section 367(d) relies upon a statutory
fiction that imposes a notional regime
with a prescribed payor and payee, and
the regulations describe cases in which a
successor succeeds to the notional payment on both sides of the construct. For
example, §1.367(d)-1T(e)(1) provides
that a related person can succeed an initial U.S. transferor for purposes of includ-

Bulletin No. 2024–44

ing income under section 367(d), and
§1.367(d)-1T(f)(3) provides that a related
person can succeed to the payor side of
the deemed payment fiction. Where intangible property is returned to the original
U.S. transferor, that U.S. transferor is also
the successor transferee under the statutory and regulatory framework of section
367(d), and, under the express language
of §1.367(d)-1T(f)(3), the annual inclusion under section 367(d) continues. This
is precisely the issue the proposed regulations were intended to address, and new
regulations providing a rule for terminating an annual inclusion stream would have
been largely unnecessary if the deemed
payment construct collapsed automatically in such cases. Instead, this Treasury
Decision provides the exclusive means by
which the continued application of section
367(d) may be terminated by reason of a
subsequent transfer of intangible property
to a U.S. person.
V. Multiple Transfers Before Repatriation
One comment suggested changes to
the proposed regulations to accommodate repatriations preceded by certain
transfers of intangible property subject
to section 367(d) between related foreign
corporations. To illustrate this suggestion,
the comment posited an example pursuant to which a repatriation was first preceded by a distribution under section 311
of the intangible property (first section
311 distribution) from one CFC (original
transferee foreign corporation, or TFC) to
another CFC (successor TFC). The successor TFC then distributes the intangible
property under section 311 to a qualified
domestic person (second 311 distribution)
in a transaction with respect to which the
successor TFC did not recognize gain
or loss (under the theory that successor
TFC’s adjusted basis in the intangible
property equaled the intangible property’s
fair market value).
On those modified facts, the comment
described how the original TFC could
recognize gain subject to U.S. taxation
by reason of the first section 311 distribution (not under section 367(d), but rather
under, for example, section 951A(a) as to
a United States shareholder), and the qualified domestic person could recognize that
same amount of gain upon the repatriation

Bulletin No. 2024–44

after the second 311 distribution under the
proposed regulations (by reason of the
application of the gain recognition rule in
proposed §1.367(d)-1(f)(4)(ii)(B), under
which gain is determined by reference
to the U.S. transferor’s former adjusted
basis in the property). And, because the
successor TFC is the TFC at the time of
the repatriation (that is, at the time of
the second section 311 distribution), the
required adjustments described in proposed §1.367(d)-1(f)(2) would apply by
reference to the successor TFC, which did
not recognize gain or loss on the repatriation under the theory described above,
rather than to the original TFC, which
recognized gain on the first section 311
distribution. To address this concern, the
comment suggested modifying the proposed regulations in a manner that would
effectively negate a prior transfer that was
subject to tax under a separate regime (for
example, section 951A).
The example provided in the comment
highlights significant potential interactions
between the operation of section 367(d)
and other generally operative provisions
in the Code and regulations. For example,
§1.367(d)-1T(f)(3) explicitly provides
that the ongoing annual royalty construct
is unaffected by the taxable distribution of
intangible property from the original TFC
to the successor TFC in the first section
311 distribution, and §1.367(d)-1T(d)(1)
and (f)(1) are clear that the amount of
income recognized by the U.S. transferor
upon a later indirect or direct disposition
of intangible property to an unrelated person is determined using the transferor’s
original basis in the property. However,
the distribution of the intangible property
from the original TFC to the successor
TFC described in the comment’s example
might result in taxable gain to the original TFC that would be treated as tested
income under section 951A, notwithstanding the lack of an acceleration of
income under section 367(d). Similarly,
the successor TFC might take the intangible property with a fair market value basis
under section 301(d), even though that
increased basis would not be available to
reduce gain under section 367(d). Essentially, the example posited in the comment
highlights that it may be possible to recognize income under both sections 951A
and 367(d) with respect to the same prop-

1017

erty in some fact patterns where separate
transactions occur in separate foreign corporations, notwithstanding that that result
would not occur in cases where the property is not transferred among multiple foreign corporations. Coordinating potential
disparities between income recognition
under section 367(d) as compared to other
generally applicable provisions of the
Code, and potential disparities in tax basis
for purposes of section 367(d) as compared
to adjusted basis for other purposes, is
beyond the scope of this rulemaking. The
request for additional guidance addressing
multiple related transfers, therefore, is not
adopted.
VI. Reporting
As a condition for terminating the
application of section 367(d) with respect
to repatriated intangible property, proposed §1.367(d)-1(f)(4)(i)(B) would
have required a U.S. transferor to provide
the information described in proposed
§1.6038B-1(d)(2)(iv). If a U.S. transferor failed to provide that information,
the repatriation was subject to proposed
§1.367(d)-1(f)(3) such that the section
367(d) regulations, including the requirement to take an annual inclusion into
account over the useful life of the intangible property, continued to apply. However,
a U.S. transferor was eligible for relief
under the proposed regulations if proposed §1.367(d)-1(f)(4)(i)(B)(2) would
have applied to the subsequent transfer
of intangible property but for the fact that
the required information was not provided
and the U.S. transferor, upon becoming
aware of the failure, promptly provided
the required information, explained its
failure to comply, and met certain other
requirements (if applicable).
One comment requested clarifications
of the reporting and relief provisions.
First, the comment requested that the final
regulations clarify whether relief for a
failure to comply is, in relevant part, also
conditioned on the U.S. transferor timely
filing one or more amended returns for
the taxable year in which the subsequent
transfer occurred and succeeding years,
and, if the U.S. transferor is under examination when an amended return is filed,
providing a copy of the amended return(s)
to the IRS personnel conducting the exam-

October 28, 2024

ination. The Treasury Department and the
IRS adopt this comment by revising of
§1.367(d)-1(f)(5) to clarify that the relief
for a failure to comply is conditioned upon
the requirements listed in the previous
sentence (if applicable).
The comment also requested that the
Treasury Department and the IRS consider prescribing in the future a particular
form for filing the required information
under proposed §1.367(d)-1(f)(5). The
Treasury Department and the IRS will
consider prescribing a particular form as
part of future improvements to reporting
with respect to section 367(d) generally.
However, to provide taxpayers with additional guidance on the manner for providing a U.S. transferor’s explanation for
its failure to comply to the IRS, the final
regulations provide an eFax number for
such purpose (and, if a taxable year of
the U.S. transferor is under examination,
that information should instead be provided to the IRS personnel conducting
the examination).
Finally, the comment suggested clarifications or modifications to the requirements in proposed §1.367(d)-1(f)(5) that
a U.S. transferor “promptly” address
its failure to file and to the way the U.S.
transferor provides the remedial information (that is, to the Director of Field Operations, Cross Border Activities Practice
Area of Large Business & International,
or any successor to that role). The comment suggested that “promptly” does not
provide sufficient guidance to taxpayers (the comment requested a prescribed
period) and the comment asserted that it
is unusual for regulations to require a taxpayer to provide information directly to a
specified official within the IRS. The final
regulations do not adopt these suggestions.
The Treasury Department and the IRS
believe that “promptly” requiring the U.S.
transferor to address its failure to comply,
rather than providing a specific period,
allows flexibility so that the relief may
apply as appropriate to a taxpayer’s particular facts and circumstances. Additionally,
proposed §1.367(d)-1(f)(5) is modeled
on similar relief provisions in other contexts (for example, §§1.367(a)-8(p) and
1.721(c)-6(f)).
The Treasury Department and the
IRS clarify proposed §1.367(d)-1(f)(5)
by striking the last clause that appeared

October 28, 2024

in the second sentence. That sentence
described the consequences of a failure
to comply, namely the continued application of the annual inclusion stream
pursuant to proposed §1.367(d)-1(f)(3)
and application of the gain recognition
rule of proposed §1.367(d)-1(f)(4)(i)
(A). If the failure to comply is remedied,
the rules of the proposed regulations are
treated as satisfied as of the date of the
repatriation (so, the repatriation terminates the continued application of section
367(d) and the U.S. transferor, if applicable, would take a partial annual inclusion into account pursuant to proposed
§1.367(d)-1(f)(4)(i)(B)(1)).
VII. Clarification to Example 3
Proposed
§1.367(d)-1(f)(6)(ii)(C)
(Example 3) illustrated the determination
of a qualified domestic person’s adjusted
basis in intangible property under the
proposed regulations. In that example,
TFC transferred the intangible property
to USS (a qualified domestic person as
defined in proposed §1.367(d)-1(f)(4)
(iii)) in an exchange described in section
351(b) pursuant to which TFC recognized
$50x of gain and USP recognized $50x
of gain under proposed §1.367(d)-1(f)
(4)(i)(A). The analysis under proposed
§1.367(d)-1(f)(6)(ii)(C)(2) was, and
remains in this Treasury decision, limited
to the determination of USS’s adjusted
basis in the intangible property.
One comment requested, in relevant
part, that the final regulations clarify that
TFC’s earnings and profits and gross
income arising by reason of the repatriation are reduced by the amount of
gain recognized by USP under proposed
§1.367(d)-1(f)(4)(i)(A) ($50x). The Treasury and the IRS adopt the comment by
clarifying in the facts of the example
that, under §1.367(d)-1(f)(2)(i), TFC
will reduce its earnings and profits and
gross income by $50x, the amount arising by reason of the repatriation and the
amount of gain recognized by USP under
§1.367(d)-1(f)(4)(i)(A).
VIII. Section 904(d) Foreign Branch
Income Rules
Proposed
§1.904-4(f)(2)(vi)(D)(4)
described the application of the prin-

1018

ciples of section 367(d) to subsequent
transfers of intangible property in determining adjustments to the amount of
gross income attributable to a foreign
branch under §1.904-4(f)(2)(vi)(D).
Specifically, the proposed regulations
would have provided that each transfer
to which §1.904-4(f)(2)(vi)(D) applies is
considered independently from any other
preceding or subsequent transfer of the
intangible property, with the result that
the subsequent transfer rules in the regulations under section 367(d), including
the rules for repatriations provided in
the proposed regulations, do not apply
in determining gross income attributable
to a foreign branch under §1.904-4(f)(2)
(vi)(D). See 88 FR 27819, 27825, and
27826.
One comment requested that the Treasury Department and the IRS finalize the
provisions of the proposed regulations
without finalizing proposed §1.904-4(f)
(2)(vi)(D)(4). The comment suggested
that such an approach could allow for further consideration of ways to simplify the
application of section 367(d) principles in
§1.904-4(f)(2)(vi)(D). The comment suggested that instead of finalizing proposed
§1.904-4(f)(2)(vi)(D)(4), that provision
could be adopted as a temporary regulation, or alternatively, this preamble could
state that, until the implementation of final
regulations addressing this issue, the Treasury Department and the IRS intend that
rules related to section 367(d) and subsequent transfer will not apply for purposes
of section 904(d).
A broader reconsideration of the
application of section 367(d) principles in §1.904-4(f)(2)(vi)(D) is beyond
the scope of these final regulations. The
Treasury Department and the IRS believe
it is necessary to finalize proposed
§1.904-4(f)(2)(vi)(D)(4) to ensure the
proper application of the foreign branch
income rules under §1.904-4(f)(2)(vi)
(D) as those rules currently stand. This is
because, as explained in the preamble to
the proposed regulations, while §1.9044(f)(2)(vi)(D) relies on the principles of
section 367(d) to determine the appropriate amount of gross income that is attributable to a foreign branch, the purposes
of section 367(d) and §1.904-4(f)(2)
(vi)(D) are different. See 88 FR 27819,
27825 (providing that, with respect to

Bulletin No. 2024–44

§1.904-4(f)(2)(vi)(D), “[i]f there are
multiple transfers of an item of intangible
property over time, each transfer must be
separately evaluated and could result in
differing amounts of deemed annual payments depending on any interim changes
in the value of the intangible property
between successive transfers…these
proposed regulations provide that each
successive transfer to which §1.904-4(f)
(2)(vi)(D) applies is considered independently from any other preceding or
subsequent transfers.”). Accordingly, the
final regulations do not adopt this comment and proposed §1.904-4(f)(2)(vi)(D)
is finalized without change.
IX. Applicability Dates
The proposed regulations were generally proposed to apply to subsequent dispositions of intangible property occurring
on or after the date of publication of the
Treasury decision adopting these rules as
final regulations in the Federal Register.
See proposed §§1.367(d)-1(j)(2), 1.9044(q)(3), and 1.6038B-1(g). Comments
recommended that the proposed regulations apply retroactively.
The Treasury Department and the IRS
generally consider several factors when
evaluating whether a rule should apply
retroactively on an elective basis. For
example, and as relevant to the proposed
regulations, retroactive application may
be more compelling where the regulations
are issued with respect to new legislation,
or where retroactive application is necessary to achieve certain policy objectives.
The Treasury Department and the IRS
also evaluate the additional administrative
burden likely to result from retroactive
application. Finally, where the regulations represent a change in existing regulations, consideration is given to whether
retroactive application could advantage
certain taxpayers over similarly situated
taxpayers, based on whether the relevant
taxable year remains open for the taxpayer
to amend their return to take advantage of
the change. The Treasury Department and
the IRS have determined that, on balance,
these factors, though not representing an
exhaustive list of factors, weigh against
permitting the retroactive application of
the final regulations and therefore do not
adopt these comments.

Bulletin No. 2024–44

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 collection of information contained
in these regulations has been reviewed and
approved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d))
under control number 1545–0026. The collection of information in these final regulations is in §1.6038B-1(d)(2)(iv). This information is necessary to ensure that proposed
§1.367(d)-1(f)(4) is appropriately applied
to the subsequent transfer. The collection
of information is required to comply with
section 367(d). The likely respondents are
domestic corporations. Burdens associated
with these requirements will be reflected in
the burden for Form 926, Return by a U.S.
Transferor of Property to a Foreign Corporation.
Estimated total annual reporting burden is 1,601 hours.
Estimated average annual burden per
respondent is 2.4 hours.
Estimated number of respondents is
667.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it displays a valid control number assigned by
the Office of Management and Budget.
Books or records relating to a collection
of information must be retained if their
contents may become material in the
administration of any Internal Revenue
law. Generally, tax returns and tax return
information are confidential, as required
by section 6103.
III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby cer-

1019

tified that these final regulations will not
have a significant economic impact on a
substantial number of small entities.
The Treasury Department and the IRS
do not have data readily available to assess
the number of small entities potentially
affected by the final regulations. However,
entities potentially affected by these proposed regulations are generally not small
entities, because of the resources and
investment necessary to develop intangible property and, once so developed,
transfer the intangible property to a foreign corporation. Therefore, the Treasury
Department and the IRS have determined
that there will not be a substantial number
of domestic small entities affected by the
final regulations. Consequently, the Treasury Department and the IRS certify that
the final regulations will not have a significant economic impact on a substantial
number of small entities.
IV. Section 7805(f)
Pursuant to section 7805(f) of the Code,
the proposed regulations (REG-11383922) preceding these final regulations were
submitted to the Chief Counsel for Advocacy of the Small Business Administration
for comment on its impact on small business, and no comments were received.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 requires that agencies
assess anticipated costs and benefits and
take certain other actions before issuing a
final rule that includes any Federal mandate that may result in expenditures in
any one year by a State, local, or Tribal
government, in the aggregate, or by the
private sector, of $100 million in 1995
dollars, updated annually for inflation.
These final regulations do 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 sub-

October 28, 2024

stantial, 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 final 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.
Drafting Information
The principal author of these regulations is Brittany N. Dobi, of the Office of
Associate Chief Counsel (International).
However, other personnel from the Treasury Department and the IRS participated
in their development.
List of Subjects in 26 CFR Part 1
Income Taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS 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 * * *
*****
Section 1.367(d)-1 also issued under
26 U.S.C. 367(d).
*****
§1.367(a)-1 [Amended]
Par. 2. Section 1.367(a)-1 is amended
by removing the language “section 936(h)
(3)(B)” in paragraphs (d)(5) and (6) and
adding the language “section 367(d)(4)”
in its place.
Par. 3. Section 1.367(d)-1 is amended
by:
a. Removing reserved paragraphs (c)
(1) through (2).
b. Adding paragraph (c) heading and
paragraphs (c)(1) and (2).

October 28, 2024

c. Removing reserved paragraphs (c)
(4) through (g)(2) (introductory text).
d. Adding paragraphs (c)(4) and (d)
through (f).
e. Removing paragraph (g)(2)(i),
reserved paragraphs (g)(2)(ii) through (iii)
(D), paragraph (g)(2)(iii)(E), and reserved
paragraph (g)(2)(iii) undesignated concluding paragraph.
f. Adding paragraph (g) heading and
paragraphs (g)(1) and (2).
g. Removing reserved paragraphs (g)
(4) through (i).
h. Adding paragraphs (g)(4) through
(6), (h), and (i).
i. Revising paragraph (j).
The additions and revision read as follows:
§1.367(d)-1 Transfers of intangible
property to foreign corporations.
*****
(c) Deemed payments upon transfer of
intangible property to foreign corporation—(1) In general. For further guidance,
see §1.367(d)-1T(c)(1).
(2) Required adjustments. For further
guidance, see §1.367(d)-1T(c)(2) introductory text and (c)(2)(i).
(i) [Reserved]
(ii) The deemed payment is treated as
an allowable deduction (whether or not
that amount is paid) of the transferee foreign corporation properly allocated and
apportioned to the appropriate classes of
gross income in accordance with §§1.8824(b)(1), 1.951A-2(c)(3), 1.954-1(c), and
1.960-1(c) and(d), as applicable.
*****
(4) Blocked income. For further guidance, see §1.367(d)-1T(c)(4).
(d) Subsequent transfer of stock of
transferee corporation to unrelated person.
For further guidance, see §1.367(d)-1T(d).
(e) Subsequent transfer of stock of
transferee foreign corporation to related
person—(1) Transfer to related U.S.
person treated as disposition of intangible property. For further guidance, see
§1.367(d)-1T(e)(1).
(2) Required adjustments. For further
guidance, see §1.367(d)-1T(e)(2) introductory text and (e)(2)(i).
(i) [Reserved]
(ii) The deemed payment is treated as
an allowable deduction (whether or not

1020

that amount is paid) of the transferee foreign corporation properly allocated and
apportioned to the appropriate classes of
gross income in accordance with §§1.8824(b)(1), 1.951A-2(c)(3), 1.954-1(c), and
1.960-1(c) and(d), as applicable.
(iii) For further guidance, see
§1.367(d)-1T(e)(2)(iii) through (e)(4).
(iv) [Reserved]
(3) through (4) [Reserved]
(f) Subsequent disposition of transferred intangible property by transferee
foreign corporation—(1) In general. For
further guidance, see §1.367(d)-1T(f)(1).
(2) Required adjustments. If a U.S.
transferor is required to recognize gain
under paragraph (f)(4)(i)(A) of this section
or §1.367(d)-1T(f)(1), then, in addition to
the adjustments described in paragraph (c)
(2)(ii) of this section and §1.367(d)-1T(c)
(2) with respect to the deemed payment
described in §1.367(d)-1T(f)(1)(ii)—
(i) For purposes of chapter 1 of the
Code, the transferee foreign corporation
reduces (but not below zero) the portion of
its earnings and profits and gross income
arising by reason of the subsequent disposition of the intangible property by the
amount of gain recognized by the U.S.
transferor under paragraph (f)(4)(i)(A) of
this section or §1.367(d)-1T(f)(1); and
(ii) The U.S. transferor may establish
an account receivable from the transferee
foreign corporation equal to the amount of
gain recognized under paragraph (f)(4)(i)
(A) of this section or §1.367(d)-1T(f)(1)
in accordance with §1.367(d)-1T(g)(1).
(3) Subsequent transfer of intangible property to related person. Except as
provided in paragraph (f)(4)(i)(B) of this
section, a U.S. person’s requirement to
recognize income under §1.367(d)-1T(c)
or (e) is not affected by the transferee
foreign corporation’s subsequent disposition of the transferred intangible property
to a related person. For purposes of any
required adjustments, and of any accounts
receivable created under §1.367(d)-1T(g)
(1), the related person that receives the
intangible property is treated as the transferee foreign corporation.
(4) Subsequent transfer of intangible
property to qualified domestic person—(i)
In general. Except as provided in paragraph (f)(4)(v) of this section, if a U.S.
person transfers intangible property subject to section 367(d) and the rules of this

Bulletin No. 2024–44

section and §1.367(d)-1T to a foreign corporation in an exchange described in section 351 or 361 and, within the useful life
of the intangible property, that transferee
foreign corporation subsequently disposes
of the intangible property to a qualified
domestic person, then—
(A) The U.S. transferor of the intangible property (or any person treated as
such pursuant to §1.367(d)-1T(e)(1)) is
required to recognize gain, as applicable,
equal to the amount described in paragraph (f)(4)(ii) of this section; and
(B) If the U.S. transferor provides the
information described in §1.6038B-1(d)
(2)(iv), then—
(1) The U.S. transferor is required to
recognize a deemed payment as provided
in §1.367(d)-1T(f)(1)(ii); and
(2) The intangible property is no longer
subject to section 367(d), this section, or
§1.367(d)-1T after applying paragraphs
(f)(4)(i)(A) and (f)(4)(i)(B)(1) of this section.
(ii) Gain recognition for U.S. transferor. The amount of gain a U.S. transferor must recognize under paragraph (f)
(4)(i)(A) of this section is determined as
follows—
(A) If the intangible property is transferred basis property (as defined in section 7701(a)(43)) by reason of the subsequent disposition (determined without
regard to section 367(d), this section,
and §1.367(d)-1T), the amount of gain,
if any, the transferee foreign corporation
would recognize if its adjusted basis in the
intangible property were equal to the U.S.
transferor’s former adjusted basis in the
property; or
(B) If the intangible property is not
transferred basis property by reason of the
subsequent disposition (determined without regard to section 367(d), this section,
and §1.367(d)-1T), the excess, if any, of
the fair market value of the intangible
property on the date of the subsequent disposition over the U.S. transferor’s former
adjusted basis in that property.
(iii) Qualified domestic person. For
purposes of this paragraph (f)(4), a qualified domestic person means—
(A) The U.S. transferor that initially
transferred intangible property subject to
section 367(d).
(B) A U.S. person treated as a U.S.
transferor under §1.367(d)-1T(e)(1),

Bulletin No. 2024–44

provided such person is an individual or
a corporation other than a corporation
exempt from tax under section 501(a), a
regulated investment company (as defined
in section 851(a)), a real estate investment trust (as defined in section 856(a)),
a DISC (as defined in section 992(a)(1)),
or an S corporation (as defined in section
1361(a));
(C) A U.S. person that is an individual related, within the meaning of
paragraph (h)(2)(ii) of this section and
§1.367(d)-1T(h), to the person described
in paragraph (f)(4)(iii)(A) or (B) of this
section; or
(D) A U.S. person that is a corporation related, within the meaning of
paragraph (h)(2)(ii) of this section and
§1.367(d)-1T(h), to the person described
in paragraph (f)(4)(iii)(A) or (B) of this
section, other than a corporation exempt
from tax under section 501(a), a regulated
investment company (as defined in section 851(a)), a real estate investment trust
(as defined in section 856(a)), a DISC (as
defined in section 992(a)(1)), or an S corporation (as defined in section 1361(a)).
(iv) Qualified domestic person’s basis
in the intangible property. The qualified
domestic person’s adjusted basis in the
intangible property is—
(A) In the case of a subsequent disposition of intangible property described in
paragraph (f)(4)(ii)(A) of this section, and
subject to any applicable limitations that
may apply under the Code, the lesser of
the U.S. transferor’s former adjusted basis
in the intangible property or the transferee
foreign corporation’s adjusted basis in the
intangible property (as determined immediately before the subsequent disposition),
in each case increased by the greater of
the amount of gain (if any) described in
paragraph (f)(4)(ii)(A) of this section and
recognized by the U.S. transferor or the
amount of gain (if any) recognized by the
transferee foreign corporation as to the
intangible property by reason of the subsequent disposition; or
(B) In the case of a subsequent disposition of intangible property described in
paragraph (f)(4)(ii)(B) of this section, the
fair market value of the intangible property (as determined on the date of the subsequent disposition).
(v) Special rule for related transactions. If the transferee foreign corporation

1021

subsequently disposes of the transferred
intangible property to a person that would,
absent this paragraph (f)(4)(v), be a qualified domestic person (initial transferee)
and, as part of a series of related transactions, the intangible property is subsequently disposed of to any other person,
including by reason of multiple dispositions, then the initial transferee is treated
as a qualified domestic person only if the
ultimate recipient of the intangible property is a qualified domestic person. See
paragraphs (f)(6)(ii)(D) and (E) of this
section (Examples 4 and 5) for illustrations of the application of this paragraph
(f)(4)(v).
(5) Relief for certain failures to comply. This paragraph (f)(5) provides relief
if paragraph (f)(4)(i)(B)(2) of this section
would apply but for the U.S. transferor’s
failure to provide the information required
by paragraph (f)(4)(i)(B) of this section
(a “failure to comply”). When a failure to
comply occurs, the subsequent disposition
of the transferred intangible property is
generally subject to paragraphs (f)(3) and
(f)(4)(i)(A) of this section. Nevertheless,
a failure to comply is deemed not to have
occurred (regardless of whether the U.S.
transferor continued to include amounts
in gross income under §1.367(d)-1T(c) or
(e) after the subsequent disposition), and
the requirements of paragraph (f)(4)(i)(B)
of this section are treated as satisfied as of
the date of the subsequent disposition if—
(i) Promptly after the U.S. transferor
becomes aware of the failure, the U.S.
transferor provides such information and
provides a reasonable explanation for its
failure to comply to the Director of Field
Operations, Cross Border Activities Practice Area of Large Business & International (or any successor to the roles and
responsibilities of such position, as appropriate), by eFax at (855) 582-4842 (or as
otherwise directed on irs.gov), or, if any
taxable year of the U.S. transferor is under
examination when the discovery is made,
to the Internal Revenue Service personnel
conducting the examination;
(ii) The U.S. transferor timely files an
amended return for the taxable year in
which the subsequent disposition occurred
(and, if applicable, for each taxable year
starting with the taxable year immediately
after the taxable year in which the subsequent disposition occurred and ending

October 28, 2024

with the taxable year in which the U.S.
transferor seeks relief under this paragraph (f)(5)) that includes the information
required by paragraph (f)(4)(i)(B) of this
section; and
(iii) If any taxable year of the U.S.
transferor is under examination when an
amended return is filed, the U.S. transferor
provides a copy of the amended return
(or, if applicable, amended returns) to the
Internal Revenue Service personnel conducting the examination.
(6) Examples—(i) Assumed facts. For
purposes of the examples in paragraph (f)
(6)(ii) of this section, and except where
otherwise indicated, the following facts
are assumed.
(A) USP and USS are domestic corporations that each use a calendar taxable
year.
(B) TFC is a foreign corporation whose
functional currency is the U.S. dollar.
(C) In year 1, USP transfers intangible
property, as defined in section 367(d)(4),
with a $0 adjusted basis, to TFC in a section 351 exchange (the transferred IP), and
such transfer is subject to section 367(d).
(D) Each annual inclusion (including
any amount described in §1.367(d)-1T(f)
(1)(ii)) is taken into account under section
367(d)(2)(A)(ii)(I) and §1.367(d)-1T(c)
(1).
(E) Any subsequent transfer or disposition of stock of TFC or the transferred IP
occurs within the useful life of the transferred IP.
(F) All transactions are respected under
general principles of tax law.
(ii) Examples. The following examples
illustrate the application of paragraph (f)
(4) of this section and other paragraphs of
this section that relate to paragraph (f)(4).
(A) Example 1: Complete liquidation of transferee foreign corporation into a qualified domestic
person—(1) Facts. In year 2, USP transfers all the
stock of TFC to USS, a related person within the
meaning of §1.367(d)-1T(h) and paragraph (h)(2)(ii)
of this section, in a section 351 exchange to which
§1.367(d)-1T(e)(1) applies (the year 2 transfer). In
year 3, TFC distributes all its property (including the
transferred IP) to USS pursuant to a complete liquidation to which sections 332 and 337 apply (the year
3 liquidation). The all earnings and profits amount
determined under §1.367(b)-2(d) with respect to the
stock of TFC held by USS is $0. The information
described in §1.6038B-1(d)(2) is provided by USS
for the taxable year in which the year 3 liquidation
occurs.
(2) Analysis—(i) The year 2 transfer. Because
the year 2 transfer involves a transfer of all the

October 28, 2024

stock of TFC by USP (the initial U.S. transferor) to
a related U.S. person (USS), under §1.367(d)-1T(e)
(1)(i) USS (a successor U.S. transferor) is treated as
receiving the right to receive a proportionate share of
the contingent annual payments that USP would have
otherwise taken into account under §1.367(d)-1T(c).
As determined under §1.367(d)-1T(e)(4), USS’s
proportionate share of such payments is 100 percent. Accordingly, USS will annually include in its
gross income the full amount of each of the annual
payments that USP would otherwise have taken into
account under §1.367(d)-1T(c) over the useful life
of the transferred IP, and USP will not recognize any
gain upon the year 2 transfer. See §1.367(d)-1T(e)
(1)(ii) and (iii).
(ii) The year 3 liquidation. The year 3 liquidation results in a subsequent disposition of the
transferred IP to USS. USS, a U.S. person treated
as the U.S. transferor pursuant to §1.367(d)-1T(e)
(1), is a qualified domestic person within the meaning of paragraph (f)(4)(iii) of this section. Pursuant to paragraph (f)(4)(i)(A) of this section, USS
must recognize the amount of gain described in
paragraph (f)(4)(ii) of this section. Because the
year 3 liquidation is a complete liquidation to
which sections 332 and 337 apply, the intangible
property is transferred basis property (as defined in
section 7701(a)(43) and determined without regard
to section 367(d), this section, and §1.367(d)-1T),
and therefore paragraph (f)(4)(ii)(A) of this section
applies to determine the amount of any gain USS
must recognize. Because TFC does not recognize
gain with respect to the transferred IP (regardless
of the adjusted basis in the intangible property) by
reason of the year 3 liquidation, the amount of gain
described in paragraph (f)(4)(ii)(A) of this section
is $0. Accordingly, USS does not recognize gain
pursuant to paragraph (f)(4)(i)(A) of this section
by reason of the year 3 liquidation. Additionally,
because USS provides the information described
in §1.6038B-1(d)(2), paragraph (f)(4)(i)(B) of this
section applies to the year 3 liquidation. USS therefore recognizes a deemed payment representing the
part of USS’s taxable year during which TFC held
the transferred IP pursuant to paragraph (f)(4)(i)
(B)(1) of this section, and the required adjustments
described in paragraph (c)(2)(ii) of this section and
§1.367(d)-1T(c)(2)(i) apply as to the deemed payment. Also, because USS does not recognize gain
pursuant to paragraph (f)(4)(i)(A) of this section,
the required adjustments described in paragraph (f)
(2) of this section do not apply. Pursuant to paragraph (f)(4)(i)(B)(2) of this section, after taking the
deemed payment into account, the transferred IP is
no longer subject to section 367(d), this section, and
§1.367(d)-1T. Finally, pursuant to paragraph (f)(4)
(iv)(A) of this section, USS’s adjusted basis in the
transferred IP is $0, which is equal to USP’s former
adjusted basis in the transferred IP ($0), increased
by the greater of the amount of gain recognized by
USS under paragraph (f)(4)(i)(A) of this section
($0) or the amount of gain recognized by TFC upon
the year 3 liquidation ($0).
(B) Example 2: Taxable distribution of the transferred intangible property to a qualified domestic
person—(1) Facts. The facts are the same as in
paragraph (f)(6)(ii)(A) of this section (Example 1),
except that, instead of in year 3 TFC distributing all

1022

its property to USS pursuant to a complete liquidation, in year 3 TFC distributes the transferred IP to
USS in a distribution described in section 311(b)
when the fair market value of the transferred IP is
$100x (the year 3 distribution). TFC’s adjusted basis
in the transferred IP immediately before the distribution is $0.
(2) Analysis. The consequence of the year 2
transfer is the same as described in paragraph (f)(6)
(ii)(A)(2)(i) of this section (Example 1). Like the
consequences described in paragraph (f)(6)(ii)(A)
(2) of this section (Example 1), the year 3 distribution is a subsequent disposition of the transferred
IP to USS, a qualified domestic person. Pursuant
to paragraph (f)(4)(i)(A) of this section, USS must
recognize the amount of gain described in paragraph (f)(4)(ii) of this section. Because the year
3 distribution is described in section 311(b) the
intangible property is not transferred basis property (as defined in section 7701(a)(43) and determined without regard to section 367(d), this section, and §1.367(d)-1T), and therefore USS must
recognize $100x gain under paragraph (f)(4)(ii)(B)
of this section. The $100x gain amount equals the
excess of the fair market value of the transferred IP
on the date of the year 3 distribution ($100x) over
USP’s former adjusted basis in the property ($0).
TFC, because of USS’s gain recognition under
paragraph (f)(4)(i)(A) of this section, reduces (but
not below zero) the portion of its earnings and profits and gross income arising by reason of the year 3
distribution by the amount of such gain under paragraph (f)(2)(i) of this section. Specifically, because
the year 3 distribution requires USS to recognize
$100x of gain, TFC reduces the portion of its earnings and profits and gross income that arise by reason of the year 3 distribution, which is $100x (the
excess of the fair market value of the transferred
IP ($100x) over TFC’s adjusted basis in the transferred IP ($0)), by $100x (the amount of gain USS
recognizes pursuant to paragraph (f)(4)(i)(A) of
this section). As a result, after taking into account
the reduction, TFC has no earnings and profits or
gross income that arise by reason of the year 3
distribution. Furthermore, USS may establish an
account receivable from TFC equal to $100x under
paragraph (f)(2)(ii) of this section. Additionally,
and as described in paragraph (f)(6)(ii)(A)(2) of
this section (Example 1), pursuant to paragraph
(f)(4)(i)(B)(1) of this section, USS recognizes a
deemed payment for the portion of USS’s taxable
year during which TFC held the transferred IP, and
the required adjustments described in paragraph (c)
(2)(ii) of this section and §1.367(d)-1T(c)(2) apply
to this deemed payment. After taking these consequences into account, pursuant to paragraph (f)
(4)(i)(B)(2) of this section, the transferred IP is no
longer subject to section 367(d), this section, and
§1.367(d)-1T. Finally, pursuant to paragraph (f)(4)
(iv)(B) of this section, USS’s adjusted basis in the
transferred IP is $100x, which is the fair market
value of the transferred IP on the date of the year
3 distribution.
(C) Example 3: Qualified domestic person’s
basis in intangible property when intangible property is repatriated in an exchange described in section 351(b)—(1) Facts. The facts are the same as
in paragraph (f)(6)(ii)(A) of this section (Example

Bulletin No. 2024–44

1), except that the transfer of stock of TFC to USS
in year 2 does not occur and instead of the year 3
liquidation, in year 3 TFC transfers the intangible
property to USS (a qualified domestic person as
defined in paragraph (f)(4)(iii) of this section) in
an exchange described in section 351(b) pursuant
to which TFC recognizes $50x of gain and USP
recognizes $50x of gain under paragraph (f)(4)(i)
(A) of this section (the year 3 exchange), which
amount will reduce TFC’s earnings and profits and
gross income by $50x under paragraph (f)(2)(i) of
this section.
(2) Analysis. Pursuant to paragraph (f)(4)(iv)(A)
of this section, USS’s adjusted basis in the intangible
property is $50x, which is the amount equal to the
lesser of USP’s former adjusted basis in the property
($0) or TFC’s adjusted basis in the property ($0),
increased by the greater of the amount of gain recognized by USP under paragraph (f)(4)(i)(A) of this
section ($50x) or the amount of gain recognized by
TFC upon the year 3 exchange ($50x).
(D) Example 4: Repatriation as part of a series
of related transactions culminating in transfer to a
foreign corporation—(1) Facts. The facts are the
same as in paragraph (f)(6)(ii)(A)(1) of this section (Example 1), except that the year 3 liquidation
occurs as part of a series of related transactions pursuant to which USS transfers the transferred IP that
it receives from TFC to a related foreign corporation
(FC1) in exchange for stock in FC1.
(2) Analysis. Because the year 3 liquidation
occurs as part of a series of related transactions
pursuant to which the transferred IP is ultimately
contributed to a FC1, a foreign corporation, and
because a foreign corporation is not a qualified
domestic person pursuant to paragraph (f)(4)(iii)
of this section, then, under paragraph (f)(4)(v) of
this section, the year 3 liquidation is not treated as
a subsequent disposition described in paragraph (f)
(4)(i) of this section, but is instead treated as a subsequent disposition described in paragraph (f)(3) of
this section.
(E) Example 5: Repatriation as part of a series
of related transactions culminating in transfer to
a qualified domestic person—(1) Facts. The facts
are the same as in paragraph (f)(6)(ii)(B)(1) of this
section (Example 2), except that the year 3 distribution occurs as part of a series of related transactions
pursuant to which USS disposes of the transferred IP
that it receives from TFC to USP.
(2) Analysis. Because the year 3 distribution
occurs as part of a series of related transactions pursuant to which the transferred IP is distributed to
USP, and because USP is a qualified domestic person
pursuant to paragraph (f)(4)(iii) of this section, paragraph (f)(4)(v) of this section does not prevent paragraph (f)(4)(i) of this section from applying to the
year 3 distribution. Accordingly, the consequences
under section 367(d) of the year 3 distribution are
the same as those described in paragraph (f)(6)(ii)(B)
(2) of this section (Example 2), and the consequences
of the subsequent disposition of the transferred IP by
USS to USP are determined after applying paragraph
(f)(4) of this section to the transfer of the transferred
IP by TFC to USS.

(g) Special rules—(1) Establishment of
accounts receivable. For further guidance,
see §1.367(d)-1T(g)(1).

Bulletin No. 2024–44

(2) Election to treat transfer as sale.
For further guidance, see §1.367(d)-1T(g)
(2) introductory text.
(i) The intangible property transferred
constitutes an operating intangible, as
defined in § 1.367(a)-1(d)(6).
(ii) For further guidance, see §1.3671T(g)(2)(ii) through (g)(2)(iii)(D).
(iii)(A) through (D) [Reserved]
(E) The transferred intangible property will be used in the active conduct of
a trade or business outside of the United
States within the meaning of § 1.367(a)-2
and will not be used in connection with the
manufacture or sale of products in or for
use or consumption in the United States.
(F) For further guidance, see §
1.367(d)-1T(g)(2)(iii)(F).
*****
(4) Coordination with section 482. For
further guidance, see § 1.367(d)-1T(g)(4)
(5) Determination of fair market value.
For further guidance, see §1.367(d)1T(g)(5).
(6) Anti-abuse rule. For further guidance, see §1.367(d)-1T(g)(6).
(h) Related person. For further guidance, see §1.367(d)-1T(h) introductory
text through (h)(1).
(1) [Reserved]
(2) For further guidance, see
§1.367(d)-1T(h)(2) introductory text and
(h)(2)(i).
(i) [Reserved]
(ii) Section 1563 applies (for purposes
of section 267(f)) without regard to section 1563(b)(2).
(i) Effective date. For further guidance,
see §1.367(d)-1T(i).
(j) Applicability dates—(1) In general.
This section applies to transfers occurring
on or after September 14, 2015, and to
transfers occurring before September 14,
2015, resulting from entity classification
elections made under §301.7701-3 of this
chapter that are filed on or after September
14, 2015. For transfers occurring before
this section is applicable, see §1.367(d)1T as contained in 26 CFR part 1 revised
as of April 1, 2016.
(2) Certain subsequent dispositions of
intangible property. Paragraphs (c)(2)(ii),
(e)(2)(ii), (f)(2) through (5), and (h)(2)(ii)
of this section apply to subsequent dispositions of intangible property occurring
on or after October 10, 2024. For subsequent dispositions of intangible property

1023

occurring before October 10, 2024 see
§1.367(d)-1T as contained in 26 CFR part
1 revised as of April 1, 2022.
Par. 4. Section 1.367(d)-1T is amended
by:
a. Revising paragraph (c)(2)(ii).
b. Removing the undesignated paragraph following paragraph (c)(2)(ii).
d. Revising paragraphs (e)(2)(ii) and
(f)(2).
e. Removing and reserving paragraph
(f)(3) and adding reserved paragraphs (f)
(4) through (6).
f. Designating the undesignated paragraph following paragraph (g)(2)(iii)(E)
as paragraph (g)(2)(iii)(F).
g. Revising paragraph (h)(2)(ii).
The revisions read as follows:
§1.367(d)-1T Transfers of intangible
property to foreign corporations
(temporary).
*****
(c) * * *
(2) * * *
(ii) For further guidance, see §1.367(d)1(c)(2)(ii).
*****
(e) * * *
(2) * * *
(ii) For further guidance, see §1.367(d)1(e)(2)(ii);
*****
(f) * * *
(2) Required adjustments. For further
guidance, see §1.367(d)-1(f)(2) through
(6).
(3) through (6) [Reserved]
*****
(h) * * *
(2) * * *
(ii) For further guidance, see §1.367(d)1(h)(2)(ii).
*****
§1.367(e)-2 [Amended]
Par. 5. Section 1.367(e)-2 is amended
by removing the language “section 936(h)
(3)(B)” in the last sentence of paragraph
(b)(2)(i)(B) and adding the language “section 367(d)(4)” in its place.
Par. 6. Section 1.904-4 is amended
by adding paragraph (f)(2)(vi)(D)(4) and
revising paragraph (q)(3) to read as follows:

October 28, 2024

§1.904-4 Separate application of
section 904 with respect to certain
categories of income.
*****
(f) * * *
(2) * * *
(vi) * * *
(D) * * *
(4) Multiple transfers of intangible
property. If the same intangible property is transferred in a series of transfers
described in paragraph (f)(2)(vi)(D)(1)
of this section, each successive transfer
is separately subject to the provisions of
paragraph (f)(2)(vi)(D)(1) and will not
terminate or otherwise affect the application of paragraph (f)(2)(vi)(D)(1) to a
prior transfer described in paragraph (f)
(2)(vi)(D)(1).
*****
(q) * * *
(3) Except as provided in the following sentence, paragraph (f) of this section
applies to taxable years that begin after
December 31, 2019, and end on or after
November 2, 2020. Paragraph (f)(2)(vi)
(D)(4) of this section applies to taxable
years that begin on or after October 10,
2024.
Par. 7. Section 1.951A-2 is amended
by revising paragraph (c)(2) to read as follows:
§1.951A-2 Tested income and tested
loss.
*****
(c) * * *
(2) Determination of gross income and
allowable deductions. For purposes of
determining tested income and tested loss,
the gross income and allowable deductions of a controlled foreign corporation
for a CFC inclusion year are determined
under the rules of § 1.952-2 for determining the subpart F income (as defined
in section 952) of the controlled foreign
corporation, except, for a controlled foreign corporation which is engaged in the
business of reinsuring or issuing insurance or annuity contracts and which, if it
were a domestic corporation engaged only
in such business, would be taxable as an
insurance company to which subchapter L
of chapter 1 of the Code applies, the text

October 28, 2024

“the principles of §§ 1.953-4 and 1.9535” means “the rules of sections 953 and
954(i)” in § 1.952-2(b)(2).
*****
Par. 8. Section 1.951A-7 is amended
by adding a paragraph (e) to read as follows:
§1.951A-7 Applicability dates.
*****
(e) Determination of gross income and
allowable deductions. Section 1.951A2(c)(2) applies to taxable years of foreign
corporations ending on or after October
10, 2024, and to taxable years of United
States shareholders in which or with
which such taxable years end. For taxable years of foreign corporations ending
before October 10, 2024, and to taxable
years of United States shareholders in
which or with which such taxable years
end, see §1.951A-2(c)(2)(i) and (ii) as
contained in 26 CFR part 1, revised as of
April 1, 2022.
Par. 9. Section 1.6038B-1 is amended
by:
a. Removing reserved paragraphs (d)
(1) through (1)(iii).
b. Adding paragraphs (d) heading and
(d)(1) introductory text and reserved
paragraphs (d)(1)(i) through (iii).
c. Removing reserved paragraphs (d)
(1)(viii) through (d)(2).
d. Adding paragraphs (d)(1)(viii), (d)
(2), and (g)(8).
The additions read as follows:
§1.6038B-1 Reporting of certain
transfers to foreign corporations.
*****
(d) Transfers subject to section
367(d)—(1) Initial transfer. For further
guidance,
see §1.6038B–1T(d)(1) introductory
text through (d)(1)(iii).
(i) through (iii) [Reserved]
*****
(viii) Other intangibles. For further
guidance, see § 1.6038B-1T(d)(1)(viii).
(2) Subsequent transfers. For additional, see § 1.6038B–1T(d)(2) introductory text through (d)(2)(ii).
(i) through (ii) [Reserved]

1024

(iii) Subsequent transfer. Except for
a subsequent transfer described in paragraph (d)(2)(iv) of this section, provide
the following information concerning the
subsequent transfer:
(A) For further guidance, see §
1.6038B–1T(d)(2)(iii)(A) through (C).
(B) through (C) [Reserved]
(iv) Subsequent transfer of intangible
property to a qualified domestic person.
Provide the following information concerning a subsequent transfer of intangible
property described in §1.367(d)-1(f)(4)(i):
(A) A statement providing that
§1.367(d)-1(f)(4)(i)(B) applies to the subsequent transfer;
(B) A general description of the subsequent transfer and any wider transaction
of which it forms a part, including the
U.S. transferor’s former adjusted basis
in the intangible property and the transferee foreign corporation’s adjusted basis
in the intangible property (as determined
immediately before the subsequent transfer), the amount and computation of
any gain recognized by the U.S. transferor under §1.367(d)-1(f)(4)(i)(A), and
a description of whether the intangible
property was, or is expected to be, subsequently transferred to one or more other
persons (as described in §1.367(d)-1(f)
(4)(v));
(C) A description of the intangible
property;
(D) A copy of the Form 926 with
respect to the original transfer of the intangible property and any attachments identifying the intangible property as within the
scope of section 367(d).
(E) The name, address, and taxpayer
identification number of the qualified
domestic person that receives the intangible property, including a statement
describing the relationship between the
U.S. transferor and the qualified domestic
person, and, if applicable, such information regarding any other persons described
in §1.367(d)-1(f)(4)(v); and
(F) Any other information as may be
prescribed by the Commissioner in publications, forms, instructions, or other guidance.
*****
(g) * * *
(8) Paragraphs (d)(2)(iii) introductory
text and (d)(2)(iv) of this section apply to

Bulletin No. 2024–44

transfers occurring on or after October 10,
2024.
Par. 10. Section 1.6038B-1T is
amended by revising paragraph (d)(2)(iii)
introductory text to read as follows:
§ 1.6038B-1T Reporting of certain
transactions to foreign corporations
(temporary).
*****

Bulletin No. 2024–44

(d) * * *
(2) * * *
(iii) Subsequent transfer. For further
guidance, see § 1.6038B-1T(d)(2)(iii)
introductory text:
*****

Aviva Aron-Dine,
Deputy Assistant Secretary of the Treasury (Tax Policy).
(Filed by the Office of the Federal Register October
09, 2024, 8:45 a.m., and published in the issue of the
Federal Register for October 10, 2024, 89 FR 82160)

Douglas W. O’Donnell,
Deputy Commissioner.
Approved: September 23, 2024.

1025

October 28, 2024

Part III
Expenses Treated as
Amounts Paid for Medical
Care
Notice 2024-71
SECTION 1. PURPOSE
This notice provides a safe harbor
under section 213 of the Internal Revenue
Code for amounts paid for condoms.
SECTION 2. BACKGROUND
Section 213 allows an individual taxpayer an itemized deduction for expenses
paid during the taxable year, not compensated for by insurance or otherwise, for
medical care of the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent,
to the extent that such expenses exceed
7.5 percent of the taxpayer’s adjusted
gross income. Section 213(d) provides, in
relevant part, that the term “medical care”
means amounts paid for the diagnosis,
cure, mitigation, treatment, or prevention
of disease, or for the purpose of affecting
any structure or function of the body. Section 1.213-1(e)(1)(ii) of the Income Tax
Regulations provides that deductions for
medical care expenses under section 213
are limited to expenses “incurred primarily for the prevention or alleviation of a
physical or mental defect or illness” and
do not include deductions for expenses
that are merely beneficial to an individual’s general health.
Amounts treated as expenses for medical care under section 213(d) are eligible
to be paid or reimbursed under a health
flexible spending arrangement (health
FSA), Archer medical savings account
(Archer MSA), health reimbursement
arrangement (HRA), or health savings
account (HSA). However, if an amount
is paid or reimbursed under a health FSA,
Archer MSA, HRA, HSA, or any other
health plan or otherwise, it is not a deductible expense under section 213.
The determination of whether an
expense is incurred for the prevention
1

of disease, or other form of medical care
under section 213(d), depends upon the
facts and circumstances. Stringham v.
Commissioner, 12 T.C. 580, 584 (1949).
Thus, depending on the specific facts and
circumstances, amounts paid for condoms
may or may not be considered medical
expenses under section 213(d).
SECTION 3. SAFE HARBOR
The Treasury Department and the IRS
will treat amounts paid for condoms as
amounts paid for medical care under section 213(d).
SECTION 4. APPLICATION OF
SAFE HARBOR
Because amounts paid for condoms are
treated as expenses for medical care under
section 213(d), if the other requirements
of section 213(a) are met (for example, if a
taxpayer’s total medical expenses exceed
the 7.5-percent adjusted gross income
limitation and are not compensated for
by insurance or otherwise), then amounts
paid by the taxpayer for condoms for the
taxpayer, the taxpayer’s spouse, or the
taxpayer’s dependent are deductible as
expenses for medical care under section
213. Additionally, because amounts paid
for condoms are treated as expenses for
medical care under section 213(d), the
amounts are also eligible to be paid or
reimbursed under a health FSA, Archer
MSA, HRA, or HSA. However, if an
amount paid for condoms is paid or reimbursed under a health FSA, Archer MSA,
HRA, HSA, or any other health plan or
otherwise, it is not a deductible expense
under section 213.
SECTION 5. DRAFTING
INFORMATION
The principal authors of this notice
are Elizabeth Choi and Amy S. Wei of
the Office of Associate Chief Counsel
(Income Tax & Accounting). However,
additional personnel in the Office of Chief
Counsel and at the Treasury Department

participated in the development of this
notice. For additional information, contact
Branch 3 of the Office of Associate Chief
Counsel (Income Tax and Accounting) at
(202) 317-5100 (not a toll-free number).

Preventive Care for
Purposes of Qualifying as
a High Deductible Health
Plan under Section 223
Notice 2024-75
I. PURPOSE
This notice expands the list of preventive care benefits permitted to be provided
by a high deductible health plan (HDHP)
under section 223(c)(2)(C) of the Internal
Revenue Code (Code) without a deductible, or with a deductible below the applicable minimum deductible for the HDHP,
to include over-the-counter (OTC) oral
contraceptives (including emergency
contraceptives) and male condoms.1 This
notice also clarifies that (1) all types of
breast cancer screening for individuals
who have not been diagnosed with breast
cancer are treated as preventive care under
section 223(c)(2)(C), (2) continuous glucose monitors for individuals diagnosed
with diabetes are generally treated as preventive care under section 223(c)(2)(C),
and (3) the new safe harbor for absence
of a deductible for certain insulin products in section 223(c)(2)(G) applies without regard to whether the insulin product
is prescribed to treat an individual diagnosed with diabetes or prescribed for the
purpose of preventing the exacerbation of
diabetes or the development of a secondary condition.
II. BACKGROUND
A. Preventive Care
Section 223 of the Code permits eligible individuals to establish tax-favored

For purposes of this notice, a “male condom” refers to an external condom and a “female condom” refers to an internal condom.

October 28, 2024

1026

Bulletin No. 2024–44

Health Savings Accounts (HSAs). Among
the requirements to qualify as an eligible
individual under section 223(c)(1) is that
the individual be covered under an HDHP
and have no disqualifying health coverage. As defined in section 223(c)(2), an
HDHP is a health plan that satisfies certain requirements, including requirements
with respect to minimum deductibles and
maximum out-of-pocket expenses.
Generally, under section 223(c)(2)
(A), an HDHP is not permitted to provide
benefits for any year until the minimum
deductible for that year is satisfied. However, section 223(c)(2)(C) provides a safe
harbor for the absence of a deductible for
preventive care. Under section 223(c)(2)
(C), “[a] plan shall not fail to be treated as
a high deductible health plan by reason of
failing to have a deductible for preventive
care (within the meaning of section 1861
of the Social Security Act, except as otherwise provided by the Secretary).” Therefore, an HDHP may provide preventive
care benefits without a deductible, or with
a deductible below the minimum annual
deductible otherwise required by section
223(c)(2)(A). To be a preventive care
benefit as defined for purposes of section
223, the benefit must either be described
as preventive care for purposes of section
1861 of the Social Security Act (SSA) or
be determined to be preventive care in
guidance issued by the Department of the
Treasury (Treasury Department) and the
Internal Revenue Service (IRS).2
Section 2713 of the Public Health Service Act3 (PHS Act) requires non-grandfathered group health plans and health
insurance issuers offering non-grandfathered group or individual health insurance coverage4 to provide benefits for certain preventive services without imposing

cost-sharing requirements. Notice 201357, 2013-40 IRB 293, provides that any
item or service that is a preventive service under section 2713 of the PHS Act
will also be treated as preventive care
under section 223(c)(2)(C) of the Code.
With respect to women,5 preventive services under section 2713 of the PHS Act
include those provided for in comprehensive guidelines supported by the Health
Resources and Services Administration
(HRSA-Supported Guidelines).
Notice 2004-23, 2004-15 IRB 725,
provides that preventive care under section 223(c)(2)(C) includes, among other
types of care, “Breast Cancer (e.g., Mammogram)” screening services.
Notice 2018-12, 2018-12 IRB 441,
states that, absent further guidance to the
contrary, benefits for male sterilization or
male contraceptives would not be considered preventive care. The notice bases its
reasoning on the fact that, at the time of
publication of the notice: (1) male sterilization and male contraceptives were
not preventive care under the SSA; (2)
HRSA-Supported Guidelines did not provide for coverage of benefits or services
relating to a man’s reproductive capacity,
such as vasectomies and condoms; and (3)
no applicable guidance issued by the Treasury Department or the IRS provided for
the treatment of male sterilization or male
contraceptives as preventive care within
the meaning of section 223(c)(2)(C).
B. Oral Contraceptives
The HRSA-Supported Guidelines
include the full range of U.S. Food and
Drug Administration (FDA)-approved,
-granted, or -cleared contraceptives,
including those currently listed in the

FDA’s Birth Control Guide, such as “oral
contraceptives (progestin only)” and
“emergency contraception (levonorgestrel).”6 An OTC progestin-only daily oral
contraceptive was recently approved by
the Food and Drug Administration (FDA)
and is currently available.7 Some emergency contraceptives also are available as
OTC products (e.g., levonorgestrel). Additional recommended preventive products
may also become available as OTC products in the future. The HRSA-Supported
Guidelines relating to contraceptives have
been updated and no longer contain the
“as prescribed” restriction they once did.
C. Male Condoms
Notice 2024-71, 2024-44 IRB 1026,
provides a safe harbor, under which the
Treasury Department and the IRS will treat
amounts paid for condoms as amounts
paid for medical care under section 213(d).
While the HRSA-Supported Guidelines
previously included only female condoms, the HRSA-Supported Guidelines
were expanded in 2021 after Notice 201812 was published to encompass contraceptives that are not female-controlled,
such as male condoms.8 However, the
expanded HRSA-Supported Guidelines
made no changes to the recommendations
regarding male sterilization and continue
not to include male sterilization.
D. Breast Cancer Screening
Notice 2004-23 provides that breast
cancer screening is treated as preventive
care under section 223(c)(2)(C) but provides a “mammogram” as the only listed
example of such screenings. Breast cancer
screening recommended with an “A” or

The determination of whether an item or service is preventive care for these purposes is separate and distinct from the determination of whether an amount paid for an item or service is
medical care under section 213(d) of the Code as an amount paid for the prevention of disease. See Rev. Rul. 79-66, 1979-1 C.B. 114; Daniels v. Commissioner, 41 T.C. 324 (1963); and
Stringham v. Commissioner, 12 T.C. 580 (1949) acq., 1950-2 C.B. 4, aff'd per curiam, 183 F.2d 579 (6th Cir. 1950).
3
See 42 U.S.C. chapter 6A.
4
The Department of Health and Human Services, the Department of Labor, and the Treasury Department (collectively, the Departments) share interpretive jurisdiction over section 1251
of the Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (2010) (ACA), as amended, which generally provides that certain group health plans and health insurance
coverage existing as of March 23, 2010, the date of enactment of ACA (referred to collectively in the statute as grandfathered health plans), are subject to only certain provisions of ACA.
5
The references to “women” in this notice are not limited based on sex assigned at birth, gender identity, or gender of the individual otherwise recorded by the plan or issuer in accordance
with FAQs about Affordable Care Act implementation Part XXVI (May 11, 2015), Q5, available at https://www.dol.gov/​sites/​dolgov/​files/​ebsa/​about-ebsa/​our-activities/​resource-center/​faqs/​
aca-part-xxvi.pdf and https://www.cms.gov/​CCIIO/​Resources/​Fact-Sheets-and-FAQs/​Downloads/​aca_​implementation_​faqs26.pdf.
6
https://www.hrsa.gov/womens-guidelines.
7
On July 13, 2023, the FDA announced that it had approved a progestin-only birth control pill as the first daily oral contraceptive for use in the United States available without a prescription
by a health care provider. See FDA Approves First Nonprescription Daily Oral Contraceptive, July 13, 2023, https://www.fda.gov/​news-events/​press-announcements/​fda-approves-first-nonprescription-daily-oral-contraceptive. Progestin-only oral contraceptives are a product that is already available in a prescription form and are a category of contraceptives listed in the
HRSA-Supported Guidelines.
8
HRSA made this change to allow women to purchase male condoms for pregnancy prevention. See 86 FR 59741, 59742 (Oct. 28, 2021).
2

Bulletin No. 2024–44

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October 28, 2024

“B” rating by the United States Preventive
Services Task Force (USPSTF), which
must be covered without cost-sharing for
certain individuals under section 2713 of
the PHS Act, generally is limited to mammography.9
E. Continuous Glucose Monitors and
Insulin
Notice 2019-45 provides that specified
services and items, including glucometers
and insulin, are treated as preventive care
under section 223(c)(2)(C). However,
the notice also provides that specified
services and items are treated as preventive care only when prescribed to treat an
individual diagnosed with the specified
associated chronic condition (diabetes in
the case of glucometers and insulin), and
only when prescribed for the purpose of
preventing the exacerbation of the chronic
condition or the development of a secondary condition.
While Notice 2019-45 provides that
glucometers are treated as preventive care,
it does not directly refer to continuous glucose monitors, which similarly measure
glucose levels.
Section 11408 of the Inflation Reduction Act of 202210 amended section 223 of
the Code with respect to insulin products
effective for plan years beginning after
December 31, 2022, by adding a new section 223(c)(2)(G) to provide that a plan
shall not fail to be treated as an HDHP by
reason of failing to have a deductible for
selected insulin products described in that
section.
III. QUESTIONS AND ANSWERS
A. Oral Contraceptives
Q-1. Will a health plan fail to qualify as
an HDHP under section 223(c)(2) of the
Code merely because it provides benefits

for OTC oral or emergency contraceptives
without a prescription before an individual satisfies the minimum annual deductible for an HDHP under section 223(c)(2)
(A)?
A-1. No. Regardless of whether OTC
contraceptives without a prescription are
preventive care required to be covered
without cost sharing under section 2713
of the PHS Act, the Treasury Department
and the IRS have determined that it is not
appropriate to distinguish OTC oral contraceptives that are now available from
other types of contraceptives that are considered to be preventive care for purposes
of the safe harbor for the absence of a
preventive care deductible under section
223(c)(2)(C).
Consequently, preventive care for purposes of section 223(c)(2)(C) includes all
benefits for OTC oral contraceptives for a
covered individual potentially capable of
becoming pregnant, including, but not limited to, OTC birth control pills and emergency contraception, regardless of whether
they are purchased with a prescription.
Accordingly, a health plan will not fail to
qualify as an HDHP under section 223(c)
(2) merely because it provides benefits
for those contraceptives before such an
individual satisfies the minimum annual
deductible for an HDHP under section
223(c)(2)(A). This guidance is effective for
plan years (in the individual market, policy
years) that begin on or after December 30,
2022.
B. Male Condoms
Q-2. Will a health plan fail to qualify as
an HDHP under section 223(c)(2) of the
Code merely because it provides benefits
for male condoms (with or without a prescription) before an individual satisfies the
minimum annual deductible for an HDHP
under section 223(c)(2)(A)?

A-2. No. Notice 2024-71, as well as
the expansion of the HRSA-Supported
Guidelines to encompass male condoms
as described above in paragraph II.C. of
the Background section of this notice, has
caused the Treasury Department and the
IRS to revisit the position on male contraceptives as set forth in Notice 2018-12.
Upon reconsideration, the Treasury
Department and the IRS have determined
that preventive care for purposes of section 223(c)(2)(C) includes all benefits
for male condoms, regardless of whether
they are purchased with a prescription and
regardless of the gender of the individual
covered under the HDHP who purchases
them. Accordingly, a health plan will not
fail to qualify as an HDHP under section 223(c)(2) merely because it provides
benefits for male condoms (with or without a prescription) before an individual
satisfies the minimum deductible for an
HDHP under section 223(c)(2)(A).11 This
guidance is effective for plan years (in the
individual market, policy years) that begin
on or after December 30, 2022.
C. Breast Cancer Screening
Q-3. Will a health plan fail to qualify as an HDHP under section 223(c)(2)
of the Code merely because it provides
benefits for breast cancer screening other
than mammograms before an individual
satisfies the minimum annual deductible
for an HDHP under section 223(c)(2)
(A)?
A-3. No. The Treasury Department and
the IRS have determined that, because
breast cancer screening may include imaging other than mammograms,12 the reference in Notice 2004-23 to breast cancer
screening should be changed to “Breast
Cancer (e.g., Mammograms, Magnetic
Resonance Imaging (MRIs), Ultrasounds,
and similar breast cancer screening services).” This language change is effective

https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/breast-cancer-screening and https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/breast-cancer-screening-2002 (in effect until January 1, 2026). FAQs about Affordable Care Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 59 (July 28, 2022), Q7,
available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-59 and https://www.cms.gov/files/document/faqs-part-59.pdf, provides that items and
services recommended with an "A" or "B" rating by the USPSTF on or after March 23, 2010, will be treated as preventive care for purposes of Code section 223(c)(2)(C), regardless of
whether these items and services must be covered, without cost sharing, under PHS Act section 2713. The HRSA-Supported Guidelines likewise mention only “mammography screening.”
10
Pub. L. 117-169, § 11408, 136 Stat. 1818, 1905 (Aug. 16, 2022).
11
While this guidance applies to male condoms, it does not apply to any other male contraceptives, such as male sterilization.
12
According to the American Cancer Society, individuals who are at high risk for breast cancer based on certain factors should get a breast MRI in addition to a mammogram. See https://www.
cancer.org/cancer/types/breast-cancer/screening-tests-and-early-detection/american-cancer-society-recommendations-for-the-early-detection-of-breast-cancer.html. Also, ultrasound can be
helpful in individuals with dense breast tissue, which can make it hard to see abnormal areas on mammograms. See https://www.cancer.org/cancer/types/breast-cancer/screening-tests-and-early-detection/breast-ultrasound.html.
9

October 28, 2024

1028

Bulletin No. 2024–44

as of the date of publication of Notice
2004-23 (April 12, 2004).
D. Continuous Glucose Monitors and
Insulin
Q-4. Will a health plan fail to qualify as
an HDHP under section 223(c)(2) of the
Code merely because it provides benefits
for continuous glucose monitors before an
individual satisfies the minimum annual
deductible for an HDHP under section
223(c)(2)(A)?
A-4. Generally, no. This notice clarifies
that in accordance with Notice 2019-45
continuous glucose monitors are preventive care for purposes of section 223(c)(2)
(C) in the same circumstances as other glucometers if the continuous glucose monitor
is measuring glucose levels using a similar
detection method or mechanism to other
glucometers (i.e., piercing the skin).13
Consequently, this notice clarifies
that preventive care for purposes of section 223(c)(2)(C) includes all benefits
for continuous glucose monitors subject
to the conditions in the preceding paragraph. Accordingly, a health plan will not
fail to qualify as an HDHP under section
223(c)(2) merely because it provides such
benefits before an individual satisfies the
minimum annual deductible for an HDHP
under section 223(c)(2)(A). This guidance is effective as of the effective date of
Notice 2019-45 (July 17, 2019).
Some continuous glucose monitors may
have additional medical functions, such as
insulin delivery, or non-medical functions.

If so, those functions also would need to
be preventive care in order for an HDHP
to cover any benefits for the continuous
glucose monitor before an individual satisfies the minimum annual deductible for an
HDHP under section 223(c)(2)(A). A continuous glucose monitor that both monitors
and provides insulin may be treated as preventive care as explained in Q&A-5 of this
notice because it is a device for delivering
insulin. If a continuous glucose monitor
provides additional medical or non-medical
functions that are not preventive care (other
than minor functions, such as clock and date
functions), however, then the HDHP may
not cover the continuous glucose monitor
before an individual satisfies the minimum
annual deductible for an HDHP.
Q-5. May an HDHP provide benefits for
the selected insulin products described in
section 223(c)(2)(G) of the Code, as added
by section 11408 of the Inflation Reduction
Act of 2022, prior to satisfying the minimum annual deductible for an HDHP under
section 223(c)(2)(A), effective for plan
years after December 31, 2022?
A-5. Yes. This notice clarifies that
an HDHP may provide benefits for the
selected insulin products described in
section 223(c)(2)(G) before an individual
satisfies the minimum annual deductible
for an HDHP under section 223(c)(2)
(A) without regard to whether the insulin
product is prescribed to treat an individual diagnosed with diabetes or prescribed
for the purpose of preventing the exacerbation of diabetes or the development
of a secondary condition. The Treasury

Department and the IRS interpret section
223(c)(2)(G) to include any devices used
to administer or deliver the selected insulin products described in that section. This
guidance is effective for plan years (in the
individual market, policy years) beginning after December 31, 2022.
IV. EFFECT ON OTHER
DOCUMENTS
Notice 2004-23 is clarified by noting
the safe harbor for absence of a deductible
for breast cancer screening.
Notice 2018-12 is superseded with
respect to the guidance regarding male
condoms.
Notice 2019-45 is clarified and
expanded by noting the safe harbor for
absence of a deductible for continuous
glucose monitors and for certain insulin
products pursuant to the Inflation Reduction Act of 2022.
V. DRAFTING INFORMATION
The principal authors of this notice are
Jennifer Friedman and William Fischer
of the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organizations, and Employment Taxes), though
other Treasury Department and IRS officials participated in its development. For
further information on the provisions of
this notice, contact William Fischer at
(202) 317-5500 (not a toll-free number).

The FDA has warned consumers, patients, caregivers, and health care providers of risks related to using smartwatches or smart rings that claim to measure blood glucose levels without
piercing the skin. These devices are different than smartwatch applications that display data from FDA-authorized blood glucose measuring devices that pierce the skin, like continuous glucose monitoring devices. The FDA has not authorized, cleared, or approved any smartwatch or smart ring that is intended to measure or estimate blood glucose values on its own. See https://
www.fda.gov/medical-devices/safety-communications/do-not-use-smartwatches-or-smart-rings-measure-blood-glucose-levels-fda-safety-communication.
13

Bulletin No. 2024–44

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October 28, 2024

NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 1167, General Rules and Specifications for Substitute Forms and Schedules.

Rev. Proc. 2024-33
TABLE OF CONTENTS
Part 1 – INTRODUCTION TO SUBSTITUTE FORMS
Section 1.1 – Overview of Revenue Procedure 2024-33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Section 1.2 – IRS Contacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1032
Section 1.3 – What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1033
Section 1.4 – Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1033
Section 1.5 – Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
Part 2 – GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS
Section 2.1 – General Specifications for Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1036
Section 2.2 – Highlights of Permitted Changes and Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1038
Section 2.3 – Vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1038
Section 2.4 – Restrictions on Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1041
Section 2.5 – Guidelines for Obtaining IRS Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1041
Section 2.6 – Office of Management and Budget (OMB) Requirements for All Substitute Forms. . . . . . . . . . . . . . . . . . . . 1044
Part 3 – PHYSICAL ASPECTS AND REQUIREMENTS
Section 3.1 – General Guidelines for Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1045
Section 3.2 – Paper. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1047
Section 3.3 – Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1048
Section 3.4 – Margins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1049
Section 3.5 – Miscellaneous Information for Substitute Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1050
Part 4 – ADDITIONAL RESOURCES
Section 4.1 – Guidance From Other Revenue Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1051
Section 4.2 – Electronic Tax Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1051
Part 5 – REQUIREMENTS FOR SPECIFIC TAX RETURNS
Section 5.1 – Tax Returns (Forms 1040, 1040-SR, 1120, etc.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1052
Section 5.2 – Changes Permitted to Graphics (Form 1040 or 1040-SR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1052
Part 6 – FORMAT AND CONTENT OF SUBSTITUTE RETURNS
Section 6.1 – Acceptable Formats for Substitute Forms and Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1055
Section 6.2 – Additional Instructions for All Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1056
Part 7 – MISCELLANEOUS FORMS AND PROGRAMS
Section 7.1 – Specifications for Substitute Schedules K-1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1058
Section 7.2 – Guidelines for Substitute Forms 8655. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1063
Section 7.3 – Guidelines for Substitute Image Character Recognition (ICR) Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1064
Part 8 – ADDITIONAL INFORMATION
Section 8.1 – Forms for Electronically Filed Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1065
Section 8.2 – Effect on Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1066
Section 8.3 – Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1066

October 28, 2024

1030

Bulletin No. 2024–44

Part 1
Introduction to Substitute Forms

Section 1.1 – Overview of Revenue Procedure 2024-33

1.1.1
Purpose

The purpose of this revenue procedure is to provide guidelines and general requirements for the
development, printing, and approval of the 2024 substitute tax forms. Approval will be based on
these guidelines. After review and approval, submitted forms will be accepted as substitutes for
official IRS forms.

1.1.2
Unique Forms

Certain unique specialized forms require the use of other publications that supplement this
publication. See Part 4.

1.1.3
Scope

The IRS accepts quality substitute tax forms that are consistent with the official forms and have no
adverse impact on processing. The IRS Substitute Forms Program (the Program) administers the
formal acceptance and processing of these forms nationwide. While this Program deals with paper
documents, it also reviews for approval other processing and filing forms used in electronic filing.
Only those substitute forms that fully comply with these requirements are acceptable. This revenue
procedure is updated as required to reflect pertinent tax year form changes and to meet processing
and/or legislative requirements.

1.1.4
Forms Covered by This
Revenue Procedure

1.1.5
Forms Not Covered by This
Revenue Procedure

Bulletin No. 2024–44

The following types of forms are covered by this revenue procedure.
•

IRS tax forms and their related schedules.

•

Worksheets as they appear in the instructions.

•

Applications for permission to file returns electronically and forms used as required documentation for electronically filed returns.

•

Powers of Attorney.

•

Over-the-counter estimated tax payment vouchers.

•

Forms and schedules relating to partnerships, exempt organizations, and employee plans.

The following types of forms are not covered by this revenue procedure. Refer to the publication
for questions.
•

W-2 and W-3. See Pub. 1141, General Rules and Specifications for Substitute Forms W-2 and
W-3.

•

W-2c and W-3c. See Pub. 1223, General Rules and Specifications for Substitute Forms W-2c
and W-3c.

1031

October 28, 2024

1.1.6
Other Information Not
Covered by This Revenue
Procedure

•

941 and attached schedules. See Pub. 4436, General Rules and Specifications for Substitute
Form 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941), and
Form 8974.

•

1096, 1097-BTC, 1098 series, 1099 series, 3921, 3922, 5498 series, W-2G, and 1042-S. See
Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498,
and Certain Other Information Returns.

•

1095-A, 1094-B, 1095-B, 1094-C, and 1095-C. See Pub. 5223, General Rules and Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C, and
1095-C.

•

8027. See Pub. 1239, Specifications for Electronic Filing of Form 8027, Employer’s Annual
Information Return of Tip Income and Allocated Tips.

•

Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced.

•

Form 5500 series (for more information on these forms, go to the Department of Labor website at https://www.efast.dol.gov).

•

Forms used internally by the IRS.

•

State tax forms.

•

Forms developed outside the IRS.

The following information is not covered by this revenue procedure.
•

Requests for information or documentation initiated by the IRS.

•

General Instructions and Specific Instructions (these are not reviewed by the Program).

Section 1.2 – IRS Contacts

1.2.1
Where To Send Substitute
Forms

Send your substitute forms for approval to the following offices. Do not send forms with taxpayer
data.
Form
5500
Software developer vouchers
(see Sections 2.3.7–2.3.9)

ACA Forms 1094-B, 1095-B, 1094-C, and
1095-C (for more information, see Pub.
5223), and Schedule K-1 forms must be
emailed for scannability testing.

October 28, 2024

1032

Office and Address
Check EFAST2 information at the Department of
Labor website at https://www.efast.dol.gov.
Internal Revenue Service
Attn: Jason Lane
3211 S. Northpointe Dr.
Santa Fe Bldg. Rm 3018
Fresno, CA 93725
Jason.L.Lane@irs.gov
scrips@irs.gov

Bulletin No. 2024–44

Form
Schedule K-1 2-D bar-coded forms
All others covered by this publication (see
Section 1.1.4)

Office and Address
For mailing addresses for sending Schedule K-1
2-D bar-coded forms for testing, see Section 7.1.6.
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
ATSC
4800 Buford Highway
Mail Stop: 061-N
Chamblee, GA 30341
substituteforms@irs.gov

Section 1.3 – What’s New

1.3.1
What’s New

The following changes have been made to this year’s revenue procedure.
•

.01 Editorial changes. We made editorial changes as needed and eliminated repetitive information.

•

.02 Form 8717 can no longer be submitted as a substitute form. Form 8717 must be submitted electronically through https://www.pay.gov. For more information about electronically
submitting Form 8717, go to https://www.irs.gov/form8717.

Section 1.4 – Definitions

1.4.1
Substitute Form

A tax form (or related schedule) that differs in any way from the official version and is intended to
replace the form that is printed and distributed by the IRS. This term also covers those approved
substitute forms exhibited in this revenue procedure.

1.4.2
Printed/Preprinted Form

A form produced using conventional printing processes or a printed form which has been
reproduced by photocopying or a similar process.

1.4.3
Preprinted Pin-Fed Form

A printed form that has marginal perforations for use with automated and high-speed printing
equipment.

1.4.4
Computer-Prepared
Substitute Form

A preprinted form in which the taxpayer’s tax entry information has been inserted by a computer,
a computer printer, or other computer-type equipment.

Bulletin No. 2024–44

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October 28, 2024

1.4.5
Computer-Generated
Substitute Tax Return or
Form

A tax return or form that is entirely designed and printed using a computer printer on plain white
paper. This return or form must conform to the physical layout of the corresponding IRS form,
although the typeface may differ. The text should match the text on the officially printed form as
closely as possible. Condensed text and abbreviations will be considered on a case-by-case basis.
Exception. All jurats (perjury statements) must be reproduced verbatim.

1.4.6
Manually Prepared Form

A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an
individual using a pen, a pencil, or other nonautomated equipment.

1.4.7
Graphics

Parts of a printed tax form that are not tax amount entries or required text. Examples of graphics
are line numbers, captions, shadings, special indicators, borders, rules, and strokes created by
typesetting, photographics, photocomposition, etc.

1.4.8
Acceptable Reproduced
Form

A legible photocopy or an exact replica of an original form.

1.4.9
Supporting Statement
(Supplemental Schedule)

A document providing detailed information to support a line entry on an official or approved
substitute form and filed with (attached to) a tax return.
Note. A supporting statement is not a tax form and does not take the place of an official form.

1.4.10
Specific Form Terms

The following specific terms are used throughout this revenue procedure in reference to all
substitute forms: format, sequence, line reference, item caption, and data entry field.

1.4.11
Format

The overall physical arrangement and general layout of a substitute form.

1.4.12
Sequence

Sequence is an integral part of the total format requirement. The substitute form should show the
same numeric and logical placement order of data as shown on the official form.

1.4.13
Line Reference

The line numbers, letters, or alphanumerics used to identify each captioned line on an official
form. These line references are printed to the immediate left of each caption and/or data entry
field.

1.4.14
Item Caption

The text on each line of a form, which identifies the data required.

1.4.15
Data Entry Field

October 28, 2024

Designated areas for the entry of data such as dollar amounts, quantities, responses, and checkboxes.

1034

Bulletin No. 2024–44

1.4.16
Advance Draft

A draft version of a new or revised form may be posted to the IRS website (https://www.irs.gov/
draftforms) for information purposes. Substitute forms may be submitted based on these advance
drafts, but any submitter that receives forms approval based on these early drafts is responsible
for monitoring and revising forms to reflect any revisions in the final forms provided by the IRS.

1.4.17
Approval

Generally, approval could be in writing or assumed after 20 business days from our receipt for
forms that have not been substantially changed by the IRS. This does not apply to newly created
or substantially revised IRS forms. However, the Program reserves the right to notify vendors of
any inaccuracies even after 20 business days have lapsed.

1.4.18
National Association
of Computerized Tax
Processors (NACTP)

The NACTP is a nonprofit association that represents tax processing software and hardware
developers, electronic filing processors, tax form publishers, tax processing service bureaus, and
payroll processors. The association promotes standards in tax processing to advance efficient and
effective tax filing. For more information, go to https://www.nactp.org.

Section 1.5 – Agreement

1.5.1
Important Stipulation of
This Revenue Procedure

1.5.2
Response Policy and
Stipulations

Any person or company who uses substitute forms and makes all or part of the changes specified
in this revenue procedure agrees to the following stipulations.
•

The IRS presumes that any required changes are made in accordance with these revenue procedures and will not be disruptive to the processing of the tax return.

•

Should any of the changes be disruptive to the IRS’s processing of the tax return, the person
or company agrees to accept the determination of the IRS as to whether the form may continue to be filed.

•

The person or company agrees to work with the IRS in correcting noted deficiencies. Notification of deficiencies may be made by any combination of letter, email, or phone contact and
may include the request for the resubmission of unacceptable forms.

The Program will email confirmation of receipt of your forms submission, if possible. Even if
you do not receive emailed confirmation of receipt, you will receive an emailed “submission
receipt,” which will provide feedback on your submission. If the Program anticipates problems
in completing the review of your submission within the 20-business-day period, the Program will
send an interim email notifying you of the extended period for review.
Once the substitute forms have been approved by the Program, you can release them after the final
versions of the forms have been issued by the IRS. Before releasing the forms, you are responsible
for updating forms approved as draft and for making form changes requested.
The policy has the following stipulations.
•

Bulletin No. 2024–44

This 20-business-day policy applies to electronic submissions only. It does not apply to substitute submissions mailed to the Program.

1035

October 28, 2024

•

The policy applies to submissions of 15 (optimal) or fewer items and submissions containing
75 pages or less. Submissions of more than 15 items may require additional review time.

•

If you send a large number of submissions within a short period of

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aa58e0ccd4bd2ce27. Public record. Not legal advice.