# Bulletin No. 2022–30

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

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HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2022–30
July 25, 2022

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

EMPLOYEE PLANS
Rev. Rul. 2022-13, page 99.
This revenue ruling addresses the application of section
432(b)(7) in the case of a merger of a multiemployer
defined benefit pension plan that receives special financial assistance (SFA) from the Pension Benefit Guaranty
Corporation into a multiemployer defined benefit pension plan that does not receive SFA.

ESTATE TAX
Rev. Proc. 2022-32, page 101.
This revenue procedure provides a simplified method
for certain estates to obtain an extension of time under

Finding Lists begin on page ii.

§ 301.9100-3 to file a return on or before the fifth anniversary of the decedent’s death to elect portability of
the deceased spousal unused exclusion (DSUE) amount
pursuant to § 2010(c)(5)(A). This revenue procedure
applies to estates that are not normally required to file
an estate tax return because the value of the gross
estate and adjusted taxable gifts is under the filing
threshold in § 6018(a).

INCOME TAX
REG 130675-17, page 104.
These proposed regulations define the term “foreign
currency contract” under section 1256(g)(2) to include
only foreign currency forward contracts.

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.

July 25, 2022 

Bulletin No. 2022–30

Part I
Applicability of section
432(b)(7) following
a merger involving a
multiemployer defined
benefit plan that has
received special financial
assistance
Rev. Rul. 2022-13
I. ISSUE
If a multiemployer defined benefit pension plan that has received special financial assistance (SFA) from the Pension
Benefit Guaranty Corporation (PBGC)
is merged into a multiemployer defined
benefit pension plan that has not received
SFA, and the plan that has not received
SFA is designated as the ongoing plan after
the merger, is the ongoing plan deemed to
be in critical status under section 432(b)
(7) of the Internal Revenue Code (Code)
solely as a result of the merger?
II. FACTS
Plan A, a multiemployer defined benefit pension plan with a calendar year plan
year, is an eligible multiemployer plan
under section 4262(b) of the Employee
Retirement Income Security Act of 1974,
Pub. L. 93-406 (88 Stat. 829 (1974)), as
amended (ERISA), and section 432(k)(3)
of the Code. Plan A applies to PBGC for
SFA and receives $50 million of SFA in
October 2022. On March 30, 2023, the
actuary for Plan A makes the annual certification required under section 432(b)
(3) of the Code and certifies that Plan A is
in critical status for the 2023 plan year in
accordance with section 432(b)(7).
Plan B, a multiemployer defined benefit pension plan that was in effect on July
16, 2006, has a calendar year plan year
and is not an eligible multiemployer plan
described in section 432(k)(3) that may

apply for SFA. After January 1, 2023,
the sponsors of Plan A and Plan B agree
to merge Plan A and Plan B, effective as
of January 1, 2024. Pursuant to the terms
of the merger agreement, Plan B will be
designated as the ongoing plan after the
merger and will obtain all the assets, and
assume all the liabilities, of Plan A. Effective as of the date of the merger, all assets
of the merged plan will be available to
pay all benefits and plan expenses of the
merged plan. In addition, with respect
to plan years beginning on or after the
merger, all plan-related documentation
and reports, including Form 5500, Annual
Return/Report of Employee Benefit Plan,
and attachments (Form 5500), will use the
name of Plan B and will be filed under the
Employer Identification Number (EIN)
and Plan Number of Plan B.
Plan A and Plan B request approval from
PBGC for the merger pursuant to 29 CFR
4262.16(f), and PBGC approves the merger.
Plan A and Plan B implement the merger as
of January 1, 2024, in accordance with the
merger agreement. Following the merger,
Plan B complies with the restrictions and
conditions that applied to Plan A before the
merger to the extent required under 29 CFR
4262.16(f)(3). Thus, for example, pursuant
to 29 CFR 4262.16(f)(3)(i), Plan B maintains a separate account for the SFA funds
received by Plan A (adjusted to reflect earnings on those funds and payments for benefits and plan-related expenses from that
separate account) in accordance with 29
CFR 4262.13(b) and invests the assets of
that separate account in permissible investments in accordance with 29 CFR 4262.14.
III. LAW AND ANALYSIS
Section 432 imposes certain requirements on multiemployer defined benefit
plans in effect on July 16, 2006. One of
those is the requirement under section
432(a)(2), which provides that the sponsor
of a plan in critical status within the meaning of section 432(b)(2) must adopt and

implement a rehabilitation plan that satisfies the requirements of section 432(e)(3).
In general, a multiemployer plan is in critical status for a plan year if, as determined
by the plan actuary, the plan is described
in section 432(b)(2)(A), (B), (C), or (D) as
of the beginning of the plan year.
Under section 432(b)(3), a multiemployer plan’s actuary must certify the
plan’s status under section 432 to the
Internal Revenue Service and to the plan
sponsor not later than the 90th day of each
plan year. The certification must state
whether or not the plan is in endangered
status for the plan year (or would be in
endangered status for that plan year but
for the application of section 432(b)(5));
whether or not the plan is or will be in critical status for the plan year or for any of
the succeeding 5 plan years; and whether
or not the plan is or will be in critical and
declining status (within the meaning of
section 432(b)(6)) for that plan year. For
a plan that is in a funding improvement
or rehabilitation period, the certification
must also state whether or not the plan is
making the scheduled progress in meeting
the requirements of its funding improvement or rehabilitation plan.
Section 432(b)(7), which was added
to the Code by section 9704(d)(2) of the
American Rescue Plan Act of 2021, Pub.
L. 117-2 (135 Stat. 4 (2021)), is one of
several provisions under which a multiemployer plan is treated as being in critical status for a plan year even if the plan
is not described in section 432(b)(2)(A),
(B), (C) or (D) of the Code.1 Specifically,
section 432(b)(7) provides that if an eligible multiemployer plan that receives
SFA under section 4262 of ERISA meets
the requirements of section 432(k)(2) of
the Code, then, notwithstanding the preceding paragraphs of section 432(b), the
plan is deemed to be in critical status for
plan years beginning with the plan year in
which the effective date of the SFA occurs
and ending with the last plan year ending
in 2051.2

1
Other provisions under which this occurs include section 432(b)(4) (which permits the sponsor of a multiemployer plan that is projected to enter critical status within 5 years to elect to be
treated as being in critical status effective for the current plan year) and section 432(e)(4)(B) (which provides that a plan in critical status remains in critical status until a plan year for which
the actuary certifies that the plan is not described in any of the subparagraphs of section 432(b)(2) and meets certain other indicia of financial health).
2
See also section 4262(m)(4) of ERISA (“An eligible multiemployer plan that receives special financial assistance shall be deemed to be in critical status within the meaning of section 305(b)
(2) [of ERISA] until the last plan year ending in 2051.”).

Bulletin No. 2022–30

99

July 25, 2022

Under section 432(e), if a plan is in
critical status, the sponsor is required to
adopt a rehabilitation plan. As described
in section 432(e)(3)(A)(i), the rehabilitation plan must be reasonably expected to
enable the plan to emerge from critical
status by the end of its 10-year rehabilitation period described in section 432(e)(4)
(unless, as described in section 432(e)(3)
(A)(ii), the plan sponsor determines that
the plan cannot reasonably be expected to
emerge from critical status by the end of
the rehabilitation period using all reasonable measures). Subject to certain exceptions, section 432(f) provides that a plan
in critical status may not be amended to
increase benefits and may not make lumpsum or similar payments. Pursuant to
section 4971(g)(1), the excise tax under
section 4971(a) would not apply to any
accumulated funding deficiency under a
plan in critical status, but the plan sponsor and contributing employers could be
subject to other excise taxes under section
4971(g)(2), (3) and (4).
The merger agreement between Plan A
and Plan B designates Plan B as the ongoing plan for the plan years beginning on or

July 25, 2022

after January 1, 2024 (the effective date of
the merger) and provides that Plan B will
obtain all of Plan A’s assets and assume
all of its liabilities. In accordance with the
designation of Plan B as the ongoing plan,
all plan-related documentation and reports
with respect to all plan years beginning on
or after January 1, 2024, including Form
5500, are in the name of Plan B and use
Plan B’s EIN and Plan Number.
Section 432(b)(7), which provides for
deemed critical status, applies only to an
eligible multiemployer plan described
in section 432(k)(3) that applies for and
receives SFA. Thus, if a multiemployer
plan that is eligible for and has received
SFA merges into a plan that did not
receive SFA, and, under the terms of the
merger, the plan that did not receive SFA
is designated as the ongoing plan, that
ongoing plan is not deemed to be in critical status under section 432(b)(7). Under
the facts of this revenue ruling, because
Plan B is not an eligible multiemployer
plan described in section 432(k)(3) that
may apply for and receive SFA under
section 4262 of ERISA, section 432(b)
(7) of the Code does not apply to Plan B.

100

Accordingly, Plan B is not deemed to be
in critical status pursuant to section 432(b)
(7) as a result of the merger with Plan A
for the plan years beginning on or after the
effective date of the merger.
IV. HOLDING
After a merger of a multiemployer
defined benefit pension plan that has
received SFA from PBGC with a second
multiemployer defined benefit pension
plan that has not received SFA, with the
second plan designated as the ongoing
plan after the merger, the ongoing plan is
not deemed to be in critical status under
section 432(b)(7) of the Code solely as a
result of the merger.
V. DRAFTING INFORMATION
The principal author of this revenue
ruling is Diane S. Bloom of the Office of
Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information,
please contact Ms. Bloom at (202) 3176700. This telephone call is not toll-free.

Bulletin No. 2022–30

Part III
26 CFR 601.201: Rulings and determination letters.
(Also Part I, Section 2010; 20.2010-2; 301.9100-3)

Rev. Proc. 2022-32
SECTION 1. PURPOSE
This revenue procedure supersedes
Rev. Proc. 2017-34, 2017-26 I.R.B. 1282,
and provides a simplified method for certain taxpayers to obtain an extension of
time under § 301.9100-3 of the Procedure
and Administration Regulations to make a
“portability” election under § 2010(c)(5)
(A) of the Internal Revenue Code (Code).
For purposes of the Federal estate and gift
taxes, a portability election allows a decedent’s unused exclusion amount (deceased
spousal unused exclusion amount, or
DSUE amount) to become available for
application to the surviving spouse’s subsequent transfers during life or at death.
The simplified method provided in this
revenue procedure is to be used in lieu
of the letter ruling process. No user fee is
required for submissions filed under this
revenue procedure.
SECTION 2. BACKGROUND
.01 Section 303(a) of the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010
(TRUIRJCA), Pub. L. No. 111-312,
124 Stat. 3296, 3302 (2010), amended
§ 2010(c) of the Code to allow the estate
of a decedent who is survived by a
spouse to make a portability election. For
purposes of the Federal estate and gift
taxes, a portability election allows the
surviving spouse to apply the decedent’s
DSUE amount to the surviving spouse’s
own transfers during life and at death.
The portability election applies to estates
of decedents dying after December 31,
2010, if such decedent is survived by a
spouse. The portability provisions under
§ 2010(c) of the Code were scheduled
to expire on January 1, 2013, pursuant
to §§ 101(a)(1) and 304 of TRUIRJCA.
However, § 101(a) of the American Taxpayer Relief Act of 2012, Pub. L. No.
112-240, 126 Stat. 2313 (2013), made
the ability to elect portability permanent.

Bulletin No. 2022–30

.02 Section 2010(c)(5)(A) provides
certain requirements that the estate of
a deceased spouse must satisfy to elect
portability, including that the estate must
elect portability of the DSUE amount on
an estate tax return that is filed within the
time prescribed by law (including extensions) for filing such return.
.03 For estates that are not required to
file an estate tax return under § 6018(a)
of the Code (as determined based on the
value of the gross estate and adjusted taxable gifts), § 20.2010-2(a)(1) of the Estate
Tax Regulations clarifies that the due date
of an estate tax return required to elect portability is nine months after the decedent’s
date of death or the last day of the period
covered by an extension (if an extension
of time for filing has been obtained). Section 20.2010-2(a)(1) further provides that
an extension of time under § 301.9100-3
to elect portability may be available to an
estate that is not required to file an estate
tax return under § 6018(a).
.04 On June 26, 2017, the Department
of the Treasury (Treasury Department)
and the Internal Revenue Service (IRS)
published Rev. Proc. 2017‑34, which
provides a method for obtaining an extension of time under § 301.9100-3 to make
a portability election under § 2010(c)
(5)(A) that is available to the estates
of decedents dying after December 31,
2010, if that estate was not required by
§ 6018(a) to file an estate tax return and
if such a decedent was survived by a
spouse. Under Rev. Proc. 2017-34, this
method is a simplified method that is to
be used in lieu of the letter ruling process
and is available for a period extending to
the second anniversary of the decedent’s
date of death.
.05 Since the publication of Rev.
Proc. 2017-34, the IRS has continued to issue numerous letter rulings
under § 301.9100-3 granting an extension of time to elect portability under
§ 2010(c)(5)(A) in situations in which
the decedent’s estate was not required by
§ 6018(a) to file an estate tax return and
the time for obtaining relief under the
simplified method had expired. The IRS
has observed that a significant percentage
of these ruling requests have been from
estates of decedents who died within five

101

years preceding the date of the request.
The number of these requests continues
to place a significant burden on the available resources of the IRS. The Treasury
Department and the IRS have determined
that the considerable number of ruling
requests for an extension of time to elect
portability received since the publication
of Rev. Proc. 2017-34 indicates a need for
continuing relief for the estates of decedents having no filing requirement under
§ 6018(a). Accordingly, this revenue procedure supersedes Rev. Proc. 2017-34 and
updates the procedures set forth therein
by extending the period within which
the estate of a decedent may make the
portability election under that simplified
method to on or before the fifth anniversary of the decedent’s date of death.
SECTION 3. SCOPE
.01 In General. The simplified method
of this revenue procedure is available to
the executor (either an appointed executor or, if none, a non-appointed executor,
as provided in § 20.2010-2(a)(6)) of the
estate of a decedent if:
(1) The decedent:
(a) was survived by a spouse;
(b) died after December 31, 2010; and
(c) was a citizen or resident of the
United States on the date of death.
(2) The executor is not required to file
an estate tax return under § 6018(a) as
determined based on the value of the gross
estate and adjusted taxable gifts and without regard to the need to file for portability
purposes;
(3) The executor did not file an estate
tax return within the time required by
§ 20.2010-2(a)(1) for filing an estate tax
return; and
(4) The executor satisfies all requirements of section 4.01 of this revenue
procedure.
.02 Executors that Timely Filed an
Estate Tax Return. The simplified method
of this revenue procedure is not available
to the estate of a decedent whose executor
filed an estate tax return within the time
prescribed by § 20.2010-2(a)(1). Such
an executor either will have elected portability of the DSUE amount by timely
filing that estate tax return or will have

July 25, 2022

affirmatively opted out of portability in
accordance with § 20.2010‑2(a)(3)(i).
.03 Estates with a § 6018 Filing
Requirement. As set forth in § 20.20102(a)(1), an extension of time to elect portability under § 301.9100-3, including
through the simplified method of this revenue procedure, is not available to an estate
that is required to file an estate tax return
under § 6018(a) (as determined based on
the value of the gross estate and adjusted
taxable gifts) because, in that case, the due
date of the election is prescribed by statute
and not by regulation.
.04 Failure to Qualify for Relief under
this Revenue Procedure. The executor of
an estate not within the scope described
in section 3.01 of this revenue procedure only because the executor does not
satisfy the requirements of section 4.01
of this revenue procedure may request
an extension of time to make the portability election under § 2010(c)(5)(A) by
requesting a letter ruling under the provisions of § 301.9100-3. The requirements
for requesting a letter ruling are described
in Rev. Proc. 2022-1 I.R.B. 1 (or any successor revenue procedure).
SECTION 4. RELIEF FOR CERTAIN
LATE PORTABILITY ELECTIONS
.01 Requirements for Relief. The
requirements for relief under this revenue
procedure are as follows:
(1) A person permitted to make the
election on behalf of the estate of a decedent--that is, an executor described in
§ 20.2010-2(a)(6)--must file a complete
and properly prepared Form 706, United
States Estate (and Generation-Skipping
Transfer) Tax Return, on or before the fifth
annual anniversary of the decedent’s date
of death. The Form 706 will be considered
complete and properly prepared if it is
prepared in accordance with § 20.20102(a)(7).
(2) The executor filing the Form 706
on behalf of the decedent’s estate must
state at the top of the Form 706 that the
return is “FILED PURSUANT TO REV.
PROC. 2022-32 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).”
.02 Extent of Relief. Satisfaction of the
requirements for relief provided in section 4.01 of this revenue procedure, by an
executor for whom the relief is available

July 25, 2022

pursuant to section 3.01 of this revenue
procedure, is deemed to satisfy the requirements for relief under § 301.9100-3 and
upon that satisfaction, relief is granted
under the provisions of § 301.9100-3 to
extend the time to elect portability under
§ 2010(c)(5)(A). Accordingly, for purposes of electing portability, the Form
706 of that decedent’s estate will be considered to have been filed timely in accordance with § 20.2010-2(a)(1).
.03 Subsequent Determination that
Executor Is Required to File a Return
under § 6018(a). If, subsequent to the
grant of relief pursuant to this revenue
procedure, it is determined that, based on
the value of the gross estate and taking
into account any taxable gifts, the executor was required to file an estate tax return
under § 6018(a), the grant of an extension
as provided in section 4.02 of this revenue procedure is deemed null and void ab
initio.
SECTION 5. IMPACT OF RELIEF ON
SURVIVING SPOUSE
.01 Application of DSUE Amount. If
the decedent’s estate is granted relief
under this revenue procedure so that the
estate tax return is considered to have
been timely filed for purposes of electing portability, the DSUE amount of
that decedent is available to the decedent’s surviving spouse or the estate of
the surviving spouse for application to
the surviving spouse’s transfers made
on or after the decedent’s date of death
in accordance with the rules prescribed
under § 20.2010-3 of the Estate Tax Regulations and § 25.2505-2 of the Gift Tax
Regulations. However, if the increase in
the surviving spouse’s applicable exclusion amount attributable to the addition
of the decedent’s DSUE amount as of
the decedent’s date of death results in an
overpayment of gift or estate tax by the
surviving spouse or his or her estate, no
claim for credit or refund may be made if
the period of limitations under § 6511(a)
of the Code for filing a claim for credit
or refund of an overpayment of tax with
respect to such transfer has expired. That
is, an extension of time to elect portability granted under this revenue procedure
does not extend the period during which
the surviving spouse or the surviving

102

spouse’s estate may make a claim for
credit or refund under § 6511(a).
.02 Protective Claim for Credit or
Refund of Tax in Anticipation of Relief
under this Revenue Procedure. Because
a surviving spouse has no DSUE amount
from a deceased spouse to apply to
such surviving spouse’s transfers until
the portability election has been made
by the deceased spouse’s executor (see
§§ 20.2010-3(a)(2) and 25.2505-2(a)(2)),
a claim for credit or refund of tax filed
within the time prescribed in § 6511(a)
by the surviving spouse or the estate of
the surviving spouse in anticipation of
a Form 706 being filed to elect portability pursuant to this revenue procedure,
and otherwise meeting applicable legal
requirements, will be considered a protective claim for credit or refund of tax.
.03 Examples.
(1) Example 1.
(a) Predeceasing Spouse (S1) dies on January 1,
2018, survived by Surviving Spouse (S2). The assets
includible in S1’s gross estate consist of cash on
deposit in bank accounts held jointly with S2 with
rights of survivorship in the amount of $4,500,000.
S1 made no taxable gifts during life. S1’s executor is not required to file an estate tax return under
§ 6018(a) and does not file such a return.
(b) S2 dies on January 29, 2021. S2’s taxable
estate is $17,000,000 and S2 made no taxable gifts
during life. S2’s executor files a Form 706 on behalf
of S2’s estate on October 29, 2021, claiming an
applicable exclusion amount of $11,700,000. S2’s
executor includes payment of the estate tax with the
Form 706.
(c) Pursuant to this revenue procedure, S1’s
executor files a complete and properly prepared
Form 706 on behalf of S1’s estate on December 1,
2022, reporting a DSUE amount of $11,180,000.
The executor includes at the top of the Form 706 the
statement required by section 4.01(2) of this revenue procedure. The filing of the return satisfies the
requirements for a grant of relief under this revenue
procedure and S1’s estate is deemed to have made a
valid portability election. The IRS accepts the return
of S1’s estate with no changes.
(d) To recover the estate tax paid, S2’s executor
must file a claim for credit or refund of tax by October 29, 2024 (the end of the period of limitations
prescribed in § 6511(a)), even though a Form 706
to elect portability was not filed on behalf of S1’s
estate at the time S2’s estate filed its Form 706. Such
a claim filed on Form 843, Claim for Refund and
Request for Abatement, in anticipation of the filing
of the Form 706 by S1’s executor will be considered
a protective claim for credit or refund of tax. Accordingly, as long as the Form 843 is filed on or before
October 29, 2024, the IRS can consider and process
that claim for credit or refund of tax once S1’s estate
is deemed to have made a valid portability election
and S2’s estate notifies the IRS that the claim for
credit or refund is ready for consideration.

Bulletin No. 2022–30

(2) Example 2.
(a) The facts relating to S1 and S1’s estate are
the same as in Example 1. S2 makes a gift to Child
of $13,000,000 on December 1, 2020. S2 has made
no prior taxable gifts. On April 15, 2021, S2’s executor files a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, claiming an
applicable exclusion amount of $11,580,000. S2’s
executor tenders payment of the gift tax with the
Form 709.
(b) To recover the gift tax paid, S2’s executor
must file a claim for credit or refund of tax (protective or otherwise) within the time prescribed in
§ 6511(a) for filing a claim for credit or refund; in
this case, April 15, 2024.
(3) Example 3.
(a) The facts are the same as in Example 2 except
that S2’s Form 709 claims an applicable exclusion
amount of $22,760,000, including a DSUE amount
of $11,180,000 from S1’s estate. As a result, the
Form 709 reports no tax due and S2’s executor tenders no gift tax.
(b) Although the portability election, once made,
makes S1’s DSUE amount available to S2 retroactively to S1’s date of death, that DSUE amount is
not available until the election is made. Because
S2’s executor files the Form 709 before S1’s estate
makes the portability election, the claimed application of the DSUE amount will be denied and gift tax
on the transfer will be assessed. S2’s executor pays
the gift tax assessed. To recover that gift tax once

Bulletin No. 2022–30

the portability election has been made by S1’s estate,
S2’s executor must file a claim for credit or refund
of tax (protective or otherwise) within the time prescribed in § 6511(a) for filing a claim for credit or
refund.

SECTION 6. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2017-34, 2017-26 I.R.B.
1282, is superseded. Rev. Proc. 2022-3,
2022-1 I.R.B. 144, is amplified.
SECTION 7. EFFECTIVE DATE
.01 In General. This revenue procedure
is effective July 8, 2022.
.02 Letter Rulings Will Not Be Issued.
On or before the fifth anniversary of a
decedent’s date of death, the exclusive
procedure for obtaining an extension of
time under § 301.9100-3 to make a portability election under § 2010(c)(5)(A) for
the estate of a decedent, if the decedent
and executor meet the requirements of
section 3.01(1) through (3) of this revenue

103

procedure, is the procedure described in
section 4.01 of this revenue procedure. If
an executor of such an estate has filed a
request for a letter ruling seeking an extension of time under § 301.9100-3 to make
a portability election under § 2010(c)(5)
(A) and that letter ruling is pending in
the National Office on July 8, 2022, the
Office of the Associate Chief Counsel
(Passthroughs & Special Industries) will
close its file on the ruling request and
refund the user fee, and the estate may
obtain the relief granted by this revenue
procedure only by complying with section
4.01 of this revenue procedure.
SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Juli Ro Kim of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further information regarding this revenue procedure
contact Ms. Kim at (202) 317-6859 (not a
toll-free number).

July 25, 2022

Part IV
Notice of Proposed
Rulemaking
Definition of Foreign
Currency Contract Under
Section 1256
REG-130675-17
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed regulations that define the term
“foreign currency contract” under section
1256 of the Internal Revenue Code (the
“Code”) to include only foreign currency
forward contracts. The proposed regulations affect certain holders of foreign currency options.
DATES: Written or electronic comments
and requests for a public hearing must be
received by September 6, 2022.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submissions via the Federal eRulemaking
Portal at www.regulations.gov (indicate
IRS and REG-130675-17) by following the online instructions for submitting comments. Once submitted to the
Federal eRulemaking Portal, comments
cannot be edited or withdrawn. The IRS
expects to have limited personnel available to process public comments that are
submitted on paper through mail. Until
further notice, any comments submitted
on paper will be considered to the extent
practicable. The Department of the Treasury (“Treasury Department”) and the
IRS will publish for public availability
any comment submitted electronically,
and to the extent practicable on paper, to
its public docket.
Send paper submissions to: CC:PA:LPD:PR (REG-130675-17), room 5203,
Internal Revenue Service, PO Box 7604,

July 25, 2022

Ben Franklin Station, Washington, D.C.
20044.
A public hearing will be scheduled if
requested in writing by any person that
timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place for the public hearing will be published in the Federal Register. For those requesting to speak during
the hearing, send an outline of topic submissions electronically via the Federal
eRulemaking Portal at www.regulations.
gov (indicate IRS and REG-130675-17).
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, D.
Peter Merkel or Karen Walny at (202)
317-6938; concerning submissions of
comments or requests for a public hearing,
Regina L. Johnson at (202) 317-5177 (not
toll-free numbers) or by sending an email
to publichearings@irs.gov.
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed regulations that would provide that the term
foreign currency contract as defined in section 1256(g)(2) of the Code applies only
to a foreign currency forward contract.
I. Statutory Development of Section 1256
A. Section 1256 Generally
Section 1256(a)(1) provides that each
section 1256 contract held by a taxpayer
at the close of the taxable year is treated
as sold for its fair market value on the last
business day of that taxable year (and any
gain or loss is taken into account for the
taxable year). Section 1256(a)(2) provides
that proper adjustment must be made
in the amount of any gain or loss subsequently realized to take into account the
gain or loss previously recognized under
section 1256(a)(1). Generally, section
1256(a)(3) provides that any gain or loss
on a section 1256 contract is treated as 60
percent long-term capital gain or loss and
40 percent short-term capital gain or loss
(“60/40 treatment”).

104

Section 1256(b)(1) defines a section
1256 contract as any regulated futures
contract, any foreign currency contract,
any nonequity option, any dealer equity
option, and any dealer securities futures
contract. Section 1256(b)(2) excludes the
following contracts from the definition of
a section 1256 contract: (1) any securities
futures contract or option on such a contract unless it is a dealer securities futures
contract, or (2) any interest rate swap,
currency swap, basis swap, interest rate
cap, interest rate floor, commodity swap,
equity swap, equity index swap, credit
default swap, or similar agreement.
Section 1256(g)(2)(A) defines the term
foreign currency contract as a contract
that (1) requires delivery of, or the settlement of which depends on the value of,
a foreign currency which is a currency in
which positions are also traded through
regulated futures contracts, (2) is traded
in the interbank market, and (3) is entered
into at arm’s length at a price determined
by reference to the price in the interbank
market. Section 1256(g)(2)(B) grants the
Secretary authority to prescribe regulations as may be necessary or appropriate
to carry out the purposes of the foreign
currency contract definition, including the
authority to exclude any contract or type
of contract from that definition if it would
be inconsistent with those purposes.
Section 1256(g)(3) defines the term
nonequity option as any listed option (generally, an option traded on or subject to
the rules of a qualified board or exchange)
that is not an equity option.
Section 1256(f)(2) provides that 60/40
treatment does not apply to gain or loss
that otherwise would be ordinary. Section 988(a)(1) provides that if a futures
contract, forward contract, option, or similar financial instrument is a section 988
transaction, the gains and losses from the
transaction are treated as ordinary, absent
an election for certain transactions. However, regulated futures contracts and nonequity options that are marked-to-market
under section 1256 are not section 988
transactions unless a taxpayer makes an
election to treat the contract as a section
988 transaction. See section 988(c)(1)(D)
(i) and (ii).

Bulletin No. 2022–30

B. Scope of Section 1256 When Enacted
in 1981
When it was enacted in 1981, section
1256 applied only to regulated futures
contracts, including regulated futures
contracts involving foreign currency.
See Economic Recovery Tax Act of
1981 (“ERTA”), Public Law 97-34 (95
Stat. 172, section 503(a) (1981)). One of
the hallmarks of regulated futures contracts is the daily cash settlement, markto-market system employed by U.S.
futures exchanges to determine margin
requirements. In contrast to U.S. futures
exchanges, the interbank market and other
over-the-counter (“OTC”) markets did not
employ a daily cash settlement, mark-tomarket system for margin requirements.
C. Technical Corrections Act of 1982
As originally enacted, section 1256
applied to regulated futures contracts
requiring the delivery of foreign currency, but not to similar foreign currency
forward contracts that were traded in the
OTC market rather than on an exchange.
In 1983, Congress extended the application of the statute to foreign currency contracts traded in the interbank market and
provided a definition in section 1256(g)(1)
for the term foreign currency contract. See
Technical Corrections Act of 1982, Public
Law 97-448, section 105(c)(5)(B) and (C)
(96 Stat. 2365 (1983)). In adding section
1256(g)(1), Congress specified that the
term foreign currency contract included
only a contract that requires delivery of
the foreign currency.
The legislative history explains that
this expansion was grounded in the economic comparability of trading foreign
currency through forward contracts in the
interbank market to trading foreign currency through regulated futures contracts
and the interchangeability of the two types
of contracts by traders. H.R. Rep. No.
97-794, at 23 (1982). In addition, the pricing of these foreign currency forward contracts was readily available because they
trade through the larger, liquid interbank
market. Id. Nothing in the statute or legislative history indicates Congress intended
to include option contracts, which are
not generally economically comparable

Bulletin No. 2022–30

to regulated futures contracts. Moreover,
while the definition of foreign currency
contract enacted in 1983 required the
delivery of foreign currency, option contracts will not always result in settlement
(either by physical delivery or delivery of
the cash equivalent value).
D. Deficit Reduction Act of 1984
In 1984, Congress further expanded the
types of contracts to which section 1256
applied to include nonequity options and
dealer equity options. See Deficit Reduction Act of 1984, Public Law 98-369 at
section 102(a)(3) (98 Stat. 494 (1984)). It
also amended the definition of a foreign
currency contract to allow for cash settlement. Id. The Deficit Reduction Act of
1984 also added section 1256(g)(2)(B),
which provides the Treasury Department
with authority to issue regulations that are
necessary or appropriate to carry out the
purposes of the foreign currency contract
definition. Id.
Before this 1984 amendment, the term
foreign currency contract applied only to
contracts that required the physical delivery of the foreign currency. However,
the futures contract and forward contract
market had developed in a manner that no
longer required physical delivery. Instead,
contracts permitted the parties to settle
contracts for their cash equivalent value.
The definition of regulated futures contract was amended in 1983 to remove the
requirement of delivery of personal property. See H.R. Conf. Rep. 97-986, at 26-27
(1982). The amendment to the definition
of foreign currency contract in 1984 was
intended similarly to treat the delivery
requirement as met where the contract
provides for a settlement determined by
reference to the value of foreign currency.
Specifically, the House Report explained
the reason for the 1984 amendment as
follows:
PRESENT LAW
 he Technical Corrections Act of 1982
T
provided that certain foreign currency
contracts entered into after May 11,
1982 (or earlier, if certain elections
were made) will be treated as regulated futures contracts and therefore be

105

taxed on the marked-to-market system
with a maximum tax rate of 32 percent.
In order for a contract to qualify as a
foreign currency contract, the contract
must require delivery of a foreign currency which is a currency in which
positions are also traded through regulated futures contracts.
EXPLANATION OF PROVISION
 ecause certain contracts may call for
B
a cash settlement by reference to the
value of the foreign currency rather
than actual delivery of the currency,
the bill provides that the delivery of
a foreign currency requirement is met
where the contract provides for a settlement determined by reference to the
value of the foreign currency.
H.R. Rep. 98-432 Part 2, at 1646 (1984).
At the same time, Congress addressed
foreign currency options by adding nonequity options to the list of section 1256
contracts, as described above. Consequently, listed foreign currency options
became subject to section 1256 by explicit
Congressional action. While the legislative history expressly stated that Congress amended the definition of a foreign
currency contract to include cash-settled
foreign currency forward contracts, the
legislative history does not indicate that
Congress intended also to expand the
scope of section 1256 to include OTC
foreign currency options regardless of
whether they may be cash-settled.
E. Technical and Miscellaneous Revenue
Act of 1988
The legislative history with respect to
a 1988 amendment to section 988 also
indicates that Congress understood that
a foreign currency contract, as defined
by section 1256(g)(2), does not include a
foreign currency option. Section 988 generally applies to forward contracts, futures
contracts, options, and similar financial
instruments if the amount that a taxpayer
is entitled to receive or is required to pay
is denominated in terms of a nonfunctional currency or determined by reference to the value of one or more nonfunctional currencies. See section 988(c)(1)

July 25, 2022

(A) and (B)(iii); see also section 988(c)
(1)(D) (providing an exception to section 988(c)(1)(B)(iii) for certain regulated
futures contracts and nonequity options).
In 1988, Congress amended section 988
to add section 988(c)(1)(E). Technical and
Miscellaneous Revenue Act of 1988, Public Law 100-647, at section 6130(b) (102
Stat. 3342 (1988)). Section 988(c)(1)(E)
provides that any instrument described in
section 988(c)(1)(B)(iii) (that is, any forward contract, futures contract, option, or
similar financial instrument) is not a section 988 transaction if it is held by certain
partnerships (each, a “qualified fund”) and
would be marked to market under section
1256. Section 988(c)(1)(E)(iv)(I) further
provides that any bank forward contract,
any foreign currency futures contract
traded on a foreign exchange, or any similar instrument to the extent provided in
regulations that is not otherwise a section
1256 contract is treated as a section 1256
contract for purposes of section 1256
when held by a qualified fund.
The legislative history indicates that
Congress believed that the term foreign
currency contract generally meant bank
forward contracts on foreign currency, and
that OTC foreign currency options were
not already section 1256 contracts. See
H.R. Conf. Rep. No. 100-1104 (Vol. 2),
at 189, reprinted in 1988-3 C.B. 473, 679
(“[T]he [conference] agreement expands
the definition of section 1256 contracts
to generally include … bank forwards:
that is, foreign currency contracts (as that
term is defined in section 1256(g)(2) of
the Code), and [certain other contracts]
…. [T]he [conference] agreement provides the Treasury with regulatory authority to treat other similar instruments (for
example, options) held by qualified funds
as section 1256 contracts.”) (emphasis
added).
II. Listed Transactions Using Offsetting
Foreign Currency Options
Taxpayers entered into tax avoidance
transactions that relied upon treating
OTC foreign currency options, in a currency in which regulated futures were
traded, as section 1256(g)(2) foreign currency contracts. On December 22, 2003,
the IRS published Notice 2003-81, 200351 I.R.B. 1223, which identified a tax

July 25, 2022

avoidance transaction involving offsetting foreign currency options. This transaction is often referred to as a “major-minor” transaction because it involved the
taxpayer purchasing call and put options
in a “major” foreign currency (one in
which regulated futures contracts traded)
and writing call and put options in a
“minor” currency (one in which regulated
futures contracts were not traded). The
purchased and written foreign currency
options were in two different currencies
that historically had a high positive correlation, such that the taxpayer could
be reasonably certain to have offsetting
gains and losses in the options. The taxpayer treated its major currency options
as foreign currency contracts under section 1256(g)(2) and treated its options
on the minor currency as not subject to
section 1256. When there was unrecognized gain and loss on the options, the
taxpayer assigned the purchased major
currency option with a loss to a charity,
and the charity assumed the offsetting
written minor currency option from the
taxpayer (the taxpayer, however, retained
the premium received on the written
option). The taxpayer treated the assignment of the major currency option as a
mark-to-market recognition event under
section 1256(c), claiming a loss upon
the assignment. However, the taxpayer
did not report the recognition of gain
on the offsetting minor currency option
assumed by the charity because the
option was a non-section 1256 contract
and the taxpayer treated the assumption
as a non-recognition event. The “Facts”
section of Notice 2003-81 stated, without
legal analysis, that the purchased major
currency options were foreign currency
contracts within the meaning of section 1256(g)(2)(A) because the major
currency was traded through regulated
futures contracts. Notice 2003-81 identified this transaction as a listed transaction
and indicated that the taxpayer would be
required under the Code to account for
the gain attributable to the premium originally received by the taxpayer for writing the minor currency option.
On August 27, 2007, the IRS published
Notice 2007-71 (2007-35 I.R.B. 472),
which modified and supplemented Notice
2003-81. Notice 2007-71 explained that
“foreign currency options, whether or

106

not the underlying currency is one in
which positions are traded through regulated futures contracts, are [not] foreign currency contracts as defined in §
1256(g)(2).” Notice 2007-71 explained
that the “Facts” section of Notice 200381 included “an erroneous conclusion of
law.” Notice 2007-71 corrected this error
in the “Facts” section of Notice 2003-81,
stating that the pertinent sentence should
have read as follows: “‘The taxpayer takes
the position that the purchased options are
‘foreign currency contracts’ within the
meaning of §1256(g)(2)(A) of the Internal
Revenue Code and §1256 contracts within
the meaning of §1256(b).’”
III. Judicial Interpretations of Section
1256(g)(2)
The IRS challenged taxpayers’ characterization of the major-minor transactions
in several cases before the United States
Tax Court (“Tax Court”). In a series of
rulings on motions for partial summary
judgment, the Tax Court held that foreign currency options were not “foreign
currency contracts” under section 1256.
In one case, however, the Sixth Circuit
disagreed and held that a foreign currency option could be a foreign currency
contract.
A. Summitt v. Commissioner
The IRS successfully challenged the
listed transactions described in Notice
2003-81 in Summitt v. Commissioner, 134
T.C. 248 (2010). The Tax Court held that
a foreign currency option is not a foreign
currency contract as defined by section
1256(g)(2).
Explaining that the plain meaning of
the statutory language controls the decision, the Tax Court held that the term foreign currency contract does not include an
option contract and that the major currency
option was not subject to the mark-to-market rules of section 1256. Id. at 264, 266.
The court noted that forwards and options
confer different rights and obligations to
the parties to these contracts. Id. at 264.
The court found that it was clear that the
words “or the settlement of which depends
on the value of” in section 1256(g)(2)(A)
(i) meant that a foreign currency contract
must require settlement at expiration and

Bulletin No. 2022–30

that the reference in the statute to settlements was included to permit a foreign
currency contract to be physically settled
or cash-settled. Id. at 265. In contrast, an
option may expire without any settlement
occurring. The court further observed that
“[t]here is no evidence in the legislative
history that a literal reading of the statute
will defeat Congress’ purpose in enacting
it.” Id.
Subsequently, the Tax Court followed
its decision in Summitt in two other
cases. See Garcia v. Commissioner, T.C.
Memo. 2011-85; Wright v. Commissioner,
T.C. Memo. 2011-292. In both cases, the
Tax Court noted that the taxpayers did
not show a material factual difference
between their cases and the earlier Tax
Court opinion on the same issue. Garcia,
T.C. Memo. 2011-85; Wright, T.C. Memo.
2011-292.
B. Wright v. Commissioner
The taxpayer appealed the Tax Court’s
decision in Wright. The Sixth Circuit
reversed the Tax Court, holding that a
foreign currency option could be a foreign currency contract based on the plain
meaning of section 1256(g)(2). Wright v.
Commissioner, 809 F.3d 877, 885 (6th
Cir. 2016). Specifically, the Sixth Circuit
found that the plain language of section
1256(g)(2)(A)(i) (“which requires delivery of, or the settlement of which depends
on the value of, a foreign currency which
is a currency in which positions are also
traded through regulated futures contracts”) does not require settlement. Id.
at 883. The court reasoned that the plain
meaning of section 1256(g)(2)(A)(i) provides that a “foreign currency contract” is
“(1) ‘a contract ... which requires delivery of ... a foreign currency’ or (2) ‘a contract ... the settlement of which depends
on the value of ... a foreign currency.’”
Id. Therefore, it found that a contract is
a “foreign currency contract” if the settlement of the contract depends on the
value of a foreign currency, even if the
contract does not mandate settlement. Id.
In concluding that the statutory language
in section 1256(g)(2)(A) was unambiguous, the Sixth Circuit noted that the Treasury Department and the IRS had express
authority to change this result for future
taxpayers. Id. at 885.

Bulletin No. 2022–30

Explanation of Provisions
Under the authority of section 1256(g)
(2)(B), and to carry out the purposes of
section 1256(g)(2)(A), these proposed
regulations provide that only a forward
contract on foreign currency is a “foreign
currency contract” as defined in section
1256(g)(2). The legislative history to section 1256, as discussed in part I of this
preamble, indicates that Congress’s purpose in amending the definition of foreign
currency contract in 1984 was merely to
include cash-settled foreign currency forward contracts within the definition of foreign currency contract. It would be inconsistent with this purpose to construe the
term foreign currency contract as including options or other derivatives.
These proposed regulations do not
change the status of foreign currency
options that otherwise qualify as section
1256 contracts. Specifically, nonequity
options are separately listed as section
1256 contracts in section 1256(b)(1)(C).
Section 1256(g)(3) provides that a nonequity option is any listed option which
is not an equity option. Section 1256(g)
(5) defines a listed option as “any option
. . . which is traded on (or subject to the
rules of) a qualified board or exchange.”
Therefore, a foreign currency option that
is listed on a qualified board or exchange
is a “nonequity option” and remains subject to section 1256.
These proposed regulations do not
define the term forward contract. For
purposes of these proposed regulations,
whether a derivative contract is properly
characterized as a forward contract for
U.S. federal income tax purposes is determined under current law. In addition, the
IRS may consider applying existing antiabuse rules and judicial doctrines to a contract and any related transactions in order
to evaluate whether a transaction is properly characterized as a forward contract
or whether a transaction characterized
as some other type of derivative contract
should be treated as a forward contract.
Proposed Applicability Date
These proposed rules are proposed to
apply to contracts entered into on or after
the date that is 30 days after the date of
publication of the Treasury decision

107

adopting these proposed rules as final regulations in the Federal Register (the “proposed applicability date”). This proposed
applicability date is intended to provide
taxpayers in the Sixth Circuit with time
to transition from the holding in Wright
v. Commissioner to the rule described in
these proposed regulations. However, for
contracts entered into before the proposed
applicability date by taxpayers in other
circuits, the IRS intends to continue to
adhere to its prior published position that
foreign currency options are not foreign
currency contracts under section 1256(g)
(2). See Notice 2007-71, 2007-35 I.R.B.
472. A taxpayer may rely on these proposed regulations for taxable years ending on or after July 6, 2022, provided the
taxpayer and its related parties, within the
meaning of sections 267(b) (determined
without regard to section 267(c)(3)) and
707(b)(1), consistently follow the proposed regulations for all contracts entered
into during the taxable year ending on or
after July 6, 2022 through the proposed
applicability date of the final regulations.
Special Analyses
I. Regulatory Planning and Review –
Economic Analysis
This regulation is not subject to review
under section 6(b) of Executive Order
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) between the
Department of the Treasury and the Office
of Management and Budget regarding
review of tax regulations.
II. Regulatory Flexibility Act
The proposed rule affects any taxpayer
that enters into a foreign currency option
contract in the interbank market and that
would otherwise treat the option as a “foreign currency contract” within the meaning of section 1256(g), contrary to the
position set forth by the IRS in Notice
2007-71. No data is available about the
number of small entities that are taking
such a position. However, the Secretary
has determined that the economic impact
on any small entities affected by the proposed rule would not be significant.
The proposed rule clarifies that a
“foreign currency contract” as defined in

July 25, 2022

section 1256(g)(2) means only a foreign
currency forward contract (and not a foreign currency option contract). The proposed rule does not require taxpayers to
collect additional information to determine whether section 1256 applies to
the taxpayer’s option contracts. Taxpayers that would have otherwise reported
these over-the-counter foreign currency
options on IRS Form 6781 (Gains and
Losses from Section 1256 Contracts
and Straddles) as section 1256 contracts
may collect less information under the
proposed rule since the options will not
be treated as section 1256 contracts.
In addition, the proposed rule does not
impose any new costs on taxpayers
since it reaffirms the IRS’s published
position that over-the-counter foreign
currency options are not “foreign currency contracts” within the meaning of
section 1256(g). Similarly, the proposed
rule does not affect a taxpayer’s reporting obligation with respect to over-thecounter foreign currency options since
the same amount of information is
required to be reported.
In accordance with the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) the
Secretary hereby certifies that this proposed rule, if adopted, will not have a significant economic impact on a substantial
number of small entities. The Treasury
Department and the IRS invite comment
from members of the public about potential impacts on small entities.
III. Section 7805(f)
Pursuant to section 7805(f), this notice
of proposed rulemaking has been submitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on its impact on small business.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (“UMRA”) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a state,
local, or tribal government, in the aggregate, or by the private sector, of $100

July 25, 2022

million in 1995 dollars, updated annually
for inflation. This proposed rule does not
include any Federal mandate that may
result in expenditures by state, local, or
tribal governments, or by the private sector in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (entitled
“Federalism”) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial, direct compliance costs on
state and local governments, and is not
required by statute, or preempts state
law, unless the agency meets the consultation and funding requirements of
section 6 of the Executive order. These
proposed regulations do not have federalism implications and do not impose
substantial direct compliance costs on
state and local governments or preempt
state law within the meaning of the
Executive order.

comments. Requests for a public hearing
are also encouraged to be made electronically by sending an email to publichearings@irs.gov. If a public hearing is scheduled, notice of the date and time for the
public hearing will be published in the
Federal Register.
Announcement 2020-4, 2020-17
I.R.B. 667 (April 20, 2020), provides
that until further notice, public hearings conducted by the IRS will be held
telephonically. Any telephonic hearing
will be made accessible to people with
disabilities.
Drafting Information
The principal authors of these regulations are D. Peter Merkel and Karen
Walny of the Office of 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

Statement of Availability of IRS
Documents

Income taxes, Reporting and recordkeeping requirements.

IRS notices and other guidance cited in
this preamble are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by
visiting the IRS website at http://www.irs.
gov.

Proposed Amendments to the
Regulations

Comments and Request for Public
Hearing

Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
*****
Section 1.1256(g)-2 also issued under
26 U.S.C. 1256(g)(2)(B).
*****
Par. 2. Section 1.1256(g)-2 is added to
read as follows:

Before these proposed regulations are
adopted as final regulations, consideration
will be given to any comments that are
submitted timely to the IRS as prescribed
in this preamble under the ADDRESSES
heading. The Treasury Department and
the IRS request comments on all aspects
of the proposed rules. Any electronic comments submitted, and to the extent practicable any paper comments submitted, will
be made available at www.regulations.gov
or upon request.
A public hearing will be scheduled
if requested in writing by any person
that timely submits electronic or written

108

Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
part 1 as follows:
PART 1–INCOME TAXES

§1.1256(g)-2 Foreign currency contract
defined.
(a) Foreign currency contract. For purposes of section 1256, the term foreign
currency contract means a forward contract that—

Bulletin No. 2022–30

(1) Requires delivery of, or the settlement of which depends on the value of,
a foreign currency that is a currency in
which positions are also traded through
regulated futures contracts;
(2) Is traded in the interbank market;
and

Bulletin No. 2022–30

(3) Is entered into at arm’s length at a
price determined by reference to the price
in the interbank market.
(b) Applicability date. This section
applies to contracts entered into on or after
[date 30 days after date of publication of
the final rule in the Federal Register].

109

Paul J. Mamo,
Acting Deputy Commissioner for Services and Enforcement.
(Filed by the Office of the Federal Register on July
05, 2022, 8:45 a.m., and published in the issue of
the Federal Register for July 06, 2022, 87 F.R.
40168)

July 25, 2022

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
­effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confusion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the

new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations
to show that the previous published rulings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.

A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.

Bulletin No. 2022–30

ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

July 25, 2022

Numerical Finding List1
Bulletin 2022–30

Notices:
2022-29, 2022-28 I.R.B. 66
2022-30, 2022-28 I.R.B. 70
2022-31, 2022-29 I.R.B. 85

Proposed Regulations:
REG-130975-08, 2022-28 I.R.B. 71
REG 130675-17, 2022-30 I.R.B. 104

Revenue Procedures:
2022-25, 2022-27 I.R.B. 3
2022-28, 2022-27 I.R.B. 65
2022-26, 2022-29 I.R.B. 90
2022-32, 2022-30 I.R.B. 101

Revenue Rulings:
2022-12, 2022-27 I.R.B. 1
2022-13, 2022-30 I.R.B. 99

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.
1

July 25, 2022

ii

Bulletin No. 2022–30

Finding List of Current Actions on
Previously Published Items1
Bulletin 2022–30

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.
1

Bulletin No. 2022–30

iii

July 25, 2022

Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,
we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Ab92c2b1ec003047a. Public record. Not legal advice.