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HIGHLIGHTS

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Bulletin No. 2022–5

January 31, 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

INCOME TAX

Notice 2022-6, page 460.

This notice updates the life expectancy and mortality

tables used to determine substantially equal periodic payments under the methods set forth in Rev. Rul.

2002-62 and provides a 5 percent floor on the maximum interest rates that may be used to calculate annuity payments under the fixed amortization and annuitization methods. This notice also modifies the guidance in

Notice 2004-15 to apply these changes for purposes

of section 72(q).

Notice 2022-5, page 457.

Because of the Coronavirus Disease 2019 (COVID-19)

pandemic, the Department of the Treasury and the

Internal Revenue Service issued Notice 2021-12,

2021-6 I.R.B. 828, as clarified by Notice 2021-17,

2021-14 I.R.B. 984, to provide temporary relief from

certain requirements under § 42 of the Internal Revenue Code (Code) for qualified low-income housing

projects and under §§ 142(d) and 147(d) of the Code

for qualified residential rental projects. In response

to the continuing presence of the pandemic and precautions necessitated by new disease variants, this

notice provides certain new relief and extends that

temporary relief for certain requirements addressed

in Notice 2021-12.

Finding Lists begin on page ii.

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.

January 31, 2022

Bulletin No. 2022–5

Part III

Notice 2022-5

I. PURPOSE

Because of the Coronavirus Disease

2019 (COVID-19) pandemic, the Department of the Treasury and the Internal

Revenue Service issued Notice 2021-12,

2021-6 I.R.B. 828, as clarified by Notice

2021-17, 2021-14 I.R.B. 984, to provide

temporary relief from certain requirements under § 42 of the Internal Revenue

Code (Code) for qualified low-income

housing projects and under §§ 142(d)

and 147(d) of the Code for qualified residential rental projects. In response to the

continuing presence of the pandemic and

precautions necessitated by new disease

variants, this notice provides certain new

relief and extends the temporary relief

for certain requirements addressed in

Notice 2021-12. Section III of this notice

describes the persons eligible for the relief granted in sections IV through VI of

this notice.

II. BACKGROUND

A. Qualified low-income housing projects

In this notice, the terms “Agency,” and

“Owner” have the same meanings as described in section 5 of Rev. Proc. 2014-49,

2014-37 I.R.B. 535.

For background on the requirements

under § 42 that are receiving an extension

under this notice of the relief provided under Notice 2021-12, refer to Section II.A

of Notice 2021-12.

An additional requirement under § 42

relating to an Agency’s inspection of

low-income units as provided in § 1.425(c)(2)(iii)(C)(2) of the Income Tax Regulations is the 15-day reasonable notice

requirement described in § 1.42-5(c)(2)

(iii)(C)(3). Section 1.42-5(c)(2)(iii)(C)

(2) provides that an Agency must select the low-income units to inspect and

low-income certifications to review in a

manner that does not give advance no-

tice that a particular low-income unit (or

low-income certifications for a particular low-income unit) will or will not be

inspected (or reviewed) for a particular

year. The Agency may notify the owner of the low-income units for on-site

inspection only on the day of inspection. However, the Agency may give an

owner reasonable notice that there will

be an inspection of the project and of

not-yet-identified low-income units or

a review of low-income certifications

of not-yet-identified low-income units.

The notice serves to enable the owner

to assemble needed documentation for

low-income certifications for review

and to notify tenants of the possibility of

physical inspection of their units. Section

1.42-5(c)(2)(iii)(C)(3) provides that reasonable notice is generally no more than

15 days.

Under § 42(m)(1)(A)(i), an Agency’s

qualified allocation plan (QAP) must have

been approved by the governmental unit

of which the Agency is a part. This approval is to be made in accordance with

rules similar to certain rules in § 147(f)

(2), other than § 147(f)(2)(B)(ii). Because

approval under § 147(f)(2)(B)(i) involves

a public hearing, such a hearing is also required for purposes of § 42(m)(1)(A)(i).

In response to the COVID-19 pandemic,

hearings under § 147 were permitted to be

conducted telephonically. See Rev. Proc.

2021-39, 2021-38 I.R.B. 426. In addition,

Notice 2021-12 permitted hearings under

§ 42(m)(1)(A)(i) to be conducted telephonically.

B. Qualified residential rental projects

financed by bonds

In this notice, the terms “Issuer” and

“Operator” have the same meanings as

described in section 4 of Rev. Proc. 201450, 2014-37 I.R.B. 540.

For background on the requirements

under §§ 142(d) and 147(d) that are receiving an extension under this notice of

the relief provided under Notice 2021-12,

refer to Section II.B of Notice 2021-12.

C. Postponement of certain deadlines by

reason of Presidentially declared disasters

On March 13, 2020, the President of

the United States issued an emergency

declaration under the Robert T. Stafford

Disaster Relief and Emergency Assistance

Act (Stafford Act), 42 U.S.C. 5121 et seq.,

in response to the ongoing COVID-19

pandemic (Emergency Declaration).1 The

Emergency Declaration instructed the Secretary of the Treasury “to provide relief

from tax deadlines to Americans who have

been adversely affected by the COVID-19

emergency, as appropriate, pursuant to 26

U.S.C. 7508A(a).” Subsequent to the Emergency Declaration, the President issued major disaster declarations under the authority

of the Stafford Act with respect to all 50

States, the District of Columbia, and 5 territories (Major Disaster Declarations).2 In

addition, under § 1.42-13(a), the Secretary

of the Treasury or her delegate has the general authority to issue guidance and provide

relief to carry out the purposes of § 42.

In the context of a Presidentially-declared Major Disaster, Rev. Proc. 201449 provides temporary relief from certain

requirements of § 42 for Agencies and

Owners of low-income housing projects.

Under section 8 of Rev. Proc. 2014-49,

in the case of a casualty loss suffered

due to a Major Disaster that has reduced

a low-income building’s qualified basis,

the Agency that has jurisdiction over the

building must determine what constitutes

a reasonable restoration period. The reasonable restoration period established by

the Agency must not extend beyond the

end of the 25th month following the close

of the month of the Major Disaster declaration (25-month reasonable restoration

period). Until the restoration is completed,

to determine the credit amount allowable

during the reasonable restoration period

for a building described in section 8 of

Rev. Proc. 2014-49, an Owner must use

the building’s qualified basis at the end of

the taxable year immediately preceding

the first day of the incident period for the

Major Disaster.

See https://www.fema.gov/news-release/20200514/president-donald-j-trump-directs-fema-support-under-emergency-declaration.

See https://www.fema.gov/coronavirus/disaster-declarations.

Bulletin No. 2022–5

457

January 31, 2022

Rev. Proc. 2014-49 also provides emergency housing relief for individuals who

are displaced by a Major Disaster from

their principal residences in certain Major

Disaster Areas. See Rev. Proc. 2014-49,

sections 12-14. In the context of a Presidentially-declared Major Disaster, Rev.

Proc. 2014-50 provides temporary relief

from certain requirements under § 142(d)

for qualified residential rental projects financed with exempt facility bonds issued

by State and local governments under §

142. Rev. Proc. 2014-50 also provides

emergency housing relief for individuals

who are displaced by a Major Disaster

from their principal residences in certain

Major Disaster Areas. See Rev. Proc.

2014-50, sections 5-7.

Notice 2020-23, 2020-18 I.R.B. 742,

published on April 27, 2020, provided

certain relief to affected taxpayers and

postponed due dates until July 15, 2020,

with respect to certain tax filings and payments, certain time-sensitive government

actions, and all time-sensitive actions listed in Rev. Proc. 2018-58, 2018-50 I.R.B.

990 (Dec. 10, 2018), that were due to be

performed on or after April 1, 2020, and

before July 15, 2020, including certain actions under § 42 for qualified low-income

housing projects.

Notice 2020-53, 2020-30 I.R.B. 151,

published on July 20, 2020, extended until

December 31, 2020, the relief provided in

Notice 2020-23 for § 42 qualified low-income housing projects, as well as providing until December 31, 2020, additional

relief under § 42 and under §§ 142(d) and

147(d) for qualified residential rental projects.

Notice 2021-12, published on February 8, 2021, extended the temporary relief

provided in Notice 2020-53, and also provided temporary relief from additional §

42 requirements not previously addressed

in Notice 2020-53.

Notice 2021-17, published on April 5,

2021, clarified Notice 2021-12 by providing a more precise citation in Section IV.E

of that notice.

III. SCOPE OF THE RELIEF

GRANTED IN THIS NOTICE

Sections IV.A through F of this notice apply to certain deadlines related

to low-income housing projects under

January 31, 2022

§ 42. Sections V.A through D apply to

relief involving operational waivers for

low-income housing projects, and Section V.E applies to relief involving operational waivers both for those projects

and for qualified rental projects under

§ 142(d). Sections VI.A and B apply to

private activity bonds that are issued for

the acquisition of buildings intended to

be qualified residential rental projects

and that are qualified bonds (as defined

in § 141(e)) if the applicable requirements of §§ 142(d) and 147(d)(2) are

satisfied. All of the provisions in Sections IV through VI also apply to Agencies, Owners, Issuers, and Operators

that have responsibilities with respect to

those projects and bonds.

IV. GRANT OF RELIEF FOR

DEADLINES RELATED TO THE

LOW-INCOME HOUSING CREDIT

In this Section IV, “original deadline”

means the deadline without regard to any

extension under Notice 2020-23, Notice

2020-53, or Notice 2021-12 (as clarified

by Notice 2021-17).

•

C. PLACED IN SERVICE DEADLINE

•

A. THE 10-PERCENT TEST FOR

CARRYOVER ALLOCATIONS

•

For purposes of § 42(h)(1)(E)(ii), if

the original deadline for an Owner of

a building with a carryover allocation

to meet the 10-percent test is on or

after April 1, 2020, and on or before

December 31, 2020, the deadline is

extended to the original deadline plus

two years.

If the original deadline is on or

after January 1, 2021, and before

December 31, 2022, the deadline is

extended to December 31, 2022.

B. THE § 42(e) 24-MONTH MINIMUM

REHABILITATION EXPENDITURE

PERIOD

•

For purposes of § 42(e)(3)(A)(ii), if

the original deadline for the 24-month

minimum rehabilitation expenditure

period for a building originally is on

or after April 1, 2020, and is on or

before December 31, 2021, then that

deadline is extended to the original

date plus 18 months.

458

If the original deadline for this

requirement is on or after January 1,

2022, and on or before June 30, 2022,

then that deadline is extended to June

30, 2023.

If the original deadline for this

requirement is on or after July 1,

2022, and on or before December 31,

2022, then that deadline is extended

to the original date plus 12 months.

If the original deadline for this

requirement is on or after January 1,

2023, and on or before December 30,

2023, then that deadline is extended

to December 31, 2023.

•

For purposes of § 42(h)(1)(E)(i), if the

original deadline for a low-income

building to be placed in service is the

close of calendar year 2020, the new

deadline is the close of calendar year

2022 (that is, December 31, 2022).

If the original placed-in-service

deadline is the close of calendar

year 2021 and the original deadline

for the 10-percent test in § 42(h)(1)

(E)(ii) was before April 1, 2020, the

new placed-in-service deadline is the

close of calendar year 2022 (that is,

December 31, 2022).

If the original placed-in-service

deadline is the close of calendar year

2021 and the original deadline for the

10-percent test in § 42(h)(1)(E)(ii)

was on or after April 1, 2020, and on

or before December 31, 2020, then

the new placed-in-service deadline is

the close of calendar year 2023 (that

is, December 31, 2023).

If the original placed-in-service

deadline is the close of calendar year

2022 (and thus the original deadline

for the 10-percent test was in 2021),

then the new placed-in-service

deadline is the close of calendar year

2023 (that is, December 31, 2023).

D. REASONABLE PERIOD FOR

RESTORATION OR REPLACEMENT

IN THE EVENT OF CASUALTY LOSS

For purposes of § 42(j)(4)(E) both in

the case of a casualty loss not due to a preCOVID-19-pandemic Major Disaster and

in situations governed by section 8.02 of

Bulletin No. 2022–5

Rev. Proc. 2014-49 in the case of a casualty loss due to a pre-COVID-19-pandemic

Major Disaster, if a low-income building’s

qualified basis is reduced by reason of the

casualty loss and the reasonable period to

restore the loss by reconstruction or replacement that was originally set by the

HCA (original Reasonable Restoration

Period) ends on or after April 1, 2020, then

the last day of the Reasonable Restoration

Period is postponed by eighteen months

but not beyond December 31, 2022. Notwithstanding the preceding sentence, the

Agency may require a shorter extension,

or no extension at all.

For purposes of determining the credit amount allowable under § 42(a) in the

case of a credit year that ends on or after

April 1, 2020, and not later than the end of

the Reasonable Restoration Period (taking

into account any extension under the preceding paragraph), if the Owner restores

the building by the end of that extended

Reasonable Restoration Period, then for

taxable years ending after the first day of

the casualty and before the completion of

the restoration, the Owner must use the

building’s qualified basis at the end of the

taxable year immediately preceding the

first day of the casualty as the building’s

qualified basis for that credit year.

year, but not beyond December 31, 2022.

If the correction period originally set by

the Agency ends during 2022, the end of

the period is extended to December 31,

2022. Notwithstanding the preceding sentences, the Agency may require a shorter

extension, or no extension at all.

E. EXTENSION TO SATISFY

OCCUPANCY OBLIGATIONS

B. COMPLIANCE-MONITORING—

PHYSICAL INSPECTIONS

If the close of the first year of the credit period with respect to a building is on

or after April 1, 2020, and on or before

December 31, 2022, then, for purposes of

§ 42(f)(3)(A)(ii), the qualified basis for

the building for the first year of the credit

period is calculated by taking into account

any increase in the number of low-income

units by the close of the 6-month period

following the close of that first year.

For purposes of § 1.42-5, an Agency is

not required to conduct compliance-monitoring physical inspections in the period

beginning on April 1, 2020, and ending

on June 30, 2022. Because of high Stateto-State and intra-State variability of

COVID-19 transmission, an Agency, in

consultation with public health experts,

may extend the waiver in the preceding

sentence if the level of transmission makes

such an extension appropriate. Depending

on varying rates of transmission, the extension may be State-wide, may be limited

to specific locales, or may be on a project-by-project basis. No such extension

may go beyond December 31, 2022. The

Agency must resume compliance-monitoring reviews as due under § 1.42-5 once

the waiver expires.

F. CORRECTION PERIOD

For purposes of § 1.42-5, if a correction period that was set by the Agency

ends on or after April 1, 2020, and before

December 31, 2021, then the end of the

correction period (including as already

extended, if applicable) is extended by a

V. GRANT OF RELIEF FOR

OPERATIONAL PROVISIONS

For purposes of § 1.42-5(c)(2)(iii)(C)

(3), between April 1, 2020, and the end

of 2022 only, when the Agency gives an

Owner reasonable notice that it will physically inspect not-yet-identified low-income units, it may treat reasonable notice

as being up to 30 days. Beginning on January 1, 2023, for this purpose reasonable

notice again is generally no more than 15

days.

A. COMPLIANCE-MONITORING—

REVIEW OF TENANT FILES

C. COMMON AREAS AND

AMENITIES

For purposes of § 1.42-5, an Agency is

not required to review tenant files in the

period beginning on April 1, 2020, and

ending on December 31, 2021. The Agency must have resumed tenant-file review

as due under § 1.42-5 as of January 1,

2022.

For purposes of § 1.42-5(c)(2)(iii)(C)

(3), between April 1, 2020, and the end

of 2022, when the Agency gives an Owner reasonable notice that it will review

low-income certifications of not-yet-identified low-income units, it may treat reasonable notice as being up to 30 days.

Beginning on January 1, 2023, for this

purpose reasonable notice again is generally no more than 15 days.

A temporary full or partial unavailability or closure of an amenity or common area in a low-income building or

project does not result in a reduction of

eligible basis of the affected building if

the unavailability or closure is during

some or all of the period from April 1,

2020, to December 31, 2022, and is in response to the COVID-19 pandemic and

not because of other noncompliance with

§ 42. During the above period, an Agency may deny any application of the above

waiver or, based on public health criteria,

may limit the waiver to partial closure,

or to limited or conditional access of an

amenity or common area. (For example, the Agency may apply the waiver

to access an amenity or common area

that is limited to persons wearing masks

or to persons fully vaccinated against

COVID-19.)

D. PERMISSION FOR AGENCIES

TO CONDUCT HEARINGS IN THE

SAME MANNER AND UNDER THE

SAME PROCEDURES AS PRIVATEACTIVITY-BOND HEARINGS

Beginning on April 1, 2020, for the

purposes of QAP approval under § 42(m)

(1)(A), if a public hearing is conducted in

a manner and under procedures such that

§ 1.147(f)-1(d) would be satisfied, taking

into account the date on which the hearing

is held, then the manner and procedures

of the hearing are acceptable for QAP approval under § 42(m)(1)(A).3 Continued

application of the preceding sentence is

not dependent on the continuation of the

COVID-19 pandemic.

For example, while Rev. Proc. 2021-39 is in effect, satisfying the hearing procedures in that revenue procedure satisfies the procedural requirements for QAP hearings.

Bulletin No. 2022–5

459

January 31, 2022

E. EMERGENCY HOUSING FOR

MEDICAL PERSONNEL AND OTHER

ESSENTIAL WORKERS

If individuals are medical personnel

or other essential workers (as defined by

State or local governments) that provide

services during the COVID-19 pandemic,

then, for purposes of providing emergency

housing from April 1, 2020, to December

31, 2022, under Rev. Proc. 2014-49 or under Rev. Proc. 2014-50, Agencies, Issuers,

Owners, and Operators of low-income

housing projects may treat these individuals as if they were Displaced Individuals

(defined under section 5.02 of Rev. Proc.

2014-49 or section 4.04 of Rev. Proc.

2014-50, as applicable). That is, Agencies,

Issuers, Owners, and Operators may provide emergency housing for these individuals pursuant to the provisions of the applicable revenue procedure. See sections

12, 13, and 14 of Rev. Proc. 2014-49 and

sections 5, 6, and 7 of Rev. Proc. 2014-50.

VI. GRANT OF RELIEF FOR

DEADLINES ASSOCIATED WITH

QUALIFIED RESIDENTIAL

RENTAL PROJECTS

In this Section VI, “originally” means

without regard to any extension under Notice 2020-23, Notice 2020-53, or Notice

2021-12 (as clarified by Notice 2021-17).

expenditure period for the bond originally was on or after April 1, 2020, and

before December 31, 2023, then that last

day is postponed to the earlier of eighteen

months from the original due date or December 31, 2023.

VII. EFFECT ON OTHER

DOCUMENTS

Notice 2020-23, Notice 2020-53, Notice 2021-12, Notice 2021-17, Rev. Proc.

2004-39, Rev. Proc. 2014-49, and Rev.

Proc. 2014-50 are amplified.

VIII. DRAFTING INFORMATION

The principal authors of this notice

are Dillon Taylor and Michael Torruella

Costa, Office of Associate Chief Counsel (Passthroughs & Special Industries)

and David White, Office of the Associate

Chief Counsel (Financial Institutions and

Products). For further information regarding this notice relating to the low-income

housing credit, please contact Dillon Taylor or Michael Torruella Costa at (202)

317-4137 (not a toll-free call); for further

information regarding this notice relating

to qualified residential rental projects,

please contact David White at (202) 3174562 (not a toll-free number).

A. THE 12-MONTH TRANSITION

PERIOD TO MEET SET-ASIDES FOR

QUALIFIED RESIDENTIAL RENTAL

PROJECTS

Determination of

Substantially Equal

Periodic Payments

For purposes of section 5.02 of Rev.

Proc. 2004-39, if the last day of a 12-month

transition period for a qualified residential

rental project originally was on or after

April 1, 2020, and before December 31,

2022, then that last day is postponed to

December 31, 2022.

Notice 2022-6

B. THE § 147(d) 2-YEAR

REHABILITATION EXPENDITURE

PERIOD FOR BONDS USED TO

PROVIDE QUALIFIED RESIDENTIAL

RENTAL PROJECTS

If a bond is used to provide a qualified

residential rental project and if the last

day of the § 147(d) 2-year rehabilitation

January 31, 2022

SECTION 1. PURPOSE

.01 This notice provides guidance on

whether a series of payments from an individual account under a qualified retirement plan is considered a series of substantially equal periodic payments within

the meaning of section 72(t)(2)(A)(iv) of

the Internal Revenue Code. This guidance

also applies for purposes of determining

whether a distribution from a non-qualified annuity contract is part of a series

of substantially equal periodic payments

within the meaning of section 72(q)(2)

(D). This notice modifies and supersedes

460

Rev. Rul. 2002-62, 2002-2 CB 710, and

Notice 2004-15, 2004-1 CB 526.

SECTION 2. BACKGROUND

.01 Section 72(t) provides for an additional income tax on early withdrawals

(which generally applies to withdrawals

before age 59½) from qualified retirement plans (as defined in section 4974(c)).

Section 4974(c) provides, in part, that the

term “qualified retirement plan” means (1)

a plan described in section 401 (including a trust exempt from tax under section

501(a)), (2) an annuity plan described in

section 403(a), (3) a tax-sheltered annuity

arrangement described in section 403(b),

(4) an individual retirement account described in section 408(a), or (5) an individual retirement annuity described in

section 408(b).

.02 Section 72(t)(1) provides that if

a taxpayer receives any amount from a

qualified retirement plan, the taxpayer’s

income tax is increased by an amount

equal to 10% of the amount received from

the qualified retirement plan that is includible in gross income. Section 72(t)(2)

sets forth exceptions to this 10% additional tax. Under section 72(t)(2)(A)(iv), one

of the exceptions to the 10% additional tax

is for distributions that are part of a series

of substantially equal periodic payments

(not less frequently than annually) made

for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and designated beneficiary.

.03 Pursuant to section 72(t)(5), the

term “employee” includes any participant,

and in the case of distributions from an

individual retirement account or annuity (IRA), the IRA owner is treated as an

employee for purposes of applying section

72(t).

.04 Section 72(t)(4) provides that if a

distribution is excepted from the 10% additional tax because the distribution is part

of a series of substantially equal periodic payments as described in section 72(t)

(2)(A)(iv) and that series of payments is

subsequently modified (other than by reason of death, disability, or a distribution

to which section 72(t)(10) applies) before

the end of the 5-year period beginning on

the date of the first payment, or before the

employee attains age 59½, the employee’s

tax for the first year of the modification is

Bulletin No. 2022–5

increased by an amount equal to the tax

that, but for the exception in section 72(t)

(2)(A)(iv), would have been imposed,

plus interest for the deferral period.

.05 Q&A-12 of Notice 89-25, 1989-1

CB 662, provides that payments are considered to be substantially equal periodic

payments under section 72(t)(2)(A)(iv) if

they are made in accordance with one of

the following three methods: (1) the required minimum distribution method; (2)

the fixed amortization method; or (3) the

fixed annuitization method.

.06 Rev. Rul. 2002-62 restates the rule

that payments are considered substantially equal periodic payments if they are

made in accordance with one of the three

methods provided in Q&A-12 of Notice

89-25. Section 2.02(c) of Rev. Rul. 200262 modifies the application of the fixed

amortization method and the fixed annuitization method by providing that the interest rate that may be used to apply the

fixed amortization method or the fixed

annuitization method is any interest rate

that is not greater than 120% of the federal

mid-term rate (determined in accordance

with section 1274(d) for either of the two

months immediately preceding the month

in which the distribution begins). In addition, section 2.01(c) of Rev. Rul. 2002-62

modifies the application of the fixed annuitization method by specifying the mortality table that must be used to apply that

method.

.07 Section 72(q)(1) provides that if

a taxpayer receives any amount under a

non-qualified annuity contract, the taxpayer’s income tax is increased by an amount

equal to 10% of the amount received from

the non-qualified annuity contract that is

includible in gross income. Section 72(q)

(2) sets forth exceptions to this 10% additional tax. Under section 72(q)(2)(D),

one of the exceptions to the 10% additional tax is for a distribution that is part

of a series of substantially equal periodic

payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or

joint life expectancies) of the taxpayer and

designated beneficiary. Section 72(q)(3)

provides rules that are generally parallel

to the rules in section 72(t)(4) and apply

if a distribution is excepted from the 10%

additional tax because the distribution is

part of a series of substantially equal peri-

Bulletin No. 2022–5

odic payments and that series of payments

is subsequently modified.

.08 Notice 2004-15 provides that taxpayers may use one of the methods set

forth in Notice 89-25, as modified by Rev.

Rul. 2002-62, to determine whether a

distribution from a non-qualified annuity

contract is part of a series of substantially equal periodic payments under section

72(q)(2)(D).

.09 Final regulations under section

401(a)(9) issued in 2020 provide new

life expectancy tables for determining required minimum distributions that apply

for distribution calendar years beginning

on or after January 1, 2022. See Treas.

Reg. § 1.401(a)(9)-9, issued in T.D. 9930,

85 FR 72427 (Nov. 12, 2020).

SECTION 3. METHODS

.01 General rule. Payments in a series

are considered substantially equal periodic payments within the meaning of section

72(t)(2)(A)(iv) if they are determined in

accordance with one of the three methods

described in section 3.01(a) through (c) of

this notice (which are based on the three

methods described in Rev. Rul. 2002-62).

(a) The required minimum distribution

method. The annual payment for each distribution year is determined by dividing

the account balance for that distribution

year by the number of years from the chosen life expectancy table in section 3.02(a)

of this notice for that distribution year.

Under this method, the account balance,

the number of years from the chosen life

expectancy table, and the resulting annual

payments are redetermined for each distribution year. This redetermination of the

annual payment is not considered a modification of the series of substantially equal

periodic payments, provided that the required minimum distribution method continues to be used and the same life expectancy tables continue to be used, except to

the extent required in section 3.02(b) of

this notice.

(b) The fixed amortization method.

The annual payment for each distribution

year is determined as the amount that will

result in the level amortization of the account balance over a specified number of

years determined using the chosen life

expectancy table under section 3.02(a)

of this notice and an interest rate that is

461

permitted pursuant to section 3.02(c) of

this notice. Under this method, once the

account balance, the number of years from

the chosen life expectancy table, and the

resulting annual payment are determined

for the first distribution year, the annual

payment is the same amount in each succeeding distribution year.

The annual payment for each distribution

year is determined by dividing the account

balance by an annuity factor that is the

present value of an annuity of $1 per year

beginning at the employee’s age and continuing for the life of the employee (or the

joint lives of the employee and designated

beneficiary). The annuity factor is derived

using the mortality rates in § 1.401(a)(9)9(e) and an interest rate that is permitted

pursuant to section 3.02(c) of this notice.

Under this method, once the account balance, the annuity factor, and the resulting

annual payment are determined for the

first distribution year, the annual payment

is the same amount in each succeeding

distribution year.

.02 Other rules. The following rules

apply for purposes of this section 3.

(a) Life expectancy tables. The life

expectancy tables that can be used to determine distribution periods under the

required minimum distribution and fixed

amortization methods are: (1) the Uniform

Lifetime Table in Appendix A of this notice; (2) the Single Life Table in § 1.401(a)

(9)-9(b); or (3) the Joint and Last Survivor

Table in § 1.401(a)(9)-9(d) (which can be

used even if the designated beneficiary is

not the spouse). The number of years that

is used for the required minimum distribution method for a distribution year is

the entry from the table for the employee’s age on the employee’s birthday in

that distribution year. If the Joint and Last

Survivor Table is used, the age of the designated beneficiary on the designated beneficiary’s birthday in the distribution year

is also used. In the case of the required

minimum distribution method, except as

provided section 3.02(b) or section 4 of

this notice, the same life expectancy table

that is used for the first distribution year

must be used in each following distribution year. Thus, if the employee uses the

Single Life Table to apply the required

minimum distribution method in the first

distribution year, the Single Life Table

January 31, 2022

must be used in subsequent distribution

years. The number of years that is used

to apply the fixed amortization method is

the entry from the table for the employee’s

age on the employee’s birthday in the first

distribution year (and, if applicable, the

designated beneficiary’s age on the designated beneficiary’s birthday in that year).

(b) Designated beneficiary under the

Joint and Last Survivor Table. If the Joint

and Last Survivor Table in § 1.401(a)(9)9(d) is used to apply the required minimum distribution method or the fixed

amortization method (or if the fixed annuitization method is applied using an annuity factor determined for the joint lives of

the employee and designated beneficiary),

then the beneficiary whose life expectancy or expected mortality is used must be

the actual designated beneficiary of the

employee with respect to the account

for the year of the determination. If the

employee has more than one beneficiary, the identity and age of the designated

beneficiary used for purposes of each of

the methods described in section 3.01 of

this notice are determined under the rules

for determining the designated beneficiary for purposes of section 401(a)(9). The

designated beneficiary is determined for

a distribution year as of January 1 of the

distribution year, without regard to changes in the designated beneficiary later in

that distribution year or designated beneficiary determinations in prior distribution

years. For example, if an IRA owner starts

distributions from an IRA in 2023 at age

50, and applies either the required minimum distribution method or fixed amortization method using the Joint and Last

Survivor Table for the IRA owner and

the designated beneficiary, and the beneficiaries on January 1, 2023 are 25 and

55 years old, the number of years used

to calculate the payment for 2023 would

be 40.2 (the entry from the Joint and Last

Survivor Table for ages 50 and 55), even

if later in 2023 the 55-year-old is eliminated as a designated beneficiary. However,

under the required minimum distribution

method, if the 55-year-old beneficiary is

eliminated or dies in 2023, that individual

would not be taken into account in future

distribution years (and if there is no designated beneficiary in a future year, the

Single Life Table in § 1.401(a)(9)-9(b) is

used for that distribution year).

January 31, 2022

may be used to apply the fixed amortization method or the fixed annuitization

method is any interest rate that is not more

than the greater of (i) 5% or (ii) 120% of

the federal mid-term rate (determined in

accordance with section 1274(d) for either

of the two months immediately preceding the month in which the distribution

begins). The revenue rulings that include

the section 1274(d) federal mid-term rates

may be found at https://apps.irs.gov/app/

picklist/list/federalRates.html.

(d) Account balance. For purposes of

applying the required minimum distribution method, the account balance for

a distribution year is determined under

§ 1.401(a)(9)-5. For the fixed amortization and fixed annuitization methods, the

account balance must be determined in a

reasonable manner based on the facts and

circumstances. The account balance will

be treated as determined in a reasonable

manner if it is the account balance on any

date within the period that begins on December 31 of the year prior to the date of

the first distribution and ends on the date

of the first distribution.

(e) Changes to account balance. Under all three methods, substantially equal

periodic payments are first calculated

with respect to an account balance as of

the first valuation date selected as described in section 3.02(d) of this notice.

A modification to the series of payments

will occur if, after such date, there is (1)

any addition to the account balance other

than by reason of investment experience,

(2) any transfer of a portion of the account balance to another retirement plan,

or (3) a rollover of the amount received

by the employee.

(f) Distributions from an IRA. In the

case of distributions from an IRA, the IRA

owner is treated as an employee for purposes of applying this notice.

.03 Special rules. The following special rules may apply.

(a) Complete depletion of assets. If, as a

result of following a method of determining substantially equal periodic payments

that qualifies for the exception of section

72(t)(2)(A)(iv), an individual’s assets

in an individual account plan or an IRA

are exhausted, any resulting reduction in

the amount of the final payment (and the

subsequent cessation of payments) is not

462

a modification within the meaning of section 72(t)(4). Accordingly, the recapture

tax described in section 72(t)(4)(A) will

not apply in this case.

(b) One-time change from fixed amortization method or fixed annuitization

method to required minimum distribution

method. An individual who begins distributions using either the fixed amortization

method or the fixed annuitization method

is permitted in any subsequent distribution

year to switch to the required minimum

distribution method to determine the payment for the distribution year of the switch

and all subsequent distribution years, and

this change in method will not be treated

as a modification within the meaning of

section 72(t)(4). Once a change is made

under this paragraph, any subsequent

change from the required minimum distribution method will be a modification for

purposes of section 72(t)(4).

.04 Application to section 72(q). Taxpayers may use one of the methods set

forth in section 3.01 of this notice (applying the rules in section 3.02 of this notice)

to determine whether a distribution from a

non-qualified annuity contract is part of a

series of substantially equal periodic payments under section 72(q)(2)(D). Taxpayers may use the principles of section 3.03

of this notice to determine whether a

change in substantially equal periodic

payments will be treated as a modification

under section 72(q)(3).

SECTION 4. EFFECTIVE DATE AND

TRANSITION RULES

The guidance in this notice replaces the

guidance in Rev. Rul. 2002-62 and Notice

2004-15 for any series of payments commencing on or after January 1, 2023, and

it may be used for a series of payments

commencing in 2022. In the case of a series of payments commencing in a year

prior to 2023 using the required minimum

distribution method, if the payments in

the series are calculated by substituting

the Single Life Table, the Joint and Last

Survivor Table, or the Uniform Lifetime

Table described in section 3.02(a) of this

notice for the corresponding table that was

used under Rev. Rul. 2002-62, then the

substitution will not be treated as a modification within the meaning of section 72(t)

(4) or section 72(q)(3).

Bulletin No. 2022–5

SECTION 5. EFFECT ON OTHER

DOCUMENTS

Rev. Rul. 2002-62 and Notice 2004-15

are modified and superseded.

DRAFTING INFORMATION

The principal authors of this notice are

Arslan Malik and Linda S.F. Marshall of

the Office of the Associate Chief Counsel

(Employee Benefits, Exempt Organizations, and Employment Taxes). For further

information regarding this notice, contact

Arslan Malik or Linda S.F. Marshall at

(202) 317-6700 (not a toll-free number).

Appendix A to Notice 2022-6

Uniform Lifetime Table

Taxpayer's Age

Bulletin No. 2022–5

Life Expectancy

88.2

87.2

86.2

85.2

84.2

83.2

82.2

81.2

80.2

79.2

78.2

77.2

76.2

75.2

74.2

73.3

72.3

71.3

70.3

69.3

68.3

67.3

66.3

65.3

64.3

63.3

62.3

61.3

60.3

59.4

58.4

57.4

56.4

55.4

54.4

53.4

52.4

463

January 31, 2022

Taxpayer's Age

January 31, 2022

Life Expectancy

51.5

50.5

49.5

48.5

47.5

46.5

45.6

44.6

43.6

42.6

41.6

40.7

39.7

38.7

37.7

36.8

35.8

34.9

33.9

33.0

32.0

31.1

30.1

29.2

28.3

27.4

26.5

25.5

24.6

23.7

22.9

22.0

21.1

20.2

19.4

18.5

17.7

16.8

16.0

15.2

14.4

13.7

12.9

12.2

464

Bulletin No. 2022–5

Taxpayer's Age

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120+

Bulletin No. 2022–5

Life Expectancy

11.5

10.8

10.1

9.5

8.9

8.4

7.8

7.3

6.8

6.4

6.0

5.6

5.2

4.9

4.6

4.3

4.1

3.9

3.7

3.5

3.4

3.3

3.1

3.0

2.9

2.8

2.7

2.5

2.3

2.0

465

January 31, 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. 2022–5

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

January 31, 2022

Numerical Finding List1

Bulletin 2022–5

Notices:

2022-1, 2022-02 I.R.B. 304

2022-2, 2022-02 I.R.B. 304

2022-3, 2022-02 I.R.B. 308

2022-4, 2022-02 I.R.B. 309

2022-5, 2022-05 I.R.B. 457

2022-6, 2022-05 I.R.B. 460

Revenue Procedures:

2022-1, 2022-01 I.R.B. 1

2022-2, 2022-01 I.R.B. 120

2022-3, 2022-01 I.R.B. 144

2022-4, 2022-01 I.R.B. 161

2022-5, 2022-01 I.R.B. 256

2022-7, 2022-01 I.R.B. 297

2022-9, 2022-02 I.R.B. 310

2022-11, 2022-03 I.R.B. 449

2022-8, 2022-04 I.R.B. 451

Revenue Rulings:

2022-1, 2022-02 I.R.B. 301

2022-2, 2022-04 I.R.B. 451

Treasury Decisions:

9959, 2022-03 I.R.B. 328

9961, 2022-03 I.R.B. 430

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2021.

January 31, 2022

Bulletin No. 2022–5

Finding List of Current Actions on

Previously Published Items1

Bulletin 2022–5

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2021.

Bulletin No. 2022–5

iii

January 31, 2022

Internal Revenue Service

Washington, DC 20224

Official Business

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