irb 2012-10 (rev. march 5, 2012)

Bulletin No. 2012-10March 5, 2012

HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative interpretations.

INCOME TAX

Notice 2012–18, page 438.This notice informs state housing finance agencies participat-ing in a specified pilot program of an alternative way to satisfycertain inspection and review responsibilities under regulationssection 1.42–5(c)(2). The notice also invites taxpayers to com-ment generally on issues relating to regulations section 1.42–5for potential changes to those rules.

Notice 2012–19, page 440.This notice provides adjusted limitations on housing expensesfor tax year 2012 for purposes of section 911 of the Code.Notices 2006–87, 2007–25, 2007–77, 2008–107, 2010–27and 2011–8 superseded.

Rev. Proc. 2012–17, page 453.This procedure provides the requirements for furnishing sub-stitute Schedule K–1, Partner’s Share of Income, Deductions,Credits, etc., in electronic format.

ESTATE TAX

Notice 2012–21, page 450.This notice grants to qualifying estates a six-month extensionof time for filing an estate tax return (Form 706) to elect porta-bility of an unused exclusion amount provided that qualifyingestates file a request for an extension (Form 4768) within 15months of the decedent’s death. A qualifying estate is the es-tate of a person who died, survived by a spouse, during thefirst half of calendar year 2011, and whose gross estate hasa fair market value that does not exceed $5 million. With the

extension granted by this notice, Form 706 must be filed within15 months of the decedent’s death.

ADMINISTRATIVE

Notice 2012–21, page 450.This notice grants to qualifying estates a six-month extensionof time for filing an estate tax return (Form 706) to elect porta-bility of an unused exclusion amount provided that qualifyingestates file a request for an extension (Form 4768) within 15months of the decedent’s death. A qualifying estate is the es-tate of a person who died, survived by a spouse, during thefirst half of calendar year 2011, and whose gross estate hasa fair market value that does not exceed $5 million. With theextension granted by this notice, Form 706 must be filed within15 months of the decedent’s death.

Rev. Proc. 2012–16, page 452.This procedure provides issuers of qualified mortgage bonds,as defined in section 143(a) of the Code, and issuers of mort-gage credit certificates, as defined in section 25(c), with theUnited States median gross income figure most recently com-puted by the Department of Housing and Urban Development(HUD). The proposed procedure also provides these issuerswith guidance concerning the area median gross incomes ascomputed by HUD. Issuers of qualified mortgage bonds (QMB)and mortgage credit certificates (MCC) must use these incomefigures in determining whether the income limitation placed onthe beneficiaries of the mortgages and certificates may be in-creased because the residences to be financed are located inhigh housing cost areas. See sections 25(c)(2)(A)(iii)(IV) and143(f)(5). Rev. Proc. 2011–37 obsoleted in part.

(Continued on the next page)

Finding Lists begin on page ii.

Rev. Proc. 2012–17, page 453.This procedure provides the requirements for furnishing sub-stitute Schedule K–1, Partner’s Share of Income, Deductions,Credits, etc., in electronic format.

Rev. Proc. 2012–18, page 455.This procedure provides guidance regarding ex parte commu-nications between Appeals and other Internal Revenue Servicefunctions. Rev. Proc. 2000–43 amplified, modified and super-seded.

March 5, 2012 2012–10 I.R.B.

The IRS MissionProvide America’s taxpayers top-quality service by helpingthem understand and meet their tax responsibilities and en-

force the law with integrity and fairness to all.

IntroductionThe Internal Revenue Bulletin is the authoritative instrument ofthe Commissioner of Internal Revenue for announcing officialrulings and procedures of the Internal Revenue Service and forpublishing Treasury Decisions, Executive Orders, Tax Conven-tions, legislation, court decisions, and other items of generalinterest. It is published weekly and may be obtained from theSuperintendent of Documents on a subscription basis. Bulletincontents are compiled semiannually into Cumulative Bulletins,which are sold on a single-copy basis.

It is the policy of the Service to publish in the Bulletin all sub-stantive rulings necessary to promote a uniform application ofthe tax laws, including all rulings that supersede, revoke, mod-ify, or amend any of those previously published in the Bulletin.All published rulings apply retroactively unless otherwise indi-cated. Procedures relating solely to matters of internal man-agement are not published; however, statements of internalpractices and procedures that affect the rights and duties oftaxpayers are published.

Revenue rulings represent the conclusions of the Service on theapplication of the law to the pivotal facts stated in the revenueruling. In those based on positions taken in rulings to taxpayersor technical advice to Service field offices, identifying detailsand information of a confidential nature are deleted to preventunwarranted invasions of privacy and to comply with statutoryrequirements.

Rulings and procedures reported in the Bulletin do not have theforce and effect of Treasury Department Regulations, but theymay be used as precedents. Unpublished rulings will not berelied on, used, or cited as precedents by Service personnel inthe disposition of other cases. In applying published rulings andprocedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,and Service personnel and others concerned are cautionedagainst reaching the same conclusions in other cases unlessthe 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 ofthe 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, Leg-islation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.To the extent practicable, pertinent cross references to thesesubjects are contained in the other Parts and Subparts. Alsoincluded in this part are Bank Secrecy Act Administrative Rul-ings. Bank Secrecy Act Administrative Rulings are issued bythe Department of the Treasury’s Office of the Assistant Secre-tary (Enforcement).

Part IV.—Items of General Interest.This part includes notices of proposed rulemakings, disbar-ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative indexfor the matters published during the preceding months. Thesemonthly indexes are cumulated on a semiannual basis, and arepublished 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.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

2012–10 I.R.B. March 5, 2012

March 5, 2012 2012–10 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Codeof 1986Section 2010.—UnifiedCredit Against Estate Tax

This notice grants to qualifying estates a six-monthextension of time for filing an estate tax return (Form706) to elect portability of an unused exclusionamount provided that qualifying estates file a requestfor an extension (Form 4768) within 15 months ofthe decedent’s death. A qualifying estate is the estateof a person who died, survived by a spouse, duringthe first half of calendar year 2011, and whose grossestate has a fair market value that does not exceed $5million. With the extension granted by this notice,Form 706 must be filed within 15 months of thedecedent’s death. See Notice 2012-21, page 450.

Section 6075.—Time forFiling Estate and GiftTax Returns26 CFR 20.6075–1: Returns; time for filing estate taxreturn.


Section 6081.—Extensionof Time for Filing Returns26 CFR 20.6081–1: Extension of time for filing thereturn.


2012–10 I.R.B. 437 March 5, 2012

Part III. Administrative, Procedural, and MiscellaneousPhysical Inspections PilotProgram

Notice 2012–18

PURPOSE

Under § 1.42–5(c)(2) of the IncomeTax Regulations, State housing financeagencies are required to conduct certainphysical inspections and other buildingreviews. In connection with inspectionsthat are conducted under the Physical In-spection Pilot Program described below,this notice informs those State agenciesof an alternate manner for satisfying thesereview requirements. This notice also so-licits comments generally on § 1.42–5 and,in particular, on the review requirementsof § 1.42–5(c)(2).

BACKGROUND

Section 42 of the Internal RevenueCode sets forth rules for determining theamount of the low-income housing credit,which is allowed as a credit against incometax pursuant to § 38. Section 42(a) pro-vides that the amount of the low-incomehousing credit determined under § 42 forany taxable year in the credit period is anamount equal to the applicable percentageof the qualified basis of each qualifiedlow-income building. A qualified low-in-come building is defined in § 42(c)(2)as any building that is part of a qualifiedlow-income housing project.

A qualified low-income housing projectis defined in § 42(g)(1) as any project forresidential rental property if the projectmeets one of the following tests electedby the taxpayer: (A) At least 20 percentof the residential units in the project arerent-restricted and occupied by individu-als whose income is 50 percent or less ofarea median gross income; or (B) at least40 percent of the residential units in theproject are rent-restricted and occupied byindividuals whose income is 60 percentor less of area median gross income. Alow-income unit is a residential unit thatis rent-restricted and its occupants meetthe applicable income limit elected by thetaxpayer as described in § 42(g)(1)(A) or

(B). Section 42(i)(3)(B)(i) provides that alow-income unit shall not be treated as alow-income unit unless the unit is suitablefor occupancy and used other than on atransient basis. Section 42(i)(3)(B)(ii) pro-vides that the suitability of a unit for oc-cupancy shall be determined under regu-lations prescribed by the Secretary takinginto account local health, safety, and build-ing codes. Failure of the project to meetthe requirements for the test elected by thetaxpayer may result in ineligibility for the§ 42 credit, reduction in the amount of thecredit, and/or recapture of previously al-lowed credits.

Section 1.42–5 provides monitoringprocedures that a State housing financeagency (or its Authorized Delegate withinthe meaning of § 1.42–5(f)(1)), hereafterreferred to as “HFA,” must follow in mon-itoring for compliance with the provisionsof § 42. As part of their compliance-moni-toring responsibilities, HFAs must performphysical inspections and review annuallow-income certifications.

In particular, § 1.42–5(c)(2)(ii) requiresthat, for each low-income housing project,and within prescribed time periods, theHFA must conduct an on-site inspectionof each building in the project and, for atleast 20 percent of the project’s low-in-come units, inspect the units and reviewthe annual low-income certifications, thedocumentation supporting the certifica-tions, and the rent records for the tenantsin those inspected units.

Section 1.42–5(c)(2)(iii) requires theHFA to randomly select which low-incomeunits will be inspected and the recordsreviewed.

Section 1.42–5(c)(5) requires the HFAto report its compliance monitoring ac-tivities annually on Form 8610, “AnnualLow-Income Housing Credit Agencies Re-port.”

In 2010, the White House DomesticPolicy Council (DPC) established theRental Policy Working Group (RPWG) toexplore ways to improve existing Federalrental policies. The RPWG consists ofrepresentatives from the DPC, the Na-tional Economic Council, the Office ofManagement and Budget, and the U.S.

Departments of Housing and Urban De-velopment (HUD), Agriculture, and theTreasury.

The RPWG solicited from a crosssection of affordable-rental-housing de-velopers and managers and State and localofficials (Stakeholders) suggestions formore efficiently achieving Federal rentalobjectives, including the coordination ofprogrammatic rules between the variousFederal rental programs. Stakeholdersidentified many areas where adminis-trative changes could increase overallprogrammatic efficiency and reduce bur-dens on the public. For example, manyprojects benefit from more than one Fed-eral source (e.g., both Federal fundingand low-income housing tax credits). Therules associated with these different pro-grams may require physical inspections ofthe same project that use different inspec-tion protocols. As a result, these projectowners and managers must now spend sig-nificant time preparing for, and respondingto, multiple physical inspection visits forthe same project.

Using input from Stakeholders, theRPWG prepared specific, actionable pro-posals for coordination. One such pro-posal is to avoid duplicative physicalinspections by conducting one coordi-nated inspection. The Physical InspectionPilot Program (Pilot Program) is testingthe feasibility of this proposal in six states(Michigan, Minnesota, Ohio, Oregon,Washington, and Wisconsin).

Under this proposal, the HFAs inthese six states may satisfy their prop-erty-inspection responsibilities under§ 1.42–5(c)(2)(ii) by using either theircurrent property-inspection protocol orthe inspection protocol of HUD’s RealEstate Assessment Center (REAC).1 TheRPWG hopes to ascertain through the PilotProgram whether this sort of coordinatedeffort will generate savings for propertyowners and managers, as well as reducecost burdens on local, State, and Federalgovernments.

If the participating HFA chooses to usethe REAC inspection protocol for a partic-ular project, HUD (or its agent) will con-duct a physical inspection of the project us-

1 Information on the REAC inspection protocol can be accessed electronically through the following link:http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/reac

March 5, 2012 438 2012–10 I.R.B.

ing the REAC inspection protocol on be-half of the HFA. To achieve the desiredefficiencies, these inspections must sat-isfy the HFA’s physical inspection respon-sibilities under § 1.42–5(c)(2)(ii). As de-scribed above, however, § 1.42–5(c)(2)(ii)requires that at least 20 percent of the low-income units in a project be physically in-spected and that the records for those sameunits be reviewed. In some cases, thenumber of low-income units physically in-spected under the REAC inspection proto-col may not satisfy the 20 percent require-ment. Absent an exception, an HFA wouldneed to perform inspections and certifica-tion reviews for any shortfall of inspectedunits in these projects to meet the mini-mum standard under § 1.42–5(c)(2). Thatnecessity would undermine the Pilot Pro-gram’s objective of minimizing duplica-tion of effort and reducing burdens on thepublic. Also, if HUD completes the phys-ical inspections late in the year, the HFAmay not be able to perform its review of theannual low-income certifications for thoseunits timely.

SATISFACTION OF CERTAINPROVISIONS OF § 1.42–5(c)(2)

The Internal Revenue Service recog-nizes the potential inconsistency betweenthe REAC inspection protocol and cer-tain review provisions of § 1.42–5(c)(2)and the potential administrative burdenscaused by those differences. Accordingly,for the HFAs in States that are participatingin the Pilot Program, and during the timeperiod of the Pilot Program (scheduled forNovember 7, 2011, through December 31,2012), if a project is physically inspectedby HUD (or its agent) under the REAC in-spection protocol, then, for that project—

(1) The HFA is deemed to satisfy theminimum 20 percent low-income unitphysical inspection requirement and therequirement to conduct on-site inspec-tions of all buildings in a project under§ 1.42–5(c)(2)(ii); and

(2) The HFA may satisfy the cer-tification review requirement under§ 1.42–5(c)(2)(ii) by reviewing the annuallow-income certifications, the documen-tation supporting the certifications, andthe rent records for the tenants in at least

20 percent of the low-income units in theproject, regardless of whether any of theunits whose files are reviewed are amongthe units that are physically inspected byHUD (or its agent).

Use of the REAC inspection protocoldoes not supersede or preempt any otherrequirements under § 1.42–5. In particular,under § 1.42–5(d)(2), low-income build-ings and units must be suitable for oc-cupancy, taking into account local health,safety, and building codes. Thus, if a par-ticipating HFA becomes aware of any vio-lation of these codes, the HFA must reportthe violation to the Service.

REQUEST FOR COMMENTS

The Service and Treasury Departmentinvite taxpayers to submit written com-ments on issues relating to this notice and§ 1.42–5 generally. In particular, the Ser-vice and Treasury Department encouragetaxpayers to submit written comments re-garding:

(1) Whether the 20 percent rule un-der § 1.42–5(c)(2)(ii)(A) and (B) for bothphysical inspections and certification re-view is appropriate, including—

• Whether this percentage appropriatelybalances the Service’s complianceconcerns against the desirability of re-ducing the inspection burden on HFAs,tenants, and building owners;

• Whether the percentage should varydepending on the type of inspection theHFA is performing (i.e., physical in-spection or annual low-income certifi-cation review);

• Whether the percentage should varywith the number of low-income unitsin a project (that is, the size of thepopulation from which the units thatwill be inspected are to be randomlydrawn); and

• Whether the percentage should varydepending on whether the inspectionis the initial inspection performedunder § 1.42–5(c)(2)(ii)(A) or theon-going inspection performed under§ 1.42–5(c)(2)(ii)(B).

(2) Whether permitting reviews ofthe annual low-income certificationsfor a sample of units different from

the units physically inspected wouldsimplify the inspection process under§ 1.42–5(c)(2)(ii)(A) and (B), and whetherthe use of a different sample would impairthe value of the data obtained.

(3) Whether the Service should amendthe current regulations to provide an ex-ception from the inspection provisions of§ 1.42–5(d) for inspections done under theREAC protocol, similar to the exceptionunder § 1.42–5(d)(3) for inspections per-formed by the Rural Housing Service un-der the section 515 program.

Comments should be submitted byMay 31, 2012. Comments may be mailedto:

Internal Revenue ServiceAttn: CC:PA:LPD:PR(Notice 2011–18)

Room 5203P.O. Box 7604Ben Franklin StationWashington, D.C. 20044

or hand delivered Monday through Fri-day between the hours of 8 a.m. and 4 p.m.to:

Courier’s DeskInternal Revenue ServiceAttn: CC:PA:LPD:PR(Notice 2011–18)

1111 Constitution Avenue, N.W.Washington, D.C. 20224

Alternatively, persons may sub-mit comments electronically viae-mail to the following address:[email protected] should include “Notice 2012–18”in the subject line. All commentssubmitted by the public will be availablefor public inspection and copying in theirentirety.

DRAFTING INFORMATION

The principal author of this notice isJulie Hanlon Bolton of the Office of theAssociate Chief Counsel (Passthroughsand Special Industries). For further infor-mation regarding this notice, please con-tact Ms. Hanlon Bolton at (202) 622–3040(not a toll-free call).

2012–10 I.R.B. 439 March 5, 2012

Determination of Housing CostAmounts Eligible for Exclusionor Deduction for 2012

Notice 2012–19

SECTION 1. PURPOSE

This notice provides adjustments to thelimitation on housing expenses for pur-poses of section 911 of the Internal Rev-enue Code (Code) for specific locations for2012. These adjustments are made on thebasis of geographic differences in housingcosts relative to housing costs in the UnitedStates.

SECTION 2. BACKGROUND

Section 911(a) of the Code allows aqualified individual to elect to excludefrom gross income the foreign earned in-come and housing cost amount of suchindividual. Section 911(c)(1) defines theterm “housing cost amount” as an amountequal to the excess of (A) the housingexpenses of an individual for the taxableyear to the extent such expenses do notexceed the amount determined under sec-tion 911(c)(2), over (B) 16 percent of theexclusion amount (computed on a daily

basis) in effect under section 911(b)(2)(D)for the calendar year in which such taxableyear begins ($259.84 per day for 2012, or$95,100 for the full year), multiplied bythe number of days of that taxable yearwithin the applicable period described insection 911(d)(1). The applicable periodis the period during which the individualmeets the tax home requirement of section911(d)(1) and either the bona fide resi-dence requirement of section 911(d)(1)(A)or the physical presence requirement ofsection 911(d)(1)(B). Assuming that theentire taxable year of a qualified individ-ual is within the applicable period, thesection 911(c)(1)(B) amount for 2012 is$15,216 ($95,100 x .16).

Section 911(c)(2)(A) of the Code lim-its the housing expenses taken into accountin section 911(c)(1)(A) to an amount equalto (i) 30 percent (adjusted as may be pro-vided under the Secretary’s authority un-der section 911(c)(2)(B)) of the amount ineffect under section 911(b)(2)(D) for thecalendar year in which the taxable year ofthe individual begins, multiplied by (ii) thenumber of days of that taxable year withinthe applicable period described in section911(d)(1). Thus, under this general limi-tation, a qualified individual whose entiretaxable year is within the applicable period

is limited to maximum housing expensesof $28,530 ($95,100 x .30) in 2012.

Section 911(c)(2)(B) of the Code au-thorizes the Secretary to issue regulationsor other guidance to adjust the percentageunder section 911(c)(2)(A)(i) based ongeographic differences in housing costsrelative to housing costs in the UnitedStates. Pursuant to this authority, theInternal Revenue Service (IRS) and theTreasury Department published Notice2006–87, 2006–2 C.B. 766, and Notice2007–25, 2007–1 C.B. 760, for 2006, No-tice 2007–77, 2007–2 C.B. 735, for 2007,Notice 2008–107, 2008–2 C.B. 1266, for2008 and 2009, Notice 2010–27, 2010–15I.R.B. 531, for 2009 and 2010, and Notice2011–8, 2011–8 I.R.B. 503, for 2010 and2011 to provide adjustments to the limi-tation on housing expenses for qualifiedindividuals incurring housing expenses incountries with high housing costs relativeto housing costs in the United States.

SECTION 3. TABLE OF ADJUSTEDLIMITATIONS FOR 2012

The following table provides adjustedlimitations on housing expenses (in lieuof the otherwise applicable limitation of$28,530) for 2012.

Country Location

Limitation onHousing Expenses

(daily)


(full year)

Angola Luanda 229.51 84,000

Argentina Buenos Aires 154.37 56,500

Australia Adelaide 89.62 32,800

Australia Brisbane 88.52 32,400

Australia Darwin, Northern Country 83.61 30,600

Australia Gold Coast 88.52 32,400

Australia Melbourne 113.39 41,500

Australia Oakey 88.52 32,400

Australia Perth 121.31 44,400

Australia Sydney 89.57 32,782

Australia Toowoomba 88.52 32,400

Austria Vienna 96.72 35,400

Bahamas, The Nassau 135.79 49,700

Bahrain Bahrain 120.22 44,000

Barbados Barbados 103.01 37,700

March 5, 2012 440 2012–10 I.R.B.

Country Location


(daily)


(full year)

Belgium Antwerp 98.63 36,100

Belgium Brussels 130.33 47,700

Belgium Gosselies 118.31 43,300

Belgium Hoogbuul 98.63 36,100

Belgium Mons 118.31 43,300

Belgium SHAPE/Chievres 118.31 43,300

Bermuda Bermuda 245.90 90,000

Bosnia-Herzegovina Sarajevo 83.61 30,600

Brazil Brasilia 144.26 52,800

Brazil Rio de Janeiro 95.90 35,100

Brazil Sao Paulo 154.64 56,600

Canada Calgary 109.02 39,900

Canada Dartmouth 93.44 34,200

Canada Edmonton 96.99 35,500

Canada Halifax 93.44 34,200

Canada London, Ontario 82.79 30,300

Canada Montreal 154.37 56,500

Canada Ottawa 136.07 49,800

Canada Toronto 134.70 49,300

Canada Vancouver 128.42 47,000

Canada Victoria 91.53 33,500

Canada Winnipeg 90.16 33,000

Cayman Islands Grand Cayman 131.15 48,000

Chile Santiago 140.16 51,300

China Beijing 194.54 71,200

China Hong Kong 312.30 114,300

China Shanghai 155.74 57,001

Colombia Bogota 147.81 54,100

Colombia All cities other than Bogota 134.97 49,400

Costa Rica San Jose 87.43 32,000

Denmark Copenhagen 119.41 43,704

Dominican Republic Santo Domingo 124.32 45,500

Ecuador Guayaquil 84.15 30,800

Ecuador Quito 88.52 32,400

Estonia Tallinn 127.32 46,600

France Garches 231.69 84,800

France Le Havre 96.17 35,200

France Lyon 133.88 49,000

2012–10 I.R.B. 441 March 5, 2012

Country Location


(daily)


(full year)

France Marseille 124.86 45,700

France Montpellier 107.92 39,500

France Paris 231.69 84,800

France Sevres 231.69 84,800

France Suresnes 231.69 84,800

France Versailles 231.69 84,800

Germany Babenhausen 113.66 41,600

Germany Bad Aibling 96.99 35,500

Germany Bad Nauheim 90.98 33,300

Germany Baumholder 108.47 39,700

Germany Berlin 138.80 50,800

Germany Birkenfeld 108.47 39,700

Germany Boeblingen 137.70 50,400

Germany Bonn 114.75 42,000

Germany Butzbach 88.80 32,500

Germany Cologne 153.55 56,200

Germany Darmstadt 113.66 41,600

Germany Frankfurt am Main 118.58 43,400

Germany Friedberg 90.98 33,300

Germany Garmisch-Partenkirchen 103.55 37,900

Germany Gelnhausen 143.17 52,400

Germany Germersheim 85.79 31,400

Germany Giebelstadt 98.09 35,900

Germany Giessen 98.36 36,000

Germany Grafenwoehr 111.75 40,900

Germany Hanau 143.17 52,400

Germany Hannover 84.70 31,000

Germany Heidelberg 107.65 39,400

Germany Idar-Oberstein 108.47 39,700

Germany Ingolstadt 160.11 58,600

Germany Kaiserslautern, Landkreis 139.07 50,900

Germany Kitzingen 98.09 35,900

Germany Leimen 107.65 39,400

Germany Ludwigsburg 137.70 50,400

Germany Mainz 153.55 56,200

Germany Mannheim 107.65 39,400

Germany Munich 160.11 58,600

Germany Nellingen 137.70 50,400

March 5, 2012 442 2012–10 I.R.B.

Country Location


(daily)


(full year)

Germany Neubruecke 108.47 39,700

Germany Ober Ramstadt 113.66 41,600

Germany Oberammergau 103.55 37,900

Germany Pirmasens 139.07 50,900

Germany Rheinau 107.65 39,400

Germany Schwetzingen 107.65 39,400

Germany Seckenheim 107.65 39,400

Germany Sembach 139.07 50,900

Germany Stuttgart 137.70 50,400

Germany Vilseck 111.75 40,900

Germany Wahn 114.75 42,000

Germany Wertheim 98.09 35,900

Germany Wiesbaden 153.55 56,200

Germany Wuerzburg 98.09 35,900

Germany Zweibruecken 139.07 50,900

Germany All cities other than Augsburg,Babenhausen, Bad Aibling, Bad Kreuznach,Bad Nauheim, Baumholder, Berchtesgaden,Berlin, Birkenfeld, Boeblingen, Bonn,Bremen, Bremerhaven, Butzbach, Cologne,Darmstadt, Delmenhorst, Duesseldorf,Erlangen, Flensburg, Frankfurt amMain, Friedberg, Fuerth, Garlstedt,Garmisch-Partenkirchen, Geilenkirchen,Gelnhausen, Germersheim, Giebelstadt,Giessen, Grafenwoehr, Grefrath, Greven,Gruenstadt, Hamburg, Hanau, Handorf,Hannover, Heidelberg, Heilbronn,Herongen, Idar-Oberstein, Ingolstadt,Kaiserslautern, Landkreis, Kalkar,Karlsruhe, Kerpen, Kitzingen, Koblenz,Leimen, Leipzig, Ludwigsburg, Mainz,Mannheim, Mayen, Moenchen-Gladbach,Muenster, Munich, Nellingen, Neubruecke,Noervenich, Nuernberg, Ober Ramstadt,Oberammergau, Osterholz-Scharmbeck,Pirmasens, Rheinau, Rheinberg,Schwabach, Schwetzingen, Seckenheim,Sembach, Stuttgart, Twisteden, Vilseck,Wahn, Wertheim, Wiesbaden, Worms,Wuerzburg, Zirndorf, and Zweibruecken

110.11 40,300

Ghana Accra 98.36 36,000

Greece Argyroupolis 88.52 32,400

Greece Athens 113.66 41,600

Greece Elefsis 113.66 41,600

Greece Ellinikon 113.66 41,600

2012–10 I.R.B. 443 March 5, 2012

Country Location


(daily)


(full year)

Greece Mt. Hortiatis 88.52 32,400

Greece Mt. Parnis 113.66 41,600

Greece Mt. Pateras 113.66 41,600

Greece Nea Makri 113.66 41,600

Greece Perivolaki 88.52 32,400

Greece Piraeus 113.66 41,600

Greece Tanagra 113.66 41,600

Greece Thessaloniki 88.52 32,400

Guatemala Guatemala City 115.03 42,100

Guyana Georgetown 95.63 35,000

Holy See, The Holy See, The 154.37 56,500

Hungary Budapest 88.80 32,500

Hungary Papá 121.58 44,500

India Mumbai 185.57 67,920

India New Delhi 82.66 30,252

Indonesia Jakarta 103.21 37,776

Ireland Dublin 134.15 49,100

Ireland Shannon Area 106.01 38,800

Israel Tel Aviv 138.80 50,800

Italy Catania 90.16 33,000

Italy Genoa 114.21 41,800

Italy Gioia Tauro 85.25 31,200

Italy La Spezia 110.38 40,400

Italy Leghorn 96.72 35,400

Italy Milan 230.60 84,400

Italy Naples 146.45 53,600

Italy Parma 117.21 42,900

Italy Pisa 96.72 35,400

Italy Pordenone-Aviano 117.21 42,900

Italy Rome 154.37 56,500

Italy Sardinia 79.23 29,000

Italy Sigonella 90.16 33,000

Italy Turin 115.30 42,200

Italy Vicenza 118.31 43,300

Italy All cities other than Avellino, Brindisi,Catania, Florence, Gaeta, Genoa, GioiaTauro, La Spezia, Leghorn, Milan, MountVergine, Naples, Nettuno, Parma, Pisa,Pordenone-Aviano, Rome, Sardinia,Sigonella, Turin, Verona, and Vicenza

92.62 33,900

March 5, 2012 444 2012–10 I.R.B.

Country Location


(daily)


(full year)

Jamaica Kingston 112.57 41,200

Japan Akashi 116.67 42,700

Japan Akizuki 102.73 37,600

Japan Atsugi 150.55 55,100

Japan Camp Zama 150.55 55,100

Japan Chiba-Ken 150.55 55,100

Japan Fussa 150.55 55,100

Japan Gifu 203.01 74,300

Japan Gotemba 111.48 40,800

Japan Haneda 150.55 55,100

Japan Iwakuni 117.76 43,100

Japan Kanagawa-Ken 150.55 55,100

Japan Komaki 203.01 74,300

Japan Machidi-Shi 150.55 55,100

Japan Misawa 126.50 46,300

Japan Nagoya 203.01 74,300

Japan Okinawa Prefecture 202.73 74,200

Japan Osaka-Kobe 247.72 90,664

Japan Sagamihara 150.55 55,100

Japan Saitama-Ken 150.55 55,100

Japan Sasebo 126.23 46,200

Japan Tachikawa 150.55 55,100

Japan Tokyo 349.73 128,000

Japan Tokyo-to 150.55 55,100

Japan Yokohama 189.34 69,300

Japan Yokosuka 175.68 64,300

Japan Yokota 150.55 55,100

Kazakhstan Almaty 131.15 48,000

Korea Camp Carroll 83.06 30,400

Korea Camp Colbern 143.44 52,500

Korea Camp Market 143.44 52,500

Korea Camp Mercer 143.44 52,500

Korea K–16 143.44 52,500

Korea Kimhae 78.14 28,600

Korea Kimpo Airfield 143.44 52,500

Korea Munsan 87.98 32,200

Korea Osan AB 90.71 33,200

Korea Pusan 78.14 28,600

2012–10 I.R.B. 445 March 5, 2012

Country Location


(daily)


(full year)

Korea Pyongtaek 89.07 32,600

Korea Seoul 143.44 52,500

Korea Suwon 143.44 52,500

Korea Taegu 86.07 31,500

Korea Tongduchon 78.96 28,900

Korea Uijongbu 84.97 31,100

Korea Waegwan 83.06 30,400

Korea All cities other than Ammo Depot #9, CampCarroll, Camp Colbern, Camp Market,Camp Mercer, Changwon, Chinhae,Chunchon, K–16, Kimhae, Kimpo Airfield,Kunsun, Kwangju, Munsan, Osan AB,Pusan, Pyongtaek, Seoul, Suwon, Taegu,Tongduchon, Uijongbu, and Waegwan

82.79 30,300

Kuwait Kuwait City 175.96 64,400

Kuwait All cities other than Kuwait City 157.65 57,700

Luxembourg Luxembourg 126.50 46,300

Macedonia Skopje 96.72 35,400

Malaysia Kuala Lumpur 126.23 46,200

Malaysia All cities other than Kuala Lumpur 92.08 33,700

Malta Malta 137.98 50,500

Mexico Mazatlan 84.70 31,000

Mexico Merida 103.55 37,900

Mexico Mexico City 118.58 43,400

Mexico Monterrey 90.71 33,200

Mexico All cities other than Ciudad Juarez,Cuernavaca, Guadalajara, Hermosillo,Matamoros, Mazatlan, Merida, Metapa,Mexico City, Monterrey, Nogales, NuevoLaredo, Reynosa, Tapachula, Tijuana,Tuxtla Gutierrez, and Veracruz

107.65 39,400

Mozambique Maputo 107.92 39,500

Namibia Windhoek 87.70 32,100

Netherlands Amsterdam 144.54 52,900

Netherlands Aruba 98.36 36,000

Netherlands Brunssum 108.74 39,800

Netherlands Eygelshoven 108.74 39,800

Netherlands Hague, The 183.88 67,300

Netherlands Heerlen 108.74 39,800

Netherlands Hoensbroek 108.74 39,800

Netherlands Hulsberg 108.74 39,800

Netherlands Kerkrade 108.74 39,800

March 5, 2012 446 2012–10 I.R.B.

Country Location


(daily)


(full year)

Netherlands Landgraaf 108.74 39,800

Netherlands Maastricht 108.74 39,800

Netherlands Papendrecht 110.93 40,600

Netherlands Rotterdam 110.93 40,600

Netherlands Schaesburg 108.74 39,800

Netherlands Schinnen 108.74 39,800

Netherlands Schiphol 144.54 52,900

Netherlands Ypenburg 183.88 67,300

Netherlands All cities other than Amsterdam, Aruba,Brunssum, Coevorden, Eygelshoven,The Hague, Heerlen, Hoensbroek,Hulsberg, Kerkrade, Landgraaf, Maastricht,Margraten, Papendrecht, Rotterdam,Schaesburg, Schinnen, Schiphol, andYpenburg

110.93 40,600

Netherlands Antilles Curacao 125.14 45,800

New Zealand Auckland 97.54 35,700

New Zealand Wellington 92.35 33,800

Nicaragua Managua 86.89 31,800

Nigeria Abuja 98.36 36,000

Norway Oslo 141.26 51,700

Norway Stavanger 119.95 43,900

Norway All cities other than Oslo and Stavanger. 103.01 37,700

Panama Panama City 96.99 35,500

Philippines Cavite 106.56 39,000

Philippines Manila 106.56 39,000

Poland Poland 80.33 29,400

Portugal Alverca 141.26 51,700

Portugal Lisbon 141.26 51,700

Qatar Doha 99.08 36,264

Qatar All cities other than Doha 88.52 32,400

Russia Moscow 295.08 108,000

Russia Saint Petersburg 163.93 60,000

Russia Sakhalin Island 211.75 77,500

Russia Vladivostok 211.75 77,500

Russia Yekaterinburg 129.51 47,400

Rwanda Kigali 86.07 31,500

Saudi Arabia Jeddah 83.79 30,667

Saudi Arabia Riyadh 109.29 40,000

Singapore Singapore 184.43 67,500

2012–10 I.R.B. 447 March 5, 2012

Country Location


(daily)


(full year)

South Africa Pretoria 107.38 39,300

Spain Barcelona 110.93 40,600

Spain Madrid 188.25 68,900

Spain Rota 113.39 41,500

Spain Valencia 108.20 39,600

Spain All cities other than Barcelona, Madrid,Rota, Seville, Seville Province, andValencia

81.69 29,900

Suriname Paramaribo 90.16 33,000

Switzerland Bern 181.69 66,500

Switzerland Geneva 257.10 94,100

Switzerland Zurich 107.16 39,219

Switzerland All cities other than Bern, Geneva, andZurich

89.89 32,900

Taiwan Taipei 126.20 46,188

Tanzania Dar Es Salaam 120.22 44,000

Thailand Bangkok 161.20 59,000

Trinidad and Tobago Port of Spain 148.91 54,500

Turkey Izmir-Cigli 86.34 31,600

Turkey Yamanlar 86.34 31,600

Ukraine Kiev 196.72 72,000

United Arab Emirates Abu Dhabi 135.76 49,687

United Arab Emirates Dubai 156.21 57,174

United Kingdom Basingstoke 112.29 41,099

United Kingdom Bath 112.02 41,000

United Kingdom Bracknell 169.67 62,100

United Kingdom Bristol 105.74 38,700

United Kingdom Brookwood 116.12 42,500

United Kingdom Cambridge 117.49 43,000

United Kingdom Caversham 201.64 73,800

United Kingdom Cheltenham 140.98 51,600

United Kingdom Croughton 117.21 42,900

United Kingdom Fairford 116.94 42,800

United Kingdom Farnborough 149.45 54,700

United Kingdom Felixstowe 111.75 40,900

United Kingdom Gibraltar 121.90 44,616

United Kingdom Harrogate 123.50 45,200

United Kingdom High Wycombe 169.67 62,100

United Kingdom Kemble 116.94 42,800

March 5, 2012 448 2012–10 I.R.B.

Country Location


(daily)


(full year)

United Kingdom Lakenheath 145.90 53,400

United Kingdom Liverpool 106.01 38,800

United Kingdom London 228.42 83,600

United Kingdom Loudwater 173.50 63,500

United Kingdom Menwith Hill 123.50 45,200

United Kingdom Mildenhall 145.90 53,400

United Kingdom Oxfordshire 115.85 42,400

United Kingdom Plymouth 115.85 42,400

United Kingdom Portsmouth 115.85 42,400

United Kingdom Reading 169.67 62,100

United Kingdom Rochester 120.22 44,000

United Kingdom Southampton 120.77 44,200

United Kingdom Surrey 132.25 48,402

United Kingdom Waterbeach 119.67 43,800

United Kingdom Wiltshire 113.66 41,600

United Kingdom All cities other than Basingstoke,Bath, Belfast, Birmingham, Bracknell,Bristol, Brookwood, Brough, Cambridge,Caversham, Chelmsford, Cheltenham,Chicksands, Croughton, Dunstable,Edinburgh, Edzell, Fairford, Farnborough,Felixstowe, Ft. Halstead, Gibraltar,Glenrothes, Greenham Common,Harrogate, High Wycombe, Hythe,Kemble, Lakenheath, Liverpool, London,Loudwater, Menwith Hill, Mildenhall,Nottingham, Oxfordshire, Plymouth,Portsmouth, Reading, Rochester,Southampton, Surrey, Waterbeach, Welford,West Byfleet, and Wiltshire

116.12 42,500

Venezuela Caracas 155.74 57,000

Vietnam Hanoi 127.87 46,800

Vietnam Ho Chi Minh City 114.75 42,000

SECTION 4. ELECTION TO APPLY2012 ADJUSTED LIMITATIONS TO2011 TAXABLE YEAR

For some locations, the limitation onhousing expenses provided in section 3 ofthis notice may be higher than the limita-tion on housing expenses provided in the“Table of Adjusted Limitations for 2011”in Notice 2011–8. A qualified individ-ual incurring housing expenses in such alocation during 2011 may apply the ad-justed limitation on housing expenses pro-

vided in section 3 of this notice in lieuof the amounts provided in the “Table ofAdjusted Limitations for 2011” in Notice2011–8 (and as set forth in the Instructionsto Form 2555 (2011)).

Treasury and the IRS anticipate that fu-ture annual notices providing adjustmentsto housing expense limitations will make asimilar election available to qualified indi-viduals that incur housing expenses in theimmediately preceding year. For example,when adjusted housing expense limitations

for 2013 are issued, it is expected that tax-payers will be permitted to apply those ad-justed limitations to the 2012 taxable year.

EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2006–87,2006–2 C.B. 766, Notice 2007–25, 2007–1C.B. 760, Notice 2007–77, 2007–2 C.B.735, Notice 2008–107, 2008–2 C.B. 1266,Notice 2010–27, 2010–15 I.R.B. 531, andNotice 2011–8, 2011–8 I.R.B. 503.

2012–10 I.R.B. 449 March 5, 2012

EFFECTIVE DATE

This notice is effective for taxable yearsbeginning on or after January 1, 2012.However, as provided in section 4, a tax-payer may elect to apply the 2012 adjustedhousing limitations contained in section 3of this notice to his or her taxable year be-ginning in 2011.


The principal author of this notice isSusan E. Massey of the Office of AssociateChief Counsel (International). For furtherinformation regarding this notice, contactMs. Massey at (202) 622–3840 (not a toll-free call).

Extension of Time to Filean Estate Tax Return Solelyto Elect Portability of aDeceased Spousal UnusedExclusion Amount

Notice 2012–21

SECTION 1. PURPOSE

This notice grants to qualifying estates,for the purpose of electing under section2010(c)(5)(A) of the Internal RevenueCode (Code) (a “portability election”),a six-month extension of time for filingForm 706 (United States Estate (and Gen-eration-Skipping Transfer) Tax Return).This extension applies when the execu-tor of a qualifying estate did not file aForm 4768 (Application for Extension ofTime To File a Return and/or Pay U.S.Estate (and Generation-Skipping Trans-fer) Taxes) within nine months after thedecedent’s date of death, and therefore theestate did not receive the benefit of theautomatic six-month extension. An ex-ecutor of a qualifying estate that wants toobtain the extension granted by this noticemust file the application for a six-monthextension no later than 15 months afterthe decedent’s date of death. With theextension granted by this notice, the Form706 of a qualifying estate will be due 15months after the decedent’s date of death.

Generally, this notice defines a qualify-ing estate as the estate of a decedent (1)whose date of death is after December 31,

2010, and before July 1, 2011, (2) who issurvived by a spouse, and (3) whose grossestate does not exceed the $5,000,000 ba-sic exclusion amount for 2011. The exten-sion provided in this notice is granted pur-suant to authority under section 6081 of theCode.


2.01. In General

Sections 302(a)(1) and 303(a) of theTax Relief, Unemployment InsuranceReauthorization, and Job Creation Actof 2010, Pub. L. No. 111–312, 124Stat. 3296, 3302 (2010), amended section2010(c) of the Code to allow the estate ofa decedent who is survived by a spouseto make a portability election to permitthe surviving spouse to apply the dece-dent’s unused exclusion (the deceasedspousal unused exclusion amount, orDSUE amount) to the surviving spouse’sown transfers during life and at death. Theportability election may be made only bythe estates of decedents dying after De-cember 31, 2010.

Section 2010(c)(2), as amended, de-fines the applicable exclusion amount usedto determine the applicable credit amountas the sum of the basic exclusion amountand, in the case of a surviving spouse, theDSUE amount. Section 2010(c)(3) definesthe basic exclusion amount as $5,000,000,to be adjusted for inflation in each year af-ter calendar year 2011. Section 2010(c)(4)defines the DSUE amount as the lesserof (A) the basic exclusion amount or (B)the excess of the basic exclusion amountof the last deceased spouse of the surviv-ing spouse over the amount with respectto which the tentative tax is determinedunder section 2001(b)(1) on the estate ofsuch deceased spouse.

Section 2010(c)(5)(A) provides cer-tain requirements that the executor of adeceased spouse must satisfy to allowa surviving spouse to apply the DSUEamount of a deceased spouse. In par-ticular, the executor of the estate of thedeceased spouse must file a Form 706that includes a computation of the DSUEamount and on which the executor electsportability of the DSUE amount. Undersection 2010(c)(5)(A), a portability elec-tion is effective only if made on a Form706 that is filed within the time prescribed

by law (including extensions) for filingsuch return.

2.02. Filing Dates and Availability of anExtension

Under section 6075(a), the due date forfiling an estate tax return is nine monthsafter the date of the decedent’s death. Sec-tion 6081(a) provides that the Secretarymay grant a reasonable extension of timefor filing any return and that, except inthe case of taxpayers who are abroad, nosuch extension may be for more than sixmonths.

Section 20.6081–1(a) of the Estate TaxRegulations provides that a request for anextension of time to file Form 706 must bemade by filing Form 4768 with the InternalRevenue Service (Service) office desig-nated in the application’s instructions andmust include an estimate of the amounts ofestate and generation-skipping transfer taxliabilities with respect to the estate.

Section 20.6081–1(b) grants an estatean automatic six-month extension of timeto file Form 706 if Form 4768 is filed on orbefore the due date for filing Form 706 andin accordance with the procedures under§ 20.6081–1(a).

Section 20.6081–1(c) provides that theService, in its discretion and upon theshowing of good and sufficient cause, maygrant an extension of time to file Form706 to an estate that did not request anautomatic extension of time to file Form706 prior to the due date for Form 4768prescribed in § 20.6081–1(b). Such anextension cannot be for more than sixmonths beyond the filing date prescribedin section 6075(a), unless the executoris abroad. Section 20.6081–1(c) furtherprovides that, to obtain such an extension,Form 4768 must be filed in accordancewith the procedures under § 20.6081–1(a)and must contain a detailed explanation ofwhy it is impossible or impractical to file areasonably complete Form 706 by the duedate, and an explanation showing goodcause for not requesting the automaticextension.

2.03. Notice 2011–82

Notice 2011–82, 2011–42 I.R.B. 516,issued on October 17, 2011, alerts tax-payers of the applicable requirements toelect portability of the decedent’s DSUE

March 5, 2012 450 2012–10 I.R.B.

amount. In addition, Notice 2011–82 an-nounces that the estate of a decedent whois survived by a spouse will be deemed toelect portability of the DSUE amount bythe timely filing of a complete and prop-erly-prepared Form 706. Furthermore,the notice provides that a timely-filed andcomplete Form 706 that is prepared inaccordance with the instructions for thatform will be deemed to contain the com-putation of the DSUE amount until suchtime as the Service revises Form 706 toexpressly contain the computation of theDSUE amount. Notice 2011–82 also pro-vides guidance to the estates of deceasedspouses who choose not to make the porta-bility election. Finally, Notice 2011–82announces that the Treasury Department(Treasury) and the Service intend to issueregulations to implement the portabilityprovisions included in section 2010(c) ofthe Code and, therefore, the notice invitespublic comment on a number of issuesaffecting portability for Treasury and theService to consider.

SECTION 3. DISCUSSION

In response to the invitation for publiccomment on issues affecting portability inNotice 2011–82, Treasury and the Servicehave received comments on a variety of is-sues. Several commentators raised the is-sue of an extension of time to file Form706 to make the portability election. Thesecommentators noted that the executors ofestates of decedents dying in 2011, partic-ularly during the early part of 2011, didnot have the benefit of guidance on elect-ing portability of the decedent’s DSUEamount and, further, that executors of es-tates having assets with a value not in ex-cess of $5,000,000 might not have knownabout the requirement to file Form 706 tomake the portability election at all.

In addition to the comments received inresponse to the invitation for public com-ment in Notice 2011–82, the Service hasalso received inquiries regarding the avail-ability of an extension to file Form 706from practitioners representing estates ofdecedents dying in early 2011 that hadmissed the due date for filing Form 706and Form 4768.

Treasury and the Service agree thatmany executors of estates of decedentswho died in the first half of 2011 that werenot otherwise required to file Form 706

because of the value of the gross estatemay have been unaware of the requirementto file Form 706 to make the portabilityelection. Such an executor would not havefiled Form 706 and, therefore, would nothave made the portability election thatis deemed made by the timely filing ofa complete and properly-prepared Form706. For the same reasons, such an execu-tor would not have timely filed Form 4768to obtain an automatic six-month exten-sion of time to file Form 706. Accordingly,Treasury and the Service believe it isappropriate to offer to executors of quali-fying estates a six-month extension of timeto file Form 706 until 15 months after thedecedent’s date of death, provided that theexecutor of the estate files an applicationfor a six-month extension on Form 4768under the authority of this notice beforethe date that is 15 months from decedent’sdate of death.

SECTION 4. SCOPE ANDAPPLICATION

4.01. This notice applies to qualify-ing estates of decedents who are citizensor residents of the United States. For pur-poses of this notice, a qualifying estate isan estate in which:

a. The decedent is survived by a spouse;b. The decedent’s date of death is after

December 31, 2010, and before July 1,2011; and

c. The fair market value of the dece-dent’s gross estate does not exceed$5,000,000.

4.02. For purposes of this notice, anestate is not a qualifying estate if the es-tate effectively requested an automaticsix-month extension of time to file Form706 under § 20.6081–1(b) by timely filingForm 4768 on or before the due date forfiling Form 706.

4.03. If it is later determined that theestate does not meet the requirements ofa qualifying estate, no extension will betreated as granted under this notice, and theForm 706, therefore, will not be timely.

SECTION 5. GUIDANCE

5.01. Treasury and the Service grant theexecutor of a qualifying estate a six-monthextension of time until 15 months after thedecedent’s date of death to file Form 706 if

the executor meets the following require-ments:

a. The executor files Form 4768 withthe Service office designated in the form’sinstructions;

b. The executor files Form 4768 nolater than 15 months from the decedent’sdate of death; and

c. The executor enters at the top ofForm 4768 the notation “Notice 2012–21,Extension for Good Cause Shown” or oth-erwise sufficiently notifies the Service onor with Form 4768 that Form 4768 is beingfiled pursuant to this notice.

5.02. The executor of a qualifying es-tate following the requirements of subsec-tion 5.01 of this section will be deemed tohave shown good and sufficient cause andto have provided all explanations requiredunder § 20.6081–1(c) without the need forthe executor to include any further expla-nations on Form 4768.

5.03. If, prior to the issuance of thisnotice, an executor of a qualifying estatefiled a Form 706 after the due date for fil-ing Form 706 had passed, but before 15months from the decedent’s date of death,without having timely requested an auto-matic six-month extension of time to fileForm 706, the executor may file Form4768 in accordance with the requirementsof this section and the extension will relateback to the due date of Form 706.

5.04. An executor of a qualifying es-tate may file Form 4768 at the same timeas the executor files Form 706, as long asboth are filed on or before the date that is15 months after decedent’s date of death.

5.05. For purposes of section 6081,except in the case of an executor abroad,Treasury and the Service cannot grant ad-ditional extensions of time to file Form 706beyond the six-month extension granted inthis notice, regardless of whether an execu-tor files a Form 4768 requesting an addi-tional extension of time to file.


The principal author of this no-tice is Karlene Lesho of the Office ofAssociate Chief Counsel (Passthroughsand Special Industries). For furtherinformation regarding this notice, contactKarlene Lesho at (202) 622–3090 (not atoll-free call).

2012–10 I.R.B. 451 March 5, 2012

26 CFR 601.601: Rules and regulations.(Also Part I, §§ 25, 103, 143; 1.25–4T, 1.103–1,6a.103A–2.)

Rev. Proc. 2012–16

SECTION 1. PURPOSE

This revenue procedure provides guid-ance with respect to the United States andarea median gross income figures that areto be used by issuers of qualified mortgagebonds, as defined in § 143(a) of the Inter-nal Revenue Code, and issuers of mortgagecredit certificates, as defined in § 25(c), incomputing the housing cost/income ratiodescribed in § 143(f)(5).


.01 Section 103(a) provides that, ex-cept as provided in § 103(b), gross incomedoes not include interest on any state orlocal bond. Section 103(b)(1) providesthat § 103(a) shall not apply to any pri-vate activity bond that is not a qualifiedbond (within the meaning of § 141). Sec-tion 141(e) provides that the term “qual-ified bond” includes any private activitybond that (1) is a qualified mortgage bond,(2) meets the applicable volume cap re-quirements under § 146, and (3) meets theapplicable requirements under § 147.

.02 Section 143(a)(1) provides that theterm “qualified mortgage bond” means abond that is issued as part of a “qualifiedmortgage issue”. Section 143(a)(2)(A)provides that the term “qualified mort-gage issue” means an issue of one or morebonds by a state or political subdivisionthereof, but only if (i) all proceeds of theissue (exclusive of issuance costs and areasonably required reserve) are to be usedto finance owner-occupied residences; (ii)the issue meets the requirements of sub-sections (c), (d), (e), (f), (g), (h), (i), and(m)(7) of § 143; (iii) the issue does notmeet the private business tests of para-graphs (1) and (2) of § 141(b); and (iv)with respect to amounts received morethan 10 years after the date of issuance,repayments of $250,000 or more of prin-cipal on financing provided by the issueare used not later than the close of the firstsemi-annual period beginning after thedate the prepayment (or complete repay-ment) is received to redeem bonds that arepart of the issue.

.03 Section 143(f) imposes eligibilityrequirements concerning the maximumincome of mortgagors for whom financingmay be provided by qualified mortgagebonds. Section 25(c)(2)(A)(iii)(IV) pro-vides that recipients of mortgage creditcertificates must meet the income re-quirements of § 143(f). Generally, under§§ 143(f)(1) and 25(c)(2)(A)(iii)(IV),these income requirements are met onlyif all owner-financing under a qualifiedmortgage bond and all certified indebt-edness amounts under a mortgage creditcertificate program are provided to mort-gagors whose family income is 115 percentor less of the applicable median familyincome. Under § 143(f)(6), the incomelimitation is reduced to 100 percent of theapplicable median family income if thereare fewer than three individuals in thefamily of the mortgagor.

.04 Section 143(f)(4) provides that theterm “applicable median family income”means the greater of (A) the area mediangross income for the area in which the res-idence is located, or (B) the statewide me-dian gross income for the state in which theresidence is located.

.05 Section 143(f)(5) provides for anupward adjustment of the income limita-tions in certain high housing cost areas.Under § 143(f)(5)(C), a high housingcost area is a statistical area for whichthe housing cost/income ratio is greaterthan 1.2. The housing cost/income ratiois determined under § 143(f)(5)(D) bydividing (a) the applicable housing priceratio by (b) the ratio that the area mediangross income bears to the median grossincome for the United States. The applica-ble housing price ratio is the new housingprice ratio (new housing average purchaseprice for the area divided by the new hous-ing average purchase price for the UnitedStates) or the existing housing price ratio(existing housing average area purchaseprice divided by the existing housing aver-age purchase price for the United States),whichever results in the housing cost/in-come ratio being closer to 1. This incomeadjustment applies only to bonds issued,and nonissued bond amounts elected, afterDecember 31, 1988. See § 4005(h) of theTechnical and Miscellaneous Revenue Actof 1988, 1988–3 C.B. 1, 311 (1988).

.06 The Department of Housingand Urban Development (HUD) hascomputed the median gross income for

the United States, the states, and statisticalareas within the states. The incomeinformation was released to the HUDregional offices on December 01, 2011,and may be obtained by calling the HUDreference service at 1–800–245–2691.The income information is also availableat HUD’s World Wide Web site,http://www.huduser.org/portal/datasets/il.html,which provides a menu from which youmay select the year and type of data ofinterest. The Internal Revenue Serviceannually publishes the median grossincome for the United States.

.07 The most recent nationwide aver-age purchase prices and average area pur-chase price safe harbor limitations werepublished on April 11, 2011, in Rev. Proc.2011–23, 2011–15 I.R.B. 626.

SECTION 3. APPLICATION

.01 When computing the income re-quirements of § 143(f), issuers of quali-fied mortgage bonds and mortgage creditcertificates must use either (1) the me-dian gross income for the United States,the states, and statistical areas within thestates, as released to the HUD regionaloffices on May 31, 2011, or (2) the me-dian gross income for the United States,the states, and statistical areas within thestates, as released to the HUD regional of-fices on December 01, 2011.

.02 If an issuer uses the median grossincome for the United States, the states,and statistical areas within the states, asreleased to the HUD regional offices onMay 31, 2011, to compute the housingcost/income ratio under § 143(f)(5),the issuer must use the median grossincome for the United States, the states,and statistical areas within the states, asreleased to the HUD regional offices onMay 31, 2011, for all purposes under§ 143(f). Likewise, if an issuer usesthe median gross income for the UnitedStates, the states, and statistical areaswithin the states, as released to the HUDregional offices on December 01, 2011,to compute the housing cost/income ratiounder § 143(f)(5), the issuer must use themedian gross income for the United States,the states, and statistical areas within thestates, as released to the HUD regionaloffices on December 01, 2011, for allpurposes under § 143(f).

March 5, 2012 452 2012–10 I.R.B.

SECTION 4. EFFECT ON OTHERREVENUE PROCEDURES

.01 Rev. Proc. 2011–37, 2011–26I.R.B. 931, is obsolete except as providedin §§ 3.01, 3.02, or 5.01 of this revenueprocedure.

.02 This revenue procedure does not af-fect the effective date provisions of Rev.Rul. 86–124, 1986–2 C.B. 27. Those ef-fective date provisions will remain opera-tive at least until the Service publishes anew revenue ruling that conforms the ap-proach to effective dates set forth in Rev.Rul. 86–124 to the general approach takenin this revenue procedure.

SECTION 5. EFFECTIVE DATES

.01 Issuers must use the United Statesand area median gross income figuresspecified in § 3.01 of this revenue proce-dure for commitments to provide financingthat are made, or (if the purchase precedesthe financing commitment) for residencesthat are purchased, in the period that be-gins on December 01, 2011, and ends onthe date when these United States and areamedian gross income figures are renderedobsolete by a new revenue procedure.


The principal authors of this rev-enue procedure are David White andTimothy Jones of the Office of AssociateChief Counsel (Financial Institutions& Products). For further informationregarding this revenue procedure, contactMr. White or Mr. Jones at (202) 622–3980(not a toll-free call).

26 CFR 601.602: Tax forms and instructions.(Also Part 1, sections 6031, 1.6031(b)–1T.)

Rev. Proc. 2012–17

SECTION 1. PURPOSE

.01 This revenue procedure providesthe requirements for furnishing substi-tute Schedule K–1, Partner’s Share ofIncome, Deductions, Credits, etc., in elec-tronic format. A partnership (includingan Electing Large Partnership, as definedin section 775 of the Internal Revenue

Code) that follows the procedures setforth in this revenue procedure will sat-isfy the requirements of section 6031(b)of the Internal Revenue Code and section1.6031(b)–1T(a)(1) of the Income TaxRegulations.


.01 Section 6031(a) of the Code pro-vides, in part, that every partnership shallmake a return for each taxable year, stat-ing specifically the items of its gross in-come and deductions, and such other infor-mation as the Secretary may by forms andregulations prescribe, and shall include inthe return the names and addresses of theindividuals who would be entitled to sharein the taxable income if distributed and theamount of the distributive share of each in-dividual.

.02 Section 6031(b) provides, in part,that each partnership required to file a re-turn for any partnership taxable year shall(on or before the day on which the returnfor such taxable year was required to befiled) furnish to each person who is a part-ner or who holds an interest in such part-nership as a nominee for another person atany time during such taxable year a copyof such information required to be shownon such return as may be required by reg-ulations.

.03 Section 1.6031(b)–1T provides, inpart, that each partnership required to filea return for any partnership taxable yearshall (on or before the day on which the re-turn for such taxable year is required to befiled) furnish to each person who is a part-ner or who holds an interest in such part-nership as a nominee for another person atany time during such taxable year a writ-ten statement containing the informationprescribed by section 1.6031(b)–1T(a)(3)and any additional information required byform or accompanying instructions. Thisinformation includes the partner’s distribu-tive share of any partnership income, gain,loss, deduction, or credit required to beshown on the partnership return.

.04 Rev. Proc. 2011–61, 2011–52I.R.B. 990, provides guidance on therequirements for forms accepted as sub-stitutes for official IRS forms. Section 7.1of Rev. Proc. 2011–61 sets forth specificguidelines for substitute Schedule K–1s.Section 7.1.1 of Rev. Proc. 2011–61provides, in part, that substitute Schedule

K–1s should be as close as possible toexact replicas of copies of the official IRSschedules.

SECTION 3. ELECTRONICFURNISHING OF SCHEDULEK–1

.01 A person required by section6031(b) to furnish a written statement onSchedule K–1 (furnisher) to the person towhom it is required to be furnished (recip-ient) may furnish the Schedule K–1 in anelectronic format in lieu of a paper format.A furnisher who meets the requirementsof Sections 4 through 10 of this revenueprocedure will be treated as furnishingthe Schedule K–1 in a timely manner andcomplying with the provisions of this rev-enue procedure.

SECTION 4. CONSENT

.01 In general. The recipient musthave affirmatively consented to receivethe Schedule K–1 in an electronic format.The consent may be made electronicallyin any manner that reasonably demon-strates that the recipient can access theSchedule K–1 in the electronic format inwhich it will be furnished to the recip-ient. Alternatively, the consent may bemade in a paper document if the consent isconfirmed electronically by the recipientand that consent reasonably demonstratesthat the recipient can access the ScheduleK–1 in the electronic format in which itwill be furnished to the recipient. A newconsent is not required if a partnershipundergoes a technical termination undersection 708(b)(1)(B).

.02 Withdrawal of consent. The consentrequirement of Section 4.01 will not be sat-isfied if the recipient withdraws the con-sent and the withdrawal takes effect beforethe statement is furnished. The furnishermay provide that a withdrawal of consenttakes effect either on the date it is receivedby the furnisher or on a subsequent datedetermined by the furnisher and commu-nicated to the recipient within a reasonableperiod of time after the furnisher receivesthe withdrawal. The furnisher may alsoprovide that a request for a paper statementwill be treated as a withdrawal of consent.

.03 Change in hardware or software re-quirements. If a change in hardware orsoftware required to access the Schedule

2012–10 I.R.B. 453 March 5, 2012

K–1 creates a material risk that the recipi-ent will not be able to access the ScheduleK–1, the furnisher must, prior to changingthe hardware or software, provide the re-cipient with a notice. The notice must de-scribe the revised hardware and softwarerequired to access the Schedule K–1 andinform the recipient that a new consent toreceive the Schedule K–1 in the revisedelectronic format must be provided to thefurnisher. After changing the revised hard-ware and software, the furnisher must ob-tain from the recipient, in the manner de-scribed in Section 4.01 of this revenue pro-cedure, a new consent or confirmation ofconsent to receive the Schedule K–1 elec-tronically.

.04 Examples. The following examplesillustrate the rules of Section 4 of this rev-enue procedure:

(1). Example 1. Furnisher F sends Recipient R aletter stating that R may consent to receive ScheduleK–1 electronically on a website instead of in a pa-per format. The letter contains instructions explain-ing how to consent to receive Schedule K–1 electron-ically by accessing the website, downloading the con-sent document, completing the consent document ande-mailing the completed consent back to F. The con-sent document posted on the website uses the sameelectronic format that F will use for the electronicallyfurnished Schedule K–1. R reads the instructions andsubmits the consent in the manner provided in the in-structions. R has consented to receive the ScheduleK–1 electronically in the manner described in Sec-tion 4 of this revenue procedure.

(2). Example 2. Furnisher F sends Recipient Ra secure e-mail stating that R may consent to receiveSchedule K–1 electronically instead of in a paper for-mat. The secure e-mail contains an attachment in-structing R how to consent to receive Schedule K–1electronically. The e-mail attachment uses the sameelectronic format that F will use for the electronicallyfurnished Schedule K–1. R opens the attachment,reads the instructions, and submits the consent in themanner provided in the instructions. R has consentedto receive Schedule K–1 electronically in the mannerdescribed in Section 4 of this revenue procedure.

(3). Example 3. Furnisher F posts a notice onits website stating that Recipient R may receiveSchedule K–1 electronically instead of in a paperformat. The website contains instructions on how Rmay access a secure webpage and consent to receivethe statements electronically. R will receive the K–1through the secure webpage in the same format asthe consent documents. By accessing the securewebpage and giving consent in the manner providedin the instructions on the website, R has consented toreceive Schedule K–1 electronically in the mannerdescribed in Section 4 of this revenue procedure.

SECTION 5. REQUIREDDISCLOSURES

.01 In general. Prior to, or at the timeof, a recipient’s consent, the furnisher mustprovide to the recipient a clear and con-spicuous disclosure statement containingeach of the disclosures described in Sec-tions 5.02 through 5.08 of this revenue pro-cedure. The statement may be electronicor on paper. The statement must provideinstructions on how to access and print thestatement.

.02 Paper statement. The furnishermust inform the recipient that the Sched-ule K–1 will be furnished on paper if therecipient does not consent to receive itelectronically.

.03 Scope and duration of consent. Thefurnisher must inform the recipient of thescope and duration of the consent. For ex-ample, the furnisher must inform the re-cipient whether the consent applies to eachSchedule K–1 required to be furnished af-ter the consent is given until it is with-drawn in the manner described in Section4.02 of this revenue procedure or only tothe first Schedule K–1 required to be fur-nished after the consent is given.

.04 Post-consent request for a paperstatement. The furnisher must inform therecipient of any procedure for obtaining apaper copy of the recipient’s statement af-ter providing the consent described in Sec-tion 4.01 of this revenue procedure andwhether a request for a paper statementwill be treated as a withdrawal of consent.

.05 Withdrawal of consent. The fur-nisher must inform the recipient that—

(1) The recipient may withdraw con-sent by writing (electronically or on pa-per) to the person or department whosename, mailing address, telephone number,and e-mail address is provided in the dis-closure statement;

(2) The furnisher may provide that awithdrawal of consent takes effect eitheron the date it is received by the furnisheror on a subsequent date determined by thefurnisher and communicated to the recipi-ent within a reasonable period of time afterthe furnisher receives the withdrawal.

(3) The furnisher will confirm the with-drawal and the date on which it takes ef-fect in writing (either electronically or onpaper); and

(4) A withdrawal of consent does notapply to a statement that was furnished

electronically in the manner described inthis revenue procedure before the date onwhich the withdrawal of consent takes ef-fect.

.06 Notice of termination. The fur-nisher must inform the recipient of theconditions under which a furnisher willcease furnishing statements electronicallyto the recipient (for example, the recipi-ent’s withdrawal from the partnership).

.07 Updating information. The fur-nisher must inform the recipient of theprocedures for updating the informationneeded by the furnisher to contact the re-cipient. The furnisher must inform the re-cipient of any change in the furnisher’scontact information.

.08 Hardware and software require-ments. The furnisher must describe tothe recipient the hardware and softwarerequired to access, print, and retain theSchedule K–1, and the date when theSchedule K–1 will no longer be availableon the website. The furnisher must informthe recipient that the Schedule K–1 maybe required to be printed and attached to aFederal, State, or local income tax return.

SECTION 6. FORMAT

.01 The electronic version of the Sched-ule K–1 must contain all required infor-mation and comply with the instructionsapplicable to the Schedule K–1 and appli-cable revenue procedures and publicationsrelating to substitute statements to recipi-ents.

SECTION 7. NOTICE

.01 In general. The furnisher must no-tify the recipient if the statement is postedon a website. The notice may be deliveredby mail, electronic mail, or in person. Thenotice must provide instructions on how toaccess and print the statement. The noticemust include the following statement incapital letters, “IMPORTANT TAX RE-TURN DOCUMENT AVAILABLE.” Ifthe notice is provided by electronic mail,the foregoing statement must be on thesubject line of the electronic mail.

.02 Undeliverable electronic address.If an electronic notice described in Sec-tion 7 of this revenue procedure is returnedas undeliverable, and the correct electronicaddress cannot be obtained from the fur-nisher’s records or from the recipient, the

March 5, 2012 454 2012–10 I.R.B.

furnisher must furnish the notice by mailor in person within 30 calendar days afterthe electronic notice is returned.

SECTION 8. AMENDED SCHEDULEK–1

.01 If the furnisher has amended a re-cipient’s Schedule K–1 that was furnishedelectronically, the furnisher must furnishthe amended Schedule K–1 to the recipi-ent electronically within 30 calendar daysof the date that the Schedule K–1 hasbeen amended. If the recipient’s Sched-ule K–1 was furnished through a websiteposting and the furnisher has amendedthe Schedule K–1, the furnisher must no-tify the recipient that it has posted theamended Schedule K–1 on the websitewithin 30 calendar days of such postingin the manner described in Section 7.01of this revenue procedure. The furnishermust provide the amended Schedule K–1or the notice by mail or in person if—

(1) An electronic notice of the websiteposting of an original Schedule K–1 or theamended Schedule K–1 was returned asundeliverable; and

(2) The recipient has not provided a newe-mail address.

SECTION 9. ACCESS PERIOD

.01 A Schedule K–1, or amendedSchedule K–1, furnished on a websitemust be retained on the website for twelvemonths following the end of the partner-ship’s tax year to which the Schedule K–1relates, or six months after the date of is-suance of the Schedule K–1, (or amendedSchedule K–1), whichever is later.

SECTION 10. PAPER STATEMENTSAFTER WITHDRAWAL OF CONSENT

.01. If a recipient withdraws consent toreceive a statement electronically and thewithdrawal takes effect before the state-ment is furnished electronically, a paperstatement must be furnished. Notwith-standing Section 7.03, an amended Sched-ule K–1 shall be considered a new state-ment for purposes of determining whethera paper statement must be furnished fol-lowing a withdrawal of consent under thissection when the withdrawal occurs be-tween the date the original Schedule K–1was furnished and the date the amended

Schedule K–1 is furnished. A paper state-ment furnished after the statement duedate under this section will be consideredtimely if furnished within 30 calendar daysafter the date the withdrawal of consent isreceived by the furnisher.

SECTION 11. APPROVAL OFSUBSTITUTE SCHEDULE K–1

.01 The furnisher will not need IRS ap-proval to use a substitute Schedule K–1 un-der the procedures described in Rev. Proc.2011–61 if the electronic copy it furnishesis an exact copy of the official ScheduleK–1.

SECTION 12. FAILURE TO FURNISH

.01 If a furnisher fails to comply withthe requirements of this revenue proce-dure, the furnisher may be deemed to havefailed to furnish the Schedule K–1 to therecipient. See section 6722 for penaltiesfor failure to furnish correct payee state-ments.

SECTION 13. OTHER RELATEDDOCUMENTS

.01. For rules regarding the elec-tronic filing of the Form 1065, U.S. Re-turn of Partnership Income, see section6011(e)(2) and section 301.6011–3 ofthe Procedure and Administration Reg-ulations. For rules regarding substituteSchedule K–1, see Rev. Proc. 2011–61,2011–52 I.R.B. 990, and successor publi-cations and instructions.

SECTION 14. EFFECTIVE DATE

This revenue procedure applies on andafter Feb. 13, 2012.

SECTION 15. DRAFTINGINFORMATION

.01 The principal author of this rev-enue procedure is Michael E. Hara ofthe Office of Associate Chief Counsel(Procedure and Administration). Mr. Haramay be contacted at (202) 622–4910 (nota toll-free number).

26 CFR 601.106: Ex Parte communications betweenappeals and other Internal Revenue Service employ-ees.

Rev. Proc. 2012–18


Section 1001(a) of the Internal RevenueService Restructuring and Reform Act of1998, Pub. L. No. 105–206, 112 Stat.685 (RRA), required the Commissioner ofInternal Revenue to develop and imple-ment a plan to reorganize the Internal Rev-enue Service (IRS). In addition, the RRAspecifically directed the Commissioner to“ensure an independent appeals functionwithin the Internal Revenue Service, in-cluding the prohibition * * * of ex partecommunications between appeals officersand other Internal Revenue Service em-ployees to the extent that such communi-cations appear to compromise the indepen-dence of the appeals officers.” RRA sec-tion 1001(a)(4). In accordance with thatdirective, the Department of the Treasuryand the IRS issued guidance in Rev. Proc.2000–43, 2000–2 C.B. 404.

Since the issuance of Rev. Proc.2000–43 in October 2000, the IRS hasmade changes to some of its business prac-tices and adopted new ones that did notexist at the time that the revenue procedurewas issued. Accordingly, Treasury andthe IRS issued Notice 2011–62, 2011–32I.R.B. 126 (Aug. 8, 2011), which set fortha proposed revenue procedure to reviseRev. Proc. 2000–43 by addressing thesechanged circumstances, as well as clari-fying and modifying the rules in light ofthe IRS’ experience working with thatrevenue procedure. Also, the revenueprocedure was redesigned from a questionand answer format to a narrative format toimprove usability. In connection with thatchange, the material was rearranged andorganized under appropriate headings tomake it easier to find.

Notice 2011–62 invited public com-ment regarding the proposed revenue pro-cedure. Treasury and the IRS consideredall comments received and the proposedrevenue procedure has been modified totake into account the concerns raised. Forexample, the remedies section has beenmodified to provide that Appeals employ-ees shall ask the taxpayer/representativefor input regarding what is an appropriate

2012–10 I.R.B. 455 March 5, 2012

remedy. The final agency decision makerregarding the appropriate remedy in eachcase will be a second-level manager. Also,the “opportunity to participate” section hasbeen modified to clarify that if no agree-ment can be reached regarding a mutuallyacceptable date and time for the discus-sion or meeting, Appeals should notifythe taxpayer/representative of the date andtime that the discussion or meeting willtake place. After having the discussion ormeeting, Appeals should share with thetaxpayer/representative the substance ofthe discussion or meeting, as appropri-ate, and give the taxpayer/representativea reasonable period of time within whichto respond. Additionally, the discussionof the role of Appeals with respect to thedevelopment of settlement initiatives hasbeen clarified. Lastly, consistent with therule that the ex parte communication rulesdo not apply to communications betweenAppeals and Counsel with respect to casesdocketed in the Tax Court, the sectionregarding remand memoranda in collec-tion due process cases has been revisedto remove the prohibition on includinglegal analysis or legal advice in remandmemoranda.

In addition, the Internal Revenue Man-ual (IRM) will be revised to provideadditional guidance, as appropriate, re-garding the ex parte communication rulesand training will be provided to all af-fected functions. Many of the commentswill be addressed in the IRM or trainingrather than in the revenue procedure. Fur-thermore, although not adopted in thisrevenue procedure, Appeals will considerimplementing some mechanism to trackbreaches of the ex parte communicationrules. It is envisioned that this trackingmechanism will help Appeals executivesmonitor breaches of the ex parte communi-cation rules and the steps taken by Appealsto rectify any breaches of those rules. Anytracking mechanism that is adopted willgenerically describe the breaches of the exparte communication rules and will not becase or employee specific.

The procedures set forth in this revenueprocedure are designed to accommodatethe overall interests of tax administration,while preserving operational features thatare vital to Appeals’ case resolution pro-cesses within the structure of the IRS andensuring open lines of communication be-tween Appeals and the taxpayer/represen-

tative. Consistent with section 1001(a)(4),this revenue procedure does not adopt theformal ex parte procedures that would ap-ply in a judicial proceeding. It is designedto ensure the independence of the Appealsorganization, while preserving the role ofAppeals as a flexible administrative settle-ment authority, operating within the IRS’overall framework of tax administrationresponsibilities.

.01 Highlights. As previously providedin Rev. Proc. 2000–43:

(1) Appeals will retain procedures for:(a) Premature referrals.(b) Raising certain new issues.(c) Seeking review and comments from

the originating function with respect tonew information or evidence furnished bythe taxpayer/representative.

(2) Appeals will continue to be ableto obtain legal advice from the Office ofChief Counsel, subject to the limitationsset forth in section 2.06(1), below.

(3) The Commissioner and other IRSofficials responsible for overall IRS oper-ations (including Appeals), as referencedin section 2.07(5), below, may continue tocommunicate ex parte with Appeals to ful-fill their responsibilities.

.02 Notable Differences.(1) Guiding principles have been added

to aid in understanding the overall ap-proach to applying the ex parte communi-cation rules.

(2) Definitions for certain terms havebeen added or clarified.

(3) Transmittals and the permissiblecontent of the administrative file havebeen clarified.

(4) The application of the ex parte com-munication rules to collection due process(CDP) cases, including those CDP casesthat are remanded by the Tax Court, hasbeen addressed.

(5) The discussion of Appeals’ involve-ment in multifunctional meetings has beenexpanded.

(6) The application of the ex parte com-munication rules in the context of alter-native dispute resolution proceedings hasbeen addressed.

(7) The remedies available to taxpayersin the event of a breach of the ex partecommunication rules have been clarified.

(8) A statement that the ex parte com-munication rules do not create substantiverights affecting a taxpayer’s liability or the

IRS’ ability to determine, assess, or collectthat tax liability has been added.

SECTION 2. GUIDANCECONCERNING EX PARTECOMMUNICATIONS AND THEAPPLICATION OF RRA SECTION1001(a)(4)

.01 Definitions. For purposes of thisrevenue procedure and the application ofRRA section 1001(a)(4), the terms setforth below are defined as follows:

(1) Ex Parte Communication. An “exparte communication” is a communicationthat takes place between any Appeals em-ployee (e.g., Appeals Officers, SettlementOfficers, Appeals Team Case Leaders,Appeals Tax Computation Specialists) andemployees of other IRS functions, withoutthe taxpayer/representative being given anopportunity to participate in the commu-nication. The term includes all forms ofcommunication, oral or written. Writtencommunications include those that aremanually or electronically generated.

(a) Communications Outside the Scopeof the Term “Ex Parte Communication.”The term “ex parte communication” doesnot include the following (not an exhaus-tive list):

(i) Database Inquiries. Account in-quiries, transcript requests, and other simi-lar inquiries conducted in an electronic en-vironment are not considered communica-tions because they do not involve a dia-logue or interaction between two or moreindividuals. This exception does not ap-ply to the administrative file, which maybe maintained electronically in whole or inpart. For a discussion of the rules applica-ble to the administrative file, see section2.03(4), below.

(ii) Communications Solely Between orAmong Appeals Employees. These are notconsidered ex parte communications be-cause they do not involve employees fromIRS functions outside of Appeals.

(iii) Communications with IRS Func-tions Other than Originating Functions.Special rules apply to communicationsbetween Appeals employees and employ-ees of certain IRS functions other thanoriginating functions, as defined in sec-tion 2.01(2), below. Employees in otherIRS functions include those in Counsel,Criminal Investigation, Competent Au-thority, Taxpayer Advocate Service, and

March 5, 2012 456 2012–10 I.R.B.

the Commissioner and other IRS officialswith overall supervisory responsibilities.For a discussion of communications withthose functions, see 2.06, 2.07(2), 2.07(3),2.07(4), and 2.07(5), respectively.

(iv) Communications with Other Gov-ernmental Entities. These are not con-sidered ex parte communications becauseRRA section 1001(a)(4) only applies tocommunications between Appeals andother IRS employees, and the persons withwhom Appeals is communicating at othergovernmental entities do not fall into thatcategory. See section 2.08, below, forexamples.

(v) Communications in Which the Tax-payer/Representative Is Given an Oppor-tunity to Participate. These are not con-sidered ex parte communications becausethe taxpayer/representative is offered achance to be involved in the communica-tion. Even if the taxpayer/representativechooses not to participate in the communi-cation, the ex parte communication rulesdo not apply.

(2) Originating Function. An “origi-nating function” is an organization withinthe IRS that makes determinations that aresubject to the Appeals process. For pur-poses of this revenue procedure, the termincludes the Examination, Collection, andService Center (Campus) functions, ortheir successor organizations. For a dis-cussion of communications with Counselor Criminal Investigation, see sections2.06 and 2.07(2), respectively. For a dis-cussion of communications with other IRSfunctions or other governmental entities,see sections 2.07 and 2.08, respectively.None of those functions are originatingfunctions.

(3) Opportunity to Participate.(a) Oral communications. The phrase

“opportunity to participate” means thatthe taxpayer/representative will be given areasonable opportunity to attend a meetingor be a participant in a conference callbetween Appeals and the originating func-tion when the strengths and weaknessesof the facts, issues, or positions in thetaxpayer’s case are discussed. The tax-payer/representative will be notified of ascheduled meeting or conference call andinvited to participate. If the taxpayer/rep-resentative is unable to participate in themeeting or conference call at the sched-uled time, reasonable accommodations

will be made to reschedule it. See alsosection 2.01(3)(d), below.

(b) Written communications. A tax-payer/representative is considered to havebeen given an “opportunity to participate”with respect to a written communicationthat is received by Appeals if the tax-payer/representative is furnished a copyof the written communication and given achance to respond to it either orally or inwriting.

(c) Waiver. If the taxpayer/representa-tive is given an opportunity to participatein a discussion but declines to participate,Appeals should proceed with the discus-sion or meeting but should document thetaxpayer’s/representative’s declination. Ataxpayer/representative has the option ofgranting a waiver on a communication-by-communication basis or a waiver coveringall communications that might occur dur-ing the course of Appeals’ consideration ofa specified case. If a taxpayer/representa-tive provides a blanket waiver with respectto a particular case, the taxpayer/represen-tative may revoke that waiver at any time,effective with respect to communicationsoccurring subsequent to the revocation.

(d) Unreasonable delay. The IRS willnot delay scheduling a meeting for a pro-tracted period of time to accommodatethe taxpayer/representative. Facts and cir-cumstances will govern what constitutesa reasonable delay. If the taxpayer/rep-resentative seeks to unreasonably delaya meeting or conference call, Appealsshould proceed with the discussion ormeeting but should document the reasonfor proceeding without the taxpayer/rep-resentative. Additionally, if no agreementcan be reached regarding a mutually ac-ceptable date and time for the discussionor meeting, Appeals should notify thetaxpayer/representative of the date andtime that the discussion or meeting willtake place. If the taxpayer/representativedoes not participate in the discussion ormeeting, Appeals should share with thetaxpayer/representative the substance ofthe discussion or meeting, as appropriate,and give the taxpayer/representative a rea-sonable period of time within which torespond.

.02 Guiding Principles. Except asspecifically addressed in other provisionsof this revenue procedure, the followingguiding principles govern communica-

tions between Appeals and other IRSfunctions, including Counsel.

(1) Principles of Tax Administration. Itis the role of the IRS, and those employeescharged with the duty of interpreting thelaw, to determine the reasonable meaningof various Code provisions in light of theCongressional purpose in enacting them;to apply and administer the law in a reason-able and practical manner; and to performthis work in a fair and impartial manner,with neither a government nor a taxpayerpoint of view. See Rev. Proc. 64–22,1964–1 C.B. 689.

(2) Appeals’ Independence. Appealsserves as the administrative dispute reso-lution forum for any taxpayer contestingan IRS compliance action. It has long beenAppeals’ mission “to resolve tax contro-versies, without litigation, on a basis that isfair and impartial to both the Governmentand the taxpayer and in a manner that willenhance voluntary compliance and publicconfidence in the integrity and efficiencyof the Service.” IRM 8.1.1.1(1). RRAsection 1001(a)(4) established a statutorybasis for Appeals’ independence by re-quiring that the Commissioner “ensure anindependent appeals function within theInternal Revenue Service . . . .” Ratherthan establish an external appeals function(as suggested in some legislative propos-als), RRA maintained Appeals within theIRS while seeking to significantly rein-force its independence. Consequently,despite their distinct roles within tax ad-ministration and required adherence topolicies set by the Commissioner, Appealsand other IRS functions, including Coun-sel, share a responsibility to interact —in all circumstances — in a manner thatpreserves and promotes Appeals’ inde-pendence. To further this independence,Appeals must continue its practice ofimpartial decision making while coordi-nating with other IRS functions to carryout the Commissioner’s policies on taxadministration.

Independence, therefore, is one of Ap-peals’ most important core values, andthe RRA statutory prohibition on ex partecommunications “to the extent that suchcommunications appear to compromisethe independence of the appeals officers”is a significant component of Appeals’independence. The guidance set forth inthis revenue procedure is designed to ac-commodate the overall interests of tax ad-

2012–10 I.R.B. 457 March 5, 2012

ministration while ensuring that Appealsis adequately insulated from influence (orthe appearance of influence) by other IRSfunctions, thereby providing Appeals withan unencumbered working environmentwithin which to objectively and indepen-dently evaluate the facts and law that arerelevant to each case and quantify the haz-ards of litigation based on that evaluation.

(3) Legal Advice.(a) In General. The Chief Counsel is

the legal adviser to the Commissioner andthe IRS’ officers and employees on allmatters pertaining to the interpretation,administration, and enforcement of theinternal revenue laws and related statutes.I.R.C. § 7803(b)(2)(A). As reflected inthe Chief Counsel’s mission statement,the IRS’ mission statement, and section2.02(1), above, attorneys in the Office ofChief Counsel are expected to providelegal advice based on an independentdetermination of the “correct and impar-tial interpretation of the internal revenuelaws” and by applying “the [tax] law withintegrity and fairness to all.” The fact thatvarious attorneys in the Office of ChiefCounsel may be simultaneously engagedin multiple activities, including some ac-tivities involving an advocacy role, doesnot diminish the responsibility of each toexercise independent judgment in render-ing legal advice.

(b) Appeals. Appeals employees gen-erally are not bound by the legal ad-vice that they receive from the Office ofChief Counsel with respect to their cases.Rather, the legal advice is but one fac-tor that Appeals will take into accountin its consideration of the case. Appealsemployees remain ultimately responsiblefor independently evaluating the strengthsand weaknesses of the issues in the casesassigned to them and making indepen-dent judgments concerning the overallstrengths and weaknesses of the cases andthe hazards of litigation. Accordingly,Appeals may obtain legal advice from theOffice of Chief Counsel consistent withthis revenue procedure without compro-mising Appeals’ independence.

(4) Opportunity to Participate. As pro-vided in section 2.01(1) and (3), above,by definition, if the taxpayer/representa-tive is given an opportunity to participatewith respect to a communication, that com-munication is not ex parte, and, thus, the

communication is permissible under the exparte communication rules.

(5) Exceptions. Not all communica-tions between Appeals employees and em-ployees of other IRS functions are prohib-ited, even if ex parte. For example, as de-scribed in more detail in section 2.03(2),below, communications regarding ministe-rial, administrative, or procedural mattersare permissible. Similarly, as described inmore detail in section 2.04, below, Appealsmay listen to or be briefed on generic, non-case-specific discussions of issues with-out violating the ex parte communicationrules.

(6) Communications with Other IRSFunctions. To fulfill its role of provid-ing an independent dispute resolutionfunction within the IRS, Appeals mustbe able to make fully informed, indepen-dent judgments regarding the strengthsand weaknesses of positions and to prop-erly evaluate the hazards of litigation incases within its jurisdiction. To accom-plish these tasks, Appeals stays abreastof relevant legal and tax administrationdevelopments, including the views andanalysis of stakeholders, as well as theCommissioner’s policies and operationalgoals. One effective and efficient wayof obtaining some of this informationis for Appeals to participate in generic,noncase-specific discussions with otherIRS functions, including Counsel, such asparticipation in multifunctional meetings.Hence, Appeals’ participation in thesediscussions or meetings is permissible un-der the ex parte communication rules, asdescribed in more detail in section 2.04,below.

In general, Appeals may not engage indiscussions with the originating functionregarding the strengths and weaknesses ofthe issues and positions in cases or with re-spect to matters other than ministerial, ad-ministrative, or procedural matters, with-out providing the taxpayer/representativean opportunity to participate. For a fullerdiscussion of these rules, see section 2.03,below.

(7) Curing a Breach of the Ex ParteCommunication Rules. Most breaches ofthe ex parte communication rules may becured by timely notifying the taxpayer/rep-resentative of the situation, sharing thecommunication or information in question,and affording the taxpayer/representativea reasonable period of time within which

to respond. The specific administrativeremedy that may be made available in anyparticular case is within the sole discre-tion of Appeals. For a fuller discussion ofremedies, see section 2.10, below.

(8) No Substantive Rights. The ex partecommunication rules set forth in this rev-enue procedure do not create substantiverights affecting the taxpayer’s tax liabilityor the IRS’ ability to determine, assess, orcollect that tax liability, including statutoryinterest and any penalties, if applicable.

.03 Communications with OriginatingFunction.

(1) General Rule. Ex parte communica-tions between Appeals employees and em-ployees of originating functions are pro-hibited to the extent the communicationsappear to compromise Appeals’ indepen-dence. See RRA section 1001(a)(4). Asdiscussed more fully below, not all ex partecommunications are prohibited.

(2) Ministerial, Administrative, orProcedural Matters. Communications be-tween Appeals and an originating functionregarding ministerial, administrative, orprocedural matters during any stage of acase are permissible without involving thetaxpayer/representative. If communica-tions with the originating function extendbeyond ministerial, administrative, or pro-cedural matters in that the substance ofthe issues in the case is addressed, thosecommunications are prohibited unless thetaxpayer/representative is given an oppor-tunity to participate.

(a) Examples. Communications regard-ing ministerial, administrative, or proce-dural matters include, but are not limitedto, the following:

(i) Communications about whethercertain information was requested andwhether it was received.

(ii) Communications about the avail-ability of a document referred to in theworkpapers that the Appeals Officer can-not locate in the file.

(iii) Communications to clarify the con-tent of illegible documents or writings.

(iv) Communications regarding casecontrols on the IRS’ management infor-mation systems.

(v) Communications relating to tax cal-culations that are solely mathematical innature.

(vi) Communications about whetherany closed cases exist that involve or af-fect the taxpayer or a related party, or other

March 5, 2012 458 2012–10 I.R.B.

information about a closed case (includ-ing the terms on which a closed case wasresolved), that do not extend beyond whatis in the public or administrative record.Examples of these closed cases include,but are not limited to, cases involvingbankruptcy, innocent spouse, TEFRApartnership, or criminal investigation is-sues. Any discussion about the substanceof a closed case extending beyond whatis in the public or administrative record isprohibited unless the taxpayer/representa-tive is given an opportunity to participate.For purposes of the preceding sentence,any information contained in the adminis-trative file for the closed case or any of theIRS’ databases is considered to be part ofthe administrative record. Moreover, thepublic or administrative record limitationdescribed in this paragraph does not applyto discussions between Appeals and theoriginating function in connection witha post-settlement conference or equiva-lent communication. For a discussion ofpost-settlement conferences, see section2.03(11), below. Additionally, this para-graph is limited to closed cases and doesnot apply to communications with respectto the case that Appeals is reviewing. Fora discussion of communications relating toother pending cases that involve or affectthe taxpayer or a related party, see section2.03(13), below.

(vii) Communications regarding gen-eral information about related cases, suchas the number of other pending cases in-volving the same or substantially similartype of transaction or issue, e.g., tax sheltertransactions or industry-wide issues, andthe aggregate amount of money in dis-pute in those cases. This paragraph alsoincludes communications about the exis-tence or status of related cases, such ascases involving a promoter, material advi-sor, or tax return preparer. For a discussionof communications with respect to closedcases that involve or affect the taxpayer ora related party, see section 2.03(2)(a)(vi),above. For a discussion of communica-tions relating to other pending cases thatinvolve or affect the taxpayer or a relatedparty, see section 2.03(13), below.

(viii) Communications regarding thestatus of the case that Appeals is review-ing, such as whether the case or an issuein the case has been resolved or when acase is expected to be closed. This doesnot include any discussion of the terms

of the resolution of an issue prior to thecase being closed or the issue resolvedwith finality, such as by the parties enter-ing into a closing agreement. Permittedcommunications concerning the status ofthe case should be limited to a direct, nar-row exchange of information without anysurrounding discussion. They are not in-tended to provide the originating functionor other IRS function a chance to discussthe strengths and weaknesses of the caseor position in the case, advocate for aparticular result, object to a potential res-olution, or otherwise attempt to influenceAppeals’ decision in any way.

(ix) Communications regarding math-ematical errors affecting the proposed taxliability discovered upon computationalreview. These errors should be discussedwith both the taxpayer/representative andthe originating function before the cor-rection is made, but the discussions maybe held separately. If the error involvesthe interpretation of a legal principle orapplication of the law to a particular setof facts, however, the taxpayer/represen-tative should be given an opportunity toparticipate in any scheduled meetings withthe originating function to discuss this typeof discrepancy. In some cases, Appealsmay choose to return the case to the orig-inating function for further developmentand correction.

(x) Communications referring a refundclaim filed during the Appeals process tothe originating function for consideration.See section 2.03(9), below.

(xi) Communications in connectionwith a CDP hearing to verify compliancewith legal or administrative requirements;communications with respect to verifica-tion of assets/liabilities involving a col-lection alternative during a CDP hearing;or communications regarding deadlinesrelating to a remanded CDP case. Seesections 2.03(10)(b) and (c)(i)(B), below.

(3) Prohibited Communications. Ex-amples of communications between Ap-peals and an originating function that areprohibited unless the taxpayer/representa-tive is given an opportunity to participateinclude, but are not limited to, the follow-ing:

(a) Discussions about the accuracy ofthe facts presented by the taxpayer and therelative importance of the facts to the de-termination.

(b) Discussions of the relative merits oralternative legal interpretations of authori-ties cited in a protest or in a report preparedby the originating function.

(c) Discussions of the originating func-tion’s perception of the demeanor or cred-ibility of the taxpayer or taxpayer’s repre-sentative.

(d) Discussions of the originatingfunction’s views concerning the level ofcooperation (or lack thereof) of the tax-payer/representative during the originatingfunction’s consideration of the case.

(e) Discussions regarding the origi-nating function’s views concerning thestrengths and weaknesses of the case orthe parties’ positions in the case.

(f) Communications from the originat-ing function to advocate for a particular re-sult or to object to a potential resolution ofthe case or an issue in the case.

(4) Administrative File.(a) In General. The administrative file

transmitted to Appeals by the originatingfunction is not considered to be an ex partecommunication within the context of thisrevenue procedure. The administrativefile, which contains, among other things,the proposed determination and the tax-payer’s protest or other approved meansof communicating disagreement with theproposed determination, sets forth theboundaries of the dispute between the tax-payer and the IRS and forms the basis forAppeals to assume jurisdiction.

(b) Transmittal. The transmittal mem-orandum, a T-Letter, or any similar docu-ment that the originating function uses totransmit the administrative file (transmit-tal) should not include statements or com-ments intended to influence Appeals’ de-cision-making process. This includes rec-ommendations concerning what Appealsshould consider and how Appeals shouldresolve the case. In contrast, it is permis-sible to include in the transmittal a neutrallist of unagreed issues, without discussion,and to indicate which ones, if any, are coor-dinated issues. If the transmittal includesthe type of statements or comments de-scribed in the second sentence of this para-graph, or includes other prohibited com-munications in a document that is eitherplaced on top of the administrative file asa transmittal or inserted into the adminis-trative file in conjunction with preparingthe case for transmission to Appeals, thedocument must be shared by the originat-

2012–10 I.R.B. 459 March 5, 2012

ing function with the taxpayer/representa-tive at the time that the administrative fileis sent to Appeals.

(c) Rebuttal to Protest. If a rebuttal tothe taxpayer’s protest is prepared by theoriginating function, it must be shared withthe taxpayer/representative by the origi-nating function at the time that it is sent toAppeals.

(d) Contents of Administrative File.The administrative file shall be compiledand maintained by the originating functionin accordance with the established proce-dures within that function or as otherwisedirected by the reviewer(s) assigned to thecase. The originating function, however,shall refrain from placing in the adminis-trative file any notes, memoranda, or otherdocuments that normally would not beincluded in the administrative file in theordinary course of developing the case ifthe reason for including this material in theadministrative file is to attempt to influ-ence Appeals’ decision-making process.For example, the originating functionshould not include gratuitous commentsin the case history, a memo to the file, or atransmittal document, such as a T-Letter,if the substance of the comments wouldbe prohibited if they were communicatedto Appeals separate and apart from theadministrative file. In contrast, it is per-missible to contemporaneously includestatements or documents that are pertinentto the originating function’s considerationof the case in the administrative file evenif the substance of those comments, state-ments, or documents would be prohibitedif they were communicated to Appealsseparate and apart from the administrativefile.

(5) Preconference Meetings. Precon-ference meetings between Appeals and theoriginating function without providing thetaxpayer/representative an opportunity toparticipate are an example of the type ofcommunications that the ex parte commu-nication rules were designed to prohibit.These meetings should not be held unlessthe taxpayer/representative is given an op-portunity to participate.

(6) Premature Referrals. Appeals is theadministrative settlement arm of the IRS.If a case is not ready for Appeals’ con-sideration, Appeals may return it for fur-ther development or for other reasons de-scribed in IRM 8.2.1.6. Appeals may com-municate with the originating function re-

garding the anticipated return of the case,including an explanation of the additionaldevelopment that Appeals is requesting orother reasons why the case is being re-turned, but generally may not engage ina discussion of matters beyond the typesof ministerial, administrative, or proce-dural matters set forth in section 2.03(2),above, as part of a discussion of whetherthe premature referral guidelines requirefurther activity by the originating function.When the case is returned to the originat-ing function, Appeals must timely notifythe taxpayer/representative that the casehas been returned to the originating func-tion, in whole or in part, for further de-velopment. In addition, the supplemen-tal report prepared by the originating func-tion reflecting the additional developmentthat was done must be shared with the tax-payer/representative.

(7) Submission of New Information. Ifnew information or evidence is submittedto Appeals by the taxpayer/representative,the principles set forth in IRM 8.2.1.9.3should be followed. In general, the orig-inating function should be given the op-portunity to timely review and commenton significant new information presentedby the taxpayer. “Significant new informa-tion” is information of a nonroutine naturethat, in the judgment of Appeals, may havehad an impact on the originating function’sfindings or that may impact Appeals’ in-dependent evaluation of the strengths andweaknesses of the issues, including thelitigating hazards relating to those issues.Normally, the review can be accomplishedby sending the material to the originatingfunction while Appeals retains jurisdictionof the case and proceeds with resolutionof other issues. Alternatively, Appealsmay return the entire case to the originat-ing function and relinquish jurisdiction, inits sole discretion, in accordance with theIRM. The taxpayer/representative must betimely notified when a case is returned tothe originating function or new materialnot available during initial considerationhas been sent to the originating function.The results of the originating function’s re-view of the new information must be com-municated to the taxpayer/representative.

(8) New Issues Raised in Appeals. Ap-peals will continue to follow the principlesof Policy Statement 8–2 and the “GeneralGuidelines” outlined in IRM 8.6.1.6.2 indeciding whether to raise a new issue.

Under Appeals’ new issue policy, newissues must continue to meet the “mate-rial” and “substantial” tests set forth inthe IRM. Communications will be in ac-cordance with the guiding principles insection 2.02(6), above.

(9) Refund Claims Filed During the Ap-peals Process. Refund claims filed dur-ing the Appeals process generally are re-ferred to the originating function with arequest for expedited review. Referralsof these refund claims to the originatingfunction involves no discussion about thestrengths and weaknesses of the issue, andthus, fall within the ministerial, adminis-trative, or procedural matters exception setforth in section 2.03(2), above. The tax-payer/representative must be timely noti-fied when the refund claim is referred tothe originating function. The results of theoriginating function’s review of the refundclaim must be communicated to the tax-payer/representative.

(10) Collection Due Process.(a) Collection Cases In General. The

principles applicable to discussions be-tween Appeals employees and officialsin originating functions apply to casesthat originate in the Collection function,such as CDP appeals, collection appealsprogram cases, offers in compromise, andtrust fund recovery penalty cases. Thesediscussions must be held in accordancewith the guiding principles in section2.02(6), above.

(b) Ministerial, Administrative, or Pro-cedural Matters. Sections 6320 and 6330of the Internal Revenue Code providethat, as part of a CDP hearing, the Ap-peals officer must obtain verification thatthe requirements of any applicable lawor administrative procedure have beenmet. Communications seeking to verifycompliance with legal and administrativerequirements fall within the ministerial,administrative, or procedural mattersexception set forth in section 2.03(2),above. Similarly, communications withrespect to verification of assets/liabilitiesinvolving a collection alternative duringa CDP hearing fall within the ministe-rial, administrative, or procedural mattersexception. Therefore, those communica-tions are permissible without providingthe taxpayer/representative an opportunityto participate.

(c) Remand By Tax Court. As providedin section 2.06(2)(a), below, the ex parte

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communication rules do not apply to com-munications between Appeals and Coun-sel with respect to cases docketed in theTax Court. CDP cases that are remandedby the Tax Court for further considera-tion (or reconsideration) by Appeals fallinto a different category, however. Al-though remanded CDP cases remain un-der the Tax Court’s jurisdiction, the Ap-peals employee assigned to the remandedCDP case must be impartial in the reviewof the remanded case within the mean-ing of section 6320(b)(3) or 6330(b)(3),as applicable, requiring the application ofsimilar considerations to those underlyingthe ex parte communication rules. There-fore, the following guidelines apply to re-manded CDP cases.

(i) Instructions Regarding the Remand.(A) The Counsel attorney who handled

the CDP case in the Tax Court should pre-pare a written memorandum to Appealsexplaining the reasons why the court re-manded the case to Appeals, any specialrequirements in the court’s Order (e.g.,whether and to what extent a new con-ference should be held; whether the casemust be reassigned to a different Appealsemployee than the Appeals employeewho handled the original CDP case; andwhat material Appeals is prohibited fromreviewing, if any), and what issues thecourt has ordered Appeals to address onremand. The memorandum should notdiscuss the credibility of the taxpayer orthe accuracy of the facts presented by thetaxpayer. A copy of the memorandum willbe provided by the Counsel attorney to thetaxpayer/representative.

(B) Communications to Appeals fromthe Counsel attorney handling the TaxCourt case regarding deadlines relatingto the remanded CDP case fall within theministerial, administrative, or proceduralmatters exception, and thus, are permissi-ble communications that may take placewithout providing the taxpayer/represen-tative an opportunity to participate.

(ii) Legal Advice.A request by Appeals for legal advice

in connection with a remanded CDP casemay be handled by the same Counsel at-torney who is handling the Tax Court case.

(iii) Review of Supplemental Notice ByCounsel. The Counsel attorney handlingthe Tax Court case should review the sup-plemental notice of determination before itis issued to the taxpayer. This review is

for the limited purpose of ensuring compli-ance with the Tax Court’s remand Order.

(11) Post-Settlement Conference. Thepost-settlement conference with Examina-tion is held after the case has been closedby Appeals. The purpose of the conferenceis to inform Examination about the settle-ment of issues to ensure that Examinationfully understands the settlement and the ra-tionale for the resolution. The conferenceprovides an opportunity for Appeals to dis-cuss with Examination the application ofDelegation Order 236, or subsequent del-egation orders (i.e., settlement by Exami-nation consistent with a prior Appeals’ set-tlement with the same or related taxpayer).The tax periods that are the subject of thepost-settlement conference have been fi-nalized and the participants are cautionedto limit discussion to the results in theclosed cycle. Any discussion of the resolu-tion of issues present in the closed periodsdoes not compromise the independence ofAppeals, and, thus, post-settlement con-ferences between Appeals and Examina-tion are permissible without giving the tax-payer/representative an opportunity to par-ticipate. In contrast, any discussion thataddresses open cycles in either Examina-tion or Appeals with respect to the sameor a related taxpayer is subject to the guid-ance provided in this revenue procedurerelating to communications with the orig-inating function contained in section 2.03,above.

(12) Review of Coordinated Issues.(a) Cases in Compliance’s Jurisdiction.

Delegation Order 4–25 provides the Com-pliance function with limited authority tosettle certain issues with Appeals’ reviewand approval. Specifically, this limitedsettlement authority applies with respectto issues that are coordinated, for exam-ple, in the Technical Advisor Program (orany successor program), and are the sub-ject of either an Appeals Settlement Guide-line (ASG) or an Appeals Settlement Posi-tion (ASP). Under existing procedures, theproposed settlement generally must be ap-proved by the Examination Technical Ad-visor and the Appeals Technical GuidanceCoordinator (TGC) for the issue in ques-tion. The purpose of the required coordi-nation is to ensure that the resolution byExamination is consistent with the analy-sis set forth in the ASG or ASP. Commu-nications between Compliance employeesand the TGC in connection with satisfying

this coordination requirement are permis-sible without giving the taxpayer/represen-tative an opportunity to participate.

(b) Cases in Appeals’ Jurisdiction.Under existing procedures, Appeals’ set-tlements involving coordinated issues,including but not limited to issues thatare the subject of either an ASG or anASP, must be reviewed and concurred bythe TGC for that issue. The TGC servesas a resource person for the Appeals or-ganization. The purpose of the requiredcoordination is to ensure that resolutionsof coordinated issues are consistent nation-wide. Communications between Appealsemployees and the TGC are entirely inter-nal within Appeals, and, consequently, theex parte communication rules do not ap-ply to those communications. See section2.01(1)(a)(ii).

(13) Taxpayers with Multiple OpenCases. Special considerations are requiredwhen a taxpayer has multiple open cases.This situation may arise, for example,when the taxpayer has cases involvingthe same issue pending with different IRSfunctions, including Counsel, which iscommon with respect to large corporatetaxpayers, or the taxpayer has multiplecases involving the same issue pendingwith Appeals in both docketed and non-docketed status. The IRS has an interestin coordinating the handling of open casesregarding the same taxpayer to ensurethat the responsible offices have completeinformation to make informed decisionsabout the cases within their respectivejurisdictions.

Discussions held with respect to opencases must be in accordance with the guid-ing principles in section 2.02(6) and theoperative rules set forth in section 2.03,above, as well as sections 2.06, 2.07, and2.08, below. The ex parte communicationrules may not apply to some of the opencases, such as those docketed in the TaxCourt or under the jurisdiction of the De-partment of Justice, see sections 2.06(2)and 2.08(2), below, but may apply to oneor more other open cases of the taxpayer.

.04 Participation in MultifunctionalMeetings.

(1) General Rule. Multifunctionalmeetings are meetings that include repre-sentatives from various IRS components,usually Compliance and Counsel. Ameeting of the members of an Issue Man-agement Team (IMT), or its successor

2012–10 I.R.B. 461 March 5, 2012

type function, is an example of this type ofmeeting. These multifunctional meetingsusually involve general discussions of howto handle technical issues or proceduralmatters. Appeals does not participateon IMTs but can be briefed by IMTs, aslong as the discussion remains genericrather than case-specific. Similarly, allparticipants in any type of multifunctionalmeeting need to be cognizant of the exparte communication rules and ensure thattaxpayer-specific discussions do not takeplace while Appeals is present.

As provided in sections 2.02(2) and (6),above, Appeals must have access to theviews and analysis of stakeholders so thatthey can make fully-informed, indepen-dent judgments. Listening to generic, non-case-specific discussions involving otherIRS functions, including Counsel, in thecontext of a multifunctional meeting pro-vides Appeals with an important forum inwhich to meet, in part, these needs, and en-ables Appeals to effectively serve as theadministrative settlement arm of the IRS.Accordingly, Appeals may attend multi-functional meetings subject to the restric-tions in section 2.04(2), below, regardingcase-specific discussions.

(a) Settlement Initiatives. To addressparticular issues or types of transactions,the IRS sometimes develops settlementinitiatives. Appeals’ perspective in theformulation of the terms contained inthese settlement initiatives is essential tothe IRS’ ability to resolve cases withoutlitigation. Therefore, Appeals is permittedto work collaboratively with Complianceand Counsel to assist with the develop-ment of these settlement initiatives byproviding input to other IRS functions,including originating functions and Coun-sel, in generic discussions of issues andtransactions. Any case-specific discus-sions continue to be prohibited, unless thetaxpayer/representative is given an oppor-tunity to participate.

(2) Case-Specific Discussions. Anydiscussion of a specific taxpayer’s case inconnection with a multifunctional meetingshould be postponed until such time asit can be conducted outside of Appeals’presence. The preceding sentence doesnot apply with respect to post-settlementconferences, as discussed in more detail insection 2.03(11), above.

.05 Alternative Dispute Resolution.(1) Cases Not in Appeals’ Jurisdic-

tion. Certain alternative dispute resolu-tion (ADR) programs, such as fast tracksettlement, involve the use of Appealsemployees to facilitate settlement whilethe case is still in Examination’s juris-diction. See, e.g., Rev. Proc. 2003–40,2003–1 C.B. 1044 (Large and Mid-SizeBusiness Fast Track Settlement Program);Announcement 2011–5, 2011–4 I.R.B.430 (Small Business/Self Employed FastTrack Settlement Program); Announce-ment 2008–105, 2008–2 C.B. 1219 (TaxExempt and Government Entities FastTrack Settlement Program); and subse-quent published guidance regarding theseor similar programs. Private caucuses be-tween the mediator and individual partiesare often a key element in the process.The prohibition against ex parte commu-nications between Appeals employees andother IRS employees does not apply be-cause Appeals employees are not actingin their traditional Appeals’ settlementrole. Consequently, Appeals employeesmay have ex parte communications withan originating function in connection withany Fast Track or similar ADR proceed-ings. For a discussion of communicationsbetween Appeals and Counsel, see sec-tion 2.06, below. In contrast, the ex partecommunication rules apply in the contextof Appeals’ consideration of an issue un-der the Early Referral to Appeals process,Rev. Proc. 99–28, 1999–2 C.B. 109, orthe Accelerated Issue Resolution program,Rev. Proc. 94–67, 1994–2 C.B. 800 (orsubsequent published guidance regardingthese programs). Ex parte communica-tions are not an integral part of those typesof ADR procedures because jurisdictionhas shifted to Appeals in those cases.

(2) Post-Appeals Mediation. The exparte communication rules do not applyto communications in connection withPost-Appeals Mediation proceedings.Revenue Procedure 2009–44, 2009–2C.B. 462, describes an optional Appeals’mediation procedure that is available afterAppeals’ settlement discussions are un-successful and when all other issues areresolved except for the issue(s) for whichmediation is being requested. See alsoAnnouncement 2011–6, 2011–4 I.R.B.433. The Appeals employee who servesas the mediator in these proceedings topromote settlement negotiations between

the parties, who are the taxpayer and Ap-peals, will not have been a member of theAppeals’ team that considered the case.Section 6.02 of Rev. Proc. 2009–44 statesthat “the parties are encouraged to include,in addition to the required decision-mak-ers, those persons with information andexpertise that will be useful to the deci-sion-makers and the mediator.” 2009–2C.B. at 463. Section 6.02 further providesthat “Appeals has the discretion to com-municate ex parte with the IRS Office ofChief Counsel, the originating function,e.g., Compliance, or both, in prepara-tion for or during the mediation session.Appeals also has the discretion to haveCounsel, the originating function, or both,participate in the mediation proceeding.”Id.

.06 Communications with Counsel.(1) General Rule. As provided in sec-

tion 2.02(3), above, the Chief Counsel isthe legal adviser to the Commissioner andhis or her officers and employees (includ-ing employees of Appeals) on all mat-ters pertaining to the interpretation, ad-ministration, and enforcement of the in-ternal revenue laws and related statutes.As part of the legal advice process, attor-neys in the Office of Chief Counsel exer-cise independent judgment in addressingthe strengths and weaknesses of the par-ties’ respective positions, the hazards oflitigation, the quality and admissibility ofthe evidence, and how a judge might reactto the evidence or particular arguments.

Appeals employees are entitled to ob-tain legal advice from attorneys in the Of-fice of Chief Counsel and, except as pro-vided below, are permitted to do so un-der the ex parte communication rules. Ap-peals employees generally are not boundby the legal advice that they receive fromthe Office of Chief Counsel. The legaladvice is but one factor that Appeals willtake into account in its consideration of thecase. Appeals employees independentlyevaluate the strengths and weaknesses ofthe specific issues in the cases assignedto them and make an independent judg-ment concerning the overall strengths andweaknesses of the cases they are review-ing and the hazards of litigation. See IRM8.6.2.6.4 and 8.6.4.1.

Appeals employees should not commu-nicate ex parte regarding an issue in a casepending before them with a field attorneyif the field attorney personally provided le-

March 5, 2012 462 2012–10 I.R.B.

gal advice regarding the same issue in thesame case to the originating function orpersonally served as an advocate for theoriginating function regarding the same is-sue in the same case. This restriction onlyapplies while Appeals is performing its du-ties of evaluating the strengths and weak-nesses of the specific issues in specificcases and the overall hazards of litigationfor those cases. If an Appeals employee isnot functioning in that capacity, for exam-ple, if an Appeals employee is preparing astatutory notice of deficiency, this restric-tion does not apply.

(2) Docketed Cases.(a) In General. The ex parte commu-

nication rules do not apply to communica-tions between Appeals and Counsel in con-nection with cases docketed in the UnitedStates Tax Court. Communications be-tween Appeals and the originating func-tion in docketed cases are still subject tothe ex parte communication rules if thecase is within Appeals’ settlement jurisdic-tion.

(b) Collection Due Process Cases. Fora discussion of the application of the exparte communication rules to CDP casesremanded by the Tax Court, see section2.03(10)(c).

.07 Communications with Other IRSFunctions.

(1) Outside Consultants and Experts.Outside consultants or experts under con-tract with the IRS, other than those hireddirectly by Appeals, are treated as IRS em-ployees for purposes of this revenue proce-dure. Consequently, communications be-tween Appeals and these outside consul-tants or experts are subject to the ex partecommunication rules. See section 2.02(6).In contrast, communications between Ap-peals and outside consultants or expertshired by Counsel in docketed cases arenot subject to the ex parte communicationrules. See section 2.06(2).

(2) Criminal Investigation. CriminalInvestigation (CI) is not an originatingfunction as defined in section 2.01(2),above, because Appeals does not reviewCI’s determinations. Communicationsbetween Appeals and CI are generallyministerial in nature. For example, Ap-peals and CI may confirm the existenceof a CI investigation, which would freezeAppeals’ action, or Appeals may reviewa CI closed case to find information rele-vant to the case that Appeals is reviewing.

Similarly, CI may communicate ex partewith Appeals to obtain information ordocuments in Appeals’ possession thatmay be relevant to the activities of CIor to ensure that Appeals’ actions willnot interfere with any ongoing criminalinvestigation or be inconsistent with anyprior criminal investigations. Since thesetypes of communications do not addressthe strengths or weaknesses of an opencase, they are permissible under section2.02(6), above. For a discussion of com-munications between Appeals and CI thatgo beyond the above matters, see section2.03(13), above.

(3) Competent Authority. The UnitedStates Competent Authority is responsi-ble for the timely and effective implemen-tation of tax treaties and tax informationexchange agreements. Communicationsbetween Appeals and IRS employees atthe request or on behalf of the competentauthority relating to a taxpayer’s requestfor relief under competent authority pro-cedures, see Rev. Proc. 2006–54, 2006–2C.B. 1035, are permissible. It is presumedthat the competent authority is acting at therequest and with the consent of the tax-payer. Communications between Appealsand IRS employees that are unrelated tothe taxpayer’s request for relief under com-petent authority procedures, however, con-tinue to be subject to the ex parte commu-nication rules.

(4) Taxpayer Advocate Service. Com-munications with Appeals that are initiatedby the Taxpayer Advocate Service (TAS)are permissible. It is presumed that theTAS employees are acting at the requestand with the consent of the taxpayer. Dueto the nature of their role within the IRSand their relationship with the taxpayer,TAS employees may discuss with Appealsthe strengths and weaknesses of the par-ties’ respective positions and may advo-cate for a particular result in the case.

(5) Commissioner and Other IRS Offi-cials with Overall Supervisory Responsi-bilities. The Commissioner is responsi-ble for administering, managing, conduct-ing, directing, and supervising the execu-tion and application of the internal rev-enue laws or related statutes and tax con-ventions to which the United States is aparty. I.R.C. § 7803(a)(2)(A). In the courseof exercising that statutory responsibility,the Commissioner and those officials, suchas the Deputy Commissioners, who have

overall supervisory responsibility for IRSoperations, may communicate with Ap-peals about specific cases or issues andmay direct that other IRS officials, includ-ing Counsel officials, participate in meet-ings or discussions about cases or issueswithout providing the taxpayer/representa-tive an opportunity to participate.

.08 Communications with Other Gov-ernmental Entities.

(1) Joint Committee on Taxation. Sec-tion 6405 requires the IRS to submit areport to the Joint Committee on Taxa-tion concerning any refund or credit inexcess of the statutory amount, and theIRS must wait at least 30 days after sub-mitting the report before making the re-fund or credit that is the subject of thereport. The Joint Committee or its staffwill occasionally question a settlement orraise a new issue. Communications be-tween Appeals and the Joint Committee orits staff are permissible without providingthe taxpayer/representative an opportunityto participate. The ex parte communica-tion rules only apply to communicationsbetween Appeals and other IRS employ-ees. Since the Joint Committee is part ofthe Legislative Branch, not the IRS, the exparte communication rules do not apply tocommunications with the Joint Committeeor its staff.

(2) Department of Justice. Appealsmay communicate with employees of theDepartment of Justice, including the U.S.Attorneys’ offices, without giving thetaxpayer/representative an opportunity toparticipate. The ex parte communicationrules only apply to communications be-tween Appeals and other IRS employees.Since the Department of Justice is not partof the IRS, the ex parte communicationrules do not apply to communications withthe Department of Justice.

.09 Monitoring Compliance. It is theresponsibility of all IRS employees to en-sure compliance with the ex parte com-munication rules. All IRS employees willmake every effort to promptly terminateany communications not permitted by theex parte communication rules. To improveunderstanding of the ex parte communi-cation rules, Appeals and other impactedIRS employees, including Counsel, willreceive training on the contents of this rev-enue procedure and will be encouraged toseek managerial guidance whenever theyhave questions about the propriety of an ex

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parte communication. Additionally, man-agers will consider feedback from otherfunctions and will be responsible for mon-itoring compliance during their day-to-dayinteraction with employees, as well as dur-ing workload reviews and closed case re-views. Breaches will be addressed in ac-cordance with existing administrative andpersonnel processes on a case-by-case ba-sis.

.10 Remedies Available to Taxpayers.(1) General Rule. The ex parte com-

munication rules set forth in this revenueprocedure do not create substantive rightsaffecting the taxpayer’s tax liability or theIRS’ ability to determine, assess, or col-lect that tax liability, including statutoryinterest and any penalties, if applicable.The IRS takes the ex parte communica-tion rules seriously and will continue itsefforts to ensure compliance through train-ing and oversight. Most breaches of the exparte communication rules may be curedby timely notifying the taxpayer/represen-tative of the situation, sharing the commu-nication or information in question, and af-fording the taxpayer/representative an op-portunity to respond. Consequently, Ap-peals shall notify the taxpayer/representa-

tive of the breach and request input fromthe taxpayer/representative regarding theappropriate remedy for a breach of the exparte communication rules. After consid-ering the specific facts and discussing thematter with the taxpayer/representative, asappropriate, Appeals may determine thatan additional remedy is warranted, includ-ing reassigning the case to a different Ap-peals/Settlement Officer who has had noprior involvement in the case. The specificadministrative remedy, however, that maybe made available in any particular caseis within the sole discretion of Appeals.The deciding official for the determinationof the appropriate remedy for a breach ofthe ex parte communication rules will bea second-level manager. For a discussionof court directed cures for breaches of theex parte communication rules, see section2.10(2), below.

(2) Collection Due Process Cases. Ifthe Tax Court determines that a breachof the ex parte communication rules oc-curred during the course of a CDP hearingin Appeals, the Tax Court may remand thecase to Appeals for either a new or a sup-plemental hearing, depending upon whatsteps the court concludes are necessary to

rectify the breach. See section 2.03(10)(c),above.

SECTION 3. EFFECT ON OTHERDOCUMENTS

Rev. Proc. 2000–43, 2000–2 C.B. 404,is amplified, modified, and superseded.

SECTION 4. EFFECTIVE DATE

This revenue procedure is effectivefor communications between Appealsemployees and other IRS employees, in-cluding Counsel, that take place afterMay 15, 2012.

SECTION 5. DRAFTINGINFORMATION

The principal authors of this revenueprocedure are Henry S. Schneiderman,Office of the Associate Chief Counsel(Procedure and Administration) andApril Adams-Johnson, Office ofAppeals. For further informationregarding this revenue procedure, contactMr. Schneiderman at (202) 622–3400 (nota toll-free number) or Ms. Adams-Johnsonat (203) 781–3143 (not a toll-free number).

March 5, 2012 464 2012–10 I.R.B.

Definition of TermsRevenue rulings and revenue procedures(hereinafter referred to as “rulings”) thathave an effect on previous rulings use thefollowing defined terms to describe the ef-fect:

Amplified describes a situation whereno change is being made in a prior pub-lished position, but the prior position is be-ing extended to apply to a variation of thefact situation set forth therein. Thus, ifan earlier ruling held that a principle ap-plied to A, and the new ruling holds that thesame principle also applies to B, the earlierruling is amplified. (Compare with modi-fied, below).

Clarified is used in those instanceswhere the language in a prior ruling is be-ing made clear because the language hascaused, or may cause, some confusion.It is not used where a position in a priorruling is being changed.

Distinguished describes a situationwhere a ruling mentions a previously pub-lished ruling and points out an essentialdifference between them.

Modified is used where the substanceof a previously published position is beingchanged. Thus, if a prior ruling held that aprinciple applied to A but not to B, and thenew ruling holds that it applies to both A

and B, the prior ruling is modified becauseit corrects a published position. (Comparewith amplified and clarified, above).

Obsoleted describes a previously pub-lished ruling that is not considered deter-minative with respect to future transac-tions. This term is most commonly used ina ruling that lists previously published rul-ings that are obsoleted because of changesin laws or regulations. A ruling may alsobe obsoleted because the substance hasbeen included in regulations subsequentlyadopted.

Revoked describes situations where theposition in the previously published rulingis not correct and the correct position isbeing stated in a new ruling.

Superseded describes a situation wherethe new ruling does nothing more than re-state the substance and situation of a previ-ously published ruling (or rulings). Thus,the term is used to republish under the1986 Code and regulations the same po-sition published under the 1939 Code andregulations. The term is also used whenit is desired to republish in a single rul-ing a series of situations, names, etc., thatwere previously published over a period oftime in separate rulings. If the new rul-ing does more than restate the substance

of a prior ruling, a combination of termsis used. For example, modified and su-perseded describes a situation where thesubstance of a previously published rulingis being changed in part and is continuedwithout change in part and it is desired torestate the valid portion of the previouslypublished ruling in a new ruling that is selfcontained. In this case, the previously pub-lished ruling is first modified and then, asmodified, is superseded.

Supplemented is used in situations inwhich a list, such as a list of the names ofcountries, is published in a ruling and thatlist is expanded by adding further names insubsequent rulings. After the original rul-ing has been supplemented several times, anew ruling may be published that includesthe list in the original ruling and the ad-ditions, and supersedes all prior rulings inthe series.

Suspended is used in rare situations toshow that the previous published rulingswill not be applied pending some futureaction such as the issuance of new oramended regulations, the outcome of casesin litigation, or the outcome of a Servicestudy.

AbbreviationsThe following abbreviations in current useand formerly used will appear in materialpublished 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.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.

2012–10 I.R.B. i March 5, 2012

Numerical Finding List1

Bulletins 2012–1 through 2012–10

Announcements:

2012-1, 2012-1 I.R.B. 249

2012-2, 2012-2 I.R.B. 285

2012-3, 2012-4 I.R.B. 335

2012-4, 2012-4 I.R.B. 335

2012-5, 2012-5 I.R.B. 348

2012-6, 2012-6 I.R.B. 366

2012-7, 2012-6 I.R.B. 367

2012-8, 2012-7 I.R.B. 373

2012-9, 2012-7 I.R.B. 377

Notices:

2012-1, 2012-2 I.R.B. 260

2012-3, 2012-3 I.R.B. 289

2012-4, 2012-3 I.R.B. 290

2012-5, 2012-3 I.R.B. 291

2012-6, 2012-3 I.R.B. 293

2012-7, 2012-4 I.R.B. 308

2012-8, 2012-4 I.R.B. 309

2012-9, 2012-4 I.R.B. 315

2012-10, 2012-5 I.R.B. 343

2012-11, 2012-5 I.R.B. 346

2012-12, 2012-6 I.R.B. 365

2012-13, 2012-9 I.R.B. 421

2012-14, 2012-8 I.R.B. 411

2012-15, 2012-9 I.R.B. 424

2012-16, 2012-9 I.R.B. 427

2012-17, 2012-9 I.R.B. 430

2012-18, 2012-10 I.R.B. 438

2012-19, 2012-10 I.R.B. 440

2012-21, 2012-10 I.R.B. 450

Proposed Regulations:

REG-109369-10, 2012-9 I.R.B. 434

REG-130302-10, 2012-8 I.R.B. 412

REG-149625-10, 2012-2 I.R.B. 279

REG-102988-11, 2012-4 I.R.B. 326

REG-124627-11, 2012-8 I.R.B. 417

REG-130777-11, 2012-5 I.R.B. 347

Revenue Procedures:

2012-1, 2012-1 I.R.B. 1

2012-2, 2012-1 I.R.B. 92

2012-3, 2012-1 I.R.B. 113

2012-4, 2012-1 I.R.B. 125

2012-5, 2012-1 I.R.B. 169

2012-6, 2012-1 I.R.B. 197

2012-7, 2012-1 I.R.B. 232

2012-8, 2012-1 I.R.B. 235

2012-9, 2012-2 I.R.B. 261

2012-10, 2012-2 I.R.B. 273

2012-11, 2012-7 I.R.B. 368

Revenue Procedures— Continued:

2012-12, 2012-2 I.R.B. 275

2012-13, 2012-3 I.R.B. 295

2012-14, 2012-3 I.R.B. 296

2012-15, 2012-7 I.R.B. 369

2012-16, 2012-10 I.R.B. 452

2012-17, 2012-10 I.R.B. 453

2012-18, 2012-10 I.R.B. 455

Revenue Rulings:

2012-1, 2012-2 I.R.B. 255

2012-2, 2012-3 I.R.B. 286

2012-3, 2012-8 I.R.B. 383

2012-4, 2012-8 I.R.B. 386

2012-5, 2012-5 I.R.B. 337

2012-6, 2012-6 I.R.B. 349

2012-7, 2012-6 I.R.B. 362

Treasury Decisions:

9559, 2012-2 I.R.B. 252

9560, 2012-4 I.R.B. 299

9561, 2012-5 I.R.B. 341

9562, 2012-5 I.R.B. 339

9563, 2012-6 I.R.B. 354

9565, 2012-8 I.R.B. 378

9566, 2012-8 I.R.B. 389

9567, 2012-8 I.R.B. 395

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2011–27 through 2011–52 is in Internal Revenue Bulletin2011–52, dated December 27, 2011.

March 5, 2012 ii 2012–10 I.R.B.

Finding List of Current Actions onPreviously Published Items1

Bulletins 2012–1 through 2012–10

Announcements:

2002-44

Supplemented by

Notice 2012-13, 2012-9 I.R.B. 421

2011-63

Corrected by

Ann. 2012-9, 2012-7 I.R.B. 377

Notices:

2006-87

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2007-25

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2007-77

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2008-107

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2010-27

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2010-88

As modified by Ann. 2011-40, is superseded by

Notice 2012-1, 2012-2 I.R.B. 260

2011-8

Superseded by

Notice 2012-19, 2012-10 I.R.B. 440

2011-28

Superseded by

Notice 2012-9, 2012-4 I.R.B. 315

Revenue Procedures:

2000-43

Amplified, modified and superseded by

Rev. Proc. 2012-18, 2012-10 I.R.B. 455

2003-61

Superseded by

Notice 2012-8, 2012-4 I.R.B. 309

2007-44

Modified by

Ann. 2012-3, 2012-4 I.R.B. 335

2011-1

Superseded by

Rev. Proc. 2012-1, 2012-1 I.R.B. 1

Revenue Procedures— Continued:

2011-2

Superseded by

Rev. Proc. 2012-2, 2012-1 I.R.B. 92

2011-3

Superseded by

Rev. Proc. 2012-3, 2012-1 I.R.B. 113

2011-4

Superseded by

Rev. Proc. 2012-4, 2012-1 I.R.B. 125

2011-5

Superseded by

Rev. Proc. 2012-5, 2012-1 I.R.B. 169

2011-6

Superseded by

Rev. Proc. 2012-6, 2012-1 I.R.B. 197

2011-7

Superseded by

Rev. Proc. 2012-7, 2012-1 I.R.B. 232

2011-8

Superseded by

Rev. Proc. 2012-8, 2012-1 I.R.B. 235

2011-9

Superseded by

Rev. Proc. 2012-9, 2012-2 I.R.B. 261

2011-10

Superseded by

Rev. Proc. 2012-10, 2012-2 I.R.B. 273

2011-37

Obsoleted in part by

Rev. Proc. 2012-16, 2012-10 I.R.B. 452

2011-40

Corrected by

Ann. 2012-6, 2012-6 I.R.B. 366

2011-49

Modified by

Ann. 2012-3, 2012-4 I.R.B. 335

2011-50

Corrected by

Ann. 2012-6, 2012-6 I.R.B. 366

2011-51

Corrected by

Ann. 2012-6, 2012-6 I.R.B. 366

2012-8

Corrected by

Ann. 2012-7, 2012-6 I.R.B. 367

Revenue Rulings:

92-19

Supplemented in part by

Rev. Rul. 2012-6, 2012-6 I.R.B. 349

Revenue Rulings— Continued:

2008-40

Modified by

Notice 2012-6, 2012-3 I.R.B. 293

2011-1

Modified by

Notice 2012-6, 2012-3 I.R.B. 293

Treasury Decision:

9517

Corrected by

Ann. 2012-4, 2012-4 I.R.B. 335Ann. 2012-5, 2012-5 I.R.B. 348

1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2011–27 through 2011–52 is in Internal Revenue Bulletin 2011–52, dated December 27,2011.

2012–10 I.R.B. iii March 5, 2012

March 5, 2012 2012–10 I.R.B.

2012–10 I.R.B. March 5, 2012

March 5, 2012 2012–10 I.R.B.

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