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This notice provides that the IRS will not assert that cash payments an employer makes to ¡ì 170(c) organizations (in exchange for vacation, sick, or personal leave that its employees elect to forgo) constitute gross income or wages of the employees under certain circumstances relating to the California Wildfires that began on October 8, 2017

This revenue procedure modifies Rev. Proc. 2015¨C13, 2015¨C5 I.R.B. 419, as clarified and modified by Rev. Proc. 2015¨C33, 2015¨C24 I.R.B. 1067, and as modified by Rev. Proc. 2016¨C1, 2016¨C1 I.R.B. 1. Rev. Proc. 2015¨C13 provides procedures for obtaining the consent of the Commissioner of Internal Revenue to change a method of accounting for federal income tax purposes. With respect to elections under ¡ì 404A of the Internal Revenue Code, which are treated as changes in method of accounting for purposes of ¡ì 481, this revenue procedure specifies the ¡ì 481 adjustment period.

Serves notice to potential donors of a stipulated decision by the United States Tax Court in declaratory judgment proceedings under Section 7428.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2017 used under ¡ì 417(e)(3)(D), the 24-month average segment rates applicable for November 2017, and the 30-year Treasury rates. These rates reflect the application of ¡ì 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112¨C141 (MAP-21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).

This revenue ruling provides tables of covered compensation under ¡ì 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, effective January 1, 2018.

This revenue ruling provides tables of covered compensation under ¡ì 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2018 plan year.

Section 401(l)(5)(E)(i) defines covered compensation with respect to an employee as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act (the ¡°Act¡±) for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Section 401(l)(5)(E)(ii) states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age.

Section 1.401(l)¨C1(c)(34) of the Income Tax Regulations defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

Section 1.401(l)¨C1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In determining an employee¡¯s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee¡¯s covered compensation for a plan year beginning after the 35-year period applicable under ¡ì 1.401(l)¨C1(c)(7)(i) is the employee¡¯s covered compensation for a plan year during which the 35-year period ends. An employee¡¯s covered compensation for a plan year beginning before the 35-year period applicable under ¡ì 1.401(l)¨C1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)¨C1(c)(7)(ii) provides that, for purposes of determining the amount of an employee¡¯s covered compensation under ¡ì 1.401(l)¨C1(c)(7)(i), a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

For purposes of determining covered compensation for the 2018 year, the taxable wage base is $128,700.

The following tables provide covered compensation for 2018.

The principal author of this notice is Tom Morgan of the Office of the Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Mr. Morgan at 202-317-6700 or Michael Spaid at 206-946-3480 (not toll-free numbers).

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under ¡ì 417(e)(3), and the 24-month average segment rates under ¡ì 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under ¡ì 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under ¡ì 431(c)(6)(E)(ii)(I).

Generally, except for certain plans under section 104 of the Pension Protection Act of 2006 and CSEC plans under ¡ì 414(y), ¡ì 430 of the Code specifies the minimum funding requirements that apply to single-employer plans pursuant to ¡ì 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan¡¯s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (¡°segment rates¡±), each of which applies to cash flows during specified periods. To the extent provided under ¡ì 430(h)(2)(C)(iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins.^[1] However, an election may be made under ¡ì 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Notice 2007¨C81, 2007¨C44 I.R.B. 899, provides guidelines for determining the monthly corporate bond yield curve, and the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent with the methodology specified in Notice 2007¨C81, the monthly corporate bond yield curve derived from October 2017 data is in Table 2017¨C10 at the end of this notice. The spot first, second, and third segment rates for the month of October 2017 are, respectively, 2.05, 3.61, and 4.27.

The 24-month average segment rates determined under ¡ì 430(h)(2)(C)(i) through (iii) must be adjusted pursuant to ¡ì 430(h)(2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates. For plan years beginning before 2021, the applicable minimum percentage is 90% and the applicable maximum percentage is 110%. The 25-year average segment rates for plan years beginning in 2016, 2017, and 2018 were published in Notice 2015¨C61, 2015¨C39 I.R.B. 408, Notice 2016¨C64, 2016¨C40 I.R.B. 429, and Notice 2017¨C50, 2017¨C41 I.R.B. 280, respectively.

The three 24-month average corporate bond segment rates applicable for November 2017 without adjustment for the 25-year average segment rate limits are as follows:

Based on ¡ì 430(h)(2)(C)(iv), the 24-month averages applicable for November 2017, adjusted to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates, are as follows:

Generally for plan years beginning after 2007, ¡ì 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to ¡ì 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in ¡ì 431(c)(6)(A), based on the plan¡¯s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88¨C73, 1988¨C2 C.B. 383, provides guidelines for determining the weighted average interest rate. The rate of interest on 30-year Treasury securities for October 2017 is 2.88 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in August 2047. For plan years beginning in November 2017, the weighted average of the rates of interest on 30-year Treasury securities and the permissible range of rates used to calculate current liability are as follows:

In general, the applicable interest rates under ¡ì 417(e)(3)(D) are segment rates computed without regard to a 24-month average. Notice 2007¨C81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value segment rates determined for October 2017 are as follows:

The principal author of this notice is Tom Morgan of the Office of the Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Mr. Morgan at 202-317-6700 or Tony Montanaro at 202-317-8698 (not toll-free numbers).

This notice provides guidance on the treatment of leave-based donation programs to aid victims of the California Wildfires that began on October 8, 2017 (2017 California Wildfires).

In response to the extreme need for charitable relief for victims of the 2017 California Wildfires, employers may have adopted or may be considering adopting leave-based donation programs. Under leave-based donation programs, employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments that the employer makes to charitable organizations described in ¡ì 170(c) of the Internal Revenue Code (¡ì 170(c) organizations). This notice provides guidance for income and employment tax purposes on the treatment of cash payments made by employers under leave-based donation programs for the relief of victims of the 2017 California Wildfires.

The Internal Revenue Service (the Service) will not assert that cash payments an employer makes to ¡ì 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo constitute gross income or wages of the employees if the payments are: (1) made to the ¡ì 170(c) organizations for the relief of victims of the 2017 California Wildfires; and (2) paid to the ¡ì 170(c) organizations before January 1, 2019.

Similarly, the Service will not assert that the opportunity to make such an election results in constructive receipt of gross income or wages for employees. Electing employees may not claim a charitable contribution deduction under ¡ì 170 with respect to the value of forgone leave excluded from compensation and wages.

The Service will not assert that an employer is permitted to deduct these cash payments exclusively under the rules of ¡ì 170 rather than the rules of ¡ì 162. Cash payments to which this guidance applies need not be included in Box 1, 3 (if applicable), or 5 of the Form W-2.

For further information, please contact Sheldon Iskow of the Office of Associate Chief Counsel (Income Tax and Accounting) at (202) 317-4718 (not a toll-free number).

This revenue procedure modifies Rev. Proc. 2015¨C13, 2015¨C5 I.R.B. 419, as clarified and modified by Rev. Proc. 2015¨C33, 2015¨C24 I.R.B. 1067, and as modified by Rev. Proc. 2016¨C1, 2016¨C1 I.R.B. 1. Rev. Proc. 2015¨C13 provides procedures for obtaining the consent of the Commissioner of Internal Revenue (Commissioner) to change a method of accounting for federal income tax purposes. With respect to elections under ¡ì 404A of the Internal Revenue Code (Code), which are treated as changes in method of accounting for purposes of ¡ì 481, this revenue procedure specifies the ¡ì 481 adjustment period.

.01 Rev. Proc. 2015¨C13 contains procedures under ¡ì 446(e) and ¡ì 1.446¨C1(e) of the Income Tax Regulations to obtain the consent of the Commissioner to change an accounting method for federal income tax purposes. Rev. Proc. 2015¨C13 provides both the procedures to obtain the non-automatic consent of the Commissioner to change a method of accounting and the procedures to obtain the automatic consent of the Commissioner to change a method of accounting described in Rev. Proc. 2017¨C30, 2017¨C18 I.R.B. 1131, (or successor) (List of Automatic Changes).

.02 Section 7.01 of Rev. Proc. 2015¨C13 generally provides that a change in method of accounting must be implemented pursuant to the terms and conditions provided in that revenue procedure and either the List of Automatic Changes (in the case of an automatic change) or the letter ruling for the change in method of accounting (in the case of a non-automatic change).

.03 Section 7.02 of Rev. Proc. 2015¨C13 generally provides that a taxpayer making a change in method of accounting must compute an adjustment as required by ¡ì 481(a) and take into account this ¡ì 481(a) adjustment in the manner provided in section 7.03 of Rev. Proc. 2015¨C13.

.04 Section 7.03(1) of Rev. Proc. 2015¨C13 generally provides that except as otherwise provided in that revenue procedure, the List of Automatic Changes (in the case of an automatic change), a letter ruling to the taxpayer (in the case of a non-automatic change), or other guidance published in the Internal Revenue Bulletin, the ¡ì 481(a) adjustment period is one taxable year (year of change) when the ¡ì 481(a) adjustment is negative and four taxable years (year of change and next three taxable years) when the ¡ì 481(a) adjustment is positive. Section 7.03 also provides additional rules regarding a ¡ì 481(a) adjustment period, such as when there is a shortened or accelerated adjustment period.

.05 Section 404A(g)(5) provides that, for purposes of ¡ì 481, an election under ¡ì 404A is treated as a change in method of accounting; an election under ¡ì 404A is made under ¡ì 404A(e)(3), and, if applicable, ¡ì 404A(f)(2). Section 404A(g)(5) further provides that, in applying ¡ì 481 with respect to any such election, the period for taking into account any increase or decrease in accumulated profits, earnings and profits, or taxable income resulting from the application of ¡ì 481(a)(2) shall be the year for which the election is made and the fourteen succeeding years. Accordingly, this revenue procedure modifies Rev. Proc. 2015¨C13 to specify that the ¡ì 481 adjustment period with respect to an election under ¡ì 404A is fifteen taxable years for a positive ¡ì 481(a) adjustment and fifteen taxable years for a negative ¡ì 481(a) adjustment.

Section 7.03 of Rev. Proc. 2015¨C13 is modified to add section 7.03(5) to read as follows:

(5) Elections under ¡ì 404A. Pursuant to ¡ì 404A(g)(5), the ¡ì 481(a) adjustment period with respect to an election under ¡ì 404A is fifteen taxable years (year of change and next fourteen taxable years) for a positive ¡ì 481(a) adjustment and fifteen taxable years (year of change and next fourteen taxable years) for a negative ¡ì 481(a) adjustment.

Rev. Proc. 2015¨C13 is modified.

This revenue procedure is effective for Forms 3115 filed under Rev. Proc. 2015¨C13 on or after November 13, 2017.

The principal author of this revenue procedure is Kari Fisher of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information relating to Rev. Proc. 2015¨C13, please contact Ms. Fisher at (202) 317-7007 (not a toll-free number), or for further information relating to ¡ì 404A, contact Jeremy Lamb of the Office of Associate Chief Counsel (Tax Exempt and Government Entities) at (202) 317-6799 (not a toll-free number).

This announcement serves notice to potential donors that the organization listed below has recently filed a timely declaratory judgment suit under section 7428 of the Code, challenging revocation of its status as an eligible donee under section 170(c)(2).

Protection under section 7428(c) of the Code begins on the date that the notice of revocation is published in the Internal Revenue Bulletin and ends on the date on which a court first determines that an organization is not described in section 170(c)(2), as more particularly set forth in section 7428(c)(1).

In the case of individual contributors, the maximum amount of contributions protected during this period is limited to $1,000.00, with a husband and wife being treated as one contributor. This protection is not extended to any individual who was responsible, in whole or in part, for the acts or omissions of the organization that were the basis for the revocation. This protection also applies (but without limitation as to amount) to organizations described in section 170(c)(2) which are exempt from tax under section 501(a). If the organization ultimately prevails in its declaratory judgment suit, deductibility of contributions would be subject to the normal limitations set forth under section 170.