This Week's Internal Revenue Bulletin

HIGHLIGHTS OF THIS ISSUE

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

EMPLOYEE PLANS

Notice 2020-37, page 900. This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for May 2020 used under § 417(e)(3)(D), the 24-month average segment rates applicable for May 2020, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

INCOME TAX

T.D. 9897, page 882. This document contains final regulations regarding the treatment of certain interests in corporations as stock or indebtedness. The final regulations generally affect corporations, including those that are partners of certain partnerships, when those corporations or partnerships issue purported indebtedness to related corporations or partnerships.

Notice 2020-38, page 903. This notice provides the inflation adjustment factors and reference prices for calendar year 2020 that are used to determine the availability of the renewable electricity production credit, the refined coal production credit, and the Indian coal production credit under section 45. The notice also provides the credit amounts for calendar year 2020 under section 45.

Rev. Proc. 2020-15, page 905. This revenue procedure updates and supersedes Rev. Proc. 2019-23 by providing an updated list of countries with which the United States has in force an information exchange agreement, such that bank deposit interest paid to residents of such countries must be reported by payors to the extent required under Treas. Reg. §§1.6049-8(a) and 1.6049-4(b)(5). This revenue procedure adds one country, Singapore, to this list.

REG-104591-18, page 911. The proposed regulations provide guidance under amended section 162(f) of the Internal Revenue Code (Code), concerning the deduction of certain fines, penalties, and other amounts, and guidance concerning the information reporting requirements, under new section 6050X of the Code, with respect to respect to those fines, penalties, and other amounts. The proposed regulations affect taxpayers that pay or incur amounts to, or at the direction of, governments or governmental entities in relation to the violation of a law or investigations or inquiries by governments or governmental entities into the potential violation of a law. The proposed regulations also affect governments or governmental entities subject to the related reporting requirement. In general, the amendments to section 162(f) and new section 6050X apply to amounts paid or incurred on or after December 22, 2017.

TAX CONVENTIONS

Announcement 2020-6, page 911. This announcement provides the Treasury Department and IRS view on the interpretation of references to the North American Free Trade Agreement (NAFTA) once that agreement is replaced by the Agreement between the United States Canada and Mexico (the USMCA). Once the USMCA goes into force, the Treasury Department and IRS will interpret any references to NAFTA in a U.S. income tax treaty as a reference to the USMCA.