Rp 2005-50

SECTION 3. PROCEDURE
.01 Maximum Automobile Value for
Using the Cents-per-mile Valuation Rule.
An employer providing a passenger automobile for the first time in calendar year
2005 for the personal use of any employee
may determine the value of the personal
use by using the vehicle cents-per-mile
valuation rule in section 1.61–21(e) of the
regulations if its fair market value on the
date it is first made available does not
exceed $14,800 for a passenger automobile other than a truck or van, or $16,300
for a truck or van. If the fair market
value of the passenger automobile exceeds
this amount, the employer may determine
the value of the personal use under the
general valuation rules of regulations section 1.61–21(b) or under the special valuation rules of section 1.61–21(d) (Automobile lease valuation) or section 1.61–21(f)
(Commuting valuation) if the applicable
requirements are met. See Rev. Proc.
2003–75 for guidance on determining the
maximum value of passenger automobiles
first made available during calendar year
2003, and Rev. Proc. 2004–20 for guidance on determining the maximum value
of passenger automobiles first made available during calendar year 2004.
.02 Maximum Automobile Value for
Using the Fleet-Average Valuation Rule.
An employer with a fleet of 20 or more
automobiles providing an automobile for
the first time in calendar year 2005 for
the personal use of any employee for an
entire year may determine the value of
the personal use by using the fleet-average valuation rule in regulations section
1.61–21(d)(5)(v) to calculate the Annual
Lease Values of the automobiles in the
fleet. The fleet-average valuation rule
may not be used to determine the Annual
Lease Value of any automobile if its fair
market value on the date it is first made
available exceeds $19,600 for a passenger
automobile other than a truck or van, or
$21,300 for a truck or van. If all other
applicable requirements are met, an employer with a fleet of 20 or more vehicles
consisting of passenger automobiles other
than trucks or vans as well as trucks and
vans may use the fleet-average valuation
rule as long as none exceeds its respective maximum allowable value. If the fair
market value of any passenger automobile in the fleet exceeds these amounts,

August 8, 2005

the employer may determine the value of
the personal use under regulations section 1.61–21(f) (Commuting valuation)
or the general valuation rules of section
1.61–21(b), or may determine the Annual
Lease Value of such automobile separately
under the automobile lease valuation rule
of section 1.61–21(d)(2) if the applicable
requirements are met.
SECTION 4. EFFECTIVE DATE
This revenue procedure applies to employer-provided passenger automobiles,
trucks or vans first made available to employees for personal use in calendar year
2005.
SECTION 5. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Frederick L. Wesner of the
Office of Division Counsel/Associate
Chief Counsel (Tax Exempt & Government Entities). For further information
regarding this revenue procedure, contact
Frederick L. Wesner at (202) 622–6040
(not a toll-free call).
26 CFR 1.6050S–1: Information reporting for qualified tuition and related expenses.

Rev. Proc. 2005–50
SECTION 1. PURPOSE
This revenue procedure prescribes how
an eligible educational institution may
obtain automatic consent from the Service
to change its method of reporting under
section 6050S of the Code and section
1.6050S–1 of the Income Tax Regulations. An eligible educational institution
that complies with all of the conditions
and procedures of this revenue procedure has obtained consent to change its
method of reporting as required by section
1.6050S–1(b)(1).
SECTION 2. BACKGROUND
In general, section 6050S requires any
eligible educational institution (as defined
in section 25A(f)(2)) to file information returns and to furnish information statements
to assist students and the Service in determining the amount of qualified tuition

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and related expenses (qualified expenses)
for which an education tax credit is allowable under section 25A (as well as other tax
benefits for higher education expenses).
For calendar years beginning after December 31, 2003, an eligible educational institution must elect to report either the aggregate amount of payments received, or
the aggregate amount billed, for qualified
expenses during the calendar year for students enrolled for any academic period.
Section 1.6050S–1(b)(1) of the regulations
provides that once an eligible educational
institution elects to report either amounts
billed, or payments received, it must continue to use the same method of reporting
for all subsequent calendar years for which
it is required to file information returns,
and furnish information statements, unless
permission is granted to change its reporting method.
Section 25A(f)(2) of the Code defines
an “eligible educational institution” to
mean an institution: (1) that is described
in 20 U.S.C. 1088 of the Higher Education Act of 1965 (Education Act) as in
effect on the date of enactment of section
25A (August 5, 1997); and (2) that is eligible to participate in federal financial
aid programs described in Title IV of the
Education Act. As of August 5, 1997, 20
U.S.C. 1088(a)(1) generally defined an
“institution of higher education” as: (1) an
accredited postsecondary educational institution (as defined in 20 U.S.C. 1141(a)
(a public or nonprofit institution of higher
education)); (2) a proprietary institution of
higher education; and (3) a postsecondary
vocational institution.
To establish eligibility to participate in
financial aid programs under the Education Act, an institution generally must apply to the Secretary of Education for a determination that it qualifies as an eligible
institution, and may request a certification
that it is eligible to participate in financial aid programs under Title IV. See 34
C.F.R. 600.20(a). If the Secretary of Education determines that the entire applicant institution, including all its locations
and all its educational programs, satisfies
the applicable requirements, then the eligibility determination extends to all educational programs and locations identified on
the institution’s application. See 34 C.F.R.
600.10(b)(1). If, however, only certain educational programs or locations satisfy the
applicable requirements, then the eligibil-

2005–32 I.R.B.

ity determination extends only to those educational programs and locations as identified by the Secretary of Education. See
34 C.F.R. 600.10(b) (2); see also 34 C.F.R.
600.20(c).
The Secretary of Education issues an
eligibility determination at the institution
level, and the determination may extend
to some or all programs, locations, and
branch campuses of the institution. Similarly, an “eligible educational institution”
for purposes of section 25A(f)(2) of the
Code is determined at the institution level
and the “eligible educational institution”
may extend to some or all programs, locations, and branch campuses of the institution consistent with the Secretary of Education’s eligibility determination.
SECTION 3. CONDITIONS FOR
AUTOMATIC CONSENT
For section 6050S purposes, the eligible educational institution at the institution level must elect one method of reporting, and the method extends to all locations
and branch campuses of the institution to
which the Secretary of Education’s eligibility determination extends. Therefore, if
an eligible educational institution changes
its reporting method under this revenue
procedure, all locations and branch campuses of the institution to which the eligibility determination extends must use
the method to which the eligible educational institution changes (new method),
beginning with the calendar year for which
the change in reporting method is effective (year of change). Because the Service has not previously announced in published guidance that locations and branch
campuses of an eligible educational institution to which the eligibility determination extends must use the same method of
reporting, the Service will not require locations or branch campuses of an eligible
educational institution that elected (before
the effective date of this revenue procedure) to use different methods of reporting
to change to the same method of reporting.
If, however, an eligible educational institution changes its method of reporting under
this revenue procedure, then all locations
and branch campuses of the eligible educational institution to which the eligibility determination extends not already using the new method of reporting must also
change to the new method of reporting un-

2005–32 I.R.B.

der this revenue procedure, beginning with
the year of the change.
An eligible educational institution may
not change its method of reporting more
frequently than once every five years under this revenue procedure, except upon
a showing of extraordinary circumstances,
such as significant hardship to the eligible
educational institution.
An eligible educational institution, including all its locations and branch campuses to which the eligibility determination extends, must include a notification
of the change in reporting method to the
students with, or on, the information statements required to be furnished to the students for the year of the change.

cations and branch campuses, has changed
its method of reporting within the four year
period preceding the year of the change,
and if so: (a) the calendar year of the previous change, and (b) an explanation of extraordinary circumstances.

SECTION 4. AUTOMATIC CONSENT
PROCEDURES

Pursuant to section 1.6050S–1(b)(1) of
the regulations, the consent of the Service
is granted to an eligible educational institution, including all its locations and branch
campuses to which the eligibility determination extends, to change its method of reporting under section 6050S and the regulations for the calendar year in which the
institution timely submits the written statement required by section 4 of this revenue procedure. This consent is granted
only if the eligible educational institution
complies with all the conditions and procedures of this revenue procedure.
If the Service determines that the eligible educational institution has not complied with the conditions and procedures
of this revenue procedure (for example,
the eligible educational institution has not
demonstrated extraordinary circumstances
for changing a method of reporting within
5 years of a previous change in reporting
method), the Service will notify the eligible educational institution that consent
to change its method of reporting under
section 6050S and the regulations for the
specified calendar year is not granted.

An eligible educational institution must
notify the Service of its change in reporting
method under this revenue procedure by
submitting a written statement to:
Internal Revenue Service
Enterprise Computing Center —
Martinsburg (ECC—MTB)
Information Reporting Program
230 Murall Drive
Kearneysville, WV 25430
The written statement must be filed no
later than three months before the due date
of the information returns for the year of
the change. The Service will not acknowledge receipt of a written statement submitted under this revenue procedure.
The written statement must include a
prominent reference to this revenue procedure and must contain the following information:
1. The eligible educational institution’s
name and Employer Identification Number (EIN);
2. All locations and branch campuses
included in the eligible educational institution (and their EINs);
3. The method of reporting under section 6050S and the regulations to which
the eligible educational institution, including all its locations and branch campuses,
is changing;
4. The calendar year for which the
change in reporting is effective;
5. A statement as to whether the eligible educational institution, or any of its lo-

273

The written statement must be signed by
an officer of the eligible educational institution authorized to sign tax returns.
The written request must be signed under
penalties of perjury that, to the best of the
person’s knowledge and belief, the information contained in the statement is true,
correct, and complete.
SECTION 5. AUTOMATIC CONSENT

SECTION 6. EFFECTIVE DATE
This revenue procedure is effective
August 8, 2005.
SECTION 7. PAPERWORK
REDUCTION ACT
The collection of information contained in this revenue procedure has been
reviewed and approved by the Office
of Management and Budget in accordance with the Paperwork Reduction Act

August 8, 2005

(44 U.S.C. 3507) under control number
1545–1952.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this
revenue procedure is in section 4. The information is required in order for an eligible educational institution to obtain permission to change its reporting method under section 6050S and the regulations. The
collection of information is voluntary to
obtain a benefit. The likely respondents
are nonprofit institutions.
The estimated total annual recordkeeping and reporting burden is 300 hours.

August 8, 2005

The estimated annual recordkeeping
and reporting burden per respondent is 10
hours. The estimated number of annual
respondents is 30.
Books or records relating to a collection
of information must be retained so long as
their contents may become material in administration of any internal revenue law.
Generally, tax returns and return information are confidential, as required by section
6103.

dure and Administration (Administrative
Provisions and Judicial Practice). For
further information regarding this revenue procedure, contact Donna Welch at
202–622–4910 (not a toll-free call); and
for further information regarding submitting a change, contact the Enterprise
Computing Center, Information Reporting Program Customer Service Section at
1–866–455–7438 (a toll-free call).

SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Donna Welch of the Office of Associate Chief Counsel, Proce-

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2005–32 I.R.B.