Rp 2009-25

granted under the contract as originally issued. Thus, for example, a death benefit
increase does not cause a contract to be
treated as a new contract if the increase is
necessary to keep the contract in compliance with § 7702, or if the increase results
from the application of policyholder dividends to purchase paid-up additions, or if
the increase is the result of market performance or contract design with regard to a
variable contract. Notice and consent are
required if a contract is treated as a new
contract by reason of a material increase in
death benefit or other material change, unless a valid consent remains in effect with
regard to the insured.
Q–15. Under what circumstances does
§ 101(j) apply to a contract that is received
after August 17, 2006, in an exchange for
an employer-owned life insurance contract
issued on or before that date?
A–15. Section 863(d) of the PPA provides that § 101(j) generally does not apply
to a contract issued after August 17, 2006
in an exchange described in § 1035 for a
contract issued on or before that date. Section 863(d) also provides that, for purposes
of determining when a contract is issued,
a material increase in the death benefit or
other material change generally causes the
contract to be treated as a new contract. A
§ 1035 exchange that results in a material
increase in death benefit or other material
change (other than a change in issuer) is
treated as the issuance of a new contract
after August 17, 2006 for purposes of determining whether § 101(j) applies to the
contract. See A–14, this Notice.
Q–16. Under what circumstances is notice and consent required with regard to a
contract received in a § 1035 exchange for
an employer-owned life insurance contract
issued after August 17, 2006, for which the
notice and consent requirements were previously satisfied?
A–16. No further notice and consent
are required if either (1) the existing consent remains valid (see A–9, this Notice),
or (2) the exchange does not result in a material change in the death benefit or other
material change in the contract. The same
standards apply to determine whether a
change is “material” for this purpose as apply to determine whether an exchange results in a material increase in death benefit or other material change under the
transition rule for purposes of determining

June 15, 2009

whether § 101(j) applies to a contract. See
A–14, this Notice.
Information Reporting under Section
6039I and Form 8925
Section 6039I and Form 8925 require
that every applicable policyholder owning
1 or more employer-owned life insurance
contracts issued after August 17, 2006,
provide the following information showing for each year the contracts are owned:
(1) the number of employees of the applicable policyholder at the end of the year;
(2) the number of such employees insured
under such contracts; (3) the total amount
of insurance in force at the end of the year
under such contracts; (4) the name, address, and identifying number of the applicable policyholder and the type of business
in which the policyholder is engaged; and
(5) that the applicable policyholder has a
valid consent for each insured employee
(or, if all such consents are not obtained,
the number of employees for whom such
consent was not obtained).
Q–17. Are there circumstances under
which more than one taxpayer may be required to file Form 8925 by reason of the
same employer-owned life insurance contract?
A–17. Section 6039I requires that a return be filed by “every applicable policyholder owning 1 or more employer-owned
life insurance contracts issued after the
date of enactment.” Section 6039I(c) provides that any term used in § 6039I that is
also used in § 101(j) has the same meaning given the term by § 101(j). Under
§ 101(j)(3)(B)(i), the term “applicable policyholder” is generally the owner of the
employer-owned life insurance contract.
Although § 101(j)(3)(B)(ii) also includes
certain related persons in the definition
of “applicable policyholder,” those related
persons are not the applicable policyholders who own the contracts. Only the applicable policyholder “owning 1 or more
employer-owned life insurance contracts”
is required to file Form 8925.
EFFECTIVE DATE
This Notice is effective June 15, 2009.
The Service will not challenge a taxpayer
who made a good faith effort to comply
with § 101(j) based on a reasonable interpretation of that provision before that date.

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DRAFTING INFORMATION
The principal author of this Notice is
Linda K. Boyd of the Office of Associate
Chief Counsel (Financial Institutions &
Products). For further information regarding this Notice, contact Linda K. Boyd at
(202) 622–3970 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also: Part 1, § 355.)

Rev. Proc. 2009–25
SECTION 1. PURPOSE
This revenue procedure describes a new
pilot program for letter rulings for certain
transactions under the jurisdiction of the
Associate Chief Counsel (Corporate). The
new program does not diminish the availability of letter rulings under existing programs.
SECTION 2. CHANGES
This revenue procedure amplifies Rev.
Proc. 2009–1, 2009–1 I.R.B. 1, which explains how the Internal Revenue Service
(Service) provides advice to taxpayers on
issues under the jurisdiction of the Associate Chief Counsel (Corporate). This revenue procedure also amplifies Rev. Proc.
2009–3, 2009–1 I.R.B. 107, which sets
forth the areas of the Internal Revenue
Code (Code) under the jurisdiction of the
Associate Chief Counsel (Corporate) relating to issues on which the Service will not
issue letter rulings.
SECTION 3. BACKGROUND
.01 Current Procedures
Ordinarily, the Service will not issue a
letter ruling on only part of an integrated
transaction. Section 6.03 of Rev. Proc.
2009–1; Section 4.02(2) of Rev. Proc.
2009–3. If, however, a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may
be issued. Where it is impossible for the
Service to determine the tax consequences
of a larger transaction without knowing the
resolution of an issue on which the Service will not issue rulings under Rev. Proc.
2009–3, and the Service nevertheless rules
on the larger transaction, then the taxpayer

2009–24 I.R.B.

must state in the request to the best of the
taxpayer’s knowledge and belief the tax
consequences of the no-rule issue. Section 2.03 of Rev. Proc. 2009–3. The Service’s ruling letter will state that the Service did not consider, and no opinion is expressed upon, the no-rule issue. In appropriate cases, the Service may decline to issue rulings on such larger transactions due
to the relevance of the no-rule issue, despite the taxpayer’s representation.
In addition, the Service generally does
not issue letter rulings with respect to an
issue that is clearly and adequately addressed by statute, regulations, decisions
of a court, or authorities published in the
Internal Revenue Bulletin. Section 6.11
of Rev. Proc. 2009–1 and section 4.02(9)
of Rev. Proc. 2009–3. Similarly, unless the Service determines that there is
a significant issue (as defined in section
3.01(38) of Rev. Proc. 2009–3), the Service will not issue a ruling on whether a
transaction qualifies for nonrecognition
treatment under § 332, § 351 (except for
certain transfers undertaken before § 355
distributions) or § 1036. Likewise, absent a significant issue, the Service will
not issue a ruling as to whether a transaction constitutes a corporate reorganization
within the meaning of § 368(a)(1)(A) (including a transaction that qualifies under
§ 368(a)(1)(A) by reason of § 368(a)(2)(D)
or § 368(a)(2)(E)), § 368(a)(1)(B),
§ 368(a)(1)(C), § 368(a)(1)(E) or
§ 368(a)(1)(F), or as to the various consequences (such as nonrecognition and
basis adjustments) that arise as a result
of a transaction constituting a corporate
reorganization. If the Service determines
that there is a significant issue, and to the
extent the transaction is not described in
another no-rule section, the Service will
rule on the entire transaction, and not just
the significant issue. Section 3.01(38) of
Rev. Proc. 2009–3.
.02 New Procedures
In order to use Service resources more
efficiently and to increase the availability of private letter rulings, this revenue
procedure allows taxpayers to request rulings on one or more issues that: (1) are
solely under the jurisdiction of the Associate Chief Counsel (Corporate), (2) are
significant (as defined in section 3.01(38)
of Rev. Proc. 2009–3), and (3) involve the
tax consequences or characterization of a
transaction (or part of a transaction) that

2009–24 I.R.B.

occurs in the context of a § 355 distribution. Under this program, taxpayers may
request and the Service may issue a ruling on part of a transaction rather than on
the larger transaction. In addition, taxpayers may request and the Service may issue
a ruling on a particular legal issue under
a Code section or a section of the Income
Tax Regulations (Regulations) rather than
a ruling that addresses all aspects of that
Code or Regulations section (or any other
section). For example, the Service may
rule on whether the acquisition of the assets of one corporation by another corporation meets the continuity of business enterprise requirement of § 1.368–1(d) or is
described in § 355(b)(2)(C) even though
the ruling does not address overall qualification of the transaction under § 368 or
§ 355, respectively, as long as the acquisition occurs in the context of a § 355 distribution. Accordingly, section 6.03 of Rev.
Proc. 2009–1 and sections 3.01(38) and
4.02(2) of Rev. Proc. 2009–3 are amplified to provide that the Service will issue
letter rulings regarding such significant issues under the conditions specified herein.
Ruling requests under this revenue procedure must comply with the relevant requirements of any other applicable revenue procedures. See, e.g., Appendix E
of Rev. Proc. 2009–1. For example, a
request for a § 351 ruling on a transaction that occurs in the context of a § 355
distribution must provide all of the information required by Rev. Proc. 83–59,
1983–2 C.B. 575. However, if the request
is solely for a ruling on a significant issue
under § 351, the request must provide the
information and representations required
by Rev. Proc. 83–59 that pertain only
to that significant issue. Further, where a
taxpayer is requesting a ruling regarding
a significant issue under a Code or Regulations section (e.g., § 368(a)(2)(C)), the
taxpayer must provide a representation regarding qualification or characterization of
the transaction under such Code or Regulations section (e.g., § 368(a)(1)(A)) assuming that the Service rules as requested. The
Service reserves the right to rule on any
other issue in, or part of, the transaction
(including ruling adversely) if the Service
believes it is in the best interests of tax administration. Cf. section 2.01 of Rev. Proc
2009–3.
All pertinent no-rule policies governing
the Service’s ruling practice will govern

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requests for rulings made pursuant to this
revenue procedure. See, for example, Rev.
Proc. 2003–48, 2003–2 C.B. 86 (no-rule
policy regarding business purpose and device issues under § 355, and § 355(e) plan
issues). In addition, the Service will not
grant a ruling on a significant non-plan issue or issues under § 355(e) unless an adverse ruling on such non-plan issue or issues would result in there being a direct
or indirect acquisition by one or more persons of stock representing a 50-percent or
greater interest in the distributing corporation or the controlled corporation that is
part of a plan under § 355(e). With respect
to ruling requests regarding the effect of a
redemption under section 355(e), the Service will entertain such requests under the
conditions described in sections 5.09 and
5.10 of this revenue procedure. Rev. Proc.
2009–3 is amplified to reflect these policies.
The Service will, if requested, endeavor
to issue letter rulings requested pursuant to
this revenue procedure within ten weeks
from receipt of the request, provided that
the request meets the requirements of sections 7.02(4) and 8.05(1) of Rev. Proc.
2009–1 as amplified by this revenue procedure.
The ruling program under this revenue
procedure is a pilot program that applies
to ruling requests postmarked or, if not
mailed, received after May 4, 2009. This
pilot program will be evaluated by the Service periodically.
SECTION 4. REQUEST FOR
COMMENTS
The Service requests comments regarding the pilot program. Comments should
refer to Rev. Proc. 2009–25, and should
be submitted to:
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:PA:RU
Room 5226
or electronically via the Service internet
site at:
[email protected]
(the Service comments e-mail address).
All comments will be available for public
inspection and copying.

June 15, 2009

SECTION 5. PROCEDURE
.01 Rev. Proc. 2009–1 is amplified by
adding the following paragraphs to section
6.03:
In addition, the Office of the Associate
Chief Counsel (Corporate) may issue a letter ruling on part of an integrated transaction without ruling on the larger transaction if the requested ruling addresses one
or more issues that: (1) are under the jurisdiction of the Associate Chief Counsel
(Corporate), (2) are significant (as defined
in section 3.01(38) of Rev. Proc. 2009–3,
and (3) involve the tax consequences or
characterization of a transaction (or part
of a transaction) that occurs in the context
of a § 355 distribution. The Service may
also rule on a particular legal issue under a
Code or Regulations section without ruling
on all aspects of such Code or Regulations
section if the issue meets the three conditions of the preceding sentence.
Before preparing the letter ruling request under this section 6.03, a taxpayer
should call the Office of the Associate
Chief Counsel (Corporate) at the telephone
number provided in section 10.07(1)(a) of
this revenue procedure for pre-submission
conferences to discuss with one of the
branches whether the Office of the Associate Chief Counsel (Corporate) will issue
a letter ruling under this section 6.03. The
Service reserves the right to rule on any
other aspect of the transaction (including
ruling adversely) if the Service believes
it is in the best interests of tax administration. Cf. section 2.01 of Rev. Proc.
2009–3.
All requests for a ruling under this section 6.03 must contain the following:
(1) A narrative description of the transaction that puts the issue in context;
(2) An explanation concerning why the
issue is significant within the meaning of
section 3.01(38) of Rev. Proc. 2009–3;
(3) Applicable information from relevant revenue procedures with respect to
the significant issue. See Appendix E of
this revenue procedure (referring to, inter
alia, Rev. Proc. 96–30, 1996–1 C.B. 696,
as modified and amplified by Rev. Proc.
2003–48, 2003–2 C.B. 86);
(4) The precise ruling being requested;
(5) Where the taxpayer is requesting a
ruling on the tax treatment of part of an
integrated transaction, a representation regarding the relevant tax consequences of

June 15, 2009

the larger transaction (to the best knowledge and belief of the taxpayer), assuming
that the Service issues the requested ruling; additionally, where the taxpayer is requesting a ruling on a particular legal issue under a Code section or section of the
Regulations (e.g., § 1.368–2(k)), a representation (to the best knowledge and belief of the taxpayer) regarding qualification or characterization of the transaction
under such Code or Regulations section
(e.g., § 368(a)(1)(A)), assuming that the
Service issues the requested ruling; and
(6) A statement that no rulings outside
the jurisdiction of the Associate Chief
Counsel (Corporate) are requested.
If the Service issues a ruling on a significant issue under this procedure, then
the letter ruling will state that no opinion
is expressed as to the overall tax consequences of the transactions described in
the letter ruling or as to any issue or step
not specifically addressed by the letter. In
addition, letter rulings under this procedure will contain the following (or similar)
language at the beginning of the letter:
This Office expresses no opinion as
to the overall tax consequences of the
transaction(s) described in this letter.
Rather, the ruling(s) contained in this
letter only address one or more discrete
legal issues involved in the transaction.
.02 Rev. Proc. 2009–1 is amplified by
replacing the last sentence of the first paragraph of section 7.02(4) with the following:
Notwithstanding the previous sentence,
expedited handling may be available for
certain issues under the jurisdiction of the
Associate Chief Counsel (Corporate), as
provided below.
.03 Rev. Proc. 2009–1 is amplified by
replacing the heading and the first sentence
of the seventh paragraph of section 7.02(4)
with the following:
EXPEDITED LETTER RULING
PROCESS FOR CERTAIN REQUESTS
UNDER THE JURISDICTION OF THE
ASSOCIATE CHIEF COUNSEL (CORPORATE): If a taxpayer requests a letter
ruling on whether a transaction constitutes a reorganization under § 368 or a
distribution under § 355, or a letter ruling
involving certain significant issues under
the jurisdiction of the Associate Chief
Counsel (Corporate) as described in section 6.03 of this revenue procedure, and
the taxpayer asks for expedited handling

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pursuant to this provision, the Service will
grant expedited handling.
.04 Rev. Proc. 2009–1 is amplified
by replacing the last sentence of section
7.02(4) with the following:
For further information regarding
this EXPEDITED LETTER RULING PROCESS FOR CERTAIN REQUESTS UNDER THE JURISDICTION OF THE ASSOCIATE CHIEF
COUNSEL (CORPORATE), call the
telephone number provided in section
10.07(1)(a) of this revenue procedure
for pre-submission conferences with the
Office of Associate Chief Counsel (Corporate).
.05 Rev. Proc. 2009–1 is amplified by
replacing the first sentence of the last paragraph of section 8.05(1) with the following:
The Service will not endeavor to
process on an expedited basis a ruling
request regarding reorganizations under
§ 368, distributions under § 355, or certain
significant issues under the jurisdiction of
the Associate Chief Counsel (Corporate)
as described in section 6.03 of this revenue
procedure unless the branch representative
in the Office of Associate Chief Counsel
(Corporate) receives all requested additional information within 10 calendar days
from the date of the request for such additional information, unless an extension of
time is granted.
.06 Rev. Proc. 2009–1 is amplified
by replacing the first sentence of the third
paragraph of section 19 with the following:
The collections of information in this
revenue procedure are in sections 5.06,
6.03, 7.01, 7.02, 7.03, 7.04, 7.05, 7.07,
8.02, 8.05, 10.01, 10.06, 10.07, 11.11,
13.02, 15.02, 15.07, 15.08, 15.09, 15.11,
paragraph (B)(1) of Appendix A, Appendix C, and Appendix E (subject matter-rate
orders; regulatory agency; normalization).
.07 Rev. Proc. 2009–1 is amplified by
replacing the second sentence of Appendix
C, Item 35 with the following sentence:
Note that certain requests under the jurisdiction of the Associate Chief Counsel
(Corporate) may receive expedited treatment without stating a compelling need.
.08 Rev. Proc. 2009–3 is amplified by
starting a new paragraph immediately before the last sentence of the first paragraph
of section 3.01(38) and by adding the following sentences at the end of the revised
first paragraph in section 3.01(38):

2009–24 I.R.B.

However, the Service may rule on a
significant issue in a transaction that occurs in the context of a § 355 distribution
without ruling on the entire transaction.
See section 6.03 of Rev. Proc. 2009–1.
Before preparing the letter ruling request,
a taxpayer should call the Office of the
Associate Chief Counsel (Corporate) at
(202) 622–7700 to discuss with one of the
branches whether the Office of the Associate Chief Counsel (Corporate) will issue
a letter ruling only involving that significant issue. The Service reserves the right
to rule on any other issue in the transaction
(including ruling adversely) if the Service
believes it is in the best interests of tax
administration. Cf. section 2.01 of this
revenue procedure.
.09 Rev. Proc. 2009–3 is amplified by
adding the following paragraph to section
3.01:
Section 355.—Distribution of Stock
and Securities of a Controlled Corporation.—Whether the distribution of the
stock of a controlled corporation is being
carried out for one or more corporate business purposes, whether the transaction is
used principally as a device, and whether
the distribution and an acquisition are part
of a plan under § 355(e). See Rev. Proc.
2003–48, 2003–2 C.B. 86. Notwithstanding the preceding sentence, the Service
may issue a ruling regarding the effect of
redemptions under § 355(e) pending the
issuance of temporary or final regulations
regarding redemptions under § 355(e) if
an adverse ruling on such question would
result in there being a direct or indirect
acquisition by one or more persons of
stock representing a 50-percent or greater
interest in the distributing corporation or
the controlled corporation that is part of a
plan under § 355(e).
.10 Rev. Proc. 2009–3 is amplified by
adding the following paragraph to section
4.01:
Section 355.—Distribution of Stock
and Securities of a Controlled Corporation.—Any issue under § 355(e) other
than whether a distribution and an acquisition are part of a plan (i.e., any non-plan
issue). Notwithstanding the preceding

2009–24 I.R.B.

sentence, the Service generally will rule
on a non-plan issue or issues (e.g., whether
a corporation constitutes a predecessor of
distributing) if an adverse ruling on such
non-plan issue or issues would result in
there being a direct or indirect acquisition
by one or more persons of stock representing a 50-percent or greater interest in the
distributing corporation or the controlled
corporation that is part of a plan under
§ 355(e).
.11 Rev. Proc. 2009–3 is amplified by
adding the following paragraph to section
4.02(2):
Notwithstanding the previous paragraph, the Office of the Associate Chief
Counsel (Corporate) may issue a letter
ruling on part of an integrated transaction
without ruling on the larger transaction
if such transaction occurs in the context
of a § 355 distribution. See section 6.03
of Rev. Proc. 2009–1. Before preparing
the letter ruling request, a taxpayer should
call the Office of the Associate Chief
Counsel (Corporate) at (202) 622–7700 to
discuss with one of the branches whether
the Office of the Associate Chief Counsel
(Corporate) will issue a letter ruling only
involving part of the transaction. The Service reserves the right to rule on any other
part of the transaction (including ruling
adversely) if the Service believes it is in
the best interests of tax administration.
Cf. section 2.01 of this revenue procedure.
SECTION 6. EFFECT ON OTHER
REVENUE PROCEDURES
Rev. Proc. 2009–1, 2009–1 I.R.B. 1,
and Rev. Proc. 2009–3, 2009–1 I.R.B.
107, are amplified.
SECTION 7. EFFECTIVE DATE
This revenue procedure is effective
May 4, 2009.
SECTION 8. PAPERWORK
REDUCTION ACT

Management and Budget (OMB) in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1522.
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 collections of information in this
revenue procedure are in section 5. This
information is required and will be used to
determine whether a taxpayer would qualify for a letter ruling on part of an integrated transaction without the Service ruling on the larger transaction. The collections of information are required to obtain
a benefit. The likely respondents are business or other for-profit institutions.
The estimated total annual reporting burden under Rev. Proc. 2009–1 is
513,150 hours.
The estimated annual burden per respondent varies from 1 hour to 200 hours,
depending on individual circumstances,
with an estimated average of 90.1054
hours. The estimated number of respondents is 5,695.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long as
their contents may become material in the
administration of any internal revenue tax
law. Generally tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 9. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Russell P. Subin of the Office
of Associate Chief Counsel (Corporate).
For further information regarding this revenue procedure, contact Russell P. Subin
at (202)–622–7790 (not a toll-free call).

The collections of information contained in this revenue procedure have been
reviewed and approved by the Office of

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June 15, 2009