Internal Revenue Bulletins  

2006 Revenue Rulings

A "Revenue Ruling" is an official interpretation by the Service of the Internal Revenue Code, related statutes, tax treaties, and regulations. It is the conclusion of the Service on how the law is applied to a specific set of facts. A revenue ruling states the Service position on an issue. Revenue rulings are issued only by the National Office and are published in the Internal Revenue Bulletin.

For more information about revenue procedures see Revenue Procedure 89-14, or, the Guide to Understanding the Differences Among Official IRS Documents.

Revenue Rulings Bulletin Date of IRB
Rev. Rul. 2006-63(HTML) IRB #2006-52(HTML) December 26, 2006
Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning January 1, 2007, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 5.5 percent.
Rev. Rul. 2006-62(HTML) IRB #2006-52(HTML) December 26, 2006
LIFO; price indexes; department stores. The October 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, October 31, 2006.
Rev. Rul. 2006-61(HTML) IRB #2006-49(HTML) December 4, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for December 2006.
Rev. Rul. 2006-60(HTML) IRB #2006-48(HTML) November 27, 2006
2007 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2007 are provided for use in determining contributions to defined benefit plans and permitted disparity.
Rev. Rul. 2006-59(HTML) IRB #2006-48(HTML) November 27, 2006
LIFO; price indexes; department stores. The September 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, September 30, 2006.
Rev. Rul. 2006-58(HTML) IRB #2006-46(HTML) November 13, 2006
Charitable remainder trust; real estate investment trust (REIT). This ruling illustrates the application of section 860E of the Code where a charitable remainder trust is a shareholder of a real estate investment trust (REIT) or a partner of a partnership, and the REIT or the partnership has excess inclusion income.
Rev. Rul. 2006-57(HTML) IRB #2006-47(HTML) November 20, 2006
Qualified transportation fringes; smartcards and debit cards. This ruling provides guidance to employers on the use of smartcards and debit cards to provide qualified transportation fringes under section 132(f) of the Code.
Rev. Rul. 2006-56(HTML) IRB #2006-46(HTML) November 13, 2006
Excess per diem allowances. This ruling provides that where an expense allowance arrangement has no mechanism or process to track allowances paid and routinely pays per diem allowances in excess of the federal per diem rates without requiring actual substantiation of all the expenses or repayment of the excess amount, all payments made under the arrangement will be treated as made under a nonaccountable plan.
Rev. Rul. 2006-55(HTML) IRB #2006-45(HTML) November 6, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for November 2006.
Rev. Rul. 2006-54(HTML) IRB #2006-45(HTML) November 6, 2006
2006 base period T-bill rate. The "base period T-bill rate" for the period ending September 30, 2006, is published as required by section 995(f) of the Code.
Rev. Rul. 2006-53(HTML) IRB #2006-44(HTML) October 30, 2006
LIFO; price indexes; department stores. The August 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, August 31, 2006.
Rev. Rul. 2006-52(HTML) IRB #2006-43(HTML) October 23, 2006
Resellers of air transportation. This ruling explains the tax consequences under section 4261 of the Code when a traveler purchases a ticket for taxable transportation from a third party intermediary other than the airline. Rev. Ruls. 75-296 and 80-31 distinguished.
Rev. Rul. 2006-51(HTML) IRB #2006-41(HTML) October 10, 2006
Low-income housing credit; satisfactory bond; "bond factor" amounts for the period January through December 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through December 2006.
Rev. Rul. 2006-50(HTML) IRB #2006-41(HTML) October 10, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2006.
Rev. Rul. 2006-49(HTML) IRB #2006-40(HTML) October 2, 2006
Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning October 1, 2006, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 5.5 percent.
Rev. Rul. 2006-48(HTML) IRB #2006-39(HTML) Sept. 25, 2006
LIFO; price indexes; department stores. The July 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 2006.
Rev. Rul. 2006-47(HTML) IRB #2006-39(HTML) Sept. 25, 2006
Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge in effect for the second half of 2006 are set forth for purposes of determining the value of noncommercial flights on employer-provided aircraft under section 1.61-21(g) of the regulations.
Rev. Rul. 2006-46(HTML) IRB #2006-39(HTML) Sept. 25, 2006
Conservation Security Program (CSP). This ruling holds that the Conservation Security Program is substantially similar to the type of programs described in section 126(a)(1) through (8) of the Code within the meaning of section 126(a)(9). As a result, all or a portion of cost-share payments received under the CSP is eligible for exclusion from gross income to the extent permitted by section 126.
Rev. Rul. 2006-45(HTML) IRB #2006-37(HTML) Sept. 11, 2006
Mutual life insurance companies; recomputed differential earnings rate. The recomputed differential earnings rate for 2004 is determined for use by mutual life insurance companies to compute their income tax liability for 2005.
Rev. Rul. 2006-44(HTML) IRB #2006-36(HTML) Sept. 5, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for September 2006.
Rev. Rul. 2006-43(HTML) IRB #2006-35(HTML) August 28, 2006
Government pick-up plans; employer contributions; income tax; prospective application. This ruling describes the actions required for a state or its political subdivisions, etc., to "pick-up" or treat certain contributions as employer contributions to a plan qualified under section 401(a) of the Code. If certain criteria are met, this ruling will be applied prospectively. Rev. Ruls. 81-35, 81-36, and 87-10 amplified and modified.
Rev. Rul. 2006-42(HTML) IRB #2006-35(HTML) August 28, 2006
Levy on bank account. This ruling explains that a superpriority lien argument is not a defense to a levy. If a bank has such an argument, it must file a wrongful levy suit within nine months of the levy. Otherwise, the statute of limitations bars such a suit.
Rev. Rul. 2006-41(HTML) IRB #2006-35(HTML) August 28, 2006
LIFO; price indexes; department stores. The June 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, June 30, 2006.
Rev. Rul. 2006-40(HTML) IRB #2006-32(HTML) August 7, 2006
LIFO; price indexes; department stores. The May 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, May 31, 2006.
Rev. Rul. 2006-39(HTML) IRB #2006-32(HTML) August 7, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for August 2006.
Rev. Rul. 2006-38(HTML) IRB #2006-29(HTML) July 17, 2006
Prohibited transactions; first tier excise tax calculations. This ruling describes how the amount involved is calculated with respect to the section 4975 prohibited transaction excise tax if an employer does not timely pay elective deferrals to a qualified plan.
Rev. Rul. 2006-37(HTML) IRB #2006-30(HTML) July 24, 2006
Low-income housing credit; satisfactory bond; "bond factor" amounts for the period January through September 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through September 2006.
Rev. Rul. 2006-36(HTML) IRB #2006-36(HTML) Sept. 5, 2006
Health reimbursement arrangements. This ruling holds that amounts that may be paid as medical benefits to a designated beneficiary (other than an employee's spouse or an employee's dependent) are not excludable from the employee's gross income under section 105(b) of the Code. Notice 2002-45 and Rev. Ruls. 2002-41 and 2005-24 amplified.
Rev. Rul. 2006-35(HTML) IRB #2006-28(HTML) July 10, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long- term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for July 2006.
Rev. Rul. 2006-34(HTML) IRB #2006-26(HTML) June 26, 2006
Real property interests; closely held business. This ruling updates the guidance provided by Rev. Ruls. 75-365, 75-366, and 75-367, and provides certain safe harbors and a non-exclusive list of factors that are likely to be relevant in determining whether a deceased owner's activities with regard to certain real property were sufficiently active to support a finding that the real property interest constitutes a closely held business interest for purposes of section 6166 of the Code. Rev. Rul. 75-365 revoked and Rev. Rul. 75-367 revoked in part.
Rev. Rul. 2006-33(HTML) IRB #2006-26(HTML) June 26, 2006
LIFO; price indexes; department stores. The April 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, April 30, 2006.
Rev. Rul. 2006-32(HTML) IRB #2006-26(HTML) June 26, 2006
Special use value; farms; interest rates. The 2006 interest rates to be used in computing the special use value of farm real property for which an election is made under section 2032A of the Code are listed for estates of decedents.
Rev. Rul. 2006-31(HTML) IRB #2006-25(HTML) June 19, 2006
Regulated investment company (RIC). This ruling modifies Rev. Rul. 2006-1 to extend until September 30, 2006, the transition period provided by that ruling, and clarifies that Rev. Rul. 2006-1 was not intended to preclude a conclusion that income from certain instruments (such as structured notes) that create a commodity exposure for the holder is qualifying income under section 851(b)(2) of the Code. Rev. Rul. 2006-1 modified and clarified.
Rev. Rul. 2006-30(HTML) IRB #2006-25(HTML) June 19, 2006
Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning July 1, 2006, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 5.5 percent.
Rev. Rul. 2006-29(HTML) IRB #2006-23(HTML) June 5, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for June 2006.
Rev. Rul. 2006-28(HTML) IRB #2006-22(HTML) May 30, 2006
LIFO; price indexes; department stores. The March 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, March 31, 2006.
Rev. Rul. 2006-27(HTML) IRB #2006-21(HTML) May 22, 2006
Down payment assistance; home buyers. This ruling sets forth the applicable rules and standards for determining whether organizations that provide down payment assistance to home buyers qualify as tax-exempt charities. In addition, the ruling addresses whether assistance received for a down payment is treated as a gift and included in a home buyer's basis.
Rev. Rul. 2006-26(HTML) IRB #2006-22(HTML) May 30, 2006
IRA, marital deduction. This ruling clarifies circumstances under which the surviving spouse is considered to have a qualifying income interest for life in an IRA where a marital trust is designated as the IRA beneficiary for purposes of electing to have the IRA treated as qualifying terminable interest property under section 2056(b)(7) of the Code. Rev. Rul. 2000-2 modified and superseded.
Rev. Rul. 2006-25(HTML) IRB #2006-20(HTML) May 15, 2006
Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2005 and 2006. Rev. Rul. 92-19 supplemented in part.
Rev. Rul. 2006-24(HTML) IRB #2006-19(HTML) May 8, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for May 2006.
Rev. Rul. 2006-23(HTML) IRB #2006-17(HTML) April 24, 2006
LIFO; price indexes; department stores. The February 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, February 28, 2006.
Rev. Rul. 2006-22(HTML) IRB #2006-14(HTML) April 3, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for April 2006.
Rev. Rul. 2006-21(HTML) IRB #2006-15(HTML) April 10, 2006
Frivolous tax returns; reliance on Paperwork Reduction Act. This ruling emphasizes to taxpayers, promoters, and return preparers that taxpayers are required to file a federal income tax return under section 6012 of the Code, and the regulations thereunder, and that the Paperwork Reduction Act of 1980 (PRA) does not relieve taxpayers of the duty to file. Any argument that the PRA relieves the taxpayer of the duty to file an income tax return has no merit and is frivolous. T.D. 9255, page 741.
Rev. Rul. 2006-20(HTML) IRB #2006-15(HTML) April 10, 2006
Frivolous tax returns; "Native American Treaty." This ruling emphasizes to taxpayers, promoters, and return preparers that there is no right to exemption from federal income tax for Native Americans under an unspecified "Native American Treaty." Any return position based on an unspecified "Native American Treaty" has no merit and is frivolous. As a general rule, Native Americans are subject to federal income tax just like every other American.
Rev. Rul. 2006-19(HTML) IRB #2006-15(HTML) April 10, 2006
Frivolous tax returns; use of sham trusts. This ruling emphasizes that an individual cannot escape taxation by attributing income to a purported trust. The Service will take vigorous enforcement action against frivolous arguments relating to trusts.
Rev. Rul. 2006-18(HTML) IRB #2006-15(HTML) April 10, 2006
Frivolous tax returns; only certain persons subject to federal income tax. This ruling emphasizes to taxpayers, promoters, and return preparers that all individuals are subject to federal income tax. Any argument that Forms W-2 only record and report payments made to federal employees, or that only federal employees or residents of the District of Columbia or federal territories and enclaves earn wages subject to tax, has no merit and is frivolous.
Rev. Rul. 2006-17(HTML) IRB #2006-15(HTML) April 10, 2006
Frivolous tax returns; "nunc pro tunc." This ruling emphasizes to taxpayers, promoters, and return preparers that inserting the phrase "nunc pro tunc" on a return or other document submitted to the Service has no legal effect and does not validate an invalid return, make a delinquent return timely, invalidate a signature, create a claim for refund of taxes previously paid, or reduce one's federal tax liability.
Rev. Rul. 2006-16(HTML) IRB #2006-14(HTML) April 3, 2006
Joint and several liability; relief under section 6015. This ruling discusses the issue of whether a taxpayer is precluded from raising a request for relief from joint and several liability under section 6015 by virtue of a previous Chapter 7 bankruptcy case in which the Service filed a proof of claim, but the bankruptcy court did not make an actual determination of tax liability.
Rev. Rul. 2006-15(HTML) IRB #2006-13(HTML) March 27, 2006
LIFO; price indexes; department stores. The January 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, January 31, 2006.
Rev. Rul. 2006-14(HTML) IRB #2006-15(HTML) April 10, 2006
Low-income housing credit; satisfactory bond; "bond factor" amounts for the period January through June 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through June 2006.
Rev. Rul. 2006-13(HTML) IRB #2006-13(HTML) March 27, 2006
Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cent-per-mile rates and terminal charges in effect for the first half of 2006 are set forth for purposes of determining the value of noncommercial flights on employer-provided aircraft under section 1.61-21(g) of the regulations.
Rev. Rul. 2006-12(HTML) IRB #2006-12(HTML) March 20, 2006
Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning April 1, 2006, will be 7 percent for overpayments (6 percent in the case of a corporation), 7 percent for underpayments, and 9 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 4.5 percent.
Rev. Rul. 2006-11(HTML) IRB #2006-12(HTML) March 20, 2006
TEFRA partnership provisions; classification of items. This ruling provides that the tax treatment by an affiliated group on a consolidated return of the parent corporation's payment to a partnership, in which the parent is not a partner, is not a "partnership item" within the meaning of section 6231(a)(3) of the Code or an "affected item" within the meaning of section 6231(a)(5), even if another member of the group is a partner in the partnership.
Rev. Rul. 2006-10(HTML) IRB #2006-10(HTML) March 6, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for March 2006.
Rev. Rul. 2006-09(HTML) IRB #2006-09(HTML) February 27, 2006
Section 45 credit offset. The credit under section 45 of the Code for electricity produced from qualified energy resources at a qualified facility is not reduced under section 45(b)(3) on account of a state or local tax credit.
Rev. Rul. 2006-08(HTML) IRB #2006-09(HTML) February 27, 2006
LIFO; price indexes; department stores. The December 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, December 31, 2005.
Rev. Rul. 2006-07(HTML) IRB #2006-06(HTML) February 6, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for February 2006.
Rev. Rul. 2006-06(HTML) IRB #2006-05(HTML) January 30, 2006
LIFO; price indexes; department stores. The November 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, November 30, 2005.
Rev. Rul. 2006-05(HTML) IRB #2006-03(HTML) January 17, 2006
Low-income housing credit; satisfactory bond; ´┐Żbond factor´┐Ż amounts for the period January through March 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through March 2006.
Rev. Rul. 2006-04(HTML) IRB #2006-01(HTML) January 9, 2006
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for January 2006.
Rev. Rul. 2006-03(HTML) IRB #2006-01(HTML) January 9, 2006
Japanese Yugen Kaisha (YK) and Tokurei Yugen Kaisha (TYK). A Yugen Kaisha, a Japanese business entity, which will become a Tokurei Yugen Kaisha under recently enacted Japanese legislation, will continue to be eligible to elect its U.S. entity classification under the check the box regulations.
Rev. Rul. 2006-02(HTML) IRB #2006-01(HTML) January 9, 2006
Section 351. The conclusion in Rev. Rul. 74-503 that a transferor's basis in transferee stock received in exchange for transferor stock is determined under section 362(a) of the Code is incorrect. The other conclusions in the ruling are under study. Rev. Rul. 74-503 revoked.
Rev. Rul. 2006-01(HTML) IRB #2006-01(HTML) January 9, 2006
Regulated investment company (RIC). A RIC's income from a derivative contract with respect to a commodity index is not qualifying income for purposes of section 851(b)(2) of the Code if the income from the contract is not derived with respect to the RIC's business of investing in stocks, securities, or currencies. Such a contract is not a security for purposes of section 851(b)(2).

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