Final regulations under section 937(b) of the Code provide rules for determining whether income is considered to be from sources within the U.S. territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands, and whether income is considered effectively connected with the conduct of a trade or business within a territory. The regulations also provide operative rules for taxation of income applicable to bona fide residents and other persons with income from a territory under related provisions of the Code, particularly sections 931 through 935. Rev. Rul. 56-127 obsoleted.

Final regulations under section 4980G of the Code provide guidance on employer comparable contributions to Health Savings Accounts (HSAs) in instances where an employee has not established an HSA by December 31st and in instances where an employer accelerates contributions for the calender year for employees who have incurred qualified medical expenses.

Economic stimulus payment; direct deposit; tax favored account. This announcement provides that individuals who have payments made by direct deposit under the Economic Stimulus Act of 2008 to their IRAs or certain other accounts afforded special tax benefits under the Code may remove the payments without incurring any adverse tax consequences.

This notice modifies Notice 2007-45, 2007-22 I.R.B. 1320, and provides additional interim guidance with respect to the requirement, under section 6104 of the Code, that section 501(c)(3) organizations make Forms 990-T available for public inspection. Notice 2007-45 modified.

The IRS has revoked its determination that Lahaina Arts Society of Lahaina, HI; Coastal Adult Daycare, Inc., of Wilmington, NC; Sea of Sound Productions, Inc., of Midlothian, VA; Recovery of Outreach, Inc., of Riviera Beach, FL; National Housing Foundation, Inc., of Beloit, WI; Agape Economic Development of Yorba Linda, CA; Homeward Foundation, Inc., of Miami, FL; Scott and Barbara Smith Foundation of South Jordan, UT; Kimberly Credit Counseling, Inc., of West Palm Beach, FL; Friends of Kohsiung Medical University of Staten Island, NY; Bergen County Career Advancement Training, Inc., of Garfield, NJ; Credit Counselors of North America, Inc., of Oakland Park, FL; Affordable Housing Concepts of Valrico, FL; Wick Charitable Family Foundation of Santa Monica, CA; Family Life Financial Services of Lubbock, TX; Polish American Citizens Club, Inc., of Monson, MA; Milennial Charities and Philanthropy of Salt Lake City, UT; and The Amicus Curiae Foundation of Windsor, CA, qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Code.

This procedure provides guidance relating to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions under section 6112 of the Code and provides that material advisors may use the Form 13976, Itemized Statement Component of Advisee List (or successor form), to maintain the itemized statement component of the list. The use of the form is optional. The form is available on the IRS website.

This document contains a correction to a misstated citation in Rev. Rul. 2008-22, 2008-16 I.R.B. 796. Rev. Rul. 2008-22 provided guidance regarding whether the corpus of an inter vivos trust is includible in the grantor’s gross estate under section 2036 or 2038 of the Code if the grantor retained the power, exercisable in a nonfiduciary capacity, to acquire property held in the trust by substituting other property of equivalent value. Rev. Rul. 2008-22 modified.

This document provides notice of public hearing on proposed regulations (REG-104946-07, 2008-11 I.R.B. 596) providing guidance relating to sections 411(a)(13) and 411(b)(5) of the Code concerning certain hybrid defined benefit plans. A public hearing is scheduled for June 6, 2008.