SECTION 2. BACKGROUND

Section 45K(a) provides for a credit for producing fuel from a nonconventional source, measured in barrel-of-oil equivalent of qualified fuel, the production of which is attributable to the taxpayer and is sold by the taxpayer to an unrelated person during the taxable year. For calendar year 2010, the credit is available only for coke or coke gas. The credit amount for coke or coke gas is equal to the product of $3.00 and the appropriate inflation adjustment factor.

Section 45K(d)(1) provides that the credit applies only to sales of qualified fuels the production of which is within the United States (within the meaning of § 638(1)) or a possession of the United States (within the meaning of § 638(2)).

Section 45K(d)(2)(A) requires that the Secretary, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for the preceding calendar year.

Section 45K(d)(2)(B) defines “inflation adjustment factor” for a calendar year as a fraction the numerator of which is the GNP implicit price deflator for the calendar year and the denominator of which is the GNP implicit price deflator for calendar year 1979. The term “GNP implicit price deflator” means the first revision of the implicit price deflator for the gross national product as computed and published by the Department of Commerce.

Section 45K(d)(2)(C) defines “reference price” to mean with respect to a calendar year the Secretary’s estimate of the annual average wellhead price per barrel for all domestic crude oil the price of which is not subject to regulation by the United States.

Section 45K(d)(5) provides that the term “barrel-of-oil equivalent” with respect to any fuel generally means that amount of the fuel that has a Btu content of 5.8 million.

Section 45K(g)(1) provides that in the case of a facility for producing coke or coke gas (other than from petroleum based products), which was placed in service before January 1, 1993, or after June 30, 1998, and before January 1, 2010, § 45K(g) shall apply with respect to coke or coke gas produced in such facility and sold during the period beginning on the later of January 1, 2006, or the date that such facility is placed in service, and ending on the date which is 4 years after the date such period began.

Section 45K(g)(2)(A) provides that the amount of coke or coke gas sold during any taxable year that may be taken into account to compute the credit under § 45K with respect to any facility shall not exceed an average barrel-of-oil equivalent of 4,000 barrels per day.

Section 45K(g)(2)(B) provides that in determining the amount of credit allowable to coke or coke gas sold after 2005, the credit shall be computed by substituting “2004” for “1979.” Accordingly, for purposes of § 45K(g), the inflation adjustment factor for a calendar year is a fraction the numerator of which is the GNP implicit price deflator for the calendar year and the denominator of which is the GNP implicit price deflator for calendar year 2004.

Section 45K(g)(2)(D) provides that the phase-out of the credit under § 45K(b)(1)

2011–17 I.R.B. 724 April 25, 2011

were included as an attachment to the notice of proposed rulemaking. On February 24, 2011, FinCEN published final FBAR regulations (76 FR 10234). The final FBAR regulations are effective on March 28, 2011, and apply to FBARs required to be filed by June 30, 2011, with respect to foreign financial accounts maintained in calendar year 2010, as well as to FBARs for future calendar years. On March 21, 2011, the IRS posted revised FBAR instructions (titled DRAFT Final Instructions) on irs.gov at www.irs.gov/businesses/small/article/ 0,,id=148849,00.html . On March 26, 2011, the IRS published a revised FBAR form with accompanying instructions that reflect the amendments made by the final FBAR regulations. ¹ There is no substantive difference between the text of the posted instructions (titled DRAFT Final Instructions) and the instructions that accompany the revised FBAR form, although the format of the instructions has changed.

In light of the recent publication of the final FBAR regulations, the posting of revised FBAR instructions, and the publication of a revised FBAR form with accompanying instructions, the Treasury Department and the IRS provide the following guidance concerning the FFA-related questions on 2010 federal income tax and information returns:

For Returns Filed Before March 28, 2011

Before March 28, 2011, which is the first date on which the final FBAR regulations become effective, the existing FBAR regulations (last amended April 1987) remain effective and may be referenced, along with other then-existing FBAR guidance, when answering FFA-related questions on 2010 tax and information returns.

Alternatively, persons filing a return before March 28, 2011, may reference the recently published final FBAR regulations and revised FBAR instructions (including the instructions, titled DRAFT Final Instructions, which were posted on irs.gov on March 21, 2011) when answering the FFA-related questions on 2010 returns. The IRS will take into account the recently published final FBAR regulations and the

revised FBAR instructions when evaluating the reasonableness of a person’s response to the FFA-related questions on 2010 tax and information returns.

For Returns Filed On or After March 28, 2011

Beginning March 28, 2011, the recently published final FBAR regulations will be effective and should be referenced, along with the revised FBAR form and instructions, when answering FFA-related questions on 2010 tax and information returns.

The principal author of this notice is Matthew P. Howard of the Office of Associate Chief Counsel (Procedure and Administration). For further information regarding this notice, contact Matthew P. Howard at (202) 622–4570 (not a toll-free call).

26 CFR 301.6011–7: Specified tax return preparers required to file individual income tax returns using magnetic media.

Rev. Proc. 2011–25