SECTION 2. BACKGROUND

Section 45Q(a)(1) allows a credit of $20 per metric ton of qualified CO 2 that is captured by the taxpayer at a qualified facility, disposed of by the taxpayer in secure geological storage, and not used by the taxpayer as a tertiary injectant. Section 45Q(a)(2) allows a credit of $10 per metric ton of qualified CO 2 that is captured by the taxpayer at a qualified facility, used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, and disposed of by the taxpayer in secure geological storage.

Section 45Q(b)(1) defines the term “qualified carbon dioxide” as CO cap2 tured from an industrial source that would otherwise be released into the atmosphere as industrial emission of greenhouse gas, and that is measured at the source of capture and verified at the point of disposal or injection. Qualified CO includes the 2 initial deposit of captured CO as a 2 used tertiary injectant but does not include CO 2 that is re-captured, recycled, or otherwise re-injected as part of the enhanced oil and natural gas recovery process.

Section 45Q(c) defines the term “qualified facility” as an industrial facility that

for certain taxpayers who are spouses (civilian spouses) of active duty members of the uniformed services (servicemembers). The relief and procedures were made available to civilian spouses who (A) accompany their servicemember spouses to a military duty station in American Samoa, Guam, the Northern Mariana Islands (NMI), Puerto Rico, or the U.S. Virgin Islands (USVI) (each a “U.S. territory”) and claim residence or domicile (tax residence) in one of the 50 States or the District of Columbia under the Military Spouses Residency Relief Act (MSRRA) or (B) accompany their servicemember spouses to a military duty station in one of the 50 States or the District of Columbia and claim tax residence in a U.S. territory under MSRRA. The relief and procedures set forth in Notice 2010–30 were initially available for the taxable year including November 11, 2009 (generally, this would be calendar year 2009, referred to hereinafter as 2009). On April 8, 2011, the Treasury Department and the IRS published Notice 2011–16, 2011–17 I.R.B. 720, which extended the relief and procedures announced in Notice 2010–30 to the first taxable year beginning after November 11, 2009 (generally, this would be calendar year 2010).

This notice further extends the relief set forth in Notice 2010–30 for civilian spouses described in the prior paragraph to taxable years beginning after November 11, 2010 (generally, these will be calendar year 2011 and subsequent calendar years, referred to hereinafter as 2011 and subsequent taxable years), and provides that such civilian spouses should follow the applicable procedures described in Notice 2010–30.

The extension of time to pay federal income taxes described in Part III(A)(1)(b) of Notice 2010–30 for 2009 is available to eligible civilian spouses described in Part III(A)(1)(b) of Notice 2010–30 claiming MSRRA relief with respect to individual federal income tax returns filed for 2011 and subsequent taxable years. To obtain an extension of time through October 17, 2012, to pay federal income taxes for 2011, such taxpayers should follow the procedures in Part III(A)(1)(b) of Notice 2010–30. To obtain an extension to pay federal income taxes for subsequent taxable years, such taxpayers should follow those same procedures adjusted for the ap

propriate filing dates in each such subsequent taxable year.

As provided in Notice 2010–30, the IRS has also determined pursuant to section 6654(e)(3)(A) of the Internal Revenue Code that, with respect to civilian spouses eligible for the extension of time to pay federal income taxes described in this notice and Part III(A)(1)(b) of Notice 2010–30, the addition to tax under section 6654(a) will not apply in the case of an underpayment of estimated tax by such civilian spouses for 2011 and subsequent taxable years due to unusual circumstances.

Civilian spouses who obtain the extension to pay federal income taxes for 2011 and subsequent taxable years provided by this notice are required to pay interest on the amount of tax from the original payment due date until the date the tax is paid. Pursuant to section 6601, interest is calculated from the prescribed payment due date determined under section 6151 without regard to any extension to pay federal income tax, including the extension to pay tax provided by this notice.

For the reasons discussed in Part III(A)(2) of Notice 2010–30, the extension to pay federal income taxes described in Part III(A)(1)(b) of Notice 2010–30 is not available to civilian spouses claiming tax residence in a State or the District of Columbia under MSRRA and filing individual federal income tax returns for 2011 and subsequent taxable years who are (A) federal employees in American Samoa, Guam, or the USVI, or (B) individuals working in Guam or the NMI to whom section 935 applies. These civilian spouses should file their individual federal income tax returns for 2011 and subsequent taxable years, and pay any taxes due, according to the procedures described in Part III(A)(2) of Notice 2010–30.

Civilian spouses who accompany their servicemember spouses to a military duty station in one of the 50 States or the District of Columbia and who claim tax residence in a U.S. territory under MSRRA should follow the procedures in Part III(B) of Notice 2010–30 with respect to their individual federal income tax returns for 2011 and subsequent taxable years.

DRAFTING INFORMATION

The principal author of this notice is Jackie B. Manasterli of the Office of

June 25, 2012 1049 2012–26 I.R.B.

§ 417(e)(3)(D) as in effect for plan years beginning after 2007.

CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 through 2007 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004–34, 2004–1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices. The methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004–34 continues to apply in determining that rate. See Notice 2006–75, 2006–2 C.B. 366. The composite corporate bond rate for May 2012 is 4.39 percent. Pursuant to Notice 2004–34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

is owned by the taxpayer, where carbon capture equipment is placed in service, and where at least 500,000 metric tons of CO 2 is captured during the taxable year.

Section 45Q(d)(2) provides that the Secretary, in consultation with the Administrator of the Environmental Protection Agency (EPA), the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of CO 2 under subsection (a)(1)(B) or (a)(2)(C) such that the CO does not 2 escape into the atmosphere. See section 5 of Notice 2009–83, 2009–44 I.R.B. 588, for procedures regarding secure geological storage.

Section 45Q(d)(5) allows the § 45Q credit to the person that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified CO to the extent 2, except provided in regulations prescribed by the Secretary.

Under § 45Q(d)(7), for taxable years beginning in a calendar year after 2009, the dollar amount contained in § 45Q(a) must be adjusted for inflation by multiplying such dollar amount by the inflation adjustment factor for such calendar year determined under § 43(b)(3)(B), determined by substituting “2008” for “1990.”

Section 43(b)(3)(B) defines “inflation adjustment factor” as, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990. For purposes of § 45Q(d)(7), with respect to 2012 calendar year, the inflation adjustment factor is a fraction the numerator of which is the GNP implicit price deflator for 2011 (113.347) and the denominator of which is the GNP implicit price deflator for 2008 (108.589).

Section 45Q(e) provides that the § 45Q credit will apply with respect to qualified CO 2 before the end of the calendar year in which the Secretary, in consultation with

For Plan Years

the EPA, certifies that 75,000,000 metric tons of qualified CO 2 have been taken into account in accordance with § 45Q(a).