SECTION 7. EFFECT ON OTHER

DOCUMENTS

Notice 2014–57 is superseded.

DRAFTING INFORMATION

The principal author of this notice is Kari Fisher of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice contact Kari Fisher at (202) 317-7007 (not a toll-free number).

2015 Section 43 Inflation Adjustment

Notice 2015–64

Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to

publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 45K(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year. The credit is phased out in any taxable year in which the reference price for the preceding calendar year exceeds $28 (as adjusted) by at least $6.

The term “inflation adjustment factor” means, 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.

Because the reference price for the 2014 calendar year ($87.39) exceeds $28 multiplied by the inflation adjustment factor for the 2014 calendar year ($28 multiplied by 1.6245 - $45.49) by $41.90, the enhanced oil recovery credit for qualified costs paid or incurred in 2015 is phased out completely.

Table 1 contains the GNP implicit price deflator used for the 2015 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2014 calendar years.

Notice 2015–64 TABLE 1 GNP IMPLICIT PRICE DEFLATORS Calendar Year GNP Implicit Price Deflator

1990 112.9 (used for 1991)

1991 117.0 (used for 1992)

1992 120.9 (used for 1993)

October 5, 2015 464 Bulletin No. 2015–40

Notice 2015–64 TABLE 1 GNP IMPLICIT PRICE DEFLATORS Calendar Year GNP Implicit Price Deflator

1993 124.1 (used for 1994)

1994 126.0 (used for 1995)*

1995 107.5 (used for 1996)

1996 109.7 (used for 1997)**

1997 112.35 (used for 1998)

1998 112.64 (used for 1999)***

1999 104.59 (used for 2000)

2000 106.89 (used for 2001)

2001 109.31 (used for 2002)

2002 110.63 (used for 2003)

2003 105.67 (used for 2004)****

2004 108.23 (used for 2005)

2005 112.129 (used for 2006)

2006 116.036 (used for 2007)

2007 119.656 (used for 2008)

2008 122.407 (used for 2009)

2009 109.764 (used for 2010)*****

2010 110.654 (used for 2011)

2011 113.347 (used for 2012)******

2012 115.387 (used for 2013)

2013 106.710 (used for 2014)*******

2014 108.407 (used for 2015)********

• Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.

** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.

*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment factor is 86.53.

**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 § 43 inflation adjustment factor is 81.589.

***** Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 § 43 inflation adjustment factor is 72.199.

****** Beginning in 2011, the 1990 GNP implicit price deflator used to compute the 2012 § 43 inflation adjustment factor is 72.260.

******* Beginning in 2013, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2014 § 43 inflation adjustment factor is 66.803.

******** Beginning in 2014, the 1990 GNP implicit price deflator used to compute the 2015 § 43 inflation adjustment factor is 66.732.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2015 cal

endar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years be

ginning in the 1991 through 2014 calendar years.

Bulletin No. 2015–40 465 October 5, 2015

Notice 2015–64 TABLE 2 INFLATION ADJUSTMENT FACTORS AND PHASE-OUT AMOUNTS Calendar Year Inflation Adjustment Factor Phase-out Amount

1991 1.0000 0

1992 1.0363 0

1993 1.0708 0

1994 1.0992 0

1995 1.1160 0

1996 1.1485 0

1997 1.1720 0

1998 1.1999 0

1999 1.2030 0

2000 1.2087 0

2001 1.2353 0

2002 1.2633 0

2003 1.2785 0

2004 1.2952 0

2005 1.3266 0

2006 1.3743 100 percent

2007 1.4222 100 percent

2008 1.4666 100 percent

2009 1.5003 100 percent

2010 1.5203 100 percent

2011 1.5326 100 percent

2012 1.5686 100 percent

2013 1.5968 100 percent

2014 1.5974 100 percent

2015 1.6245 100 percent

percentage is the percentage (not greater than 25 percent) equal to the sum of 15 percent, plus one percentage point for each whole dollar by which $20 exceeds the reference price (determined under § 45K(d)(2)(C)) for crude oil for the calendar year preceding the calendar year in which the taxable year begins. The reference price determined under § 45K(d)(2)(C) for the 2014 calendar year is $87.39.

The following table contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 2015.

DRAFTING INFORMATION

The principal author of this notice is Martha M. Garcia of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Garcia at (202) 317-6853 (not a toll-free number).

2015 Marginal Production Rates

Notice 2015–65

This notice announces the applicable percentage under § 613A of the Internal Revenue Code to be used in determining percentage depletion for marginal properties for the 2015 calendar year.

Section 613A(c)(6)(C) defines the term “applicable percentage” for purposes of determining percentage depletion for oil and gas produced from marginal properties. The applicable

October 5, 2015 466 Bulletin No. 2015–40

Notice 2015–65 APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION Calendar Year Applicable Percentage

1991 15 percent

1992 18 percent

1993 19 percent

1994 20 percent

1995 21 percent

1996 20 percent

1997 16 percent

1998 17 percent

1999 24 percent

2000 19 percent

2001 15 percent

2002 15 percent

2003 15 percent

2004 15 percent

2005 15 percent

2006 15 percent

2007 15 percent

2008 15 percent

2009 15 percent

2010 15 percent

2011 15 percent

2012 15 percent

2013 15 percent

2014 15 percent

2015 15 percent

The principal author of this notice is Martha M. Garcia of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice contact Ms. Garcia at (202) 317-6853 (not a toll-free number).

26 CFR 601.201: Rulings and determination letters. (Also Part I, §§ 337, 355, 851, 856.)

Rev. Proc. 2015–43