SECTION 3. SCOPE

.01 The Safe Harbor provided in section 4 of this revenue procedure applies to any partnership (Project Company) that validly claims the Section 45Q Credit. Partners in a Project Company may include a project developer (Developer) and one or more investors, as defined in section 4.01 of this revenue procedure (Investors). The Project Company typically owns the carbon capture equipment (Equipment). In addition to the Project Company, the Developer, and the Investors, carbon oxide capture and sequestration transactions may involve lenders, one or more carbon oxide emitters (Emitters), one or more construction contractors, one or more qualified carbon oxide purchasers (Offtakers), and one or more project operators.

.02 If a Project Company, Developer, and Investor(s) satisfy all of the requirements of the Safe Harbor provided in section 4 of this revenue procedure, the IRS will treat the Investor as a partner in the Project Company and will treat the Project Company as properly allocating the Section 45Q Credit in accordance with section 704(b).

.03 The federal income tax treatment described in section 3.02 of this revenue procedure applies solely with respect to carbon oxide capture and sequestration transactions described in sections 3.01 and 3.02 of this revenue procedure and should not be viewed as precedent for any other federal tax credit transaction. Taxpayers should not infer that compliance with the Safe Harbor ensures that they are otherwise entitled to validly claim the Section 45Q Credit. A Project Company and its partners that do not satisfy each of the requirements in section 4 of this revenue procedure do not qualify for the Safe Harbor.

.04 This revenue procedure applies only to partnerships with a Section 45Q Credit and partners in such partnerships. This revenue procedure does not apply to any other tax credits and may not be cited as precedent for any other federal tax credit allocation.

.05 The Safe Harbor in this revenue procedure provides guidance on partnership allocations of the Section 45Q Credit to taxpayers establishing or participating

in carbon capture partnerships in lieu of such taxpayers requesting letter rulings. Therefore, the IRS will not issue letter rulings on any issues under subchapter K of chapter 1 of subtitle A of the Code for partnerships claiming or seeking to claim the Section 45Q Credit.