SECTION 3. REQUEST FOR

COMMENTS

The Treasury Department and the IRS request comments on issues arising from new § 45X and the amendments made by

the IRA to § 48C that should be addressed in guidance. Commenters are encouraged to specify the issues on which guidance is needed most quickly as well as the most important issues on which guidance is needed. In addition to general comments, the Treasury Department and the IRS request comments that address the following specific issues:

.01 Section 45X Advanced Manufactur- ing Production Credit .

(1) Section 45X(a)(3)(B)(i) allows a taxpayer to make an election to treat a sale of components by such taxpayer to a related person as made to an unrelated person. Is guidance needed to clarify the meaning of the terms “unrelated person” and “related person”? If so, how should these terms be clarified?

(2) Section 45X(d)(4) provides that for purposes of § 45X, a person is treated as having sold an eligible component to an unrelated person if such component is integrated, incorporated, or assembled into another eligible component which is sold to an unrelated person. How should “integrated, incorporated, or assembled” be determined?

(3) What factors should the Treasury Department and the IRS consider in determining what information or registration is necessary for purposes of preventing duplication, fraud, or any improper or excessive credit amount, as referenced in § 45X(a)(3)(B)?

(4) Is guidance needed regarding the capacity-to-power ratio in § 45X(b)(4)? If so, what guidance?

(5) Is additional clarification needed regarding the definitions of an “eligible component” in § 45X(c)?

(a) How should the amount of the § 45X credit be calculated for components that could be used in systems of varying capacities?

(b) In such cases, how should verification of the applicable credit amount be demonstrated?

(6) Section 45X(c)(4) identifies “related offshore wind vessels” as one of the qualifying “wind energy components.”

(a) What should the requirements be for establishing that a vessel is for offshore wind development?

(b) Where it is uncertain how much a vessel will be used for offshore wind, how should such situations be addressed?

October 24, 2022 314 Bulletin No. 2022–43

(7) Section 45X(c)(6) identifies “applicable critical minerals,” and includes minimum purity percentages by mass.

(a) How should purity percentages be determined?

(b) Should an independent third party be required to verify the results?

(c) If so, what qualifications should be required of an independent third-party providing such verification?

(8) Is guidance needed regarding the definitions of “converted” and “purified”?

(9) Is guidance needed regarding the apportionment and pass-thru of credit amounts to beneficiaries of estates or trusts as provided in § 45X(d)(3)?

(10) Please provide comments on any other topics under § 45X that may require guidance.

.02 Qualifying Advanced Energy Proj- ect Credit (§ 48C)

(1) Section 48C(c)(1)(A)(i), as amended by the IRA, includes additional types of equipment and property that may be produced or recycled at a project that re-equips, expands, or establishes an industrial or manufacturing facility.

(a) Is guidance needed to define “equipment designed to refine electrolyze, or blend any fuel, chemical, or product which is renewable, or low-carbon and low-emission”? If so, how should this be defined?

(b) Is guidance needed to define “property designed to produce energy conservation technologies (including residential, commercial, and industrial applications)”? If so, how should this be defined?

(c) What should the Treasury Department and the IRS consider in determining “other advanced energy property designed to reduce greenhouse gas emissions”?

(2) Section 48C(c)(1)(A)(ii) adds to the list of eligible projects any project which re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent through the installation of certain systems, including through the installation of energy efficiency and reduction in waste from industrial processes.

(a) Is guidance needed to define “energy efficiency”? If so, how should this be defined?

(b) Is guidance needed to define “reduction in waste from industrial processes”? If so, how should this be defined?

(c) Is guidance needed to define baseline criteria, boundary conditions and/or timeframe to determine achievement of the 20 percent threshold?

(3) What should the Treasury Department and the IRS consider in determining “any other industrial technology designed to reduce greenhouse gas emissions”? Is guidance needed to include eligibility of facilities currently producing industrial materials for use in the construction or alteration of buildings and infrastructure projects (such as concrete, steel, asphalt, and flat glass) that can be retrofitted to produce materials that have substantially lower levels of embodied greenhouse gas emissions?

(4) How should a qualifying advanced energy project substantiate its eligibility based on any of the available criteria, but particularly the criteria provided by § 13501 of the IRA?

(a) Are there industry guidelines currently in place that a taxpayer may use to demonstrate that a project reduces greenhouse gas or other pollutant emissions? If so, what guidelines?

(b) Are there existing industry guidelines or regulatory practices employed by local governments or states that a taxpayer may use to demonstrate that a project reduces greenhouse gas or other pollutant emissions, including submittal of environmental product declarations (EPDs) that include measurements of the embodied greenhouse gas emissions of the relevant material or product and conform with international standards?

(5) Section 48C(e) directs the Secretary to establish a program to consider and award certifications of qualified investments eligible for the § 48C credit.

(a) What should the Treasury Department and the IRS consider in determining the selection criteria for awarding the § 48C credit and to what extent should the Treasury Department and the IRS rely on precedent from previous experience administering the § 48C credit during previous allocation rounds provided in Notice 2009-72, 2009-37 I.R.B. 325 and Notice 2013-12, 2013-10 I.R.B. 543?

(b) What aspects of the previous allocation rounds of the § 48C credit should the Treasury Department and IRS consider revising in establishing a new § 48C program and administering it?

(6) Section 48C(e)(3)(C) provides, in part, that if any certification is revoked, the amount of the limitation under § 48C(e) (2) must be increased by the amount of the credit with respect to such revocation.

(a) Is guidance needed on revocation of certifications? If so, what guidance?

(7) Please provide comments on any other topics that may require guidance.