SECTION 5. SECTION — Internal Revenue Bulletin 2023-10

PROGRAM

.01 In General . The IRS will consider a project under the § 48C(e) program only if DOE provides a recommendation and ranking for the project (DOE recommen

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dation) to the IRS. DOE will provide a recommendation and ranking only if it de termines that the project has a reasonable expectation of commercial viability and merits a recommendation based on the cri teria provided in the additional § 48C(e) program guidance. See section 5.03(3) of this notice for additional information re garding DOE recommendations.

.02 Program Timeline . Generally, the § 48C(e) program will proceed as follows:

(1) A taxpayer submits a concept paper to DOE through the eXCHANGE por tal, an online application portal used by DOE available at https://infrastructure-ex change.energy.gov/ (or any successor interface) (eXCHANGE portal). See Ap pendix B for additional information.

(2) DOE reviews the concept paper and sends the taxpayer a letter encour aging or discouraging the submission of a § 48C(e) application. After receiving a letter of encouragement or discourage ment from DOE, the taxpayer determines whether to submit a § 48C(e) application. All taxpayers who submit concept papers are eligible to submit a § 48C(e) applica tion, regardless of DOE’s response to its concept paper.

(3) Taxpayers submit § 48C(e) applica tions through the eXCHANGE portal. See Appendix B for additional information.

(4) DOE reviews the § 48C(e) applica tions for compliance with eligibility and other threshold requirements.

(5) If the § 48C(e) application complies with all eligibility and threshold require ments, DOE conducts a technical review of the application to form a DOE recom mendation.

(6) DOE provides a recommendation to the IRS regarding the acceptance or re jection of each § 48C(e) application and a ranking of the applications.

(7) The IRS makes a decision regard ing the acceptance or rejection of each § 48C(e) application based on DOE’s recommendation and ranking and notifies each taxpayer that submitted a § 48C(e) application of the outcome by sending a letter allocating § 48C credits in the case of an acceptance (Allocation Letter) or letter denying the requested allocation in the case of a rejection (Denial Letter). In the case of an acceptance, the amount of § 48C credits allocated to a project will also be based on the taxpayer’s qualified

investment in the qualifying advanced energy project and whether the taxpayer intends to apply for and receive an allo cation of § 48C credits calculated at the 30 percent credit rate (see section 5.07 of this notice). A taxpayer that receives a Denial Letter may be eligible to request a debriefing in accordance with the criteria set forth in section 5.03(9) of this notice.

(8) Within 2 years of receiving an Allo cation Letter, a taxpayer must notify DOE that the certification requirements have been met by submitting this information through the eXCHANGE portal. See Ap pendix B for additional information.

(9) DOE notifies the taxpayer and the IRS that it has received the taxpayer’s notification that the certification require ments have been met.

(10) The IRS certifies the project by sending a letter (Certification Letter).

(11) Within 2 years of receiving the Certification Letter, the taxpayer notifies DOE that the project has been placed in service by submitting such information through the eXCHANGE portal. See Ap pendix B for additional information. A taxpayer that does not notify DOE that it has placed the project in service within the required 2-year period will forfeit § 48C credits allocated to the taxpayer for such project.

(12) DOE notifies the taxpayer and the IRS that it has received the taxpayer’s no tification that the project has been placed in service or notification that the taxpayer will not place the project in service within the required 2-year period.

(13) If the taxpayer has placed the proj ect in service within the required 2-year period and has notified DOE, the taxpay er claims the § 48C credit on its income tax return for the taxable year in which the project was placed in service. If the taxpayer has not placed the project in ser vice within the required 2-year period or has not notified DOE that the project has been placed in service within the required 2-year period, then the § 48C credit allo cated to the taxpayer’s project is forfeited.

.03 Program Specifications . (1) For each project that a taxpayer sponsors, the taxpayer must submit the following to request a credit allocation:

(a) A concept paper for DOE consider ation;

(b) A § 48C(e) application.

(2) A taxpayer must submit a concept paper as specified in section 6 of this no tice through the eXCHANGE portal. See Appendix B for additional information. This portal will allow applicants to se curely input their data and information for review by DOE and the IRS.

A taxpayer that receives a letter of dis couragement in response to a submitted concept paper may still submit a § 48C(e) application in accordance with the addi tional § 48C(e) program guidance. Re ceiving such a letter does not disqualify a taxpayer from submitting a § 48C(e) ap plication but represents DOE’s feedback that the project is unlikely to receive a recommendation based on the information provided in the concept paper.

(3) DOE’s recommendation provid ed to the IRS will include a ranking of projects in descending order (that is, first, second, third, etc.). See section 5.06 of this notice for additional information regarding DOE recommendations with respect to projects located in § 48C(e) Energy Communities Census Tracts (as defined in section 5.06 of this notice). The amount of credit allocated to a proj ect reduces the amount of credit available to the remaining pool of recommended projects. The IRS will make allocations to successive projects according to DOE recommendations and ranking until the amount available for allocation is ex hausted. The amount of § 48C credits allocated to a project will be based on the taxpayer’s qualified investment in the qualifying advanced energy project and whether the taxpayer intends to apply for and receive an allocation of § 48C cred its calculated at the 30 percent credit rate (see section 5.07 of this notice). DOE will recommend and rank projects only to the extent necessary to exhaust the amount available for allocation in each § 48C(e) program allocation round.

(4) For Round 1 of the § 48C(e) pro gram, the application period begins on May 31, 2023, and ends on the date by which § 48C(e) applications must be sub mitted as specified in additional § 48C(e) program guidance (end of the application period). Any § 48C(e) application submit ted through the eXCHANGE portal after May 31, 2023, and on or before the date that ends the application period will be deemed to be submitted by the taxpayer

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on the date that ends the application pe riod.

(5) For Round 1 of the § 48C(e) pro gram, a concept paper for DOE consider ation must be submitted by July 31, 2023. The § 48C(e) application (as defined in section 5.02(3) of this notice) must be sub mitted by the date specified in additional § 48C(e) program guidance. If a project meets the preliminary compliance review criteria (as specified in section 6.01 of this notice), DOE will determine the merits of the project and (for projects determined to be meritorious) provide DOE recommen dation to the IRS

(6) Each applicant will receive an electronically generated confirmation of receipt upon submission of (a) the con cept paper and (b) the § 48C(e) applica tion. The timeliness of submission of the § 48C(e) application will be determined by the submittal date and time shown on the confirmation of receipt.

(7) For Round 1 of the § 48C(e) pro gram, the IRS will send each applicant an Allocation Letter in the case of an accep tance or a Denial Letter in the case of a rejection and will also notify DOE.

(8) If the taxpayer’s § 48C(e) applica tion is accepted, the IRS will determine the amount of the § 48C credit allocated to the project and the Allocation Letter will state the amount of the credit allocated to the project. The date of the Allocation Letter will be treated as the date of acceptance by the Secretary of the taxpayer’s § 48C(e) application for purposes of establishing the time to meet criteria for certification as required by § 48C(e)(3)(B).

(9) Upon request, DOE will offer a de briefing to an applicant that submitted a § 48C(e) application (after submitting a concept paper and being encouraged to submit such § 48C(e) application) and subsequently, was not allocated a cred it in Round 1 of the § 48C(e) program. Debriefings will not be available to ap plicants that receive a letter of discour agement. Debriefings will be held by DOE after the application period ends. Requests for a debriefing must be re ceived by DOE no later than 30 business days from the date of the Denial Letter issued to the applicant. The sole purpose of the debriefing is to provide DOE’s im pression of the strengths and weaknesses of the rejected § 48C(e) application to

enable applicants to improve § 48C(e) applications for future rounds of the § 48C(e) program or § 48C credit alloca tion programs.

(10) The Allocation Letter applies only to the taxpayer who requested it. Any suc cessor in interest may request that the IRS, by letter, transfer the credit allocation for the project to the successor in interest. The due date for making this request with the IRS is no later than 30 days prior to the due date (including extensions) of the successor in interest’s Federal income tax return for the taxable year in which the transfer occurs.

The successor’s letter must be signed by a person who meets the requirements of section 7.02(2) of this notice. The suc cessor’s letter should provide:

(a) the name of the transferor and its TIN;

(b)the name and TIN of the successor’s parent (if any) if the successor files a re turn as a member of a consolidated group;

(d) the successor’s tax name and its TIN;

(e) the successor’s contact telephone number; and

(f) copy of binding contract of the transfer;

(g) a statement that there is no signifi cant change from the application informa tion provided by the transferor, including that the project has not been placed in service at a location which is materially different than the location specified in the application for such project.

The successor’s letter must include a signed attestation using the language from section 7.02(1) of this notice (replacing “submission” with “letter”), be signed by a person who meets the requirements of section 7.02(2) of this notice, and should include the name, title, and contact infor mation (address, phone number, fax num ber (if available), and email address) of the signer.

The successor in interest must submit the letter through the eXCHANGE portal.

The IRS will review the taxpayer’s re quest and determine whether to transfer the project’s allocation to the successor in interest and will notify the successor in interest by letter of its decision. If the proj ect’s credit allocation is not transferred to

the successor in interest, the following rules apply:

(a) In the case of an interest acquired at or before the time the qualifying advanced energy project is placed in service, any credit allocated to the project will be fully forfeited (and rules similar to the recap ture rules of § 50(a) apply with respect to qualified progress expenditures); and

(b) In the case of an interest acquired after the qualifying advanced energy proj ect is placed in service, the project ceases to be investment credit property and the recapture rules of § 50(a) (and similar rules with respect to qualified progress ex penditures) apply.

(11) The additional § 48C(e) program guidance will provide further details of the information required to be submitted to DOE in an application for DOE rec ommendation. The additional § 48C(e) program guidance will also provide addi tional details regarding the process for ap plying for DOE recommendation and the instructions for filing concept papers and applications for DOE recommendation.

.04 Limitation on Qualified Invest- ment . A taxpayer’s qualified investment in a qualified advanced energy property is limited to the basis of eligible property (as defined in § 48C(c)(2) and section 3.03 of this notice).

.05 Denial of Double Benefit . (1) In general . Section 48C(f) provides that a credit is not allowed under § 48C for any qualified investment for which a cred it is allowed under §§ 48, 48A, 48B, 48E, 45Q, or 45V. If the IRS determines a credit has been claimed for that same investment under §§ 48, 48A, 48B, 48E, 45Q, or 45V, the IRS will not allocate the § 48C credit and any previously sent Allocation Letter is void.”

(2) Coordination with § 45X credit . Additionally, property is not an “eligible component” for purposes of the credit un der § 45X (§ 45X credit) if it is produced at a facility and the basis of any proper ty included in such facility is taken into account for purposes of § 48C after Au gust 16, 2022. See § 45X(c)(1)(B). For purposes of § 48C, a facility includes all eligible property included in a qualify ing advanced energy project for which a taxpayer receives an allocation of § 48C credits and claims such credits after Au gust 16, 2022. Guidance regarding wheth

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er property has been produced at a facility the basis of which has been taken into ac count for purposes of § 48C will be pro vided in additional guidance regarding the § 45X credit.

(3) Required taxpayer certification . A taxpayer must certify under penalties of perjury that the taxpayer did not claim a credit for that same investment under any of §§ 45X, 48, 48A, 48B, 48E, 45Q, or 45V. “Under penalties of perjury, I declare that I have examined the information con tained in this affirmative statement and the documents that substantiate this affir mative statement, and to the best of my knowledge and belief, it is true, correct, and complete.”

Additionally, the person signing the penalty of perjury statement must also certify the following:

“I further declare that I have authori ty to sign this document on behalf of the taxpayer.”

A taxpayer must provide this certifica tion statement with (1) its § 48C(e) appli cation and (2) at the time it notifies DOE that the project has been placed in service.

.06 Section 48C(e) Energy Commu- nities Census Tracts . Section 48C(e)(2) limits the total amount of § 48C credits that the Secretary may allocate under the § 48C(e) program to $10 billion. Of that amount, the Secretary must allocate at least $4 billion of § 48C credits to projects located in certain energy communities (as described in § 45(b)(11)(B)(iii)) that did not have a project that received a certifi cation and allocation of credits under the § 48C(e) allocation program (§ 48C(e) Energy Communities Census Tracts). Ac cordingly, as part of DOE’s recommenda tions, DOE will determine which projects are in § 48C(e) Energy Communities Cen sus Tracts and are therefore eligible for an allocation of the $4 billion of § 48C credits that are available only for projects located in those census tracts. Because of the limitation in § 48C(e)(2) on alloca tions with respect to projects that are not in § 48C(e) Energy Communities Census Tracts, whether a project is in a § 48C(e) Energy Communities Census Tract may impact DOE’s recommendation with re spect to a project. An applicant will be able to determine whether its project is located in a § 48C(e) Energy Communi

ties Census Tract using the mapping tool that will be referenced in the additional § 48C(e) program guidance. The determi nation of whether a project is located in a § 48C(e) Energy Communities Census Tract will be made at the time that DOE provides recommendations to the IRS and will not be redetermined.

.07 Certification for Prevailing Wage and Apprenticeship Requirements . As part of a § 48C(e) application (as described in section 6 of this notice), an applicant who intends to apply for and receive an allo cation of § 48C credits calculated at the 30 percent credit rate must confirm that it intends to satisfy the prevailing wage and apprenticeship requirements described in section 4 of this notice (Initial PWA Confirmation). When the taxpayer noti fies DOE that it has placed the project in service (pursuant to section 5.09 of this notice), such taxpayer must also confirm that it satisfied the requirements in section 4 of this notice (Final PWA Confirmation). If a taxpayer does not provide an Initial and Final PWA Confirmation at the times described in this paragraph, such taxpayer will be required to claim the § 48C cred it at the 6 percent credit rate and the re mainder of § 48C credits allocated to such project, if any, will be forfeited and avail able for reallocation in a future § 48C(e) program allocation round. Nothing in this paragraph prevents the IRS from deter mining during an examination that a tax payer did not satisfy the requirements in section 4 of this notice.

.08 IRS Issuance of Certification . A taxpayer whose application is accepted and who received an Allocation Letter from the IRS pursuant to section 5.02(8) of this notice must obtain a Certification Letter pursuant to section 7 of this notice to be eligible to claim the § 48C credit specified in its Allocation Letter.

.09 Notification that Project is Placed In Service .

(1) A taxpayer has 2 years from the date of the Certification Letter (as described in section 5.08 and section 7 of this notice) to place the project in service. See section 3.04 of this notice for the definition of placed in service. A taxpayer must notify DOE when the project is placed in service by submitting such notification through the eXCHANGE portal. DOE will accept a taxpayer’s notification that the project

was placed in service and send an ac knowledgement letter.

(2) If a taxpayer fails to place a project in service within 2 years from the date of the Certification Letter, a taxpayer must promptly notify DOE and the IRS within 60 days of the date that is 2 years from the date of the Certification Letter by sub mitting such notification through the eX CHANGE portal. Under § 48C(e)(3)(C), any certification is void if the project is not placed in service within 2 years from the date of the Certification Letter.