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Rev. Proc. 2023-27

SECTION 2. BACKGROUND

Internal Revenue Bulletin 2023-35 · 2026-10-03 edition · updated 2026-10-04 · United States

.01 Section 13103 of Public Law 117– 169, 136 Stat. 1818, 1921 (August 16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA), added new § 48(e) to the Code. Section 48(e) increases the amount of the § 48 credit with respect to eligible property that is part of a qualified solar or wind facility that is awarded an allocation of Capacity Limitation as part of the low-income communities bonus credit program for the energy investment credit (Program). The § 48 credit for a taxable year is generally calculated by multiplying the basis of each energy property placed in service

during that taxable year by the energy percentage (as defined in § 48(a)(2)). Section 48(e) increases the § 48 credit by increasing the energy percentage used to calculate the amount of the § 48 credit (§ 48(e) Increase) in the case of qualified solar and wind facilities that receive an allocation of Capacity Limitation.

.02 Section 48(e)(4) directs the Secretary to establish a program, within 180 days of enactment of the IRA, to allocate amounts of Capacity Limitation to qualified solar and wind facilities. Notice 2023–17, 2023–10 I.R.B. 505, established the Low-Income Communities Bonus Credit Program and provided definitions and other guidance related to the program. On June 1, 2023, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) published in the Federal Register (88 FR 35791) a notice of proposed rulemaking (REG110412-23, 2023-26 I.R.B. 1098) under § 48(e) (Proposed Regulations) relating to the Low-Income Communities Bonus Credit Program. A Treasury Decision adopting the Proposed Regulations with modifications appears in the Final Regulations section of 88 FR 55506 (Final Regulations).

.03 This revenue procedure provides the process for the Low-Income Communities Bonus Credit Program. These procedural rules provide guidance necessary to implement the Low-Income Communities Bonus Credit Program,

Table 1

Category 1: Located in a Low-Income Community 700 megawatts

Category 2: Located on Indian Land 200 megawatts

Category 3: Qualified Low-Income Residential Building Project 200 megawatts

Category 4: Qualifed Low-Income Economic Beneft Project 700 megawatts

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▸Contents — Internal Revenue Bulletin 2023-35
Internal Revenue Bulletin 2023-35

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