Bulletin No. 2025–34

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2025–34

August 18, 2025

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE, INCOME TAX

Notice 2025-28, page 316.

This Notice informs taxpayers of the intention of the Department of the Treasury and the Internal Revenue Service to partially withdraw proposed regulations and issue revised proposed regulations regarding the application of the Corporate

Alternative Minimum Tax (CAMT) to applicable corporations

with financial statement income (FSI) attributable to investments in partnerships. In addition, the notice provides interim

guidance primarily on simplified methods to determine an

applicable corporation’s adjusted financial statement income

(AFSI) with respect to an investment in a partnership, report-

Finding Lists begin on page ii.

ing by partnerships of information needed to compute ASFI,

and rules for partnership contributions and distributions.

EXCISE TAX

Notice 2025-41, page 325.

This Notice of Determinations adds twenty-one chemical substances to the list of taxable substances under

§ 4672 subject to the tax imposed by § 4671. This

Notice also modifies Notice 2021-66, 2021-52 I.R.B.

901, by correcting the spelling of sodium nitrilotriacetate

monohydrate and by prescribing a tax rate for sodium

nitrilotriacetate monohydrate.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

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of the tax laws, including all rulings that supersede, revoke,

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internal practices and procedures that affect the rights and

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Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

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identifying details and information of a confidential nature are

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Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

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monthly indexes are cumulated on a semiannual basis, and are

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The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

August 18, 2025 

Bulletin No. 2025–34

Part III

Interim Guidance

Simplifying Application

of the Corporate

Alternative Minimum Tax to

Partnerships

Notice 2025-28

SECTION 1. OVERVIEW

This notice provides interim guidance

to reduce the compliance burdens and

costs associated with applying the corporate alternative minimum tax (CAMT) to

partnerships and CAMT entity partners.

The Department of the Treasury (Treasury

Department) and the Internal Revenue

Service (IRS) intend to partially withdraw the CAMT proposed regulations (as

defined in section 2.03 of this notice) and

to issue revised proposed regulations, in

part, to include rules similar to the interim

guidance provided in sections 3 through 7

of this notice regarding the application of

§§ 56A(c)(2)(D) and 56A(c)(15)(B) of the

Internal Revenue Code (Code) to partnership investments (forthcoming proposed

regulations).1 Taxpayers may rely on the

interim guidance provided in sections 3

through 7 of this notice as described in

section 9 of this notice. Section 8 of this

notice modifies the reliance rules provided

in the CAMT proposed regulations.

SECTION 2. BACKGROUND

.01 CAMT under the Inflation Reduction Act.

(1) Overview. Section 10101 of Public

Law 117-169, 136 Stat. 1818, 1818-1828

(August 16, 2022), commonly referred to

as the Inflation Reduction Act of 2022,

amended § 55 to impose the CAMT

based on the “adjusted financial statement

income” (AFSI) of an applicable corporation for taxable years beginning after

December 31, 2022. Section 59(k)(1)

(A) provides that, for purposes of §§ 55

through 59, the term “applicable corporation” means, with respect to any taxable

year, any corporation (other than an S corporation, a regulated investment company,

or a real estate investment trust) that meets

an average annual AFSI test for one or

more taxable years that (i) are before that

taxable year and (ii) end after December

31, 2021.

(2) AFSI under § 56A.

(a) General definition of AFSI. For purposes of §§ 55 through 59, the term AFSI

means, with respect to any corporation for

any taxable year, the net income or loss

of the taxpayer set forth on the taxpayer’s

applicable financial statement (AFS) for

that taxable year, adjusted as provided in

§ 56A. See § 56A(a). Section 56A(c) provides general adjustments to be made to

AFSI. Section 56A(c)(2) provides special

rules that take into account the relationship between entities.

(b) AFSI of partners and partnerships.

Section 56A(c)(2)(D)(i) provides that,

except as provided by the Secretary of

the Treasury or the Secretary’s delegate

(Secretary), if the taxpayer is a partner in

a partnership, the taxpayer’s AFSI with

respect to such partnership is adjusted to

take into account only the taxpayer’s distributive share of such partnership’s AFSI.

Section 56A(c)(2)(D)(ii) provides that, for

purposes of §§ 55 through 59, the AFSI

of a partnership is the partnership’s net

income or loss set forth on that partnership’s AFS (adjusted under rules similar to

the rules set forth in § 56A).

(3) Authority of the Secretary to provide

necessary adjustments. Section 56A(c)

(15) authorizes the Secretary to issue regulations or other guidance to provide for

such adjustments to AFSI as the Secretary

determines necessary to carry out the purposes of § 56A, including adjustments to

AFSI (i) to prevent the omission or duplication of any item, and (ii) to carry out

the principles of part II of subchapter K

of chapter 1 of the Code (subchapter K),

relating to partnership contributions and

distributions.

(4) General authority of the Secretary.

Section 56A(e) authorizes the Secretary

to provide such regulations and other

guidance as necessary to carry out the

purposes of § 56A, including regulations

and other guidance relating to the effect

of the rules of § 56A on partnerships with

income taken into account by an applicable corporation.

.02 Notice 2023-7. On January 17,

2023, the Treasury Department and the

IRS published Notice 2023-7, 2023-3

I.R.B. 390, which announced the intention

of the Treasury Department and the IRS to

issue proposed regulations addressing the

application of the CAMT. Notice 2023-7

provides interim guidance on certain

issues relating to the CAMT, including

issues regarding contributions to, and distributions from, partnerships, referred to

as “partnership contributions and distributions” in this notice. Notice 2023-7 stated

that taxpayers may rely on the guidance

provided in Notice 2023-7 until the issuance of the CAMT proposed regulations.

.03 CAMT Proposed Regulations.

(1) Summary. On September 13, 2024,

the Treasury Department and the IRS published a notice of proposed rulemaking

(REG-112129-23) in the Federal Register

(89 F.R. 75062) referred to as the “CAMT

proposed regulations” in this notice. The

CAMT proposed regulations addressed

the application of the CAMT and permit

taxpayers to rely on the proposed regulations subject to certain conditions and limitations. On December 26, 2024, the Treasury Department and the IRS published

in the Federal Register (89 F.R. 104909)

technical corrections to the CAMT proposed regulations. The CAMT proposed

regulations generally would provide that

the AFSI of a CAMT entity partner2 with

respect to its partnership investment is

adjusted as required under the distributive

share provisions in proposed § 1.56A-5 and

by the rules for partnership contributions

and distributions in proposed § 1.56A-20.

Numerous comments were submitted in

response to the CAMT proposed regula-

1

Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1). Additionally, unless otherwise specified, terms used in

this notice have the same meaning as in the CAMT proposed regulations.

2

Proposed § 1.56A-1(b)(8) would define “CAMT entity” as any entity identified in § 7701 and the regulations under § 7701 other than a disregarded entity. Proposed § 1.56A-5(e)(4) would

define “CAMT entity partner” as any CAMT entity that is a partner in a partnership.

August 18, 2025

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Bulletin No. 2025–34

tions, which the Treasury Department and

the IRS continue to consider and study.

Section 2.03(2) of this notice discusses

the provisions of proposed § 1.56A-5,

section 2.03(3) of this notice discusses the

provisions of proposed § 1.56A-20, and

section 2.03(4) of this notice provides a

brief discussion of comments received on

the CAMT proposed regulations.

(2) AFSI adjustments to partner’s distributive share of partnership AFSI in

proposed § 1.56A-5. Proposed § 1.56A-5

would require application of a bottom-up

approach to determine a partner’s distributive share of partnership AFSI for purposes of § 56A(c)(2)(D). Under the applicable method in proposed § 1.56A-5(c),

a CAMT entity partner would generally

compute its distributive share of AFSI

with respect to a partnership investment

by, first, disregarding any amount the

CAMT entity partner reflects in its financial statement income as defined in proposed § 1.56A-1(b)(20) (FSI) with respect

to that investment for the taxable year and,

second, including its “distributive share

amount.”

Pursuant to proposed § 1.56A-5(e), a

CAMT entity partner’s distributive share

amount for each taxable year would be

calculated under a bottom-up method

based on the following four steps: (1) the

CAMT entity partner determines its “distributive share percentage”; (2) the partnership determines its “modified FSI”;

(3) the CAMT entity partner multiplies its

distributive share percentage by the modified FSI of the partnership (as reported by

the partnership); and (4) the CAMT entity

partner adjusts the product of the amount

determined in step (3) for certain separately-stated § 56A adjustments.

Proposed § 1.56A-5(e)(2) generally

would provide that a CAMT entity partner’s distributive share percentage is a

fraction, the numerator of which is the

FSI amount that is disregarded under the

applicable method, and the denominator of which depends on the method of

accounting the CAMT entity partner uses

for AFS purposes, but in each case, as

determined by the CAMT entity partner

for AFS purposes.

Proposed § 1.56A-5(e)(3) generally

would provide that a partnership’s modi3

fied FSI is equal to the partnership’s FSI

for the taxable year, adjusted for all relevant AFSI adjustments provided in the

§ 56A regulations (that is, those AFSI

adjustments that can apply to partnerships), with certain enumerated exceptions.

Proposed § 1.56A-5(e)(4)(iii) generally would require the partnership to separately state certain AFSI items that are

not taken into account as adjustments to a

CAMT entity partner’s distributive share

amount. Instead, these AFSI items would

be directly taken into account by a CAMT

entity partner in determining its AFSI.

These AFSI items include items described

in proposed §§ 1.56A-4(c)(1)(ii) and

1.56A-6(c)(2)(iii) with respect to stock of

foreign corporations owned by the partnership and items described in proposed

§ 1.56A-8(c) with respect to creditable

foreign tax expenditures of a partnership.

In a tiered-partnership structure, the

CAMT proposed regulations would

require each partnership, starting with the

lowest-tier partnership and continuing up

the chain of ownership, to use the applicable method to determine the distributive

share amounts of each CAMT entity partner in the tiered-partnership chain.

Under proposed § 1.56A-5(d), a CAMT

entity partner would not be permitted to

disregard any FSI amounts attributable to

a transfer, sale or exchange, contribution,

distribution, dilution, deconsolidation,

change in ownership, or any other transaction between any partners (including the

CAMT entity partner) and the partnership,

or between any partners (including the

CAMT entity partner), that are not derived

from, and included in, the partnership’s

FSI. As a result, such amounts would not

be excluded from a CAMT entity partner’s AFSI under the applicable method.

However, these amounts may be subject

to adjustment under proposed §§ 1.56A1(d)(4) (concerning redetermination of

FSI gains and losses) and 1.56A-20 (concerning AFSI adjustments to apply certain

principles of subchapter K).

(3) AFSI adjustments to apply certain subchapter K principles in proposed

§ 1.56A-20. Proposed § 1.56A-20 would

provide rules for computing AFSI resulting from partnership contributions and

distributions (except for certain contributions or distributions of stock of a foreign

corporation). Proposed § 1.56A-20(b)

would provide a general operating rule

for transactions between a CAMT entity

partner and a partnership in which it holds

an investment. Generally, this rule would

require each CAMT entity partner and the

partnership itself to include in its AFSI any

income, expense, gain, or loss reflected

in its FSI as a result of the transaction,

except as otherwise provided in proposed

§ 1.56A-20. In certain circumstances, proposed § 1.56A-20 would allow deferred

recognition of FSI resulting from partnership contributions and distributions to

more closely align with the general principles of subchapter K.

(a) Contributions of property. Proposed

§ 1.56A-20 would adopt an approach

under which, if property is contributed

by a CAMT entity partner (contributor)

to a partnership in a transaction to which

§ 721(a) applies, any gain or loss reflected

in the contributor’s FSI from the property

transfer would be deferred by the contributor and included in its AFSI ratably,

on a monthly basis, over an applicable

recovery period that would depend on the

type of property contributed (deferred sale

approach). The deferred sale approach

would not apply to disregard any other

FSI amount resulting to the contributor or

the partnership from the transaction (for

example, FSI gain or loss resulting from a

deconsolidation or a dilution) for purposes

of determining AFSI.

Under proposed § 1.56A-20(c)(2),

a contributor would accelerate a portion of its deferred sale gain or loss into

its AFSI upon the occurrence of certain

events, including if a contributor’s distributive share percentage in the partnership

decreases by more than one-third or if the

partnership disposes of the deferred sale

property.

Proposed § 1.56A-20(c)(3) would

also provide guidance on the determination of CAMT basis.3 The partnership’s

initial CAMT basis in contributed property would be the partnership’s initial

AFS basis in the contributed property at

the time of contribution, regardless of

whether § 721(a) applies, in whole or in

part, to the contribution. Upon a contri-

Proposed § 1.56A-1(b)(7) would define “CAMT basis” as the basis of an item for purposes of determining AFSI.

Bulletin No. 2025–34

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August 18, 2025

bution of property to the partnership to

which § 721(a) applies, the contributor’s

initial CAMT basis in its partnership

investment would be the contributor’s

AFS basis in the acquired partnership

investment, decreased by any deferred

sale gain or increased by any deferred sale

loss that is required to be included in the

contributor’s AFSI under the deferred sale

approach. The contributor’s initial CAMT

basis in the acquired partnership investment would be subsequently increased or

decreased as the deferred sale gain or loss

is included in its AFSI under the deferred

sale approach.

(b) Distributions of property. Proposed

§ 1.56A-20(d) would adopt a deferred distribution gain or loss approach, similar to

the rules for contributions of property, for

any gain or loss reflected in a partnership’s

FSI (deferred distribution gain or loss) as

the result of a distribution of property

(deferred distribution property) to which

§ 731(b) applies. Deferred distribution

gain or loss would be (i) allocated among

the partners in proportion to their distributive share percentages and (ii) included

by the partners in their respective distributive share amounts ratably, on a monthly

basis, over an applicable recovery period

that would depend on the type of property

distributed.

(c) Treatment of liabilities. Proposed

§ 1.56A-20(e) generally would provide

that the treatment of partner and partnership liabilities for purposes of determining a CAMT entity partner’s or partnership’s AFSI is based on the treatment of

such liabilities for AFS purposes and not

on the treatment of such liabilities under

§ 752. Regarding the treatment of liabilities upon a contribution or distribution

of property to or from a partnership, the

CAMT proposed regulations would provide that § 752 is inapplicable in determining the amount of gain or loss to be

included in the AFSI of the CAMT entity

partner or partnership. Accordingly, any

rules relating to liabilities for regular tax

purposes, such as those under §§ 1.707-5

and 1.707-6, would not apply for purposes

of the CAMT.

(4) Comments received on the partnership provisions of the CAMT proposed

regulations.

(a) Comments on the partnership distributive share rules of proposed § 1.56A-

August 18, 2025

5. Comments submitted in response

to proposed § 1.56A-5 have generally

requested that alternative methods be

provided for computing a CAMT entity

partner’s distributive share of partnership AFSI, including an elective method

based on the amount of FSI a CAMT

entity partner reports for AFS purposes

with respect to its partnership investment,

additional methods to determine a partner’s distributive share percentage, and an

elective taxable-income exception allowable under certain fact patterns. The comments generally provide that the rules in

proposed § 1.56A-5 are unduly complex

and burdensome. A number of comments

requested that interim guidance be provided regarding the determination of a

CAMT entity partner’s AFSI with respect

to a partnership investment.

(b) Comments on the partnership contribution and distribution rules of proposed § 1.56A-20. Comments submitted

in response to proposed § 1.56A-20 have

generally requested either that changes be

made to the deferred sale approach and the

deferred distribution gain or loss approach

or that different approaches be permitted.

Some comments have requested modifications to proposed § 1.56A-20 to account

for the inclusion of partnership liabilities

when calculating the amount of AFSI

resulting from partnership contributions

and distributions, to remove AFSI inclusions resulting from certain transactions,

and to modify the acceleration events and

the applicable recovery periods. Additionally, other comments have requested

allowing for the use of additional subchapter K provisions to account for partnership contributions and distributions.

SECTION 3. TOP-DOWN ELECTION

.01 Purpose. The Treasury Department

and the IRS anticipate that the forthcoming proposed regulations will include

modifications to proposed §§ 1.56A-5

and 1.56A-20 consistent with the guidance provided in this section 3 to allow

a CAMT entity partner to make a “topdown election” to elect to determine its

amount of AFSI from a partnership investment for each taxable year (starting with

the first taxable year for which the election

is in effect) by reference to the amount the

CAMT entity partner reflects in its FSI for

318

the taxable year with respect to the partnership investment.

.02 Effect of Top-Down Election.

(1) General calculation of AFSI for a

partnership investment. If a CAMT entity

partner has a top-down election in effect

with respect to a partnership investment,

the CAMT entity partner’s AFSI for such

partnership investment is the sum of (i)

80 percent of the top-down amount (as

defined in section 3.02(2) of this notice),

(ii) amounts included in AFSI from a sale

or exchange of the partnership investment as described in section 3.02(3) of

this notice, and (iii) the AFSI adjustments

described in section 3.02(4) of this notice.

Except as provided in this section 3.02, the

CAMT entity partner does not adjust its

AFSI for such partnership investment by

making any other adjustments provided

in § 56A and the CAMT proposed regulations (such as the AFSI adjustments in proposed § 1.56A-15 applicable to “property

to which section 168 applies,” as defined

in proposed § 1.56A-15(c)). For purposes

of applying the rules of proposed § 1.56A5, 80 percent of the top-down amount will

be treated as the CAMT entity partner’s

distributive share amount. Thus, under

proposed § 1.56A-5(j)(1), if 80 percent of

the top-down amount is a negative number, the CAMT entity partner includes

such amount in its AFSI for the taxable

year only to the extent that such negative

amount does not exceed the CAMT entity

partner’s CAMT basis in its partnership

investment. Under proposed § 1.56A-5(j)

(3), the CAMT entity partner’s CAMT

basis in its partnership investment must

be increased or decreased (as applicable),

but not below zero pursuant to proposed

§ 1.56A-5(j), by 80 percent of the topdown amount and, to the extent provided

by the CAMT proposed regulations, the

AFSI adjustments described in section

3.02(4) of this notice.

(2) Top-down amount.

(a) Inclusions. Except as provided

in section 3.02(2)(b) of this notice, the

top-down amount equals any amounts

reflected in the CAMT entity partner’s FSI

for the taxable year that are attributable to

the partnership investment for which the

top-down election is in effect, including

FSI amounts attributable to a contribution of property to the partnership by the

CAMT entity partner or a distribution of

Bulletin No. 2025–34

property by the partnership to the CAMT

entity partner. Thus, the CAMT entity

partner may not apply § 721, § 731, the

rules in section 3 of Notice 2023-7, the

rules in proposed § 1.56A-20, or the rules

in section 6 of this notice to defer inclusion of FSI amounts attributable to a contribution of property to the partnership by

the CAMT entity partner or a distribution

of property by the partnership.

(b) Exclusions.

(i) The top-down amount excludes

any FSI amounts attributable to a sale or

exchange of all or a portion of the CAMT

entity partner’s partnership investment

(including a sale or exchange under

§ 731(a)) in a transaction that is not a

nonrecognition transaction for regular tax

purposes (recognition transaction). See

section 3.02(3) of this notice, under which

100 percent of such FSI amounts generally are included in AFSI.

(ii) The top-down amount excludes

any FSI or AFSI amounts described in

proposed §§ 1.56A-4(c)(1)(i) and (ii),

1.56A-6(c)(2)(iii), or 1.56A-8(b) and (c).

See section 3.02(4) of this notice, which

instructs how such amounts should be

taken into account by a CAMT entity partner in computing its AFSI with respect to

a partnership investment for which a topdown election is in effect.

(iii) The top-down amount excludes

any specified non-realization amounts to

the extent excluded under section 7 of this

notice.

(3) AFSI upon sale or exchange of

partnership investment. If a CAMT entity

partner sells or exchanges all or a portion

of its partnership investment (including

a sale or exchange under § 731(a)) in a

recognition transaction, the CAMT entity

partner determines the attributable AFSI

using CAMT basis and includes such

amount in its AFSI for the taxable year of

the sale or exchange.

(4) Certain adjustments for foreign

stock. If a CAMT entity partner has a topdown election in effect with respect to a

partnership investment, in determining

the CAMT entity partner’s AFSI for the

taxable year with respect to its partnership investment, the FSI items described

in proposed §§ 1.56A-4(c)(1)(i) and

1.56A-8(b) are disregarded and the items

described in proposed §§ 1.56A-4(c)(1)

(ii), 1.56A-6(c)(2)(iii), and 1.56A-8(c) are

Bulletin No. 2025–34

included in AFSI as provided in proposed

§ 1.56A-5(e)(4)(iii)(A) through (C).

(5) Effect on a partnership. If a CAMT

entity partner has a top-down election in

effect with respect to a partnership investment, the partnership is not required to

report its modified FSI to such CAMT

entity partner. However, the partnership is

required to compute and report its modified FSI to another CAMT entity partner

if notice is provided to the partnership that

such other CAMT entity partner requires

the partnership to compute and report its

modified FSI. If a partnership computes

or reports modified FSI (or other CAMT

amounts) for a CAMT entity partner for

a taxable year in which the CAMT entity

partner has a top-down election in effect

for such partnership investment, the

CAMT entity partner must continue to

apply the top-down election with respect

to such partnership investment in accordance with section 3.05 of this notice.

.03 Eligibility to Make Top-Down

Election. Any CAMT entity partner other

than a partnership may make a top-down

election with respect to one or more partnerships in which it is a direct partner for

Federal income tax purposes. If a CAMT

entity partner is a direct partner in multiple partnerships, it may make a top-down

election with respect to its investments in

some partnerships and not its investments

in other partnerships. A top-down election may not be made with respect to an

investment other than an investment in a

partnership.

.04 Manner of Making Top-Down Election.

(1) In general. Except as provided in

section 3.04(2) of this notice, a CAMT

entity partner makes a top-down election

by attaching a statement to its Federal

income tax return for the taxable year. The

statement must be titled “Top-Down Election for CAMT” and include the CAMT

entity partner’s name, address, taxpayer

identification number, a statement that

the CAMT entity partner is making a topdown election under Notice 2025-28, and

the name and taxpayer identification number (if applicable) of each partnership for

which the CAMT entity partner is making

a top-down election.

(2) CFCs. In the case of a CAMT

entity partner that is a controlled foreign corporation (as defined in § 957 or,

319

if applicable, § 953(c)(1)(B)) (CFC), the

controlling domestic shareholders (as

defined in § 1.964-1(c)(5)) of the CFC

make a top-down election on behalf of the

CFC in accordance with the procedures

set forth in § 1.964-1(c)(3). The statement

described in § 1.964-1(c)(3)(ii) must be

titled “Top-Down Election for CAMT on

Behalf of CFC” and, in addition to the

information set forth in § 1.964-1(c)(3)(ii),

must include a statement that the CFC is

making a top-down election under Notice

2025-28 and the names and taxpayer identification number (if applicable) of each

partnership for which the CFC is making

a top-down election. A top-down election

made on behalf of a CFC is binding on all

United States shareholders (as defined in

§ 951(b) or, if applicable, § 953(c)(1)(A))

of the CFC.

.05 Duration of Top-Down Election.

Once made, a top-down election continues

in effect for all subsequent taxable years

beginning before the issuance of the forthcoming proposed regulations.

SECTION 4. LIMITED TAXABLEINCOME ELECTION

.01 Purpose. The Treasury Department

and the IRS anticipate that the forthcoming proposed regulations will include

modifications to proposed §§ 1.56A-5 and

1.56A-20 consistent with the guidance

provided in this section 4 to allow certain

CAMT entity partners to make a “taxable-income election” to elect to use taxable-income amounts to determine their

AFSI from a partnership investment.

.02 Effect of Taxable-Income Election.

(1) Effect of taxable-income election

by CAMT entity partner. If a CAMT

entity partner has a taxable-income election in effect with respect to a partnership

investment for a taxable year, the CAMT

entity partner’s AFSI for the partnership

investment for such taxable year is equal

to the sum of: (i) the CAMT entity partner’s taxable-income amount determined

under section 4.02(2) of this notice, (ii)

AFSI attributable to sales or exchanges

described in section 4.02(3) of this notice,

and (iii) the inclusions in AFSI attributable to adjustments described in section

4.02(4) of this notice. For purposes of

applying the rules of proposed § 1.56A-5,

the taxable-income amount will be treated

August 18, 2025

as the CAMT entity partner’s distributive share amount. Thus, under proposed

§ 1.56A-5(j)(1), if the taxable-income

amount is a negative number, the CAMT

entity partner includes such amount in

its AFSI for the taxable year only to the

extent that such negative amount does not

exceed the CAMT entity partner’s CAMT

basis in its partnership investment. Under

proposed § 1.56A-5(j)(3), the CAMT

entity partner’s CAMT basis in its partnership investment must be increased or

decreased (as applicable), but not below

zero pursuant to proposed § 1.56A-5(j),

by the taxable-income amount, and, to

the extent provided by the CAMT proposed regulations, the AFSI adjustments

described in section 4.02(4) of this notice.

(2) CAMT entity partner’s taxable-income amount. A CAMT entity partner’s

taxable-income amount from a partnership investment includes the sum of the

CAMT entity partner’s distributive share

of income, gain, loss, and deduction from

the partnership investment for regular

tax purposes, based on application of all

applicable regular tax rules (for example,

§ 704(c) and (d)), to the extent included in

the CAMT entity partner’s taxable income,

but excluding any amounts described in

proposed §§ 1.56A-4(c)(1)(ii), 1.56A-6(c)

(2)(iii), or 1.56A-8(c). Additionally, in lieu

of applying the rules of section 3 of Notice

2023-7, proposed § 1.56A-20, or any

rules in section 6 of this notice, a CAMT

entity partner’s taxable-income amount

with respect to a partnership investment

includes any income, gain, loss, or deduction resulting from partnership contributions and distributions as computed for

regular tax purposes. See section 7 of this

notice regarding the treatment of certain

transactions.

(3) Certain sales or exchanges. If a

CAMT entity partner with a taxable-income election in effect with respect to

a partnership receives a distribution of

property from the partnership in a transaction that is a nonrecognition transaction

for regular tax purposes, the CAMT entity

partner’s initial CAMT basis upon receipt

of the distributed property is its adjusted

basis for regular tax purposes. Following

the distribution, the CAMT entity partner’s CAMT basis in the distributed property must be adjusted in accordance with

the rules of the CAMT proposed regula-

August 18, 2025

tions. Thus, if the CAMT entity partner

subsequently disposes of the distributed

property, any AFSI attributable to such

disposition must be determined using that

CAMT basis and included in the CAMT

entity partner’s AFSI. If a CAMT entity

partner with a taxable-income election in

effect with respect to a partnership investment sells or exchanges all or a portion

of its partnership investment (including

a sale or exchange under § 731(a)), any

resulting AFSI must be determined using

CAMT basis and included in the CAMT

entity partner’s AFSI. See section 7 of this

notice regarding the treatment of certain

transactions.

(4) Certain adjustments for foreign

stock. If a CAMT entity partner has a taxable-income election in effect with respect

to a partnership investment, in determining the CAMT entity partner’s AFSI for

the taxable year with respect to its partnership investment, the FSI items described

in proposed §§ 1.56A-4(c)(1)(i) and

1.56A-8(b) are disregarded and the items

described in proposed §§ 1.56A-4(c)(1)

(ii), 1.56A-6(c)(2)(iii), and 1.56A-8(c) are

included in AFSI as provided in proposed

§ 1.56A-5(e)(4)(iii)(A) through (C).

(5) Effect on a partnership of a CAMT

entity partner’s taxable-income election.

If a CAMT entity partner has a taxable-income election in effect with respect to a

partnership investment, the partnership is

not required to report its modified FSI to

such CAMT entity partner. However, the

partnership is required to compute and

report its modified FSI to another CAMT

entity partner if notice is provided to the

partnership that such other CAMT entity

partner requires the partnership to compute and report its modified FSI. If a partnership computes or reports modified FSI

(or other CAMT amounts) for a CAMT

entity partner for a taxable year for which

the CAMT entity partner has a taxable-income election in effect for such partnership investment, the CAMT entity partner

must continue to apply the taxable-income

election with respect to such partnership

investment in accordance with section

4.05 of this notice.

.03 Eligibility to Make Taxable-Income

Election.

(1) Type of entity. Any CAMT entity

partner other than a partnership may make

a taxable-income election with respect to

320

a partnership in which it is a direct partner for Federal income tax purposes if, as

of the last day of the taxable year, (i) the

CAMT entity partner’s test group does not

own more than 20 percent of the interests

in capital or profits of the partnership (as

determined under section 4.03(2) of this

notice), and (ii) the fair market value

of such partnership investment held by

the CAMT entity partner’s test group is

$200,000,000 or less (as determined under

section 4.03(2) of this notice).

(2) Test group. For purposes of this

section 4.03, “test group” has the meaning in proposed § 1.59-2(b)(6). The

CAMT entity partner desiring to make a

taxable-income election with respect to a

partnership investment determines its test

group as of the last day of the taxable year.

Accordingly, such test group is comprised

of the CAMT entity partner desiring to

make the taxable-income election and the

CAMT entities required to be aggregated

with such CAMT entity partner under the

relevant relationship criteria as defined in

proposed § 1.59-2(b)(4) as of the last day

of the taxable year. For purposes of section 4.03(1)(i) and (ii) of this notice, the

CAMT entity partner’s test group’s interests in capital or profits of the partnership,

or the fair market value of the investments

in the partnership held by the CAMT entity

partner’s test group, as applicable, is the

sum of each test group member’s interest

in the capital or profits of the partnership,

or the sum of the fair market value of each

investment in the partnership held by each

member of the CAMT entity partner’s test

group, as applicable, as of the last day of

the taxable year.

(3) Investments in multiple partnerships. If a CAMT entity partner has

investments in multiple partnerships that

qualify for the taxable-income election,

it may make a taxable-income election

with respect to its investments in some

partnerships and not to its investments in

other partnerships. A taxable-income election may not be made with respect to an

investment other than an investment in a

partnership.

.04 Manner of Making Taxable-Income

Election.

(1) In general. Except as provided in

section 4.04(2) of this notice, an eligible

CAMT entity partner makes a taxable-income election by attaching a statement to

Bulletin No. 2025–34

its Federal income tax return for the taxable year in which the election is made.

The statement must be titled “Taxable-Income Election for CAMT” and include

the CAMT entity partner’s name, address,

taxpayer identification number, a statement that the CAMT entity partner is

making a taxable-income election under

Notice 2025-28, and the name and taxpayer identification number (if applicable)

of each partnership for which the CAMT

entity partner makes a taxable-income

election.

(2) CFCs. In the case of an eligible

CAMT entity partner that is a CFC, the

controlling domestic shareholders of the

CFC make a taxable-income election on

behalf of the CFC in accordance with the

procedures set forth in § 1.964-1(c)(3).

The statement described in § 1.964-1(c)

(3)(ii) must be titled “Taxable-Income

Election for CAMT on Behalf of CFC”

and, in addition to the information set

forth in § 1.964-1(c)(3)(ii), must include

a statement that the CFC is making a

taxable-income election under Notice

2025-28 and the name and taxpayer identification number (if applicable) of each

partnership for which the CFC is making

a taxable-income election. A taxable-income election made on behalf of a CFC

is binding on all United States shareholders of the CFC.

.05 Duration of Taxable-Income Election. Once made, a taxable-income election continues in effect for all subsequent

taxable years beginning before the issuance of the forthcoming proposed regulations unless the CAMT entity partner

no longer meets the eligibility requirements for making a taxable-income election under section 4.03 of this notice. If

on the last day of the taxable year the

CAMT entity partner no longer meets the

eligibility requirements for making the

taxable-income election, the election will

terminate for that taxable year and any

subsequent taxable year, and the CAMT

entity partner will not be allowed to make

a subsequent taxable-income election with

respect to the partnership. For the taxable

year in which the taxable-income election

ceases to be in effect, the CAMT entity

partner must attach a statement to its Federal income tax return disclosing the reasons for the termination of the taxable-income election.

Bulletin No. 2025–34

SECTION 5. REASONABLE METHOD

TO DETERMINE PARTNERS’

DISTRIBUTIVE SHARES OF

MODIFIED FSI AND REPORTING

REQUIREMENT MODIFICATIONS

.01 Purpose. The Treasury Department

and the IRS anticipate that the forthcoming proposed regulations will modify proposed § 1.56A-5 consistent with the guidance provided in this section 5 to allow

partnerships to use any reasonable method

to determine a CAMT entity partner’s distributive share. In addition, the forthcoming proposed regulations will modify certain reporting requirements in proposed

§ 1.56A-5.

.02 Reasonable Method to Determine CAMT Entity Partners’ Distributive

Shares of Modified FSI.

(1) Partnership determination. Following the determination of modified FSI pursuant to proposed § 1.56A-5(e)(3), a partnership may determine a CAMT entity

partner’s distributive share of such modified FSI using any reasonable method,

provided that it uses the same method

for all CAMT entity partners in the partnership. If a partnership determines any

CAMT entity partner’s distributive share

of modified FSI in accordance with the

rules of this section 5.02, the partnership

must report to each CAMT entity partner

its distributive share amount for the taxable year pursuant to section 5.04(2) of

this notice; however, the partnership need

not report distributive share amounts to a

CAMT entity partner that has a top-down

election or taxable-income election in

effect with respect to the partnership. In

the case of a CAMT entity partner that

has a top-down or taxable-income election in effect with respect to a partnership

investment, if the partnership computes

or reports modified FSI (or other CAMT

amount) for the CAMT entity partner,

the CAMT entity partner must continue

to apply the top-down or taxable-income

election with respect to such partnership

investment in accordance with section

3.05 or 4.05 of this notice.

(2) Reasonable methods. A reasonable method must be consistent with the

purposes of § 56A. A reasonable method

does not include a method that results in

the partnership allocating more than, or

less than, all of its modified FSI among its

321

partners, or a method undertaken with a

principal purpose of avoiding applicable

corporation status or reducing or avoiding

a CAMT liability under § 55. A reasonable

method includes a method that determines

a CAMT entity partner’s distributive share

of modified FSI for a taxable year based

on:

(a) The partner’s relative share of “net

§ 704(b) income or loss” (meaning, if the

partnership has net income attributable to

§ 704(b) items, such net income, and if

the partnership has overall net loss attributable to § 704(b) items, such net loss) for

such taxable year. The determination of

the partnership’s net § 704(b) income or

loss would disregard § 704(c) and its principles, and “regulatory allocations” such

as those described in § 1.721(c)-1(b)(10).

If the partnership makes a guaranteed payment within the meaning of § 707(c) that

is deductible for regular tax purposes, then

solely for purposes of this section 5.02(2)

(a), such guaranteed payment is treated as

a share of net § 704(b) income; or

(b) The provisions in the partnership agreement that the partnership uses

to allocate net § 704(b) income or loss

for the entire taxable year, provided the

partnership’s allocations of net § 704(b)

income or loss comply with § 704(b). If

the partnership makes a guaranteed payment within the meaning of § 707(c) that is

deductible for regular tax purposes, solely

for purposes of this section 5.02(2)(b), the

provisions of the partnership agreement

that the partnership uses to allocate net

§ 704(b) income or loss are considered to

include the provisions of the partnership

agreement relating to such guaranteed

payment.

(3) Effect of a partnership determination. A partnership that applies proposed

§ 1.56A-20, including with any of the

modifications described in section 6.03 of

this notice, must use the same method to

determine a partner’s distributive share of

deferred distribution gain or loss as it uses

to determine a partner’s distributive share

of modified FSI.

.03 Selection and Duration of Method.

A partnership chooses a reasonable

method under this section 5 by attaching a statement to its Federal income or

information return for the taxable year.

The statement must be titled “Reasonable Allocation Method for CAMT” and

August 18, 2025

include the partnership’s name, address,

taxpayer identification number, a statement that the partnership is applying a reasonable method under section 5 of Notice

2025-28 and a description of the reasonable method. Once a partnership has chosen a reasonable method under this section 5, the partnership must consistently

apply the method for all subsequent taxable years beginning before the issuance

of the forthcoming proposed regulations.

.04 Modifications to Certain Reporting

Requirements.

(1) Permissible modifications. A

CAMT entity, including an upper-tier

partnership (UTP), may apply proposed

§ 1.56A-5(h) and (i) with the following

modifications:

(a) Instead of a CAMT entity being

required to request information from a

partnership by the 30th day after the close

of the taxable year of the partnership

pursuant to proposed § 1.56A-5(h)(1), a

CAMT entity may request information

from a partnership up to 60 days before the

due date (with extensions) for the filing of

the partnership’s Federal return of partnership income for such taxable year. In the

case of a partnership that is not required

to file a return under § 1.6031(a)-1(b), the

CAMT entity may request information

from the partnership up to the fifteenth

day of the seventh month after the close

of the taxable year of the partnership (as

determined applying § 706(b));

(b) If a partnership fails to furnish the

information requested by a CAMT entity

as described in proposed § 1.56A-5(h)(2)

(i) then, instead of applying the required

estimate rules under proposed § 1.56A5(h)(2)(ii), a CAMT entity may base its

estimate on its books and records and is

not required to continue to use its best

efforts to obtain the requested information

from the partnership; and

(c) Instead of a UTP being required

to request any necessary information by

the later of the 30th day after the close

of the taxable year of the partnership to

which the information request relates or

14 days after the date the UTP receives a

request from another UTP under proposed

§ 1.56A-5(i)(2)(iii), a UTP can request

the information by the later of the 60th

day after the close of the taxable year of

the partnership to which the information

request relates or 30 days after the date

August 18, 2025

the UTP receives a request from another

UTP (with corresponding changes to proposed § 1.56A-5(i)(3)(ii) relating to late

requests).

(2) Required modification. If a partnership determines a CAMT entity partner’s distributive share of modified FSI in

accordance with this section 5 for a taxable year, instead of applying the rules of

proposed § 1.56A-5(i)(1)(i) and (ii), the

partnership must report to each CAMT

entity partner for the taxable year the

CAMT entity partner’s distributive share

of the partnership’s modified FSI.

SECTION 6. ADDITIONAL

METHODS TO ACCOUNT FOR

PARTNERSHIP CONTRIBUTIONS

AND DISTRIBUTIONS

.01 Purpose. The Treasury Department

and the IRS anticipate that the forthcoming

proposed regulations will include modifications to proposed § 1.56A-20 consistent

with the guidance provided in this section

6 to allow CAMT entities to choose from

two additional methods described in sections 6.02 and 6.03 of this notice to determine AFSI adjustments for partnership

contributions and distributions. However,

these additional methods do not apply to

partnership contributions and distributions involving stock of a foreign corporation. See proposed § 1.56A-4(c) for rules

that apply to partnership contributions and

distributions involving stock of a foreign

corporation.

.02 Modified -20 Method. A CAMT

entity partner may choose to apply proposed § 1.56A-20 with the modifications

described in section 6.02(1)(a) through

(h) of this notice (modified -20 method)

rather than the corresponding rules in proposed § 1.56A-20.

(1) Effect of choosing modified -20

method.

(a) In lieu of the liability allocation

rules under proposed § 1.56A-20(e)(2),

the rules of § 752 and the rules under

§§ 1.707-4, 1.707-5 and 1.707-6 apply to

determine whether § 721(a) or § 731(b)

apply to partnership contributions and distributions of property subject to liabilities;

(b) In lieu of the applicable recovery

period rules of proposed § 1.56A-20(c)

(2)(i)(B) through (E), the applicable

recovery period is 15 years for deferred

322

sale property that is “property to which

section 168 applies” (as defined in proposed § 1.56A-15(c)), qualified wireless spectrum (as defined in proposed

§ 1.56A-16(c)), or subject to depreciation

or amortization for AFS purposes;

(c) In lieu of the recovery period

rules of proposed § 1.56A-20(c)(2)(i)(F),

there is no applicable recovery period for

deferred sale property that is not subject

to depreciation or amortization for AFS

purposes, and no deferred sale gain or loss

is required to be included in a contributor’s AFSI for such property except in the

case of an event described in proposed

§ 1.56A-20(c)(2)(iii) or (iv) (as modified

by this section 6.02);

(d) Proposed § 1.56A-20(c)(2)(ii) does

not apply, except to the extent the contributor disposes of its entire investment in

the partnership, including through a liquidating distribution by the partnership;

(e) Proposed § 1.56A-20(c)(2)(iii)

applies only to the extent the partnership

sells, distributes, or otherwise disposes of

the deferred sale property, or any property the tax basis of which is determined

in whole or in part by reference to the

adjusted basis of the deferred sale property, in a recognition transaction;

(f) In lieu of the recovery period

rules of proposed § 1.56A-20(d)(1)(ii)

(B) through (E), the applicable recovery

period is 15 years for deferred distribution

property that is “property to which section 168 applies” (as defined in proposed

§ 1.56A-15(c)), qualified wireless spectrum, or subject to depreciation or amortization for AFS purposes;

(g) In lieu of the recovery period rules

of proposed § 1.56A-20(d)(1)(ii)(F),

there is no applicable recovery period for

deferred distribution property that is not

subject to depreciation or amortization for

AFS purposes, and no deferred distribution gain or loss would be required to be

included in a partner’s distributive share

amount except in the case of an event

described in proposed § 1.56A-20(d)(1)

(iii) or (d)(2)(ii) (as modified by this section 6.02); and

(h) Proposed § 1.56A-20(d)(1)(iii)(B)

does not apply.

(2) Method of choosing modified -20

method.

(a) Except as provided in section

6.02(2)(b) of this notice, a CAMT entity

Bulletin No. 2025–34

partner chooses the modified -20 method

with respect to a partnership investment

by attaching a statement to its Federal

income tax return, income return, or

information return for the taxable year.

The statement must be titled “Modified

-20 Method for CAMT” and include the

CAMT entity partner’s name, address,

taxpayer identification number, a statement that the CAMT entity partner is

choosing the modified -20 method under

section 6.02 of Notice 2025-28, and the

name and taxpayer identification number (if applicable) of each partnership for

which the CAMT entity partner is choosing the modified -20 method.

(b) CFCs. In the case of an eligible

CAMT entity partner that is a CFC, the

controlling domestic shareholders of the

CFC choose the modified -20 method

on behalf of the CFC in accordance with

the procedures set forth in § 1.964-1(c)

(3). The statement described in § 1.9641(c)(3)(ii) must be titled “Modified -20

Method for CAMT on Behalf of CFC”

and, in addition to the information set

forth in § 1.964-1(c)(3)(ii), must include

a statement that the CFC is choosing the

modified -20 method under Notice 202528 and the name and taxpayer identification number (if applicable) of each partnership for which the CFC is choosing the

modified -20 method. The choice of the

modified -20 method made on behalf of a

CFC is binding on all United States shareholders of the CFC.

(3) Duration of modified -20 method.

Once a CAMT entity partner has chosen

the modified -20 method, it must consistently apply all of the modifications

under section 6.02(1)(a) through (h) of

this notice to all contributions and distributions for all subsequent taxable years

beginning before the issuance of the forthcoming proposed regulations.

.03 Full Subchapter K Method. A partnership (with the written consent of all

CAMT entity partners that were partners

at any time during the year for which the

full subchapter K method is adopted and

that do not have a top-down or taxable-income election in effect with respect to the

partnership investment) may apply the

principles of §§ 721 and 731 to determine

its partners’ distributive shares of partnership AFSI resulting from partnership contributions and distributions.

(1) Effect of choosing full subchapter K method. Under the full subchapter

K method, the provisions of subchapter K would apply with the partnership

using CAMT inputs (for example, using

CAMT basis for an item of property if the

CAMT basis is different from the regular

tax basis) where appropriate. For example, if a partnership applies the principles

of §§ 721 and 731 for partnership contributions and distributions for CAMT purposes, the partnership must also apply the

principles of other relevant provisions in

subchapter K (for example, §§ 704(c),

732, 734, 737) for CAMT purposes.

Additionally, if a partnership adopts the

full subchapter K method described in

this section 6.03, the partnership must

adopt the same relevant methods and

elections for CAMT purposes as it does

for regular tax purposes. For example, if

a partnership adopts the remedial allocation method under § 1.704-3(d) for an

item of property for regular tax purposes,

it must also adopt the remedial allocation method for such property for CAMT

purposes. Similarly, if a partnership

makes special basis adjustments under

§§ 734(b) or 743(b), it must make corresponding basis adjustments for CAMT

purposes.

(2) Method of choosing full subchapter

K method. A partnership chooses the full

subchapter K method by attaching a statement to its Federal income or information

return for the taxable year. The statement

must be titled “Full Subchapter K Method

for CAMT” and include the partnership’s

name, address, taxpayer identification

number, and a statement that the partnership is choosing the full subchapter

K method under section 6.03 of Notice

2025-28. The partnership must also maintain in its books and records computations

substantiating compliance with the full

subchapter K method.

(3) Duration of full subchapter K

method. Once a partnership has chosen the

full subchapter K method, the partnership

must consistently apply the method to all

contributions and distributions for all subsequent taxable years beginning before

the issuance of the forthcoming proposed

regulations, regardless of whether a new

CAMT entity partner is admitted to the

partnership and does not consent to the

subchapter K method.

SECTION 7. FSI ATTRIBUTABLE TO

CERTAIN TRANSACTIONS

.01 Purpose. The Treasury Department

and the IRS anticipate that the forthcoming proposed regulations will include

modifications to proposed §§ 1.56A-5

and 1.56A-20 consistent with the guidance provided in this section 7 to allow a

CAMT entity partner to:

(1) Disregard in computing AFSI with

respect to a partnership investment any FSI

amounts attributable to a consolidation,

remeasurement, deconsolidation, dilution,

or change in ownership of a partner other

than the CAMT entity partner to the extent

that such transactions are non-realization

events for regular tax purposes, referred to

as “specified non-realization amounts” in

this notice,4 and

(2) Make appropriate adjustments to

any relevant CAMT attributes to ensure

that the disregarded amounts are not permanently eliminated.

.02 AFSI Exclusion. A CAMT entity

partner (including a UTP) may disregard

in computing AFSI any specified non-realization amounts with respect to a partnership investment for a taxable year.

.03 Appropriate Adjustments. If a

CAMT entity partner disregards in computing AFSI with respect to a partnership

investment any specified non-realization

amounts under section 7.02 of this notice,

appropriate adjustments must be made to

any relevant CAMT attributes (for example, the CAMT basis of the partnership

investment) to reflect that the CAMT

entity partner did not include the specified non-realization amounts in AFSI with

respect to the partnership investment and

to ensure that the CAMT entity partner’s

AFSI from the partnership investment will

be properly computed.

Specified non-realization amounts do not include FSI attributable to a change in the fair value of a partnership investment, such as for a CAMT entity partner that uses the fair value method

of accounting with respect to its partnership investment.

4

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323

August 18, 2025

SECTION 8. RELIANCE ON

PROPOSED §§ 1.56A-5 AND 1.56A-20.

.01 The Treasury Department and the

IRS anticipate that the forthcoming proposed regulations will provide that, for

taxable years beginning before the applicability date of final regulations addressing §§ 56A(c)(2)(D) and 56A(c)(15)(B)

as applied to partnership investments, a

taxpayer may rely on the rules set forth

in proposed § 1.56A-5 (excluding proposed § 1.56A-5(l)(2)(ii) and (iii)), as

contained in the CAMT proposed regulations and without any of the modifications described in this notice, including

for purposes of filing an amended return

or administrative adjustment request,

if the taxpayer and each member of its

test group determined under proposed

§ 1.59-2 for that taxable year consistently

follow proposed § 1.56A-5 (excluding

proposed § 1.56A-5(l)(2)(ii) and (iii)) in

its entirety, regardless of whether the taxpayer also relies on proposed § 1.56A-20.

Similarly, for such taxable years, a taxpayer may rely on proposed § 1.56A-20,

as contained in the CAMT proposed regulations and without any of the modifications contained in this notice, including

for purposes of filing an amended return

or administrative adjustment request,

if the taxpayer and each member of its

test group determined under proposed

§ 1.59-2 for that taxable year consistently

follow such section in its entirety, regardless of whether the taxpayer also relies

on proposed § 1.56A-5.

.02 In addition, for taxable years

beginning before the date the forthcoming proposed regulations are published

in the Federal Register, a taxpayer may

rely on the rules set forth in proposed

§ 1.56A-5 (excluding proposed § 1.56A5(l)(2)(ii) and (iii)), as contained in the

CAMT proposed regulations and without

any of the modifications contained in this

notice, including for purposes of filing an

amended return or administrative adjustment request, if the taxpayer and each

member of its test group determined under

proposed § 1.59-2 for that taxable year

consistently follow proposed § 1.56A-5

in its entirety, regardless of whether the

5

taxpayer also relies on proposed § 1.56A20. Similarly, for such taxable years, a

taxpayer may rely on proposed § 1.56A20, as contained in the CAMT proposed

regulations and without any of the modifications contained in this notice, including

for purposes of filing an amended return

or administrative adjustment request,

if the taxpayer and each member of its

test group determined under proposed

§ 1.59-2 for that taxable year consistently

follow proposed § 1.56A-20 in its entirety,

regardless of whether the taxpayer also

relies on proposed § 1.56A-5.

SECTION 9. APPLICABILITY DATES

It is anticipated that the forthcoming

proposed regulations will provide that

rules consistent with the rules described

in sections 3 through 7 of this notice

apply for taxable years beginning on or

after the date final regulations addressing §§ 56A(c)(2)(D) and 56A(c)(15)(B)

as applied to partnership investments are

published in the Federal Register. For

taxable years beginning before the date

on which forthcoming proposed regulations are published in the Federal Register or other guidance modifying this

section 9 is published in the Internal Revenue Bulletin, taxpayers may choose to

apply the guidance in sections 3 through

7 of this notice, including for purposes

of filing amended returns or administrative adjustment requests. Thus, for partnership contributions and distributions

in taxable years ending on or before the

issuance of the CAMT proposed regulations on September 13, 2024, taxpayers

may rely on the guidance in this notice,

the guidance in Notice 2023-7, or the

CAMT proposed regulations; in each

case, any FSI attributable to a partnership contribution or distribution that is

deferred must eventually be included in

AFSI. A taxpayer’s reliance on any of the

guidance in sections 3 through 7 of this

notice for a taxable year will not cause

the taxpayer to become subject to, or to

violate, the reliance rules, including the

consistency requirements, provided in

the preamble of the CAMT proposed regulations,5 for such taxable year.

SECTION 10. PAPERWORK

REDUCTION ACT

The Paperwork Reduction Act of 1995

(44 U.S.C. §§ 3501 - 3520) (PRA) requires

that a Federal agency obtain the approval

of the Office of Management and Budget (OMB) before collecting information

from the public, whether such collection

of information is mandatory, voluntary, or

required to obtain or retain a benefit. An

agency may not conduct or sponsor, and a

person is not required to respond to, a collection of information unless the collection of information displays a valid OMB

control number.

The collections of information in this

notice are in sections 3.04, 4.04, 4.05,

5.03, 5.04, 6.02(2), and 6.03(2) of this

notice.

The information requested in sections

3.04, 4.04, 5.03, and 6.02(2) of this notice

is required to obtain the benefit of choosing

one of the optional simplified methods of

determining AFSI with respect to a partnership investment provided in this notice.

This information will be used by the IRS

to confirm whether such a choice has been

made. The likely respondents are partnerships with corporate partners and corporations that are partners in partnerships.

The information requested in section 4.05

of this notice is required if a taxpayer chose

to obtain the benefit of making a taxable-income election in section 4.03 of this notice

but no longer qualifies for the taxable-income election. This information will be used

by the IRS to confirm that the taxpayer no

longer qualifies to make a taxable-income

election. The likely respondents are corporations that are partners in partnerships.

Section 5.04 of this notice simplifies the

partnership reporting requirements contained in the CAMT proposed regulations.

Section 6.03(2) of this notice requires a

partnership to file a statement with its Federal income return or information return if it

chooses the full subchapter K method and

to maintain in its books and records computations substantiating compliance with the

full subchapter K method. The information

requested in section 6.03(2) of this notice is

required to obtain the benefit of using the

full subchapter K method. This information

See 89 F.R. at 75127.

August 18, 2025

324

Bulletin No. 2025–34

will be used by the IRS to confirm compliance with the full subchapter K method.

The likely respondents are partnerships.

The reporting and third-party disclosure requirements in this notice will be

included within OMB control number

1545-0123 in accordance with the PRA

procedures under 5 CFR § 1320.10. The

recordkeeping requirements are considered general tax records under § 1.60011(e). For PRA purposes, general tax

records are already approved by OMB

under 1545-0123 for business filers.

Books or records relating to a collection of information must be retained as

long as their contents may become material in the administration of any internal

revenue law. Generally, tax returns and

tax return information are confidential, as

required by § 6103.

SECTION 11. DRAFTING AND

CONTACT INFORMATION

The principal authors of this notice

are John Hanebuth, Jeremy Milton, Timothy Steitz, and Benjamin Weaver of the

Office of the Associate Chief Counsel

(Passthroughs, Trusts, and Estates). Other

personnel from the Treasury Department

and the IRS participated in its development. For further information regarding this notice, please contact Messrs.

Hanebuth, Milton, Steitz, or Weaver at

(202) 317-6850.

Superfund Tax on

Chemical Substances;

Notice of Determinations

to Add Substances

to List of Taxable

Substances; Corrected

Name and Tax Rate for

Sodium Nitrilotriacetate

Monohydrate

Notice 2025-41

SUMMARY: This notice of determinations modifies the list of taxable substances

to include the following 21 substances:

polyphenylene sulfide, cellulose acetate

Bulletin No. 2025–34

(degree of substitution = 1.5 - 2.0), 4,4’-isopropylidenediphenol-epichlorohydrin

copolymer, nylon 6, caprolactam, methyl

ethyl ketoxime, iso-butanol, diethylene

glycol monomethyl ether, ethylene glycol

phenyl ether, methoxytriglycol, propylene

glycol methyl ether acetate, propylene glycol methyl ether, propylene glycol n-propyl ether, propylene glycol phenyl ether,

di-isobutyl carbinol, di-isobutyl ketone,

methyl isobutyl carbinol, cyanuric acid,

potassium bicarbonate, potassium carbonate, and sodium chlorite. This notice also

modifies the list included in Notice 202166 by correcting a typographical error

in the spelling of the name of the taxable

substance sodium nitrilotriacetate monohydrate and prescribing a tax rate for sodium

nitrilotriacetate monohydrate.

EFFECTIVE DATES: The effective date

for purposes of the tax under section 4671

of the Internal Revenue Code (Code) for

the taxable substances added to the list is

January 1, 2026. For the effective date for

purposes of refund claims under section

4662(e) of the Code for the taxable substances added to the list, see the determination for each substance. The tax rate for

sodium nitrilotriacetate monohydrate is

effective July 1, 2022.

FOR FURTHER INFORMATION

CONTACT: Andrew Clark or Jacob

Peeples at (202) 317-6855 (not a toll-free

number).

SUPPLEMENTARY INFORMATION:

Background

Section 4671(a) of the Code imposes

an excise tax on the sale or use of a taxable

substance by the importer thereof. Section

4672(a)(1) of the Code defines the term

taxable substance as any substance which,

at the time of sale or use by the importer,

is listed as a taxable substance by the Secretary of the Treasury or the Secretary’s

delegate (Secretary) on the list of taxable

substances under section 4672(a) (List).

Under section 4672(a)(2), an importer

or exporter of any substance may request

that the Secretary determine whether such

substance should be added to the List as

a taxable substance or should be removed

from the List. Under section 4672(a)(2)

325

(B) and (4) and (b)(2), the Secretary is

required to add a substance to the List

if the Secretary determines that any taxable chemicals that are listed in section

4661(b) of the Code constitute more than

20 percent of the weight, or more than

20 percent of the value, of the materials

used to produce such substance, which

determination is required under section

4672(a)(2)(B) and (a)(4) to be made based

on the predominant method of production

(weight or value test). Section 4672(a)(4)

authorizes the Secretary to remove a substance from the List only if such substance

meets neither the weight nor the value test

of section 4672(a)(2)(B).

Section 4672(a)(3) includes an initial list of taxable substances. Section 4

of Notice 2021-66 (2021-52 I.R.B. 901)

provides the list of 101 substances that

the Secretary added to the List before

November 15, 2021. Rev. Proc. 2022-26

(2022-29 I.R.B. 90), as modified by Rev.

Proc. 2023-20 (2023-15 I.R.B. 636), provides the exclusive procedures by which

an importer, exporter, or interested person

may request a determination that a particular substance be added to or removed

from the List.

Section 4671(b)(3) authorizes the Secretary to prescribe a tax rate for taxable

substances in lieu of the tax rate specified

in section 4671(b)(2). The tax rate prescribed by the Secretary for a substance

added to the List is calculated by multiplying the conversion factor for each taxable

chemical used in the production of the

substance by the corresponding tax rate

for that taxable chemical under section

4661(b), and adding those results together.

Conversion factors are determined based

on the predominant method of production of the substance. See sections 8 and

10.04(8) of Rev. Proc. 2022-26. Importers are not required to use the prescribed

tax rate for a taxable substance and may

calculate their own rate under section

4671(b)(1).

Pursuant to section 4672(a)(4), this

notice of determination modifies the List

to include the 21 additional taxable substances listed in the Summary of Determinations section of this notice, as explained

in the Requests to Add Substances to the

List and General Explanation of Determinations sections of this notice. The

determination for each specific substance

August 18, 2025

added to the List is explained in parts I

through XXI of the Modifications to the

List of Taxable Substances section of this

notice.

In June 2022, the Secretary prescribed

rates for some of the substances listed

in section 4672(a)(3) and Notice 202166.1 The Correction to the List of Taxable

Substances section of this notice modifies

Notice 2021-66 by correcting a typographical error in the spelling of sodium nitrilotriacetate monohydrate and prescribing a tax

rate for the substance. The updated List and

prescribed tax rates for taxable substances

will be included in the instructions to Form

6627, Environmental Taxes.

Summary of Determinations

On August 1, 2025, the Secretary determined to add the following substances to

the List:

I.

Polyphenylene sulfide

II.

Cellulose acetate (degree of substitution = 1.5 - 2.0)

III.

4,4’-isopropylidenediphenol-epichlorohydrin copolymer

IV.

Nylon 6

V.

Caprolactam

VI.

Methyl ethyl ketoxime

VII. Iso-butanol

VIII. Diethylene glycol monomethyl

ether

IX.

Ethylene glycol phenyl ether

X.

Methoxytriglycol

XI.

Propylene glycol methyl ether acetate

XII. Propylene glycol methyl ether

XIII. Propylene glycol n-propyl ether

XIV. Propylene glycol phenyl ether

XV. Di-isobutyl carbinol

XVI. Di-isobutyl ketone

XVII. Methyl isobutyl carbinol

XVIII. Cyanuric acid

XIX. Potassium bicarbonate

XX. Potassium carbonate

XXI. Sodium chlorite

Requests to Add Substances to the List

For each of the substances listed in the

Summary of Determinations section of

this notice, an importer, an exporter, or

an interested person submitted a petition

1

to the IRS in accordance with Rev. Proc.

2022-26 requesting a determination under

section 4672(a)(2) to add the substance

to the List. For each substance, the petition represented that the taxable chemicals constitute more than 20 percent of

the weight of materials used to produce

the substance, based on the predominant

method of production.

General Explanation of Determinations

After reviewing the petitions for each

of the substances listed in the Summary of

Determinations section of this notice, the

Secretary determined that taxable chemicals constitute more than 20 percent by

weight of the materials used to produce

the substance, based on the predominant

method of production. Therefore, each

of the substances is added to the List as

required under section 4672(a)(2) and (4).

The Secretary made the determinations to

add these substances to the List in accordance with the requirements of section

4672(a)(2) and (4), and pursuant to the

procedures set forth in Rev. Proc. 202226, as modified by Rev. Proc. 2023-20.

The relevant information for each taxable

substance is provided in the specific determinations included in parts I through XXI of

the Modification to the List of Taxable Substances section of this notice. The tax rate

for each taxable substance, as prescribed by

the Secretary, is provided in paragraph (a)(6)

of each specific determination.

Classification numbers proposed by

each petitioner are included in paragraph

(b) of each part, after each specific determination. The classification numbers

provided with respect to a taxable substance are not part of the determination

of whether it is added to the List and do

not impact whether such substance is a

taxable substance. Taxpayers may not rely

on classification numbers for any purpose

under sections 4661, 4662, 4671, and

4672, including (but not limited to) identification of a substance as a taxable substance on the List. Classification numbers

may change over time. The Department of

the Treasury (Treasury Department) and

the IRS do not anticipate updating this

document to reflect any such changes.

For purposes of the section 4671 tax, all

the modifications in parts I through XXI of

the Modification to the List of Taxable Substances section of this notice are effective

on and after January 1, 2026. For purposes

of refund claims under section 4662(e), see

the effective date for each specific determination in paragraph (a)(5)(ii) of each of

parts I through XXI of the Modification to

the List of Taxable Substances section of

this notice. The tax rate for sodium nitrilotriacetate monohydrate in the Correction

to the List of Taxable Substances section of

this notice is effective July 1, 2022.

Modifications to the List of Taxable

Substances

I. Determination to Add Polyphenylene

Sulfide to the List

Celanese Ltd., an exporter of polyphenylene sulfide, submitted a petition

in accordance with Rev. Proc. 2022-26

requesting to add polyphenylene sulfide

to the List. According to the petition, the

taxable chemicals sodium hydroxide, benzene, and chlorine constitute 90.00 percent by weight of the materials used to

produce polyphenylene sulfide, based on

the predominant method of production.

(a) Determination. Polyphenylene

sulfide is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production:

The process involves three separate reactions:

(i) 1,4 dichlorobenzene is made from

the reaction of benzene with 2 equivalents

of chlorine;

(ii) Sodium hydrogen sulfide is made

from the reaction of hydrogen sulfide with

sodium hydroxide; and

(iii) 1,4-dichlorobenzene (p-dichlorobenzene, p-DCB), sodium hydrosulfide

(NaSH), and sodium hydroxide (NaOH)

are reacted at high temperature and high

pressure to form polyphenylene sulfide

and byproduct sodium chloride.

(2) Stoichiometric material consumption equation:

n [2 NaOH + C6H6 + 2 Cl2 + H2S] →

[C6H4S]n + 2n H2O + 2n NaCl + 2n HCl

Available at https://www.irs.gov/newsroom/irs-issues-superfund-chemical-excise-tax-rates.

August 18, 2025

326

Bulletin No. 2025–34

(3) Reasons for the determination:

The polyphenylene sulfide petition was

filed on December 20, 2022. The notice

of filing summarizing the petition and

requesting comments was published

in the Federal Register (87 FR 80579)

on December 30, 2022. A supplemental

notice of filing announcing a corrected

petition and correction to the stoichiometric material consumption equation in

the original notice of filing and requesting comments was published in the Federal Register (89 FR 11941) on February

15, 2024. The Treasury Department and

the IRS received no written comments

in response to the original notice of filing or the supplemental notice of filing.

A public hearing was neither requested

nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation in

the corrected petition, as provided in the

supplemental notice of filing, and other

information in the petition shows that the

taxable chemicals sodium hydroxide, benzene, and chlorine constitute more than 20

percent by weight of the materials used

in the production of polyphenylene sulfide, based on the predominant method of

production. Therefore, the test in section

4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of polyphenylene sulfide to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $14.50 per ton. The conversion

factors for the taxable chemicals used in

the production of polyphenylene sulfide

are 0.74 for sodium hydroxide, 0.72 for

benzene, and 1.31 for chlorine. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable

chemical: ((0.74 x $0.56) + (0.72 x $9.74)

+ (1.31 x $5.40) = $14.50).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 3911.90.2500

(ii) Schedule B number: 3911.90.6100

(iii) CAS numbers: 25212-74-2, 2612540-6

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

II. Determination to Add Cellulose

Acetate (Degree of Substitution = 1.5 –

2.0) to the List

Celanese Ltd., an exporter of cellulose

acetate (degree of substitution = 1.5 – 2.0),

submitted a petition in accordance with

Rev. Proc. 2022-26 requesting to add cellulose acetate (degree of substitution = 1.5

– 2.0) to the List. According to the petition,

the taxable chemical methane constitutes

greater than 20 percent2 by weight, of the

materials used to produce cellulose acetate

(degree of substitution = 1.5 – 2.0), based

on the predominant method of production.

(a) Determination. Cellulose acetate (degree of substitution = 1.5 – 2.0)

is added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production:

Cellulose acetate is derived from cellulose by deconstructing wood pulp into a

purified cellulose. The cellulose is reacted

with acetic acid and acetic anhydride in the

presence of sulfuric acid. It is subjected to

a controlled, partial hydrolysis to remove

the sulfate and a sufficient number of acetate groups to give the product the desired

degree of substitution. The polymer unit

is the fundamental repeating structure of

cellulose and has three hydroxyl groups

which can react to form acetate esters.

The most common form of cellulose acetate fiber has an acetate group on approximately two of every three hydroxyls,

referred to as cellulose diacetate. In this

petitioner’s cellulose acetate, the actual

substitution is 1.674 acetate/cellulose, a

degree of substitution commonly used in

U.S. cellulose acetate production.

(2) Stoichiometric material consumption equation:

3.5 CH4 + 1.75 O2 + C6H10O5 →

C9.5H13.5O6.75 + 3.50 H2 + 1.75 H2O

(3) Reasons for the determination: The

cellulose acetate (degree of substitution =

1.5 – 2.0) petition was filed on December

20, 2022. The notice of filing summarizing the petition and requesting comments

was published in the Federal Register (88

FR 16307) on March 16, 2023. The Treasury Department and the IRS received

no written comments in response to the

notice of filing. A public hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation

and other information in the petition

shows that the taxable chemical methane constitutes more than 20 percent

by weight of the materials used in the

production of cellulose acetate (degree

of substitution = 1.5 – 2.0), based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of cellulose acetate (degree of substitution = 1.5

– 2.0) to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $1.65 per ton. The conversion factor

for the methane used in the production of

cellulose acetate (degree of substitution =

1.5 – 2.0) is 0.24. The tax rate is calculated by multiplying the conversion factor

by the tax rate for methane: (0.24 x $6.88

= $1.65).

(b) Classification numbers.

The petition covers cellulose acetate (degree of substitution = 1.5 – 2.0), commonly referred to as cellulose diacetate. Cellulose acetate in this range generally has similar properties. The

petition uses the lowest end of the range cellulose acetate (degree of substitution = 1.5) (21 percent taxable chemicals) to demonstrate that >20% of the substance is made from taxable chemicals, and the midpoint cellulose acetate (degree of substitution = 1.75) (24 percent taxable chemicals) to calculate the tax rate for the entire range.

2

Bulletin No. 2025–34

327

August 18, 2025

(1) The Secretary has no basis to object

to the following proposed classification

number: CAS number: 9035-69-2

(2) The Secretary is unable to confirm the following proposed classification

numbers:

(i) HTSUS numbers: 5502.10.0000,

5403.33.0020

(ii) Schedule B numbers: 5502.10.0000,

5403.33.0000

III. Determination to Add

4,4’-IsopropylidenediphenolEpichlorohydrin Copolymer to the List

Westlake Epoxy Inc., an exporter of

4,4’-isopropylidenediphenol-epichlorohydrin copolymer, also known as

“bisphenol A epoxy resin,” submitted a

petition in accordance with Rev. Proc.

2022-26 requesting to add 4,4’-isopropylidenediphenol-epichlorohydrin

copolymer to the List. According to the

petition, the taxable chemicals benzene,

propylene, chlorine, and sodium hydroxide constitute 92.98 percent by weight of

the materials used to produce 4,4’-isopropylidenediphenol-epichlorohydrin

copolymer, based on the predominant

method of production.

(a)

Determination.

4,4’-isopropylidenediphenol-epichlorohydrin copolymer, also known as “bisphenol A epoxy

resin,” is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production:

4,4’-isopropylidenediphenol-epichlorohydrin copolymer is produced from

epichlorohydrin and bisphenol-A via a

two-step glycidation reaction sequence.

Epichlorohydrin is typically produced

via an addition reaction of chlorine to

propylene that yields allyl chloride and

subsequently dichlorohydrin isomers,

followed by a dehydrochlorination step

in the presence of sodium hydroxide to

yield epichlorohydrin. Bisphenol A is

typically produced from the reaction of

benzene and propylene that yields phenol

and acetone. Under acidic conditions and

with an appropriate catalyst, two units of

phenol can react with one unit of acetone

to yield Bisphenol A. With available epichlorohydrin and Bisphenol A, 4,4’-isopropylidenediphenol-epichlorohydrin

copolymer can be obtained through a two-

August 18, 2025

step glycidation reaction sequence where

epichlorohydrin is added to Bisphenol A

(deprotonated with sodium hydroxide)

and then water, sodium hydroxide, and

sodium chloride are removed in a dehydrochlorination step.

(2) Stoichiometric material consumption equation:

2 C6H6 (benzene) + 4 C3H6 (propylene)

+ 4 Cl2 (chlorine) + 6 NaOH (sodium

hydroxide) + 2 O2 (oxygen) →

(CH3)2C(C6H4OC3H5O)2 (4,4’-isopropylidenediphenol-epichlorohydrin

copolymer) + CH3COCH3 (acetone) +

2 HCl (hydrogen chloride) + 6 NaCl

(sodium chloride) + 5 H2O (water)

(3) Reasons for the determination:

The 4,4’-isopropylidenediphenol-epichlorohydrin copolymer petition was

filed on December 20, 2022. The notice

of filing summarizing the petition and

requesting comments was published in

the Federal Register (88 FR 3478) on

January 19, 2023. The Treasury Department and the IRS received no written

comments in response to the notice

of filing. A public hearing was neither

requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation

and other information in the petition

shows that the taxable chemicals benzene, propylene, chlorine, and sodium

hydroxide constitute more than 20 percent by weight of the materials used in

the production of 4,4’-isopropylidenediphenol-epichlorohydrin

copolymer,

based on the predominant method of

production. Therefore, the test in section

4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

4,4’-isopropylidenediphenol-epichlorohydrin copolymer to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

328

(6) Tax rate prescribed by the Secretary:

$14.13 per ton. The conversion factors for

the taxable chemicals used in the production of 4,4’-isopropylidenediphenol-epichlorohydrin copolymer are 0.46 for benzene, 0.49 for propylene, 0.83 for chlorine,

and 0.71 for sodium hydroxide. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable

chemical: ((0.46 x $9.74) + (0.49 x $9.74)

+ (0.83 x $5.40) + (0.71 x $0.56) = $14.13).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 3907.30.0000

(ii) Schedule B number: 3907.30.0000

(iii) CAS number: 25068-38-6

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

IV. Determination to Add Nylon 6 to

the List

AdvanSix Inc., an exporter of nylon

6, submitted a petition in accordance

with Rev. Proc. 2022-26 requesting to

add nylon 6 to the List. According to the

petition, nylon 6 is made from the taxable

chemicals benzene, propylene, ammonia,

methane, and sulfuric acid; however, sulfuric acid is cancelled from the stoichiometric material consumption equation due

to no net consumption/production. The

petition further represented that the benzene, propylene, ammonia, and methane

constitute 46.64 percent by weight of the

materials used to produce nylon 6, based

on the predominant method of production.

(a) Determination. Nylon 6 is added to

the list of taxable substances under section

4672(a). Other pertinent information is as

follows:

(1) Predominant method of production:

The predominant method of production

of nylon 6 is the “hydrolytically initiated

ring-opening polymerization of caprolactam” which is also referred to in industry

literature as the “hydrolytic polymerization

of nylon 6.” This process is termed “hydrolytic” because water plays a key role in the

chemical mechanism. Nylon 6 is produced

almost exclusively through this method

because it is easier to control and better

adapted for large-scale operations.

Bulletin No. 2025–34

The hydrolytic polymerization of nylon

6 generally entails heating a mixture of

caprolactam and water to ~270°C in an

inert atmosphere of nitrogen and holding

until equilibrium conditions are achieved.

The three principal reactions in this process are summarized below:

(i) In the initiation step of the process,

the caprolactam ring is hydrolyzed via ring

opening with the addition of one water

molecule to become amino-caproic acid.

(ii) In the next step of the mechanism,

the amino-caproic acid acts as the initiating species to begin the addition polymerization by ring-opening of caprolactam.

(iii) The last major mechanism step of

the hydrolytic polymerization of nylon 6

is the condensation of primary amine and

carboxylic acid chain-ends to form an

amide linkage in the now higher molecular weight polyamide with the simultaneous loss of a water molecule.

(2) Stoichiometric material consumption equation:

nC6H6 (benzene) + nC3H6 (propylene)

+ 2.5nO2 (oxygen) + 0.5nCH4 (methane) + 5nNH3 (ammonia) + 2nH2O

(water) + 2nSO2 (sulfur dioxide) →

(C6H11NO)n (nylon 6) + nC3H6O

(acetone) + 2n(NH4)2SO4 (ammonium

sulfate) + 0.5nCO2 (carbon dioxide)

(3) Reasons for the determination: The

nylon 6 petition was filed on November

8, 2023. The notice of filing summarizing the petition and requesting comments

was published in the Federal Register

on February 22, 2024 (89 FR 13399). A

supplemental notice of filing announcing

a corrected petition, correction to the stoichiometric material consumption equation in the original notice of filing, and

requesting comments was published in

the Federal Register (89 FR 66175) on

August 14, 2024. The Treasury Department and the IRS received no written

comments in response to the notice of

filing and received one written comment

in response to the supplemental notice of

filing, discussed below. A public hearing

was neither requested nor held.

The public comment submitted in

response to the supplemental notice

of filing generally wrote in support of

adding nylon 6 to the list of taxable

substances. However, the commenter

Bulletin No. 2025–34

requested that the Treasury Department

and the IRS add to the list of taxable

substances the categories ‘nylon resins’

or ‘polyamides’ rather than merely the

single taxable substance nylon 6. The

commenter asserts that nylon 6 is one of

the many grades of nylons or polyamides

which contain more than 20 percent of

taxable chemicals.

At this time, the Treasury Department

and the IRS decline to add the additional

categories of nylon resins and polyamides to the List, as suggested by the commenter. The filed petition that is the subject of this determination requested only

to add the substance nylon 6 to the List, so

a comment that the Treasury Department

and the IRS should add additional substances to the List is outside the scope of

the determination for nylon 6. To request

to add nylon resins and polyamides to the

List, an importer, exporter, or interested

person must follow the determination

procedures provided under Rev. Proc.

2022-26, including submitting a petition

for each substance with the required information. See sections 4 and 6 of Rev. Proc.

2022-26.

The Secretary followed the process

in section 4672(a)(2)(B) in making the

determination to add nylon 6 to the List.

A review of the stoichiometric material

consumption equation in the corrected

petition, as provided in the supplemental

notice of filing, and other information in

the petition shows that the taxable chemicals benzene, propylene, ammonia, and

methane constitute more than 20 percent

by weight of the materials used in the production of nylon 6, based on the predominant method of production. Therefore, the

test in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of nylon

6 to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $14.77 per ton. The conversion

factors for the taxable chemicals used

329

in the production of nylon 6 are 0.69 for

benzene, 0.37 for propylene, 0.75 for

ammonia, and 0.07 for methane. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable chemical: ((0.69 x $9.74) + (0.37 x

$9.74) + (0.75 x $5.28) + (0.07 x $6.88)

= $14.77).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 3908.10.00

(ii) Schedule B number: 3908.10.0000

(iii) CAS number: 25038-54-4

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

V. Determination to Add Caprolactam

to the List

AdvanSix Inc., an exporter of caprolactam, submitted a petition in accordance

with Rev. Proc. 2022-26 requesting to add

caprolactam to the List. According to the

petition, caprolactam is made from the

taxable chemicals benzene, propylene,

ammonia, methane, and sulfuric acid;

however, sulfuric acid is cancelled from

the stoichiometric material consumption

equation due to no net consumption/production. The petition also represented

that the benzene, propylene, ammonia,

and methane constitute 46.64 percent by

weight of the materials used to produce

caprolactam, based on the predominant

method of production.

(a) Determination. Caprolactam is

added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production: Caprolactam is produced by first

oxidizing cumene to yield phenol, which

is then partially reduced with hydrogen to

yield cyclohexanone. Cyclohexanone is

then reacted with Raschig hydroxylamine

to generate cyclohexanone oxime. The

cyclohexanone oxime undergoes Beckmann rearrangement in the presence of

fuming sulfuric acid (oleum) to give an

intermediate material known as rearrangement mass, which is subsequently hydrolyzed and then neutralized with ammonia

to yield ε-caprolactam.

August 18, 2025

(2) Stoichiometric material consumption equation:

C6H6 (benzene) + C3H6 (propylene) +

2.5 O2 (oxygen) + 0.5 CH4 (methane) +

5 NH3 (ammonia) + 2 H2O (water) +

2 SO2 (sulfur dioxide) → C6H11ON

(ε-caprolactam) + C3H6O (acetone) +

2(NH4)2SO4 (ammonium sulfate) +

0.5 CO2 (carbon dioxide)

(3) Reasons for the determination:

The caprolactam petition was filed on

November 8, 2023. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

Register (89 FR 13400) on February 22,

2024. The Treasury Department and the

IRS received no written comments in

response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals benzene, propylene, ammonia, and methane constitute

more than 20 percent by weight of the

materials used in the production of caprolactam, based on the predominant method

of production. Therefore, the test in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

caprolactam to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): January 1, 2023

(6) Tax rate prescribed by the Secretary: $14.77 per ton. The conversion

factors for the taxable chemicals used in

the production of caprolactam are 0.69

for benzene, 0.37 for propylene, 0.75 for

ammonia, and 0.07 for methane. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable chemical: ((0.69 x $9.74) + (0.37 x

$9.74) + (0.75 x $5.28) + (0.07 x $6.88)

= $14.77).

August 18, 2025

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2933.71.00

(ii) Schedule B number: 2933.71.0000

(iii) CAS number: 105-60-2

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

VI. Determination to Add Methyl

Ethyl Ketoxime to the List

AdvanSix Inc., an exporter of methyl

ethyl ketoxime (commonly referred to as

MEKO), submitted a petition in accordance with Rev. Proc. 2022-26 requesting

to add methyl ethyl ketoxime to the List.

According to the petition, methyl ethyl

ketoxime is made from the taxable chemicals ammonia, sulfuric acid, and butylene;

however, sulfuric acid is cancelled from the

stoichiometric material consumption equation due to no net consumption/production. The petition further represented that

ammonia and butylene constitute 39.97

percent by weight of the materials used to

produce methyl ethyl ketoxime, based on

the predominant method of production.

(a) Determination. Methyl ethyl ketoxime is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production:

The conventional method was developed

in the late 1960s via a route that involves

condensation of methyl ethyl ketone with

a hydroxylamine salt in the presence of

a base. More specifically, methyl ethyl

ketone is oximated with Raschig hydroxylamine to yield methyl ethyl ketoxime.

(2) Stoichiometric material consumption equation:

C4H8 (butylene) + 5 NH3 (ammonia) +

2 H2O (water) + 1.5 O2 (oxygen) +

2 SO2 (sulfur dioxide) → C4H9ON

(methyl ethyl ketoxime) + 2

(NH4)2SO4 (ammonium sulfate) + H2

(hydrogen)

(3) Reasons for the determination: The

methyl ethyl ketoxime petition was filed

on July 10, 2023. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

330

Register (88 FR 45454) on July 17, 2023.

The Treasury Department and the IRS

received no written comments in response

to the notice of filing. A public hearing

was neither requested nor held.

The Secretary followed the process in

section 4672(a)(2)(B) in making this determination. A review of the stoichiometric

material consumption equation and other

information in the petition shows that the

taxable chemicals ammonia and butylene

constitute more than 20 percent by weight

of the materials used in the production of

methyl ethyl ketoxime, based on the predominant method of production. Therefore,

the test in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

methyl ethyl ketoxime to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): January 1, 2023

(6) Tax rate prescribed by the Secretary: $11.41 per ton. The conversion factors for the taxable chemicals used in the

production of methyl ethyl ketoxime are

0.98 for ammonia and 0.64 for butylene.

The tax rate is calculated by adding the

products of the conversion factor for each

taxable chemical and the tax rate for that

taxable chemical: ((0.98 x $5.28) + (0.64

x $9.74) = $11.41).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2928.00.10

(ii) Schedule B number: 2928.00.1000

(iii) CAS number: 96-29-7

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

VII. Determination to Add Iso-butanol

to the List

OQ Chemicals Corporation, an

exporter of iso-butanol, submitted a petition in accordance with Rev. Proc. 202226 requesting to add iso-butanol to the

List. According to the petition, the taxable

Bulletin No. 2025–34

chemicals methane and propylene constitute 78.41 percent by weight of the materials used to produce iso-butanol, based on

the predominant method of production.

(a) Determination. Iso-butanol is added

to the list of taxable substances under section 4672(a). Other pertinent information

is as follows:

(1) Predominant method of production:

Iso-butanol is co-produced by hydroformylation of propylene to produce both

iso-butyraldehyde and n-butyraldehyde

followed by hydrogenation of the aldehyde intermediates to the corresponding

iso-butanol and n-butanol. The predominant method of production is as follows:

(i) Partial oxidation of methane with

oxygen to produce synthesis gas, a mixture of carbon monoxide and hydrogen.

This petitioner uses a Partial Oxidation

(POX) process that is non catalytic but

operates at >1300 deg C and >40 atm

pressure. Thus, synthesis gas is produced

from methane and oxygen:

CH4 + ½ O2 → CO + 2H2

(ii) Oxo process: Hydroformylation

of propylene with carbon monoxide

and hydrogen over a catalyst to produce

iso-butyraldehyde. The reaction also

produces normal butyraldehyde simultaneously; the stoichiometry is the same

for either the iso or the normal aldehyde.

Thus, iso-butyraldehyde is produced from

propylene and syngas.

CO + H2 + CH2 =CH-CH3 →

(CH3)2-CH-CHO

(iii) Iso-butyraldehyde is hydrogenated with hydrogen over a catalyst. Thus,

iso-butanol is produced from iso-butyraldehyde and hydrogen.

(CH3)2-CH-CHO + H2 →

(CH3)2CHCH2OH

(2) Stoichiometric material consumption equation:

CH4 (methane) + ½ O2 + CH2 =

CH-CH3 (propylene) → (CH3)2CHCH2OH (iso-butanol)

3

(3) Reasons for the determination: The

iso-butanol petition was filed on January

25, 2024. The notice of filing summarizing the petition and requesting comments

was published in the Federal Register

(89 FR 14558) on February 27, 2024.

The Treasury Department and the IRS

received no written comments in response

to the notice of filing. A public hearing

was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals methane and

propylene constitute more than 20 percent by weight of the materials used in

the production of iso-butanol, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

iso-butanol to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): April 1, 2023

(6) Tax rate prescribed by the Secretary: $7.07 per ton. The conversion factors for the taxable chemicals used in the

production of iso-butanol are 0.22 for

methane and 0.57 for propylene. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable

chemical: ((0.22 x $6.88) + (0.57 x $9.74)

= $7.07).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2905.14.50.10

(ii) Schedule B number: 2905.14.5010

(iii) CAS number: 78-83-1

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

VIII. Determination to Add Diethylene

Glycol Monomethyl Ether to the List

The Dow Chemical Company,

an exporter of diethylene glycol

monomethyl ether, submitted a petition

in accordance with Rev. Proc. 202226 requesting to add diethylene glycol

monomethyl ether to the List. According

to the petition, the taxable chemicals ethylene and methane constitute 59.00 percent by weight of the materials used to

produce diethylene glycol monomethyl

ether, based on the predominant method

of production.

(a) Determination. Diethylene glycol monomethyl ether is added to the

list of taxable substances under section

4672(a). Other pertinent information is

as follows:

(1) Predominant method of production: Glycol ethers are predominantly

produced by reacting an epoxide (typically ethylene oxide or propylene oxide)

with an alcohol; this reaction process is

referred to as alkoxylation. Diethylene

glycol monomethyl ether (C5H12O3) is

produced by the alkoxylation process

using methanol (CH3OH) and 2 equivalents of ethylene oxide (C2H4O). Methanol is made from syngas (carbon monoxide and dihydrogen). Carbon monoxide

(CO) and dihydrogen (H2) are made by

steam-methane reforming (CH4 and

H2O). Ethylene oxide (EO) is made from

oxidizing ethylene (C2H4). Additional

information on the production process is

as follows:

(i) The diethylene glycol monomethyl

ether reaction (methanol + EO) is base

catalyzed, using a small amount of metal

hydroxide to produce methoxide. Since

the amount of metal hydroxide used to

produce diethylene glycol monomethyl

ether3 is very small, the metal hydroxide

has been excluded from the stoichiometric

material consumption equation; including

the metal hydroxide would lead to a distorted conversion factor.

(ii) Once methoxide is made, it is

regenerated following conversion to the

product in the presence of EO as follows:

(A) Methoxide + 2 EO → diethylene

glycol monomethyl ether-alkoxide

The Notice of Filing erroneously stated, “Since the amount of metal hydroxide used to produce propylene glycol methyl ether…” This error is corrected here.

Bulletin No. 2025–34

331

August 18, 2025

(B) Diethylene glycol monomethyl

ether-alkoxide + methanol → diethylene

glycol monomethyl ether + methoxide

(goes back to participate in the reaction

above).

(iii) Regenerated methoxide in the

presence of EO will perpetually react

until all EO is consumed or the reaction is

halted through the use of controls.

(2) Stoichiometric material consumption equation:

2 C2H4 (ethylene) + O2 (oxygen) +

CH4 (methane) + H2O (water) →

H2 (hydrogen) + C5H12O3 (diethylene

glycol monomethyl ether)

(3) Reasons for the determination:

The diethylene glycol monomethyl ether

petition was filed on June 13, 2024. The

notice of filing summarizing the petition

and requesting comments was published

in the Federal Register (89 FR 71788) on

September 3, 2024. The Treasury Department and the IRS received no written

comments in response to the notice

of filing. A public hearing was neither

requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation

and other information in the petition

shows that the taxable chemicals ethylene and methane constitute more than

20 percent by weight of the materials

used in the production of diethylene glycol monomethyl ether, based on the predominant method of production. Therefore, the test in section 4672(a)(2)(B) is

satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of diethylene glycol monomethyl ether to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $5.47 per ton. The conversion factors

for the taxable chemicals used in the production of diethylene glycol monomethyl

August 18, 2025

ether are 0.47 for ethylene and 0.13 for

methane. The tax rate is calculated by adding the products of the conversion factor

for each taxable chemical and the tax rate

for that taxable chemical: ((0.47 x $9.74)

+ (0.13 x $6.88) = $5.47).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2909.44.01.10

(ii) Schedule B number: 2909.49.0000

(iii) CAS number: 111-77-3

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

IX. Determination to Add Ethylene

Glycol Phenyl Ether to the List

The Dow Chemical Company, an

exporter of ethylene glycol phenyl ether,

submitted a petition in accordance with

Rev. Proc. 2022-26 requesting to add

ethylene glycol phenyl ether to the List.

According to the petition, the taxable

chemicals ethylene, benzene, and propylene constitute 76.00 percent by weight of

the materials used to produce ethylene

glycol phenyl ether, based on the predominant method of production.

(a) Determination. Ethylene glycol

phenyl ether is added to the list of taxable

substances under section 4672(a). Other

pertinent information is as follows:

(1) Predominant method of production: Glycol ethers are predominantly

produced by reacting an epoxide (typically ethylene oxide or propylene oxide)

with an alcohol; this reaction process

is referred to as alkoxylation. Ethylene

glycol phenyl ether (C8H10O2) is produced by the alkoxylation process using

phenol (CH3OH) and ethylene oxide

(C2H4O). Ethylene oxide is made by

oxidizing ethylene (C2H4). Phenol is

made via the Hock process (sometimes

called the cumene process). The Hock

process has two stages. In stage 1, benzene (C6H6) is alkylated with propylene

(C3H6) to make cumene (isopropyl benzene). In stage 2, cumene (C6H5(C3H7))

is partially oxidized to make phenol

(C6H5OH) and side product dimethyl

ketone ((CH3)2CHO)).

(2) Stoichiometric material consumption equation:

332

C2H4 (ethylene) + 1.5 O2 (oxygen) +

C6H6 (benzene) + C3H6 (propylene) →

C3H6O (dimethyl ketone) + C8H10O2

(ethylene glycol phenyl ether)

(3) Reasons for the determination:

The ethylene glycol phenyl ether petition was filed on June 13, 2024. The

notice of filing summarizing the petition

and requesting comments was published

in the Federal Register (89 FR 71785)

on September 3, 2024. The Treasury

Department and the IRS received no

written comments in response to the

notice of filing. A public hearing was

neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals ethylene, benzene, and propylene constitute more than

20 percent by weight of the materials

used in the production of ethylene glycol

phenyl ether, based on the predominant

method of production. Therefore, the test

in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of ethylene glycol phenyl ether to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $10.42 per ton. The conversion factors for the taxable chemicals used in the

production of ethylene glycol phenyl ether

are 0.20 for ethylene, 0.57 for benzene,

and 0.30 for propylene. The tax rate is calculated by adding the products of the conversion factor for each taxable chemical

and the tax rate for that taxable chemical:

((0.20 x $9.74) + (0.57 x $9.74) + (0.30 x

$9.74) = $10.42).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) Schedule B number: 2909.49.0000

(ii) CAS number: 122-99-6

Bulletin No. 2025–34

(2) The Secretary is unable to confirm the following proposed classification

number:

HTSUS number: 2909.49.60.00

X. Determination to Add

Methoxytriglycol to the List

The Dow Chemical Company, an

exporter of methoxytriglycol, submitted

a petition in accordance with Rev. Proc.

2022-26 requesting to add methoxytriglycol to the List. According to the petition,

the taxable chemicals ethylene and methane constitute 60.00 percent by weight of

the materials used to produce methoxytriglycol, based on the predominant method

of production.

(a) Determination. Methoxytriglycol

is added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production:

Glycol ethers are predominantly produced

by reacting an epoxide (typically ethylene

oxide or propylene oxide) with an alcohol; this reaction process is referred to as

alkoxylation. Methoxytriglycol (C7H16O4)

is produced by the alkoxylation process

using methanol (CH3OH) and 3 equivalents of ethylene oxide (C2H4O). Methanol is made from syngas (carbon monoxide and dihydrogen). Carbon monoxide

(CO) and dihydrogen (H2) are made by

steam-methane reforming (CH4 and H2O).

Ethylene oxide (EO) is made from oxidizing ethylene (C2H4). Additional information on the production process is as follows:

(i) The methoxytriglycol reaction

(methanol + EO) is base catalyzed, using

a small amount of metal hydroxide to produce methoxide. Since the amount of metal

hydroxide used to produce methoxytriglycol4 is very small, the metal hydroxide has

been excluded from the stoichiometric

material consumption equation; including

the metal hydroxide would lead to a distorted conversion factor.

(ii) Once methoxide is made, it is

regenerated following conversion to the

product in the presence of EO as follows:

(A) Methoxide + 3 EO → methoxytriglycol- alkoxide

4

(B) Methoxytriglycol-alkoxide +

methanol → methoxytriglycol + methoxide (goes back to participate in the reaction above).

(iii) Regenerated methoxide in the

presence of EO will perpetually react

until all EO is consumed or the reaction is

halted through the use of controls.

(2) Stoichiometric material consumption equation:

3 C2H4 (ethylene) + 1.5 O2 (oxygen) +

CH4 (methane) + H2O (water) →

H2 (hydrogen) + C7H16O4

(methoxytriglycol)

(3) Reasons for the determination:

The methoxytriglycol petition was filed

on June 13, 2024. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

Register (89 FR 71789) on September

3, 2024. The Treasury Department and

the IRS received no written comments in

response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals ethylene and

methane constitute more than 20 percent

by weight of the materials used in the

production of methoxytriglycol, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

methoxytriglycol to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $5.66 per ton. The conversion factors for the taxable chemicals used in the

production of methoxytriglycol are 0.51

for ethylene and 0.10 for methane. The tax

rate is calculated by adding the products

of the conversion factor for each taxable

chemical and the tax rate for that taxable

chemical: ((0.51 x $9.74) + (0.10 x $6.88)

= $5.66).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2909.49.6000

(ii) Schedule B number: 2922.17.0000

(iii) CAS number: 112-35-6

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XI. Determination to Add Propylene

Glycol Methyl Ether Acetate to the List

The Dow Chemical Company, an

importer and exporter of propylene glycol

methyl ether acetate, submitted a petition

in accordance with Rev. Proc. 2022-26

requesting to add propylene glycol methyl

ether acetate to the List. According to the

petition, the taxable chemicals propylene,

chlorine, sodium hydroxide, and methane

constitute 93.00 percent by weight of the

materials used to produce propylene glycol methyl ether acetate, based on the predominant method of production.

(a) Determination. Propylene glycol

methyl ether acetate is added to the list of

taxable substances under section 4672(a).

Other pertinent information is as follows:

(1) Predominant method of production:

Glycol ethers are predominantly produced

by reacting an epoxide (typically ethylene

oxide or propylene oxide) with an alcohol; this reaction process is referred to

as alkoxylation. Propylene glycol methyl

ether acetate is made by esterification of

propylene glycol methyl ether and acetic

acid. Propylene glycol methyl ether is

made via the alkoxylation process (also

known as ring opening of an epoxide)

using methanol and propylene oxide.

Methanol is made from syngas (carbon

monoxide and dihydrogen). Carbon monoxide (CO) and dihydrogen (H2) are made

by steam-methane reforming (CH4 and

H2O). Propylene oxide is made by hydrochlorination (chlorine (Cl2), propylene

The Notice of Filing erroneously stated, “Since the amount of metal hydroxide used to produce propylene glycol methyl ether…” This error is corrected here.

Bulletin No. 2025–34

333

August 18, 2025

(C3H6), and sodium hydroxide (NaOH)).

Acetic acid is made via the carbonylation

of methanol with carbon monoxide. Additional information on the production process is as follows:

(i) The propylene glycol methyl ether

alkoxylation reaction (methanol + propylene oxide) is base catalyzed, using a small

amount of metal hydroxide to produce

methoxide. Once methoxide is made, it is

regenerated following conversion to the

product in the presence of propylene oxide.

Regenerated methoxide in the presence of

propylene oxide will perpetually react until

all propylene oxide is consumed or the

reaction is halted through the use of controls. Since the amount of metal hydroxide

used to produce propylene glycol methyl

ether acetate5 is very small, the metal

hydroxide has been excluded from the stoichiometric material consumption equation;

including the metal hydroxide would lead

to a distorted conversion factor.

(ii) After the production of methanol

from syngas, methanol is reacted with

CO to produce acetic acid. This process

is commonly referred to as carbonylation.

The reaction is typically catalyzed by

either a rhodium or iridium-based catalyst

and involves iodomethane as a key intermediate.

(iii) Acetic acid when combined with

propylene glycol methyl under specific

conditions (temperature, pressure, pH,

etc.) produces propylene glycol methyl

ether acetate. This reaction is commonly

known as esterification (or Fischer esterification). Esterification typically involves

a basic or acid catalytic species and can

generate water or an aqueous hydroxide as

byproduct depending on the pH. Once the

final reaction contents are dehydrated and

separated, commercial grade propylene

glycol methyl ether acetate is obtained.

(2) Stoichiometric material consumption equation:

C3H6 (propylene) + Cl2 (chlorine) +

2 NaOH (sodium hydroxide) +

3 CH4 (methane) + H2O (water) →

2 NaCl (sodium chloride) + 5 H2

(hydrogen) + C6H12O3 (propylene

glycol methyl ether acetate)

5

(3) Reasons for the determination: The

propylene glycol methyl ether acetate petition was filed on June 13, 2024. The notice

of filing summarizing the petition and

requesting comments was published in the

Federal Register (89 FR 71789) on September 3, 2024. The Treasury Department

and the IRS received no written comments

in response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals propylene,

chlorine, sodium hydroxide, and methane

constitute more than 20 percent by weight

of the materials used in the production

of propylene glycol methyl ether acetate, based on the predominant method of

production. Therefore, the test in section

4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of propylene glycol methyl ether acetate to the

List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $8.85 per ton. The conversion

factors for the taxable chemicals used

in the production of propylene glycol

methyl ether acetate are 0.32 for propylene, 0.54 for chlorine, 0.61 for sodium

hydroxide, and 0.36 for methane. The

tax rate is calculated by adding the products of the conversion factor for each

taxable chemical and the tax rate for

that taxable chemical: ((0.32 x $9.74) +

(0.54 x $5.40) + (0.61 x $0.56) + (0.36 x

$6.88) = $8.85).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2915.39.90.00

(ii) Schedule B number: 2915.39.9500

(iii) CAS number: 108-65-6

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XII. Determination to Add Propylene

Glycol Methyl Ether to the List

The Dow Chemical Company, an

importer and exporter of propylene glycol methyl ether, submitted a petition

in accordance with Rev. Proc. 2022-26

requesting to add propylene glycol methyl

ether to the List. According to the petition,

the taxable chemicals propylene, chlorine,

sodium hydroxide, and methane constitute

100.00 percent by weight of the materials

used to produce propylene glycol methyl

ether, based on the predominant method of

production.

(a) Determination. Propylene glycol

methyl ether is added to the list of taxable

substances under section 4672(a). Other

pertinent information is as follows:

(1) Predominant method of production:

Glycol ethers are predominantly produced

by reacting an epoxide (typically ethylene

oxide or propylene oxide) with an alcohol; this reaction process is referred to

as alkoxylation. Propylene glycol methyl

ether is made via the alkoxylation process

(also known as ring opening of an epoxide) using methanol and propylene oxide.

Methanol is made from syngas (carbon

monoxide and dihydrogen). Carbon monoxide (CO) and dihydrogen (H2) are made

by steam-methane reforming (CH4 and

H2O). Propylene oxide is made by hydrochlorination (chlorine (Cl2), propylene

(C3H6), and sodium hydroxide (NaOH)).

Additional information on the production

process is as follows:

(i) The propylene glycol methyl ether

alkoxylation reaction (methanol + propylene oxide) is base catalyzed, using a

small amount of metal hydroxide to produce methoxide. Once methoxide is made,

it is regenerated following conversion to

the product in the presence of propylene

oxide. Regenerated methoxide in the presence of propylene oxide will perpetually

The Notice of Filing erroneously stated, “Since the amount of metal hydroxide used to produce propylene glycol methyl ether is very small…” This error is corrected here.

August 18, 2025

334

Bulletin No. 2025–34

react until all propylene oxide is consumed or the reaction is halted through the

use of controls.

(ii) Since the amount of metal hydroxide

used to produce propylene glycol methyl

ether is very small, the metal hydroxide

has been excluded from the stoichiometric

material consumption equation; including

the metal hydroxide would lead to a distorted conversion factor.

(2) Stoichiometric material consumption equation:

C3H6 (propylene) + Cl2 (chlorine) +

2 NaOH (sodium hydroxide) +

CH4 (methane) → C4H10O2 (propylene

glycol methyl ether) + 2 NaCl (sodium

chloride) + H2 (hydrogen)

(3) Reasons for the determination: The

propylene glycol methyl ether petition

was filed on June 13, 2024. The notice

of filing summarizing the petition and

requesting comments was published in the

Federal Register (89 FR 71784) on September 3, 2024. The Treasury Department

and the IRS received no written comments

in response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals propylene,

chlorine, sodium hydroxide, and methane

constitute more than 20 percent by weight

of the materials used in the production of

propylene glycol methyl ether, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of propylene glycol methyl ether to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $10.58 per ton. The conversion factors for the taxable chemicals used in the

Bulletin No. 2025–34

production of propylene glycol methyl

ether are for 0.47 for propylene, 0.79 for

chlorine, 0.89 for sodium hydroxide, and

0.18 for methane. The tax rate is calculated by adding the products of the conversion factor for each taxable chemical

and the tax rate for that taxable chemical:

((0.47 x $9.74) + (0.79 x $5.40) + (0.89 x

$0.56) + (0.18 x $6.88) = $10.58).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2909.49.6000

(ii) Schedule B number: 2909.49.0000

(iii) CAS number: 107-98-2

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XIII. Determination to Add Propylene

Glycol N-Propyl Ether to the List

The Dow Chemical Company, an

importer and exporter of propylene glycol n-propyl ether, submitted a petition

in accordance with Rev. Proc. 2022-26

requesting to add propylene glycol n-propyl ether to the List. According to the

petition, the taxable chemicals propylene,

chlorine, sodium hydroxide, ethylene,

and methane constitute 100.00 percent by

weight of the materials used to produce

propylene glycol n-propyl ether, based on

the predominant method of production.

(a) Determination. Propylene glycol

n-propyl ether is added to the list of taxable substances under section 4672(a).

Other pertinent information is as follows:

(1) Predominant method of production:

Glycol ethers are predominantly produced

by reacting an epoxide (typically ethylene

oxide or propylene oxide) with an alcohol; this reaction process is referred to as

alkoxylation. Propylene glycol n-propyl

ether is produced via the alkoxylation

process (also known as ring opening of

an epoxide) using n-propylene and propylene oxide. Propylene oxide is made by

hydrochlorination (chlorine, propylene,

NaOH). The n-propanol is manufactured

by catalytic hydrogenation of propionaldehyde (hydrogen (H2) + propionaldehyde (CH3CH2CHO)). Propionaldehyde is

produced by hydroformulation of ethylene

(C2H4) using carbon monoxide (CO). The

n-propanol is made by hydrogenating pro-

335

pionaldehyde in the presence of a catalyst.

Additional information on the production

process is as follows:

(i) The propylene glycol n-propyl ether

alkoxylation reaction (n-propanol + propylene oxide) is base catalyzed, using a

small amount of metal hydroxide to produce methoxide. Once propoxide is made,

it is regenerated following conversion to

the product in the presence of propylene

oxide. Regenerated propoxide in the presence of propylene oxide will perpetually

react until all propylene oxide is consumed or the reaction is halted through the

use of controls.

(ii) Since the amount of metal hydroxide used to produce propylene glycol

n-propyl ether is very small, the metal

hydroxide has been excluded from the

stoichiometric material consumption

equation; including the metal hydroxide

would lead to a distorted conversion factor.

(2) Stoichiometric material consumption equation:

C3H6 (propylene) + Cl2 (chlorine) +

2 NaOH (sodium hydroxide) + C2H4

(ethylene) + CH4 (methane) → 2 NaCl

(sodium chloride) + H2 (hydrogen) +

C6H14O2 (propylene glycol n-propyl

ether)

(3) Reasons for the determination:

The propylene glycol n-propyl ether

petition was filed on June 13, 2024. The

notice of filing summarizing the petition

and requesting comments was published

in the Federal Register (89 FR 71791) on

September 3, 2024. The Treasury Department and the IRS received no written

comments in response to the notice

of filing. A public hearing was neither

requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals propylene,

chlorine, sodium hydroxide, ethylene, and

methane constitute more than 20 percent

by weight of the materials used in the

production of propylene glycol n-propyl

ether, based on the predominant method of

production. Therefore, the test in section

4672(a)(2)(B) is satisfied.

August 18, 2025

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of propylene glycol n-propyl ether to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $10.43 per ton. The conversion

factors for the taxable chemicals used in

the production of propylene glycol n-propyl ether are for 0.36 for propylene, 0.60

for chlorine, 0.68 for sodium hydroxide,

0.24 for ethylene, and 0.14 for methane.

The tax rate is calculated by adding the

products of the conversion factor for each

taxable chemical and the tax rate for that

taxable chemical: ((0.36 x $9.74) + (0.60

x $5.40) + (0.68 x $0.56) + (0.24 x $9.74)

+ (0.14 x $6.88) = $10.43).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2909.49.60.00

(ii) Schedule B number: 2909.49.0000

(iii) CAS number: 1569-01-3

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XIV. Determination to Add Propylene

Glycol Phenyl Ether to the List

The Dow Chemical Company, an

importer and exporter of propylene glycol phenyl ether, submitted a petition

in accordance with Rev. Proc. 2022-26

requesting to add propylene glycol phenyl

ether to the List. According to the petition,

the taxable chemicals propylene, chlorine,

sodium hydroxide, and benzene constitute

91.00 percent by weight of the materials

used to produce propylene glycol phenyl

ether, based on the predominant method of

production.

(a) Determination. Propylene glycol

phenyl ether is added to the list of taxable

substances under section 4672(a). Other

pertinent information is as follows:

(1) Predominant method of production:

Glycol ethers are predominantly produced

August 18, 2025

by reacting an epoxide (typically ethylene

oxide or propylene oxide) with an alcohol; this reaction process is referred to

as alkoxylation. Propylene glycol phenyl

ether is made via the alkoxylation process

(also known as ring opening of an epoxide) using phenol and propylene oxide.

Propylene oxide is made by hydrochlorination (chlorine (Cl2), propylene (C3H6),

and sodium hydroxide (NaOH)). Phenol

is made via the Hock process (sometimes

called the cumene process). The Hock

process has two stages. In stage 1, benzene (C6H6) is alkylated with propylene

(C3H6) to make cumene (isopropyl benzene). In stage 2, cumene (C6H5(C3H7))

is partially oxidized to make phenol

(C6H5OH) and side product dimethyl

ketone ((CH3)2CHO). Additional information on the production process is as follows:

(i) The propylene glycol phenyl ether

alkoxylation reaction (phenol + propylene oxide) is base catalyzed, using a small

amount of metal hydroxide. Once phenoxide is made, it is regenerated following

conversion to the product in the presence

of propylene oxide. Regenerated phenoxide in the presence of propylene oxide

will perpetually react until all propylene

oxide is consumed or the reaction is halted

through the use of controls.

(ii) Since the amount of metal hydroxide used to produce propylene glycol phenyl ether is very small, the metal hydroxide

has been excluded from the stoichiometric

material consumption equation; including

the metal hydroxide would lead to a distorted conversion factor.

(2) Stoichiometric material consumption equation:

2 C3H6 (propylene) + Cl2 (chlorine) +

2 NaOH (sodium hydroxide) + C6H6

(benzene) + O2 (oxygen) → 2 NaCl

(sodium chloride) + H2O (water)

+ (CH3)2CO (dimethyl ketone) +

C9H12O2 (propylene glycol phenyl

ether)

(3) Reasons for the determination: The

propylene glycol phenyl ether petition

was filed on June 13, 2024. The notice

of filing summarizing the petition and

requesting comments was published in the

Federal Register (89 FR 71786) on September 3, 2024. The Treasury Department

336

and the IRS received no written comments

in response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals propylene,

chlorine, sodium hydroxide, and benzene

constitute more than 20 percent by weight

of the materials used in the production of

propylene glycol phenyl ether, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of propylene glycol phenyl ether to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $13.16 per ton. The conversion factors for the taxable chemicals used in the

production of propylene glycol phenyl

ether are 0.55 for propylene, 0.47 for chlorine, 0.53 for sodium hydroxide, and 0.51

for benzene. The tax rate is calculated

by adding the products of the conversion

factor for each taxable chemical and the

tax rate for that taxable chemical: ((0.55 x

$9.74) + (0.47 x $5.40) + (0.53 x $0.56) +

(0.51 x $9.74) = $13.16).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2909.49.15.00

(ii) Schedule B number: 2909.49.0000

(iii) CAS number: 770-35-4

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XV. Determination to Add Di-Isobutyl

Carbinol to the List

ALTIVIA Ketones & Additives, LLC,

an exporter of di-isobutyl carbinol, submitted a petition in accordance with Rev.

Bulletin No. 2025–34

Proc. 2022-26 requesting to add di-isobutyl carbinol to the List. According to the

petition, the taxable chemical propylene

constitutes 87.51 percent by weight of the

materials used to produce di-isobutyl carbinol, based on the predominant method

of production.

(a) Determination. Di-isobutyl carbinol

is added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production: The predominant method of production is aldol condensation of acetone.

Aldol condensation is a two-step process in which an aldol reaction forms an

aldol product and a dehydration reaction

removes water to form the final product.

The process uses acetone in condensation, dehydration, and hydrogenation

steps. Acetone is passed over a strong

base catalyst to form diacetone alcohol,

then dehydrated to mesityl oxide, and

subsequently hydrogenated to methyl

isobutyl ketone. Generally, the process forms co-produced methyl isobutyl ketone, methyl isobutyl carbinol,

di-isobutyl ketone and, to a lesser extent,

di-isobutyl carbinol.

(2) Stoichiometric material consumption equation:

3(C3H6 (propylene)) + H2O → C9H20O

(di-isobutyl carbinol)

(3) Reasons for the determination: The

di-isobutyl carbinol petition was filed on

September 23, 2024. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

Register (89 FR 94878) on November

29, 2024. The Treasury Department and

the IRS received no written comments in

response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation

and other information in the petition

shows that the taxable chemical propylene constitutes more than 20 percent by

weight of the materials used in the production of di-isobutyl carbinol, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

Bulletin No. 2025–34

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

di-isobutyl carbinol to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): January 1, 2024

(6) Tax rate prescribed by the Secretary: $8.57 per ton. The conversion factor

for the propylene used in the production of

di-isobutyl carbinol is 0.88. The tax rate is

calculated by multiplying the conversion

factor by the tax rate for propylene (0.88 x

$9.74 = $8.57).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2905.19.9090

(ii) Schedule B number: 2905.19.9095

(iii) CAS number: 108-82-7

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XVI. Determination to Add Di-Isobutyl

Ketone to the List

ALTIVIA Ketones & Additives, LLC,

an exporter of di-isobutyl ketone, submitted a petition in accordance with Rev.

Proc. 2022-26 requesting to add di-isobutyl

ketone to the List. According to the petition,

the taxable chemical propylene constitutes

87.51 percent by weight of the materials

used to produce di-isobutyl ketone, based

on the predominant method of production.

(a) Determination. Di-isobutyl ketone

is added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production:

The predominant method of production is

aldol condensation of acetone. Aldol condensation is a two-step process in which

an aldol reaction forms an aldol product

and a dehydration reaction removes water

to form the final product. The process uses

acetone in condensation, dehydration, and

hydrogenation steps. Acetone is passed

over a strong base catalyst to form diacetone alcohol, then dehydrated to mesityl

337

oxide, and subsequently hydrogenated

to methyl isobutyl ketone. Generally,

the process forms co-produced methyl

isobutyl ketone, methyl isobutyl carbinol,

di-isobutyl ketone and, to a lesser extent,

di-isobutyl carbinol.

(2) Stoichiometric material consumption equation:

3(C3H6 (propylene)) + H2O → C9H18O

(di-isobutyl ketone) + H2

(3) Reasons for the determination:

The di-isobutyl ketone petition was

filed on September 23, 2024. The notice

of filing summarizing the petition and

requesting comments was published

in the Federal Register (89 FR 94879)

on November 29, 2024. The Treasury

Department and the IRS received no

written comments in response to the

notice of filing. A public hearing was

neither requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemical propylene constitutes more than 20 percent by weight

of the materials used in the production of

di-isobutyl ketone, based on the predominant method of production. Therefore, the

test in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

di-isobutyl ketone to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): January 1, 2024

(6) Tax rate prescribed by the Secretary: $8.67 per ton. The conversion factor

for the propylene used in the production of

di-isobutyl ketone is 0.89. The tax rate is

calculated by multiplying the conversion

factor by the tax rate for propylene: (0.89

x $9.74 = $8.67).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

August 18, 2025

(i) HTSUS number: 2914.19.0000

(ii) Schedule B number: 2914.19.0000

(iii) CAS number: 108-83-8

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XVII. Determination to Add Methyl

Isobutyl Carbinol to the List

ALTIVIA Ketones & Additives, LLC,

an exporter of methyl isobutyl carbinol, submitted a petition in accordance

with Rev. Proc. 2022-26 requesting to

add methyl isobutyl carbinol to the List.

According to the petition, the taxable

chemical propylene constitutes 82.36

percent by weight of the materials used to

produce methyl isobutyl carbinol, based

on the predominant method of production.

(a) Determination. Methyl isobutyl

carbinol is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production:

The predominant method of production is

aldol condensation of acetone. Aldol condensation is a two-step process in which an

aldol reaction forms an aldol product and a

dehydration reaction removes water to form

the final product. The process uses acetone

in condensation, dehydration, and hydrogenation steps. Acetone is passed over a

strong base catalyst to form diacetone alcohol, then dehydrated to mesityl oxide, and

subsequently hydrogenated to methyl isobutyl ketone. Generally, the process forms

co-produced methyl isobutyl ketone, methyl

isobutyl carbinol, di-isobutyl ketone and, to

a lesser extent, di-isobutyl carbinol.

(2) Stoichiometric material consumption equation:

2(C3H6 (propylene)) + H2O → C6H14O

(methyl isobutyl carbinol)

(3) Reasons for the determination: The

methyl isobutyl carbinol petition was filed

on September 23, 2024. The notice of filing summarizing the petition and requesting comments was published in the Federal Register (89 FR 94877) on November

29, 2024. The Treasury Department and

the IRS received no written comments in

response to the notice of filing. A public

hearing was neither requested nor held.

August 18, 2025

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemical propylene constitutes more than 20 percent by weight

of the materials used in the production

of methyl isobutyl carbinol, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

methyl isobutyl carbinol to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): January 1, 2024

(6) Tax rate prescribed by the Secretary: $7.99 per ton. The conversion factor

for the propylene used in the production

of methyl isobutyl carbinol is 0.82. The

tax rate is calculated by multiplying the

conversion factor by the tax rate for propylene: (0.82 x $9.74 = $7.99).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2905.19.9090

(ii) Schedule B number: 2905.19.9095

(iii) CAS number: 108-11-2

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XVIII. Determination to Add Cyanuric

Acid to the List

Occidental Chemical Corporation,

an interested person in cyanuric acid,

submitted a petition in accordance with

Rev. Proc. 2022-26 requesting to add

cyanuric acid to the List. According

to the petition, the taxable chemical

ammonia constitutes 27.90 percent by

weight of the materials used to produce

cyanuric acid, based on the predominant

method of production.

(a) Determination. Cyanuric acid is

added to the list of taxable substances

338

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production:

The predominant process for the manufacture of cyanuric acid is using urea thermal

decomposition to produce cyanuric acid.

(2) Stoichiometric material consumption equation:

3 NH3 (ammonia) + 3 CO2 (carbon

dioxide) → C3N3O3H3 (cyanuric acid)

+

3 H2O (water)

(3) Reasons for the determination:

The cyanuric acid petition was filed on

November 25, 2024. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

Register (90 FR 7246) on January 21,

2025. The Treasury Department and the

IRS received one written comment, discussed below, in response to the notice

of filing. A public hearing was neither

requested nor held.

The commenter asserts that the notice

did not give a reason to add the substance to the List and inquires “[w]hy

would a long-term product be added…if

it’s already in production at a chemical

plant for distribution.” It is not clear to the

Treasury Department and the IRS what

is the significance of a “long-term product.” Regardless, the commenter did not

demonstrate that cyanuric acid does not

meet the weight or value test under section 4672(a)(2)(B). Under section 4672(a)

(2)(b) and (4) and (b)(2), the Secretary is

required to add a substance to the List if

the Secretary determines that any taxable

chemicals used to produce the substance

meet the weight or value test. The petition

represented and the Secretary determined

that a taxable chemical constitutes more

than 20 percent by weight of the materials used in the production of cyanuric

acid, based on the predominant method of

production. For this reason, the Treasury

Department and the IRS decline to adopt

any change to this determination based on

the public comment.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation

and other information in the petition

shows that the taxable chemical ammo-

Bulletin No. 2025–34

nia constitutes more than 20 percent

by weight of the materials used in the

production of cyanuric acid, based on

the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

cyanuric acid to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): October 1, 2024

(6) Tax rate prescribed by the Secretary: $2.11 per ton. The conversion factor

for the ammonia used in the production of

cyanuric acid is 0.40. The tax rate is calculated by multiplying the conversion factor

by the tax rate for ammonia: (0.40 x $5.28

= $2.11).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2933.69.6050

(ii) Schedule B number: 2933.69.0000

(iii) CAS number: 108-80-5

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XIX. Determination to Add Potassium

Bicarbonate to the List

Occidental Chemical Corporation, an

exporter of potassium bicarbonate, submitted a petition in accordance with Rev.

Proc. 2022-26 requesting to add potassium bicarbonate to the List. According

to the petition, the taxable chemical potassium hydroxide constitutes 56.04 percent

by weight of the materials used to produce

potassium bicarbonate, based on the predominant method of production.

(a) Determination. Potassium bicarbonate is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production: The predominant process for the

manufacture of potassium bicarbonate is

absorption of CO2 with potassium hydrox-

Bulletin No. 2025–34

ide. The predominant process for carbonate manufacture is absorption of CO2 with

alkaline liquid. This substance is produced

as a pure component, not a mixture.

(2) Stoichiometric material consumption equation:

CO2 (carbon dioxide) + KOH

(potassium hydroxide) → HKCO3

(potassium bicarbonate)

(3) Reasons for the determination: The

potassium bicarbonate petition was filed

on November 25, 2024. The notice of filing summarizing the petition and requesting comments was published in the Federal Register (90 FR 7245) on January

21, 2025. The Treasury Department and

the IRS received no written comments in

response to the notice of filing. A public

hearing was neither requested nor held.

The Secretary followed the process in

section 4672(a)(2)(B) in making this determination. A review of the stoichiometric

material consumption equation and other

information in the petition shows that the

taxable chemical potassium hydroxide

constitutes more than 20 percent by weight

of the materials used in the production of

potassium bicarbonate, based on the predominant method of production. Therefore,

the test in section 4672(a)(2)(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

potassium bicarbonate to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $0.25 per ton. The conversion factor for the potassium hydroxide used in

the production of potassium bicarbonate is 0.56. The tax rate is calculated by

multiplying the conversion factor by the

tax rate for potassium hydroxide: (0.56 x

$0.44 = $0.25).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2836.40.2000

339

(ii) Schedule B number: 2836.40.0000

(iii) CAS number: 298-14-6

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XX. Determination to Add Potassium

Carbonate to the List

Occidental Chemical Corporation, an

exporter of potassium carbonate, submitted a petition in accordance with Rev.

Proc. 2022-26 requesting to add potassium carbonate to the List. According to

the petition, the taxable chemical potassium hydroxide constitutes 71.83 percent

by weight of the materials used to produce

potassium carbonate, based on the predominant method of production.

(a) Determination. Potassium carbonate is added to the list of taxable substances under section 4672(a). Other pertinent information is as follows:

(1) Predominant method of production:

The predominant process for the manufacture of potassium carbonate is absorption of

CO2 with KOH. The predominant process for

carbonate manufacture is absorption of CO2

with alkaline liquid. This substance is produced as a pure component, not a mixture.

(2) Stoichiometric material consumption equation:

CO2 (carbon dioxide) + 2 KOH

(potassium hydroxide) → K2CO3

(potassium carbonate) + H2O (water)

(3) Reasons for the determination: The

potassium carbonate petition was filed on

November 25, 2024. The notice of filing

summarizing the petition and requesting

comments was published in the Federal

Register (90 FR 7247) on January 21,

2025. The Treasury Department and the

IRS received two written comments, discussed below, in response to the notice

of filing. A public hearing was neither

requested nor held.

One public comment asserted that

potassium carbonate does “not pose

any significant health or environmental

risks,” objected to the weight or value

test of section 4672(a)(2)(B), and urged

the Secretary to exercise discretion when

determining whether a substance poses a

significant danger that warrants imposing

the tax under section 4671. Another pub-

August 18, 2025

lic comment inquired about the effects

of potassium carbonate and asserted that

“[t]he most important thing is to avoid

any type of exposure to the chemical as it

can cause severe damage.” Neither comment demonstrated whether potassium

carbonate meets the weight or value test

under section 4672(a)(2)(B). Under section 4672(a)(2)(b) and (4) and (b)(2), the

Secretary is required to add a substance

to the List if the Secretary determines

that any taxable chemicals used to produce the substance meet the weight or

value test. Congress did not give the Secretary discretion to determine whether

a substance poses significant health or

environmental risks or otherwise poses

a significant danger. The petition represented and the Secretary determined

that a taxable chemical constitutes more

than 20 percent by weight of the materials used in the production of potassium

carbonate, based on the predominant

method of production. For this reason,

the Treasury Department and the IRS

decline to adopt the suggestions of these

public comments.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemical potassium

hydroxide constitutes more than 20 percent by weight of the materials used in the

production of potassium carbonate, based

on the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

potassium carbonate to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $0.36 per ton. The conversion factor

for the potassium hydroxide used in the

production of potassium carbonate is 0.81.

The tax rate is calculated by multiplying

the conversion factor by the tax rate for

August 18, 2025

potassium hydroxide: (0.81 x $0.44 =

$0.36).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2836.40.1000

(ii) Schedule B number: 2836.40.0000

(iii) CAS number: 584-08-7

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

XXI. Determination to Add Sodium

Chlorite to the List

Occidental Chemical Corporation, an

exporter of sodium chlorite, submitted

a petition in accordance with Rev. Proc.

2022-26 requesting to add sodium chlorite

to the List. According to the petition, the

taxable chemicals chlorine and sodium

hydroxide constitute 75.87 percent by

weight of the materials used to produce

sodium chlorite, based on the predominant method of production.

(a) Determination. Sodium chlorite

is added to the list of taxable substances

under section 4672(a). Other pertinent

information is as follows:

(1) Predominant method of production: The predominant process for the

manufacture of sodium chlorite is electrolytic production of NaClO3 followed

by hydrochlorination with wet acid with

byproduct chlorine and hydrogen used in

the manufacture of acid. This substance is

produced as a pure component, not a mixture, though it may be sold as an aqueous

liquid.

(2) Stoichiometric material consumption equation:

2 Cl2 (chlorine) + 4 NaOH (sodium

hydroxide) + 3 O2 (oxygen) →

4 NaClO2 (sodium chlorite) +

2 H2O (water)

(3) Reasons for the determination:

The sodium chlorite petition was filed

on November 25, 2024. The notice of

filing summarizing the petition and

requesting comments was published in

the Federal Register (90 FR 7247) on

January 21, 2025. The Treasury Department and the IRS received no written

comments in response to the notice of

340

filing. A public hearing was neither

requested nor held.

The Secretary followed the process

in section 4672(a)(2)(B) in making this

determination. A review of the stoichiometric material consumption equation and

other information in the petition shows

that the taxable chemicals chlorine and

sodium hydroxide constitute more than 20

percent by weight of the materials used in

the production of sodium chlorite, based

on the predominant method of production.

Therefore, the test in section 4672(a)(2)

(B) is satisfied.

(4) Date of determination: August 1,

2025.

(5) Effective dates for addition of

sodium chlorite to the List:

(i) Effective date for purposes of the

section 4671 tax (see section 11.01 of Rev.

Proc. 2022-26): January 1, 2026

(ii) Effective date for purposes of refund

claims under section 4662(e) (see sections

11.02 and 11.03 of Rev. Proc. 2022-26, as

modified by section 3 of Rev. Proc. 202320): July 1, 2022

(6) Tax rate prescribed by the Secretary: $2.35 per ton. The conversion factors for the taxable chemicals used in the

production of sodium chlorite are 0.39 for

chlorine and 0.44 for sodium hydroxide.

The tax rate is calculated by adding the

products of the conversion factor for each

taxable chemical and the tax rate for that

taxable chemical: (0.39 x $5.40 + 0.44 x

$0.56 = $2.35).

(b) Classification numbers.

(1) The Secretary has no basis to object

to the following proposed classification

numbers:

(i) HTSUS number: 2828.90.0000

(ii) Schedule B number: 2828.90.0000

(iii) CAS number: 7758-19-2

(2) The Secretary is unable to confirm the following proposed classification

numbers: Not applicable.

Correction to the List of Taxable

Substances

Section 4 of Notice 2021-66 includes

in the initial list of taxable substances

the taxable substance “sodium nitriolotriacetate monohydrate.” There is

a typographical error in the spelling

of this taxable substance. The correct name of this taxable substance

Bulletin No. 2025–34

is “sodium nitrilotriacetate monohydrate.” The tax rate for sodium nitrilotriacetate monohydrate was not previously provided by the Secretary. The

tax rate prescribed by the Secretary for

sodium nitrilotriacetate monohydrate is

$3.97 per ton. The conversion factors

for the taxable chemicals used in the

production of sodium nitrilotriacetate

Bulletin No. 2025–34

monohydrate are 0.25 for ammonia,

0.35 for methane, and 0.44 for sodium

hydroxide. The tax rate is calculated by

adding the products of the conversion

factor for each taxable chemical and

the tax rate for that taxable chemical:

((0.25 x $5.28) + (0.35 x $6.88) + (0.44

x $0.56) = $3.97). This tax rate is effective

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