# Bulletin No. 2023–30

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A2f4faf0449df9643

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2023–30
July 24, 2023

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.

EMPLOYEE PLANS, INCOME TAX

EXEMPT ORGANIZATIONS

REG-124123-22, page 369.

Announcement 2023-19, page 367.

These proposed regulations set forth rules specifying the
methodology for constructing the corporate bond yield curve
that is used to derive the interest rates used in calculating
present value and making other calculations under a defined
benefit plan, as well as for discounting unpaid losses and estimated salvage recoverable of insurance companies. These
regulations affect participants in, beneficiaries of, employers
maintaining, and administrators of certain retirement plans,
as well as insurance companies.

EXCISE TAX
Announcement 2023-18, page 366.

The purposes of this announcement are to announce that:
(1) taxpayers will not be required to report the new excise
tax imposed by section 4501 of the Internal Revenue Code
on repurchases of corporate stock during a covered corporation’s taxable year (stock repurchase excise tax) on any
returns filed with the IRS, or to make any payments of such
tax, before the time specified in forthcoming regulations;
(2) there will be no addition to tax under section 6651(a)
of the Internal Revenue Code (or any other provision of the
Internal Revenue Code) for failure to file a return reporting the
stock repurchase excise tax, or for failure to pay the stock
repurchase excise tax, before the time specified in the forthcoming regulations; and (3) the forthcoming regulations will
require covered corporations to keep complete and detailed
records to establish accurately any amount of stock repurchases (including repurchases made after December 31,
2022, but before the forthcoming regulations are published)
and to retain these records as long as their contents may
become material.

Finding Lists begin on page ii.

Revocation of IRC 501(c) (3) Organizations for failure to meet
the code section requirements Contributions made to the
Organizations by individual donors are no longer deductible
under IRC 170 (b)(1)(A)

Announcement 2023-20, page 368.

Revocation of IRC 501(c) (3) Organizations for failure to meet
the code section requirements Contributions made to the
Organizations by individual donors are no longer deductible
under IRC 170 (b)(1)(A)

INCOME TAX
Notice 2023-37, page 359.

In response to the end of the Coronavirus Disease 2019
(COVID-19) public health emergency and the National
Emergency Concerning the Novel Coronavirus Disease 2019
Pandemic, this notice modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that
can be provided by a health plan that otherwise satisfies the
requirements to be a high deductible health plan under section
223(c)(2)(A). Specifically, this notice provides that the relief
described in Notice 2020-15, 2020-14 IRB 559, applies only
with respect to plan years ending on or before December 31,
2024. This notice also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)
(C). Specifically, this notice clarifies that the preventive care
safe harbor, as described in Notice 2004-23, 2004-15 IRB
725, does not include screening (i.e., testing) for COVID-19,
effective as of the date of publication of this notice. This notice
also provides that items and services recommended with an
“A” or “B” rating by the United States Preventive Services Task

Force on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of
whether these items and services must be covered, without
cost sharing, under Public Health Service Act section 2713.

Notice 2023-50, page 361.

This notice announces that under § 613A(c)(6)(C) of the
Internal Revenue Code, the applicable percentage for purposes of determining percentage depletion on marginal
properties for calendar year 2023 is 15 percent. The format
of the notice is identical to the format of notices previously
published on this issue.

Notice 2023-51, page 362.

This notice publishes the inflation adjustment factor and reference price for calendar year 2023 for the renewable electricity production credit under section 45 of the Internal Revenue
Code. The 2023 inflation adjustment factor and reference
price are used in determining the availability of the credit and
apply to calendar year 2023 sales of kilowatt hours of electricity produced in the United States or a possession thereof
from qualified energy resources. This notice also provides
the credit amounts for calendar year 2023 under section 45.

T.D. 9976, page 354.

This document contains final regulations that finalize, in part,
proposed regulations issued on Oct. 9, 2019. The proposed
regulations were published to facilitate an orderly transition in
connection with the discontinuation of London interbank offer
rates (LIBOR) and other IBORs. One issue addressed by those
proposed regulations was to propose an alternative interest
rate (specifically, yearly average Secured Overnight Financing
Rate (SOFR)) for the election provided by § 1.882-5(d)(5)(ii)
(B) (the published rate election). Generally, § 1.882-5 provides
rules for determining the amount of a foreign corporation’s
interest expense that is allocable to its income effectively
connected with the conduct of a U.S. trade or business.
The published rate election permits a foreign bank to elect
to use the 30-day USD LIBOR rate to compute the interest
expense attributable to its excess U.S.-connected liabilities.
A comment to the proposed regulations asserted that SOFR
was not an appropriate replacement for 30-day USD LIBOR
and recommended that finalization be delayed until a suitable
replacement could be identified. In July 2022, a comment
recommended using the average published one-month Term
SOFR plus a static spread adjustment of 0.11448%. This final
regulation adopts that recommendation.

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
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
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
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

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.

July 24, 2023 

Bulletin No. 2023–30

Part I
T.D. 9976
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Additional Guidance
on the Transition from
Interbank Offer Rates to
Other Reference Rates
with Respect to the Interest
Rates of a Foreign Bank
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
additional final regulations that provide
guidance on the transition away from the
use of interbank offer rates (“IBORs”) to
other reference rates. Specifically, this regulation provides the replacement rate for
the IBOR presently used in the published
rate election, which may be used by taxpayers to determine the amount of interest expense attributable to their excess
U.S.-connected liabilities and allocable to
income that is effectively connected with
the conduct of a trade or business within
the United States (“ECI”). The final regulations will affect foreign banks that have
income that is ECI.
DATES: Effective date: This regulation is
effective on June 30, 2023.
Applicability date: For dates of applicability, see § 1.882-5(f)(3).
FOR
FURTHER
INFORMATION
CONTACT: D. Peter Merkel or Caleb

W. Trimm, (202) 317-6938 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Background
This document contains final regulations that provide for the replacement of
the 30-day IBOR rate presently referenced
by § 1.882-5(d)(5)(ii)(B) with the Secured
Overnight Financing Rate (“SOFR”) of the
same tenor, plus a fixed spread adjustment.
I. Discontinuation of IBORs and
Transition to SOFRs
The London Interbank Offered Rate
(“LIBOR”) is an interest rate benchmark
that was the dominant reference rate used
in financial contracts, at one point serving
as the benchmark for more than $200 trillion of contracts worldwide. On July 27,
2017, the Financial Conduct Authority,
the United Kingdom regulator tasked with
overseeing LIBOR, announced that publication of all currency and term variants of
LIBOR, including the U.S. dollar LIBOR
(“USD LIBOR”), may cease after the end
of 2021. On March 5, 2021, the administrator of LIBOR, Intercontinental Exchange
(ICE) Benchmark Association, announced
that publication of the overnight, onemonth, three-month, six-month, and
12-month USD LIBORs would cease following the LIBOR publication on June 30,
2023. The ICE Benchmark Association
will continue to publish an unrepresentative synthetic USD LIBOR in one-month,
three-month, and six-month tenors until
September 30, 2024.1 Publication of
all other currency and tenor variants of
LIBOR (including the one-week and twomonth USD LIBOR) ceased following
the LIBOR publication on December 31,
2021.
The Alternative Reference Rate
Committee (“ARRC”), whose ex officio

members include the Board of Governors
of the Federal Reserve System, the
Department of the Treasury (“Treasury
Department”), the Commodity Futures
Trading Commission, and the Office of
Financial Research, was convened by the
Board of Governors of the Federal Reserve
System and the Federal Reserve Bank of
New York to identify alternative reference rates that would be both more robust
than USD LIBOR and that would comply
with standards such as the International
Organization of Securities Commissions’
“Principles for Financial Benchmarks.” In
2017, the ARRC identified a SOFR-based
rate as its recommended replacement for
LIBOR.
In 2021, the ARRC recommended the
forward-looking term SOFRs published
by the Chicago Mercantile Exchange
Group Benchmark Administration, Ltd.
in one-month, three-month, and sixmonth tenors. The ARRC has also recommended static spread adjustments
to each of those tenors to adjust for the
fact that SOFRs are risk-free rates, while
IBORs include an element of bank credit
risk. The static spread adjustments are
based on the historical median over a
5-year lookback period calculating the
difference between USD LIBOR and
compounded averages of SOFR, set on
March 5, 2021.2 The recommended static
spread adjustment for one-month SOFR
is 0.11448%.
To support the transition away from
USD LIBOR, the ARRC has published
recommended fallback language for inclusion in the terms of certain cash products.
Contracts governed by U.S. law that reference USD LIBOR but that do not have
any (or that have inadequate) fallback
provisions are generally required by the
Adjustable Interest Rate Act (“LIBOR
Act”), Pub. L. 117-103, div. U, to use
the SOFR of the same tenor, plus a static
spread adjustment. The static spread
adjustments to SOFR for each USD tenor

The synthetic USD LIBOR will be the Term SOFR of the same tenor (published by the Chicago Mercantile Exchange Group Benchmark Administration, Ltd.), plus a fixed spread adjustment
of 0.11448%, 0.26161%, or 0.42826% for the one-, three-, and six-month tenors, respectively. Financial Conduct Authority, Article 23D Benchmarks Regulation Draft Notice of Requirements
(April 3, 2023), https://www.fca.org.uk/publication/libor-notices/article-23d-benchmarks-regulation-usd-draft-notice-requirements.pdf. This rate is not considered representative because it
uses a synthetic methodology to determine rates instead of the panel bank methodology that has historically been used to determine IBORs.
2
For an explanation of the SOFR averaging calculation, see Federal Reserve Bank of New York, Additional Information About the Reference Rates Administered by the New York Fed, https://
www.newyorkfed.org/markets/reference-rates/additional-information-about-reference-rates.
1

July 24, 2023

354

Bulletin No. 2023–30

required by the LIBOR Act are the same
as those recommended by the ARRC.
II. Regulatory Background
The transition from IBORs to SOFRs
or other reference rates may give rise to
various tax issues. To minimize market
disruption and facilitate an orderly transition in connection with the discontinuation of LIBOR and other IBORs, the
Treasury Department and IRS published
proposed regulations (REG-118784-18)
in the Federal Register (84 FR 54068)
on October 9, 2019 (“2019 Proposed
Regulations”).
One issue addressed by the 2019
Proposed Regulations was the election
provided by § 1.882-5(d)(5)(ii)(B). A foreign corporation that has a U.S. branch or
other trade or business within the United
States applies § 1.882-5 to determine its
interest expense allocable under section
882(c) to its ECI. If a foreign corporation
uses the method described in § 1.8825(b) through (d), that foreign corporation could have liabilities attributable to
its U.S. branch (U.S.-connected liabilities) that exceed its U.S.-booked liabilities (excess U.S.-connected liabilities).
When a foreign corporation has excess
U.S.-connected liabilities, § 1.882-5(d)
(5)(ii)(A) entitles the foreign corporation
to increase its interest expense allocable
to its ECI in an amount determined by
reference to the average U.S.-dollar borrowing cost on all U.S.-dollar liabilities
other than its U.S.-booked liabilities. If
the foreign corporation is a bank, it may
elect under § 1.882-5(d)(5)(ii)(B) to use a
published average 30-day LIBOR for the
year rather than the actual rate computed
under § 1.882-5(d)(5)(ii)(A). Because
use of that election will no longer be
possible when LIBOR is phased out, the
2019 Proposed Regulations included a
proposal to replace 30-day USD LIBOR
referenced in § 1.882-5(d)(5)(ii)(B) with
a yearly average SOFR. Because SOFR
is an overnight risk-free rate, the Treasury
Department and the IRS acknowledged
that the yearly average SOFR was likely
to result in a lower rate than the 30-day
LIBOR calculation previously allowed
under § 1.882-5(d)(5)(ii)(B) and requested
comments on whether another rate might
be more appropriate.

Bulletin No. 2023–30

Following publication of the 2019
Proposed Regulations, the Treasury
Department and the IRS received one
comment regarding the proposal to use
yearly average SOFR in place of 30-day
USD LIBOR for the election available
under § 1.882-5(d)(5)(ii)(B). The comment noted two key differences between
30-day LIBOR and the yearly average
SOFR, which the commenter stated made
the yearly average SOFR an inappropriate substitute for 30-day LIBOR. First,
SOFR is a risk-free rate, while LIBOR
is an unsecured rate. Second, SOFR is an
overnight rate, while the 30-day LIBOR is
a one-month rate. The comment noted that
SOFR removes the credit risk premium
and term liquidity premium from the
cost of borrowing as compared to 30-day
LIBOR. The comment, however, did not
identify a more reasonable substitute for
30-day LIBOR at that time and recommended that the Treasury Department and
the IRS defer finalizing the proposed rule
under § 1.882-5(d)(5)(ii)(B) because a
yearly average SOFR calculation was not
a reasonable replacement rate for 30-day
USD LIBOR.
On January 4, 2022, the Treasury
Department and the IRS published final
regulations (TD 9961) in the Federal
Register (87 FR 166) relating to the
transition from IBORs to other reference
rates (“2022 Final Regulations”). The
2022 Final Regulations did not finalize
the proposed change to § 1.882-5(d)(5)
(ii)(B). Instead, the Treasury Department
and the IRS sought additional comments
regarding the appropriate replacement
rate for 30-day USD LIBOR for the purpose of the election under § 1.882-5(d)
(5)(ii)(B).
Following the publication of the
2022 Final Regulations, the Treasury
Department and the IRS received one
additional comment regarding the appropriate replacement rate for the 30-day
USD LIBOR rate referenced by § 1.8825(d)(5)(ii)(B).
This comment is available for public
inspection at https://www.regulations.gov
or upon request. No public hearing was
requested, and none was held. After consideration of the comments, the Treasury
Department and the IRS adopt the 2019
Proposed Regulation as amended by this
Treasury decision (“final regulations”).

355

Summary of Comments and
Explanation of Revisions
I. Appropriate Replacement Rate for 30Day LIBOR
In response to the request for additional
comments in TD 9961, one comment
was received relating to the 30-day USD
LIBOR replacement in § 1.882-5(d)(5)
(ii)(B). The comment made three recommendations for the final regulations under
§ 1.882-5(d)(5)(ii)(B).
A. One-Month Term SOFR Plus a Static
Spread Adjustment
First, the comment recommended finalizing the regulation using the one-month
term SOFR plus static spread adjustment of 0.11448% as recommended by
the ARRC (which endorsed Term SOFR
rates in June of 2021 and spread adjustments in October of 2021) and codified in
the LIBOR Act (enacted in December of
2021). The comment noted that the onemonth term SOFR plus a fixed spread
adjustment accounts for some of the differences between SOFR and LIBOR rates
and implied that one-month term SOFR
plus static spread adjustment of 0.11448%
is a more appropriate replacement than
yearly average SOFR. The published rate
election provides eligible taxpayers with
administrative relief from the burden of
calculating their actual borrowing rate,
which is based on data maintained outside
the United States.
The final regulations adopt this recommendation. The ARRC, whose ex
officio members include the Treasury
Department, has generally recommended
that contracts referencing USD LIBOR
adopt fallback provisions that reference
the term SOFR of the same tenor, plus a
static spread adjustment. The Treasury
Department has supported the recommendations of the ARRC in prior guidance
issued in Revenue Procedure 2020–44,
2020–45 I.R.B. 991 and the 2022 Final
Regulations. In addition, contracts governed by U.S. law that have not voluntarily adopted such fallback provisions are
generally required by the LIBOR Act to
use the SOFR of the same tenor, plus the
ARRC-recommended static spread adjustment, as a matter of law. Pub. L. 117-103,

July 24, 2023

div. U. Accordingly, both the Treasury
Department and the U.S. Congress have
endorsed, or required, the use of a term
SOFR of the same tenor, plus the ARRCrecommended static spread adjustment,
as a replacement for term USD LIBORs.
Because the published rate election available under § 1.882-5(d)(5)(ii)(B) references 30-day LIBOR, the one-month term
SOFR (plus static spread adjustment) is
the most appropriate replacement rate.
B. Alternative Method Approximating
Actual Rate
The comment also recommended that
the final regulations allow taxpayers to use
a rate that reasonably approximates the
bank’s actual rate and that is consistently
applied from year to year. This recommendation is based on the approach taken in
regulations that were in effect from 1981
through 1996. TD 7749, 46 FR 1681 (Jan.
7, 1981) (codified at former § 1.882-5(b)
(3)(i)(B)). This historical regulation provided that, if information needed to calculate the taxpayer’s actual interest rate
could not be reasonably obtained, then the
taxpayer could determine its interest rate
by applying any method that reasonably
approximated its actual interest rate and
that was consistently applied year over
year, including, for example, approximating its interest rate by reference to 30-day
LIBOR. Id. at 1684-85. The comment
expressed concern that the one-month
term SOFR plus static spread adjustment
may be less than the actual cost of borrowing; however, for some taxpayers it
may not be worthwhile or possible for the
corporation to calculate its actual borrowing rate.
The final regulations do not adopt this
recommendation. An approach based on a
reasonable approximation of a taxpayer’s
actual interest would establish a different method for determining a taxpayer’s
borrowing rate that does not provide the
certainty, accuracy, and simplicity of a
published rate election. Additionally, the
IRS would face significant challenges in
administering such a rule. For example,
the comment did not suggest any standard by which the IRS might determine
whether a taxpayer’s method is a reasonable approximation of its actual borrowing rate.

July 24, 2023

Finally, data from recent filing years
indicates that the actual rate calculation is
not a significant burden to taxpayers. For
taxable years 2020 and 2021 (the most
recent years for which data is available),
a majority of foreign banks with excess
U.S.-connected liabilities chose to calculate their actual rate rather than use the
published rate election. In both years,
approximately 80% of such taxpayers
opted to calculate their actual rate, while
less than 20% chose to use the published
rate election available under § 1.882-5(d)
(5)(ii)(B).
C. Mechanism for Endorsing Additional
Replacement Rates
Finally, the comment recommended
that the final regulations include a mechanism for identifying additional qualified
alternative reference rates via Internal
Revenue Bulletin, Revenue Procedure, or
another similar notice. The final regulations do not adopt this recommendation.
The Treasury Department and the IRS do
not anticipate a need to name additional
alternative reference rates, and, if the
need does arise in the future, the Treasury
Department and the IRS may prefer to
propose any new alternative reference rate
through the regulatory process.
II. Application of the Published Rate
Election by the IRS in an Examination
If a taxpayer failed to file a timely
return or incorrectly determined that it
did not have excess U.S.-connected liabilities, § 1.882-5(d)(5)(ii)(B) allowed
the Director of Field Operations to calculate the taxpayer’s interest expense with
respect to excess U.S.-connected liabilities using either the taxpayer’s actual
rate or the published rate provided by §
1.882-5(d)(5)(ii)(B). The final regulations
amend this rule to require the Director of
Field Operations to use the published rate
in order to reduce the administrative burden of calculating the actual rate for both
the IRS and taxpayers.
III. Transitional Rule For Taxable Years
Including the Date of LIBOR Cessation
For a taxable year that begins before
and ends after the USD LIBOR cessation

356

date of June 30, 2023, a taxpayer that
makes the published rate election available under § 1.882-5(d)(5)(ii)(B) must
calculate a blended published rate average for the taxable year which uses the
30-day USD LIBOR for the portion of
its taxable year ending on June 30, 2023,
and the one-month Term SOFR, plus
static spread adjustment, for the portion
of its taxable year beginning on July 1,
2023.
IV. Applicability Date
These final regulations apply to taxable
years ending after June 30, 2023.
Special Analyses
I. Regulatory Planning and Review –
Economic Analysis
Pursuant to the Memorandum
of Agreement, Review of Treasury
Regulations under Executive Order 12866
(June 9, 2023), tax regulatory actions
issued by the IRS are not subject to the
requirements of section 6 of Executive
Order 12866, as amended. Therefore,
a regulatory impact assessment is not
required.
II. Regulatory Flexibility Act
The final regulations affect any foreign bank that has ECI and that has
excess U.S.-connected liabilities, but
which cannot reasonably calculate its
actual borrowing rate. The number of
small entities potentially affected by
the final regulations is unknown; however, it is unlikely to be a substantial
number because the final regulations
only affect foreign banks that operate
in the United States. In addition, data
collected from Forms 1120-F, Schedule
I filed in recent taxable years indicates
that fewer than 100 total taxpayers are
foreign banks with both ECI and excess
U.S-connected liabilities. The data from
Forms 1120-F, Schedule I shows that the
number of foreign banks that elected to
use the 30-day USD LIBOR rate to compute the interest expense attributable to
their excess U.S.-connected liabilities
varied from year to year. In some years,
as many as 50 foreign banks made the

Bulletin No. 2023–30

election on Schedule I to use the 30-day
USD LIBOR rate; in other years, fewer
than ten taxpayers made that election.
The Secretary has determined that the
economic impact on any small entities
affected by the final regulations is not
significant.
The final regulations provide that the
annual published rate election available
under § 1.882-5(d)(5)(ii)(B) will be modified by substituting the one-month term
SOFR, plus a static spread adjustment,
for 30-day USD LIBOR. The rule does
not require taxpayers to collect additional information to determine whether
the taxpayer is eligible for the election.
Additionally, the rule does not impose
any new costs on taxpayers because it
only replaces the published rate used
for the purpose of the election and does
not affect a taxpayer’s obligation with
respect to the information to be gathered
and reported.
In accordance with the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) the
Secretary hereby certifies that these final
regulations will not have a significant economic impact on a substantial number of
small entities.

V. Executive Order 13132: Federalism

III. Section 7805(f)

Drafting Information

Pursuant to section 7805(f), the proposed regulations (REG-118784-18)
preceding these final regulations were submitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on the impact on small business,
and no comments were received.

The principal authors of these regulations are D. Peter Merkel and Caleb
W. Trimm of the Office of Associate
Chief Counsel (International). However,
other personnel from the IRS and
Treasury Department participated in their
development.

IV. Unfunded Mandates Reform Act

List of Subjects in 26 CFR Part 1

Section 202 of the Unfunded Mandates
Reform Act of 1995 requires that agencies assess anticipated costs and benefits
and take certain other actions before issuing a final rule that includes any Federal
mandate that may result in expenditures
in any one year by a state, local, or tribal
government, in the aggregate, or by the
private sector, of $100 million in 1995
dollars, updated annually for inflation.
This rule does not include any Federal
mandate that may result in expenditures
by state, local, or tribal governments,
or by the private sector in excess of that
threshold.

Income taxes, Reporting and recordkeeping requirements.

Bulletin No. 2023–30

Executive Order 13132 (entitled
“Federalism”) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial, direct compliance costs on
state and local governments, and is not
required by statute, or preempts state law,
unless the agency meets the consultation
and funding requirements of section 6 of
the Executive order. This regulation does
not have federalism implications and does
not impose substantial direct compliance
costs on state and local governments or
preempt state law within the meaning of
the Executive order.
Statement of Availability of IRS
Documents
IRS Notices and other guidance
cited in this preamble are published
in the Internal Revenue Bulletin (or
Cumulative Bulletin) and are available
from the Superintendent of Documents,
U.S. Government Publishing Office,
Washington, DC 20402, or by visiting the
IRS website at https://www.irs.gov.

Adoption of Amendments to the
Regulations
Accordingly, the Treasury Department
and IRS amend 26 CFR part 1 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by revising the entry
for § 1.882-5 to read in part as follows:
Authority: 26 U.S.C. 7805 * * *

357

*****
Section 1.882-5 also issued under
26 U.S.C. 882(c), 26 U.S.C. 864(e), 26
U.S.C. 988(d), and 26 U.S.C. 7701(l).
*****
Par. 2. Section 1.882-5 is amended by
revising the fourth sentence of paragraph
(a)(7)(i) and paragraphs (d)(5)(ii)(B) and
(f) to read as follows:
§ 1.882-5 Determination of interest
deduction.
(a) * * *
(7) * * *
(i) * * * An elected method (other than
the fair market value method under paragraph (b)(2)(ii) of this section, or the published rate election in paragraph (d)(5)(ii)
of this section) must be used for a minimum period of five years before the taxpayer may elect a different method. * * *
*****
(d) * * *
(5) * * *
(ii) * * *
(B) Annual published rate election—
(1) In general. For each taxable year in
which a taxpayer is a bank within the
meaning of section 585(a)(2)(B) (without
regard to the second sentence of section
585(a)(2)(B) or whether any such activities are effectively connected with a trade
or business within the United States), the
taxpayer may elect to compute the interest expense attributable to excess U.S.connected liabilities by using the average
published one-month Term Secured
Overnight Financing Rate published by
the Chicago Mercantile Exchange Group
Benchmark Administration, Ltd. (or any
successor administrator) (“Term SOFR”)
for the taxable year, plus a static spread
adjustment of 0.11448%, rather than the
interest rate provided in paragraph (d)
(5)(ii)(A) of this section. A taxpayer
may elect to apply the rate provided in
this paragraph (d)(5)(ii)(B) on an annual
basis and does not require the consent of
the Commissioner to change this election in a subsequent taxable year. If a
taxpayer that is eligible to make the published rate election either does not file a
timely return or files a calculation with
no excess U.S.-connected liabilities and
it is later determined by the Director of
Field Operations that the taxpayer has

July 24, 2023

excess U.S.-connected liabilities, then the
Director of Field Operations will apply the
interest rate provided under this paragraph
(d)(5)(ii)(B) to the taxpayer’s excess U.S.connected liabilities in determining interest expense.
(2) Transitional rule for taxable years
including June 30, 2023. For a taxable
year that includes June 30, 2023, a taxpayer that makes the annual published
rate election must compute the interest expense attributable to excess U.S.connected liabilities by ratably using
the average 30-day U.S. dollar London
Interbank Offered Rate for the portion
of its taxable year ending on June 30,
2023, and the average one-month Term

July 24, 2023

SOFR, plus a static spread adjustment of
0.11448%, for the portion of its taxable
year beginning on July 1, 2023.
*****
(f) Applicability date—(1) General
rule. Except as provided in paragraph (f)
(3) of this section, this section is applicable
for tax years ending on or after August 15,
2009. A taxpayer, however, may choose
to apply § 1.882-5T, rather than applying
the regulations in this section, for any taxable year beginning on or after August 16,
2008, but before August 15, 2009.
(2) [Reserved]
(3) Applicability date for published
rate election. Paragraphs (a)(7)(i) and (d)
(5)(ii)(B) of this section apply to taxable

358

years ending after June 30, 2023. For taxable years ending before July 1, 2023, see
§ 1.882-5(d)(5)(ii)(B) (as contained in 26
CFR part 1, revised as of April 1, 2023).
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
Approved: June 19, 2023.
Lily Batchelder,
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register June 29,
2023, 8:45 a.m., and published in the issue of the
Federal Register for June 30, 2023, 88 FR 42231)

Bulletin No. 2023–30

Part III
EXPENSES RELATED
TO COVID-19 AND
PREVENTIVE CARE FOR
PURPOSES OF HIGH
DEDUCTIBLE HEALTH
PLANS
Notice 2023-37
PURPOSE
In response to the end of the Coronavirus
Disease 2019 (COVID-19) public health
emergency (referred to in this document
as the PHE) and the National Emergency
Concerning the Novel Coronavirus
Disease 2019 Pandemic1 (referred to in
this document as the COVID-19 National
Emergency), this notice modifies prior
guidance regarding benefits relating to
testing for and treatment of COVID-19
that can be provided by a health plan that
otherwise satisfies the requirements to be
a high deductible health plan (HDHP)
under section 223(c)(2)(A) of the Internal
Revenue Code (Code). Specifically, this
notice provides that the relief described in
Notice 2020-15, 2020-14 IRB 559, applies
only with respect to plan years ending on
or before December 31, 2024.
This notice also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C).
Specifically, this notice clarifies that the
preventive care safe harbor, as described
in Notice 2004-23, 2004-15 IRB 725,
does not include screening (i.e., testing)
for COVID-19, effective as of the date

of publication of this notice.2 This notice
also provides that items and services recommended with an “A” or “B” rating by
the United States Preventive Services
Task Force (USPSTF) on or after March
23, 2010, are treated as preventive care for
purposes of section 223(c)(2)(C), regardless of whether these items and services
must be covered, without cost sharing,
under Public Health Service Act3 (PHS
Act) section 2713.
BACKGROUND
Section 223 of the Code permits eligible individuals to deduct contributions
to Health Savings Accounts (HSAs).4
Among the requirements for an individual
to qualify as an eligible individual under
section 223(c)(1) is that the individual
be covered under an HDHP and have no
disqualifying health coverage. As defined
in section 223(c)(2), an HDHP is a health
plan that satisfies certain requirements,
including requirements with respect to
minimum deductibles and maximum outof-pocket expenses.
Generally, under section 223(c)(2)
(A), an HDHP is not permitted to provide benefits for any year until the minimum deductible for that year is satisfied.
However, section 223(c)(2)(C) provides a
safe harbor for the absence of a deductible
for preventive care. Under section 223(c)
(2)(C), “[a] plan shall not fail to be treated
as a high deductible health plan by reason
of failing to have a deductible for preventive care (within the meaning of section
1861 of the Social Security Act, except
as otherwise provided by the Secretary).”

Therefore, an HDHP may provide preventive care benefits without a deductible,
or with a deductible below the minimum
annual deductible otherwise required by
section 223(c)(2)(A). To be a preventive
care benefit as defined for purposes of
section 223, the benefit must either be
described as preventive care for purposes
of section 1861 of the Social Security Act
(SSA) or be determined to be preventive
care in guidance issued by the Department
of the Treasury (Treasury Department)
and the Internal Revenue Service (IRS).5
Notice 2013-57, 2013-40 IRB 293, provides that a health plan will not fail to
qualify as an HDHP under section 223(c)
(2) merely because it provides without
a deductible the preventive care health
services required under section 2713 of
the PHS Act to be covered without cost
sharing by a group health plan or a health
insurance issuer offering group or individual health insurance coverage.
In March 2020, the Treasury
Department and the IRS issued Notice
2020-15. The notice provides that due to
the unprecedented public health emergency posed by COVID-19, and the need
to eliminate potential administrative and
financial barriers to testing for and treatment of COVID-19, a health plan that
otherwise satisfies the requirements to be
an HDHP under section 223(c)(2)(A) will
not fail to be an HDHP merely because the
health plan provides benefits for medical
care services and items purchased related
to testing for and treatment of COVID-19
prior to the satisfaction of the applicable
minimum deductible.6 As a result, individuals covered by such a plan will not

On March 13, 2020, by Proclamation 9994 (85 FR 15337 (March 18, 2020)), the President declared a national emergency concerning the COVID-19 pandemic beginning March 1, 2020,
under both the National Emergencies Act (Pub. L. 94-412, 90 Stat. 1255 (1976)) and the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Pub. L. 93-288, 88 Stat. 143 (1974))
(the Stafford Act). The national emergency has since been extended, with the last announcement of continuation made by the President on February 10, 2023. See The White House, Notice
on the Continuation of the National Emergency Concerning the Coronavirus Disease 2019 (COVID-19) Pandemic (Feb. 10, 2023), available at https://www.whitehouse.gov/briefing-room/
presidential-actions/2023/02/10/notice-on-the-continuation-of-the-national-emergency-concerning-the-coronavirus-disease-2019-covid-19-pandemic-3/. Subsequently, the President signed
H.J. Res. 7 (Pub. L. 118-3, 137 Stat. 6), ending the national emergency under the National Emergencies Act on April 10, 2023, and the Federal Emergency Management Agency gave notice
in the Federal Register that the national emergency under the Stafford Act would end on May 11, 2023. See https://www.govinfo.gov/content/pkg/FR-2023-02-10/pdf/2023-02964.pdf.
2
Although the preventive care safe harbor does not include testing for COVID-19, an HDHP may continue to provide benefits related to testing for COVID-19 before satisfaction of the
applicable minimum deductible for plan years ending on or before December 31, 2024, pursuant to this notice.
3
See Pub. L. 111-148, 124 Stat. 119 (March 23, 2010).
4
Tax-favored contributions may also be made on behalf of eligible individuals by their employers. See Q&A 19 of Notice 2004-2 (2004-2 IRB 269).
5
The determination of whether an item or service is preventive care for these purposes is unrelated to the determination of whether an amount paid for an item or service is medical care
under section 213(d) of the Code as an amount paid for the prevention of disease. See Rev. Rul. 79-66 (1979-1 CB 114); Daniels v. Commissioner, 41 T.C. 324 (1963); and Stringham v.
Commissioner, 12 T.C. 580 (1949), (acq. 1950-2 CB 4), aff’d per curiam, 183 F.2d 579 (6th Cir. 1950).
6
Notice 2020-15 permitted, but not did require, an HDHP to provide these health benefits prior to the satisfaction of the applicable minimum deductible.
1

Bulletin No. 2023–30

359

July 24, 2023

fail to be eligible individuals under section 223(c)(1) merely because of the provision of those health benefits prior to the
satisfaction of the applicable minimum
deductible.
On January 31, 2020, the Secretary
of Health and Human Services (HHS)
declared that a nationwide PHE existed
as of January 27, 2020, as a result of
COVID-19.7 This declaration was continually renewed by the HHS Secretary, most
recently effective February 11, 2023.8 On
January 30 and February 9, 2023, respectively, the President and the HHS Secretary
announced their intent to end the COVID19 National Emergency and the PHE on
May 11, 2023.9 On February 10, 2023, the
Federal Emergency Management Agency
gave notice in the Federal Register that
the national emergency under the Stafford
Act would end on May 11, 2023.10 On
April 10, 2023, the President signed H.J.
Res. 7 ending the national emergency
under the National Emergencies Act on
April 10, 2023.11
On March 29, 2023, the Departments
of Labor, HHS, and the Treasury (the
Departments) issued Frequently Asked
Questions (FAQs) under the heading,
FAQs About Families First Coronavirus
Response Act, Coronavirus Aid, Relief,
and Economic Security Act, and Health
Insurance Portability and Accountability
Act Implementation Part 58 (FAQs
Part 58), which address changes in various rules as the result of the end of the
COVID-19 National Emergency and the
PHE.12 Question and Answer 8 of FAQs
Part 58 states that, while Notice 2020-15
applies until further guidance is issued,

the Treasury Department and the IRS are
reviewing the appropriateness of continuing the relief in Notice 2020-15 given the
anticipated end of the COVID-19 National
Emergency and the PHE and anticipate
issuing additional guidance in the near
future.
GUIDANCE
The Treasury Department and the IRS
have determined that, with the end of the
COVID-19 National Emergency and the
PHE, the relief described in Notice 202015 is no longer needed. Accordingly, this
notice modifies Notice 2020-15 to provide
that the relief described in Notice 202015 applies only with respect to plan years
ending on or before December 31, 2024.
For subsequent plan years, an HDHP is
not permitted to provide health benefits
associated with testing for and treatment
of COVID-19 without a deductible, or
with a deductible below the minimum
deductible (for self-only or family coverage) for an HDHP, except as otherwise
provided in this notice.
The Treasury Department and the IRS
note that Notice 2004-23 provides that
preventive care under section 223(c)(2)
(C) includes, but is not limited to, screening services as specified in the Appendix
to Notice 2004-23. However, preventive
care does not generally include any service or benefit intended to treat an existing illness, injury, or condition. As part
of the preventive care safe harbor, the
Appendix to Notice 2004-23 includes
Infectious Diseases Screening Services
for the following infections: Bacteriuria,

Chlamydial
Infection,
Gonorrhea,
Hepatitis B Virus Infection, Hepatitis C,
Human Immunodeficiency Virus (HIV)
Infection, Syphilis, and Tuberculosis
Infection. Screenings for common and
episodic illnesses, such as the flu, are
not included on the list. Accordingly, the
Treasury Department and the IRS are of
the view that COVID-19 differs from the
types of infectious diseases included in
the preventive care safe harbor as specified in Notice 2004-23, and this notice
clarifies that the preventive care safe harbor as described in Notice 2004-23 does
not include screening (i.e., testing) for
COVID-19, effective as of the date of
publication of this notice.
In addition, the Treasury Department
and the IRS note that on April 13, 2023,
the Departments issued FAQs entitled,
FAQs About Affordable Care Act and
Coronavirus Aid, Relief, and Economic
Security Act Implementation Part 59
(FAQs Part 59), which provide initial guidance on how the decision in Braidwood
Management Inc. v. Becerra13 affects the
requirement to cover preventive services
without cost sharing under PHS Act section 2713.14 Question and Answer 7 of
FAQs Part 59 states that, until further
guidance is issued, items and services recommended with an “A” or “B” rating by
the USPSTF on or after March 23, 2010,
will be treated as preventive care for purposes of section 223(c)(2)(C) of the Code,
regardless of whether these items and services must be covered, without cost sharing, under PHS Act section 2713.
Consistent with the position taken in
Question and Answer 7 of FAQs Part

See HHS Office of the Assistant Secretary for Preparedness and Response, Determination of the HHS Secretary that a Public Health Emergency Exists (Jan. 31, 2020), available at https://
www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
8
See HHS Office of the Assistant Secretary for Preparedness and Response, Renewal of Determination That A Public Health Emergency Exists (Feb. 9, 2023), available at https://aspr.hhs.
gov/legal/PHE/Pages/COVID19-9Feb2023.aspx.
9
See Executive Office of the President, Office of Management and Budget, Statement of Administration Policy: H.R. 382 and H.J. Res. 7 (Jan. 30, 2023), available at https://www.whitehouse.
gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf; Letter to U.S. Governors from HHS Secretary Xavier Becerra on renewing COVID-19 Public Health Emergency (PHE)
(Feb. 9, 2023), available at https://www.hhs.gov/about/news/2023/02/09/letter-us-governors-hhs-secretary-xavier-becerra-renewing-covid-19-public-health-emergency.html; Executive
Office of the President, Notice on the Continuation of the National Emergency Concerning the Coronavirus Disease 2019 (COVID-19) Pandemic (Feb. 10, 2023), available at https://www.
whitehouse.gov/briefing-room/presidential-actions/2023/02/10/notice-on-the-continuation-of-the-national-emergency-concerning-the-coronavirus-disease-2019-covid-19-pandemic-3/.
10
See https://www.govinfo.gov/content/pkg/FR-2023-02-10/pdf/2023-02964.pdf.
11
The April 10, 2023, end of the national emergency under the National Emergencies Act did not change the anticipated end date of the PHE or the end date of the national emergency under
the Stafford Act.
12
See https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58 and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-58.
pdf. Question and Answer 5 of FAQs Part 58 states that the Treasury Department, the IRS, and the Department of Labor “anticipate that the Outbreak Period will end July 10, 2023 (60 days
after the anticipated end of the COVID-19 National Emergency).” The Treasury Department and the IRS, in coordination with the Department of Labor, clarify that the Outbreak Period ends
July 10, 2023, irrespective of the last day of the national emergency under the National Emergencies Act or the last day of the national emergency under the Stafford Act.
13
Civil Action No. 4:20-cv-00283-O (N.D. Tex. March 30, 2023). On May 15, 2023, the Fifth Circuit issued an administrative stay of the decision pending appeal, and the Fifth Circuit issued
a further Order regarding the stay pending appeal on June 13, 2023.
14
See https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-59 and https://www.cms.gov/files/document/faqs-part-59.pdf.
7

July 24, 2023

360

Bulletin No. 2023–30

59, this notice provides that items and
services recommended with an “A” or
“B” rating by the USPSTF on or after
March 23, 2010, are treated as preventive care for purposes of section 223(c)
(2)(C) of the Code, regardless of
whether these items and services must
be covered, without cost sharing, under
PHS Act section 2713. Accordingly, if
COVID-19 testing were to be recommended with an “A” or “B” rating by
the USPSTF, then that testing would be
treated as preventive care under section 223(c)(2)(C) of the Code, regardless of whether it must be covered,
without cost sharing, under PHS Act
section 2713.
EFFECT ON OTHER GUIDANCE
Notice 2020-15 is modified. Notice
2004-23 is clarified.

DRAFTING INFORMATION
The principal author of this notice
is Jennifer Friedman of the Office of
Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes), though other
Treasury Department and IRS officials
participated in its development. For further information on the provisions of this
notice, contact Jennifer Friedman at (202)
317-5500 (not a toll-free number).

2023 Marginal Production
Rates
Notice 2023-50
This notice announces the applicable
percentage under § 613A of the Internal

Revenue Code to be used in determining
percentage depletion for marginal properties for the 2023 calendar year.
Section 613A(c)(6)(C) defines the term
“applicable percentage” for purposes of
determining percentage depletion for oil
and gas produced from marginal properties. The applicable percentage is the
percentage (not greater than 25 percent)
equal to the sum of 15 percent, plus one
percentage point for each whole dollar
by which $20 exceeds the reference price
(determined under § 45K(d)(2)(C)) for
crude oil for the calendar year preceding
the calendar year in which the taxable year
begins. The reference price determined
under § 45K(d)(2)(C) for the 2022 calendar year is $93.97.
The following table contains the applicable percentages for marginal production
for taxable years beginning in calendar
years 1991 through 2023.

Notice 2023-50
APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION
Calendar Year
Applicable Percentage
1991
15 percent
1992
18 percent
1993
19 percent
1994
20 percent
1995
21 percent
1996
20 percent
1997
16 percent
1998
17 percent
1999
24 percent
2000
19 percent
2001
15 percent
2002
15 percent
2003
15 percent
2004
15 percent
2005
15 percent
2006
15 percent
2007
15 percent
2008
15 percent
2009
15 percent
2010
15 percent
2011
15 percent
2012
15 percent
2013
15 percent

Bulletin No. 2023–30

361

July 24, 2023

Notice 2023-50
APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION
Calendar Year
Applicable Percentage
2014
15 percent
2015
15 percent
2016
15 percent
2017
15 percent
2018
15 percent
2019
15 percent
2020
15 percent
2021
15 percent
2022
15 percent
2023
15 percent

The principal author of this notice
is Elimelech Brander of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries). For further information regarding this notice contact Mr.
Brander at (202) 317-6853 (not a toll-free
number).

Credit for Renewable
Electricity Production and
Publication of Inflation
Adjustment Factor and
Reference Price for
Calendar Year 2023
Notice 2023-51
This notice publishes the inflation
adjustment factor and reference price for
calendar year 2023 for the renewable electricity production credit under section 45
of the Internal Revenue Code (section 45
credit). The 2023 inflation adjustment factor and reference price are used in determining the availability of the credit and
apply to calendar year 2023 sales of kilowatt hours of electricity produced in the
United States or a possession thereof from
qualified energy resources.

BACKGROUND
Section 45 was amended by section
13101 of Public Law 117-169, 136 Stat.
1818 (August 16, 2022), commonly
known as the Inflation Reduction Act of
2022 (IRA). The IRA changed the manner
in which the section 45 credit amounts are
calculated for any qualified facility placed
in service after December 31, 2021. The
IRA also removed the one-half reduction
of the credit amount under section 45(b)
(4)(A) for qualified hydropower facilities
and marine and hydrokinetic renewable
energy facilities placed in service after
December 31, 2022. In the case of any
qualified facility placed in service before
January 1, 2022, the section 45 credit
amounts are determined under the calculation rules provided by the prior version
of section 45.
As amended by the IRA, section 45(b)
(6)(A) provides that, in the case of any
qualified facility that satisfies the requirements of section 45(b)(6)(B), the credit
amount determined under section 45(a)
(determined after the application of section 45(b)(1) through (5) and without
regard to section 45(b)(6)) is equal to such
amount multiplied by 5. A qualified facility satisfies the requirements of section
45(b)(6)(B) if it is placed in service after
December 31, 2021, and it is one of the
following: (i) a facility with a maximum

net output of less than 1 megawatt (as
measured in alternating current); (ii) a
facility the construction of which began
prior to January 29, 2023, which is the
date that is 60 days after the publication of
the guidance with respect to the requirements of section 45(b)(7)(A) (prevailing
wage requirements) and section 45(b)(8)
(apprenticeship requirements);1 or (iii) a
facility that satisfies the requirements of
section 45(b)(7)(A) and (8). The IRA also
added bonus credit amounts with respect
to qualified facilities placed in service after
December 31, 2022, that meet domestic
content requirements under section 45(b)
(9)2 or energy community requirements
under section 45(b)(11).3
The IRA amended the phaseout of the
section 45 credit for wind facilities under
section 45(b)(5) such that it does not
apply to facilities placed in service after
December 31, 2021. The IRA also added
a new phaseout of the section 45 credit
under section 45(b)(10) in the case of
qualified facilities placed in service after
December 31, 2022, for taxpayers making
an elective payment election under section
6417. The IRA also amended the credit
amount reduction under section 45(b)(3)
in the case of qualified facilities the construction of which began after August 16,
2022.
The IRA amended section 45(d)(4) to
restore the section 45 credit for electricity

See Notice 2022-61, 2022-52 I.R.B. 560 (Dec. 27, 2022), for additional information regarding the prevailing wage and apprenticeship requirements.
See Notice 2023-38, 2023-22 I.R.B. 872 (May 12, 2023), for additional information regarding the domestic content bonus credit.
3
See Notice 2023-45, 2023-29 I.R.B. 317 (July 17, 2023), for additional information regarding the energy community bonus credit.
1
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July 24, 2023

362

Bulletin No. 2023–30

produced in solar energy facilities in the
case of qualified facilities placed in service after December 31, 2021, and the
construction of which begins before
January 1, 2025. Effective for facilities
placed in service after December 31, 2022,
the IRA amended the definition of marine
and hydrokinetic renewable energy under
section 45(c)(10) and the definition of
a marine and hydrokinetic renewable
energy facility under section 45(d)(11).
The IRA extended certain deadlines in the
definitions under section 45(d) for wind
facilities, closed-loop biomass facilities,
open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash
facilities, qualified hydropower facilities,
and marine and hydrokinetic renewable
energy facilities.
Section 45(a) provides that the renewable electricity production credit for any
tax year is an amount equal to the product
of the kilowatt hours of specified electricity produced by the taxpayer and sold to
an unrelated person during the tax year
multiplied by 1.5 cents (in the case of a
qualified facility placed in service before
January 1, 2022) or 0.3 cents (in the case
of a qualified facility placed in service
after December 31, 2021). This electricity
must be produced from qualified energy
resources and at a qualified facility during
the 10-year period beginning on the
date the facility was originally placed in
service.
Section 45(b)(1) provides that the
amount of the credit determined under
section 45(a) is reduced by an amount
which bears the same ratio to the amount
of the credit as the amount by which the
reference price for the calendar year in
which the sale occurs exceeds 8 cents,
bears to 3 cents. Under section 45(b)(2),
the 1.5 cent (or 0.3 cent) amount in section 45(a) and the 8 cent amount in section
45(b)(1) are each adjusted by multiplying
such amount by the inflation adjustment
factor for the calendar year in which the
sale occurs. In the case of any qualified
facility placed in service before January
1, 2022, if any amount as increased under
section 45(b)(2) is not a multiple of 0.1
cent, such amount is rounded to the nearest multiple of 0.1 cent. In the case of any

4

qualified facility placed in service after
December 31, 2021, if the 0.3 cent amount
as increased under section 45(b)(2) is not
a multiple of 0.05 cent, such amount is
rounded to the nearest multiple of 0.05
cent.
In the case of electricity produced in
open-loop biomass facilities, landfill gas
facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities, section
45(b)(4)(A) requires the amount in effect
under section 45(a)(1) (determined before
rounding as required by section 45(b)(2))
to be reduced by one-half. As amended
by the IRA, the one-half reduction under
section 45(b)(4)(A) no longer applies to
qualified hydropower facilities and marine
and hydrokinetic renewable energy facilities placed in service after December 31,
2022.
Section 45(b)(5) provides that in the
case of any qualified wind facility placed
in service before January 1, 2022, the
amount of the credit determined under
section 45(a) (determined after the application of section 45(b)(1), (2), and (3) and
without regard to section 45(b)(5)) shall
be reduced by (A) in the case of any facility the construction of which began after
December 31, 2016, and before January 1,
2018, 20 percent, (B) in the case of any
facility the construction of which began
after December 31, 2017, and before
January 1, 2019, 40 percent, (C) in the
case of any facility the construction of
which began after December 31, 2018,
and before January 1, 2020, 60 percent,
and (D) in the case of any facility the construction of which began after December
31, 2019, and before January 1, 2022, 40
percent.
Section 45(c)(1) defines qualified
energy resources as wind, closed-loop
biomass, open-loop biomass, geothermal energy, solar energy, small irrigation
power,4 municipal solid waste, qualified
hydropower production, and marine and
hydrokinetic renewable energy.
Section 45(d)(1) defines a qualified
facility using wind to produce electricity as any facility owned by the taxpayer
that is originally placed in service after
December 31, 1993, and the construction

of which begins before January 1, 2025.
See section 45(e)(7) for rules relating to
the inapplicability of the credit to electricity sold to utilities under certain contracts.
Section 45(d)(2)(A) defines a qualified facility using closed-loop biomass to
produce electricity as any facility owned
by the taxpayer that is originally placed
in service after December 31, 1992, and
the construction of which begins before
January 1, 2025, or owned by the taxpayer
which before January 1, 2025, is originally placed in service and modified to use
closed-loop biomass to co-fire with coal,
with other biomass, or with both, but only
if the modification is approved under the
Biomass Power for Rural Development
Programs or is part of a pilot project of
the Commodity Credit Corporation as
described in 65 FR 63052. For purposes
of section 45(d)(2)(A)(ii), a facility shall
be treated as modified before January 1,
2025, if the construction of such modification begins before such date. Section 45(d)
(2)(C) provides that in the case of a qualified facility described in section 45(d)(2)
(A)(ii), the 10-year period referred to in
section 45(a) is treated as beginning no
earlier than the date of the enactment of
section 45(d)(2)(C)(i) (October 22, 2004),
and if the owner of such facility is not the
producer of the electricity, the person eligible for the credit allowable under section
45(a) is the lessee or the operator of such
facility. A qualified facility using closedloop biomass includes a new unit placed
in service after the date of the enactment
of section 45(d)(2)(B) (October 3, 2008)
in connection with a qualified facility
using closed-loop biomass, but only to the
extent of the increased amount of electricity produced at the facility by reason of
such new unit.
Section 45(d)(3)(A) defines a qualified facility using open-loop biomass to
produce electricity as any facility owned
by the taxpayer which in the case of a
facility using agricultural livestock waste
nutrients, is originally placed in service
after the date of the enactment of section
45(d)(3)(A)(i)(I) (October 22, 2004) and
the construction of which begins before
January 1, 2025, and the nameplate capacity rating of which is not less than 150

The section 45 credit is expired for small irrigation power facilities.

Bulletin No. 2023–30

363

July 24, 2023

kilowatts, and in the case of any other
facility, the construction of which begins
before January 1, 2025. In the case of any
facility described in section 45(d)(3)(A),
if the owner of such facility is not the producer of the electricity, section 45(d)(3)
(C) provides that the person eligible for
the credit allowable under section 45(a) is
the lessee or the operator of such facility.
A qualified facility using open-loop biomass includes a new unit placed in service
after the date of the enactment of section
45(d)(3)(B) (October 3, 2008) in connection with a qualified facility using openloop biomass, but only to the extent of the
increased amount of electricity produced
at the facility by reason of such new unit.
Section 45(d)(4) defines a qualified
facility using geothermal energy to produce electricity as any facility owned by
the taxpayer that is originally placed in
service after the date of the enactment of
section 45(d)(4) (October 22, 2004) and
the construction of which begins before
January 1, 2025. A qualified facility using
geothermal energy does not include any
property described in section 48(a)(3) the
basis of which is taken into account by the
taxpayer for purposes of determining the
energy credit under section 48.
As amended by the IRA and effective
for solar energy facilities placed in service
after December 31, 2021, section 45(d)(4)
also defines a qualified facility using solar
energy to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the
enactment of section 45(d)(4) (October
22, 2004) and the construction of which
begins before January 1, 2025. A qualified
facility using solar energy does not include
any property described in section 48(a)(3)
the basis of which is taken into account by
the taxpayer for purposes of determining
the energy credit under section 48.
Section 45(d)(6) defines a qualified
facility using gas derived from the biodegradation of municipal solid waste to
produce electricity as any facility owned
by the taxpayer that is originally placed in
service after the date of the enactment of
section 45(d)(6) (October 22, 2004) and
the construction of which begins before
January 1, 2025.
Section 45(d)(7) defines a qualified
facility (other than a facility described in
section 45(d)(6)) that uses municipal solid

July 24, 2023

waste to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the
enactment of section 45(d)(7) (October
22, 2004) and the construction of which
begins before January 1, 2025. A qualified facility using municipal solid waste
includes a new unit placed in service in
connection with a facility placed in service on or before the date of the enactment
of section 45(d)(7), but only to the extent
of the increased amount of electricity produced at the facility by reason of such new
unit.
Section 45(d)(9) defines a qualified
facility producing qualified hydroelectric
production described in section 45(c)(8)
as (i) any facility producing incremental
hydropower production, but only to the
extent of its incremental hydropower production attributable to efficiency improvements or additions to capacity described in
section 45(c)(8)(B) placed in service after
the date of the enactment of section 45(d)
(9) (August 8, 2005) and before January
1, 2025, and (ii) any other facility placed
in service after the date of the enactment
of section 45(d)(9) (August 8, 2005) and
the construction of which begins before
January 1, 2025. Section 45(d)(9)(B) provides that, in the case of a qualified facility described in section 45(d)(9)(A), the
10-year period referred to in section 45(a)
shall be treated as beginning on the date
the efficiency improvements or additions
to capacity are placed in service. Section
45(d)(9)(C) provides that for purposes
of section 45(d)(9)(A)(i), an efficiency
improvement or addition to capacity shall
be treated as placed in service before
January 1, 2025, if the construction of
such improvement or addition begins
before such date.
As amended by the IRA, section 45(d)
(11) provides in the case of a facility
producing electricity from marine and
hydrokinetic renewable energy, the term
“qualified facility” means any facility
owned by the taxpayer which has a nameplate capacity rating of at least 150 kilowatts (or at least 25 kilowatts in the case of
a facility placed in service after December
31, 2022), and is originally placed in service on or after the date of the enactment
of section 45(d)(11) (October 3, 2008) and
the construction of which begins before
January 1, 2025.

364

Section 45(e)(2)(A) requires the
Secretary to determine and publish in the
Federal Register each calendar year the
inflation adjustment factor and the reference price for such calendar year. The
inflation adjustment factor and the reference price for the 2023 calendar year were
published in the Federal Register at 88 FR
40400 on June 21, 2023.
Section 45(e)(2)(B) defines the inflation adjustment factor for a calendar year
as a fraction the numerator of which is
the GDP implicit price deflator for the
preceding calendar year and the denominator of which is the GDP implicit price
deflator for the calendar year 1992. The
term “GDP implicit price deflator” means
the most recent revision of the implicit
price deflator for the gross domestic product as computed and published by the
Department of Commerce before March
15 of the calendar year.
Section 45(e)(2)(C) provides that the
reference price with respect to a calendar year is the Secretary’s determination
of the annual average contract price per
kilowatt hour of electricity generated
from the same qualified energy resource
and sold in the previous year in the United
States. Only contracts entered into after
December 31, 1989 are taken into account.
INFLATION ADJUSTMENT
FACTOR AND REFERENCE PRICE
The inflation adjustment factor for
calendar year 2023 for qualified energy
resources is 1.8909.
The reference price for calendar year
2023 for facilities producing electricity from wind (based upon information
provided by the Department of Energy)
is 3.74 cents per kilowatt hour. The reference prices for facilities producing
electricity from closed-loop biomass,
open-loop biomass, geothermal energy,
solar energy, municipal solid waste, qualified hydropower production, and marine
and hydrokinetic energy have not been
determined for calendar year 2023.
PHASEOUT CALCULATION
Because the 2023 reference price for
electricity produced from wind (3.74 cents
per kilowatt hour) does not exceed 8 cents
multiplied by the inflation adjustment

Bulletin No. 2023–30

factor (1.8909), the phaseout of the credit
provided in section 45(b)(1) does not
apply to such electricity sold during calendar year 2023. However, section 45(b)
(5) provides an additional phaseout of the
credit for wind facilities placed in service before January 1, 2022, and the construction of which began after December
31, 2016. For electricity produced from
closed-loop biomass, open-loop biomass,
geothermal energy, solar energy, municipal solid waste, qualified hydropower
production, and marine and hydrokinetic
energy, the phaseout of the credit provided
in section 45(b)(1) does not apply to such
electricity sold during calendar year 2023.
CREDIT AMOUNT FOR A
QUALIFIED FACILITY PLACED
IN SERVICE BEFORE JANUARY 1,
2022
As required by section 45(b)(2), the
1.5 cent amount provided in section
45(a)(1) is adjusted by multiplying such
amount by the inflation adjustment factor for the calendar year in which the
sale occurs. If any amount as increased
under section 45(b)(2) is not a multiple
of 0.1 cent, such amount is rounded to
the nearest multiple of 0.1 cent. In the
case of electricity produced in open-loop
biomass facilities, landfill gas facilities,
trash facilities, qualified hydropower
facilities, and marine and hydrokinetic
renewable energy facilities, section 45(b)
(4)(A) requires the amount in effect
under section 45(a)(1) (before rounding
to the nearest 0.1 cent as required by section 45(b)(2)) to be reduced by one-half.
Under the calculation required by section 45(b)(2), the credit for renewable

Bulletin No. 2023–30

electricity production for calendar year
2023 determined under section 45(a) is
2.8 cents per kilowatt hour on the sale
of electricity produced in any qualified
facility placed in service before January
1, 2022, from the qualified energy
resources of wind, closed-loop biomass,
and geothermal energy, and 1.4 cents
per kilowatt hour on the sale of electricity produced in any qualified facility
placed in service before January 1, 2022,
from the qualified energy resources of
open-loop biomass, landfill gas, trash,
qualified hydropower, and marine and
hydrokinetic energy.
CREDIT AMOUNT FOR A
QUALIFIED FACILITY PLACED IN
SERVICE AFTER DECEMBER 31,
2021
As required by section 45(b)(2), the 0.3
cent amount provided in section 45(a)(1)
is adjusted by multiplying such amount by
the inflation adjustment factor for the calendar year in which the sale occurs. If the
0.3 cent amount as adjusted for inflation
is not a multiple of 0.05 cent, the amount
is rounded to the nearest multiple of 0.05
cent. In the case of electricity produced in
open-loop biomass facilities, landfill gas
facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities, section
45(b)(4)(A) requires the amount in effect
under section 45(a)(1) (determined before
rounding as required by section 45(b)(2))
to be reduced by one-half.
Under the calculation required by section 45(b)(2), the credit for renewable
electricity production for calendar year
2023 determined under section 45(a) is

365

0.55 cents per kilowatt hour on the sale of
electricity produced in any qualified facility placed in service after December 31,
2021, from the qualified energy resources
of wind, closed-loop biomass, geothermal
energy, and solar energy, and 0.3 cents
per kilowatt hour on the sale of electricity
produced in any qualified facility placed
in service after December 31, 2021, from
the qualified energy resources of openloop biomass, landfill gas, trash, qualified
hydropower, and marine and hydrokinetic
renewable energy.
CREDIT AMOUNT FOR
QUALIFIED HYDROPOWER
FACILITIES AND MARINE AND
HYDROKINETIC RENEWABLE
ENERGY FACILITIES PLACED IN
SERVICE AFTER DECEMBER 31,
2022
Under the calculation required by section 45(b)(2), the credit for renewable
electricity production for calendar year
2023 determined under section 45(a) is
0.55 cents per kilowatt hour on the sale of
electricity produced in any qualified facility placed in service after December 31,
2022, from the qualified energy resources
of qualified hydropower and marine and
hydrokinetic renewable energy.
DRAFTING AND CONTACT
INFORMATION
The principal author of this notice is
Charles Hyde of the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). For further information
regarding this notice contact Mr. Hyde at
(202) 317-6853 (not a toll-free number).

July 24, 2023

Part IV
Transitional Guidance
with Respect to Stock
Repurchase Excise Tax
Announcement 2023-18
This announcement confirms that no
taxpayer is required to report the new
excise tax imposed by section 4501 of the
Internal Revenue Code (Code) on repurchases of corporate stock during a covered
corporation’s taxable year (stock repurchase excise tax) on any returns filed with
the Internal Revenue Service (IRS), or to
make any payments of such tax, before the
time specified in forthcoming regulations.
The stock repurchase excise tax applies
to repurchases made after December
31, 2022. On January 17, 2023, the
Department of the Treasury (Treasury
Department) and the IRS published Notice
2023-2, 2023-3 I.R.B. 374, to provide initial guidance regarding the application of
the stock repurchase excise tax. The notice
announced that the Treasury Department
and the IRS intend to issue forthcoming
regulations addressing the application of
the stock repurchase excise tax. The notice
describes certain rules for determining the
amount of stock repurchase excise tax

July 24, 2023

owed that the Treasury Department and
the IRS intend to include in the forthcoming regulations and provides that taxpayers
may rely on these rules until the publication of the forthcoming regulations.
Additionally, the notice describes anticipated procedures for reporting and paying any liability for the stock repurchase
excise tax that the Treasury Department
and the IRS intend to include in the
forthcoming regulations. Specifically,
the notice states that the forthcoming
regulations are expected to provide that
(i) the stock repurchase excise tax will
be reported once per taxable year on the
Form 720, Quarterly Federal Excise Tax
Return, that is due for the first full quarter
after the close of the taxpayer’s taxable
year, (ii) the deadline for payment of the
stock repurchase excise tax will be the
same as the filing deadline, and (iii) no
extensions will be permitted for reporting
or paying the stock repurchase excise tax.
For those taxpayers with a taxable year
ending after December 31, 2022, but prior
to publication of the forthcoming regulations, such regulations are expected
to provide that any liability for the stock
repurchase excise tax for such taxable
year will be reported on the Form 720
that is due for the first full quarter after
the date of publication of the forthcoming

366

regulations, and that the deadline for payment of the stock repurchase excise tax
is the same as the filing deadline. There
will be no addition to tax under section
6651(a) of the Code (or any other provision of the Code) for failure to file a return
reporting the stock repurchase excise tax,
or for failure to pay the stock repurchase
excise tax, before the time specified in the
forthcoming regulations.
The Treasury Department and the IRS
expect the forthcoming regulations will
require covered corporations to keep
complete and detailed records to establish
accurately any amount of stock repurchases (including repurchases made after
December 31, 2022, but before the forthcoming regulations are published) and to
retain these records as long as their contents may become material.
DRAFTING INFORMATION
The principal author of this announcement is Samuel G. Trammell of the
Office of the Associate Chief Counsel
(Corporate). For further information
regarding this announcement contact Mr.
Trammell at (202) 317-6975 (not a tollfree number).

Bulletin No. 2023–30

Deletions From Cumulative
List of Organizations,
Contributions to Which are
Deductible Under Section
170 of the Code
Announcement 2023-19
Table of Contents
The Internal Revenue Service has
revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.

Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not precluded from disallowing a deduction for
any contributions made after an organization ceases to qualify under section 170(c)
(2) if the organization has not timely filed
a suit for declaratory judgment under section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.

Effective Date of
Revocation
01/01/2018
01/01/2018
01/01/2018
01/01/2018
01/01/2018
01/01/2018
01/01/2018
01/01/2018
01/01/2018

NAME OF ORGANIZATION
AMERICAN CANCER OF SOCIETY FLORIDA
AMERICAN CANCER SOCIETY OF WASHINGTON
AMERICAN CANCER SOCIETY OF MASSACHUSETTS
AMERICAN CANCER SOCIETY OF BALTIMORE
AMERICAN CANCER SOCIETY OF CINNCINATI
AMERICAN CANCER PF OF GEORGIA
AMERICAN CANCER SOCIETY OF MARYLAND
AMERICAN CANCER SOCIETY OF OHIO
CHILDREN’S CANCER SOCIETY OF TEXAS

Bulletin No. 2023–30

If on the other hand a suit for declaratory judgment has been timely filed,
contributions from individuals and organizations described in section 170(c)(2)
that are otherwise allowable will continue
to be deductible. Protection under section
7428(c) would begin on July 24, 2023 and
would end on the date the court first determines the organization is not described
in section 170(c)(2) as more particularly
set for in section 7428(c)(1). For individual contributors, the maximum deduction
protected is $1,000, with a husband and
wife treated as one contributor. This benefit is not extended to any individual, in
whole or in part, for the acts or omissions
of the organization that were the basis for
revocation.

367

LOCATION
New York, NY
New York, NY
New York NY
New York, NY
New York, NY
New York, NY
New York, NY
New York, NY
New York, NY

July 24, 2023

Deletions From Cumulative
List of Organizations,
Contributions to Which are
Deductible Under Section
170 of the Code
Announcement 2023-20
Table of Contents
The Internal Revenue Service has
revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.

Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not precluded from disallowing a deduction for
any contributions made after an organization ceases to qualify under section 170(c)
(2) if the organization has not timely filed
a suit for declaratory judgment under section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.

NAME OF ORGANIZATION
AMERICAN CANCER SOCIETY OF GREEN BAY
AMERICAN CANCER SOCIETY OF DETROIT
AMERICAN CANCER SOCIETY FOR CHILDREN OF NEW YORK
COACHELLA VALLEY CHURCH
AMERICAN CANCER FDN OF BROOKLYN
AMERICAN CANCER FDN OF COLUMBUS INC.
AMERICAN CANCER FDN OF AMERICA INC
AMERICAN CANCER FDN OF GEORGIA
AMERICAN CANCER FDN OF GREEN BAY INC.
AMERICAN CANCER FDN OF FRESNO

July 24, 2023

368

If on the other hand a suit for declaratory judgment has been timely filed,
contributions from individuals and organizations described in section 170(c)(2)
that are otherwise allowable will continue
to be deductible. Protection under section
7428(c) would begin on July 24, 2023 and
would end on the date the court first determines the organization is not described
in section 170(c)(2) as more particularly
set for in section 7428(c)(1). For individual contributors, the maximum deduction
protected is $1,000, with a husband and
wife treated as one contributor. This benefit is not extended to any individual, in
whole or in part, for the acts or omissions
of the organization that were the basis for
revocation.

Effective Date of
Revocation
01/01/2021
01/01/2021
01/01/2021
01/01/2017
01/01/2021
01/01/2021
01/01/2021
01/01/2021
01/01/2021
01/01/2021

LOCATION
STATEN ISLAND, NY
STATEN ISLAND, NY
STATEN ISLAND, NY
SAN JOSE, CA
STATEN ISLAND, NY
STATEN ISLAND, NY
STATEN ISLAND, NY
STATEN ISLAND, NY
STATEN ISLAND, NY
STATEN ISLAND, NY

Bulletin No. 2023–30

Notice of Proposed
Rulemaking
Corporate Bond Yield
Curve for Determining
Present Value
REG-124123-22
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION:
Notice
of
Proposed
Rulemaking and Notice of Public Hearing.
SUMMARY: This document sets forth
proposed regulations specifying the methodology for constructing the corporate
bond yield curve that is used to derive the
interest rates used in calculating present
value and making other calculations under
a defined benefit plan, as well as for discounting unpaid losses and estimated salvage recoverable of insurance companies.
These regulations affect participants in,
beneficiaries of, employers maintaining,
and administrators of certain retirement
plans, as well as insurance companies.
DATES: Written or electronic comments must be received by August 22,
2023. A public hearing on this proposed
regulation has been scheduled for August
30, 2023 at 10:00 a.m. ET. Requests to
speak and outlines of topics to be discussed
at the public hearing must be received
by August 22, 2023. If no outlines are
received by August 22, 2023, the public
hearing will be cancelled. Requests to
attend the public hearing must be received
by 5:00 p.m. ET on August 28, 2023. The
public hearing will be made accessible to
people with disabilities. Requests for special assistance during the public hearing
must be received by August 25, 2023.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically via the Federal eRulemaking Portal at www.regulations.gov
(indicate IRS and REG-124123-22) by
following the online instructions for submitting comments. Requests for a public

hearing must be submitted as prescribed
in the “Comments and Requests for a
Public Hearing” section. Once submitted
to the Federal eRulemaking Portal, comments cannot be edited or withdrawn. The
Department of the Treasury (Treasury
Department) and the IRS will publish for
public availability any comments submitted to the IRS’s public docket. Send paper
submissions to: CC:PA:LPD:PR (REG124123-22), room 5203, Internal Revenue
Service, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Arslan Malik or Linda S. F. Marshall at
(202) 317-6700 (not a toll-free number);
concerning submissions of comments, the
hearing, and/or to be placed on the building access list to attend the hearing, Vivian
Hayes at (202) 317-5306 (not a toll-free
number) or by sending an email to publichearings@irs.gov (preferred).
SUPPLEMENTARY INFORMATION:
Background
Section 412 of the Internal Revenue
Code (Code) prescribes minimum funding
requirements for defined benefit pension
plans. Section 430 specifies the minimum
funding requirements that apply generally to defined benefit plans that are not
multiemployer plans.1 For a plan subject
to section 430, section 430(a) defines the
minimum required contribution for a plan
year by reference to the plan’s funding target for the plan year. Under section 430(d)
(1), a plan’s funding target for a plan year
generally is the present value of all benefits accrued or earned under the plan as of
the first day of that plan year.
Section 430(h)(2) provides rules
regarding the interest rates to be used
under section 430. Section 430(h)(2)
(B) provides that a plan’s funding target
and target normal cost for a plan year are
determined using three interest rates: (1)
the first segment rate, which applies to
benefits reasonably determined to be payable during the 5-year period beginning

on the valuation date; (2) the second segment rate, which applies to benefits reasonably determined to be payable during
the next 15-year period; and (3) the third
segment rate, which applies to benefits
reasonably determined to be paid after
that 15‑year period. Under section 430(h)
(2)(C)(i) through (iii), each of these segment rates is determined for a month on
the basis of the corporate bond yield curve
for the month, taking into account only
that portion of the yield curve that is based
on bonds maturing during the period for
which the segment rate is used.
Section 430(h)(2)(C)(iv), which was
added to the Code in 2012 by section
40211 of the Moving Ahead for Progress in
the 21st Century Act, Pub. L.112-141, 126
Stat. 405, and has been modified several
times since then (most recently in 2021
by section 80602 of the Infrastructure
Investment and Jobs Act, Pub. L. 117-58,
135 Stat. 429), provides interest rate stabilization rules under which the segment
rates are constrained by reference to the
25-year average segment rates. Under section 430(h)(2)(C)(iv), if a segment rate for
a month is less than the applicable minimum percentage, or more than the applicable maximum percentage, of the average
of the corresponding segment rates for
years in the 25-year period ending with
September 30 of the calendar year preceding the calendar year in which the plan
year begins, then the segment rate for that
month is equal to the applicable minimum
percentage or the applicable maximum
percentage of the corresponding 25-year
average segment rate, whichever is closest. The last sentence of section 430(h)(2)
(C)(iv)(I) provides that any 25-year average segment rate that is less than 5 percent
is deemed to be 5 percent.
Under section 430(h)(2)(D)(i), the term
“corporate bond yield curve” means, with
respect to any month, a yield curve prescribed by the Secretary for the month
that reflects the average, for the 24-month
period ending with the month preceding
such month, of monthly yields on investment grade corporate bonds with varying
maturities and that are in the top 3 quality

Section 302 of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (1974), as amended (ERISA) sets forth funding rules that are parallel to those in
section 412 of the Code, and section 303 of ERISA sets forth additional funding rules for defined benefit plans (other than multiemployer plans) that are parallel to those in section 430 of the
Code. Pursuant to section 101 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App., as amended, the Secretary of the Treasury has interpretive jurisdiction over the subject matter addressed
in these regulations for purposes of ERISA, as well as the Code. Thus, these Treasury regulations issued under section 430 of the Code also apply for purposes of section 303 of ERISA.
1

Bulletin No. 2023–30

369

July 24, 2023

levels available. Section 430(h)(2)(D)(ii)
permits a plan sponsor to elect to use the
corporate bond yield curve, rather than
the segment rates, to determine the plan’s
minimum required contribution. The yield
curve that applies pursuant to this election
is determined without regard to 24-month
averaging. This election, once made, may
be revoked only with the consent of the
Secretary.
Under section 430(h)(2)(F), the
Secretary is instructed to publish for each
month the corporate bond yield curve
(without regard to the 24‑month averaging
specification), the segment rates described
in section 430(h)(2)(C), and the 25‑year
averages of segment rates used under
section 430(h)(4)(C)(iv). The Secretary
is also instructed to publish a description
of the methodology used to determine
the yield curve and segment rates which
is sufficiently detailed to enable plans to
make reasonable projections regarding the
yield curve and segment rates for future
months based on the plan’s projection of
future interest rates.
Section 1.430(h)(2)-1 was issued in
2009 to provide rules regarding the interest rates to be used under section 430. T.D.
9467, 74 FR 53004. Section 1.430(h)(2)1(d) provides that the methodology for
determining the yield curve is provided in
guidance that is published in the Internal
Revenue Bulletin. Notice 2007-81, 2007-2
CB 899, describes the methodology
used by the Department of the Treasury
(Treasury Department) to develop the corporate bond yield curve. Section 1.430(h)
(2)-1(d) also provides that the yield curve
for each month will be set forth in guidance published in the Internal Revenue
Bulletin. Monthly IRS notices set forth the
corporate bond yield curve for the month
(without regard to the 24‑month averaging
specification), the section 430 segment
interest rates (before and after adjustment
pursuant to section 430(h)(3)(C)(iv)), and
the 25-year average segment rates (which
are updated annually).
Section 417(e)(3) provides assumptions for determining minimum present

value for certain purposes, including the
determination of a lump-sum that is the
present value of an annuity, and prescribes
an applicable interest rate for this purpose. Section 417(e)(3)(C) provides that
the term “applicable interest rate” means
the adjusted first, second, and third segment rates applied under rules similar to
the rules of section 430(h)(2)(C) for the
month before the date of a distribution or
such other time as the Secretary may prescribe by regulations. However, for purposes of section 417(e)(3), these rates are
determined without regard to the segment
rate stabilization rules of section 430(h)(2)
(C)(iv). In addition, under section 417(e)
(3)(D), these rates are determined using
the average yields for a month, rather than
the 24-month average used under section
430(h)(2)(D).
Under section 846(c), the Secretary
determines the applicable interest rate to
be used by insurance companies to discount unpaid losses on the basis of the
corporate bond yield curve (as defined in
section 430(h)(2)(D)(i), determined by
substituting “60-month period” for “24month period”). Under §1.832-4(c), the
applicable interest rate determined under
section 846(c) is also used by insurance
companies to discount estimated salvage
recoverable, unless the Commissioner
publishes applicable discount factors to be
used for that purpose.
Explanation of Provisions
These proposed regulations specify the
methodology used to develop the corporate bond yield curve. This methodology
is generally the same as the methodology
set forth in Notice 2007-81 but would
include two refinements to take into
account changes in the bond market since
2007. The proposed regulations would
also amend the existing regulations under
section 430(h)(2) to reflect the addition
of the interest rate stabilization rules of
section 430(h)(2)(C)(iv) and to eliminate
transition rules that applied to plan years
beginning before January 1, 2010.

Under these proposed regulations, as
under Notice 2007-81, the monthly corporate bond yield curve for a month is
defined as the set of spot rates at specified
durations. The specified durations are at
6-month intervals ranging from 6 months
through 100 years, and the spot rate at a
duration is the yield (when compounded
semiannually) for a bond that matures
at that duration with a single payment at
maturity. Each spot rate at a specified duration on the monthly corporate bond yield
curve for a month is equal to the arithmetic average for each business day of that
month of the spot rates at that duration on
the daily corporate bond yield curves.
Under these proposed regulations, as
under Notice 2007-81, each spot rate on
the daily corporate bond yield curve is calculated using a discount function, which is
derived from a forward interest rate function (that is, the projected instantaneous
interest rate at each point in time). The
forward interest rate function is defined
by the selection of five coefficients of
B-splines that are determined using the
bond data and taking into account certain
adjustment factors.
Two of those adjustment factors, which
are included in the methodology set forth
in Notice 2007-81, take into account the
ratings of the bonds used to develop the
daily corporate bond yield curve. The third
adjustment factor, which was not included
in the methodology set forth in that notice,
is a hump adjustment variable that peaks
at 20 years maturity2 and serves to capture
the effects of the hump in spot rates that is
often seen around 20 years maturity.
These proposed regulations generally adopt the specification for the bond
data set for a month in Notice 2007-81
but modify an exclusion from that bond
data set. Under Notice 2007-81 and the
proposed regulations, subject to certain
exclusions, the bonds that are used to construct the daily corporate bond yield curve
for a business day are bonds with the
following characteristics: (1) maturities
longer than a ½ year,3 (2) at least two payment dates, (3) designated as corporate,

The hump adjustment variable is a mathematical function that is a cubic spline in the interval from 10 years maturity through 30 years maturity made up of two polynomials with a smooth
junction at 20 years maturity.
3
Under Notice 2007-81 and the proposed regulations, the data for durations equal to or below ½ year that is used to construct the daily corporate bond yield curve consists of AA financial
and AA nonfinancial commercial paper rates, as reported by the Federal Reserve Board.
2

July 24, 2023

370

Bulletin No. 2023–30

(4) high quality ratings (that is, AAA,
AA, or A) as of that business day from
the nationally recognized statistical rating
organizations,4 (5) at least $250 million in
par amount outstanding on at least one day
during the month, (6) payment of fixed
nominal semiannual coupons and the principal amount at maturity, and (7) maturity
not later than 30 years after that day.
Under Notice 2007-81 and these proposed regulations, the following categories of bonds are excluded from the bond
data set: (1) bonds not denominated in
U.S. dollars, (2) bonds not issued by U.S.
corporations, (3) bonds that are capital
securities (sometimes referred to as hybrid
preferred stock), (4) bonds having variable
coupon rates, (5) convertible bonds, (6)
bonds issued by a government-sponsored
enterprise (such as the Federal National
Mortgage Association), (7) asset-backed
bonds, (8) putable bonds, (9) bonds with
sinking funds, and (10) bonds with a par
amount outstanding below $250 million
for the day for which the daily yield curve
is constructed.
Notice 2007-81 also excluded callable
bonds (unless the call feature is makewhole) from the bond data set used to
construct the daily corporate bond yield
curve. The proposed regulations generally
retain this exclusion but narrow it. Under
the proposed regulations, this exclusion
does not apply if the call feature is exercisable only during the last year before maturity. This type of call feature has recently
become more widely used, and the inclusion of bonds with this feature in the data
set will result in a significantly larger pool
of bonds that more accurately reflects the
market for high quality corporate bonds.
Proposed Applicability Date
The rules in the proposed regulations
are proposed to apply for months that
begin more than 15 days after the date
final regulations specifying the methodology for constructing the corporate bond
yield curve are published in the Federal
Register.

Statement of Availability of IRS
Documents
IRS Revenue Rulings, Revenue
Procedures, and Notices cited in this
document are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government Printing
Office, Washington, DC 20402, or by visiting the IRS website at www.irs.gov.
Special Analyses
Regulatory Planning and Review
(Executive Orders 12866 and 13563)
These regulations are not subject to
review under section 6(b) of Executive
Order 12866 pursuant to the Memorandum
of Agreement (April 11, 2018) between
the Treasury Department and the Office
of Management and Budget regarding
review of tax regulations.
Regulatory Flexibility Act (5 U.S.C.
chapter 6).
It is hereby certified that this rule will
not have a significant economic impact on
a substantial number of small entities. The
vast majority of plan sponsors of defined
benefit plans that are subject to section
430 choose to use the segment rates under
section 430(h)(2)(C), rather than the corporate bond yield curve under section
430(h)(2)(D), to determine minimum
required contributions. Furthermore, most
of the plan sponsors who choose to use the
corporate bond yield curve for this purpose are not small employers. Therefore,
the methodology set forth in the proposed
regulations for constructing the corporate
bond yield curve will not have a significant effect on minimum required contributions for small employers. In addition,
the insurance companies that are required
to use a modified version of the corporate bond yield curve to discount unpaid
losses are typically not small employers. Accordingly, a regulatory flexibility

analysis under the Regulatory Flexibility
Act is not required.
Pursuant to section 7805(f) of the Code,
these proposed regulations will be submitted to the Chief Counsel for Advocacy
of the Small Business Administration
for comment on their impact on small
business.
Comments and Requests for a Public
Hearing
Before these proposed amendments to
the regulation are adopted as a final regulation, consideration will be given to comments regarding the notice of proposed
rulemaking that are submitted timely
to the IRS as prescribed in the preamble under the ADDRESSES section. The
Treasury Department and the IRS request
comments on all aspects of the proposed
regulation. All comments will be made
available at www.regulations.gov. Once
submitted to the Federal eRulemaking
Portal, comments cannot be edited or
withdrawn.
A public hearing has been scheduled for
August 30, 2023 beginning at 10 a.m. ET
in the Auditorium of the Internal Revenue
Building, 1111 Constitution Avenue NW,
Washington, DC. Due to building security procedures, visitors must enter at the
Constitution Avenue entrance. In addition,
all visitors must present photo identification to enter the building. Because of
access restrictions, visitors will not be
admitted beyond the immediate entrance
area more than 30 minutes before the hearing starts. Participants may alternatively
attend the public hearing by telephone. .
The rules of 26 CFR §601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments must submit
an outline of the topics to be addressed
and the time to be devoted to each topic
by August 22, 2023, as prescribed in
the preamble under the ADDRESSES
section. A period of 10 minutes will be
allocated to each person for making comments. An agenda showing the scheduling
of the speakers will be prepared after the

Although section 939A(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376, generally prohibits federal agencies from issuing regulations
that apply a standard that is based on credit ratings from statistical rating organizations, this prohibition does not apply to the construction of the daily corporate bond yield curve because the
use of those credit ratings is required by section 430(h)(2)(D) of the Code.
4

Bulletin No. 2023–30

371

July 24, 2023

deadline for receiving outlines has passed.
Copies of the agenda will be available
free of charge at the hearing. If no outline
of the topics to be discussed at the hearing
is received by August 22, 2023, the public hearing will be cancelled. If the public
hearing is cancelled, a notice of cancellation of the public hearing will be published in the Federal Register.
Individuals who want to testify in
person at the public hearing must send
an email to publichearings@irs.gov to
have your name added to the building
access list. The subject line of the email
must contain the regulation number REG124123-22 and the language TESTIFY In
Person. For example, the subject line may
say: Request to TESTIFY In Person at
Hearing for REG-124123-22.
Individuals who want to testify by
telephone at the public hearing must send
an email to publichearings@irs.gov to
receive the telephone number and access
code for the hearing. The subject line
of the email must contain the regulation
number REG-124123-22 and the language
TESTIFY Telephonically. For example, the subject line may say: Request to
TESTIFY Telephonically at Hearing for
REG-124123-22.
Individuals who want to attend the
public hearing in person without testifying must also send an email to publichearings@irs.gov to have your name added to
the building access list. The subject line
of the email must contain the regulation
number REG-124123-22 and the language
ATTEND In Person. For example, the
subject line may say: Request to ATTEND
Hearing In Person for REG-124123-22.
Requests to attend the public hearing must
be received by 5:00 p.m. EST on August
28, 2023.
Individuals who want to attend the
public hearing by telephone without
testifying must also send an email to
publichearings@irs.gov to receive the
telephone number and access code for
the hearing. The subject line of the email
must contain the regulation number REG124123-22 and the language ATTEND
Hearing Telephonically. For example, the
subject line may say: Request to ATTEND
Hearing Telephonically for REG-12412322. Requests to attend the public hearing
must be received by 5:00 p.m. EST on
August 28, 2023.

July 24, 2023

Hearings will be made accessible to
people with disabilities. To request special
assistance during a hearing please contact
the Publications and Regulations Branch
of the Office of Associate Chief Counsel
(Procedure and Administration) by sending an email to publichearings@irs.
gov (preferred) or by telephone at (202)
317-6901 (not a toll-free number) at least
August 25, 2023.
Drafting Information
The principal authors of these regulations are Arslan Malik and Linda S.
F. Marshall of the Office of Associate
Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the Treasury Department and the IRS
participated in the development of these
regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
part 1 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Amend § 1.430(h)(2)-1 as
follows:
1. Amend paragraph (a)(1) by removing the phrase “and transition rules” in the
last sentence.
2. Revise paragraph (b)(2).
3. Amend paragraph (c)(1) by removing the last sentence.
4. Amend paragraphs (c)(2)(i), (c)(2)
(ii), and (c)(2)(iii) by removing the phrase
“under the transition rule of paragraph (h)
(4) of this section” and adding the phrase
“under the interest rate stabilization rules
in section 430(h)(2)(C)(iv)” in its place.
5. Revise paragraph (d).
6. Remove paragraph (e)(3) and redesignate paragraph (e)(4) as paragraph (e)

372

(3) and paragraph (e)(5) as paragraph (e)
(4).
7. In newly redesignated paragraph (e)
(3)(ii), remove the phrase “this paragraph
(e)(4)” and add the phrase “this paragraph
(e)(3)” in its place.
8. Revise paragraph (h).
The revisions and additions read as
follows:
§1.430(h)(2)-1 Interest rates used to
determine present value.
*****
(b) * * *
(2) In the case of benefits expected to
be payable during the 5-year period beginning on the valuation date for the plan
year, the interest rate used in determining
the present value of the benefits that are
included in the target normal cost and
the funding target for the plan is the first
segment rate with respect to the applicable month, as described in paragraph (c)
(2)(i) of this section.
*****
(d) Monthly corporate bond yield
curve—(1) In general—(i) Construction
of monthly corporate bond yield curve.
For purposes of this section, the monthly
corporate bond yield curve for a month is
defined as the set of spot rates at specified
durations. The specified durations are at
6-month intervals ranging from 6 months
through 100 years and the spot rate at a
duration is the yield (when compounded
semiannually) for a bond that matures
at that duration with a single payment at
maturity. The monthly corporate bond
yield curve is constructed as the average
of the spot rates from the set of daily corporate bond yield curves as specified in
paragraph (d)(1)(ii) of this section. Each
daily corporate bond yield curve is constructed using the methodology set forth
in paragraph (d)(2) of this section based
on the data described in paragraph (d)(3)
of this section. Note 1 to paragraph (d)(1)
of this section, the yield curve for each
month will be published in the Internal
Revenue Bulletin. See § 601.601(d) of
this chapter.
(ii) Monthly corporate bond yield curve
constructed through averaging. Each spot
rate at a specified duration on the monthly
corporate bond yield curve for a month is
equal to the arithmetic average, for each

Bulletin No. 2023–30

business day of that month, of the spot
rates at that duration on the daily corporate bond yield curves.
(2) Construction of the daily corporate
bond yield curve—(i) In general—(A)
Calculation of spot rates. Each spot rate
at duration t on a daily corporate bond
yield curve is calculated from the discount
function described in paragraph (d)(2)(i)
(B) of this section and the hump adjustment variable described in paragraph (d)
(2)(iii)(D) of this section.
(B) Derivation of discount function.
The discount function for a day at duration
t is derived from the forward interest rate
function as described in paragraph (d)(2)
(ii) of this section (denoted f(z)) using the
following equation:

d (t ) = exp −


t



∫ f ( z)dz
0

(ii) Determination of forward interest
rates—(A) In general. The forward interest rate function used to derive the discount function is determined as a series of
cubic polynomials (referred to as a cubic
spline) that have a smooth junction at
specified knot points (maturities of 0, 1.5,
3, 7, 15, and 30 years). The requirement
that the polynomials have a smooth junction at a knot point is satisfied if the two
polynomials that are meeting at the knot
have the same value, the same derivative,
and the same second derivative at that
knot point.
(B) Constraints on the forward interest
function. The following three constraints
are placed on the forward interest rate
function—
(1) The second derivative of the function is set to zero at maturity zero.
(2) The value of the forward interest
rate function at and after 30 years is constrained to equal its average value from 15
to 30 years.
(3) The derivative of the forward interest rate function is set to zero at maturity
30 years.
(iii) Parameters for daily bond price
model—(A) B-spline coefficients. The
assumed cubic spline for the forward
interest rate function can be described as
a linear combination of B-splines, with
five parameters, which are determined
taking into account the two coefficients
for the bond-quality adjustment variables

Bulletin No. 2023–30

described in paragraphs (d)(2)(iii)(B) and
(C) of this section and the coefficient for
the hump adjustment variable described
in paragraph (d)(2)(iii)(D) of this section.
The five parameters and three coefficients are determined using the bond data
weighted as described in paragraph (d)(2)
(iv) of this section. After this weighting
of the bond data, the five parameters and
three coefficients are chosen to minimize
the sum of the squared differences between
the bid price for each of the bonds (or ask
price for commercial paper) and the price
estimated for each of those bonds determined using the specified parameters and
coefficients, and taking into account the
bond’s coupon rate, number of years until
maturity, and rating.
(B) Adjustment factor for share of
bonds that are AA-rated. The first adjustment variable is based on the proportion
of bonds that are rated AA within the universe of bonds in the data set that are rated
AA or AAA, weighted by par value. In
the case of an AAA-rated bond the adjustment variable described in this paragraph
(d)(2)(iii)(B) is equal to the product of
the proportion described in the preceding
sentence and the number of years until
maturity for the bond. In the case of an
AA-rated bond the adjustment variable
described in this paragraph (d)(2)(iii)(B)
is equal to the product of (1- that proportion) and the number of years until maturity for the bond. In the case of an A‑rated
bond, the adjustment variable described in
this paragraph (d)(2)(iii)(B) is set to 0.
(C) Adjustment factor for share of
bonds that are A‑rated. The second adjustment variable is based on the proportion of
bonds rated A within the universe of bonds
in the data set, weighted by par value.
In the case of an AAA-rated bond or an
AA-rated bond, the adjustment variable
described in this paragraph (d)(2)(iii)(C)
is equal to the product of the proportion
described in the preceding sentence and
the number of years until maturity for the
bond. In the case of an A-rated bond the
adjustment variable described in this paragraph (d)(2)(iii)(C) is equal to the product
of (1- that proportion) and the number of
years until maturity for the bond.
(D) Hump adjustment variable. The
hump adjustment variable is a mathematical function that is a cubic spline in the
interval from 10 years maturity through

373

30 years maturity made up of two polynomials with a smooth junction (as described
in paragraph (d)(2)(ii)(A) of this section)
at 20 years maturity. The spline rises from
zero at 10 years maturity to 1.0 at 20 years
maturity, then falls back down to zero at
30 years maturity. The hump adjustment
variable is zero for maturities less than 10
years and maturities greater than 30 years.
(iv) Weighting of bond data. The bond
data are weighted in two steps. First, equal
weights are assigned to the commercial
paper rates at the short end of the curve,
and the par amounts outstanding of all the
bonds are rescaled so that their sum equals
the sum of the weights for commercial
paper. Then, the squared price difference
for each bond is multiplied by the bond’s
rescaled par amount outstanding, and the
squared difference for each commercial
paper rate is multiplied by the commercial
paper weight. In the second stage, applicable for bonds with duration greater than 1,
the weighted squared price difference for
each bond from the first stage is divided
by the bond’s duration.
(3) Data used—(i) In general. Except
as otherwise provided in this paragraph
(d)(3), the bonds that are used to construct
the daily corporate bond yield curve for
a business day are bonds with maturities
longer than a ½ year, with at least two
payment dates, and that:
(A) Are designated as corporate;
(B) Have high quality ratings (AAA,
AA, or A) as of that business day from
the nationally recognized statistical rating
organizations;
(C) Have at least $250 million in par
amount outstanding on at least one day
during the month;
(D) Pay fixed nominal semiannual coupons and the principal amount at maturity;
and
(E) Mature not later than 30 years after
that business day.
(ii) Excluded bonds. The following
types of bonds are not used to construct
the daily corporate bond yield curve for a
date:
(A) Bonds not denominated in U.S.
dollars;
(B) Bonds not issued by U.S.
corporations;
(C) Bonds that are capital securities
(sometimes referred to as hybrid preferred
stock);

July 24, 2023

(D) Bonds having variable coupon
rates;
(E) Convertible bonds;
(F) Bonds issued by a government-sponsored enterprise (such as the
Federal National Mortgage Association);
(G) Asset-backed bonds;
(H) Callable bonds unless the call
feature is make-whole or the call feature
is exercisable only during the last year
before maturity;
(I) Putable bonds;
(J) Bonds with sinking funds; and

July 24, 2023

(K) Bonds with a par amount outstanding below $250 million for the day for
which the daily yield curve is constructed.
(iii) Durations equal to or below a ½
year. The data for durations equal to or
below a ½ year that is used to construct
the daily corporate bond yield curve consists of AA financial and AA nonfinancial
commercial paper rates, as reported by the
Federal Reserve Board.
****
(h) Applicability date of regulations. This
section applies to months that begin more

374

than 15 days after the date final regulations
issued pursuant to these proposed regulations are published in the Federal Register.
For rules that apply for earlier periods, see
§1.430(h)(2)-1, as it appeared in the April 1,
2022, edition of 26 CFR part 1.
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register June 22,
2023, 8:45 a.m., and published in the issue of the
Federal Register for June 23, 2023, 88 FR 41047)

Bulletin No. 2023–30

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
­effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is being made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the

new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations
to show that the previous published rulings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.

A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.

Bulletin No. 2023–30

ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

July 24, 2023

Numerical Finding List1
Bulletin 2023–30

Announcements:
2023-18, 2023-30 I.R.B. 366
2023-19, 2023-30 I.R.B. 367
2023-20, 2023-30 I.R.B. 368

Notices:
2023-29, 2023-29 I.R.B. 1
2023-45, 2023-29 I.R.B. 317
2023-47, 2023-29 I.R.B. 318
2023-37, 2023-30 I.R.B. 359
2023-50, 2023-30 I.R.B. 361
2023-51, 2023-30 I.R.B. 362

Proposed Regulations:
REG-124123-22, 2023-30 I.R.B. 369

Treasury Decisions:
9976, 2023-30 I.R.B. 354

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 27, 2023.
1

July 24, 2023

ii

Bulletin No. 2023–30

Finding List of Current Actions on
Previously Published Items1
Bulletin 2023–30

A cumulati

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A2f4faf0449df9643. Public record. Not legal advice.