# Bulletin No. 2023–13

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## Record

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

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2023–13
March 27, 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
Notice 2023-23, page 571.

Notice 2023-23 provides guidance to financial institutions
on reporting required minimum distributions (RMD) for
2023 after the amendment to section 401(a)(9) of the Internal Revenue Code made by Section 107, Division T of the
Consolidated Appropriations Act, 2023, P.L. 117-328 (the
SECURE 2.0 Act). Pursuant to Notice 2002-27, if an IRA
owner has an RMD due for 2023, the financial institution
that maintains the IRA must provide a statement by January
31, 2023, informing the IRA owner of the amount due (or
an offer to calculate such amount) and the date by which
the RMD must be distributed. Prior to the SECURE 2.0 Act,
this statement would have been required for all IRA owners
who will attain age 72 in 2023 (the year for which the first
RMD is due). However, after the Act, the first RMD will be
due for the year in which the IRA owner attains age 73. This
notice provides that if the RMD statement is provided in
the year in which the IRA owner attains age 72, the IRS will
not consider such statement to be incorrect provided the
financial institution notifies the IRA owner no later than April
28, 2023, that no RMD is due for 2023.

EMPLOYMENT TAX
Rev. Proc. 2023-13, page 581.

General Rules and Specifications for Substitute Form 941,
Schedule B (Form 941), Schedule D (Form 941), Schedule
R (Form 941), and Form 8974.
This revenue procedure provides general rules and specifications from the IRS for paper and computer-generated
substitutes for Form 941; Schedule B (Form 941); Schedule D (Form 941); Schedule R (Form 941); and Form 8974.
This revenue procedure supersedes Revenue Procedure
2022-15, 2022-13 I.R.B. 908.

Finding Lists begin on page ii.

Rev. Proc. 2023-18, page 605.

This revenue procedure modifies and supersedes both Rev.
Proc. 2016-33 and Rev. Proc. 2017-14. It addresses the
procedures for applying to be certified as a Certified Professional Employer Organization (CPEO), the requirements
for a CPEO to remain certified, and the procedures relating
to suspension and revocation of CPEO certification.

INCOME TAX
Notice 2023-24, page 571.

This notice provides the general rules for determining the
credit for production from advanced nuclear power facilities
under § 45J (§ 45J credit) and that the amount of the unutilized national megawatt capacity limitation (NMCL) available
for allocation is 6,000 megawatts. This notice also provides the procedures for taxpayers to apply for allocations
of, and that the Internal Revenue Service (IRS) will use to allocate, the unutilized NMCL to facilities that the Department
of Energy previously certified as an “advanced nuclear facility” under Notice 2013-68, 2013-46 I.R.B. 501. In addition,
the notice provides the procedures for a “qualified public
entity” to elect to transfer all or a portion of the § 45J credit
to an “eligible project partner.” Finally, the notice requests
comments on issues impacting the § 45J credit.

Notice 2023-26, page 577.

Notice 2023-26 provides for adjustments to the limitation
on housing expenses for purposes of section 911 of the
Internal Revenue Code for the 2023 tax year. These adjustments are made on the basis of geographic differences in
housing costs relative to housing costs in the United States.
If the limitation on housing expenses is higher for the 2023
tax year than the adjusted limitations on housing expenses
provided in Notice 2022-10, qualified taxpayers may apply
the adjusted limitations in this notice for the 2023 tax year
to their 2022 tax year.

Rev. Proc. 2023-17, page 604.

they can choose to exclude from their income a limited
amount of their foreign earned income (up to $120,000 for
2022). Both the bona fide residence test and the physical
presence test contain minimum time requirements. Revenue Procedure 2023-19 provides a waiver under section
911(d)(4) for the time requirements for individuals electing
to exclude their foreign earned income who must leave a
foreign country because of war, civil unrest, or similar adverse conditions in that country. Rev. Proc. 2023-19 adds
Ethiopia, Iraq, Ukraine, Belarus, China, and Mali to the list of
waiver countries for tax year 2022 for which the minimum
time requirements are waived.

This revenue procedure provides indexing adjustments for
the applicable dollar amounts under section 4980H(c)(1) and
(b)(1) of the Internal Revenue Code. These indexed amounts
are used to calculate the employer shared responsibility payments under section 4980H(a) and (b)(1), respectively.

Rev. Proc. 2023-19, page 626.

Generally, U.S. citizens or resident aliens living and working
abroad are taxed on their worldwide income. However, if
their tax home is in a foreign country and they meet either
the bona fide residence test or the physical presence test,

March 27, 2023

2

Bulletin No. 2023–13

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.

March 27, 2023 

Bulletin No. 2023–13

Part III
Relief for Reporting
Required Minimum
Distributions for IRAs for
2023
Notice 2023-23
PURPOSE
This notice provides guidance to financial institutions on reporting required
minimum distributions (RMDs) for 2023
after the amendment to section 401(a)(9)
of the Internal Revenue Code made by the
Consolidated Appropriations Act, 2023, P.
L. 117-328 (the Act).
BACKGROUND
The Act was enacted on December 29,
2022. Division T of the Act, titled “SECURE 2.0 Act of 2022” (SECURE 2.0
Act), included a number of retirement
savings provisions. Section 107 of the SECURE 2.0 Act amended section 401(a)(9)
(C) of the Code to delay the required beginning date applicable to section 401(a)
plans and other eligible retirement plans
described in section 402(c)(8), including
individual retirement accounts and annuities (IRAs). For an IRA owner who attains age 72 after December 31, 2022, and
age 73 before January 1, 2033, the new
required beginning date (that is, the date
by which RMDs must begin) is April 1 of
the calendar year following the calendar
year in which the individual attains age
73, rather than April 1 of the calendar year
following the calendar year in which the
individual attains age 72.
This amendment to section 401(a)(9)
(C) is effective for distributions required
to be made after December 31, 2022,
with respect to individuals who will attain
age 72 after that date. As a result of this
amendment, IRA owners who will attain
age 72 in 2023 (that is, individuals born in
1951) will have a required beginning date
of April 1, 2025, rather than April 1, 2024.
This delay in the required beginning date
means that these IRA owners (who, prior to enactment of the SECURE 2.0 Act,

Bulletin No. 2023–13

would have been required to take minimum distributions from their IRAs for
2023) will have no RMD due from their
IRAs for 2023.
IRA REPORTING
If an IRA owner has an RMD due
for 2023, the financial institution that is
the trustee, custodian, or issuer maintaining the IRA must file a 2022 Form
5498 (IRA Contribution Information) by
May 31, 2023, and indicate by a check
in Box 11 that an RMD is required for
2023. The financial institution may also
choose to provide further information in
Box 12a (RMD Date) and Box 12b (RMD
Amount). Additionally, under Notice
2002-27, 2002-1 CB 814, if an IRA owner
has an RMD due for 2023, the financial
institution must furnish a statement to the
IRA owner by January 31, 2023, that informs the IRA owner of the date by which
the RMD must be distributed, and either
provides the amount of the RMD or offers to calculate that amount upon request
(RMD statement).
For IRA owners who will attain age
72 in 2023, the RMD statement required
under Notice 2002–27 should not be sent,
and the 2022 Form 5498 should not include a check in Box 11 or any entries in
Box 12a or 12b. However, in recognition
of the short amount of time that financial
institutions have had to change their systems for furnishing the RMD statement
since the enactment of the SECURE 2.0
Act, relief is being provided with respect
to this reporting. Under this relief, the
Internal Revenue Service (IRS) will not
consider an RMD statement provided to
an IRA owner who will attain age 72 in
2023 to have been provided incorrectly if
the IRA owner is notified by the financial
institution no later than April 28, 2023,
that no RMD is actually required for 2023.
The SECURE 2.0 Act did not change
the required beginning date for IRA owners who attained age 72 prior to January 1,
2023. To reduce misunderstanding among
IRA owners, the IRS encourages all financial institutions, in communicating these
RMD changes, to remind IRA owners
who attained age 72 in 2022, and have not

571

yet taken their 2022 RMDs, that they are
still required to take those distributions by
April 1, 2023.
DRAFTING INFORMATION
The principal author of this notice is
Brandon Ford of the Office of the Associate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regarding
this notice, contact Brandon Ford at (202)
317-4148 (not a toll-free number).

Section 45J Credit for
Production of Electricity
from Advanced Nuclear
Power Facilities
Notice 2023-24
SECTION 1. PURPOSE
.01 This notice provides guidance under § 45J of the Internal Revenue Code
(Code), relating to the credit for the production of electricity from advanced nuclear power facilities (§ 45J credit). In
response to the amendments to certain
requirements for the § 45J credit made by
§ 40501 of the Bipartisan Budget Act of
2018 (2018 Act), Public. Law. 115-123,
Div. D, Title I, 132 Stat. 64, 153 (February 9, 2018), this notice provides: (i)
guidance for computing the § 45J credit;
(ii) the amount of the unutilized national
megawatt capacity limitation (NMCL) (as
defined in § 45J(b)(5)(B)); (iii) the procedures for taxpayers to apply for allocations
of, and that the Internal Revenue Service
(IRS) will use to allocate, the unutilized
NMCL solely with respect to facilities
that the Department of Energy (DOE) previously certified as “advanced nuclear facilities” (as defined in § 45J(d)(2)) under
Notice 2013-68, 2013-46 I.R.B. 501; and
(iv) the procedures for a “qualified public
entity” (as defined in § 45J(e)(2)(A)) to
elect, pursuant to § 45J(e), to transfer the
§ 45J credit to an “eligible project partner”
(as defined in § 45J(e)(2)(B)). This notice

March 27, 2023

also requests public comment on topics
related to the § 45J credit that may require
guidance.
.02 The Department of the Treasury
(Treasury Department) and the IRS intend
to issue additional guidance regarding
the procedures by which any unutilized
NMCL will be allocated to a facility that
did not receive a certification from the
DOE as an “advanced nuclear facility”
under Notice 2013-68.
SECTION 2. BACKGROUND
.01 Section 45J was enacted by § 1306
of the Energy Policy Act of 2005, Public
Law 109-58, Title XIII, 119 Stat. 594, 997
(August 8, 2005). Subject to limitations
under § 45J(b) and (c), a taxpayer may be
allowed a § 45J credit of 1.8 cents for each
kilowatt hour of electricity (1) that the
taxpayer produces at an advanced nuclear
power facility during the eight-year period
beginning on the date the facility is placed
in service and (2) that the taxpayer sells
to an unrelated person during the taxable
year (qualifying electricity). See § 45J(a).
.02 Under § 45J(d)(1), an “advanced
nuclear power facility” is (i) any nuclear
facility the reactor design for which is approved by the Nuclear Regulatory Commission (NRC) after December 31, 1993
(and such design or a substantially similar
design of comparable capacity was not
approved on or before that date), (ii) that
is owned by the taxpayer, and (iii) uses
nuclear energy to produce electricity. See
§ 45J(d).
.03 On May 1, 2006, the Treasury Department and the IRS published Notice
2006-40, 2006-18 I.R.B. 855, to provide
guidance on the § 45J credit. Specifically,
Notice 2006-40 specified the method that
the IRS would use to allocate the NMCL
and prescribed the application process by
which taxpayers could request such an
allocation. The notice also provided guidance on the requirement that electricity
be sold to an unrelated person and on the
effect of grants, tax-exempt bonds, subsidized energy financing, and other credits.
.04 On November 12, 2013, the Treasury Department and the IRS published

Notice 2013-68, which modified and superseded Notice 2006-40. Notice 201368 generally republished the guidance
contained in Notice 2006-40, but also
provided a new streamlined application
process allowing an applicant to submit
a single application only to the IRS. The
IRS would then obtain necessary certification from the DOE. In addition, Notice
2013-68 provided guidance on the allocation rules for facilities that are directly or
indirectly owned by more than one person
and the time for filing an application with
the NRC.
.05 As originally enacted in 2005,
§ 45J(d)(1) required all advanced nuclear power facilities to be placed in service
before January 1, 2021, to be eligible for
a § 45J credit. Accordingly, section 6 of
Notice 2013-68 provided that the amount
of the NMCL allocated to a facility under
Notice 2013-68 will be withdrawn if the
facility is not placed in service before January 1, 2021, or if the DOE informs the IRS
that the DOE certification for the facility
has been withdrawn. However, effective
for taxable years beginning after its February 9, 2018, date of enactment, § 40501
of the 2018 Act added new § 45J(b)(5) to
the Code, which, in part, eliminates the
requirement for a facility receiving an allocation of unutilized NMCL pursuant to
§ 45J(b)(5) to be placed in service before
January 1, 2021, to qualify as an advanced
nuclear power facility.
.06 Under § 45J(b)(1) and (3), a taxpayer may be allowed a § 45J credit for
qualifying electricity only if an amount of
NMCL has been allocated to the facility,
in the manner prescribed by the Secretary
of the Treasury or her delegate (Secretary).1 The aggregate amount of NMCL
allocated by the Secretary cannot exceed
6,000 megawatts. See § 45J(b)(2).
.07 As added by § 40501 of the 2018
Act, § 45J(b)(5)(A) directs the Secretary
to allocate any unutilized NMCL (as defined in § 45J(b)(5)(B)) as rapidly as is
practicable after December 31, 2020, as
follows: (i) first to facilities placed in
service on or before December 31, 2020,
to the extent that such facilities did not
receive an allocation equal to their full

nameplate capacity under the procedures
provided in Notice 2013-68, and (ii) then
to facilities placed in service after December 31, 2020, in the order in which
such facilities are placed in service. Section 45J(b)(5)(B) defines the term “unutilized NMCL” as the excess (if any)
of 6,000 megawatts over the aggregate
amount of NMCL allocated by the Secretary before January 1, 2021, reduced by
any amount of such limitation that was
allocated to a facility that was not placed
in service before January 1, 2021. Under
§ 45J(b)(5)(C), any allocation of the unutilized NMCL is treated for purposes of
the § 45J credit in the same manner as an
allocation of the NMCL.
.08 The 2018 Act also added new
§ 45J(e) to the Code effective for taxable
years beginning after February 9, 2018.
Section 45J(e) permits a “qualified public
entity” to make an election for any taxable year with respect to all or any portion of its § 45J credits to transfer such
credits to one or more eligible project
partners specified in the election. With
respect to any § 45J credits transferred
by a qualified public entity to an eligible
project partner, the credit must be taken
into account in the first taxable year of
the eligible project partner ending with,
or after, the qualified public entity’s taxable year with respect to which the credit
was determined.
.09 Section 45J(e)(2)(A) defines the
term “qualified public entity” to mean (i)
a Federal, State, or local government entity, or any political subdivision, agency,
or instrumentality thereof; (ii) a mutual or
cooperative electric company described in
§ 501(c)(12) or § 1381(a)(2) of the Code;
or (iii) a not-for-profit electric utility
which had or has received a loan or loan
guarantee under the Rural Electrification
Act of 1936.
.10 Section 45J(e)(2)(B) defines the
term “eligible project partner” to mean
any person who (i) is responsible for, or
participates in, the design or construction
of the advanced nuclear power facility to
which the § 45J credit relates; (ii) participates in the provision of the nuclear steam
supply system to such facility; (iii) partic-

The amount of the § 45J credit allowed a taxpayer under § 45J(a) for a taxable year may be (i) limited (after the application of § 45J(b)) by an annual limitation under § 45J(c)(1) applicable
to each facility and (ii) reduced under § 45J(c)(2) based on an inflation adjusted reference price for electricity described in § 45(e)(2)(C) of the Code.
1

March 27, 2023

572

Bulletin No. 2023–13

ipates in the provision of nuclear fuel to
such facility; (iv) is a financial institution
providing financing for the construction
or operation of such facility; or (v) has an
ownership interest in such facility.
.11 In the case of a § 45J credit determined at the partnership level, a qualified
public entity is treated as the taxpayer
with respect to its distributive share of the
§ 45J credit, and the term “eligible project
partner” includes any partner of the partnership. See § 45J(e)(3)(A).
.12 Section 38(b)(21) includes the
§ 45J credit as a current year business
credit. Section 39(a)(1) provides, in part,
that if the amount of the current year business credit for the taxable year exceeds
the amount of the limitation imposed by
§ 38(c) for the taxable year (unused credit
year), the excess results in a 1-year business credit carryback to the taxable year
preceding the unused credit year, and a
business credit carryforward to each of
the twenty (20) taxable years following
the unused credit year. Section 39(a)(2)
(A) provides that the entire amount of the
unused credit for an unused credit year is
carried to the earliest of the twenty-one
(21) taxable years to which the credit may
be carried. Section 39(a)(2)(B) provides
that the amount of the unused credit for
the unused credit year is carried to each of
the other twenty (20) taxable years to the
extent that such unused credit may not be
taken into account under § 38(a) for a prior taxable year because of the limitations
of § 39(b) and (c).
SECTION 3. DETERMINATION OF
THE § 45J CREDIT
.01 In general. Under § 45J(a), (b)(1),
and (c), the § 45J credit allowed to a taxpayer for a taxable year with respect to
qualifying electricity is the lesser of:
(1) the tentative credit for the facility
for the taxable year (determined under
section 3.02(1) of this notice) multiplied
by the taxpayer’s credit percentage (determined under section 3.02(2) of this notice), or
(2) $125,000,000 per 1,000 megawatts
of the facility limitation determined under
section 5.03(1) and (2) of this notice that
is allocated to the taxpayer under section
5.03(3), (4), and (5) of this notice.
.02 Tentative credit; credit percentage

Bulletin No. 2023–13

(1) A facility’s tentative credit for the
taxable year is equal to 1.8 cents multiplied by the kilowatt hours of qualifying
electricity.
(2) The credit percentage for each taxpayer that has been allocated all or part
of the amount of the facility limitation is
determined by dividing the facility limitation that is allocated to the taxpayer
under section 5.03(3), (4), and (5) of this
notice by the nameplate capacity of the
facility.
.03 Credit determination for partnerships and S corporations. If a facility is
owned by a partnership or S corporation,
then the partnership or S corporation, and
not the partners or shareholders, will be
treated as the taxpayer that owns the facility for the purposes of this notice. In such
cases, the § 45J credit must be allocated to
the partners or shareholders in accordance
with § 1.704-1(b)(4)(ii) of the Income Tax
Regulations, in the case of partnerships,
or § 1.1366-1(a)(2)(v) of the Income Tax
Regulations, in the case of S corporations.
If the facility is owned through an organization that has made a valid election under
§ 761(a) of the Code (§ 761(a) election),
each member’s undivided ownership
share in the facility will be treated for purposes of this notice as a separate facility
owned by such member.
.04 Sale of Electricity to Unrelated
Person. The § 45J credit is allowed only
for qualifying electricity that the taxpayer
produces and sells to an unrelated person,
as defined in § 45(e)(4). Solely for purposes of § 45J, electricity will be treated as
sold to an unrelated person if the ultimate
purchaser of the electricity is not related
to the person that produces the electricity. Thus, the requirement of a sale to an
unrelated person will be treated as satisfied if the producer sells the electricity to
a related person for resale by the related
person to a person that is not related to the
producer.
.05 Effect of Grants, Tax-Exempt Bond
Proceeds, Subsidized Energy Financing,
and Other Credits. The amount of the
§ 45J credit with respect to any facility
for any taxable year is not reduced by the
amount of any grants, tax-exempt bond
proceeds, subsidized energy financing,
or other credits (as described in § 45(b)
(3)) used for, or in connection with, the
facility.

573

SECTION 4. DETERMINATION
OF THE UNUTILIZED NATIONAL
MEGAWATT CAPACITY
LIMITATION
After consultation with the DOE, the
Treasury Department and the IRS have
determined that no advanced nuclear
power facility that received an allocation of the NMCL under Notice 201368 was placed in service before January 1, 2021. Therefore, in accordance
with section 6 of Notice 2013-68 and
§ 45J(b)(5)(B), all previous allocations
of the NMCL are withdrawn and the
total unutilized NMCL is 6,000 megawatts. The unutilized NMCL is available
for allocation as provided in section 5 of
this notice.
SECTION 5. ALLOCATION OF
THE UNUTILIZED NATIONAL
MEGAWATT CAPACITY
LIMITATION
.01 Application Limited to Facilities
Certified by DOE. The IRS will allocate
the unutilized NMCL only to advanced
nuclear power facilities (within the meaning of § 45J(d)(1)(A)) for which the DOE
provides certification to the IRS that the
facility qualifies as an “advanced nuclear facility.” For purposes of this notice,
each nuclear power reactor located on a
multi-reactor site is a separate facility. At
this time, only an owner of an advanced
nuclear power facility that (i) either (I)
previously received a certification from
the DOE under Notice 2013-68 that such
facility qualified as an “advanced nuclear
facility” or (II) acquired the facility after
the IRS had provided a previous owner of
the facility a letter stating that the DOE
had certified that facility as an “advanced
nuclear facility” under Notice 2013-68,
and (ii) maintains an active NRC construction permit or license or combined
license, may apply for an allocation of the
unutilized NMCL pursuant to this notice.
In addition, the rule in section 4.04(3) and
(5) of Notice 2013-68 that undivided ownership shares in a facility would be treated
as separate facilities for purposes of that
notice is disregarded for purposes of determining whether a facility previously
received a DOE certification under Notice
2013-68.

March 27, 2023

.02 Application Required. The IRS will
not allocate the unutilized NMCL to any
owner of an advanced nuclear power facility unless such owner submits a completed application in accordance with section 6 of this notice.
.03 Allocation Method. The unutilized
NMCL will be allocated as follows:
(1) Each facility that meets the requirements of sections 5 and 6 of this notice
(qualified facility) will be allocated an
amount of the unutilized NMCL equal
to its nameplate capacity in the order in
which such facilities are placed in service
(provided the application deadline specified in section 6.02 of this notice is met).
The amount of the unutilized NMCL allocated to a qualified facility is referred to as
the facility limitation.
(2) The IRS will continue to allocate the
unutilized NMCL equal to the nameplate
capacity of a qualified facility until all the
unutilized NMCL is allocated. The final
recipient(s) of the remaining unutilized
NMCL may receive only a portion of the
unutilized NMCL for which it applied even
if it otherwise meets the requirements under this notice to receive a full allocation.
(3) If only one taxpayer owns a direct
interest in a qualified facility, the entire
facility limitation is allocated to such taxpayer. If more than one taxpayer owns a
direct interest in a qualified facility, each
taxpayer’s undivided ownership share in
the qualified facility will be treated for
purposes of this notice as a separate qualified facility owned by such taxpayer. In
such cases, a taxpayer’s application must
identify the portion of the total nameplate
capacity of the qualified facility that is
equal to its undivided ownership share in
the qualified facility.
(4) Except as provided in sections
3.03 and 5.03(5) of this notice, if a qualified facility is owned by a partnership
or S corporation, then the partnership
or S corporation, and not the partners or
shareholders, will be treated as the taxpayer that owns the qualified facility for the
purposes of this notice. In such cases, the
§ 45J credit must be allocated to the partners or shareholders in accordance with
§ 1.704-1(b)(4)(ii), in the case of partnerships, or § 1.1366-1(a)(2)(v), in the case
of S corporations.
(5) If the qualified facility is owned
through an organization that has made a

March 27, 2023

valid § 761(a) election, each member’s
undivided ownership share in the qualified facility will be treated for purposes of
this notice as a separate qualified facility
owned by such member. In such cases,
a member’s application for an allocation must identify the portion of the total
nameplate capacity of the qualified facility that is equal to its undivided ownership
share in the qualified facility.
SECTION 6. APPLICATION FOR
ALLOCATION OF UNUTILIZED
NATIONAL MEGAWATT CAPACITY
LIMITATION
.01 In general. (1) A taxpayer must submit, for each facility for which an allocation of the unutilized NMCL is requested,
an application to the IRS for an allocation
of the unutilized NMCL under § 45J(b)(5)
(Application for § 45J Allocation).
(2) An Application for § 45J Allocation should be marked or titled “APPLICATION FOR SECTION 45J ALLOCATION” and delivered in the manner
provided in section 6.04 of this notice.
(3) Multiple taxpayers owning (or treated as owning) a direct interest in a facility
(as described in section 5.03(3) or (5) of
this notice) must each file a separate Application for § 45J Allocation with respect
to a single facility. See section 6.03(6) of
this notice.
(4) No user fee is required for the
submission of an Application for § 45J
Allocation.
.02 Application Deadline. An Application for § 45J Allocation must be filed
no later than thirty (30) days after the date
that the facility is placed in service. A taxpayer may file its Application for § 45J
Allocation before the facility is placed in
service, but the taxpayer must supplement
its application with the statement required
under section 6.03(4) of this notice no later than thirty (30) days after the date that
the facility is placed in service.
.03 Required Information. An Application for § 45J Allocation must include the
following:
(1) The name, taxpayer identification
number (if available), and address of the
taxpayer who placed or who will place the
facility in service;
(2) The name and location of the
facility;

574

(3) The nameplate capacity of the
facility;
(4) A statement signed under penalties
of perjury (as provided in section 6.03(8)
of this notice) providing the date on which
the facility was placed in service, the date
the facility received an NRC construction
permit or license or combined license, and
a statement that such permit or license
remains active. If the date on which the
facility was placed in service is unknown
at the time of the Application for § 45J Allocation, such application may be supplemented at any time prior to the application
deadline specified in section 6.02 of this
notice;
(5) The total amount of unutilized
NMCL requested (not to exceed the nameplate capacity of the facility);
(6) If a taxpayer’s Application for
§ 45J Allocation relates to a facility in
which more than one person owns (or is
treated as owning) a direct interest (as
described in section 5.03(3) or (5) of this
notice), the taxpayer must submit documentation of its undivided ownership
share in the facility;
(7) If the facility is owned by an organization that has made a § 761(a) election,
a copy of the § 761 election;
(8) A declaration, applicable to the Application for § 45J Allocation and any required supplemental submissions, signed
by a person currently authorized to bind
the taxpayer in these matters, in the following form:
“Under penalties of perjury I declare
that I have examined the information
contained in this Application for § 45J
Allocation and the documents that substantiate this Application for § 45J Allocation, and to the best of my knowledge and belief, it is true, correct, and
complete.”
(9) The following additional statement:
“ I further declare that I have authority
to sign this Application for § 45J Allocation (and any supplemental submissions) on behalf of the taxpayer.”
.04 Where to Submit an Application for
§ 45J Allocation.
(1) An Application for § 45J Allocation
should be sent to the following address:

Bulletin No. 2023–13

Internal Revenue Service
Attn: CC:PSI:6, Room 5114
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
(2) If a private delivery service is used,
the address is:
Internal Revenue Service
Attn: CC:PSI:6, Room 5114
1111 Constitution Ave., N.W.
Washington, DC 20224
(3) An Application for § 45J Allocation may also be faxed or e-faxed to (855)
591-7868.
.05 IRS Action. (1) Upon receipt of a
taxpayer’s Application for § 45J Allocation, the IRS will determine whether the
Application for § 45J Allocation satisfies
the requirements of this notice. If the Application for § 45J Allocation does not satisfy the requirements of this notice, the IRS
may advise the taxpayer how to perfect its
Application for § 45J Allocation. The IRS
will not consider an Application for § 45J
Allocation to be complete until the IRS receives all the information requested in this
notice. The IRS will confirm that the DOE
previously certified the taxpayer’s facility
as an advanced nuclear facility pursuant to
the procedures of Notice 2013-68.
(2) Upon receipt of a completed Application for § 45J Allocation, the IRS
will review the taxpayer’s Application
for § 45J Allocation and will notify the
taxpayer, by letter, of its decision. If the
IRS accepts the taxpayer’s Application for
§ 45J Allocation, the acceptance letter will
state the amount of the facility limitation
and the portion of that facility limitation
being allocated to the taxpayer.
(3) The IRS will allocate the unutilized NMCL under this notice based on
the information provided in a taxpayer’s
Application for § 45J Allocation. If the
IRS determines upon an examination that
a facility was not placed in service on the
date the taxpayer specified under section
6.03(4) of this notice, the IRS may subsequently withdraw a facility’s allocation of
the unutilized NMCL.
SECTION 7. TRANSFER OF
CREDIT BY QUALIFIED PUBLIC
ENTITIES
.01 In general. Section 45J(e) permits
a qualified public entity (as defined in

Bulletin No. 2023–13

§ 45J(e)(2)(A)) to elect to transfer all or
a portion of its § 45J credit to an eligible project partner (as defined in § 45J(e)
(2)(B)) (§ 45J(e) Election). If a facility
is owned by a partnership, a qualified
public entity may elect to transfer its distributive share under § 1.704-1(b)(4)(ii)
of the credit to an eligible project partner. In addition, if a facility is owned by
a partnership, an eligible project partner
includes any partner of the partnership.
A § 45J(e) Election may be made by a
qualified public entity for a taxable year
only if a § 45J credit is determined for
the qualified public entity for such taxable year. If a qualified public entity is
not required to file an income tax return
for the taxable year that the § 45J credit
is determined, the qualified public entity
is still considered a taxpayer for purposes of making the § 45J(e) Election and
its taxable year is treated as the calendar year for purposes of determining the
§ 45J credit and making such election.
.02 Election Procedures. (1) A qualified public entity may make a § 45J(e)
Election by furnishing an eligible project partner with a statement titled “SECTION 45J(e) ELECTION STATEMENT”
(§ 45J(e) Election Statement) transferring
all or a portion of the qualified public entity’s § 45J credit. The statement must be
signed under penalties of perjury by an
individual with authority to legally bind
the qualified public entity. The election
statement must also include the written
consent of an individual with authority to
legally bind the eligible project partner.
A qualified public entity must furnish a
separate statement to each eligible project
partner to whom it transfers any portion of
its § 45J credit.
(2) The § 45J(e) Election Statement
must include the following information:
(a) The name, address, and taxpayer
identification number (if available) of the
qualified public entity;
(b) The name and location of the
facility;
(c) The nameplate capacity of the
facility;
(d) The date on which the facility was
placed in service;
(e) The full amount of the unutilized
NMCL allocated to the qualified public
entity with respect to the facility and a
copy of the letter issued by the IRS stating

575

the amount of the unutilized NMCL allocated to the qualified public entity;
(f) The taxable year of the qualified
public entity for which the § 45J credit is
determined and the election is made;
(g) The name, address and taxpayer
identification number of all known eligible project partners receiving any portion
of the qualified public entity’s transferred
§ 45J credit;
(h) The total kilowatt-hours of electricity produced by the facility and sold to an
unrelated taxpayer during the taxable year
of the qualified public entity for which the
election is made;
(i) The total amount of the § 45J credit
determined with respect to the qualified
public entity for the taxable year for which
the election is made and the amount of
that § 45J credit that the qualified public
entity is electing to transfer to the eligible
project partner;
(j) A statement providing how the § 45J
credit claimant qualifies as an eligible
project partner; and
(k) A declaration, applicable to the
§ 45J(e) Election Statement signed by a
person currently authorized to bind the
qualified public entity in these matters, in
the following form:
“Under penalties of perjury I declare
that I have examined the information
contained in this § 45J(e) Election
Statement and the documents that substantiate this § 45J(e) Election Statement, and to the best of my knowledge and belief, it is true, correct, and
complete.”
(l) The following additional statement:
“ I further declare that I have authority
to sign this § 45J(e) Election Statement
on behalf of the qualified public entity.”
(3) A § 45J(e) Election is an annual
election that must be made for each taxable year for which a qualified public entity will transfer the credit to an eligible
project partner. A separate election must
be made for each eligible project partner
for which a qualified public entity will
transfer a portion of the § 45J credit.
.03 Due Date for Making Election. The
§ 45J(e) Election Statement must be furnished to the eligible project partner on or

March 27, 2023

before the due date (including extensions of
time) of the eligible project partner’s Federal income tax return on which it claims
the transferred § 45J credit for the taxable
year ending with, or after, the qualified
public entity’s taxable year with respect to
which the credit was determined.
.04 Election Irrevocable. An election
by a qualified public entity to transfer any
portion of the § 45J credit is irrevocable
once the § 45J(e) Election Statement referred to in section 7.02 of this notice is
furnished to the eligible project partner.
.05 Requirement for an Eligible Project
Partner to Claim the Credit. An eligible
project partner claims the § 45J credit by
filing the applicable IRS form for claiming the credit (and including all requested
information) and attaching the § 45J(e)
Election Statement furnished by the qualified public entity as provided in section
7.02 of this notice.
.06 Carryforwards and Carrybacks
of Credits. In the case of any credit or
portion thereof with respect to which a
§ 45J(e) Election is made, the credit must
be taken into account under § 38 by the
eligible project partner in the first taxable
year of the eligible project partner ending
with or after the qualified public entity’s
taxable year with respect to which the
credit was determined. The carryback and
carryforward rule provided in § 39 regarding unused business credits applies to the
eligible project partner.
SECTION 8. REQUEST FOR
COMMENTS
.01 Comments Requested. The Treasury Department and IRS request written
comments on issues relating to § 45J(b)
(5) and (e) and the guidance provided in
this notice. In particular, the Treasury Department and the IRS request comments to
address the following:
(1) Section 45J(b)(5) provides that the
unutilized NMCL is allocated to facilities
in the order in which a facility is placed
in service in an allocation amount up to
the facility’s nameplate capacity. The
Treasury Department and the IRS intend
to issue guidance to provide the proce-

March 27, 2023

dures for a facility that has not previously received a certification from the DOE
as an “advanced nuclear facility” under
Notice 2013-68 to be allocated unutilized
NMCL. Accordingly, the Treasury Department and the IRS invite comments regarding the procedures for allocating the
remaining unutilized NMCL.
(2) Section 45J(c)(2) provides that the
§ 45J credit phases out based on a ratio
of the credit determined in § 45J(a) to the
reference price defined in § 45(e)(2)(C).
The Treasury Department and the IRS invite comments regarding the method for
calculating the reference price for the generation of electricity at an advanced nuclear power facility.
.02 How to Submit Comments. All
commenters are strongly encouraged to
submit comments electronically. Comments should be submitted in writing by
May 8, 2023, and should include reference to Notice 2023-24. Comments may
be submitted electronically via the Federal eRulemaking Portal at www.regulations.gov (type IRS-2023-0008 in the
search field on the regulations.gov homepage to find this notice and submit comments). Alternatively, comments may be
mailed to: Internal Revenue Service, Attn:
CC:PA:LPD:PR (Notice 2023-24), Room
5203, P.O. Box 7604, Ben Franklin Station, Washington D.C. 20044. The Treasury Department and the IRS will publish for public availability any comment
submitted electronically or on paper to its
public docket on www.regulations.gov.
SECTION 9. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been submitted to the
Office of Management and Budget in accordance with the Paperwork Reduction
Act (PRA) (44 U.S.C. 3507) under control
number 1545-2000. An agency may not
conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information
displays a valid OMB control number.
The collections of information in this
notice are in sections 6 and 7. The sec-

576

tion 6 requirements are not defined as a
collection of information under 5 CFR
1320.3(c). The information collection requirements contained in section 7 will be
submitted to OMB for review and approval in accordance with 5 CFR 1320.10.
Section 7 provides procedures for a
qualified public entity to make an election
to transfer the § 45J credits to an eligible
project partner (a third-party disclosure
under the PRA). The information will be
used to determine the portion of the § 45J
credits to which an eligible project partner is entitled. An eligible project partner
will use the election statement to claim the
§ 45J credit. This information is required
to be collected and retained for taxpayers
to claim the § 45J credit.
The collection of information is required to obtain a benefit. The likely respondents are corporations and
partnerships.
The estimated total annual reporting
burden is 406 hours.
The estimated annual burden per respondent is 5.07 hours. The estimated
number of respondents is 80.
The estimated frequency of responses
is on occasion.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax
return information are confidential, as required by § 6103 of the Code.
SECTION 10. EFFECT ON OTHER
DOCUMENTS
Notice 2013-68 is obsoleted.
SECTION 11. DRAFTING
INFORMATION
The principal author of this notice is
John M. Deininger of the Office of Associate Chief Counsel (Passthroughs &
Special Industries). For further information regarding this notice contact Mr.
Deininger at (202) 317-6853 (not a tollfree number).

Bulletin No. 2023–13

Determination of Housing
Cost Amounts Eligible for
Exclusion or Deduction for
2023
Notice 2023-26
SECTION 1. PURPOSE
This notice provides adjustments to the
limitation on housing expenses for purposes of section 911 of the Internal Revenue Code for specific locations for 2023.
These adjustments are based on geographic differences in housing costs relative to
housing costs in the United States.
SECTION 2. BACKGROUND
Section 911 allows a qualified individual to elect to exclude from gross income
the foreign earned income and to exclude
or deduct the housing cost amount of such
individual.
The term “housing cost amount” is
generally the total of the housing expenses
for the taxable year minus a base housing

Country
Angola
Argentina
Australia
Bahamas, The
Bahrain
Barbados
Belgium
Bermuda
Brazil
Canada
Canada
Canada
Canada
Canada
Canada
Cayman Islands
China

Bulletin No. 2023–13

amount. See § 911(c)(1). For this purpose,
the base housing amount for the taxable
year is limited to an amount that is tied to
the maximum foreign earned income exclusion amount of the qualified individual,
which is $120,000 for 2023. See § 911(c)
(1)(B). Specifically, the base housing
amount is 16 percent of the maximum
foreign earned income exclusion amount
(computed on a daily basis), multiplied
by the number of days in the applicable
period that fall within the taxable year.
Assuming that the entire taxable year of
a qualified individual is within the applicable period, the base housing amount for
2023 is $19,200 ($120,000 x .16).
Similarly, the housing expense amount
is also limited, based on a percentage of
the maximum foreign earned income exclusion amount. Specifically, the limit on
such housing expenses generally equals
30 percent of the maximum foreign earned
income exclusion amount (computed on a
daily basis), multiplied by the number of
days in the applicable period for which
the taxpayer is a qualified individual. See
§ 911(c)(2)(A) and (d)(1). Thus, under
this general limitation, a qualified individual whose entire taxable year is within the

applicable period is limited to maximum
housing expenses of $36,000 ($120,000
x .30) for 2023. However, section 911(c)
(2)(B) authorizes the Secretary to issue
regulations or other guidance to adjust
the percentage under section 911(c)(2)(A)
(i) (which determines the limit on housing expenses) based on geographic differences in housing costs relative to housing
costs in the United States. Pursuant to this
authority, the Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) have published
annual notices concerning the limitation
on the section 911 housing cost amounts
since the 2006 taxable year.
For more background on the foreign
housing exclusion, see https://www.irs.
gov/individuals/international-taxpayers/
foreign-housing-exclusion-or-deduction.
SECTION 3. TABLE OF ADJUSTED
HOUSING LIMITATIONS FOR 2023
The following table provides adjusted
limitations on housing expenses (in lieu
of the otherwise applicable limitation of
$36,000) for 2023. All amounts are in U.S.
dollars.

Limitation on Housing
Expenses (full year)
84,000
56,500
66,500
49,700
48,300
37,700
38,700
90,000
56,600
38,600
52,600
46,100
59,900
56,800
41,300
48,000
69,600

Location
Luanda
Buenos Aires
Sydney
Nassau
Bahrain
Barbados and Bridgetown
Brussels
Bermuda
Sao Paulo
Calgary
Montreal
Ottawa
Toronto
Vancouver
Victoria
Grand Cayman
Beijing

577

Limitation on Housing
Expenses (daily/365 days)
230.14
154.79
182.19
136.16
132.33
103.29
106.03
246.58
155.07
105.75
144.11
126.30
164.11
155.62
113.15
131.51
190.68

March 27, 2023

Limitation on Housing
Expenses (full year)
114,300
57,001
58,700
49,400
37,800
42,000

Limitation on Housing
Expenses (daily/365 days)
313.15
156.17
160.82
135.34
103.56
115.07

43,704
45,500
38,200
46,600
66,400

119.74
124.66
104.66
127.67
181.92

36,700
39,800
39,600

100.55
109.04
108.49

42,000
56,200
41,000
46,500
39,900

115.07
153.97
112.33
127.40
109.32

Germany
Germany
Germany
Guatemala
Guinea
Holy See, The
India
India
Indonesia
Ireland
Israel
Israel

Copenhagen
Santo Domingo
Quito
Tallinn
Garches, Paris, Sevres,
Suresnes, and Versailles
Lyon
Berlin
Boeblingen, Ludwigsburg,
Nellingen, and Stuttgart
Bonn
Cologne
Gelnhausen and Hanau
Ingolstadt
Kaiserslautern, Landkreis,
Pirmasens, Sembach, and
Zweibrueken
Mainz and Wiesbanden
Munich
Wahn
Guatemala City
Conakry
Holy See, The
Mumbai
New Delhi
Jakarta
Dublin
Beer Sheva
Jerusalem

44,500
46,500
42,000
42,000
51,300
44,200
67,920
56,124
37,776
38,400
58,000
49,000

121.92
127.40
115.07
115.07
140.55
121.10
186.08
153.76
103.50
105.21
158.90

Israel
Israel
Italy
Italy
Italy
Italy
Italy
Italy

Tel Aviv
West Bank
Genoa
La Spezia
Milan
Naples
Rome
Vicenza

50,800
49,000
41,800
40,400
66,000
45,300
44,200
36,900

Country

Location

China
China
Colombia
Colombia
Costa Rica
Democratic Republic of the
Congo
Denmark
Dominican Republic
Ecuador
Estonia
France

Hong Kong
Shanghai
Bogota
All cities other than Bogota
San Jose
Kinshasa

France
Germany
Germany
Germany
Germany
Germany
Germany
Germany

March 27, 2023

578

134.25
139.18
134.25
114.52
110.68
180.82
124.11
121.10
101.10

Bulletin No. 2023–13

Country
Jamaica
Japan
Japan
Japan
Japan
Japan
Japan
Kazakhstan
Korea
Korea
Korea
Kuwait
Kuwait
Luxembourg
Malaysia
Malta
Mexico
Mexico
Mexico

Mozambique
Netherlands
Netherlands
Netherlands
Netherlands Antilles
Oman
Panama
Peru
Poland
Portugal
Qatar
Romania
Russia
Russia
Saudi Arabia
Singapore
Slovenia
South Africa

Bulletin No. 2023–13

Location
Kingston
Gifu, Komaki, and Nagoya
Okinawa Prefecture
Osaka-Kobe
Tokyo
Yokohama
Yokosuka
Almaty
Camp Colbern
Camp Market, K-16, Kimpo
Airfield, Seoul, and Suwon
Camp Mercer
Kuwait City
All cities other than Kuwait
City
Luxembourg
Kuala Lumpur
Malta
Merida
Mexico City
All cities other than Ciudad
Juarez, Cuernavaca,
Guadalajara, Hermosillo,
Matamoros, Mazatlan,
Merida, Metapa, Mexico City,
Monterrey, Nogales, Nuevo
Laredo, Tijuana, and Veracruz
Maputo
Amsterdam and Schiphol
Aruba
Hague, The
Curacao
Muscat
Panama City
Lima
Warsaw
Alverca and Lisbon
Doha
Bucharest
Moscow
Saint Petersburg
Riyadh
Singapore
Ljubljana
Pretoria

579

Limitation on Housing
Expenses (full year)
41,200
74,300
47,200
90,664
77,000
41,000
44,300
48,000
54,200
48,600

Limitation on Housing
Expenses (daily/365 days)
112.88
203.56
129.32
248.39
210.96
112.33
121.37
131.51
148.49
133.15

54,200
64,400
57,700

148.49
176.44
158.08

36,200
46,200
55,100
37,900
47,900
39,400

99.18
126.58
150.96
103.84
131.23
107.95

39,500
52,900
39,300
52,700
45,800
41,300
39,500
39,100
50,200
40,400
45,888
41,200
108,000
60,000
40,000
82,900
46,400
39,300

108.22
144.93
107.67
144.38
125.48
113.15
108.22
107.12
137.53
110.68
125.72
112.88
295.89
164.38
109.59
227.12
127.12
107.67

March 27, 2023

Country
Spain
Spain
Switzerland
Switzerland
Switzerland
Taiwan
Tanzania
Thailand
Trinidad and Tobago
Ukraine
United Arab Emirates
United Arab Emirates
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Venezuela
Vietnam
Vietnam

Location
Barcelona
Madrid
Bern
Geneva
Zurich
Taipei
Dar Es Salaam
Bangkok
Port of Spain
Kiev
Abu Dhabi
Dubai
Basingstoke
Bath
Bracknell, High Wycombe,
and Reading
Caversham
Cheltenham
Farnborough
Gibraltar
Lakenheath and Mildenhall
London
Loudwater
Southampton
Surrey
Caracas
Hanoi
Ho Chi Minh City

SECTION 4. OPTION TO APPLY
2023 ADJUSTED HOUSING
LIMITATIONS TO 2022 TAXABLE
YEAR
For some locations, the limitation on
housing expenses provided in Section
3 of this notice may be higher than the
limitation on housing expenses provided in the “Table of Adjusted Limitations
for 2022” in Notice 2022-10, 2022-10
I.R.B. 815. A qualified individual incurring housing expenses in such a location
during 2022 may apply the adjusted limitation on housing expenses provided in
Section 3 of this notice for 2023 in lieu
of the amounts provided in the “Table of
Adjusted Limitations for 2022” in Notice
2022-10 (and as set forth in the Instruc-

March 27, 2023

Limitation on Housing
Expenses (full year)
40,600
53,900
69,000
98,300
39,219
46,188
44,000
59,000
54,500
72,000
49,687
57,174
41,099
41,000
62,100

Limitation on Housing
Expenses (daily/365 days)
111.23
147.67
189.04
269.32
107.45
126.54
120.55
161.64
149.32
197.26
136.13
156.64
112.60
112.33
170.14

73,800
45,600
54,700
44,616
42,600
64,600
52,400
44,200
48,402
57,000
46,800
42,000

202.19
124.93
149.86
122.24
116.71
176.99
143.56
121.10
132.61
156.16
128.22
115.07

tions to Form 2555, Foreign Earned Income, for 2022).
The Treasury Department and the IRS
anticipate that future annual notices providing adjustments to housing expense
limitations will make a similar option
available to qualified individuals that incur housing expenses in the immediately
preceding year. For example, when adjusted housing expense limitations for 2024
are issued, it is expected that taxpayers
will be permitted to apply those adjusted
limitations to the 2023 taxable year.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This notice supersedes Notice 2022-10,
2022-10 I.R.B. 815.

580

SECTION 6. EFFECTIVE DATE
This notice is effective for taxable years
beginning on or after January 1, 2023. However, as provided in Section 4, taxpayers
may apply the 2023 adjusted housing limitations contained in Section 3 of this notice
to his or her taxable year beginning in 2022.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
Kate Y. Hwa of the Office of Associate
Chief Counsel (International). For further
information regarding this notice contact
Kate Y. Hwa at (202) 317-5001 (not a tollfree number).

Bulletin No. 2023–13

NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 4436, General Rules and Specifications for Substitute Form 941, Schedule
B (Form 941), Schedule D (Form 941), Schedule R (Form 941), and Form 8974.

Rev. Proc. 2023-13
TABLE OF CONTENTS
PART 1 –
Section 1.1 – Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 582
Section 1.2 – What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584
Section 1.3 – Reminders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584
Section 1.4 – General Requirements for Reproducing IRS Official Form 941, Schedule B, Schedule D,
Schedule R, and Form 8974 �������������������������������������������������������������������������������������������������������������������������������584
Section 1.5 – Reproducing Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 for
Software-Generated Paper Forms�����������������������������������������������������������������������������������������������������������������������586
Section 1.6 – Specific Instructions for Schedule D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
Section 1.7 – Specific Instructions for Schedule R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
Section 1.8 – Specific Instructions for Form 8974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589
Section 1.9 – Office of Management and Budget (OMB) Requirements for Substitute Forms. . . . . . . . . . . . . . . . . . . . . . . . 590
Section 1.10 – Order Forms and Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590
Section 1.11 – Effect on Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591
Section 1.12 – Helpful Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591
Section 1.13 – Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592

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Part 1

Section 1.1 – Purpose

.01 The purpose of this revenue procedure is to provide general rules and specifications from
the IRS for paper and computer-generated substitutes for Form 941, Employer’s QUARTERLY
Federal Tax Return; Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule
Depositors (referred to in this revenue procedure as “Schedule B”); Schedule D (Form 941),
Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (referred
to in this revenue procedure as “Schedule D”); Schedule R (Form 941), Allocation Schedule for
Aggregate Form 941 Filers (referred to in this revenue procedure as “Schedule R”); and Form
8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities.
Caution. Before creating a substitute Form 941, see Pub. 1167, General Rules and Specifications
for Substitute Forms and Schedules, for additional rules and specifications for payment vouchers
(Vouchers), printing in margins (Marginal Printing), and additional instructions (Additional
Instructions for All Forms).
Note. Substitute territorial forms (941-PR, Planilla para la Declaración Federal TRIMESTRAL
del Patrono; 941-SS, Employer’s QUARTERLY Federal Tax Return (American Samoa, Guam,
the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands); and Anexo B
(Formulario 941-PR), Registro de la Obligación Contributiva para los Despositantes de Itinerario
Bisemanal), should also generally conform to the specifications outlined in this revenue procedure.
However, some of the measurements provided in the exhibits, later, may need to be adjusted for
substitute territorial forms.
.02 This revenue procedure provides information for substitute Form 941, Schedule B, Schedule
D, Schedule R, and Form 8974. If you need more in-depth information on who must complete
these forms and how to complete them, see the Instructions for Form 941, the Instructions for
Schedule B, the Instructions for Schedule D, the Instructions for Schedule R, the Instructions for
Form 8974, and Pub. 15, Employer’s Tax Guide, or go to IRS.gov.
Note. Failure to produce acceptable substitutes of the forms and schedules listed in this revenue
procedure may result in delays in processing. This may result in penalties.
.03 Forms that completely follow the guidelines in this revenue procedure and are exact replicas
of the official IRS forms do not need to be submitted to the IRS for specific approval. Substitute
forms and schedules need to be scanned using IRS scanning equipment.
If you are uncertain of any specification and want clarification, do the following.

March 27, 2023

1.

Submit a letter citing the specification.

2.

State your understanding of the specification.

3.

Enclose an example (if appropriate) of how the form would appear if produced using your
understanding.

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4.

Be sure to include your name, complete address, phone number, and, if applicable, your
email address with your correspondence. Send your request to SCRIPS@IRS.gov or
SubstituteForms@IRS.gov, or use the following address.
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
5000 Ellin Road, Mail Stop C6-110
Lanham, MD 20706

Note. Allow at least 30 days for the IRS to respond.
.04 However, software developers and form producers should send a blank copy of their substitute
Form 941, Schedule B, and Schedule R in Portable Document Format (PDF) to SCRIPS@IRS.
gov. The purpose is not specifically for approval but to assist the IRS in preparing to scan
these forms. Submitters will only receive comments if a significant problem is discovered
through this process. Submitters are not expected to delay marketing their forms in order to
receive feedback. Submitters must not include any “live” taxpayer data on any substitute form
submitted for review.
.05 Form 941, Schedule B, Schedule R, and Form 8974 have a six-digit form ID code in the upper
right-hand corner. The first two digits of the form ID code represent whether the form is an official
paper form or a substitute 6x10 grid. The third and fourth digits of the form ID code are a unique
identifier that is subject to change each quarter when changes are made to a page of the form. The
fifth and six digits of the form ID code generally represent the year in which the IRS made major
formatting changes to the layout of a page of the form. The following six-digit form ID codes,
some of which have been updated for the first quarter of 2023, are currently used on Form 941,
Schedule B, Schedule R, and Form 8974.
•

Official paper forms: 950122 (Form 941, page 1); 951222 (Form 941, page 2); 950922
(Form 941, page 3); 951020 (Form 941, page 4); 960311 (Schedule B); 951422 (Schedule R,
page 1); 951522 (Schedule R, page 2); and 950823 (Form 8974).

•

Substitute 6x10 grids: 970122 (Form 941, page 1); 971222 (Form 941, page 2); 970922
(Form 941, page 3); 971020 (Form 941, page 4); 970311 (Schedule B); 971422 (Schedule R,
page 1); 971522 (Schedule R, page 2); and 970823 (Form 8974).

You must always use the form ID code provided on the current form for the applicable quarter
for which you are creating a substitute form, even if this revenue procedure is not superseded to
reflect a change to a form ID code.
Note. Page 4 of Form 941 (page intentionally left blank) is not required to be filed with the IRS
as part of a substitute Form 941. However, if page 4 of the substitute Form 941 is filed, it must
include the form ID code.
.06 This revenue procedure will be updated only if there are major formatting changes to the
layout of the forms (that is, changes to the measurements provided in the exhibits at the end of this
revenue procedure) or there are other changes that impact the processing of substitute forms. This
revenue procedure won’t be updated solely because a line is changed to “Reserved for future use”
or solely because a form ID code changes without major formatting changes.

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Section 1.2 – What’s New

.01 Some measurements shown in the exhibits for Form 941 have changed due to minor design
changes.
.02 Some column headings on Schedule R were revised to make use of columns that were
previously “Reserved for future use.”
.03 Form 8974 was revised due to the Inflation Reduction Act of 2022. See the instructions for this
form at IRS.gov/Form8974.
.04 Form 941-SS and Form 941-PR will no longer be available after the fourth quarter of
2023. Instead, employers in the U.S. territories will file Form 941, or, if you prefer your form
and instructions in Spanish, you can file new Form 941 (sp), Declaración del Impuesto Federal
TRIMESTRAL del Empleador.

Section 1.3 – Reminders

.01 Draft forms. Draft forms can be found at IRS.gov/DraftForms.

Section 1.4 – General Requirements for Reproducing IRS Official Form 941, Schedule B, Schedule D, Schedule R,
and Form 8974

.01 Submit substitute Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 to the IRS
for specifications review. Substitute Form 941, Schedule B, Schedule D, Schedule R, and Form
8974 that completely conform to the specifications contained in this revenue procedure do not
require prior approval from the IRS, but should be submitted to SCRIPS@IRS.gov to ensure that
they conform to IRS format and scanning specifications.
.02 Print the form on standard 8.5-inch wide by 11-inch paper.
.03 Use white paper that meets generally accepted weight, color, and quality standards (minimum
20 lb. white bond paper).

March 27, 2023

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Note. Reclaimed fiber in any percentage is permitted provided that the requirements of this
standard are met.
.04 The IRS prefers printing Form 941 on both sides of a single sheet of paper, but it is acceptable
to print on one side of each of two separate sheets of paper.
.05 Make the substitute paper form as identical to the official form as possible.
.06 Print the substitute form using nonreflective black (not blue or other-colored) ink. Printing in
an ink color other than black may reduce readability in the scanning process. This may result in
figures being too faint to be recognizable.
.07 Use typefaces that are substantially identical in size and shape to the official form and use rules
and shading (if used) that are substantially identical to those on the official form. Use font size as
large as possible within the fields.
.08 In the same location as shown on the official IRS forms, print the six-digit form ID code (if one
exists on the official form) on each form using nonreflective black, carbon-based, 12-point font.
The use of non-OCR-A font may reduce readability for scanning. Use the official form to develop
your substitute form.
Note. Maintain as much white space as possible around the form ID code. Do not allow character
strings to print adjacent to the code.
The following six-digit form ID codes are used on Form 941, Schedule B, Schedule R, and Form
8974 for the first quarter of 2023. Print “950122” on Form 941, page 1; “951222” on Form 941,
page 2; “950922” on Form 941, page 3; “951020” on Form 941, page 4; “960311” on Schedule B;
“951422” on Schedule R, page 1; “951522” on Schedule R, page 2; and “950823” on Form 8974.
You must always use the form ID code provided on the current form for the applicable quarter
for which you are creating a substitute form, even if this revenue procedure is not superseded to
reflect a change to a form ID code. See Section 1.5 for information on form ID codes for softwaregenerated forms.
Note. Page 4 of Form 941 (page intentionally left blank) is not required to be filed with the IRS
as part of a substitute Form 941. However, if page 4 of the substitute Form 941 is filed, it must
include the form ID code.
.09 Print the OMB number in the same location as on the official form. Be sure to include the
OMB number on Form 941, Schedule B, Schedule D, Schedule R, and Form 8974.
.10 Print all entry boxes and checkboxes exactly as shown (location and size) on the official
forms.
Note. Instead of a four-sided checkbox for the entry, just the bottom line of the box can be used as
long as the location and size remain the same.
.11 Print “For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment
Voucher.” at the bottom of page 1 of Form 941.

Bulletin No. 2023–13

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March 27, 2023

.12 Print “For Paperwork Reduction Act Notice, see separate instructions.” at the bottom of
Schedule B and Schedule D.
.13 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of
Schedule R.
.14 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of
Form 8974.
.15 Do not print the form catalog number (“Cat. No.”) at the bottom of the forms or instructions.
Instead, print your IRS-issued three-letter substitute form source code in place of the catalog
number on the left at the bottom of page 1 of Form 941, Schedule B, Schedule D, Schedule R, and
Form 8974.
Note. You can obtain a three-letter substitute form source code by requesting it by email at
SubstituteForms@IRS.gov. Enter “Substitute Forms” on the subject line.
.16 Do not print the Government Publishing Office (GPO) symbol at the bottom of the forms or
instructions.

Section 1.5 – Reproducing Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 for Software-Generated
Paper Forms

.01 You may use the PDF files to develop the layout for your forms. Draft forms found at IRS.
gov/DraftForms can be used to develop interim formats until the forms are finalized. When forms
become finalized, they are posted and can be found at IRS.gov/Forms. You may use 6x10 grid
formats to develop software versions of Form 941, Schedule B, Schedule D, Schedule R, and
Form 8974.
Please follow the specifications exactly to develop the fields.
.02 If you are developing software using the 6x10 grid, the following six-digit form ID codes are
used on Form 941, Schedule B, Schedule R, and Form 8974 for the first quarter of 2023.
•

“970122” for Form 941, page 1; “971222” for Form 941, page 2; “970922” for Form 941,
page 3; “971020” for Form 941, page 4; “970311” for Schedule B; “971422” for Schedule R,
page 1; “971522” for Schedule R, page 2; and “970823” for Form 8974.
You must always use the form ID code provided on the current form, with the first two digits
changed to “97” when using a 6x10 grid, for the applicable quarter for which you are creating
a substitute form, even if this revenue procedure is not superseded to reflect a change to a form
ID code.
Note. Maintain as much white space as possible around the form ID code. Do not allow
character strings to print adjacent to the code.

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•

Place all 6x10 grid boxes and entry spaces in the same field locations as indicated on the
official forms.

•

Use single lines for “Employer Identification Number (EIN)” and other entry areas in the
entity section of Form 941, pages 1, 2, and 3; Schedule B; Schedule R, pages 1 and 2; and
Form 8974.

•

Reverse type is not needed as shown on the official form.

•

Do not pre-print decimal points in the data boxes. However, where the amounts are required,
the amounts should be printed with decimal points and place holders for cents.

•

Delete the pre-printed formatting in any “date” boxes.

•

Use a single box for “Personal Identification Number (PIN)” on Form 941.

•

You may delete all shading when using the 6x10 grid format.

.03 If producing both the form and the data or the form only, print your three-letter source code
at the bottom of Form 941, page 1; Schedule B; Schedule D; Schedule R, page 1; or Form 8974.
See Section 1.4.15.
.04 If producing only the data on the form, print your four-digit software industry vendor code
on Form 941. The four-digit vendor code preceded by four zeros and a slash (0000/9876) must
be pre-printed. If you have a valid vendor code issued to you through the National Association
of Computerized Tax Processors (NACTP), you should use that code. If you do not have a valid
vendor code, contact the NACTP via email at president@nactp.org for information on these codes.
.05 Print “For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment
Voucher.” at the bottom of Form 941, page 1.
.06 Print “For Paperwork Reduction Act Notice, see separate instructions.” at the bottom of
Schedule B and Schedule D.
.07 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of
Schedule R, page 1.
.08 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of
Form 8974.
.09 Be sure to print the OMB number in the same location as on the official forms on substitute
Form 941, Schedule B, Schedule D, Schedule R, and Form 8974.
.10 Do not print the form catalog number (“Cat. No.”) at the bottom of the forms or instructions.
.11 Do not print the Government Publishing Office (GPO) symbol at the bottom of the forms or
instructions.
.12 To ensure accurate scanning and processing, enter data on Form 941, Schedule B, Schedule D,
Schedule R, and Form 8974 as follows.

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•

Display/print the name and EIN on all pages and attachments in the proper associated fields.

•

Use 12-point (minimum 10-point) Courier font (where possible).

•

Omit dollar signs. Commas are optional.

•

Except for Form 941, lines 1, 2, and 12, leave blank any data field with a value of zero.

•

Enter negative amounts with a minus sign. For example, report “-10.59” instead of “(10.59).”

Note. The IRS prefers that you use a minus sign for negative amounts instead of parentheses or
some other means. However, if your software only allows for parentheses in reporting negative
amounts, you may use them.

Section 1.6 – Specific Instructions for Schedule D

.01 To properly file and to reduce delays and contact from the IRS, Schedule D must be produced
as close as possible to the official form.
.02 Use Schedule D to explain why you have certain discrepancies. See the Instructions for
Schedule D for more information. In many cases, the information on Schedule D helps the IRS
resolve discrepancies without contacting you.
.03 If a substitute Schedule D is not submitted in similar format to the official IRS schedule, the
substitutes may be returned, you may be contacted by the IRS, delays in processing may occur,
and you may be subject to penalties.

Section 1.7 – Specific Instructions for Schedule R

.01 To properly file and to reduce delays and contact from the IRS, Schedule R and Continuation
Sheets for Schedule R must be produced as close as possible to the official form.
Note. Do not present the information in spreadsheet or similar format. We may not be able to
properly process nonconforming documents with an excessive number of entries. Complete as
many Continuation Sheets for Schedule R (Schedule R, page 2) as necessary. If Continuation
Sheets are not used or they vary in form from the official form, processing may be delayed and
you may be subject to penalties.
.02 Use Schedule R to allocate the aggregate information reported on Form 941 to each client. If
you have more than 5 clients, complete as many Continuation Sheets for Schedule R as necessary.
Attach Schedule R, including any Continuation Sheets, to your aggregate Form 941 and file it
with your return.

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Enter your business information carefully.
Make sure all information exactly matches the information shown on the aggregate Form 941.
Compare the total of each column on Schedule R, line 9 (including your information on line 8),
to the amounts reported on the aggregate Form 941. For each column total of Schedule R, the
relevant line from Form 941 is noted in the column heading. If the totals on Schedule R, line 9, do
not match the totals on Form 941, there is an error that must be corrected before submitting Form
941 and Schedule R.
.03 Do:
•

Develop and submit only conforming Schedules R;

•

Follow the format and fields exactly as on the official Schedule R, even if this revenue
procedure is not superseded to reflect a change in a column heading on Schedule R; and

•

Maintain the same number of entry lines on the substitute Schedule R as on the official form.

.04 Do not:
•

Add or delete entry lines;

•

Submit spreadsheets, database printouts, or similar formatted documents instead of using the
Schedule R format to report data; and

•

Reduce or expand font size to add or delete extra data or lines.

.05 If substitute Schedules R and Continuation Sheets for Schedule R are not submitted in similar
format to the official schedule, the substitutes may be returned, you may be contacted by the IRS,
delays in processing may occur, and you may be subject to penalties.

Section 1.8 – Specific Instructions for Form 8974

.01 To properly file and to reduce delays and contact from the IRS, Form 8974 must be produced
as close as possible to the official form.
.02 Use Form 8974 only if you are claiming the qualified small business payroll tax credit for
increasing research activities.
.03 If a substitute Form 8974 is not submitted in similar format to the official IRS form, the
substitutes may be returned, you may be contacted by the IRS, delays in processing may occur,
and you may be subject to penalties.

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Section 1.9 – Office of Management and Budget (OMB) Requirements for Substitute Forms

.01 The Paperwork Reduction Act (the Act) of 1995 (P.L. 104-13) requires the following.
•

OMB approves all IRS tax forms that are subject to the Act.

•

Each IRS form contains the OMB approval number, if assigned. The official OMB numbers
may be found on the official IRS-printed forms.

•

Each IRS form (or its instructions) states:
1.

Why the IRS needs the information,

2.

How it will be used, and

3.

Whether or not the information is required to be furnished to the IRS.

.02 This information must be provided to any users of official or substitute IRS forms or instructions.
.03 The OMB requirements for substitute IRS forms are the following.
•

Any substitute form or substitute statement to a recipient must show the OMB number as it
appears on the official form.

•

For Form 941, Schedule B, Schedule D, Schedule R, and Form 8974, the OMB number (15450029) must appear exactly as shown on the official form.

•

For Form 941, Schedule B, Schedule D, Schedule R, and Form 8974, the OMB number must
use one of the following formats.
1.

OMB No. 1545-0029 (preferred).

2.

OMB # 1545-0029 (acceptable).

.04 If no instructions are provided to users of your forms, you must furnish to them the exact text
of the Privacy Act and Paperwork Reduction Act Notice.

Section 1.10 – Order Forms and Instructions

.01 You can order forms and instructions at IRS.gov/OrderForms.

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Section 1.11 – Effect on Other Documents

.01 Revenue Procedure 2022-15, 2022-13 I.R.B. 908, dated March 28, 2022, is superseded.

Section 1.12 – Helpful Information

.01 Please follow the specifications and guidelines to produce substitute Form 941, Schedule B,
Schedule D, Schedule R, and Form 8974.
.02 These forms are subject to review and possible changes, as required. Therefore, employers are
cautioned against overstocking supplies of privately printed substitutes.
.03 Here is a review of references that were listed throughout this document.

Bulletin No. 2023–13

•

Form 941, Employer’s QUARTERLY Federal Tax Return.

•

Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors (referred
to in this revenue procedure as “Schedule B”).

•

Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers,
or Consolidations (referred to in this revenue procedure as “Schedule D”).

•

Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers (referred to in
this revenue procedure as “Schedule R”).

•

Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities.

•

Substitute territorial forms (941-PR, 941-SS, and Anexo B (Formulario 941-PR)).

•

Instructions for Form 941.

•

Instructions for Schedule B (Form 941).

•

Instructions for Schedule D (Form 941).

•

Instructions for Schedule R (Form 941).

•

Instructions for Form 8974.

•

Pub. 15, Employer’s Tax Guide.

•

SCRIPS@IRS.gov for submissions.

•

SubstituteForms@IRS.gov for questions.

591

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•

For questions:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
5000 Ellin Road, Mail Stop C6-110
Lanham, MD 20706

•

IRS.gov/DraftForms for draft forms.

•

IRS.gov/Forms for final forms.

Section 1.13 – Exhibits

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26 CFR 601.601: Rules and Regulations.
(Also Part I, §§ 4980H; 54.4980H)

Rev. Proc. 2023-17
SECTION 1. PURPOSE
This revenue procedure provides indexing adjustments for the applicable dollar amounts under § 4980H(c)(1) and (b)
(1) of the Internal Revenue Code. These
indexed amounts are used to calculate the
employer shared responsibility payments
(ESRP) under § 4980H(a) and (b)(1),
respectively.
SECTION 2. ADJUSTED ITEMS
Under § 4980H(c)(5), in the case of any
calendar year after 2014, the applicable
dollar amounts of $2,000 and $3,000 under § 4980H(c)(1) and (b)(1), respectively, are increased by an amount equal to the
product of such dollar amount and the premium adjustment percentage (as defined
in § 1302(c)(4) of the Patient Protection
and Affordable Care Act1) for the calendar

1
2

year. If the amount of any increase is not a
multiple of $10, such increase is rounded
to the next lowest multiple of $10.
The Department of Health and Human
Services (HHS) published the premium
adjustment percentage for 2024 on December 12, 2022, using the most recent
National Health Expenditure Accounts
(NHEA) income and premium data that
was available at the time of publication.
For calculation of the 2024 benefit year
payment parameters, HHS used the NHEA
Projections 2021-2030, the data source
that reflected the most recent projections
available. Using the NHEA Projections
2021-2030, the premium adjustment percentage for 2024 is the percentage (if any)
by which the NHEA Projections 20212030 value for per enrollee ESI premiums
for 2023 ($7,292) exceeds the NHEA Projections 2021-2030 value for per enrollee
ESI premiums for 2013 ($4,894) carried
out to ten significant digits. Using this formula, the applicable premium adjustment
percentage is 1.4899877401.2 For calendar year 2024, the adjusted $2,000 amount
under § 4980H(c)(1) is $2,970 ($2,000

x 1.4899877401 = $2,979.9754802
rounded down to $2,970), and the adjusted $3,000 amount under § 4980H(b)
(1) is $4,460 ($3,000 x 1.4899877401 =
$4,469.9632203 rounded down to $4,460).
SECTION 3. EFFECTIVE DATE
This revenue procedure is effective for
taxable years and plan years beginning after December 31, 2023.
SECTION 4. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Jennifer Friedman of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and
Employment Taxes). For further information regarding this revenue procedure,
contact the Health and Welfare Branch
in the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organizations, and Employment Taxes) at (202)
317-5500 (not a toll-free number).

Pub. L. 111–148, 124 Stat. 119 (2010).
See https://www.cms.gov/files/document/2024-papi-parameters-guidance-2022-12-12.pdf.

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604

Bulletin No. 2023–13

26 CFR 301.7705: Applying for and maintaining certification as a certified professional employer organization.

Rev. Proc. 2023-18
TABLE OF CONTENTS
SECTION 1. BACKGROUND AND DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606
.01 Nature of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
.03 Changes and request for comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
SECTION 2. PROCEDURES FOR APPLYING FOR CERTIFICATION AS A CPEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
.01 Method of submission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
.02 Controlled groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
.03 User fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610
.04 Surety letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610
.05 Submission of annual audited financial statements, CPA opinion, and statement of working capital. . . . . . . . . . . . . . . 610
.06 Submission of quarterly assertions, attestations, and working capital statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611
SECTION 3. SUITABILITY AND TAX-COMPLIANCE CHECK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
SECTION 4. STANDARDS FOR GRANTING CERTIFICATION AS A CPEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
.01 Eligibility for certification must be established in the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
.02 Incomplete or inaccurate application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
.03 Even if an application is complete, additional information may be required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
.04 CPEO applicant must notify IRS of material changes relevant to its application for certification . . . . . . . . . . . . . . . . . 613
SECTION 5. WITHDRAWAL OF APPLICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.01 Application may be withdrawn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.02 Information may be used in subsequent examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
SECTION 6. NOTICE OF CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.01 Notice of certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.02 Proof of bond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.03 Effective date of certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.04 Disclosure of organizations certified as CPEOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
SECTION 7. DENIAL OF CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.01 Notice of proposed denial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.02 Circumstances in which denial is final, with no opportunity for review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
.03 Request for review of a notice of proposed denial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614
.04 Notice of final denial where no request for review of the proposed denial is submitted. . . . . . . . . . . . . . . . . . . . . . . . . 614
.05 How the IRS handles a request for review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614
.06 Consideration by OPR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
.07 A request for review may be withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
SECTION 8. PROCEDURES FOR MAINTAINING CERTIFICATION AS A CPEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
.01 In general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
.02 Annual verification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
.03 Bond requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
.04 Submission of annual audited financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
.05 Submission of quarterly assertions, attestations, and working capital statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618
.06 Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618

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SECTION 9. SUSPENSION AND REVOCATION OF CPEO CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
.01 In general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
.02 Specific failures resulting in suspension and proposed revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622
.03 Notice of suspension and proposed revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622
.04 Notice of final revocation issued if no request for review of the proposed revocation is submitted. . . . . . . . . . . . . . . . 623
.05 How the IRS handles a request for review of the proposed revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623
.06 Consideration by OPR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
.07 A request for review may be withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
.08 Notice of final revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
.09 Consequences of revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
.10 Reapplication after revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
SECTION 10. VOLUNTARY TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
.01 Notice of voluntary termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
.02 Notice of termination sent to customers by IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
.03 Effect of voluntary termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .625
.04 Reapplication after voluntary termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
SECTION 11. EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
SECTION 12. PAPERWORK REDUCTION ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
SECTION 13. DRAFTING INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626

SECTION 1. BACKGROUND AND
DEFINITIONS
The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014,
enacted on December 19, 2014, as part of
the Tax Increase Prevention Act of 2014
(Pub. L. 113-295), added sections 3511
and 7705 to the Internal Revenue Code
(Code) relating to the certification requirements for, and the federal employment tax
consequences of being, a certified professional employer organization (CPEO).
The ABLE Act requires the establishment
of a voluntary program for persons to apply to the Internal Revenue Service (IRS)
to become certified as a CPEO. On May
6, 2016, the Department of the Treasury
(Treasury Department) and the IRS published final and temporary regulations under section 7705 (TD 9768) in the Federal
Register (81 FR 27315, as corrected July
12, 2016, at 81 FR 45012) that describe
the application process and certification
requirements necessary for a person to become and remain a CPEO. On the same
date, the Treasury Department and the IRS
published a notice of proposed rulemak-

March 27, 2023

ing (REG-127561-15) in the Federal Register (81 FR 27360) cross-referencing
the temporary regulations and proposing
additional regulations under section 3511
that describe the federal employment tax
consequences of becoming a CPEO for
CPEOs and their customers.
On June 3, 2016, Revenue Procedure
2016-33 (2016-25 I.R.B. 1034) was issued, providing procedures for applying
to be certified as a CPEO. To address several comments received in response to the
temporary and proposed regulations and
Revenue Procedure 2016-33 that required
prompt attention, the Treasury Department
and the IRS issued Notice 2016-49 (201634 I.R.B. 265) on August 5, 2016. The
Treasury Department and the IRS also issued Revenue Procedure 2017-14 (2017-3
I.R.B. 426) on December 29, 2016, which
addressed the requirements for a CPEO to
remain certified and the procedures relating to suspension and revocation of CPEO
certification. Final regulations under sections 3511 and 7705 (TD 9860) describing the certification requirements necessary for a person to become and remain
a CPEO, and the federal employment tax

606

consequences of being a CPEO, which incorporated changes from Notice 2016-49,
were published in the Federal Register (84
FR 24367) on May 28, 2019.
This revenue procedure modifies and
supersedes both Rev. Proc. 2016-33 and
Rev. Proc. 2017-14. It addresses the procedures for applying to be certified as a
CPEO, the requirements for a CPEO to
remain certified, and the procedures relating to suspension and revocation of CPEO
certification. This revenue procedure consolidates the ongoing requirements articulated in Rev. Proc. 2016-33, as modified
by Notice 2016-49, Rev. Proc. 2017-14,
and the regulations under sections 3511
and 7705. In addition, it reflects changes
in the ongoing operations of the CPEO
program, including updates to the IRS
Online Registration System, since Rev.
Proc. 2016-33 and Rev. Proc. 2017-14
were issued, and changes in response to
comments and questions received from
CPEOs and CPEO applicants.
The IRS received several written comments in response to the proposed and
temporary regulations, Rev. Proc. 201633, Rev. Proc. 2017-14, and Notice 2016-

Bulletin No. 2023–13

49. While all relevant comments were
considered and addressed in the final regulations, some comments were beyond the
scope of the regulations. When appropriate, comments not addressed in the final
regulations because they were beyond the
scope of the regulations were considered
in the drafting of this revenue procedure.
.01 Nature of Changes. This revenue
procedure provides clarifications and
substantive changes to the procedures
outlined in Rev. Proc. 2016-33 and Rev.
Proc. 2017-14. Specifically, this revenue
procedure:
(1) Expands and defines the role of the
application submitter in order to make
application processing, document and
information submission, and other communications with respect to the CPEO
applicant or CPEO more efficient. Because of this expanded role, this revenue
procedure also further clarifies who can
be an application submitter. Rev. Proc
2016-33, section 2.01, provided that the
individual submitting the online application for CPEO certification on behalf of
the CPEO applicant must be authorized
by section 6103(e) to inspect the return
of the CPEO applicant. Furthermore, Rev.
Prov. 2017-14, section 2.01, provided that
the individual submitting information
and documents on behalf of the CPEO
through the CPEO’s online account must
be authorized by section 6103(e) to inspect the returns and return information of
the CPEO. Under this revenue procedure,
an application submitter must either hold
a position specified in section 1.02(1)1 or
have a valid Form 2848, Power of Attorney and Declaration of Representative, for
the CPEO applicant or CPEO on file with
the IRS.
(2) Provides updates to the procedures
for a denial of CPEO certification and for
the suspension and proposed revocation
of a certification—specifically, procedures concerning what information the
IRS CPEO program office will consider
when reviewing a CPEO applicant’s or
CPEO’s request for review and when this
information should be submitted. Further,
additional detail is provided concerning
review by the IRS Office of Professional Responsibility (OPR), including rules

1

prohibiting most communications between OPR and the IRS CPEO Program
Office and between OPR and the CPEO
applicant or CPEO during OPR’s review.
(3) Provides information on how
CPEOs should submit Form 8973, Certified Professional Employer Organization/
Customer Reporting Agreement, unsigned
by a client, for CPEOs that occasionally
experience difficulty in obtaining a signature on Form 8973 from a client subject to a service agreement described in
§ 31.3504-2(b)(2).
(4) Provides additional details concerning the CPEO applicant’s and CPEO’s use
of the IRS Online Registration System account, including a requirement that CPEO
applicants and CPEOs that are members
of a controlled group in which more than
one member of the controlled group is a
CPEO applicant or CPEO must create a
controlled group license within the IRS
Online Registration System.
(5) Clarifies that as part of an examination level attestation indicating that the
CPEO or CPEO applicant failed to withhold or make deposits in certain immaterial aspects, the CPEO or CPEO applicant
may include an explanation not only as
to why the failures were immaterial, but
also how the failures were addressed, if
applicable.
(6) Provides updates to the fingerprint
procedures for responsible individuals.
Specifically, all responsible individuals
are now required to submit fingerprints
electronically using Fieldprint. Fingerprint submissions on Form FD-258 will
no longer be processed. All current responsible individuals will have until
June 1, 2023, to submit new fingerprints
electronically.
.02 Definitions. For purposes of this
revenue procedure—
(1) Application Submitter. The term
“application submitter” means the individual who is submitting an application
on behalf of a CPEO applicant and any
other individual submitting information
and documents to the IRS on behalf of
a CPEO. Except as provided in this section 1.02(1), the application submitter
must be a partner or limited partner if the
CPEO applicant or CPEO is a partner-

ship; the president, vice president, secretary, treasurer, chief accounting officer,
any tax officer (including Controller), 1%
shareholder (corporation), or shareholder
(S-corporation) if the CPEO applicant or
CPEO is a corporation or S-corporation;
or owner or sole proprietor if the CPEO
applicant or CPEO is a sole proprietorship. An individual who does not occupy
one of these positions must have a valid
Form 2848, Power of Attorney and Declaration of Representative, for the CPEO
applicant or CPEO on file with the IRS in
order to be the application submitter.
(2) Controlled Group. The term “controlled group” means any group of corporations or trades or businesses under
common control within the meaning of
section 414(b) and (c), and §§ 1.414(b)-1
and 1.414(c)-1 through 1.414(c)-6 of the
Treasury Regulations.
(3) Certified Public Accountant. The
term “certified public accountant” (CPA)
means a certified public accountant who-(a) With respect to a CPEO or CPEO
applicant, is independent of the CPEO
or CPEO applicant (as prescribed by the
American Institute of Certified Public Accountants’ Professional Standards, Code
of Professional Conduct, and its interpretations and rulings);
(b) Is not currently under suspension or
disbarment from practice before the IRS;
(c) Is duly qualified to practice in any
state; and
(d) Files with the IRS a written declaration that the CPA is currently qualified
as a CPA.
(4) Covered Employee. The term “covered employee” means, with respect to
a customer, any individual (other than a
self-employed individual, as defined in
section 1.02(18)) who performs services
for the customer and who is covered by
a CPEO contract between the CPEO and
the customer.
(5) CPEO. The term “CPEO” means a
person that has been certified by the Commissioner as meeting the requirements
of § 301.7705-2, this revenue procedure,
instructions in the online application, and
any applicable subsequent guidance, and
whose certification has not been revoked
or voluntarily terminated.

Unless otherwise indicated, all references to sections in this document refer to sections of this revenue procedure.

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(6) CPEO Applicant. The term “CPEO
applicant” means a person that submits
or has submitted an application to be
certified as a CPEO in accordance with
§ 301.7705-2, this revenue procedure,
the instructions in the online application,
and any applicable subsequent guidance.
A CPEO applicant remains a CPEO applicant until the CPEO applicant is certified
(meaning the CPEO applicant receives a
notice of certification described in section
6.01 and timely and correctly submits a
proof of bond, as described in section
6.02); withdraws its application; or receives a notice of final denial, as described
in section 7.04.
(7) CPEO Contract. The term “CPEO
contract” means a service contract between a CPEO and a customer that satisfies the requirements in section 7705(e)(2)
and § 301.7705-1(b)(3).
(8) Customer. The term “customer” means any person who enters into a
CPEO contract with a CPEO, except that
a provider of employment-related services
that uses its own employer identification
number (EIN) for filing federal employment tax returns on behalf of its clients (or
that used its own EIN for filing its clients’
returns immediately prior to entering into
a CPEO contract with the CPEO) is not
a customer, even if it has entered into a
CPEO contract with the CPEO.
(9) Federal Employment Taxes. The
term “federal employment taxes” means
the taxes imposed by subtitle C of the
Code.
(10) Guidance. The term “guidance”
includes guidance published in the Federal Register or Internal Revenue Bulletin,
as well as administrative guidance such as
forms, instructions, publications, or other
guidance on IRS.gov.
(11) IRS Online Registration System.
The term “IRS Online Registration System” means the system made available by
the IRS on IRS.gov and used by CPEO
applicants and CPEOs to apply for and
maintain certification, and by responsible individuals of CPEO applicants and
CPEOs to create a Responsible Individual
Personal Attestation. To apply for certification, CPEO applicants must create an
account on the IRS Online Registration
System, and CPEO applicants must use
this account to provide the IRS with the
information and supporting documenta-

March 27, 2023

tion necessary to obtain certification. A
CPEO must use its IRS Online Registration System account to annually verify
information previously submitted, to provide updates that reflect material changes
to previously submitted information, and
to comply with annual and quarterly program requirements. Responsible individuals of CPEO applicants and CPEOs must
use the IRS Online Registration System to
create a Responsible Individual Personal
Attestation (RIPA), through which they
provide the information necessary for
their CPEO applicants and CPEOs to obtain and maintain certification. See section
2.02 for a discussion of controlled group
licenses and their use on the IRS Online
Registration System.
(12) Online Application. The term
“online application” means the electronic
submission by a CPEO applicant and its
responsible individuals of all information
required by the CPEO application for certification on the IRS Online Registration
System, as well as the accompanying
forms and documentation required by
§ 301.7705-2, this revenue procedure, and
any applicable subsequent guidance.
(13) Precursor Entity. The term “precursor entity” means an entity described
in § 301.7705-1(b)(10).
(14) Qualified Surety. The term “qualified surety” means a surety that meets the
requirements of § 301.7705-2(g)(6).
(15) Related Entity. The term “related entity” means an entity described in
§ 301.7705-1(b)(12).
(16) Responsible Individual. The term
“responsible individual” means an individual described in § 301.7705-1(b)(13).
(17) Responsible Individual Personal Attestation. The term “Responsible
Individual Personal Attestation” (RIPA)
means the attestation a responsible individual must submit through the IRS Online Registration System as a prerequisite
to the organization submitting a CPEO
application via the IRS Online Registration System. The RIPA contains information that will allow the IRS to perform
a suitability check on the responsible
individual.
(18) Self-Employed Individual. The
term “self-employed individual” means an
individual with net earnings from self-employment (as defined in section 1402(a)
and without regard to the exceptions

608

thereunder) derived from providing services covered by a CPEO contract, whether the net earnings from self-employment
are derived from providing services as a
non-employee to a customer of the CPEO,
from the individual’s own trade or business as a sole proprietor customer of the
CPEO, or as an individual who is a partner
in a partnership that is a customer of the
CPEO, but in each case only with regard
to those net earnings.
(19) Work Site. The term “work site”
means a physical location at which an individual regularly performs services for
a customer of a CPEO or, if there is no
physical location at which an individual
regularly performs services for a customer
of a CPEO, the location from which the
customer assigns work to the individual.
A work site may not be the individual’s
residence or a telework site unless the
customer requires the individual to work
at that site. For purposes of this section
1.02(19), work sites that are contiguous
locations will be treated as a single physical location and thus a single work site,
and noncontiguous locations will be treated as separate physical locations and thus
separate work sites, except as provided in
the next sentence. A CPEO customer may
treat noncontiguous locations as a single
physical location and thus a single work
site if each of the locations is separated by
less than 35 miles from every other location in the single work site, and all locations in the single work site operate in the
same industry. For purposes of the preceding sentence, the determination of the industry of a work site is based on the nature
of the CPEO customer’s work at that work
site, irrespective of work performed by
other entities at the same site. When treating noncontiguous locations as a single
physical location and thus a single work
site, a noncontiguous location cannot be
included in more than one work site.
(20) Work Site Employee. The term
“work site employee” means, with respect
to a customer, a covered employee who
performs services for the customer at a
work site where, at any time during a calendar quarter, at least eighty-five percent
of the individuals performing services for
the customer are covered employees of
the customer. To be a work site employee,
a covered employee regularly performing services for a customer at a work site

Bulletin No. 2023–13

during a calendar quarter is not required
to be performing services for the customer
at the time the work site coverage requirement is met at that work site.
(a) Solely for purposes of determining
whether the eighty-five percent threshold
described in this section 1.02(20) is met,
a self-employed individual described in
section 1.02(18) is treated as a covered
employee if the individual is performing
services at the work site and would be a
covered employee but for the exclusion of
self-employed individuals from the definition of a covered employee in section
1.02(4).
(b) In determining whether the eightyfive percent threshold is met, an individual
who is an excluded employee described in
section 414(q)(5) is not treated as either an
individual providing services or covered
employee.
(c) A covered employee will be considered a work site employee for the entirety
of a calendar quarter with respect to all
services performed for a customer at one
or more work sites if the employee qualifies as a work site employee with respect
to the customer at any work site during
that calendar quarter.
(d) The determination of whether a
work site meets the eighty-five percent
threshold is made separately with respect
to each customer of a CPEO and with
respect to each work site of a customer.
However, a covered employee may be
determined to be a work site employee of
more than one work site during a calendar
quarter.
(e) A CPEO’s determination that a covered employee is a work site employee
will be respected if the CPEO has made
a good faith determination that the covered employee meets the requirements
of section 7705(e), § 301.7705-1(b)(17),
this section 1.02(20), and any applicable
subsequent guidance related to work site
employee determinations.
.03 Changes and request for comments.
This revenue procedure may be updated
periodically to improve CPEO program
procedures. The IRS solicits comments on
this revenue procedure and the administration of the CPEO program. Comments

on whether additional guidance is needed due to ongoing changes in workforce
practices that have in part resulted from
the COVID-19 pandemic as those changes
relate to the definition of work site or work
site employee are specifically requested
and should be submitted by June 9, 2023.
All comments will be available for public
inspection and copying. Comments may
be submitted in one of two ways:
(1) Mail. Send paper submissions to:
CC:PA:LPD:PR (RP-2023-18), Room
5203, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044.
(2) Electronically. Submit electronic
submissions via the Federal eRulemaking
Portal at www.regulations.gov (indicate
IRS and RP-2023-18) by following the online instructions for submitting comments.
Once submitted to the Federal eRulemaking Portal, comments cannot be edited or
withdrawn. Commenters are strongly encouraged to submit public comments electronically. The Treasury Department and
the IRS will publish for public availability
any comment submitted electronically,
and to the extent practicable on paper, to
its public docket.
SECTION 2. PROCEDURES FOR
APPLYING FOR CERTIFICATION AS
A CPEO
.01 Method of submission. A person
seeking certification as a CPEO must
electronically submit through its IRS
Online Registration System account a
properly completed and executed online
application for CPEO certification and all
accompanying forms and documentation
required by § 301.7701-2, this revenue
procedure, the instructions in the online
application, and any applicable subsequent guidance. Paper submissions will
not be accepted and will be treated as an
incomplete application as described in
section 4.02. Except as otherwise provided in this revenue procedure or the instructions in the online application, documents required to be submitted after the
application is submitted must also be submitted electronically through the CPEO

applicant’s IRS Online Registration System account. Only an application submitter can submit the online application for
CPEO certification and all accompanying
forms and documentation. In addition,
each of the CPEO applicant’s responsible
individuals must electronically submit a
properly completed and executed RIPA at
the time and in the manner described in
the instructions in the online application.2
As of June 1, 2022, responsible individuals must also submit fingerprints electronically using Fieldprint, or by another
method permitted in the instructions in
the online application. Fingerprint submissions on an FD-258, Fingerprint Card,
will no longer be processed. All current
CPEO responsible individuals will have
until June 1, 2023, to submit new fingerprints electronically. For more information on the electronic fingerprinting
process, including scheduling an appointment, see Publication 5249, Fingerprint
Card Instructions for Voluntary Certification of Professional Employer Organizations. For more information on how
to electronically submit the information
and documents required in this revenue
procedure, see instructions in the online
application or responsible individual’s
RIPA accessible through the CPEO’s IRS
Online Registration System account.
.02 Controlled groups. If more than
one member of a controlled group seeks to
be certified as a CPEO, each such member
must submit a separate online application.
Members of a controlled group may not
apply jointly on one online application.
However, CPEOs and CPEO applicants
that are members of a controlled group in
which more than one member is a CPEO
or CPEO applicant must create a controlled group license within the IRS Online Registration System. The controlled
group license will formalize the link between members of the controlled group
in the system and will allow for certain
documents to be submitted only once for
all CPEO and CPEO applicant members
in the controlled group. See sections 2.04,
2.05(6), and 2.06(5) for details regarding
the necessary documentation relating to
the bond and financial review require-

Once the RIPA is submitted, the information contained in the RIPA becomes return information, under section 6103, of the CPEO applicant and may be disclosed to the CPEO applicant if
the IRS determines that the disclosure will not seriously impair federal tax administration.

2

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609

March 27, 2023

ments that CPEO applicants that are members of a controlled group must submit.
.03 User fee. Consistent with section
7528(b)(4), upon submission of the online
application for certification through the
IRS Online Registration System, the application submitter will be automatically
directed to pay a user fee in the amount of
$1,000. No CPEO application will be processed until the IRS receives the user fee.
Once processing of the application has begun, the user fee will not be returned, even
if the application is withdrawn or denied.
.04 Surety letter. With its online application, a CPEO applicant must submit
through its IRS Online Registration System account a signed letter from a qualified
surety confirming that the surety agrees to
issue a bond to the CPEO applicant if and
when it is certified as a CPEO (a “surety
letter”). The surety letter must also state
that the surety agrees to issue a bond in the
amount required by § 301.7705-2(g)(2)
and pursuant to the terms set forth in Form
14751, Certified Professional Employer
Organization Surety Bond. If a CPEO applicant is a member of a controlled group
of which other members are CPEO applicants or CPEOs, the surety letter must also
contain the name and EIN of each CPEO
applicant and each CPEO that is or will be
covered by the bond. All CPEO members
of a controlled group are required to be
on the same bond in the amount required
by § 301.7705-2(g)(2), applied as if all
such CPEO members (and any of their
precursor entities, if applicable) were one
organization.
.05 Submission of annual audited financial statements, CPA opinion, and
statement of working capital.
(1) Copy of annual audited financial
statements. With its online application, a
CPEO applicant must submit through its
IRS Online Registration System account a
copy of its annual audited financial statements for the most recently completed
fiscal year, except as provided in the next
sentence. If a CPEO applicant submits
its application before the last day of the
sixth month following its most recently completed fiscal year, and the audit
of the financial statements for that fiscal
year has not been completed at the time
it submits its application, the CPEO applicant must provide with its application
the annual audited financial statements for

March 27, 2023

the fiscal year immediately preceding the
most recently completed fiscal year, and
the CPEO applicant must subsequently
provide to the IRS the annual audited financial statements for the most recently
completed fiscal year by the last day of the
sixth month after such fiscal year ends. In
addition, for any fiscal year that ends after
the CPEO applicant submits its application for certification and on or before the
effective date of certification, the CPEO
applicant must provide the annual audited financial statements by the last day of
the sixth month after such fiscal year ends.
The obligations described in this section
2.05(1) continue even if the CPEO applicant is certified as a CPEO before the IRS
has received the annual audited financial
statements. See section 8.04 for obligations concerning annual audited financial
statements that continue after certification.
(2) CPA opinion. With each of these
annual audited financial statements, the
CPEO applicant must submit an opinion
of a CPA that the financial statements are
presented fairly and in accordance with
generally accepted accounting principles
(GAAP). The CPA opinion must be an
unmodified opinion (i.e., it cannot be a
qualified opinion, an adverse opinion, or
a disclaimer of opinion), accompanied by
a written and signed declaration that the
CPA is currently qualified as a CPA.
(3) Working capital statement. Each
of the annual audited financial statements
submitted to the IRS must include a st

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A38f1b2984ad806f4. Public record. Not legal advice.