Bulletin No. 2023–22

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Bulletin No. 2023–22

May 30, 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.

ADMINISTRATIVE

EMPLOYEE PLANS

Notice 2023-39, page 877.

Notice 2023-40, page 879.

This notice describes proposed amendments to the Income

Tax Regulations (26 CFR part 1) under § 148 of the Internal

Revenue Code (Code) that the Department of the Treasury

and the Internal Revenue Service intend to issue (forthcoming proposed regulations) regarding an exception to the

arbitrage investment restrictions under § 148 applicable to

bonds the interest on which is excludable from gross income

under § 103(a) (tax-exempt bonds). Specifically, the forthcoming proposed regulations will amend § 1.148-11(d)(1)

(i)(F) regarding whether certain perpetual trust funds created and controlled by States that are pledged as credit

enhancement to guarantee tax-exempt bonds will be treated

as replacement proceeds of the guaranteed bonds for purposes of the arbitrage investment restrictions on tax-exempt

bonds under § 148.

Rev. Proc. 2023-23, page 883.

This revenue procedure provides the 2024 inflation adjusted

amounts for Health Savings Accounts (HSAs) as determined

under § 223 of the Internal Revenue Code and the maximum

amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under

§ 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.

Finding Lists begin on page ii.

This notice sets forth updates on the corporate bond monthly

yield curve, the corresponding spot segment rates for May

2023 used under § 417(e)(3)(D), the 24-month average

segment rates applicable for May 2023, and the 30-year

Treasury rates, as reflected by the application of § 430(h)

(2)(C)(iv).

INCOME TAX

Notice 2023-38, page 872.

The notice provides the general rules taxpayers must satisfy

to qualify for the domestic content bonus credit amounts. In

addition to providing the general rules, it describes the manufactured product adjusted percentage rule under which all

manufactured products of an applicable project are deemed

to meet the domestic content requirement applicable to manufactured products. The notice also provides a safe harbor

for the classification of certain components in representative types of qualified facilities, energy projects, or energy

storage. Finally, the notice provides that certain retrofitted

projects are eligible for the domestic content bonus credit

amounts.

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.

May 30, 2023

Bulletin No. 2023–22

Part III

Domestic Content Bonus

Credit Guidance under

Sections 45, 45Y, 48, and

48E

Notice 2023-38

this notice for the domestic content bonus

credit requirements for any qualified

facility, energy project, or energy storage technology the construction of which

begins before the date that is 90 days after

the date of publication of the forthcoming proposed regulations in the Federal

SECTION 1. PURPOSE

SECTION 2. BACKGROUND

The Department of the Treasury

(Treasury Department) and the Internal

Revenue Service (IRS) intend to propose

regulations (forthcoming proposed regulations) addressing the application of the

rules that taxpayers must satisfy to qualify for the domestic content bonus credit

amounts under §§ 45, 45Y, 48, and 48E of

the Internal Revenue Code (Code).1 Public Law 117-169, 136 Stat. 1818 (August

16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA), amends

§§ 45 and 48 to provide a domestic content

bonus credit amount for certain qualified

facilities or energy projects placed in service after December 31, 2022, and adds

new §§ 45Y and 48E, which include a

domestic content bonus credit amount for

certain investments in qualified facilities

or energy storage technologies placed in

service after December 31, 2024.2 This

notice describes certain rules that the

Treasury Department and the IRS intend

to include in the forthcoming proposed

regulations regarding the domestic content bonus credit requirements and related

recordkeeping and certification requirements. This notice also describes a safe

harbor regarding the classification of certain components in representative types

of qualified facilities, energy projects, or

energy storage technologies. The Treasury

Department and the IRS intend to propose

that the forthcoming proposed regulations

will apply to taxable years ending after

May 12, 2023. Taxpayers may rely on the

rules described in sections 3 through 6 of

.01 Domestic Content Bonus Credit

Amounts. For purposes of this notice, an

“Applicable Project” refers to: (i) a qualified facility under §§ 45 or 45Y; (ii) an

energy project under § 48, which may

include qualified property for which a

valid irrevocable election under § 48(a)

(5) has been made to treat such qualified

property as energy property under § 48; or

(iii) a qualified investment with respect to

a qualified facility or energy storage technology under § 48E.

Domestic content bonus credit

amounts are available under §§ 45(b)(9),

45Y(g)(11), 48(a)(12), and 48E(a)(3)(B)

to increase the amount of a credit determined under § 45 (§ 45 credit), § 45Y

(§ 45Y credit), § 48 (§ 48 credit), and

§ 48E (§ 48E credit), respectively, for a

taxpayer whose Applicable Project satisfies the domestic content requirement

set forth in § 45(b)(9)(B)(i) (incorporated by cross-reference in § 48(a)(12),

which is incorporated by cross-reference

in § 48E(a)(3)(B)) and in § 45Y(g)(11)

(B)(i) (Domestic Content Requirement).

A taxpayer establishes that the Domestic Content Requirement is satisfied with

respect to an Applicable Project by certifying to the Secretary of the Treasury

or her delegate (Secretary) (at such time,

and in such form and manner, as the Secretary may prescribe) that “any steel,

iron, or manufactured product which is

a component of [the Applicable Project]

(upon completion of construction) was

produced in the United States (as deter-

mined under section [sic] 661 of title

49, Code of Federal Regulations).” See

§§ 45(b)(9)(B)(i) and 45Y(g)(11)(B)(i).

Sections 661.1 through 661.21 of title

49 of the Code of Federal Regulations,

which are known as the Buy America

Requirements, that are administered

by the Federal Transit Administration

(FTA), Department of Transportation.

Section 45(b)(9)(A) provides that in

the case of any § 45 qualified facility, the

amount of the § 45 credit (determined

after application of § 45(b)(1) through

(8)) is increased by 10 percent (not 10 percentage points) if the Domestic Content

Requirement is satisfied. Similarly, for any

§ 45Y qualified facility placed in service

after December 31, 2024, § 45Y(g)(11)

(A) provides that the amount of the § 45Y

credit (determined without application of

§ 45(g)(7)) is increased by 10 percent

(not 10 percentage points) if the Domestic

Content Requirement is satisfied.

Section 48(a)(12)(C) provides a domestic

content bonus credit amount for a § 48

energy project by increasing the “energy

percentage” provided in § 48(a)(2),

which is used to determine the amount of

the § 48 credit, by 10 percentage points if

(1) the Domestic Content Requirement is

satisfied and (2) any one of the following

requirements is satisfied (and by 2 percentage points if the Domestic Content

Requirement is satisfied and none of the

following requirements are satisfied): (i)

the energy project has a maximum net

output of less than 1 megawatt of electrical (as measured in alternating current)

or thermal energy; (ii) construction of

the energy project began before January 29, 2023;3 or (iii) the energy project

satisfies the prevailing wage and apprenticeship requirements in §§ 48(a)(10)(A)

and (11).

If the Domestic Content Requirement

is satisfied for any § 48E qualified investment with respect to a qualified facility or

energy storage technology placed in ser-

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

See § 13101(g) of the IRA for the domestic content bonus credit under § 45(b)(9), § 13701(a) of the IRA for the domestic content bonus credit under § 45Y(g)(11), § 13102(l) of the IRA for

the domestic content bonus credit under § 48(a)(12), and § 13702(a) of the IRA for the domestic content bonus credit under § 48E(a)(3)(B).

January 29, 2023 is the date 60 days after the November 30, 2022, publication date of Notice 2022-61, 2022-52 I.R.B. 560 (87 F.R. 73580 as corrected in 87 F.R. 75141), which provides

initial guidance regarding the prevailing wage and apprenticeship requirements in § 48(a)(10)(A) and (11) and other sections of the Code.

May 30, 2023

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Bulletin No. 2023–22

vice after December 31, 2024, § 48E(a)

(3)(B) provides that rules similar to the

rules of § 48(a)(12) apply for determining whether the domestic content bonus

credit amount increases the “applicable

percentage” provided in § 48E(a)(2) by

10 percentage points or 2 percentage

points.

Sections 45(b)(12) and 48(a)(16)

authorize the Secretary to issue such regulations or other guidance as the Secretary

determines necessary to carry out the purposes of §§ 45(b) and 48(a) (and therefore

the domestic content bonus credit rules

in §§ 45(b)(9), 48(a)(12), and 48E(a)(3)

(B) (by cross-reference to § 48(a)(12)),

including regulations or other guidance

that provide requirements for recordkeeping or information reporting for purposes

of administering the requirements of

§§ 45(b) and 48(a). Similarly, § 45Y(f)

authorizes the Secretary to issue guidance

regarding the implementation of § 45Y

(and therefore § 45Y(g)(11)), including

the determination of the amount of § 45Y

credits.

.02 Steel, Iron, or Manufactured Products. In general, the Domestic Content

Requirement applies to any steel, iron,

or Manufactured Product (as defined in

section 3.01(2)(c) of this notice) that is

a component of an Applicable Project.

Sections 45(b)(9)(B)(ii) and 45Y(g)(11)

(B)(ii) provide that the Domestic Content

Requirement for steel or iron applies in a

manner consistent with section 661.5 of

title 49, Code of Federal Regulations.

Sections 45(b)(9)(B)(iii) and 45Y(g)(11)

(B)(iii) provide that “manufactured products which are components of a qualified

facility upon completion of construction

shall be deemed to have been produced

in the United States if not less than the

adjusted percentage . . . of the total costs

of all such manufactured products of such

facility are attributable to manufactured

products (including components) which are

mined, produced, or manufactured in the

United States” (Adjusted Percentage Rule).

Section 45(b)(9)(C) provides that, for

purposes of § 45(b)(9)(B)(iii), the adjusted

percentage is 40 percent, or 20 percent in

the case of a qualified facility that is an

offshore wind facility. Under § 45Y(g)

(11)(C) the adjusted percentage increases

from 40 percent for qualified facilities the

Bulletin No. 2023–22

construction of which begins before 2025

to 55 percent for qualified facilities the

construction of which begins after 2026,

and from 20 percent for a qualified facility

that is an offshore wind facility the construction of which begins before 2025 to

55 percent in the case of a qualified facility that is an offshore wind facility the

construction of which begins after 2027.

As provided in section 2.01 of this notice,

§ 48(a)(12)(B) provides that rules similar

to the rules of § 45(b)(9)(B) apply for purposes of determining the domestic content

bonus credit amount under § 48. Similarly, § 48E(a)(3)(B) provides that rules

similar to the rules of § 48(a)(12) apply

for purposes of determining the domestic

content bonus credit amount under § 48E.

SECTION 3. GUIDANCE WITH

RESPECT TO THE DOMESTIC

CONTENT REQUIREMENT

.01 Domestic Content Requirement.

(1) In general. An Applicable Project

is eligible for a domestic content bonus

credit amount if the Applicable Project

satisfies the Domestic Content Requirement and the taxpayer timely submits

to the IRS the certification described in

section 5 of this notice. An Applicable

Project satisfies the Domestic Content

Requirement if the Steel or Iron Requirement described in section 3.02 of this

notice and the Manufactured Products

Requirement described in section 3.03 of

this notice are satisfied.

(2) Definitions. The following definitions apply for purposes of the Domestic

Content Requirement.

(a) Applicable Project Component.

“Applicable Project Component” means

any article, material, or supply, whether

manufactured or unmanufactured, that is

directly incorporated into an Applicable

Project. An Applicable Project Component may qualify as steel, iron, or a

Manufactured Product.

(b) Manufactured. “Manufactured”

means produced as a result of the manufacturing process.

a result of the manufacturing process.

(d) Manufactured Product Component.

“Manufactured Product Component”

873

means any article, material, or supply,

whether manufactured or unmanufactured, that is directly incorporated into an

Applicable Project Component that is a

Manufactured Product.

(e) Manufacturing Process. “Manufacturing process” means the application

of processes to alter the form or function

of materials or of elements of a product

in a manner adding value and transforming those materials or elements so that

they represent a new item functionally

different from that which would result

from mere assembly of the elements or

materials.

(f) Mined. “Mined” means derived

from the extraction of ores or minerals

from the ground or from the waste or residue of prior mining.

(g) Produced. “Produced,” with res

pect to a Manufactured Product Component,

has the same meaning as the term “manufactured” as defined in section 3.01(2)(b)

of this notice.

(h) United States. “United States”

means the several States, the District of

Columbia, the Commonwealth of Puerto

Rico, Guam, American Samoa, the U.S.

Virgin Islands, and the Commonwealth of

the Northern Mariana Islands.

.02 Steel or Iron Requirement.

The Domestic Content Requirement

with respect to steel or iron (Steel or Iron

Requirement) applies in a manner consistent with 49 CFR § 661.5(b) and (c).

See §§ 45(b)(9)(B)(ii) and 45Y(g)(11)

(B)(ii). The Steel or Iron Requirement is

met if, consistent with 49 CFR § 661.5(b)

and (c), all manufacturing processes with

respect to any steel or iron items that are

Applicable Project Components take place

in the United States, except metallurgical

processes involving refinement of steel

additives. The Steel or Iron Requirement

applies to Applicable Project Components

that are construction materials made primarily of steel or iron and are structural

in function. The Steel or Iron Requirement does not apply to steel or iron used

in Manufactured Product Components or

subcomponents of Manufactured Product

Components. For example, items such

as nuts, bolts, screws, washers, cabinets,

covers, shelves, clamps, fittings, sleeves,

adapters, tie wire, spacers, door hinges,

and similar items that are made primar-

May 30, 2023

ily of steel or iron but are not structural

in function are not subject to the Steel or

Iron Requirement.

.03 Manufactured Products Requirement.

(1) In General. The Domestic Content Requirement with respect to

Manufactured Products (Manufactured

Products Requirement) applies in a manner consistent with 49 CFR § 661.5(d).

See §§ 45(b)(9)(B)(i) and 45Y(g)(11)(B)

(i). The Manufactured Products Requirement is met if all Applicable Project

Components that are Manufactured

Products are produced in the United

States or are deemed to be produced in

the United States. All Applicable Project Components that are Manufactured

Products are deemed to be produced in

the United States if the Adjusted Percentage Rule described in section 3.03(2) of

this notice is satisfied.

A Manufactured Product is considered

to be produced in the United States (U.S.

Manufactured Product) if: (1) all of the

manufacturing processes for the Manufactured Product take place in the United

States; and (2) all of the Manufactured

Product Components of the Manufactured

Product are of U.S. origin. A Manufactured Product Component is considered

to be of U.S. origin if it is manufactured in the United States, regardless of

the origin of its subcomponents. See 49

CFR § 661.5(d). This notice refers to a

Manufactured Product that is not a U.S.

Manufactured Product as a “Non-U.S.

Manufactured Product.”

(2) Adjusted Percentage Rule.

(a) In general. For purposes of the

Adjusted Percentage Rule, the percentage

produced by dividing the Domestic Manufactured Products and Components Cost

(as described in section 3.03(2)(b) of this

notice) by the Total Manufactured Products Cost (as described in section 3.03(2)

Percentage” calculated for an Applicable

Project. If the Domestic Cost Percentage for an Applicable Project equals or

exceeds the adjusted percentage that

applies to the Applicable Project, then the

Applicable Project satisfies the Adjusted

Percentage Rule.

(b) Domestic Manufactured Products

and Components Cost. The Domestic

May 30, 2023

Manufactured Products and Components

Cost is the sum of the costs of an Applicable Project’s (1) U.S. Manufactured

Products that are Applicable Project Components and (2) Manufactured Product

Components of Non-U.S. Manufactured

Products that are Applicable Project

Components if the Manufactured Product Components are mined, produced,

or manufactured in the United States

(U.S. Component). Consistent with 49

CFR § 661.5(d), a Manufactured Product

Component that is manufactured is a U.S.

Component if it is manufactured or produced in the United States, regardless of

the origin of its subcomponents. A Manufactured Product Component that is not

manufactured is a U.S. Component if it is

mined in the United States.

For purposes of determining the

Domestic Manufactured Products and

Components Cost for an Applicable

Project, the cost of a U.S. Manufactured

Product or U.S. Component includes only

direct costs as defined in § 1.263A-1(e)(2)

(i), that is, direct materials and direct labor

costs, that are paid or incurred within the

meaning of § 461 by the U.S. Manufactured Product’s manufacturer to produce

the U.S. Manufactured Product or by the

Non-U.S. Manufactured Product’s manufacturer to produce or acquire the U.S.

Component. The Domestic Manufactured

Products and Components Cost does not

include the direct materials or direct labor

costs that are paid or incurred within

the meaning of § 461 by the Non-U.S.

Manufactured Product’s manufacturer to

produce the Non-U.S. Manufactured Product. Direct costs, including direct labor

costs, of incorporating the Applicable

Project Components into the Applicable

Project are not counted in the Domestic

Manufactured Products and Components

Cost.

For purposes of this notice, the manufacturer of a U.S. Manufactured Product

or a Non-U.S. Manufactured Product is

the person that performed the manufacturing process that produced the U.S.

Manufactured Product or the Non-U.S.

Manufactured Product. The rules under

§ 263A that are used to determine whether

a taxpayer is engaged in production or

resale activities for purposes of § 263A do

not apply for purposes of this notice.

874

The Total Manufactured Products Cost for

an Applicable Project is the sum of the

costs of each Applicable Project Component that is a Manufactured Product. For

purposes of determining the Total Manufactured Products Cost for an Applicable

Project, the cost of an Applicable Project

Component that is a Manufactured Product includes only direct costs as defined

in § 1.263A-1(e)(2)(i) that are paid or

incurred within the meaning of § 461 by

the manufacturer of the Manufactured

Product to produce the Manufactured

Product. For purposes of this notice, the

manufacturer of a U.S. Manufactured

Product or a Non-U.S. Manufactured

Product is the person that performed the

manufacturing process that produced the

U.S. Manufactured Product or the NonU.S. Manufactured Product. The rules

under § 263A that are used to determine

whether a taxpayer is engaged in production or resale activities for purposes of

§ 263A do not apply for purposes of this

notice.

(d) Adjusted Percentage Rule Example.

Taxpayer purchases Applicable Project

A from Contractor under an engineering,

procurement, and construction contract

and places Applicable Project A in service.

Applicable Project A has two Applicable

Project Components that are Manufactured Products.

Contractor performed the manufacturing process that produced Applicable

Project A’s first manufactured product

(Manufactured Product 1). Manufactured

Product 1 is manufactured in the United

States and has two Manufactured Product Components (Components 1A and

1B) that are manufactured in the United

States. Manufactured Product 1 is a U.S.

Manufactured Product because it and both

of its Manufactured Product Components

are produced in the United States.

Supplier performed the manufacturing process that produced Applicable

Project A’s second manufactured product

(Manufactured Product 2). Contractor

purchased Manufactured Product 2 from

Supplier. Manufactured Product 2 is

manufactured in the United States and

has three Manufactured Product Components. Manufactured Product 2’s

first Manufactured Product Component

Bulletin No. 2023–22

(Component 2A) is manufactured in the

United States, its second Manufactured

Product Component (Component 2B) is

manufactured in the United States, and its

third Manufactured Product Component

(Component 2C) is manufactured outside of the United States. Manufactured

Product 2 is a Non-U.S. Manufactured

Product because Component 2C is manufactured outside of the United States.

Components 2A and 2B are U.S. Components because they are manufactured in

the United States.

All costs shown in the table below are

the direct costs (as defined in § 1.263A1(e)(2)(i)) of producing the Manufactured

Product or producing or acquiring the

Manufactured Product Component that

were paid or incurred within the meaning of § 461 by the manufacturer of the

Manufactured Product. Contractor is the

manufacturer of Manufactured Product 1,

and Supplier is the manufacturer of Manufactured Product 2.

Table 1 – Direct Costs of Manufactured

Products 1 and 2

Asset

Manufactured Product 1

Component 1A

Component 1B

Cost

$100

Manufactured Product 2

Component 2A

Component 2B

Component 2C

$200

100

Bulletin No. 2023–22

Applicable Project A’s Domestic Manufactured Products and Components Cost

consists of the cost of Manufactured

Product 1 ($100), Component 2A ($30),

and Component 2B ($50) for a total of

$180. Applicable Project A’s Total Manufactured Products Cost consists of the

cost of Manufactured Product 1 ($100)

and Manufactured Product 2 ($200) for

a total of $300. Applicable Project A’s

Domestic Cost Percentage is 60% ($180

divided by $300). Applicable Project A

satisfies the Adjusted Percentage Rule

because its Domestic Cost Percentage

of 60% exceeds the adjusted percentage.

Thus, Manufactured Products 1 and 2

are both deemed to have been produced

in the United States under the Adjusted

Percentage Rule.

.04 Safe Harbor for Classifications of

Certain Applicable Project Components.

The Treasury Department and the IRS

identified certain Applicable Project Components that may be found in utility-scale

photovoltaic systems, land-based wind

facilities, offshore wind facilities, and

battery energy storage technologies. The

FTA provided assistance in evaluating the

classification of the identified Applicable

Project Components. The categorization

of each item described in Table 2 of this

notice as subject to either the Steel or Iron

Requirement or Manufactured Product

Requirement is based on the FTA’s analysis and will be accepted by the IRS for

those Applicable Project Components and

Manufactured Product Components. In

conducting this analysis, which involves

energy technologies that the FTA would

not ordinarily analyze under its regula-

875

tions with respect to public transportation

projects, the FTA has relied on the expert

technical assistance of the Department of

Energy (DOE), particularly with respect

to the function of Applicable Project

Components identified by the Treasury

Department and the IRS, the manufacturing processes involved in producing them,

and the identification of certain Manufactured Product Components of specified

Manufactured Products. The technologies analyzed are different from public

transportation, and the IRA includes specific rules on domestic content (such as a

minimum required percentage for manufactured products) that are different from

those in the FTA’s Buy America statute

and regulations. Thus, conclusions about

how the items described in Table 2 are

classified under the IRA do not constitute

precedent for future the FTA implementation of its Buy America requirements

to federally funded public transportation

projects.

The Applicable Project Components

described in Table 2 of this notice may

not be an exhaustive set of all Applicable

Project Components for those types of

Applicable Projects. The Applicable Projects and Applicable Project Components

described in Table 2 must meet the statutory requirements for the relevant credit

under §§ 45, 45Y, 48, or 48E to be eligible for such credit and a domestic content

bonus credit amount.

May 30, 2023

Table 2 – Categorization of Applicable Project Components

Applicable Project

Utility-scale

photovoltaic system

Land-based wind

facility

Offshore wind

facility

Battery energy

storage technology

Applicable Project Component

Steel photovoltaic module racking

Pile or ground screw

Steel or iron rebar in foundation (e.g., concrete pad)

Photovoltaic tracker

Photovoltaic module (which includes the following Manufactured Product

Components, if applicable: photovoltaic cells, mounting frame or backrail, glass,

encapsulant, backsheet, junction box (including pigtails and connectors), edge

seals, pottants, adhesives, bus ribbons, and bypass diodes)

Inverter

Categorization

Steel/Iron

Manufactured Product

Tower

Steel or iron rebar in foundation (e.g., spread footing)

Wind turbine (which includes the following Manufactured Product Components,

if applicable: the nacelle, blades, rotor hub, and power converter)

Wind tower flanges

Steel/Iron

Manufactured Product

Tower

Jacket foundation

Wind tower flanges

Wind turbine (which includes the following Manufactured Product Components,

if applicable: the nacelle, blades, rotor hub, and power converter)

Transition piece

Monopile

Steel/Iron

Manufactured Product

Inter-array cable

Offshore substation

Export cable

Steel or iron rebar in foundation (e.g., concrete pad)

Battery pack (which includes the following Manufactured Product Components,

if applicable: cells, packaging, thermal management system, and battery

management system)

Battery container/housing

Inverter

Manufactured Product

Steel/Iron

Manufactured Product

SECTION 4. RETROFITTED

PROJECTS

.01 In General. An Applicable Project

may qualify as originally placed in service

even though it contains some used property, provided the fair market value of the

used property is not more than 20 percent

of the Applicable Project’s total value

calculated by adding the cost of the new

property to the value of the used property

(80/20 Rule). See Rev. Rul. 94-31, 1994-1

C.B. 16; Notice 2008-60, 2008-2 C.B.

May 30, 2023

178. The cost of new property includes all

costs properly included in the depreciable basis of the new property. See Notice

2017-4, 2017-3 I.R.B. 541.

.02 Application to the Domestic Content

Requirement. An Applicable Project that is

placed in service after December 31, 2022,

and meets the 80/20 Rule is eligible for a

domestic content bonus credit amount if

the new property in the Applicable Project

meets the Domestic Content Requirement

and the taxpayer complies with the requirements described in this notice.

876

Manufactured Product

SECTION 5. CERTIFICATION

REQUIREMENTS

.01 Certification Statement.

(1) In General. Sections 45(b)(9)(B)

(i), 45Y(g)(11)(B)(i), 48(a)(12)(B), and

48E(a)(3)(B) authorize the Secretary to

prescribe the time, form, and manner for

certifying compliance with the Domestic

Content Requirement.

(2) Certification Procedures.

(a) A taxpayer must submit to the IRS

a statement certifying for each Applicable

Bulletin No. 2023–22

Project for which the taxpayer is reporting

a domestic content bonus credit amount

under §§ 45, 45Y, 48, or 48E that any

steel or iron items subject to the Steel or

Iron Requirement or Manufactured Product that is a component of the Applicable

Project upon completion of construction

was produced in the United States (Domestic Content Certification Statement).

(b) The Domestic Content Certification

Statement must be attached to Form 8835,

Renewable Electricity Product Credit;

Form 3468, Investment Credit; or other

applicable form for reporting domestic

content bonus credit amounts under §§ 45,

45Y, 48, or 48E filed with the taxpayer’s

annual return submitted to the IRS for the

first taxable year in which the taxpayer

reports a domestic content bonus credit

amount for such Applicable Project. For

each taxable year after the first taxable

year in which a taxpayer initially reports

a domestic content bonus credit amount

under §§ 45 or 45Y for an Applicable Project, a taxpayer must attach a copy of the

Domestic Content Certification Statement

that was initially submitted to the IRS

with the annual return for the first taxable

year.

Statement must also include the following

information for each Applicable Project:

(i) Whether the Applicable Project is a

qualified facility, energy project, or energy

storage technology;

(ii) The specific type of Applicable

Project (for example, Utility-Scale Photovoltaic System or Battery Energy Storage

Technology);

(iii) The geographic coordinates of an

Applicable Project and the address of the

Applicable Project, if applicable;

(iv) The date the Applicable Project

was placed in service;

(v) The total domestic content bonus

credit amount determined under §§ 45(b)

(9), 45Y(g)(11), 48(a)(12), or 48E(a)(3)

(B) with respect to the Applicable Project in the first taxable year in which the

taxpayer reports a domestic content bonus

credit amount for such Applicable Project;

and

(vi) Any additional information with

respect to the Applicable Project that

is required by the applicable forms and

instructions for reporting domestic content bonus credit amounts determined

under §§ 45, 45Y, 48, or 48E.

(vii) The Domestic Content Certification Statement must be signed by a person

with legal authority to bind the taxpayer

and contain the following statement:

“Under penalties of perjury I declare that I

have examined the information contained

in this Domestic Content Certification

Statement and to the best of my knowledge and belief, it is true, correct, and

complete.”

.02 Timing of Certification. A taxpayer

must certify that an Applicable Project

meets the Domestic Content Requirement

as of the date the Applicable Project is

placed in service. The date an Applicable

Project is considered placed in service for

purposes of this notice is the date on which

such property is placed in a condition or

state of readiness and availability for a

specifically assigned function, whether in

a trade or business or in the production of

income.

SECTION 6. SUBSTANTIATION

A taxpayer reporting a domestic content bonus credit amount for meeting the

Domestic Content Requirement must meet

the general recordkeeping requirements

under § 6001 in order to substantiate that

the Domestic Content Requirement has

been met. Section 6001 provides that

every person liable for any tax imposed

by the Code, or for the collection thereof,

must keep such records as the Secretary

may from time to time prescribe. Section 1.6001-1(a) provides that any person

subject to income tax must keep such permanent books of account or records as are

sufficient to establish the amount of gross

income, deductions, credits, or other matters required to be shown by such person

in any return of such tax. Section 1.60011(e) provides that the books and records

required by § 1.6001-1 must be retained so

long as the contents thereof may become

material in the administration of any internal revenue law. See also §§ 45(b)(12),

48(a)(16), 48E(a)(3)(B) (by cross-reference to § 48(a)(12)), and 45Y(f).

SECTION 7. PAPERWORK

REDUCTION ACT

Any collection burden associated with

this notice is accounted for in Office of

Management and Budget (OMB) control

numbers 1545-0123 and 1545-0047. The

collections of information associated with

the IRA-related changes to Form 3468

and Form 8835 were approved, and will

continue to be approved, under OMB control numbers 1545-0123 and 1545-0047.

This notice does not alter any previously

approved information collection requirements and does not create new collection

requirements not already approved by

OMB.

SECTION 8. DRAFTING

INFORMATION

The principal author of this notice

is the Office of Associate Chief Counsel (Passthroughs & Special Industries).

However, other personnel from the Treasury Department and the IRS participated

in its development. For further information regarding this notice, call the energy

security guidance contact number at (202)

317-5254 (not a toll-free call).

Arbitrage Treatment of

Certain Guarantee Funds

Notice 2023-39

SECTION 1. PURPOSE

This notice describes proposed amendments to the Income Tax Regulations (26

CFR part 1) under § 148 of the Internal

Revenue Code (Code)1 that the Department

of the Treasury (Treasury Department)

and the Internal Revenue Service (IRS)

intend to issue (forthcoming proposed

regulations) regarding an exception to the

arbitrage investment restrictions under

§ 148 applicable to bonds the interest on

which is excludable from gross income

under § 103(a) (tax-exempt bonds).

Specifically, the forthcoming proposed

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

Bulletin No. 2023–22

877

May 30, 2023

regulations will amend § 1.148-11(d)(1)

(i)(F) regarding whether certain perpetual trust funds created and controlled by

States that are pledged as credit enhancement to guarantee tax-exempt bonds

will be treated as replacement proceeds

of the guaranteed bonds for purposes of

the arbitrage investment restrictions on

tax-exempt bonds under § 148.

SECTION 2. BACKGROUND

.01 Arbitrage restrictions generally

In general, the interest on bonds issued

by State and local governments is excludable from gross income under § 103(a) if

certain requirements are met. Section 148

imposes arbitrage investment restrictions

on tax-exempt bonds that limit the investment of proceeds of tax-exempt bonds

in higher-yielding investments and that

require issuers to rebate certain excess

earnings above the yield on tax-exempt

bonds to the United States Government.2

The arbitrage restrictions apply to ordinary proceeds derived from the sale of

tax-exempt bonds and investment earnings

thereon. In addition, the arbitrage restrictions apply to a special type of tax-exempt

bond proceeds, known as “replacement

proceeds,” as a result of their use as

security for tax-exempt bonds or other

nexus to tax-exempt bonds. These special replacement proceeds include, among

other things, certain “pledged funds” that

are pledged to secure repayment of tax-exempt bonds with a reasonable assurance

of availability for such purpose. One special exception to the treatment of pledged

funds as replacement proceeds covers

certain perpetual trust funds under certain

parameters and under a specified size limitation, as described further in section 2.03

of this notice.

.02 Statutory and regulatory arbitrage

restriction rules

Section 148(a) defines an “arbitrage

bond” as any bond issued as part of an

issue any portion of the proceeds of which

are reasonably expected (at the time of

issuance of the bond) to be used directly

or indirectly (1) to acquire higher yield-

ing investments or (2) to replace funds

which were used directly or indirectly to

acquire higher yielding investments. Section 148(a) further provides that a bond is

an arbitrage bond if an issuer intentionally uses any portion of the proceeds of

the issue of which such bond is a part to

acquire higher yielding investments or to

replace funds which were used directly

or indirectly to acquire higher yielding

investments. In addition, § 148(f) requires

that issuers rebate certain excess earnings on proceeds of tax-exempt bonds

to the United States Government. Under

§§ 1.148-2(a) and 1.148-3(a), “proceeds”

for these purposes means “gross proceeds”

of an issue. Section 1.148-1(b) defines

“gross proceeds” to include proceeds and

replacement proceeds of an issue.

Section 1.148-1(c)(1) defines “replacement proceeds” as amounts that have a

sufficiently direct nexus to a tax-exempt

bond issue or to the governmental purpose

of a tax-exempt bond issue to conclude

that the amounts would have been used

for that governmental purpose if the proceeds of the bond issue were not used or

to be used for that governmental purpose.

Section 1.148-1(c)(1) further provides

that replacement proceeds include, but

are not limited to, sinking funds, pledged

funds, and other replacement proceeds

described in § 1.148-1(c)(4) to the extent

that those funds or amounts are held by

or derived from a substantial beneficiary of the issue. Section 1.148-1(c)(1)

defines a “substantial beneficiary” of an

issue to include the issuer of such issue,

any related party to the issuer and, if the

issuer is not a State, the State in which

the issuer is located. Section 1.148-1(c)

(1) further provides, however, that a person is not a substantial beneficiary of

an issue solely because it is a guarantor

under a qualified guarantee.

Section 1.148-1(c)(3)(i) defines a

“pledged fund” as any amount that is

directly or indirectly pledged to pay principal or interest on the issue. Although a

pledge need not be cast in any particular

form, it must, in substance, provide reasonable assurance that the amount will be

available to pay principal or interest on the

issue even if the issuer encounters financial difficulties.

.03 Exception for certain perpetual

trust funds

Section § 1.148-11(d)(1)(i) provides

a special exception to the treatment of

funds as pledged funds for arbitrage

purposes for certain perpetual trust

funds if the requirements and limitations

enumerated in §§ 1.148-11(d)(1)(i)(A)

through (F) are satisfied. Specifically,

§ 1.148-11(d)(1)(i) provides that a guarantee by a fund created and controlled

by a State and established pursuant to its

constitution does not cause the amounts

in the fund to be pledged funds treated

as replacement proceeds if: (A) substantially all of the corpus of the fund consists

of nonfinancial assets, revenues derived

from these assets, gifts, and bequests;

(B) the corpus of the guarantee fund may

be invaded only to support specifically

designated essential governmental functions (designated functions) carried on

by political subdivisions with general

taxing powers or public elementary and

public secondary schools; (C) substantially all of the available income of the

fund is required to be applied annually

to support designated functions; (D) the

issue guaranteed consists of obligations

that are not private activity bonds (other

than qualified 501(c)(3) bonds) substantially all of the proceeds of which are to

be used for designated functions; (E) the

fund satisfied each of the requirements

in §§ 1.148-11(d)(1)(i) through (iii) on

August 16, 1986; and (F) as of the sale

date of the bonds to be guaranteed, the

amount of the bonds to be guaranteed

by the fund plus the then-outstanding

amount of bonds previously guaranteed by the fund does not exceed a total

amount equal to 500 percent of the total

costs of the assets held by the fund as of

December 16, 2009. (The references in

(E) to §§ 1.148-11(d)(1)(i) through (iii)

should be to §§ 1.148-11(d)(1)(i)(A)

through (C).)

Bond guarantees enable issuers to

obtain lower bond interest rates. The

Under § 1.148-3(g), rebate payments (1) must be paid no later than 60 days after the computation date to which the payment relates, (2) are considered paid when the payment is filed with

the IRS as designated by the Commissioner of Internal Revenue (Commissioner), and (3) must be accompanied by the form provided by the Commissioner for this purpose (currently, Form

8038-T, Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate).

May 30, 2023

878

Bulletin No. 2023–22

demand for public school bond guarantees

continues to grow as student populations

expand and existing school buildings

age. As a result, certain perpetual trust

funds that otherwise could provide credit

enhancement under the special exception

to the arbitrage restrictions for eligible

pledged funds under § 1.148-11(d)(1)(i)

will soon be limited in their capacity to

provide guarantees for tax-exempt bonds

at a time when there is a significant need

for such guarantees.

SECTION 3. SCOPE AND

APPLICATION

The Treasury Department and the IRS

intend to issue the forthcoming proposed

regulations to amend § 1.148-11(d)(1)(i)

(F) to provide that, as of the sale date of

the bonds to be guaranteed, the amount

of the bonds to be guaranteed by the

fund plus the then-outstanding amount of

bonds previously guaranteed by the fund

does not exceed a total amount equal to

500 percent of the total costs of the assets

held by the fund.

SECTION 4. RELIANCE ON THIS

NOTICE

This notice may be relied upon for

bonds sold on or after May 10, 2023, and

before the applicability date of future regulations or other published guidance under

§ 148 addressing or otherwise affecting

funds described in § 1.148-11(d)(1)(i) and

this notice.

SECTION 5. REQUEST FOR

COMMENTS

.01 Comments Regarding Guidance in

this Notice. The Treasury Department and

the IRS request comments on any questions arising from the interim guidance set

forth in this notice.

.02 Procedures for Submitting

Comments.

(1) Deadline. Written comments

should be submitted by July 31, 2023.

Consideration will be given, however, to

any written comment submitted after July

31, 2023, if such consideration will not

delay the issuance of the forthcoming proposed regulations.

(2) Form and manner. The subject line

for the comments should include a reference to Notice 2023-39. All commenters

are strongly encouraged to submit comments electronically. However, comments

may be submitted in one of two ways:

(a) Electronically via the Federal

eRulemaking Portal at www.regulations.

gov (type IRS-2023-0020 in the search

field on the regulations.gov homepage to

find this notice and submit comments); or

(b) By mail to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2023-39),

Room 5203, P.O. Box 7604, Ben Franklin

Station, Washington, D.C., 20044.

(3) Publication of comments. 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 6. DRAFTING

INFORMATION

The principal author of this notice is

Johanna Som de Cerff, Office of the Chief

Counsel (Financial Institutions and Products). However, other personnel from the

IRS and the Treasury Department participated in its development. For further

information regarding this notice, contact

Johanna Som de Cerff at (202) 317-6980

(not a toll-free number).

Update for Weighted

Average Interest Rates,

Yield Curves, and Segment

Rates

Notice 2023-40

This notice provides guidance on the

corporate bond monthly yield curve, the

corresponding spot segment rates used

under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the

Internal Revenue Code. In addition, this

notice provides guidance as to the inter-

est rate on 30-year Treasury securities

under § 417(e)(3)(A)(ii)(II) as in effect for

plan years beginning before 2008 and the

30-year Treasury weighted average rate

under § 431(c)(6)(E)(ii)(I).

YIELD CURVE AND SEGMENT

RATES

Section 430 specifies the minimum

funding requirements that apply to single-employer plans (except for CSEC plans

under § 414(y)) pursuant to § 412. Section

430(h)(2) specifies the interest rates that

must be used to determine a plan’s target

normal cost and funding target. Under

this provision, present value is generally

determined using three 24-month average

interest rates (“segment rates”), each of

which applies to cash flows during specified periods. To the extent provided under

§ 430(h)(2)(C)(iv), these segment rates

are adjusted by the applicable percentage

of the 25-year average segment rates for

the period ending September 30 of the

year preceding the calendar year in which

the plan year begins.1 However, an election may be made under § 430(h)(2)(D)

(ii) to use the monthly yield curve in place

of the segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,

provides guidelines for determining the

monthly corporate bond yield curve, and

the 24-month average corporate bond

segment rates used to compute the target

normal cost and the funding target. Consistent with the methodology specified in

Notice 2007-81, the monthly corporate

bond yield curve derived from April 2023

data is in Table 2023-4 at the end of this

notice. The spot first, second, and third

segment rates for the month of April 2023

are, respectively, 4.77, 4.97, and 5.13.

The 24-month average segment rates

determined

under

§ 430(h)(2)(C)(i)

through (iii) must be adjusted pursuant

to § 430(h)(2)(C)(iv) to be within the

applicable minimum and maximum percentages of the corresponding 25-year

average segment rates. For this purpose,

any 25-year average segment rate that is

less than 5% is deemed to be 5%. The

25-year average segment rates for plan

years beginning in 2022 and 2023 were

Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount

of the full funding limitation under § 433(c)(7)(C)).

Bulletin No. 2023–22

879

May 30, 2023

published in Notice 2021-54, 2021-41

I.R.B. 457, and Notice 2022-40, 2022-40

I.R.B. 266, respectively. The applicable

minimum and maximum percentages are

95% and 105% for a plan year beginning

in 2022 or 2023.

Applicable Month

May 2023

24-MONTH AVERAGE CORPORATE

BOND SEGMENT RATES

2023 without adjustment for the 25-year

average segment rate limits are as follows:

The three 24-month average corporate

bond segment rates applicable for May

24-Month Average Segment Rates Without 25-Year Average Adjustment

First Segment

Second Segment

2.85

4.02

The adjusted 24-month average segment rates set forth in the chart below

reflect § 430(h)(2)(C)(iv) of the Code. The

24-month averages applicable for May

2023, adjusted to be within the applicable

minimum and maximum percentages of

Third Segment

4.19

the corresponding 25-year average segment rates in accordance with § 430(h)(2)

(C)(iv) of the Code, are as follows:

Adjusted 24-Month Average Segment Rates

For Plan Years

Beginning In

Applicable Month

First Segment

Second Segment

Third Segment

2022

May 2023

4.75

5.18

5.92

2023

May 2023

4.75

5.00

5.74

30-YEAR TREASURY SECURITIES

INTEREST RATES

Section 431 specifies the minimum funding requirements that apply

to multiemployer plans pursuant to

§ 412. Section 431(c)(6)(B) specifies

a minimum amount for the full-funding limitation described in § 431(c)(6)

(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides

that the interest rate used to calculate

current liability for this purpose must

be no more than 5 percent above and

no more than 10 percent below the

weighted average of the rates of interest

on 30-year Treasury securities during

the four-year period ending on the last

day before the beginning of the plan

year. Notice 88-73, 1988-2 C.B. 383,

provides guidelines for determining the

weighted average interest rate. The rate

of interest on 30-year Treasury securities for April 2023 is 3.68 percent. The

Service determined this rate as the average of the daily determinations of yield

on the 30-year Treasury bond maturing

in February 2053. For plan years beginning in May 2023, the weighted average

of the rates of interest on 30-year Treasury securities and the permissible range

of rates used to calculate current liability are as follows:

For Plan Years Beginning In

Treasury Weighted Average Rates

30-Year Treasury Weighted Average

Permissible Range 90% to 105%

May 2023

2.62

2.36 to 2.75

under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month

average. Notice 2007-81 provides guidelines for determining the minimum

present value segment rates. Pursuant to

that notice, the minimum present value

segment rates determined for April 2023

are as follows:

MINIMUM PRESENT VALUE

SEGMENT RATES

In general, the applicable interest rates

Month

April 2023

Minimum Present Value Segment Rates

First Segment

Second Segment

4.77

4.97

Third Segment

5.13

May 30, 2023

880

Bulletin No. 2023–22

DRAFTING INFORMATION

The principal author of this notice

is Tom Morgan of the Office of Associ-

Bulletin No. 2023–22

ate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

881

of this guidance. For further information

regarding this notice, contact Mr. Morgan

at 202-317-6700 or Tony Montanaro at

626-927-1475 (not toll-free numbers).

May 30, 2023

Table 2023-4

Monthly Yield Curve for April 2023

Derived from April 2023 Data

Maturity

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

Yield

5.29

5.09

4.91

4.77

4.68

4.62

4.58

4.57

4.59

4.61

4.64

4.67

4.71

4.75

4.78

4.82

4.86

4.89

4.92

4.95

4.98

5.00

5.02

5.04

5.05

5.07

5.08

5.09

5.10

5.11

5.12

May 30, 2023

Maturity

20.5

21.0

21.5

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

33.5

34.0

34.5

35.0

35.5

36.0

36.5

37.0

37.5

38.0

38.5

39.0

39.5

40.0

Yield

5.12

5.13

Maturity

40.5

41.0

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

47.0

47.5

48.0

48.5

49.0

49.5

50.0

50.5

51.0

51.5

52.0

52.5

53.0

53.5

54.0

54.5

55.0

55.5

56.0

56.5

57.0

57.5

58.0

58.5

59.0

59.5

60.0

Yield

5.13

5.14

882

Maturity

60.5

61.0

61.5

62.0

62.5

63.0

63.5

64.0

64.5

65.0

65.5

66.0

66.5

67.0

67.5

68.0

68.5

69.0

69.5

70.0

70.5

71.0

71.5

72.0

72.5

73.0

73.5

74.0

74.5

75.0

75.5

76.0

76.5

77.0

77.5

78.0

78.5

79.0

79.5

80.0

Yield

5.14

Maturity

80.5

81.0

81.5

82.0

82.5

83.0

83.5

84.0

84.5

85.0

85.5

86.0

86.5

87.0

87.5

88.0

88.5

89.0

89.5

90.0

90.5

91.0

91.5

92.0

92.5

93.0

93.5

94.0

94.5

95.0

95.5

96.0

96.5

97.0

97.5

98.0

98.5

99.0

99.5

100.0

Yield

5.14

Bulletin No. 2023–22

26 CFR 601.602: Tax forms and instructions.

(Also Part I, §§ 1, 223; Part III § 54.9831-1)

Rev. Proc. 2023-23

SECTION 1. PURPOSE

This revenue procedure provides the

2024 inflation adjusted amounts for Health

Savings Accounts (HSAs) as determined

under § 223 of the Internal Revenue Code

and the maximum amount that may be

made newly available for excepted benefit health reimbursement arrangements

(HRAs) provided under § 54.98311(c)(3)(viii) of the Pension Excise Tax

Regulations.

SECTION 2. 2023 INFLATION

ADJUSTED ITEMS

.01 HSA Inflation Adjusted Items.

(1) Annual contribution limitation. For

calendar year 2024, the annual limitation

Bulletin No. 2023–22

on deductions under § 223(b)(2)(A) for an

individual with self-only coverage under a

high deductible health plan is $4,150. For

calendar year 2024, the annual limitation

on deductions under § 223(b)(2)(B) for an

individual with family coverage under a

high deductible health plan is $8,300.

(2) High deductible health plan. For

calendar year 2024, a “high deductible

health plan” is defined under § 223(c)(2)

(A) as a health plan with an annual deductible that is not less than $1,600 for self-only

coverage or $3,200 for family coverage,

and for which the annual out-of-pocket

expenses (deductibles, co-payments, and

other amounts, but not premiums) do not

exceed $8,050 for self-only coverage or

$16,100 for family coverage.

.02 HRA Inflation Adjusted Item.

For plan years beginning in 2024,

the maximum amount that may be made

newly available for the plan year for an

excepted benefit HRA under § 54.98311(c)(3)(viii) is $2,100. See § 54.9831-1(c)

883

(3)(viii)(B)(1) for further explanation of

this calculation.

SECTION 3. EFFECTIVE DATE

This revenue procedure is effective

for HSAs for calendar year 2024 and for

excepted benefit HRAs for plan years

beginning in 2024.

SECTION 4. DRAFTING

INFORMATION

The principal author of this revenue

procedure is Kyle Walker of the Office

of Associate Chief Counsel (Income Tax

& Accounting). For further information

regarding § 223, HSAs, and excepted

benefit HRAs, contact Jason Sandoval at

(202) 317-5500 (not a toll-free number).

For further information regarding the calculation of the inflation adjustments in this

revenue procedure, contact Mr. Walker at

(202) 317-4718 (not a toll-free number).

May 30, 2023

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus, if

an earlier ruling held that a principle applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is being made clear because the language has

caused, or may cause, some confusion. It

is not used where a position in a prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to

show that the previous published rulings

will not be applied pending some future

action such as the issuance of new or

amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

Abbreviations

The following abbreviations in current

use and formerly used will appear in

material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2023–22

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

May 30, 2023

Numerical Finding List1

Bulletin 2023–22

Announcements:

2023-2, 2023-2 I.R.B. 344

2023-1, 2023-3 I.R.B. 422

2023-3, 2023-5 I.R.B. 447

2023-4, 2023-7 I.R.B. 470

2023-5, 2023-9 I.R.B. 499

2023-6, 2023-9 I.R.B. 501

2023-8, 2023-14 I.R.B. 632

2023-9, 2023-15 I.R.B. 639

2023-10, 2023-16 I.R.B. 663

2023-7, 2023-17 I.R.B. 797

2023-11, 2023-17 I.R.B. 798

2023-12, 2023-17 I.R.B. 799

2023-13, 2023-18 I.R.B. 833

2023-14, 2023-19 I.R.B. 853

2023-16, 2023-20 I.R.B. 854

2023-15, 2023-21 I.R.B. 856

AOD:

2023-1, 2023-10 I.R.B. 502

2023-2, 2023-11 I.R.B. 529

Notices:

2023-4, 2023-2 I.R.B. 321

2023-5, 2023-2 I.R.B. 324

2023-6, 2023-2 I.R.B. 328

2023-8, 2023-2 I.R.B. 341

2023-1, 2023-3 I.R.B. 373

2023-2, 2023-3 I.R.B. 374

2023-3, 2023-3 I.R.B. 388

2023-7, 2023-3 I.R.B. 390

2023-9, 2023-3 I.R.B. 402

2023-10, 2023-3 I.R.B. 403

2023-11, 2023-3 I.R.B. 404

2023-12, 2023-6 I.R.B. 450

2023-13, 2023-6 I.R.B. 454

2023-16, 2023-8 I.R.B. 479

2023-17, 2023-10 I.R.B. 505

2023-18, 2023-10 I.R.B. 508

2023-20, 2023-10 I.R.B. 523

2023-19, 2023-11 I.R.B. 560

2023-21, 2023-11 I.R.B. 563

2023-22, 2023-12 I.R.B. 569

2023-23, 2023-13 I.R.B. 571

2023-24, 2023-13 I.R.B. 571

2023-26, 2023-13 I.R.B. 577

2023-25, 2023-14 I.R.B. 629

2023-27, 2023-15 I.R.B. 634

2023-28, 2023-15 I.R.B. 635

2023-31, 2023-16 I.R.B. 661

2023-30, 2023-17 I.R.B. 766

2023-33, 2023-18 I.R.B. 803

2023-34, 2023-19 I.R.B. 837

2023-36, 2023-21 I.R.B. 855

Notices:—Continued

2023-38, 2023-22 I.R.B. 872

2023-39, 2023-22 I.R.B. 877

2023-40, 2023-22 I.R.B. 879

Proposed Regulations:

REG-100442-22, 2023-3 I.R.B. 423

REG-146537-06, 2023-3 I.R.B. 436

REG-114666-22, 2023-4 I.R.B. 437

REG 122286-18, 2023-11 I.R.B. 565

REG-120653-22, 2023-15 I.R.B. 640

REG-105954-22, 2023-16 I.R.B. 713

REG-120080-22, 2023-16 I.R.B. 746

REG 109309-22, 2023-17 I.R.B. 770

REG 121709-19, 2023-17 I.R.B. 789

REG-124064-19, 2023-17 I.R.B. 789

Revenue Procedures:

2023-1, 2023-1 I.R.B. 1

2023-2, 2023-1 I.R.B. 120

2023-3, 2023-1 I.R.B. 144

2023-4, 2023-1 I.R.B. 162

2023-5, 2023-1 I.R.B. 265

2023-7, 2023-1 I.R.B. 305

2023-8, 2023-3 I.R.B. 407

2023-10, 2023-3 I.R.B. 411

2023-11, 2023-3 I.R.B. 417

2023-14, 2023-6 I.R.B. 466

2023-9, 2023-7 I.R.B. 471

2023-13, 2023-13 I.R.B. 581

2023-17, 2023-13 I.R.B. 604

2023-18, 2023-13 I.R.B. 605

2023-19, 2023-13 I.R.B. 626

2023-20, 2023-15 I.R.B. 636

2023-12, 2023-17 I.R.B. 768

2023-15, 2023-18 I.R.B. 806

2023-21, 2023-19 I.R.B. 837

2023-22, 2023-19 I.R.B. 838

2023-23, 2023-22 I.R.B. 883

Revenue Rulings:

2023-1, 2023-2 I.R.B. 309

2023-3, 2023-6 I.R.B. 448

2023-4, 2023-9 I.R.B. 480

2023-5, 2023-10 I.R.B. 503

2023-6, 2023-14 I.R.B. 627

2023-7, 2023-15 I.R.B. 633

2023-2, 2023-16 I.R.B. 658

2023-8, 2023-18 I.R.B. 801

2023-9, 2023-19 I.R.B. 835

Treasury Decisions:

9970, 2023-2 I.R.B. 311

9771, 2023-3 I.R.B. 346

9772, 2023-11 I.R.B. 530

9773, 2023-11 I.R.B. 557

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin

2022–52, dated December 27, 2022.

May 30, 2023

Bulletin No. 2023–22

Finding List of Current Actions on

Previously Published Items1

Bulletin 2023–22

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2022–27 through 2022–52 is in Internal Revenue Bulletin

2022–52, dated December 27, 2022.

Bulletin No. 2023–22

iii

May 30, 2023

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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