Bulletin No. 2025–20

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2025–20

May 12, 2025

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

INCOME TAX

Notice 2025-25, page 1445.

This notice publishes the inflation adjustment factor for the

carbon oxide sequestration credit under § 45Q for calendar

year 2025. The inflation adjustment factor is used to determine the amount of the credit allowable under § 45Q for

taxpayers that make an election under § 45Q(b)(3) to have

the dollar amounts applicable under § 45Q(a)(1) or (2) apply.

Finding Lists begin on page ii.

Notice 2025-26, page 1445.

This notice publishes the reference price under § 45K(d)(2)

(C) of the Internal Revenue Code for calendar year 2024.

The reference price applies in determining the amount of the

enhanced oil recovery credit under § 43, the marginal well

production credit under § 45I, and the percentage depletion

in case of oil and natural gas produced from marginal properties under § 613A.

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 12, 2025 

Bulletin No. 2025–20

Part III

Credit for Carbon Oxide

Sequestration 2025

Section 45Q Inflation

Adjustment Factor

Notice 2025-25

SECTION 1. PURPOSE

This notice publishes the inflation

adjustment factor for the credit for carbon oxide sequestration under § 45Q of

the Internal Revenue Code (§ 45Q credit)

for calendar year 2025.1 The inflation

adjustment factor is used to determine

the amount of the credit allowable under

§ 45Q for taxpayers that make an election under § 45Q(b)(3) to have the dollar

amounts applicable under § 45Q(a)(1) or

(2) apply.

SECTION 2. BACKGROUND

Section 45Q was added to the Code

by § 115 of the Energy Improvement and

Extension Act of 2008, enacted as Division B of Pub. L. 110-343, 122 Stat. 3765,

3829 (October 3, 2008), to provide a credit

for the sequestration of carbon dioxide.

Section 45Q was amended by § 1131 of

the American Recovery and Reinvestment

Tax Act of 2009, enacted as Division B of

Pub. L. 111-5, 123 Stat 115 (February 17,

2009), § 41119 of the Bipartisan Budget

Act of 2018 (BBA), Pub. L. No. 115-123

(February 9, 2018), § 121 of the Taxpayer

Certainty and Disaster Tax Relief Act of

2020, enacted as Division EE of the Consolidated Appropriations Act, 2021, Pub.

L. 116-260, 134 Stat. 3051 (December 27,

2020), and § 13104 of Pub. L. 117-169,

136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction

Act (IRA).

Section 45Q(a)(1) allows a credit of

$20 per metric ton of qualified carbon

oxide (i) captured by the taxpayer using

carbon capture equipment which is originally placed in service at a qualified facil-

1

ity before the date of the enactment of the

BBA, (ii) disposed of by the taxpayer in

secure geological storage, and (iii) not

used by the taxpayer as a tertiary injectant

in a qualified enhanced oil or natural gas

recovery project.

Section 45Q(a)(2) allows a credit of

$10 per metric ton of qualified carbon

oxide (i) captured by the taxpayer using

carbon capture equipment which is originally placed in service at a qualified

facility before the date of the enactment

of the BBA, and (ii) either (I) used by the

taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery

project and disposed of by the taxpayer in

secure geological storage or (II) utilized

by the taxpayer in a manner described in

§ 45Q(f)(5).

Section 45Q(b)(3) provides that, for

purposes of determining the carbon oxide

sequestration credit under this section,

a taxpayer may elect to have the dollar

amounts applicable under § 45Q(a)(1)

or (2) apply in lieu of the dollar amounts

applicable under § 45Q(a)(3) or (4) for

each metric ton of qualified carbon oxide

which is captured by the taxpayer using

carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of

the BBA.

Notice 2022-38 provided that 2022

was the final calendar year for which a

taxpayer may claim a § 45Q credit under

§ 45Q(a)(1) and (2) for qualified carbon

oxide that is captured by carbon capture

equipment originally placed in service at a

qualified facility before the date of enactment of the BBA. Therefore, the inflation

adjustment amounts in section 3 of this

notice only apply if a taxpayer elects under

§ 45Q(b)(3) to apply the dollar amounts

applicable under § 45Q(a)(1) or (2) in lieu

of the dollar amounts applicable under §

45Q(a)(3) or (4).

Under § 45Q(f)(7), for taxable years

beginning in a calendar year after 2009,

the dollar amounts contained in § 45Q(a)

(1) and (2) must be adjusted for inflation

by multiplying such dollar amount by the

inflation adjustment factor for such calendar year determined under § 43(b)(3)(B),

determined by substituting “2008” for

“1990.”

Section 43(b)(3)(B) defines the term

“inflation adjustment factor” as, with

respect to any calendar year, a fraction the

numerator of which is the GNP implicit

price deflator for the preceding calendar

year and the denominator of which is the

GNP implicit price deflator for 1990. For

purposes of § 45Q(f)(7), for the 2024 calendar year, the inflation adjustment factor

is a fraction the numerator of which is

the GNP implicit price deflator for 2024

(125.139) and the denominator of which

is the GNP implicit price deflator for 2008

(88.046).

SECTION 3. INFLATION

ADJUSTMENT FACTOR

The inflation adjustment factor for

calendar year 2025 is 1.4213. The § 45Q

credit for calendar year 2025 is $28.43 per

metric ton of qualified carbon oxide under

§ 45Q(a)(1) and $14.21 per metric ton of

qualified carbon oxide under § 45Q(a)(2).

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice is

Christopher Vlcek of the Office of Associate Chief Counsel (Energy, Credits, and

Excise). For further information regarding

this notice contact Christopher Vlcek at

(202) 317-4743 (not a toll-free number).

2024 Section 45K(d)(2)(C)

Reference Price

Notice 2025-26

SECTION 1. PURPOSE

This notice publishes the reference

price under § 45K(d)(2)(C) of the Internal

Unless otherwise specified, all “section” references will be to the Internal Revenue Code, as amended, or the Income Tax Regulations.

Bulletin No. 2025–20

1445

May 12, 2025

Revenue Code for calendar year 2024.1

The credit period for the nonconventional

source production credit under § 45K

ended on December 31, 2013, for facilities producing coke or coke gas (other

than from petroleum-based products).

However, the reference price continues

to apply in determining the amount of the

enhanced oil recovery credit under § 43,

the marginal well production credit for

qualified crude oil production under § 45I,

and the applicable percentage under §

613A to be used in determining percentage depletion in the case of oil and natural

gas produced from marginal properties.

SECTION 2. BACKGROUND

Section 45K(d)(2)(C) provides that the

term “reference price” means, with respect

to a calendar year, the Secretary’s estimate

of the annual average wellhead price per

barrel for all domestic crude oil the price

of which is not subject to regulation by the

United States.

Section 43(a) provides that, for purposes of § 38, the enhanced oil recovery

credit for any taxable year is an amount

equal to 15 percent of the taxpayer’s qualified enhanced oil recovery costs for such

taxable year.

Section 43(b)(1) provides that the

amount of enhanced oil recovery credit

for any taxable year shall be reduced by

an amount which bears the same ratio to

the amount of such credit (determined

without regard to this paragraph) as - (A)

the amount by which the reference price

for the calendar year preceding the calen-

1

dar year in which the taxable year begins

exceeds $28, bears to (B) $6. Section

43(b)(2) provides that the term “reference

price” means, with respect to any calendar

year, the reference price determined for

such calendar year under § 45K(d)(2)(C).

Section 45I(a) provides that, for purposes of § 38, the marginal well production credit for any taxable year is an

amount equal to the product of the credit

amount and the qualified crude oil production and the qualified natural gas production which is attributable to the taxpayer.

Section 45I(b)(1) provides that for

crude oil production, the amount of the

marginal well production credit is $3 per

barrel of qualified crude oil production.

Section 45I(b)(2) provides that the $3

amount under § 45I(b)(1) shall be reduced

(but not below zero) by an amount which

bears the same ratio to such amount

(determined without regard to this paragraph) as – (i) the excess (if any) of the

applicable reference price over $15, bears

to (ii) $3. The applicable reference price

for a taxable year is the reference price of

the calendar year preceding the calendar

year in which the taxable year begins.

Section 45I(b)(2)(C) provides that for

qualified crude oil production the term

“reference price” means, with respect

to any calendar year, the reference price

determined under § 45K(d)(2)(C).

Section 613A(c)(6)(A) provides, in

general, that the allowance for depletion

under § 611 shall be computed in accordance with § 613 with respect to - (i) so

much of the taxpayer’s average daily marginal production of domestic crude oil as

does not exceed the taxpayer’s depletable

oil quantity (determined without regard

to paragraph (3)(A)(ii)), and (ii) so much

of the taxpayer’s average daily marginal

production of domestic natural gas as

does not exceed the taxpayer’s depletable

natural gas quantity (determined without

regard to paragraph (3)(A)(ii)), and the

applicable percentage shall be deemed to

be specified in subsection (b) of § 613 for

purposes of subsection (a) of that section.

Section 613A(c)(6)(C) provides that

the term “applicable percentage” means

the percentage (not greater than 25 percent) equal to the sum of - (i) 15 percent,

plus (ii) 1 percentage point for each whole

dollar by which $20 exceeds the reference price for crude oil for the calendar

year preceding the calendar year in which

the taxable year begins. For purposes of

this paragraph, the term “reference price”

means, with respect to any calendar year,

the reference price determined for such

calendar year under § 45K(d)(2)(C).

SECTION 3. REFERENCE PRICE

The reference price under § 45K(d)(2)

(C) for calendar year 2024 is $74.48.

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice

is Christopher Vlcek of the Office of Associate Chief Counsel (Energy, Credits, and

Excise). For further information regarding

this notice, contact Mr. Vlcek on (202)

317-6853 (not a toll-free number).

Unless otherwise specified, all “section” references will be to the Internal Revenue Code, as amended, or the Income Tax Regulations.

May 12, 2025

1446

Bulletin No. 2025–20

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. 2025–20

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

May 12, 2025

Numerical Finding List1

Proposed Regulations:—Continued

Bulletin 2025–20

REG-110878-24, 2025-9 I.R.B. 979

REG-112261-24, 2025-10 I.R.B. 983

Announcements:

2025-2, 2025-2 I.R.B. 305

2025-3, 2025-2 I.R.B. 306

2025-4, 2025-2 I.R.B. 306

2025-1, 2025-3 I.R.B. 431

2025-5, 2025-3 I.R.B. 433

2025-6, 2025-5 I.R.B. 526

2025-8, 2025-13 I.R.B. 1384

2025-13, 2025-15 I.R.B. 1392

2025-15, 2025-18 I.R.B. 1420

Notices:

2025-1, 2025-3 I.R.B. 415

2025-2, 2025-3 I.R.B. 418

2025-4, 2025-3 I.R.B. 419

2025-5, 2025-3 I.R.B. 426

2025-3, 2025-4 I.R.B. 488

2025-7, 2025-5 I.R.B. 524

2025-9, 2025-6 I.R.B. 681

2025-10, 2025-6 I.R.B. 682

2025-11, 2025-6 I.R.B. 704

2025-13, 2025-6 I.R.B. 710

2025-6, 2025-8 I.R.B. 799

2025-8, 2025-8 I.R.B. 800

2025-12, 2025-8 I.R.B. 813

2025-14, 2025-10 I.R.B. 980

2025-15, 2025-11 I.R.B. 1089

2025-16, 2025-13 I.R.B. 1378

2025-17, 2025-14 I.R.B. 1387

2025-18, 2025-16 I.R.B. 1416

2025-19, 2025-17 I.R.B. 1418

2025-20, 2025-19 I.R.B. 1423

2025-21, 2025-19 I.R.B. 1424

2025-22, 2025-19 I.R.B. 1427

2025-23, 2025-19 I.R.B. 1428

2025-24, 2025-19 I.R.B. 1429

2025-25, 2025-20 I.R.B. 1445

2025-26, 2025-20 I.R.B. 1445

Proposed Regulations:

REG-117213-24, 2025-3 I.R.B. 433

REG-134420-10, 2025-4 I.R.B. 513

REG-105479-18, 2025-5 I.R.B. 527

REG-116610-20, 2025-5 I.R.B. 638

REG-115560-23, 2025-6 I.R.B. 716

REG-123525-23, 2025-6 I.R.B. 726

REG-124930-21, 2025-7 I.R.B. 772

REG‑100669‑24, 2025-8 I.R.B. 819

REG-101268-24, 2025-8 I.R.B. 836

REG-107420-24, 2025-8 I.R.B. 854

REG-116085-23, 2025-8 I.R.B. 865

REG-118988-22, 2025-8 I.R.B. 869

REG-107895-24, 2025-9 I.R.B. 972

Revenue Procedures:

2025-1, 2025-1 I.R.B. 1

2025-2, 2025-1 I.R.B. 118

2025-3, 2025-1 I.R.B. 142

2025-4, 2025-1 I.R.B. 158

2025-5, 2025-1 I.R.B. 260

2025-7, 2025-1 I.R.B. 301

2025-8, 2025-3 I.R.B. 427

2025-9, 2025-4 I.R.B. 491

2025-10, 2025-4 I.R.B. 492

2025-11, 2025-4 I.R.B. 501

2025-12, 2025-4 I.R.B. 512

2025-6, 2025-6 I.R.B. 713

2025-14, 2025-7 I.R.B. 770

2025-13, 2025-8 I.R.B. 816

2025-15, 2025-11 I.R.B. 1090

2025-16, 2025-11 I.R.B. 1100

2025-17, 2025-13 I.R.B. 1382

2025-18, 2025-19 I.R.B. 1430

Revenue Rulings:

2025-1, 2025-3 I.R.B. 307

2025-2, 2025-3 I.R.B. 309

2025-3, 2025-4 I.R.B. 443

2025-4, 2025-7 I.R.B. 758

2025-5, 2025-7 I.R.B. 767

2025-6, 2025-11 I.R.B. 1064

2025-7, 2025-13 I.R.B. 1239

2025-8, 2025-15 I.R.B. 1390

2025-9, 2025-16 I.R.B. 1415

2025-10, 2025-19 I.R.B. 1421

Treasury Decisions:

10016, 2025-3 I.R.B. 313

10020, 2025-3 I.R.B. 408

10018, 2025-4 I.R.B. 446

10019, 2025-4 I.R.B. 482

10017, 2025-5 I.R.B. 517

10028, 2025-6 I.R.B. 660

10022, 2025-8 I.R.B. 773

10026, 2025-9 I.R.B. 878

10027, 2025-9 I.R.B. 897

10029, 2025-9 I.R.B. 936

10030, 2025-11 I.R.B. 1066

10024, 2025-12 I.R.B. 1104

10023, 2025-13 I.R.B. 1259

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin

2024–52, dated December 23, 2024.

1

May 12, 2025

ii

Bulletin No. 2025–20

Finding List of Current Actions on

Previously Published Items1

Bulletin 2025–20

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin

2024–52, dated December 23, 2024.

1

Bulletin No. 2025–20

iii

May 12, 2025

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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