Bulletin No. 2024–12

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2024–12

March 18, 2024

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE, INCOME TAX

INCOME TAX

Notice 2024-26, page 713.

Notice 2024-25, page 712.

This notice announces that withholding agents (both U.S.

and foreign persons) are administratively exempt from the

requirements to electronically file Forms 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, required to be filed in calendar year 2024. Additionally,

this notice announces that withholding agents that are foreign persons are administratively exempt from the requirements to electronically file Forms 1042 required to be filed in

calendar year 2025.

EXEMPT ORGANIZATION

Announcement 2024-14, page 719.

Revocation of IRC 501(c)(3) Organizations for failure to meet

the code section requirements. Contributions made to the

organizations by individual donors are no longer deductible

under IRC 170(b)(1)(A).

Finding Lists begin on page ii.

Resident populations of the 50 states, the District of Columbia, Puerto Rico, and the insular areas for purposes of determining the 2024 calendar year (1) state housing credit ceiling under section 42(h) of the Code, (2) private activity bond

volume cap under section 146, and (3) private activity bond

volume limit under section 142(k) are reproduced.

Notice 2024-27, page 715.

This notice requests additional comments on any situations

in which an election under § 6417(a) could be made for a

credit that was purchased in a transfer for which an election under § 6418(a) is made. Such sequence of events is

referred to as “chaining” in this notice.

Rev. Proc. 2024-15, page 717.

This revenue procedure sets forth the Federal income tax

treatment that may apply to certain legislatively authorized

transactions entered into by a public utility to recover specified costs through a surcharge to customers within the utility’s service area. The transactions in question involve a securitization in which the issuance of debt instruments is by a

qualifying State financing entity. The revenue procedure also

modifies Rev. Proc. 2005-62, 2005-2 C.B. 507.

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 18, 2024 

Bulletin No. 2024–12

Part III

2024 Calendar Year

Resident Population

Figures

Notice 2024-25

This notice advises State and local

housing credit agencies that allocate

low-income housing credits under § 42 of

the Internal Revenue Code, and States and

other issuers of tax-exempt private activity bonds under § 141, of the population

figures to use in calculating: (1) the 2024

calendar year population-based component of the State housing credit ceiling

(Credit Ceiling) under § 42(h)(3)(C)(ii);

(2) the 2024 calendar year volume cap

(Volume Cap) under § 146; and (3) the

2024 volume limit (Volume Limit) under

§ 142(k)(5).

Generally, the population-based component of both the Credit Ceiling and

the Volume Cap are determined under §

146(j), which requires determining the

population figures for any calendar year

on the basis of the most recent census estimate of the resident population of a State

(or issuing authority) released by the U.S.

Census Bureau before the beginning of the

calendar year. Similarly, § 142(k)(5) bases

the Volume Limit on the State population.

Sections 42(h)(3)(H) and 146(d)(2)

require adjusting for inflation the population-based component of the Credit Ceiling and the Volume Cap. The Credit Ceiling adjustment for the 2024 calendar year

is in Rev. Proc. 2023-34; 2023-48 I.R.B.

1287. Section 3.09 of Rev. Proc. 2023-34

provides that, for calendar year 2024, the

amount for calculating the Credit Ceiling under § 42(h)(3)(C)(ii) is the greater

of $2.90 multiplied by the State popula-

Resident Population Figures

5,108,468

733,406

44,620

7,431,344

3,067,732

38,965,193

5,877,610

3,617,176

1,031,890

678,972

22,610,726

11,029,227

169,330

1,435,138

1,964,726

12,549,689

6,862,199

3,207,004

2,940,546

4,526,154

4,573,749

1,395,722

6,180,253

7,001,399

10,037,261

5,737,915

2,939,690

6,196,156

1,132,812

Alabama

Alaska

American Samoa

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

District of Columbia

Florida

Georgia

Guam

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

March 18, 2024

tion, or $3,360,000. Further, section 3.20

of Rev. Proc. 2023-34 provides that the

amount for calculating the Volume Cap

under § 146(d)(1) for calendar year 2024

is the greater of $125 multiplied by the

State population, or $378,230,000.

For the 50 states, the District of Columbia, and Puerto Rico, the population figures for calculating the Credit Ceiling, the

Volume Cap, and the Volume Limit for the

2024 calendar year are the resident population estimates released electronically

by the U.S. Census Bureau on December

19, 2023, and described in Press Release

CB23-217. For American Samoa, Guam,

the Northern Mariana Islands, and the

U.S. Virgin Islands, the population figures

for the 2024 calendar year are the 2023

midyear population figures in the U.S.

Census Bureau’s International Data Base.

For convenience, these figures are

reprinted below.

712

Bulletin No. 2024–12

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Northern Mariana Islands

Ohio

Oklahoma

Oregon

Pennsylvania

Puerto Rico

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Virgin Islands, U.S.

Washington

West Virginia

Wisconsin

Wyoming

The principal authors of this notice are

Waheed M. Olayan, Office of the Associate Chief Counsel (Passthroughs and Special Industries), and David White, Office

of the Associate Chief Counsel (Financial

Institutions and Products). For further

information regarding this notice, please

contact Waheed M. Olayan at (202) 3174137 (not a toll-free number).

Administrative Exemption

from Requirement to

Electronically File Form

1042, Annual Withholding

Tax Return for U.S. Source

Income of Foreign Persons

Notice 2024-26

SECTION 1. PURPOSE

This notice announces that withholding agents (both U.S. and foreign persons)

1,978,379

3,194,176

1,402,054

9,290,841

2,114,371

19,571,216

10,835,491

783,926

51,295

11,785,935

4,053,824

4,233,358

12,961,683

3,205,691

1,095,962

5,373,555

919,318

7,126,489

30,503,301

3,417,734

647,464

8,715,698

104,917

7,812,880

1,770,071

5,910,955

584,057

are administratively exempt from the

requirements to electronically file Forms

1042, Annual Withholding Tax Return for

U.S. Source Income of Foreign Persons,

required to be filed in calendar year 2024.

Additionally, this notice announces that

withholding agents that are foreign persons are administratively exempt from the

requirements to electronically file Forms

1042 required to be filed in calendar year

2025. These administrative exemptions

are intended to promote effective and efficient tax administration.

SECTION 2. BACKGROUND

Section1 1.1461-1(b) requires a withholding agent to file a withholding tax

return on Form 1042 for income paid

during the preceding calendar year that

the withholding agent is required to report

on Form 1042-S, Foreign Person’s U.S.

Source Income Subject to Withholding. A

withholding agent must file Form 1042 on

or before March 15 of the calendar year

following the year in which the income

was paid. See §1.1474-1(c) for a with-

holding agent’s obligation to report chapter 4 reportable amounts on Form 1042.

Section 6011(e)(1) provides that the

Secretary of the Treasury or her delegate (Secretary) shall prescribe regulations providing standards for determining

which returns must be filed on magnetic

media (which includes electronic filing).

Section 6011(e)(2) provides that in prescribing regulations, the Secretary shall

not require any person to file returns on

magnetic media unless such person is

required to file at least the applicable number of returns during the calendar year.

Before calendar year 2021, the applicable

number of returns for most filers was 250.

On July 1, 2019, the President signed into

law the Taxpayer First Act (TFA), Public

Law 116-25, 133 Stat. 981 (2019). Section

2301 of the TFA amended section 6011(e)

by adding to it a new paragraph 5, which

authorizes the issuance of regulations that

decrease, in accordance with the TFA, the

threshold number of returns a taxpayer is

required to file during a year at, or above,

which the taxpayer is required to file electronically. Under the TFA, for calendar

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

Regulations (26 CFR part 301).

1

Bulletin No. 2024–12

713

March 18, 2024

years after 2021, the applicable number of

returns is 10.

On February 23, 2023, the Department

of the Treasury (Treasury Department)

and the Internal Revenue Service (IRS)

published final regulations in the Federal

Register (TD 9972, 88 FR 11754) (final

regulations) on electronic-filing rules for

certain returns and other documents that

implemented the amendments to section

6011(e) made by the TFA. The final regulations include a provision for the electronic-filing of Forms 1042 that amended

§1.1461-1 and added §301.6011-15,

which require a withholding agent, except

an individual, estate, or trust, to electronically file Form 1042 if the withholding

agent is required to file 10 or more returns

of any type during the same calendar year

in which Form 1042 is required to be filed.

Section 301.6011-15 also requires a withholding agent that is a partnership with

more than 100 partners to file Form 1042

electronically regardless of the number of

returns the partnership is required to file

during the calendar year. Additionally,

the final regulations amended §§1.1474-1

and 301.1474-1 to require a withholding

agent that is a financial institution to file

Form 1042 electronically without regard

to the number of returns it is required to

file during the calendar year.

The final regulations also authorize

the Commissioner of Internal Revenue

(Commissioner) to provide exemptions

from the electronic-filing requirements to

promote effective and efficient tax administration. See §§301.1474-1(b)(2) and

301.6011-15(b)(2). The final regulations

provide that the electronic-filing requirements apply to Forms 1042 required to be

filed for taxable years ending on or after

December 31, 2023. Accordingly, the final

regulations require withholding agents to

apply these requirements beginning with

Forms 1042 due on or after March 15,

2024.

Since the publication of the final regulations, the IRS has received feedback

from withholding agents noting challenges in transitioning to the procedures

necessary for filing Forms 1042 electronically. Among the concerns expressed

are the limited number of Approved IRS

Modernized e-File Business Providers

for Form 1042, coupled with difficulties

accessing the schema and business rules

March 18, 2024

for filing Form 1042 electronically. For

withholding agents that do not rely on

Modernized e-File Business Providers

for their electronic-filing requirements,

the feedback notes that additional time

is needed to upgrade their systems for

filing Forms 1042 on the IRS’s Modernized e-File platform. Withholding agents

requested a deferral of the Form 1042

electronic-filing requirements in light of

these concerns. Additionally, withholding

agents noted challenges specific to foreign

persons filing Forms 1042 with respect to

implementing the authentication requirements necessary for accessing the IRS’s

Modernized e-File platform.

SECTION 3. ADMINISTRATIVE

EXEMPTION FROM

REQUIREMENTS TO FILE

CERTAIN FORMS 1042

ELECTRONICALLY

.01 Administrative Exemption from

Requirement for Withholding Agents to

File Forms 1042 Electronically During

Calendar Year 2024

As described in section 2 of this notice,

pursuant to certain provisions in the relevant Treasury regulations, the Commissioner may provide an exemption

from the requirement to electronically

file Form 1042 in the interest of effective and efficient tax administration. As a

result, withholding agents (both U.S. and

foreign persons) are not required to file

Forms 1042 electronically during calendar year 2024. Specifically, pursuant to

§§1.1461-1(i) and 301.6011-15(b)(2), a

withholding agent required to file Form

1042 that is not a financial institution and

is required to file at least 10 returns (as

determined under §301.6011-15(d)(5))

in 2024 is administratively exempt from

the requirement to electronically file Form

1042 during calendar year 2024. Additionally, pursuant to §§1.1461-1(i) and

301.6011-15(b)(2), a partnership required

to file Form 1042 that has more than 100

partners is administratively exempt from

the requirement to electronically file Form

1042 during calendar year 2024. Finally,

pursuant to §§1.1474-1(e) and 301.14741(b)(2), a financial institution required to

file Form 1042 is administratively exempt

from the requirement to file Form 1042

electronically during calendar year 2024.

714

A Form 1042 timely submitted on paper

in calendar year 2024 will not be a failure

to file Form 1042, and, therefore, no addition to tax under section 6651(a)(1) will

apply with respect to an otherwise valid

Form 1042 timely submitted on paper in

calendar year 2024 (with no electronic-filing waiver request required).

.02 Additional Administrative Exemption from Requirement for Foreign Withholding Agents to File Forms 1042 Electronically During Calendar Year 2025

As described in section 2 of this notice,

pursuant to certain provisions in relevant Treasury regulations, the Commissioner may provide an exemption from

the requirement to electronically file

Form 1042 in the interest of effective and

efficient tax administration. As a result,

withholding agents that are foreign persons are not required to file Forms 1042

electronically during calendar year 2025.

Specifically, pursuant to §§1.1461-1(i)

and 301.6011-15(b)(2), a foreign person

required to file Form 1042 that is not a

financial institution and is required to file

at least 10 returns (as determined under

§301.6011-15(d)(5)) in 2025 is administratively exempt from the requirement

to electronically file Form 1042 during

calendar year 2025. Additionally, pursuant to §§1.1461-1(i) and 301.6011-15(b)

(2), a foreign partnership required to file

Form 1042 that has more than 100 partners is administratively exempt from the

requirement to electronically file Form

1042 during calendar year 2025. Finally,

pursuant to §§1.1474-1(e) and 301.14741(b)(2), a foreign financial institution

required to file Form 1042 is administratively exempt from the requirement

to electronically file Form 1042 during

calendar year 2025. A Form 1042 timely

submitted on paper by a foreign person in

calendar year 2025 will not be a failure to

file Form 1042, and, therefore, no addition

to tax under section 6651(a)(1) will apply

with respect to an otherwise valid Form

1042 timely submitted on paper by a foreign person in calendar year 2025 (with no

electronic-filing waiver request required).

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice is W.

Shawver Adams of the Office of Associate

Bulletin No. 2024–12

Chief Counsel (International). For further

information regarding this notice contact W. Shawver Adams at (202) 317-5132

(not a toll-free number).

Request for Comments

on Situations in Which a

Section 6417(a) Election

Could Be Made for Credits

Purchased in Transfers

Under Section 6418(a)

Notice 2024-27

SECTION I. PURPOSE

This notice requests additional comments on any situations in which an election under § 6417(a) of the Internal Revenue Code (Code)1 could be made for a

credit that was purchased in a transfer

for which an election under § 6418(a) is

made. Such sequence of events is referred

to as “chaining” in this notice. Comments

regarding chaining will inform the ongoing review by the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) of the tax credit

transfer market for eligible credits under §

6418(f)(1) and any potential future rules

that would be consistent with the statutory

framework, as well as the legislative purposes, of §§ 6417 and 6418.

SECTION II. BACKGROUND

Sections 6417 and 6418 of the Code

were enacted by § 13801 of Public Law

117-169, 136 Stat. 2003 (August 16,

2022), commonly known as the Inflation

Reduction Act of 2022 (IRA), to provide

two novel credit monetization mechanisms. Generally, § 6417 allows applicable entities to elect to treat the amount

of applicable credits defined in § 6417(b)

for a taxable year as a payment of such an

amount of Federal income tax made by the

applicable entity to the IRS rather than a

credit against their Federal income tax liabilities. Generally, § 6418 permits eligible

1

taxpayers defined in § 6418(f)(2) (transferor taxpayers) to elect to transfer the use

of eligible credits defined in § 6418(f)(1)

(transferred credits) to unrelated taxpayers

in exchange for cash.

On October 24, 2022, the Treasury

Department and the IRS published Notice

2022-50, 2022-43 I.R.B. 325 to, among

other things, request general comments on

questions arising under new §§ 6417 and

6418, and to inform development of future

guidance implementing §§ 6417 and 6418.

In response to Notice 2022-50, multiple

stakeholders asked that regulations clarify

whether chaining is permissible.

On June 21, 2023, the Treasury Department and the IRS published two sets of

proposed regulations, as well as temporary regulations, in the Federal Register. The first set of proposed regulations

(REG-101607-23; 88 FR 40528) provided

guidance on § 6417 (§ 6417 Proposed

Regulations). The second set of proposed

regulations (REG-101610-23; 88 FR

40496) provided guidance on § 6418 (§

6418 Proposed Regulations). The temporary regulations (TD 9975; 88 FR 40086)

in §§ 1.6417-5T and 1.6418-4T implement the pre-filing registration process

also described in proposed §§ 1.6417-5

and 1.6418-4.

After noting that multiple stakeholders asked that regulations clarify whether

applicable entities may engage in chaining by making an election under § 6417(a)

for tax credits purchased in the transfer

market, the § 6417 Proposed Regulations

proposed that such chaining would not be

permissible and sought further comment

on the issue. The preamble to the § 6417

Proposed Regulations noted several

potential obstacles to permitting chaining

and requested comments on limited situations in which exceptions to this proposed

rule may be appropriate because they are

consistent with the text, design, and intent

of the IRA, while also ensuring that such

exceptions are not subject to fraud or

abuse.

On March 5, 2024, final regulations

under § 6417 (TD 9988) were filed for

public inspection (§ 6417 Final Regulations). The § 6417 Final Regulations adopt

the position of the Treasury Department

and the IRS set forth in the § 6417 Proposed Regulations on chaining, expressing the view that §§ 6417 and 6418, when

read together, are most straightforwardly

understood as creating two separate,

mutually exclusive regimes regarding

credit monetization. While the Treasury

Department and the IRS acknowledged

in the preamble to the § 6417 Final Regulations that no specific language in §§

6417 or 6418 directly prohibits chaining,

not permitting chaining allows for more

straightforward application of the statute

as a whole. The Treasury Department and

the IRS also remain concerned about the

administrability of chaining and potential for fraud and abuse. Thus, the § 6417

Final Regulations do not permit chaining.

SECTION III. REQUEST FOR

COMMENTS

As discussed in section II of this notice,

the § 6417 Final Regulations reflect the

current view of the Treasury Department

and the IRS that chaining is impermissible under §§ 6417 and 6418. This view is

based, in part, on the text “determined with

respect to” in both statutes, which is more

straightforwardly interpreted as requiring

an applicable entity to own the underlying

applicable credit property and conduct the

activities for which the applicable credit

is “determined with respect to,” or in the

case of the credit that is determined under

§ 45X (§ 45X credit), for which ownership of applicable credit property is not

required, requiring an applicable entity to

be considered the taxpayer with respect to

which the § 45X credit is determined.

The Treasury Department and the IRS

recognize that a robust market for transferred credits (credit transfer market) that

helps support a broad array of projects and

investment is consistent with Congress’s

intent in enacting the IRA. There are early

indications that a robust market for transferring credits under § 6418 is forming

under the current rule; however, the market

is relatively nascent, economic conditions

are strong, and allowing chaining could

further increase demand in and access to

that market. The Treasury Department and

the IRS will continue to evaluate whether

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

Bulletin No. 2024–12

715

March 18, 2024

potential chaining rules would be consistent with the statutory framework, as well

as the legislative purposes, of §§ 6417

and 6418. At the same time, the Treasury

Department and the IRS will be reviewing administrability challenges associated

with elective payment elections and transfer elections and will be carefully monitoring for fraud and improper payments,

which could undermine the credit transfer

market. To that end, the Treasury Department and the IRS request comments that

address the following specific questions:

.01 Impacts on credit transfer market. If chaining were ultimately permitted, how would it specifically impact the

credit transfer market? Would demand for

transferred credits significantly increase?

How would the cost of transferred credits be affected? Some commenters have

suggested that chaining would increase

market participation. Commenters are

requested to provide specific examples

of entities that lack access to the current

transfer market and transactions that could

be entered into should chaining be permitted.

.02 “Determined with respect to”

interpretation

(1) How can the language in § 6417(a)

and § 6418(a) regarding a credit being

“determined with respect to” an applicable entity or transferor taxpayer be reasonably interpreted to refer to a taxpayer that

does not own the underlying applicable

credit property and conduct the activities

giving rise to the credit or, in the case of a

§ 45X credit (in which case ownership of

applicable credit property is not required),

be considered the taxpayer with respect to

which the § 45X credit is determined?

(2) How should basis reduction and

recapture rules under §§ 6417(g) and

6418(g)(3) work in the case of a chaining rule if credits that are purchased by

an applicable entity must be treated as

“determined with respect to” an applicable entity for that purpose?

.03 Administrability challenges

(1) Under § 1.6418-4T, a transferor taxpayer will complete pre-filing registration

without identifying a transferee taxpayer.

Under proposed § 1.6418-2, a transferee

taxpayer may file a tax return and claim a

transferred credit on its tax return before

or after a transferor taxpayer files its own

return, so long as the transferee taxpayer

March 18, 2024

has the pre-filing registration number for

the eligible credit property and a transfer

election statement. Different rules would

be necessary should the Treasury Department and the IRS conclude chaining is

allowable. If chaining were permissible,

the Treasury Department and the IRS

would potentially propose that a transferor taxpayer could not obtain a pre-filing registration number for the eligible

credit property without first identifying

the transferee taxpayer. There may also

be impacts on the time at which a transferee taxpayer can file its tax return for the

“chained” transferred credit, including the

possibility that a transferee taxpayer could

be prohibited from obtaining the transferred credit until the transferor taxpayer

files its own return. The Treasury Department and the IRS seek comments on how

a potential rule requiring identification of

a transferee taxpayer during a transferor

taxpayer’s pre-filing registration process

would impact taxpayers and how the IRS

could administer such a system.

(2) Can the statutory text of §§ 6417

and 6418 be interpreted to allow for chaining for any particular type(s) or group(s)

of taxpayers, or for certain situations? If

so, what type(s) or group(s) of taxpayers and in which scenarios should such

taxpayers be allowed to “chain”? What

clear and objective factors could criteria for determining eligibility be based

on, and how administrable for taxpayers

and the IRS would compliance with such

criteria be? What additional information

and documentation would be needed for

the IRS to identify chaining-eligible and

chaining-ineligible taxpayers through the

pre-filing registration process?

(3) Can the statutory text of §§ 6417

and 6418 be reasonably interpreted to limit

application of both an excessive credit

transfer addition to tax under § 6418(g)

(2) and an excessive payment addition to

tax under § 6417(d)(6) to a taxpayer that is

both an applicable entity under § 6417 and

a transferee taxpayer under § 6418?

(4) In what ways could the IRS limit

the risk for fraudulent elective payment

elections with respect to transferred credits? For example, how could the IRS limit

the risk that an entity would make an election under § 6417(a) for a purportedly

transferred credit and receive payment,

and then dissolve?

716

(5) In the case of a chaining rule, the

IRS would need to conduct additional diligence of applicable entities and electing

taxpayers, as well as transferor taxpayers,

during the pre-filing registration process.

How could such additional diligence

avoid being treated as a determination

or an examination by the IRS, such that

the provisions of § 7605(b) are not implicated?

.04 Other issues

(1) If chaining is permitted generally,

what rules should apply with respect to the

transferred credits for which the election

under § 6417(a) is made for multiple years

(the credits under §§ 45, 45Q, 45V, and

45Y)?

(2) The elective payment election with

regard to the credits under §§ 45, 45Q,

45V, and 45Y must be made in the taxable year the facility is placed in service

under § 6417(d)(3)(B), (C), (D), and (E).

In instances in which A (a transferor taxpayer) and B (a transferee taxpayer) have

differing taxable years, A places a facility

in service before B’s taxable year begins,

and A subsequently transfers an eligible

credit arising from production at the facility to B, if chaining is permitted generally,

should B be permitted to make a § 6417(a)

election with regard to the transferred

credit?

(3) Section 6418(a) does not permit

transfers between related parties. The

§ 6418 Proposed Regulations would also

provide for anti-abuse rules for situations in which a transaction is intended to

decrease the transferor taxpayer’s gross

income or increase a transferee taxpayer’s

deductions. See proposed § 1.6418-2(e)

(4). An example of when the anti-abuse

rule may apply is a transaction in which a

transferor taxpayer undercharges for services to a customer who is also purchasing credits from the transferor taxpayer as

a transferee taxpayer at an inflated price.

How should this dynamic inform a potential chaining rule? What safeguards would

be necessary for a chaining rule to prevent

the avoidance of any Federal tax liability

beyond the intent of § 6418?

SECTION IV. SUBMISSION OF

COMMENTS

.01 Deadline. Written comments should

be submitted by December 1, 2024.

Bulletin No. 2024–12

.02 Form and manner. The subject line

for the comments should include a reference to Notice 2024-27. 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 https://www.

regulations.gov/ (type IRS-2024-0008

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:01:PR (Notice 2024-27),

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

Station, Washington, D.C., 20044.

.03 Publication of comments. The Treasury Department and the IRS will publish

for public availability any comment submitted electronically and on paper to its

public docket on https://www.regulations.

gov.

SECTION V. DRAFTING

INFORMATION

The principal author of this notice is

the Office of the Associate Chief Counsel (Passthrough and Special Industries).

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

in its development. For further information regarding this notice, contact Waheed

Olayan at (202) 317-4137 (not a toll-free

number).

26 CFR 601.105: Examination of returns and claims

for refund, credit, or abatement; determination of

correct tax liability. (Also: Part 1, §§ 61, 451, 1001.)

Rev. Proc. 2024-15

SECTION 1. PURPOSE

This revenue procedure sets forth the

manner in which a public utility may treat

certain legislatively authorized transactions entered into by the public utility to

recover specified costs through a non-bypassable surcharge to customers within the

utility’s historic service area. Specifically,

this revenue procedure addresses a securitization that involves the issuance of debt

instruments by a qualifying State financing entity, as defined below. This revenue

procedure also modifies Rev. Proc. 2005-

Bulletin No. 2024–12

62, 2005-2 C.B. 507, to expand the definition of “public utility” to include all public

utilities, not just investor-owned utilities,

and to change the definition of a “qualifying securitization” to allow payments to

be provided at least annually.

SECTION 2. BACKGROUND

.01 Rev. Proc. 2005-62 provides that

if a public utility company is authorized

by State legislation to enter into a transaction to recover certain costs through a

“qualifying securitization” (as defined in

section 5.04 of that revenue procedure),

the public utility will be treated as not

recognizing gross income upon (1) the

receipt of a financing order that creates

an intangible property right in the amount

of the specified costs that may be recovered through securitization; (2) the receipt

of cash or other valuable consideration

in exchange for the transfer of that property right to the financing entity that is

wholly owned, directly or indirectly, by

the utility; or (3) the receipt of cash or

other valuable consideration in exchange

for securitized instruments issued by the

financing entity that is wholly owned,

directly or indirectly, by the utility. Rev.

Proc. 2005-62 further provides that the

securitized instruments issued under such

a qualifying securitization will be treated

as obligations of the public utility and the

non-bypassable charges are gross income

to the utility recognized under the utility’s

usual method of accounting.

.02 For purposes of Rev. Proc. 200562, a “qualified securitization” is defined

as an issuance of any bonds, notes, other

evidences of indebtedness, or certificates

of participation or beneficial interest that

(1) is secured by the intangible property

right to collect charges for the recovery

of specified costs and such other assets, if

any, of the financing entity that is wholly

owned, directly or indirectly, by the utility; (2) is issued by a financing entity that

is wholly owned, directly or indirectly, by

the utility that is initially capitalized by

the utility in such a way that equity interests in the financing entity are at least 0.5

percent of the aggregate principal amount

of the non-equity interests issued; and (3)

provides for payments on a quarterly or

semi-annual basis. Accordingly, the tax

treatment permitted in Rev. Proc. 2005-

717

62 applies only if the financing entity is

wholly owned, directly or indirectly, by

the utility. For a wholly owned entity that

is disregarded as an entity separate from

the public utility, the activities of the

entity are treated in the same manner as a

sole proprietorship, branch, or division of

the public utility under §§301.7701-2 and

301.7701-3 of the Procedure and Administration Regulations.

.03 Some States have enacted legislation to allow a public utility to engage

in transactions similar to those described

in Rev. Proc. 2005-62. However, in these

transactions, a qualifying State financing entity serves as a financing vehicle

to securitize the rights of the public utility created by the financing order. The

treatment provided in Rev. Proc. 2005-62

would not apply to such a securitization

transaction because the qualifying State

financing entity is not wholly owned,

directly or indirectly, by the public utility,

but instead is a separate entity unrelated to

the public utility.

SECTION 3. SCOPE

Section 5 of this revenue procedure

applies to public utilities that, pursuant

to qualifying securitization financing legislation, receive an irrevocable financing

order from an appropriate State agency

that determines the amount of certain

specified costs the utility will be permitted

to recover through a qualifying State securitization of an intangible property right

created by the special legislation. Section

6 of this revenue procedure modifies the

definitions of public utility and qualifying

securitization in Rev. Proc. 2005-62.

SECTION 4. DEFINITIONS

.01 PUBLIC UTILITY

For purposes of this revenue procedure, the terms “public utility” or “utility”

refer to any utility company (electric or

non-electric) that is subject to the regulatory authority of a State public utility

commission or other appropriate State

agency.

.02 QUALIFYING STATE FINANCING ENTITY

For purposes of this revenue procedure, the term “qualifying State financing

entity” means an entity that is designated

March 18, 2024

pursuant to a qualifying securitization

financing legislation as a financing entity

and that is a State, political subdivision

thereof, or other organization authorized

to issue debt on behalf of a State or political subdivision thereof.

.03 QUALIFYING SECURITIZATION FINANCING LEGISLATION

For purposes of this revenue procedure, the term “qualifying securitization

financing legislation” means legislation

that-(1) Is enacted by a State to facilitate

the recovery of certain specified costs

incurred by a public utility;

(2) Authorizes the public utility to

apply for, and authorizes the public utility commission or other appropriate State

agency to issue, a financing order determining the amount of specified costs the

public utility will be allowed to recover;

(3) Provides that pursuant to the financing order, the public utility acquires an

intangible property right to charge, collect,

and receive amounts necessary to provide

for the full recovery of the specified costs

determined to be recoverable, and assures

that the charges are non-bypassable and

will be paid by customers within the public utility’s historic service territory who

receive utility goods or services through

the public utility’s transmission and distribution system, even if those customers

elect to purchase these goods or services

from a third party;

(4) Guarantees that neither the State

nor any of its agencies has the authority

to rescind or amend the financing order,

to revise the amount of specified costs, or

in any way to reduce or impair the value

of the intangible property right, except as

may be contemplated by periodic adjustments authorized by such legislation;

(5) Provides procedures assuring that

the sale, assignment, or other transfer

of the intangible property right from the

public utility to a qualifying State financing entity will be perfected under State

law as an absolute transfer of the public

utility’s right, title, and interest in the

property; and

March 18, 2024

(6) Authorizes the securitization of the

intangible property right to recover the

fixed amount of specified costs through

the issuance of debt instruments by a qualifying State financing entity pursuant to an

indenture, contract, or other agreement.

.04 SPECIFIED COSTS

For purposes of this revenue procedure, the term “specified costs” means

those costs identified by the State legislature as appropriate for recovery through

the securitization mechanism of the qualifying securitization financing legislation.

.05 QUALIFYING STATE SECURITIZATION

For purposes of this revenue procedure,

the term “qualifying State securitization”

means an issuance of debt instruments

that-(1) Is secured by the intangible property right to collect charges for the recovery of specified costs and such other

assets, if any, of a public utility;

(2) Is issued by a qualifying State

financing entity; and

(3) Provides for payments on at least an

annual basis.

procedure will be treated as payments on

obligations of the public utility.

.03 The non-bypassable charges will be

treated as gross income of the public utility recognized under the public utility’s

usual method of accounting.

SECTION 5. APPLICATION

SECTION 7. EFFECT ON OTHER

DOCUMENTS

.01 The public utility will be treated as

not recognizing gross income upon-(1) The receipt of a financing order that

creates an intangible property right in the

amount of the specified costs that may be

recovered through securitization;

(2) The receipt of cash or other valuable

consideration in exchange for the transfer

of that property right to a qualifying State

financing entity;

(3) The receipt by the qualifying State

financing entity of cash or other valuable

consideration in exchange for the debt issued

by the qualifying State financing entity; or

(4) The receipt by the public utility

of the proceeds of the debt issued by the

qualifying State financing entity.

.02 The payments of the public utility to

the qualifying State financing entity pursuant to the securitized debt instruments

described in section 4.05 of this revenue

718

SECTION 6. MODIFICATIONS TO

REV. PROC. 2005-62

.01 Modification to the definition of

public utility. Section 5.01 of Rev. Proc.

2005-62 is modified to read as follows:

.01 PUBLIC UTILITY

For purposes of this revenue procedure,

the terms “public utility” or “utility”

refer to any utility company (electric or

non-electric) that is subject to the regulatory authority of a State public utility

commission or other appropriate State

agency.

.02 Modification to the definition of

qualifying securitization. Section 5.04(3)

of Rev. Proc. 2005-62 is modified to read

as follows:

(3) Provides for payments on at least an

annual basis.

This document modifies Rev. Proc.

2005-62.

SECTION 8. EFFECTIVE DATE

This revenue procedure is effective on

or after February 29, 2024. Taxpayers may

apply this revenue procedure to securitizations issued before February 29, 2024.

SECTION 9. DRAFTING

INFORMATION

The principal author of this revenue

procedure is Brian Choi of the Office of

the Associate Chief Counsel (Financial

Institutions and Products). For further

information regarding this revenue procedure, contact Mr. Choi at 202-317-3154

(not a toll-free number).

Bulletin No. 2024–12

Part IV

Deletions From Cumulative

List of Organizations,

Contributions to Which are

Deductible Under Section

170 of the Code

Announcement 2024-14

Table of Contents

The Internal Revenue Service has

revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and

170(c)(2) of the Internal Revenue Code of

1986.

Name Of Organization

Uplifting Her Inc.

Bulletin No. 2024–12

Generally, the IRS will not disallow

deductions for contributions made to a

listed organization on or before the date

of announcement in the Internal Revenue

Bulletin that an organization no longer

qualifies. However, the IRS is not precluded from disallowing a deduction for

any contributions made after an organization ceases to qualify under section 170(c)

(2) if the organization has not timely filed

a suit for declaratory judgment under section 7428 and if the contributor (1) had

knowledge of the revocation of the ruling

or determination letter, (2) was aware that

such revocation was imminent, or (3) was

in part responsible for or was aware of the

activities or omissions of the organization

that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed,

contributions from individuals and organizations described in section 170(c)(2)

that are otherwise allowable will continue to be deductible. Protection under

section 7428(c) would begin on March

18, 2024 and would end on the date the

court first determines the organization is

not described in section 170(c)(2) as more

particularly set for in section 7428(c)(1).

For individual contributors, the maximum

deduction protected is $1,000, with a husband and wife treated as one contributor.

This benefit is not extended to any individual, in whole or in part, for the acts or

omissions of the organization that were

the basis for revocation.

Effective Date of Revocation

1/1/2020

Location

Highlands, CA and Fresno, CA

719

March 18, 2024

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. 2024–12

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.

March 18, 2024

Numerical Finding List1

Bulletin 2024–12

Announcements:

2024-1, 2024-02 I.R.B. 363

2024-3, 2024-02 I.R.B. 364

2024-5, 2024-05 I.R.B. 635

2024-6, 2024-05 I.R.B. 635

2024-4, 2024-06 I.R.B. 665

2024-7, 2024-07 I.R.B. 673

2024-8, 2024-07 I.R.B. 674

2024-9, 2024-07 I.R.B. 675

2024-12, 2024-08 I.R.B. 676

2024-11, 2024-08 I.R.B. 683

2024-13, 2024-10 I.R.B. 710

2024-10, 2024-11 I.R.B. 711

2024-14, 2024-12 I.R.B. 719

Notices:

2024-1, 2024-02 I.R.B. 314

2024-2, 2024-02 I.R.B. 316

2024-3, 2024-02 I.R.B. 338

2024-4, 2024-02 I.R.B. 343

2024-5, 2024-02 I.R.B. 347

2024-6, 2024-02 I.R.B. 348

2024-7, 2024-02 I.R.B. 355

2024-8, 2024-02 I.R.B. 356

2024-9, 2024-02 I.R.B. 358

2024-11, 2024-02 I.R.B. 360

2024-10, 2024-03 I.R.B. 406

2024-12, 2024-05 I.R.B. 616

2024-13, 2024-05 I.R.B. 618

2024-16, 2024-05 I.R.B. 622

2024-18, 2024-05 I.R.B. 625

2024-19, 2024-05 I.R.B. 627

2024-21, 2024-06 I.R.B. 659

2024-22, 2024-06 I.R.B. 662

2024-20, 2024-07 I.R.B. 668

2024-23, 2024-07 I.R.B. 672

2024-24, 2024-10 I.R.B. 707

2024-25, 2024-12 I.R.B. 712

2024-26, 2024-12 I.R.B. 713

2024-27, 2024-12 I.R.B. 715

Revenue Procedures:—Continued

2024-5, 2024-01 I.R.B. 262

2024-7, 2024-01 I.R.B. 303

2024-8, 2024-04 I.R.B. 479

2024-9, 2024-05 I.R.B. 628

2024-12, 2024-09 I.R.B. 677

2024-13, 2024-09 I.R.B. 678

2024-14, 2024-09 I.R.B. 682

2024-15, 2024-12 I.R.B. 717

Revenue Rulings:

2024-1, 2024-02 I.R.B. 307

2024-2, 2024-02 I.R.B. 311

2024-3, 2024-06 I.R.B. 646

2024-5, 2024-07 I.R.B. 666

2024-4, 2024-10 I.R.B. 686

2024-6, 2024-10 I.R.B. 688

Treasury Decisions:

9984, 2024-03 I.R.B. 386

9985, 2024-05 I.R.B. 573

9986, 2024-05 I.R.B. 610

9987, 2024-06 I.R.B. 648

Proposed Regulations:

REG-118492-23, 2024-02 I.R.B. 366

REG-107423-23, 2024-03 I.R.B. 411

REG-121010-17, 2024-05 I.R.B. 636

Revenue Procedures:

2024-1, 2024-01 I.R.B. 1

2024-2, 2024-01 I.R.B. 119

2024-3, 2024-01 I.R.B. 143

2024-4, 2024-01 I.R.B. 160

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

2023–52, dated December 26, 2023.

1

March 18, 2024

ii

Bulletin No. 2024–12

Finding List of Current Actions on

Previously Published Items1

Bulletin 2024–12

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

2023–52, dated December 26, 2023.

1

Bulletin No. 2024–12

iii

March 18, 2024

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,

we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page

www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.

NW, IR-6230 Washington, DC 20224.