# Bulletin No. 2024–52

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aaf806ab49b1393e8

## Record

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

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2024–52
December 23, 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
AOD 2024-1, page 1354.

Acquiescence to the holding that notices that identify certain
arrangements as reportable transactions, issued without following notice-and-comment rulemaking procedures after the
American Jobs Creation Act of 2004, are invalid under the
Administrative Procedure Act.

ADMINISTRATIVE, INCOME TAX
Rev. Proc. 2024-44, page 1438.

ther adversely affected by Hurricane Helene, Tropical Storm
Helene, and Hurricane Milton with respect to their employee
benefit plans, certain timeframes are extended during the
Relief Period established by this document. This document
is jointly issued by the Departments of Labor and the Treasury, through the Employee Benefits Security Administration
and the Internal Revenue Service, respectively, under section
518 of ERISA and section 7508A(b) of the Code.

EMPLOYMENT TAX
REG-106595-22, page 1444.

This proposed revenue procedure specifies when information
shown on a return in accordance with the applicable forms
and instructions will be an adequate disclosure for purposes
of reducing an understatement of income tax under section
6662(d) and for purposes of avoiding the section 6694(a)
preparer penalty. This revenue procedure updates Rev. Proc.
2023-40, 2023-51 I.R.B. 1553, and applies to any income
tax return filed on 2024 tax forms for a taxable year beginning in 2024, and to any income tax return filed in 2025 on
2024 tax forms for short taxable years beginning in 2025.

These proposed regulations relate to the definition of qualified nonpersonal use vehicles. Qualified nonpersonal use
vehicles are excepted from the substantiation requirements
that apply to certain listed property. These proposed regulations add unmarked vehicles used by firefighters or members of a rescue squad or ambulance crew as a new type of
qualified nonpersonal use vehicle. These regulations affect
governmental units that provide firefighter or rescue squad
or ambulance crew member employees with unmarked qualified nonpersonal use vehicles and the employees who use
those vehicles.

EMPLOYEE PLANS

INCOME TAX

Notice 2024-82, page 1425.

T.D. 10015, page 1355.

This notice sets forth the 2024 Required Amendments List
(2024 RA List). The 2024 RA List applies to individually
designed plans qualified under section 401(a) of the Internal
Revenue Code and individually designed plans that satisfy
the requirements of section 403(b). The 2024 RA List also
applies to pre-approved plans with respect to interim amendments.

Notice 2024-86, page 1429.

In order to ensure that plans, participants, beneficiaries, qualified beneficiaries, and claimants in disaster areas are not fur-

Finding Lists begin on page ii.

Section 48 provides an investment tax credit for energy property (energy credit). These final regulations update the regulations under section 48 to reflect changes to that section
since 1987, mostly notably changes made by the Inflation
Reduction Act of 2022 (IRA). Generally, in connection with
the IRA, the final regulations update the types of energy property eligible for the energy credit, including additional types
of energy property added by the IRA; clarify the application
of new credit transfer rules to recapture due to failure to
satisfy the prevailing wage requirements, including notification requirements for eligible taxpayers; and include quali-

fied interconnection costs in the basis of certain lower-output energy properties. The final regulations also provide
rules generally applicable to energy property, such as rules
regarding: functionally interdependent components; property
that is an integral part of an energy property; application
of the “80/20 Rule” to retrofitted energy property; dual use
property; ownership of components of an energy property;
energy property that may be eligible for multiple Federal
income tax credits; and the election to treat qualified facilities eligible for the renewable electricity production credit
under section 45 instead as property eligible for the energy
credit.

INCOME TAX, TAX CONVENTIONS
Rev. Proc. 2024-42, page 1433.

This revenue procedure updates and supersedes the lists
of countries in Rev. Proc. 2023-36. Armenia and Uruguay
are added to the list of jurisdictions with which the United
States has in effect a relevant information exchange agreement. Costa Rica and Thailand are added to the list of coun-

tries with which Treasury and the IRS have determined it is
appropriate to have an automatic exchange relationship with
respect to the information collected under Treas. Reg. §§
1.6049-4(b)(5) and 1.6049-8(a).

TAX CONVENTIONS
Announcement 2024-42, page 1443.

The competent authorities of the United States and the Kingdom of Norway have entered a Competent Authority Arrangement under paragraph 2 of Article 27 (Mutual Agreement
Procedure) of the Convention between the United States of
America and the Kingdom of Norway for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income and Property in which the competent authorities confirm that Article 20 (Investment or
Holding Companies) is not applicable to a U.S. investment
company that qualifies as a Regulated Investment Company
pursuant to sections 851 (Definition of regulated investment
company) and 852 (Taxation of regulated investment companies and their shareholders) of the Internal Revenue Code.

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.

December 23, 2024 

Bulletin No. 2024–52

Actions Relating to Court
Decisions
It is the policy of the Internal Reve­
nue Service to announce at an early date
whether it will follow the holdings in cer­
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued
at the discretion of the Service only on
un­appealed issues decided adverse to the
government. Generally, an Action on De­
cision is issued where its guidance would
be helpful to Service personnel working
with the same or similar issues. Unlike a
Treasury Regulation or a Revenue Ruling,
an Action on Decision is not an affirma­
tive statement of Service position. It is not
intended to serve as public guidance and
may not be cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu­
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda­

tion of the Action on Decision to similar
cases where the facts are different. More­
over, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published
acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help­
ful. Accordingly, the Service now may
acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid­
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as ac­
quiescence, acquiescence in result only,
or nonacquiescence. Both “acquiescence”
and “acquiescence in result only” mean
that the Service accepts the holding of the

court in a case and that the Service will
follow it in disposing of cases with the
same controlling facts. However, “acqui­
escence” indicates neither approval nor
disapproval of the reasons assigned by the
court for its conclusions; whereas, “acqui­
escence in result only” indicates disagree­
ment or concern with some or all of those
reasons. “Nonacquiescence” signifies that,
although no further review was sought,
the Service does not agree with the hold­
ing of the court and, generally, will not
follow the decision in disposing of cases
involving other taxpayers. In reference to
an opinion of a circuit court of appeals, a
“nonacquiescence” indicates that the Ser­
vice will not follow the holding on a na­
tionwide basis. However, the Service will
recognize the precedential impact of the
opinion on cases arising within the venue
of the deciding circuit.
The Commissioner DOES ACQUI­
ESCE in the following decision:
Green Rock LLC v. Internal Revenue Serv., 104 F.4th 220 (11th Cir.
2024).1

Acquiescence to the holding that notices that identify certain arrangements as reportable transactions, issued without following notice-and-comment rulemaking procedures after the Amer­
ican Jobs Creation Act of 2004, are invalid under the Administrative Procedure Act.
1

December 23, 2024

1354

Bulletin No. 2024–52

Part I
26 CFR 1.48-9, 1.48-13, 1.48-14, and 1.6418-5

T.D. 10015
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Definition of Energy
Property and Rules
Applicable to the Energy
Credit
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document sets forth
final rules relating to the energy credit,
including rules for determining whether
investments in energy property are eligi­
ble for the energy credit and for imple­
menting certain amendments made by the
Inflation Reduction Act of 2022. The final
regulations impact taxpayers who invest
in energy property eligible for the energy
credit.
DATES: Effective date: These regulations
are effective on December 12, 2024.
Applicability dates: For dates of applica­
bility, see §§1.48-9(g), 1.48-13(f), 1.4814(j), and 1.6418-5(j).
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
the IRS Office of the Associate Chief
Counsel (Passthroughs and Special Indus­
tries) at (202) 317‑6853 (not a toll‑free
number).
SUPPLEMENTARY INFORMATION:
Authority
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under sections 48 and 6418 of the
Internal Revenue Code (Code) issued by

Bulletin No. 2024–52

the Secretary of the Treasury or her dele­
gate (Secretary) pursuant to the authority
granted under sections 45(b)(12), 48(a)
(3)(D), and (a)(16), 6418(g) and (h), and
7805(a) of the Code (final regulations).
Section 48(a)(3)(D) provides a specific
delegation of authority for the Secretary to
prescribe by regulations performance and
quality standards for energy property after
consulting with the Secretary of Energy.
Sections 45(b)(12) and 48(a)(16) pro­
vide specific delegations of authority with
respect to the requirements of section
45(b), including the prevailing wage and
apprenticeship (PWA) requirements of
section 45(b)(7) and (8), as incorporated
by section 48(a)(10) and (11), with each
stating, “[t]he Secretary shall issue such
regulations or other guidance as the Sec­
retary determines necessary to carry out
the purposes of this subsection, including
regulations or other guidance which pro­
vides for requirements for recordkeeping
or information reporting for purposes of
administering the requirements of this
subsection.” Section 48(a)(10)(C) grants
authority for the Secretary to provide,
by regulations or other guidance, for
recapturing the benefit of any increase
in the credit allowed under section 48(a)
allowed to an energy project that initially
satisfies the PWA requirements if such
energy project should later fail to satisfy
such requirements during the recapture
period by applying rules similar to the
rules of section 50(a) of the Code. Sec­
tion 48(a)(16) provides a general grant of
regulatory authority for section 48(a), by
stating: “The Secretary shall issue such
regulations or other guidance as the Sec­
retary determines necessary to carry out
the purposes of this subsection, including
regulations or other guidance which pro­
vides for requirements for recordkeeping
or information reporting for purposes of
administering the requirements of this
subsection.”
Section 6418(g) provides several spe­
cific delegations of authority to the Sec­
retary with regard to enforcing require­
ments for valid transfers of certain Federal
income tax credits under section 6418 and
recapturing excessive credit transfers.
Section 6418(h) provides a specific del­
egation of authority with respect to the

1355

transfer of credits under section 6418,
stating, in part, that “[t]he Secretary shall
issue such regulations or other guidance
as may be necessary to carry out the pur­
poses of this section.”
Finally, section 7805(a) authorizes the
Secretary to “prescribe all needful rules
and regulations for the enforcement of
[the Code], including all rules and regu­
lations as may be necessary by reason of
any alteration of law in relation to internal
revenue.”
Background
I. Overview
Section 38 of the Code allows cer­
tain business credits against the Federal
income tax imposed by chapter 1 of the
Code (chapter 1). Among the credits
allowed by section 38 is the investment
credit determined under section 46 of the
Code, which includes the energy credit
determined under section 48 (section 48
credit). See sections 38(b)(1) and 46(2).
Section 48(a)(1) generally provides that
the section 48 credit for any taxable year
is the energy percentage of the basis of
each energy property placed in service
during such taxable year. For most types
of energy property, eligibility for the
section 48 credit and, in some cases, the
amount of the section 48 credit depend
upon meeting certain deadlines for begin­
ning construction of the energy property
or for placing the energy property in ser­
vice.
Section 48 originally was enacted by
section 2 of the Revenue Act of 1962, Pub­
lic Law 87-834, 76 Stat. 960, 963 (Octo­
ber 16, 1962), to spur economic growth by
encouraging investments in various capital
projects across many industries including
energy, transportation, and communica­
tions. Section 48 has been amended many
times since its enactment, most recently by
section 13102 of Public Law 117-169, 136
Stat. 1818 (August 16, 2022), commonly
known as the Inflation Reduction Act of
2022 (IRA). The IRA amended section
48 in several ways, including by making
additional types of energy property eligi­
ble for the section 48 credit, providing a
special rule to allow certain lower-output

December 23, 2024

energy properties to include amounts paid
for qualified interconnection property in
connection with the installation of energy
property, and providing an increased
credit amount for energy projects that sat­
isfy prevailing wage and apprenticeship
requirements, a domestic content bonus
credit amount, and an increase in credit
rate for energy communities.
The Income Tax Regulations at §1.48-9
in effect prior to December 12, 2024 (for­
mer §1.48-9), which provide definitions
and rules for determining whether prop­
erty is energy property eligible for the sec­
tion 48 credit, originally were published
on January 23, 1981 (T.D. 7765, 46 FR
7287). Those regulations were amended on
July 21, 1987 (T.D. 8147, 52 FR 27336) to
provide rules for dual use property. Thus,
former §1.48-9 has not been updated since
1987, which is before many of the current
types of energy property became eligible
for the section 48 credit.
II. Prior Guidance
Prior to proposing the amendments
to the regulations under section 48
being finalized by this treasury decision,
the Department of the Treasury (Trea­
sury Department) and the IRS twice
requested comments on issues to be
addressed in these regulations. On Octo­
ber 26, 2015, the Treasury Department
and the IRS published Notice 2015-70,
2015-43 I.R.B. 604, requesting com­
ments regarding statutory updates to
section 48 preceding those made by the
IRA. On October 24, 2022, in response
to the passage of the IRA, the Trea­
sury Department and the IRS published
Notice 2022-49, 2022-43 I.R.B. 321,
requesting general as well as specific
comments on issues arising under sec­
tion 48, among other sections, that were
amended or added by the IRA.
On August 30, 2023, the Treasury
Department and the IRS published a
notice of proposed rulemaking (REG100908-23) in the Federal Register (88
FR 60018), corrected in 88 FR 73807
(Oct. 27, 2023), corrected in 89 FR 25550
(April 11, 2024), proposing rules regard­
ing the increased credit amounts available
for taxpayers satisfying PWA require­
ments established by the IRA (PWA
Proposed Regulations). Comments were

December 23, 2024

requested and a public hearing was held
November 21, 2023.
On November 22, 2023, after consid­
eration of all the comments submitted in
response to Notice 2015-70 and Notice
2022-49, and after consultation with the
Department of Energy (DOE), the Trea­
sury Department and the IRS published
a notice of proposed rulemaking and a
notice of public hearing (REG-13256917) in the Federal Register (88 FR
82188), corrected in 89 FR 2182 (January
12, 2024), proposing rules that would pro­
vide guidance under section 48 (Proposed
Regulations). On February 22, 2024, the
Treasury Department and the IRS pub­
lished a second correction to the Proposed
Regulations in the Federal Register (89
FR 13293) that re-opened the comment
period through March 25, 2024 (Correc­
tion). The Proposed Regulations withdrew
certain portions of the PWA Proposed
Regulations and re-proposed regulations
that would provide additional guidance
on the PWA requirements under section
48, including the statutory exception for
energy projects with a maximum output
of less than one megawatt (MW) and the
recapture rules under section 48(a)(10)(C)
related to the PWA requirements.
Although the Proposed Regulations
withdrew certain portions of the PWA
Proposed Regulations, the Explanation
of Provisions section in the preamble to
the PWA Proposed Regulations gener­
ally remained relevant. Therefore, to the
extent consistent with the preamble to the
Proposed Regulations, the Explanation of
Provisions section of the PWA Proposed
Regulations was incorporated in the pre­
amble to the Proposed Regulations.
The preamble to the Proposed Regu­
lations did not address written comments
that were submitted in response to the
PWA Proposed Regulations. Any com­
ments received in response to the Pro­
posed Regulations, including comments
on the re-proposed regulations addressing
the PWA requirements specific to sec­
tion 48, are addressed in the Summary of
Comments and Explanation of Revisions
section of this preamble. The Proposed
Regulations did not extend the comment
period or affect the scheduled hearing for
the PWA Proposed Regulations. The PWA
Proposed Regulations, other than the por­
tions that were withdrawn, were adopted

1356

as final regulations by Treasury Decision
(T.D. 9998), which was published in the
Federal Register (89 FR 53184) on June
25, 2024 (PWA Final Regulations).
On June 21, 2023, the Treasury Depart­
ment and the IRS published a notice of
proposed rulemaking (REG-101610-23)
in the Federal Register (88 FR 40496)
proposing rules concerning the election
under section 6418 to transfer certain
Federal income tax credits, including the
section 48 credit (6418 Proposed Regu­
lations). Proposed §1.6418-5 of the 6418
Proposed Regulations included proposed
rules addressing notification requirements
and the impact of the credit recapture rules
under sections 50(a), 49(b), and 45Q(f)
(4) on the transfer of Federal income tax
credits. Comments were requested and a
public hearing on the 6418 Proposed Reg­
ulations was held on August 23, 2023.
The Proposed Regulations would
supplement the 6418 Proposed Reg­
ulations by adding provisions to pro­
posed §1.6418-5 addressing notification
requirements and the impact of the recap­
ture rules for failing to satisfy the PWA
requirements under section 48(a)(10) if
an election under §1.6418-2 or §1.6418-3
has been made. The preamble to the Pro­
posed Regulations did not address written
comments that were submitted in response
to the regulations proposed in the 6418
Proposed Regulations. Any comments
received in response to the Proposed
Regulations, including the additions to
proposed §1.6418-5 described in the Pro­
posed Regulations, are addressed in the
Summary of Comments and Explanation
of Revisions section of this preamble. The
Proposed Regulations did not otherwise
extend the comment period for the 6418
Proposed Regulations. On April 30, 2024,
a Treasury Decision (T.D. 9993) adopting
the 6418 Proposed Regulations as final
regulations (6418 Final Regulations) was
published in the Federal Register (89
FR 34770). The 6418 Final Regulations
did not finalize the portion of proposed
§1.6418-5 that was included in the Pro­
posed Regulations.
Summary of Comments and
Explanation of Revisions
The Treasury Department and the
IRS received 350 written comments in

Bulletin No. 2024–52

response to the Proposed Regulations.
The comments are available for public
inspection at https://www.regulations.gov
or upon request. After full consideration
of the comments received in response to
the Proposed Regulations, these final reg­
ulations adopt the Proposed Regulations
with modifications as described in this
Summary of Comments and Explanation
of Revisions.
Comments addressing the require­
ments for energy property are described
in part I of this Summary of Comments
and Explanation of Revisions. Comments
addressing the PWA requirements are
described in part II of this Summary of
Comments and Explanation of Revisions.
Comments addressing rules applicable to
energy property are described in part III of
this Summary of Comments and Explana­
tion of Revisions.
Comments summarizing the statute or
the Proposed Regulations, recommending
statutory revisions, or addressing issues
that are outside the scope of this rulemak­
ing (such as revising other Federal regula­
tions and recommending changes to IRS
forms) generally are not addressed in this
Summary of Comments and Explanation
of Revisions or adopted in these final
regulations. In addition to modifications
described in this Summary of Comments
and Explanation of Revisions, the final
regulations also include non-substantive
grammatical or stylistic changes to the
Proposed Regulations. Unless otherwise
indicated in this Summary of Comments
and Explanation of Revisions, provisions
of the Proposed Regulations with respect
to which no comments were received are
adopted without substantive change.
I. Requirements for Energy Property
For purposes of the section 48 credit,
energy property consists of all the compo­
nents of property that meet the statutory
requirements for an energy property as
defined by section 48(a)(3) and (c).
Section 48(a)(3)(B) through (D) pro­
vide general requirements for all types
of energy property. Section 48(a)(3)(B)
limits energy property to property that is
constructed, reconstructed, or erected by
the taxpayer or that the taxpayer acquires
if the original use of such property com­
mences with the taxpayer. Section 48(a)(3)

Bulletin No. 2024–52

(C) provides that to be eligible as energy
property, depreciation (or amortization in
lieu of depreciation) must be allowable for
the property. Section 48(a)(3)(D) provides
that to be eligible as energy property, the
property must also meet any performance
and quality standards that have been pre­
scribed by the Secretary, after consulta­
tion with the Secretary of Energy, and
are in effect at the time of the taxpayer’s
acquisition of the property. Under section
48(a)(3), energy property does not include
property that is part of a qualified facility
the production from which is allowed a
renewable electricity production credit
determined under section 45 (section 45
credit) for the taxable year or any prior
taxable year. Lastly, if the statutory text of
section 48 provides dates by which con­
struction of energy property must begin or
when energy property must be placed in
service, such energy property must meet
those deadlines to be eligible for the sec­
tion 48 credit at specified energy percent­
ages.
A. Definitions related to requirements for
energy property
Before 1990, section 48 defined the
term “section 38 property” to include,
among other types of property, energy
property eligible for the section 48 credit.
The Revenue Reconciliation Act of 1990,
Public Law 101-508, 104 Stat. 1388
(November 5, 1990) removed the term
“section 38 property” in amending section
48. However, section 48 is one of the cred­
its that comprise the investment credit for
any taxable year determined under section
46, which is included in section 38(b)(1)
and remains subject to the general busi­
ness credit rules under section 38. As a
result, rules related to “section 38 prop­
erty” remain generally applicable to the
section 48 credit.
Sections 1.48-1 and 1.48-2 provide
guidance with respect to section 38 prop­
erty. Section 1.48-1 was last substan­
tially revised on October 11, 1988 (T.D.
8233, 53 FR 39592) and §1.48-2 was last
revised on June 28, 1985 (T.D. 8031, 50
FR 26698). Although subsequent amend­
ments to section 48 have made some of the
rules provided by these regulations inap­
plicable, those rules continue to provide
useful definitions related to requirements

1357

for energy property, some of which would
be adopted under proposed §1.48-9.
1. Performance and Quality Standards for
Energy Property
Section 48(a)(3)(D) provides that
energy property is property that meets the
performance and quality standards (if any)
that have been prescribed by the Secretary
by regulations (after consultation with the
Secretary of Energy) and are in effect at
the time of the acquisition of the prop­
erty. Former §1.48-9(m)(1) provided that
“energy property must meet quality and
performance standards, if any, that have
been prescribed by the Secretary (after
consultation with the Secretary of Energy)
and are in effect at the time of acquisition.”
Generally, proposed §1.48-9(c)(2)(i)
would adopt this rule for performance and
quality standards for energy property from
former §1.48-9(m)(1) by providing that
energy property must meet performance
and quality standards, if any, which have
been prescribed by the Secretary (after
consultation with the Secretary of Energy)
and are in effect at the time of acquisition
of the energy property. The final regula­
tions adopt this rule as proposed.
2. Performance and Quality Standards for
Electrochromic Glass Property
Proposed §1.48-9(c)(2)(ii)(B) would
provide rules for performance and qual­
ity standards for electrochromic glass
property by stating that to be eligible for
the section 48 credit, electrochromic win­
dows must be rated in accordance with
the National Fenestration Rating Coun­
cil (NFRC) and secondary glazing sys­
tems must be rated in accordance with
the Attachments Energy Rating Council
(AERC) Rating and Certification Process,
or subsequent revisions.
A few commenters addressed the per­
formance and quality standards for elec­
trochromic glass provided in the Proposed
Regulations. Generally, these commenters
suggested methods to satisfy the NFRC
rating requirement and were particularly
interested in a simulation-based process.
For example, a commenter advocated for a
process that emphasizes simulation-based
validation to expedite compliance and
reduce barriers to implementation, partic­

December 23, 2024

ularly given the lengthy delays associated
with physical testing. This commenter
stated that simulations, supported by
advanced and reliable modeling software,
have become a standard practice within
the industry. Another commenter also
emphasized the need to use simulations to
satisfy the NFRC rating requirement.
In response to these comments, the
Treasury Department and the IRS con­
sulted with the DOE and learned that the
existing NRFC and the AERC ratings sys­
tems incorporate simulation methodolo­
gies that should address the commenters’
concerns. Accordingly, the final regula­
tions adopt this rule as proposed.
3. Placed in Service
a. General rules
Section 48(a) provides that the sec­
tion 48 credit for any taxable year is the
energy percentage of the basis of each
energy property placed in service during
such taxable year. As part of the regula­
tions under section 46 for the investment
credit, §1.46-3(d)(1) provides general
rules for determining when a taxpayer has
placed a property in service for purposes
of the section 48 credit. Under §1.463(d)(1), property is considered placed in
service in the earlier of the taxable year
in which, under the taxpayer’s deprecia­
tion practice, the period for depreciation
with respect to such property begins; or
the taxable year in which the property is
placed in a condition or state of readiness
and availability for a specifically assigned
function, whether in a trade or business, in
the production of income, in a tax-exempt
activity, or in a personal activity.
Proposed §1.48-9(b)(5) largely pro­
posed to adopt the general rules of §1.463(d)(1) for determining when a taxpayer
has placed an energy property in service.
However, to be eligible for the section 48
credit, energy property must be property
with respect to which depreciation (or
amortization in lieu of depreciation) is
allowable. Accordingly, proposed §1.489(b)(5)(i) would provide that the taxable
year in which energy property is placed in
service is the earlier of the taxable year in
which, under the taxpayer’s depreciation
practice, the period for depreciation of
such property begins, or the taxable year

December 23, 2024

in which the energy property is placed in
a condition or state of readiness and avail­
ability for a specifically assigned function
in either a trade or business or in the pro­
duction of income.
A commenter requested that the final
regulations provide a different placed in
service rule for energy storage technology.
Because energy storage technology may
charge and discharge prior to commer­
cial readiness, the commenter suggested
that energy storage technology should
be treated as placed in service when: (i)
such property has all licenses, permits,
and approvals required to store and dis­
patch power; (ii) pre-operational testing is
complete; (iii) the taxpayer has title to the
property; and (iv) the property is available
to store and discharge power on a regular,
commercial basis.
Proposed §1.48-9(b)(5) would adopt
the general placed in service rules of
§1.46-3(d)(1), which have applied to
the section 48 credit since its enactment,
with a modification to reflect the require­
ment that the property be eligible for
depreciation or amortization. Until the
IRA amended section 48, energy storage
property (referred to as “energy storage
technology” after the IRA amendments)
was considered a component of energy
property. Without providing specific
indicia that an energy property is placed
in service, the rule provided at proposed
§1.48-9(b)(5) would provide general prin­
ciples for a taxpayer to determine when an
energy property has been placed in service
that are broadly applicable to all types of
energy property, well-understood, and
widely relied upon by industry. The gen­
eral principles provided by the final rule
are sufficiently broad to address the com­
menter’s concerns. Therefore, the final
regulations do not adopt these comments
and instead adopt the placed in service
rules as proposed.
b. Lease-passthrough election
Section 1.46-3(d)(3) provides that,
notwithstanding the provisions of §1.463(d)(1), property with respect to which an
election is made under §1.48-4 to treat the
lessee as having purchased such property
is considered placed in service by the les­
sor in the taxable year in which possession
is transferred to such lessee. Proposed

1358

§1.48-9(b)(5)(ii) would adopt the special
rule from §1.46-3(d)(3) for determining
when a leased property has been placed
in service. Several commenters provided
comments relating to the rule for leased
property in the context of qualified biogas
property.
A commenter requested clarification on
the application of the lease passthrough
election under §1.48-4 to treat a lessee as
having purchased such energy property
from the lessor with respect to any prop­
erty comprising a qualified biogas prop­
erty, including both component properties
considered functionally interdependent as
a single unit of energy property and prop­
erty treated as an integral part of energy
property. This commenter asked for illus­
trative examples of the application of the
lease passthrough election in the context
of a renewable natural gas (RNG) qual­
ified biogas property if the equipment
comprising the qualifying biogas produc­
tion property, including equipment treated
as an integral part of the qualifying biogas
property, is owned by multiple taxpayers.
Another commenter suggested allow­
ing a single taxpayer to consolidate
deemed ownership of an entire qualified
biogas property to permit a more efficient
use and/or transfer of the section 48 credit
under the section 6418 credit transfer rules
by relying on existing lease passthrough
rules that apply to energy property. The
commenter asserted that this would per­
mit greater qualified investment and use
of the section 48 credit if, for regulatory or
environmental permitting reasons, some
portion of the section 48 credit-eligible
qualified biogas property simply cannot
be owned by a single or related taxpayers.
The commenter acknowledged that under
the 6418 Proposed Regulations, the trans­
fer of the tax credits to a lessee under a
lease passthrough election will preclude
further transfers under section 6418.
Guidance on eligibility for the lease
passthrough election is beyond the scope
of the Proposed Regulations because pro­
posed §1.48-9(b)(5)(ii) merely proposed a
rule for determining when property with
respect to which a lease passthrough elec­
tion is made under §1.48-4 is placed in
service. Guidance on eligibility for the
lease passthrough election is addressed
elsewhere, such as in §1.48-4 and the
6418 Final Regulations. Accordingly,

Bulletin No. 2024–52

these final regulations do not adopt these
comments.
4. Acquisition of energy property
Proposed §1.48-9(b)(2) would provide
that the term acquisition of energy prop­
erty means a transaction by which a tax­
payer obtains rights and obligations with
respect to energy property, including title
to the energy property under the law of the
jurisdiction in which the energy property
is placed in service, unless the property is
possessed or controlled by the taxpayer as
a lessee, and physical possession or con­
trol of the energy property. This definition
was intended to require that the taxpayer
establish tax ownership of the energy
property for Federal income tax purposes.
The final regulations modify the definition
in proposed §1.48-9(b)(2) to make this
requirement explicit.
B. Types of energy property
Proposed §1.48-9(e) would expand the
definitions of energy property provided
in former §1.48-9 to account for new
technologies that were added by amend­
ments to section 48, including by the IRA.
Generally, the definitions of the types of
energy property provided in the Proposed
Regulations incorporate the definitions
provided in section 48(a)(3) and (c) but
do not provide specific beginning of con­
struction or placed in service deadlines.
Taxpayers should refer to the current defi­
nitions of energy property provided by
section 48 for specific requirements appli­
cable to each type of energy property. The
definitions of the types of energy property
provided in proposed §1.48-9(e) were
developed by the Treasury Department
and the IRS in consultation with the DOE.
Some commenters requested clarifica­
tion concerning whether a particular type
of technology would fall into one of the
categories of energy property. For exam­
ple, a commenter requested guidance
concerning what type of energy property
would include sewage energy recovery
property and provided three options: geo­
thermal heat pump (GHP) property by
reference to “underground fluids,” energy
storage technology, or waste energy
recovery property (WERP). A definitive
response to such comments would require

Bulletin No. 2024–52

the Treasury Department and the IRS to
conduct a complete factual analysis of the
property in question, which may include
information that was not provided by the
commenters. Because more information
is needed to make the determinations
requested by the commenters, these final
regulations do not address the requested
clarifications concerning the categoriza­
tion of specific technologies.
1. Combined Heat and Power System
Property
Section 48(a)(3)(A)(v) includes com­
bined heat and power system (CHP) prop­
erty as a type of energy property. Section
48(c)(3)(A) defines CHP property as
property comprising a system that, among
other requirements, uses the same energy
source for the simultaneous or sequential
generation of electrical power, mechanical
shaft power, or both, in combination with
the generation of steam or other forms of
useful thermal energy (including heating
and cooling applications). Section 48(c)
(3)(A) further provides, in part, that a
CHP property must produce at least 20
percent of its total useful energy in the
form of thermal energy that is not used to
produce electrical or mechanical power
(or combination thereof), and at least 20
percent of its total useful energy in the
form of electrical or mechanical power (or
combination thereof), and that the energy
efficiency percentage of the system must
exceed 60 percent.
Section 48(c)(3)(B) provides that
the amount of the section 48 credit with
respect to CHP property is reduced to the
extent that a CHP property has an electri­
cal or mechanical capacity in excess of
applicable limits. Subject to the exception
for CHP property that uses closed or openloop biomass as feedstock, CHP property
with capacity in excess of the applicable
capacity limit (15 MW or a mechanical
capacity of more than 20,000 horsepower
or an equivalent combination of electrical
and mechanical energy capacities) is eli­
gible for only a fraction of the otherwise
allowable section 48 credit. This frac­
tion is equal to the applicable capacity
limit divided by the capacity of the CHP
property. However, CHP property with a
capacity in excess of 50 MW or a mechan­
ical energy capacity in excess of 67,000

1359

horsepower or an equivalent combina­
tion of electrical and mechanical energy
capacities does not qualify for the section
48 credit.
Section 48(c)(3)(C) provides that the
energy efficiency percentage of a CHP
property is the fraction (i) the numera­
tor of which is the total useful electrical,
thermal, and mechanical power produced
by the system at normal operating rates,
and expected to be consumed in its nor­
mal application, and (ii) the denomina­
tor of which is the lower heating value
of the fuel sources for the system. The
energy efficiency percentage and the per­
centages under section 48(c)(3)(A)(ii)
are determined on a British thermal unit
(Btu) basis. Section 48(c)(3)(C)(iii) spe­
cifically provides that the term “combined
heat and power system property” does
not include property used to transport an
energy source to the facility or to distrib­
ute energy produced by the facility.
Additionally, section 48(c)(3)(D) pro­
vides that a CHP property with a fuel
source that is at least 90 percent from
closed or open-loop biomass that would
otherwise qualify for the section 48 credit
but for the failure to meet the efficiency
standard is eligible for a credit reduced in
proportion to the degree to which the sys­
tem fails to meet the efficiency standard.
For example, a system that would other­
wise be required to meet the 60-percent
efficiency standard, but that only achieves
30-percent efficiency, would be permitted
to claim a credit equal to one-half of the
otherwise allowable credit.
Proposed §1.48-9(e)(6)(i) would pro­
vide generally that CHP property is prop­
erty comprising a system that uses the
same energy source for the simultane­
ous or sequential generation of electrical
power, mechanical shaft power, or both, in
combination with the generation of steam
or other forms of useful thermal energy
(including heating and cooling applica­
tions). Proposed §1.48-9(e)(6)(i) would
also provide that CHP property must pro­
duce at least 20 percent of its total useful
energy in the form of thermal energy that is
not used to produce electrical or mechani­
cal power (or combination thereof), and at
least 20 percent of its total useful energy
in the form of electrical or mechanical
power (or combination thereof). Further,
proposed §1.48-9(e)(6)(i) would provide

December 23, 2024

that the energy efficiency percentage of
CHP property must exceed 60 percent
(except in the case of CHP systems that
use biomass within the meaning of sec­
tion 45). Proposed §1.48-9(e)(6)(i) would
also provide that CHP property does not
include any property comprising a system
if such system has a capacity in excess of
50 MW or a mechanical energy capac­
ity in excess of 67,000 horsepower or an
equivalent combination of electrical and
mechanical energy capacities. Proposed
§1.48-9(e)(6)(ii) would provide that CHP
property does not include property used to
transport the energy source to the gener­
ating facility or to distribute energy pro­
duced by the facility.
A commenter requested that the final
regulations clarify whether a CHP prop­
erty would be eligible for the section 48
credit, assuming all other criteria are met,
if the fuel source is exclusively non-re­
newable natural gas. There is no require­
ment that a CHP property use a specific
fuel or feedstock. The Treasury Depart­
ment and the IRS emphasize that all CHP
property must meet the requirements of
section 48(c)(3) and those provided in
proposed §1.48-9(e)(6)(i), which the final
regulations adopt as proposed.
2. Geothermal Heat Pump Property
Section 48(a)(3)(A)(vii) provides, in
part, that energy property includes equip­
ment that uses the ground or ground water
as a thermal energy source to heat a struc­
ture or as a thermal energy sink to cool a
structure (geothermal heat pump or GHP
property). Proposed §1.48-9(e)(8) would
adopt the statutory definition of GHP
property while providing the modification
that in addition to the ground and ground
water, other underground working fluids
may be used as a thermal energy source
or as a thermal energy sink. Accordingly,
proposed §1.48-9(e)(8) would provide
that GHP property is equipment that uses
the ground, ground water, or other under­
ground fluids as a thermal energy source
to heat a structure or as a thermal energy
sink to cool a structure.
Several commenters requested revi­
sions to the definition of GHP property to
include recovered heat as a thermal energy
source. For example, representative of
these comments, a commenter requested

December 23, 2024

clarification that equipment used to cir­
culate recovered heat qualifies as GHP
property. This commenter asserted that
the same GHP property that uses a ground
heat exchanger as a source or sink can
be designed to operate in a heat recov­
ery mode, simply recycling heat around
a building if the potential exists. Another
commenter noted that the use of GHP
property in heat recovery mode should be
considered a qualified energy source for
purposes of the calculation to determine
whether the GHP property qualifies as
dual use property.
As defined in proposed §1.48-14(b)(1),
the term “dual use property” would mean
property that uses energy derived from
both a qualifying source (that is, from
an energy property including a qualified
facility for which a section 48(a)(5) elec­
tion has been made) and from a non-qual­
ifying source (that is, sources other than
an energy property including a qualified
facility for which a section 48(a)(5) elec­
tion has been made). As proposed §1.4814(b)(2) would further provide, if dual use
property uses energy derived from both
a qualifying source and a non-qualifying
source it will qualify as energy property
if its use of energy from non-qualifying
sources does not exceed 50 percent of its
total energy input during an annual mea­
suring period (Dual Use Rule). Further, if
the energy used from qualifying sources is
between 50 percent and 100 percent, only
a proportionate amount of the basis of the
energy property will be taken into account
in computing the amount of the section 48
credit. For example, if 80 percent of the
energy used by a dual use property is from
qualifying sources, 80 percent of the basis
of the dual use property will be taken into
account in computing the amount of the
section 48 credit.
The Treasury Department and the IRS
decline to adopt these suggested revisions
because they would conflict with the stat­
utory definition of GHP property. Section
48(a)(3)(A)(vii) specifically provides that
GHP property includes equipment that
uses the ground or ground water as a ther­
mal energy source. While the Proposed
Regulations would provide that under­
ground fluids may be included, this is a
clarification that underground fluids other
than water may offer another medium that
contains thermal energy from the ground

1360

or ground water. The statute does not
include any other thermal energy sources.
For further discussion of the Dual Use
Rule see part III.B. of this Summary of
Comments and Explanation of Revisions.
Additionally, a few commenters sug­
gested expanding the definition to allow
GHP property to be used to heat domestic
hot water in addition to a structure. For
example, a commenter requested that the
final rule clarify that domestic hot water
generation by GHP property is included
in the definition of GHP property. Another
commenter asserted that GHP property
eligible for the section 48 credit should
also be permitted to provide hot water
generation because it would be counter­
intuitive if heating hot water for space
conditioning is included in the definitions,
but heating of domestic hot water is not.
The statute requires GHP property heat a
structure or cool a structure; therefore, the
suggestion to expand the definition is not
authorized by the statute. The Treasury
Department and the IRS decline to adopt
these suggested revisions. The final regu­
lations adopt this rule as proposed.
A commenter mentioned that the
energy property definition in proposed
§1.48-9(e)(3) concerning geothermal
energy property includes clarifying lan­
guage on the scope of included property,
specifically addressing production and
distribution equipment. The commenter
recommended including similar language
for GHP property described in section
48(a)(3)(A)(vii). The Treasury Depart­
ment and the IRS declined to adopt this
suggestion in the Proposed Regulations,
and explained in the preamble to the
Proposed Regulations that, while section
48(a)(3)(A)(vii) does not specify energy
distribution equipment and components
of a building’s heating and/or cooling sys­
tem as components of GHP property, such
equipment may be integral to the func­
tion of the GHP property to heat or cool a
structure. Thus, energy distribution equip­
ment may be considered GHP property for
the reasons stated in the preamble to the
Proposed Regulations.
3. Waste Energy Recovery Property
Section 48(a)(3)(A)(viii) provides that
energy property includes waste energy
recovery property (WERP). Section 48(c)

Bulletin No. 2024–52

(5) defines WERP as property (with a
capacity not in excess of 50 MW) that
generates electricity solely from heat from
buildings or equipment if the primary pur­
pose of such building or equipment is not
the generation of electricity. Additionally,
section 48(c)(5)(C) prevents taxpayers
from claiming a double benefit by provid­
ing that any property that could be treated
as WERP (determined without regard to
section 48(c)(5)(C)) and is part of a CHP
property is not treated as WERP for pur­
poses of section 48 unless the taxpayer
elects not to treat such system as a CHP
property for purposes of section 48.
Proposed §1.48-9(e)(9)(i) would pro­
vide that WERP is property that generates
electricity solely from heat from build­
ings or equipment if the primary purpose
of such building or equipment is not the
generation of electricity. Proposed §1.489(e)(9)(i) would also provide examples
of buildings or equipment the primary
purpose of which is not the generation of
electricity including, but not limited to,
manufacturing plants, medical care facil­
ities, facilities on college campuses, pipe­
line compressor stations, and associated
equipment. Further, proposed §1.48-9(e)
(9)(i) would provide that WERP does not
include any property that has a capacity in
excess of 50 MW. Proposed §1.48-9(e)(9)
(ii) would provide that any WERP that is
part of a system that is a CHP property is
not treated as WERP for purposes of sec­
tion 48 unless the taxpayer elects to not
treat such system as a CHP property for
purposes of section 48.
Several commenters requested that
specific technologies, including “pres­
sure reduction” equipment or “pressure
letdown” equipment, sometimes referred
to as “turboexpanders,” which generally
allow high pressure gas to expand and
produce heat, be added to the examples of
WERP that would be provided in proposed
§1.48-9(e)(9)(i). Another commenter
requested that “pressure reduction” equip­
ment be included as an example of WERP
because pipeline transmissions (regard­
less of geographic distance) require high
pressure, but at pressure letdown stations
and within industrial facilities where the
pressure is reduced, pressure reduction
affords an opportunity for energy collec­
tion. A commenter requested that district
energy systems paired with WERP be

Bulletin No. 2024–52

added to the examples of WERP, while
another commenter suggested adding car­
bon dioxide power system technology to
the examples of WERP.
In response to these requests, the Trea­
sury Department and the IRS highlight
that proposed §1.48-9(e)(9) would provide
non-exhaustive examples of buildings and
facilities at which WERP may function
rather than examples of technology that
may qualify as WERP. This approach
provides a function-oriented approach to
determine whether a technology is WERP
that is broad enough to encompass nascent
technologies without rendering the regula­
tions quickly obsolete. Therefore, the final
regulations do not adopt the requested
revisions to the definition of WERP, and
the final regulations adopt this rule as pro­
posed.
4. Energy Storage Technology
Section 48(a)(3)(A)(ix), which was
added by the IRA, provides that energy
property includes energy storage technol­
ogy. Section 48(c)(6)(A)(i) defines energy
storage technology to mean property
(other than property primarily used in the
transportation of goods or individuals and
not for the production of electricity) that
receives, stores, and delivers energy for
conversion to electricity (or, in the case
of hydrogen, that stores energy), and has a
nameplate capacity of not less than 5 kilo­
watt-hours (kWh). Section 48(c)(6)(A)(ii)
provides that thermal energy storage prop­
erty is also energy storage technology.
Section 48(c)(6)(B) provides a rule for
modifications of energy storage technol­
ogy. In the case of any property that either
was placed in service before August 16,
2022, and would be described in section
48(c)(6)(A)(i), except that such property
has a capacity of less than 5 kWh and is
modified in a manner that such property
(after such modification) has a nameplate
capacity of not less than 5 kWh, or is
energy storage technology (as described
in section 48(c)(6)(A)(i)) and is modified
in a manner that such property (after such
modification) has an increase in name­
plate capacity of not less than 5 kWh, such
property is treated as energy storage tech­
nology (as described in section 48(c)(6)
(A)(i)) except that the basis of any exist­
ing property prior to such modification is

1361

not taken into account for purposes of the
section 48 credit.
Section 48(c)(6)(C) defines thermal
energy storage property, for purposes of
section 48(c)(6), as property comprising
a system that: is directly connected to a
heating, ventilation, or air conditioning
system; removes heat from, or adds heat
to, a storage medium for subsequent use;
and provides energy for the heating or
cooling of the interior of a residential or
commercial building. Section 48(c)(6)(C)
(ii) provides that thermal energy storage
property does not include a swimming
pool, a CHP property, or a building or its
structural components.
Commenters requested clarifications
regarding the treatment of energy stor­
age technology co-located with, an inte­
gral part of, or shared with a facility that
is otherwise eligible for certain Federal
tax credits. For example, a commenter
requested clarification concerning bound­
aries between energy storage technology
eligible for the section 48 credit and qual­
ified clean hydrogen production facilities
eligible for the credit under section 45V.
Another commenter requested confir­
mation that energy storage technology,
including a hydrogen energy storage prop­
erty, separately qualifies for the section 48
credit regardless of whether it is part of a
facility for which a credit under section
45, 45V, or 48 is or has been allowed. A
commenter also requested confirmation
that energy storage technology will be
treated as separate property for section
48 and other Code provisions. The Trea­
sury Department and the IRS confirm
that energy storage technology is eligi­
ble for the section 48 credit if it satisfies
the requirements of section 48 even if the
energy storage technology is co-located
with or shared by a facility that is other­
wise eligible for the section 45, 45V, or 48
credits.
a. Hydrogen energy storage property
Proposed §1.48-9(e)(10)(iv) would
provide that hydrogen energy storage
property is property (other than property
primarily used in the transportation of
goods or individuals and not for the pro­
duction of electricity) that stores hydro­
gen and has a nameplate capacity of not
less than 5 kWh, equivalent to 0.127 kg of

December 23, 2024

hydrogen or 52.7 standard cubic feet (scf)
of hydrogen. Proposed §1.48-9(e)(10)
(iv) would also require hydrogen energy
storage property to store hydrogen that is
solely used for the production of energy
and not for other purposes such as for the
production of end products such as fertil­
izer. Proposed §1.48-9(e)(10)(iv) would
also provide a non-exhaustive list of
components of hydrogen energy storage
property that would include, but would
not be limited to, a hydrogen compressor
and associated storage tank and an under­
ground storage facility and associated
compressors.
In the preamble to the Proposed Regu­
lations, the Treasury Department and the
IRS requested comments on alternative
approaches to assessing limitations on the
use of hydrogen energy storage property,
including whether additional clarifica­
tion is needed regarding the production
of energy from hydrogen, and what type
of documentation would be needed to
demonstrate that a hydrogen energy stor­
age property was used to store hydrogen
that is solely used for the production of
energy.
A commenter particularly endorsed
the approach taken in the Proposed Reg­
ulations by providing that the nameplate
capacity requirement for hydrogen is
0.127 kilograms for 5 kWh. The com­
menter suggested this rule be retained in
the final regulations.
Generally, commenters disagreed with
the requirement that hydrogen energy
storage property must store hydrogen
that is solely used for the production of
energy and not for other purposes, which
the commenters referred to as the “end use
requirement.” For example, a commenter
stated that the final regulations should be
revised to align with the statutory language
and asserted that the end use requirement
is not in accord with legislative intent,
would cause delays, is unworkable, and
misaligns with the Biden Administration’s
U.S. National Clean Hydrogen Strategy
and Roadmap. Some commenters asserted
that the end use requirement is simply
unworkable due to lack of tracing mecha­
nisms once hydrogen enters the stream of
commerce.
Multiple commenters also asserted
that imposing an end use requirement
on hydrogen energy storage property is

December 23, 2024

unsupported by the statute and would
be impossible to administer. Comment­
ers expressed concerns that the end use
requirement would render the credit use­
less, impact markets inappropriately,
and lead to confusion. Commenters
also asserted that section 48(c)(6)(A)(i)
requires only that hydrogen energy stor­
age property “store energy” and does not
require that it actually be used for the pro­
duction of energy. Another commenter
noted that because hydrogen is a form of
energy, that hydrogen storage is per se
energy use.
With respect to administrability, com­
menters explained the difficulties of both
requiring exclusive energy use and obtain­
ing the information to make this determi­
nation. For example, a commenter stated
that it is too difficult for the storage owner
to predict how hydrogen will be used and
another asserted that requiring stored
hydrogen to be used solely for the pro­
duction of energy would, in cases of bulk
storage, be nearly impossible. Another
commenter likewise stated that taxpay­
ers do not have full control of, or even
information regarding, the use of hydro­
gen once it leaves their storage facilities
and will be unable to have the certainty
needed regarding end use to obtain proj­
ect financing. This commenter, along with
others, also noted the significant burden
of documenting the end use of the stored
hydrogen. This commenter explained that
currently there are no recordkeeping or
documentation precedents available for
a taxpayer to efficiently demonstrate the
end-use of hydrogen, a fungible molecule,
stored in a taxpayer’s hydrogen energy
storage property. The commenter asserted
that because there is no available docu­
mentation pathway for tracking hydro­
gen molecules through to their end use,
it would be both impractical and prohibi­
tively costly for a taxpayer to develop and
implement such recordkeeping practices.
Another commenter requested that the end
use requirement conclude with the recap­
ture period.
Lastly, commenters explained how the
end use requirement would limit the use­
fulness of the credit. For example, a com­
menter asserted that the end use require­
ment would render the section 48 credit
largely useless as a means of encouraging
the development of the large-scale hydro­

1362

gen storage capability that will be essential
to the establishment of a robust hydrogen
ecosystem in the United States. Addition­
ally, a commenter stated that an end use
requirement would cause several prob­
lems, including deterring the provision of
hydrogen storage services to a significant
portion of the hydrogen market sector (for
example, for ammonia production). This
commenter also requested clarification
regarding the appropriate treatment in a
case in which hydrogen is another step
removed from ammonia production with
electricity production as an interim step.
Generally, under the Proposed Regula­
tions, this scenario satisfies the end use
requirement.
A commenter noted that the end use
requirement would lead to a risk of cre­
ating two separate markets for hydrogen:
those that are able to use the section 48
credit and those that are not. Emphasiz­
ing the same points, another commenter
stated that restricting the end-use of the
clean hydrogen to “energy” may mate­
rially impact the ability of producers to
secure offtake agreements and/or restrict
the usage of hydrogen storage and trans­
portation networks to only certain types of
hydrogen end-uses.
Another commenter noted that energy
storage technology neutrality is very
important. This commenter stated that it
believes that the “energy only” end use
requirement would make hydrogen stor­
age a second (or even third) class tech­
nology if compared to battery energy stor­
age for purposes of the section 48 credit.
The commenter added that one way of
reading the positioning of hydrogen and
battery storage within the same statutory
provision is that this reflects the intent of
Congress to not favor one form of energy
storage over the other. This commenter
further asserts that the absence of an
end use requirement imposed on battery
storage property indicates that no such
requirement should be imposed on hydro­
gen energy storage property.
While the majority of commenters
objected to including the end use require­
ment, several commenters provided sug­
gestions if the end use requirement is
adopted. Several of these commenters
suggested the use of an allocation rule sim­
ilar to the Dual Use Rule under proposed
§1.48-14(b)(2) and discussed in part III.B.

Bulletin No. 2024–52

of this Summary of Comments and Expla­
nation of Revisions. A commenter sug­
gested revising the Proposed Regulations
to require a reasonable allocation between
qualifying energy uses and nonqualifying
non-energy uses of stored hydrogen simi­
lar to the requirements found in the Dual
Use Rule. Another commenter stated that
the final regulations should provide flexi­
bility and permit any reasonable method
to establish the annual use of the stored
hydrogen similar to proposed §1.48-14(b)
(2)(ii). A commenter proposed that the
final regulations provide a Dual Use safe
harbor for a portion of a hydrogen energy
storage property.
Alternatively, several commenters sug­
gested linking the end use requirement to
the rules for the credit for production of
clean hydrogen under section 45V of the
Code. These commenters proposed that
hydrogen energy storage be eligible for
the section 48 credit regardless of end use,
if the hydrogen stored is at least 50 per­
cent qualified clean hydrogen under sec­
tion 45V(c)(2).
Commenters also requested clarifica­
tions regarding what would be consid­
ered energy use for purposes of applying
the end use requirement. For example, a
commenter requested a clarification that
the definition of energy use is inclusive
of an application in which hydrogen is
fully consumed in the manufacturing of
a downstream molecule, which is in turn
clearly used in an energy application for
which hydrogen would be qualified if used
directly. Another commenter noted that
the examples provided in the preamble to
the Proposed Regulations are too narrow
and should be expanded to reflect vari­
ous uses of hydrogen as energy, including
ammonia as a feedstock for fuel. A com­
menter asked for clarification that storage
of hydrogen that is solely used as energy
includes hydrogen used as energy for
mobility purposes. Finally, a commenter
requested that the final regulations allow
for the storage of hydrogen whose end use
is fertilizer for food production, because
prohibiting hydrogen storage used in this
way may encourage the parallel develop­
ment of hydrogen storage and transporta­
tion infrastructure that could otherwise be
shared.
Several commenters also requested
clarification regarding substantiation of

Bulletin No. 2024–52

the end use requirement. A commenter
suggested that taxpayers be permitted to
rely on the use described in commercial
sales contracts without the need to track
the ultimate end use of hydrogen by thirdparty users. Another commenter asked
that taxpayers be required only to main­
tain documentation, such as an agreement
between the two parties or a certification,
that the immediate purchaser of the stored
hydrogen intends to use it for energy. This
commenter stated that tracking use past
the point of immediate purchaser to the
end use of the molecule is impossible and
as a result may make the credit unavail­
able to a variety of hydrogen storage
projects. Another commenter noted that
operators of clean hydrogen transport and
storage systems will need to know what
sort of assurances are needed from off-tak­
ers at the limits of their system to satisfy
credit eligibility and ensure limited recap­
ture risk.
Several commenters suggested that the
final regulations provide a method for a
taxpayer to demonstrate that a hydrogen
energy storage property was used to store
hydrogen solely used for the production
of energy. A commenter recommended
that taxpayers be able to meet this require­
ment through (i) an affirmative attestation
of intent by the taxpayer that owns the
storage property and (ii) a five-year look­
back process, with reasonable threshold
tests, to determine whether a recapture has
occurred and what percentage of the credit
should be recaptured. Another commenter
recommended that the final regulations
create a rebuttable presumption of energy
use allowing taxpayers to demonstrate
energy end use requirements under the
relevant facts and circumstances.
The Proposed Regulations would
require that the hydrogen energy storage
property store hydrogen solely use for the
production of energy and not for other
purposes such as for the production of end
products such as fertilizer. After consider­
ation of comments received, the Treasury
Department and the IRS agree that section
48(c)(6)(A)(i) does not require that hydro­
gen energy storage property store hydro­
gen that will be used for the production
of energy. The Treasury Department and
the IRS also understand commenters’ con­
cerns regarding the administrative chal­
lenges the end use requirement presents

1363

for taxpayers and agree that the final regu­
lations require modification. Accordingly,
the final regulations do not adopt the
requirement that hydrogen energy storage
property store hydrogen that is solely used
for the production of energy and not for
other purposes such as for the production
of end products such as fertilizer.
Some commenters asserted that the
preamble to the Proposed Regulations
indicated that hydrogen energy storage
property is not limited to hydrogen. Since
hydrogen may be stored within ammonia
or methanol, commenters requested that
the final regulations state that hydrogen
storage property that stores hydrogen
in the form of ammonia, methanol, or
another stable medium qualifies as energy
storage technology if such product is pro­
duced directly from hydrogen and subject
to any use limitation provided in the regu­
lations. Another commenter requested that
the final regulations clarify that equipment
used to process hydrogen into ammonia,
methanol, and other carriers, as well as
storage for such hydrogen carriers, is
hydrogen energy storage property.
The Treasury Department and the IRS
decline to adopt the comments request­
ing that the final regulations provide that
chemical storage, that is, equipment used
to store hydrogen carriers (such as ammo­
nia and methanol), is hydrogen energy
storage property. Section 48(c)(6)(A)(i)
specifically references only hydrogen, not
compounds containing hydrogen. While
most vessels designed for hydrogen stor­
age (both above and below ground) may
be capable of storing other gases, they are
usually dedicated to a single gas (and not
repurposed) to avoid contamination and
mixing of gases.
Many commenters also provided feed­
back on the non-exhaustive list of compo­
nents of property that may be considered
part of hydrogen energy storage property
as would be provided in proposed §1.489(e)(10)(iv). A commenter endorsed the
inclusion of “compressor and storage
tank” as a component of hydrogen energy
storage property. Several commenters
requested that additional components of
property be added to this list, some by
asserting that the components should be
eligible under rules for functionally inter­
dependent or integral property. Other
commenters requested that the final reg­

December 23, 2024

ulations expand the examples of integral
and functionally interdependent equip­
ment to be more inclusive of existing and
future hydrogen energy storage property
technologies.
Specifically, commenters requested
that hydrogen energy storage property
include hydrogen liquefaction and related
equipment, equipment required to operate
underground hydrogen storage property,
as well as dedicated hydrogen distribution
equipment such as pipelines located on
the storage side of custody meters, hydro­
gen trailers (for example, cryogenic liquid
tankers, or cylinders hauled by modules
or chassis) and railcars. Another com­
menter proposed that the final regulations
treat hydrogen liquefaction equipment
and related equipment in the same man­
ner as power conditioning and transfer
equipment may be treated with respect
to certain energy property that generates
electricity.
The Treasury Department and IRS
agree that additional clarity on the defini­
tion of hydrogen energy storage property
is warranted. The Treasury Department
and IRS understand that hydrogen lique­
faction equipment may prepare hydrogen
for storage in the hydrogen energy storage
property, making such property an integral
part of hydrogen energy storage property.
Section 48(c)(6)(A)(i) provides that
energy storage technology does not
include property primarily used in the
transportation of goods or individuals
and not for the production of electricity.
Pipelines, trailers, and railcars are prop­
erty primarily used in the transportation
of goods or individuals not for the pro­
duction of electricity. However, hydrogen
energy storage property may have gath­
ering and distribution lines to transport
hydrogen within the hydrogen energy
storage property, making such property an
integral part of the hydrogen energy stor­
age property. Therefore, the gathering and
distribution lines used within a hydrogen
energy storage property are not pipelines
used to transport hydrogen outside of the
hydrogen energy storage property. The
final regulations provide that property that
is an integral part of hydrogen energy stor­
age property includes, but is not limited
to, hydrogen liquefaction equipment and
gathering and distribution lines within a
hydrogen energy storage property.

December 23, 2024

Several commenters requested clari­
fication regarding the costs included in
hydrogen energy storage property. In
the context of salt caverns, a commenter
asserted that the final regulations should
confirm that eligible costs for a salt cavern
include not only the costs to acquire and
construct the eligible property but also all
direct and indirect costs associated with
the development and construction of the
salt cavern and referenced rules under
section 263A of the Code. Another com­
menter requested clarification regarding
what equipment from an operational stor­
age facility would be includible in basis
for purposes of the section 48 credit. A
commenter requested that power-to-gas
methanation facility qualify as hydrogen
energy storage.
As stated for other energy properties,
the Treasury Department and the IRS
emphasize that the rule for determining
what constitutes a unit of energy property
is function-based. Because more informa­
tion is needed to make the determinations
requested by the commenters, the final
regulations do not adopt these comments.
b. Electrical energy storage property
Proposed §1.48-9(e)(10)(ii) would pro­
vide that electrical energy storage prop­
erty is property (other than property pri­
marily used in the transportation of goods
or individuals and not for the production
of electricity) that receives, stores, and
delivers energy for conversion to electric­
ity, and has a nameplate capacity of not
less than 5 kWh. For example, subject to
the exclusion for property primarily used
in the transportation of goods or individ­
uals, electrical energy storage property
includes, but is not limited to, recharge­
able electrochemical batteries of all types
(such as lithium ion, vanadium flow,
sodium sulfur, and lead-acid); ultracapac­
itors; physical storage such as pumped
storage hydropower, compressed air stor­
age, flywheels; and reversible fuel cells.
Multiple commenters requested clari­
fication concerning specific technologies
that may be electrical energy storage prop­
erty. A commenter requested that the defi­
nition be expanded to include compressed
fluid storage in addition to compressed
air storage so as to include liquid and gas
applications. Because these applications

1364

generally are used by pipelines, which are
property primarily used in the transporta­
tion of goods or individuals and not for
the production of electricity, the Treasury
Department and the IRS decline to adopt
these revisions.
Multiple commenters requested that
load controllers be described as an inte­
gral part of electrical energy storage tech­
nology while other commenters requested
that bidirectional chargers be eligible as
energy storage technology. Another com­
menter requested that the final regulations
explicitly include thermal batteries capa­
ble of storing energy for conversion to
electricity in its non-exhaustive list of eli­
gible “electrical energy storage property”
due to confusion related to thermal energy
storage (TES) being a separate category.
As has been noted previously, the Pro­
posed Regulations are intended to provide
a function-oriented method to determine
whether a technology is energy storage
technology that is broad enough to encom­
pass nascent technologies without render­
ing the regulations quickly obsolete. It
is impossible to enumerate every single
technology that may be eligible for the
section 48 credit given the ever-changing
nature of the industry and technological
development. Although these regulations
do not list all technologies that may qual­
ify for the section 48 credit, the Proposed
Regulations provide adequate guidance
and examples to illustrate the application
of the rules for taxpayers to analyze a par­
ticular technology. The Treasury Depart­
ment and the IRS, therefore, do not adopt
commenters’ requests concerning specific
technologies.
Multiple commenters questioned what
primarily used in the transportation in
section 48(c)(6)(A)(i) means in the case
of electrical energy storage property. A
commenter explained that pipeline sys­
tems can be multi-tasked with a section
of the pipe to act as energy storage and
requested that the phrase “primarily used
in the transportation of goods” specifi­
cally exclude equipment that is mobile
but include stationary property such as
pipelines. Another commenter requested
a bright line rule for technologies that are
not primarily used in transportation of
goods or individuals to qualify for the sec­
tion 48 credit. This commenter suggested
that property, including school buses,

Bulletin No. 2024–52

that receives, stores, and delivers energy
for conversion to electricity and that is
used less than 35 percent of the hours in
a calendar year for transporting goods or
individuals is not primarily used for trans­
portation. In response to these comments,
the Treasury Department and the IRS note
that pipelines and school buses are both
primarily used in transportation. In addi­
tion, there are other IRA tax incentives
intended to benefit some technologies for
which commenters seek section 48 credit
eligibility. For instance, section 45W
provides a tax credit for electric school
buses. Furthermore, a notice of proposed
rulemaking (REG-118269-23) published
in the Federal Register (89 FR 76759) on
September 19, 2024, regarding the sec­
tion 30C alternative fuel vehicle refueling
property credit (30C Proposed Regula­
tions) proposed a definition for property
primarily used in the transportation of
goods or individuals and not for the pro­
duction of electricity for purposes of sec­
tions 48 and 48E. In particular, proposed
§1.48-9(e)(10)(vi) of the 30C Proposed
Regulations would provide that energy
storage property is primarily used in the
transportation of goods or individuals
and not for the production of electricity,
and therefore is not energy storage tech­
nology eligible for the section 48 credit,
if a credit is claimed under section 30C
for such property. Accordingly, comments
regarding this proposed definition will be
addressed when the 30C Proposed Regu­
lations are finalized.
In the context of a pumped storage
hydropower facility, a commenter sug­
gested that the scope of eligible electrical
energy storage technology be defined to
include all property necessary to receive,
store, and deliver energy for conversion
to electricity, consistent with the defini­
tion in section 48(c)(6)(A)(i), and include
all tangible personal property and other
tangible property up to and including the
step-up transformer at the substation prior
to transmission to the grid. This com­
menter also suggested that an example
be included to illustrate these concepts.
Another commenter stated that the final
regulations should confirm that the term
“energy storage technology” includes all
the qualified property up to and including
the step-up transformer at the substation
prior to transmission to the grid, and that

Bulletin No. 2024–52

this property would include the two reser­
voirs, the powerhouse (including the gen­
erators, turbines, and associated electrical
equipment), the piping and pumps, the
tunnel, substation equipment, and other
integral property.
A definitive response to such comments
would require the Treasury Department
and the IRS to conduct a complete fac­
tual analysis of the property in question,
which may include information beyond
that which was provided by the comment­
ers. Because more information is needed
to make the determinations requested by
the commenters, the requested clarifica­
tions are not addressed in these final reg­
ulations.
c. Thermal energy storage property
Proposed §1.48-9(e)(10)(iii) would
provide that thermal energy storage prop­
erty is property comprising a system that
is directly connected to a heating, venti­
lation, or air conditioning (HVAC) sys­
tem; removes heat from, or adds heat to,
a storage medium for subsequent use; and
provides energy for the heating or cool­
ing of the interior of a residential or com­
mercial building. Thermal energy storage
property includes equipment and materi­
als, and parts related to the functioning of
such equipment, to store thermal energy
for later use to heat or cool, or to provide
hot water for use in heating a residential or
commercial building. It does not include a
swimming pool, CHP property, or a build­
ing or its structural components. The Pro­
posed Regulations included a non-exhaus­
tive list of examples of thermal energy
storage property.
Commenters requested clarifications
on what constitutes thermal energy stor­
age property. A commenter requested clar­
ification that thermal energy storage prop­
erty includes all air-source heat pumps,
electric boilers, and hot water heat pumps,
but does not include fossil-fuel-pow­
ered water boilers. The commenter also
requested that the final regulations clar­
ify that ground and air source heat pumps
qualify as energy storage technology
and suggested that thermal energy stored
in one medium may be transferred and
stored in a second medium for subsequent
use. The commenter also requested that
the use of the term “subsequent” in the

1365

definition of thermal energy storage prop­
erty under section 48(c)(6)(C)(i)(II) not
require a specific interval of time between
storage and use for a process to qualify.
Another commenter stated that the point
at which the scope of thermal energy
storage property ends is unclear and
requested clarification regarding whether
“equipment” extends to the thermal
energy source for thermal energy storage
property. This commenter also requested
clarity on whether the thermal energy
source equipment (for example, chiller,
heat pump, or furnace) may be used for
multiple purposes or if the thermal energy
source equipment must be dedicated to the
thermal energy storage property. Another
commenter asked whether equipment
that uses thermal energy to heat or cool
a structure is also thermal energy storage
property. Some commenters endorsed the
proposed examples of thermal energy
storage property, while other comment­
ers requested additions, such as including
“chilled water” to ice and electric boilers
that use electricity to heat water and later
use this stored energy to heat a building
through the HVAC system.
The Treasury Department and IRS agree
that the definition of thermal energy stor­
age property requires clarification. Ther­
mal energy storage property is defined,
in part, as a system which “removes heat
from, or adds heat to, a storage medium
for subsequent use.” The Treasury Depart­
ment and IRS, in consultation with DOE,
understand the phrase “adds heat to” as
including equipment that is involved in
adding, or transferring, already-exist­
ing heat from one medium to the storage
medium, but not equipment involved
in transforming other forms of energy
into heat in the first instance. Equipment
that just adds (or removes) heat includes
technologies, like heat pumps, that draw
heat from the ambient air or other stores
of heat, and add that heat to a storage
medium. By contrast, equipment that
transforms other forms of energy into heat
in the first instance, for example, through
combustion or electric resistance, is not
property that “removes heat from, or adds
heat to” a storage medium and is therefore
not an eligible component of a thermal
energy storage property. For example, a
conventional gas boiler with an integrated
storage tank would not generally be ther­

December 23, 2024

mal energy storage property. While the
gas boiler elements would not be part of
such property, the integrated storage tank,
however, may be thermal energy storage
property if it otherwise meets the ther­
mal energy storage property definition.
Further, an air-to-water heat pump with a
thermal storage tank, for example, would
generally be thermal energy storage prop­
erty provided that it otherwise meets the
thermal energy storage definition. This
could be the case even if the heat pump
also serves a purpose in the connected
HVAC system’s real-time heating or cool­
ing of a building. In that case, the thermal
storage tank would be thermal energy stor­
age property and the heat pump may also
qualify as part of that eligible property to
the extent the taxpayer’s costs exceed the
cost of an HVAC system without thermal
storage capacity that would meet the same
functional heating or cooling needs as the
heat pump system with a storage medium,
other than time shifting of heating or cool­
ing.
The Proposed Regulations included an
example of electric furnaces that use elec­
tricity to heat bricks to high temperatures
and later use this stored energy to heat a
building through the HVAC system. The
Treasury Department and IRS acknowl­
edge that this example needs to be refined
to more precisely delineate the scope of
eligible thermal energy storage property.
Whereas the heated bricks and equipment
that adds heat generated by the furnace
to those bricks, or removes heat from the
bricks, are eligible thermal energy storage
property, the electric furnace equipment
that transforms energy into the thermal
energy in the first instance is not. The final
regulations clarify that thermal energy
storage property does not include property
that transforms other forms of energy into
heat in the first instance and this example
has been revised accordingly in the final
regulations.
With respect to the requirement for
subsequent use, the Treasury Department
and IRS also agree that additional clarity
is warranted. The statute requires that ther­
mal energy storage property must be able
to perform certain functions, not simply
performing heat transfer. Any heat trans­
fer may take some amount of time and
heat does not immediately dissipate even
if no effort is made to store it. While some

December 23, 2024

may assert that such heat transfer is sub­
sequent use, the Treasury Department and
IRS disagree. A plain reading of the stat­
ute indicates that thermal energy storage
property does not include property that
simply engages in heat transfer. The ther­
mal energy storage property must be able
to store the heat. The Treasury Depart­
ment and IRS, in consultation with DOE,
find that a minimum time interval for sub­
sequent use provides certainty for taxpay­
ers and sound tax administration. Accord­
ingly, the final regulations clarify that
property that “removes heat from, or adds
heat to, a storage medium for subsequent
use” is property that is designed with the
particular purpose of substantially altering
the time profile of when heat added to or
removed from the thermal storage medium
can be used to heat or cool the interior of
a residential or commercial building. The
final regulations also provide a safe harbor
for thermal energy storage property. If the
thermal energy storage property can store
energy that is sufficient to provide heating
or cooling of the interior of a residential or
commercial building for the minimum of
one hour, it is deemed to have the purpose
of substantially altering the time profile of
when heat added to or removed from the
thermal storage medium can be used to
heat or cool the interior of a residential or
commercial building.
The Treasury Department and IRS
have revised the definition of thermal
energy storage property and the exam­
ples in the final regulations to illustrate
what constitutes thermal energy storage
property. These final regulations also add
that thermal energy storage property may
store thermal energy in an artificial pit, an
aqueous solution, or a solid-liquid phase
change material, in addition to the under­
ground tank or a borehole field already
included in the Proposed Regulations, in
order to be extracted for later use for heat­
ing and/or cooling. The final regulations
clarify that a heat pump system that trans­
fers heat into and out of a storage medium
is thermal energy storage property. How­
ever, consistent with §1.48-14(d), if ther­
mal energy storage property, such as a heat
pump system, includes equipment, such
as a heat pump, that also serves a purpose
in an HVAC system that is installed in
connection with the thermal energy stor­
age property, the taxpayer’s basis in the

1366

thermal energy storage property includes
the total cost of the thermal energy stor­
age property and HVAC system less the
cost of an HVAC system without thermal
storage capacity that would meet the same
functional heating or cooling needs as the
heat pump system with a storage medium,
other than time shifting heating or cool­
ing.
Commenters also requested clarifi­
cations regarding whether specific com­
ponents may be part of thermal energy
storage. A commenter requested that pipes
to distribute stored thermal energy to and
within buildings (including for multiple
residential or commercial buildings such
as through a district heating system) and
equipment in building heating and/or
cooling systems — such as coils, radia­
tors, and other end-use equipment — nec­
essary to convey stored thermal energy to
building space or domestic hot water sup­
ply be included in thermal energy storage
property.
With respect to the request to include
pipes and equipment in building heating
and/or cooling systems, the statutory defi­
nition of thermal energy storage property
provides, in part, that it is directly con­
nected to an HVAC system, not that it is an
HVAC system. The Proposed Regulations
would provide a function-oriented method
to evaluate whether property is a func­
tionally interdependent or an integral part
of thermal energy storage property. With
respect to the request to include equipment
necessary to convey domestic hot water
supply, the statutory definition further pro­
vides, in part, that thermal energy storage
property provides energy for the heating
or cooling of the interior of a residential
or commercial building. The statute does
not provide for stored energy for domes­
tic hot water supply for consumptive use.
Therefore, property that provides energy
for domestic hot water supply exclusively
for consumptive use and not for heating or
cooling of the interior of such a building
is not eligible under the statute. The final
regulations do not adopt these comments.
Another commenter requested clari­
fication that if property that would oth­
erwise qualify as thermal energy storage
property is connected to a district heating
system that provides energy for the heat­
ing or cooling of multiple buildings, it
would nonetheless be considered “directly

Bulletin No. 2024–52

connected to a heating, ventilation, or air
conditioning system”. Proposed §1.489(e)(10)(iii) would not preclude ther­
mal energy storage technology property
that is directly connected to more than
one HVAC system from being a thermal
energy storage property. The final regula­
tions do not modify the example.
Commenters also requested modifica­
tion of the definition of thermal energy
storage property in proposed §1.48-9(e)
(10)(iii). A commenter suggested adding
“refrigeration” to “is directly connected to
a heating, ventilation, or air conditioning
system” because industrial refrigeration
systems are considered part of the HVAC
system in construction. This commenter
also joined another in recommending add­
ing “industrial” to “for use in heating a
residential or commercial building” to pre­
vent restricting the use of thermal energy
storage in industrial sites and to elimi­
nate confusion regarding commercial and
industrial building types. To maintain con­
sistency with the statutory text, the final
regulations maintain the wording set forth
in section 48(c)(6)(C)(i)(I) and (III) as is.
Commenters also expressed concerns
that the language “directly connected
to…” in proposed §1.48-9(e)(10)(iii)
might exclude thermal energy storage
property that directly functions as a heat­
ing system itself without connecting to an
HVAC system. A commenter suggested
providing guidance to clarify that thermal
energy storage property that functions as a
self-contained heating or cooling system
is eligible thermal energy storage property
under proposed §1.48-9(e)(10)(iii). Sec­
tion 48(c)(6)(C)(i)(I) requires that ther­
mal energy storage property is directly
connected to a heating, ventilation, or air
conditioning system, but does not include
the HVAC system itself as eligible ther­
mal energy storage property. Therefore,
these comments are not adopted because
they would be inconsistent with the stat­
ute. However, elements of such a system
could constitute eligible thermal energy
storage property.
Additionally, a commenter requested
clarification that thermal energy storage
property may be considered battery stor­
age technology for the purpose of claiming
the credit available to residential custom­
ers under section 25D(d)(6) of the Code.
The Treasury Department and the IRS

Bulletin No. 2024–52

decline to address this request because it
is outside of the scope of section 48 and,
therefore, these final regulations.
d. Modifications of energy storage
property
Proposed §1.48-9(e)(10)(v) would pro­
vide that with respect to electrical energy
storage property and hydrogen energy
storage property placed in service after
December 31, 2022, energy storage tech­
nology that is modified as set forth in pro­
posed §1.48-9(e)(10)(v) is treated as elec­
trical energy storage property or hydrogen
energy storage property, except that the
basis of any existing property prior to such
modification is not taken into account for
purposes of the section 48 credit. Proposed
§1.48-9(e)(10)(v) applies to any electrical
energy storage property and hydrogen
energy storage property that either: (A)
was placed in service before August 16,
2022, and would be described in section
48(c)(6)(A)(i), except that such property
had a capacity of less than 5 kWh and is
modified in a manner that such property
(after such modification) has a nameplate
capacity (after such modification) of not
less than 5 kWh; or (B) is described in
section 48(c)(6)(A)(i) and is modified in
a manner that such property (after such
modification) has an increase in name­
plate capacity of not less than 5 kWh.
A commenter asked if the section 48
credit is available for repurposed batter­
ies used to build energy storage systems.
Whether a battery is repurposed and eli­
gible for the section 48 credit requires a
factual determination that is beyond the
scope of these regulations. The 80/20
Rule provides general rules for taxpayers
that include some used components when
placing in service an energy property.
Another commenter requested that the
requirement that any modified energy stor­
age property must increase the nameplate
capacity of the energy storage property by
5 kWh or more be removed. Section 48(c)
(6)(B) sets forth the 5 kWh requirement
for modifications to energy storage prop­
erty so it cannot be removed. The final
regulations do not adopt this comment.
Multiple commenters requested clari­
fication that the minimum 5 kWh capac­
ity increase needed for modifications of
energy storage under section 48(c)(6)

1367

(B) be the nameplate capacity not actual
capacity (which may have decreased
due to degradation). The commenters
explained that focusing on nameplate
capacity will provide greater certainty
than measuring actual capacity. Another
commenter explained that nameplate
capacity should be tested at the time of
purchase, rather than on the date of mod­
ification, especially due to non-degrading
systems and storage augmentation. The
commenter noted that if augmentations
are implemented, the installed energy
storage capacity of the energy storage
technology is increased (original instal­
lation nameplate capacity plus the aug­
mentation totaling the amount installed),
but the nameplate capacity of the property
and interconnection agreement remains
unchanged.
Section 48(c)(6)(B) provides that, for
purposes of the modification rule, name­
plate capacity is examined at the time
of the modification and must result in a
nameplate capacity increase from below 5
kWh to not less than 5 kWh (for energy
storage property originally placed in ser­
vice before enactment of the IRA) or by
at least 5 kWh (for energy storage tech­
nology placed in service after the enact­
ment of the IRA that is later modified).
Consistent with the statute, the Proposed
Regulations would not take into account
actual capacity but instead use nameplate
capacity. The only instance in which sec­
tion 48(c)(6)(B) uses the term “capacity”
alone, rather than “nameplate capacity”,
is nonetheless still a reference to name­
plate capacity. Specifically, section 48(c)
(6)(B)(i) refers to property that “would be
described in subparagraph (A)(i), except
that such property has a capacity of less
than 5 kilowatt hours”. The referenced
section 48(c)(6)(A)(i) text makes clear that
the 5 kWh capacity threshold is, in fact, a
nameplate capacity threshold. Therefore,
for the avoidance of doubt, the final regu­
lations at §1.48-9(e)(10)(v)(A) clarify that
the relevant pre-modification capacity is
the nameplate capacity. Therefore, other
than the minor clarification noted above,
these comments were not adopted in the
final regulations.
Additionally, a commenter requested
clarification whether capacity must be
added within the bounds of an existing
electrical storage property enclosure, or

December 23, 2024

whether the enclosure may be expanded or
an additional enclosure added to accom­
modate the increased capacity. Another
commenter requested clarification that
adding new battery racks to an existing
enclosure would be eligible for the section
48 credit if the nameplate capacity of the
new battery rack is at least 5 kWh. The
Proposed Regulations would provide no
limitation on the physical space occupied
by an energy storage technology and the
final regulations retain this approach.
5. Qualified Biogas Property
Section 48(a)(3)(A)(x) was added by
the IRA to provide that energy property
includes qualified biogas property. Sec­
tion 48(c)(7)(A) defines qualified biogas
property as property comprising a system
that converts biomass (as defined in sec­
tion 45K(c)(3), as in effect on the date of
enactment of section 48(a)(7) (August 16,
2022)) into a gas that consists of not less
than 52 percent methane by volume, or is
concentrated by such system into a gas
that consists of not less than 52 percent
methane, and captures such gas for sale
or productive use, and not for disposal via
combustion. Section 48(c)(7)(B) provides
that qualified biogas property includes any
property that is part of such system that
cleans or conditions such gas.
Proposed §1.48-9(e)(11) would adopt
the statutory definition of qualified bio­
gas property. Proposed §1.48-9(f)(2)
(i) would provide that components of
property are considered qualified biogas
property if they are functionally inter­
dependent, that is, if the placing in ser­
vice of each component is dependent
upon the placing in service of each of the
other components in order to perform the
intended function of the qualified bio­
gas property as described in proposed
§1.48-9(e)(11)(i). The Proposed Regu­
lations adopted this approach because it
provides a function-oriented method to
determine what is considered included in
a qualified biogas property and is broad
enough to encompass technological
changes. Additionally, proposed §1.489(e)(11)(i) would provide examples of
functionally interdependent components
of a qualified biogas property including,
but not limited to, a waste feedstock col­
lection system, a landfill gas collection

December 23, 2024

system, mixing or pumping equipment,
and an anaerobic digester.
Proposed §1.48-9(e)(11)(i) would
clarify that upgrading equipment is not
a functionally interdependent component
of qualified biogas property. The pream­
ble to the Proposed Regulations stated
that the upgrading equipment that is nec­
essary to condition biogas into the appro­
priate mixture for injection into the pipe­
line is not functionally interdependent
with the qualified biogas property that
converts biomass into a gas containing
not less than 52 percent methane and cap­
tures such gas for sale or productive use
as specified in the statute. The preamble
to the Proposed Regulations also stated
that while this upgrading equipment
makes the injection of biogas into a pipe­
line possible, such upgrading equipment
is not necessary to satisfy the statutory
requirements that the biogas converted
from biomass contain not less than 52
percent methane, and that it be captured
for sale or productive use.
a. Correction and cleaning and
conditioning property
The Correction published on Feb­
ruary 22, 2024, stated that a correction
was needed to clarify that gas upgrading
equipment that is necessary to concentrate
the gas from qualified biogas property
into the appropriate mixture for injection
into a pipeline through removal of other
gases such as carbon dioxide, nitrogen,
or oxygen, would be energy property if
it is an integral part of an energy prop­
erty as defined in proposed §1.48-9(f)(3).
Accordingly, the Proposed Regulations
were corrected by revising the following
sentence: “However, gas upgrading equip­
ment necessary to concentrate the gas
into the appropriate mixture for injection
into a pipeline through removal of other
gases such as carbon dioxide, nitrogen, or
oxygen is not included in qualified bio­
gas property.” to read as follows: “How­
ever, gas upgrading equipment necessary
to concentrate the gas into the appropri­
ate mixture for injection into a pipeline
through removal of other gases such as
carbon dioxide, nitrogen, or oxygen is not
a functionally interdependent component
(as defined in paragraph (f)(2)(ii) of this
section) of qualified biogas property.”

1368

The Proposed Regulations and Correc­
tion requested comments regarding what
types of components may be included
within the definition of cleaning and con­
ditioning property provided in the defini­
tion of qualified biogas property in section
48(c)(7)(B). The Treasury Department
and the IRS received numerous comments
regarding the components that should be
included in qualified biogas property.
Commenters universally supported the
inclusion of upgrading equipment in qual­
ified biogas property and some asserted
that the Proposed Regulations’ exclusion
of upgrading equipment conflicts with
analogous provisions in the Proposed Reg­
ulations that allow the inclusion of power
conditioning and transfer equipment such
as that allowed in offshore wind projects.
Most commenters asserted that upgrading
equipment should be considered function­
ally interdependent to qualified biogas
property and therefore, eligible for the
section 48 credit. A commenter requested
that biogas energy property include a defi­
nition of system for section 48(c)(7)(A)
purposes that includes all integrated prop­
erty.
Commenters also expressed concern
that the Proposed Regulations and the
Correction unduly limit what would be
included as qualified biogas property. For
example, a commenter stated that prop­
erty used to capture, clean, condition,
upgrade, and perform “chemical, mechan­
ical, or thermochemical conversion” are
all necessary to convert biogas into usable
products. Commenters explained that
the Proposed Regulations would allow
only biogas property with limited utility
to qualify and would exclude a majority
of costs related to biogas property. For
example, a commenter stated that under
the Proposed Regulations, property used
to produce the raw biogas from the land­
fill, remove sulfur from the biogas, and
remove the volatile organic compounds
from the biogas would appear to qualify
for the section 48 credit, whereas property
used to remove carbon dioxide, nitrogen,
and oxygen from biogas and to otherwise
prepare the gas for injection into a natu­
ral gas pipeline would not qualify for the
section 48 credit. The commenter asserted
that the equipment used in these latter pro­
cesses are essential components of a RNG
system and comprise approximately 85

Bulletin No. 2024–52

percent of overall capital investment in an
RNG project.
A commenter asserted that the Pro­
posed Regulations read the sale or pro­
ductive use language out of the statute.
Another commenter stated that the Pro­
posed Regulations would limit eligibility
for the section 48 credit to essentially
raw biogas (if it can meet the 52 percent
methane threshold). According to the
commenter, raw biogas generally cannot
be used without some treatment due to the
contaminants present in the gas stream
and even if the raw biogas can be used,
such use is typically through combustion
(that is, burned on-site for electricity or
as process energy), which is excluded
under the statute. The commenter
explained that, at best, the Proposed Reg­
ulations may allow some medium-BTU
gas, which is biogas that received only
limited treatment to remove certain con­
taminants, to be eligible for the section
48 credit. However, medium-BTU gas is
not as valuable as RNG and is typically
used locally.
Generally, many commenters agreed
that the utility of biogas is significantly
limited without proper cleaning and con­
ditioning. These commenters stated that,
without upgrading, the extracted biogas
faces considerable challenges for market­
ability because its high moisture content
and corrosive properties make it difficult
to safely store, compress, mix with other
gases, transport, inject into the natural
gas system, or market. Consequently, the
non-upgraded biogas is of limited util­
ity, such as on-site combustion to create
process heat, generate electricity, or to be
flared into the atmosphere. In contrast, a
commenter described the marketable uses
of upgraded RNG as including, but not
limited to, advanced electricity genera­
tion in fuel cells, hydrogen production,
advanced liquid fuels for aviation, and
RNG for use in trucking, industrial pro­
cesses, and space heating.
Generally, commenters requested the
final regulations correct the treatment of
“gas upgrading equipment” in the Pro­
posed Regulations to instead treat it as
property that “cleans and conditions” gas,
asserting that such treatment is consistent
with the plain text of the statute and the
intention of Congress. To support this
position, a commenter asserted that the

Bulletin No. 2024–52

statute and legislative history do not con­
template any limitation on what property
“cleans or conditions” gas. Several com­
menters cited certain congressional state­
ments regarding the Agriculture Environ­
mental Stewardship Act to support their
reading of the definition of qualified bio­
gas property added to section 48 by the
IRA.
Similarly, many commenters asserted
there is a misunderstanding in the Pro­
posed Regulations that the term “upgrad­
ing” is interchangeable with the phrase
“cleaning and conditioning.” For exam­
ple, a commenter stated that the exclusion
of upgrading equipment appears contra­
dictory to the statute, which expressly
includes cleaning and conditioning prop­
erty. This commenter noted that the Pro­
posed Regulations misunderstand the
“upgrading” process, which is an indus­
try verbiage, but is essentially part of the
“cleaning and conditioning process” nec­
essary to process biogas to standards that
support its productive use or sale. Another
commenter stated that the DOE uses these
terms interchangeably.
Additionally, a few commenters stated
that the Proposed Regulations incorrectly
implemented the 52 percent measurement
as a ceiling rather than a floor. For exam­
ple, a commenter pointed to the preamble
to the Proposed Regulations as mistakenly
interpreting that the statute was enacted to
incentivize taxpayers to produce 52 per­
cent methane (and nothing greater). The
commenter stated that this is contrary to
the statute, to the relevant legislative his­
tory, and to an understanding of how the
quantities of biogas that can be produced
by RNG developers can be used.
Several commenters also pointed to
the reference to “such gas” in the stat­
ute to evidence that “such gas” refers to
biogas not less than 52 percent methane
and captured for sale or productive use.
A commenter asserted that the reference
to “such gas” provides a two-prong test.
According to the commenter, first the sys­
tem must convert the biomass into a gas
that is between 52 percent and 100 per­
cent methane by volume and second the
system must capture “such gas for sale or
productive use, and not for disposal via
combustion”; thus, in the commenter’s
view, the reference to “such gas” is to gas
described in the first prong.

1369

Another commenter stated that the ref­
erence to “such gas” includes biogas that
is at least 52 percent methane by volume.
The commenter concluded therefore, that
the statute does not exclude from qualified
biogas property cleaning and conditioning
equipment that is used to process biogas
that is already 52 percent methane by vol­
ume.
Another commenter stated that the
statute uniquely and broadly defines the
term “cleaning and condition property”
not as the Proposed Regulations suggest,
which limits its applicability to instances
in which an otherwise ineligible property
needs cleaning and conditioning to be eli­
gible. Instead, the commenter noted that
the Proposed Regulations’ interpretation
of section 48(c)(7)(B) ignores the refer­
ence to “such gas,” referring to the defini­
tion in section 48(c)(7)(A), which clearly
states “any property which is part of such
system which cleans or conditions such
gas.” The commenter asserted that the
term “such gas” refers to biogas that is not
less than 52 percent methane and captured
for sale or productive use, as confirmation
that cleaning and conditioning equipment
for gas that has already met the conditions
set forth in section 48(c)(7)(A), is quali­
fied biogas property.
Commenters also objected to the exclu­
sion of gas upgrading equipment provided
in the Proposed Regulations because com­
menters assert that it could negatively
impact investment and financing for bio­
gas projects, especially those on small
farms, agricultural projects, and municipal
projects. A commenter, who works with
smaller scale farms including dairy farms,
asserted that the upgrading equipment is
integral to the cleaning and conditioning
process, and crucial for achieving energy
output suitable for productive use or sale,
especially for projects in rural and remote
communities. The commenter concluded
that the limitation on upgrading equip­
ment provided in the Proposed Regula­
tions will prevent projects from moving
forward and disproportionately impact
small agricultural projects.
Several commenters asserted that the
statute supports redefining the components
of property that are considered function­
ally interdependent to a qualified biogas
property. A commenter suggested redefin­
ing qualified biogas property as property

December 23, 2024

that is placed in service to upgrade biogas
for sale or a productive use beyond the
point that such gas is typically vented or
flared. This commenter explained that this
definition properly places the focus on
property used to convert an unproductive
substance (such as landfill gas) into a pro­
ductive substance (such as RNG).
Another commenter agreed with the
inclusion of the gas upgrading equipment
as integral property but stated that the Cor­
rection is limited to technology specific
to upgrading for pipeline injection and
therefore, is out of line with the technol­
ogy neutral definition in the statute. The
commenter asserted that upgrading, pro­
cessing, or reforming should be viewed
without limitation to specific technology
and that many biomass resources may not
be close to natural gas pipelines or have
other limitations on pipeline injection. The
commenter further stated that the focus
should be on the components required for
property that captures such gas for sale or
productive use. Therefore, if additional
onsite steps are required to process raw
biogas that meets the minimum 52 percent
methane content threshold into a usable
product, whatever the product may be,
then the property necessary to take those
steps should be considered qualified bio­
gas property.
The Treasury Department and the
IRS agree with the commenters that the
proposed rule addressing gas upgrading
equipment is too restrictive. As comment­
ers explained, upgrading equipment is
used interchangeably with cleaning and
conditioning equipment and such equip­
ment may be needed to make the biogas
suitable for sale or productive use. The
Treasury Department and IRS also agree
that specific upgrading equipment should
not be identified for injection into a pipe­
line. Therefore, the final regulations pro­
vide more generally that gas upgrading
equipment is cleaning and conditioning
property.
Commenters requested clarifications
regarding what types of equipment are
considered qualified biogas property,
including as functionally interdependent
components or as property integral to the
qualified biogas property. For example, a
commenter requested that a list of equip­
ment be included as qualifying biogas
property in the final regulations includ­

December 23, 2024

ing gas removal equipment, pressure and
temperature control equipment, moisture
removal equipment, compression equip­
ment, thermal oxidizer equipment, gas
recycling equipment, and synthetic meth­
ane production equipment. Another com­
menter proposed revisions to the example
in proposed §1.48-9(e)(11)(i) to include
as qualified biogas property cleaning and
conditioning equipment used to remove
toxins or any other impurities from raw
biogas or concentrate the gas into the
appropriate mixture for sale or produc­
tive use through removal of other gases
such as carbon dioxide, nitrogen, or oxy­
gen. A commenter requested the inclu­
sion of landfill municipal solid waste as a
renewable resource to produce renewable
natural gas as energy property because
such a system may implement thermal
gasification and other relevant technolo­
gies. Another commenter suggested that
qualified biogas property should include
the pipeline and compression equipment
necessary to transport the gas from the
production plant to the common carrier
pipeline.
Another commenter suggested that
the Proposed Regulations be modified to
specifically provide that the property com­
prising a biogas conversion/concentration
and capture system, including any prop­
erty that is part of such system and that
cleans and conditions, is a single unit of
energy property (collectively referred to
as a RNG Production System). This com­
menter also suggested that the gas upgrad­
ing equipment necessary to concentrate the
gas into the appropriate mixture for injec­
tion into a pipeline through the removal
of other gases and impurities is a func­
tionally interdependent component of the
RNG Production System. This commenter
also described a second type of property, a
landfill gas collection system (LFG Col­
lection System), and noted that the LFG
Collection System is property that is an
integral part of, but not functionally inter­
dependent with, the RNG Production Sys­
tem because the placing in service of an
LFG Collection System is not dependent
upon placing in service the RNG Produc­
tion System, but the LFG Collection Sys­
tem is used directly in and essential to the
completeness of the intended function of
the RNG Production System. While this
commenter’s focus was on landfills, the

1370

commenter noted the same analysis would
apply to other collection systems such as
anaerobic digesters operating at farms.
Some commenters asserted that anaerobic
digesters were functionally interdepen­
dent property, while others asserted that
anaerobic digesters were integral property.
After consultation with the DOE, the
Treasury Department and IRS understand
that the methane content of biogas in an
anaerobic digester can vary between 44%
and 68%. Thus, if biogas processed by
an anaerobic digester consists of not less
than 52% methane and all other statu­
tory requirements are met, an anaerobic
digester would be a unit of energy prop­
erty. Commenters explained that although
biogas exiting an anaerobic digester might
not be put to productive use, the statute
requires that qualified biogas property
capture the gas “for sale or productive
use.” To illustrate, if a taxpayer places in
service an anaerobic digester, which gen­
erates biogas meeting the not less than
52% methane requirement, and sells the
biogas to another taxpayer who in turn
places in service cleaning and condition­
ing property to clean such biogas, each
taxpayer has a qualified biogas property
and may be eligible for the section 48 tax
credit. On the other hand, if the biogas in
the anaerobic digester does not meet the
not less than 52% methane requirement,
then such digester is not, by itself, a qual­
ified biogas property. Nevertheless, the
anaerobic digester still may be an integral
part of other qualified biogas property,
such as a system that cleans and condi­
tions the biogas.
The Treasury Department and the IRS
intend that the final regulations provide a
function-oriented approach to determin­
ing what property is considered energy
property, including qualified biogas prop­
erty. The Proposed Regulations provided
examples of types of property that are
included as qualified biogas property,
which were intended to be illustrative but
not exclusive. Therefore, the final regula­
tions do not include additional examples
of property that is included as qualified
biogas property but do clarify that prop­
erty that is an integral part of qualified
biogas property includes, but is not lim­
ited to, a waste feedstock collection sys­
tem, landfill gas collection system, and
mixing and pumping equipment.

Bulletin No. 2024–52

b. Flaring allowance
The preamble to the Proposed Reg­
ulations explained that a commenter to
Notice 2022-49 stated that some proper­
ties that produce electricity from gas using
a combustion process may flare waste or
tail gas, including during commissioning
or maintenance periods. This commenter
recommended a de minimis exception.
In response to this concern, the Proposed
Regulations requested comments regard­
ing whether such an exception is neces­
sary and what should be considered de
minimis for this purpose.
All comments received in response to
this request were in favor of an exception.
Some comments pointed to the overarch­
ing purpose of the qualified biogas prop­
erty and noted that nominal leakage should
not prevent property from qualifying. For
example, a commenter asserted that if the
overarching purpose of the biogas is for
sale or productive use

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aaf806ab49b1393e8. Public record. Not legal advice.