Internal Revenue Bulletin 2017-22 (PDF rendition): IRS Revenue Procedures

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HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EMPLOYEE PLANS
Notice 2017–31, page 1253.
This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for May
2017 used under § 417(e)(3)(D), the 24-month average seg-
ment rates applicable for May 2017, and the 30-year Treasury
rates. These rates reflect the application of § 430(h)(2)(C)(iv),
which was added by the Moving Ahead for Progress in the 21st
Century Act, Public Law 112–141 (MAP–21) and amended by
section 2003 of the Highway and Transportation Funding Act of
2014 (HATFA).
INCOME TAX
Notice 2017–32, page 1255.
Credit for Carbon Dioxide Sequestration; 2017 Section 45Q
Inflation Adjustment Factor. This notice publishes the inflation
adjustment factor for the carbon dioxide (CO2) sequestration
credit under § 45Q for calendar year 2017. Generally, § 45Q
allows a credit for the amount of qualified CO2 that a taxpayer
captures at a qualified facility and disposes of in secure geo-
logical storage within the United States.
Notice 2017–33, page 1256.
Credit for Renewable Electricity Production and Refined Coal
Production, and Publication of Inflation Adjustment Factor and
Reference Prices for Calendar Year 2017: The notice reports
for 2017 the inflation adjustment factor and reference prices
used to determine the availability of the section 45 credit for
electricity produced from qualified energy resources and re-
fined coal and includes the credit amounts for renewable elec-
tricity production and refined coal production.
ADMINISTRATIVE
Rev. Proc. 2017–38, page 1258.
This revenue procedure modifies Rev. Proc. 2017–3 I.R.B.
130, to remove the no-rule position concerning whether sec-
tions 355 or 361 apply to a distributing corporation’s distribu-
tion of stock or securities of a controlled corporation in ex-
change for, and in retirement of, any putative debt of the
distributing corporation if such debt is issued in anticipation of
the distribution.
Finding Lists begin on page ii.
Bulletin No. 2017–22
May 30, 2017

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force 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 Conven-
tions, 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 other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal 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, identify-
ing 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, Legisla-
tion 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 Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
May 30, 2017Bulletin No. 2017–22

Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2017–31
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Generally, except for certain plans un-
der sections 104 and 105 of the Pension
Protection Act of 2006 and CSEC plans
under § 414(y), § 430 of the Code speci-
fies the minimum funding requirements
that apply to single-employer plans pursu-
ant to § 412. Section 430(h)(2) specifies
the interest rates that must be used to
determine a plan’s target normal cost and
funding target. Under this provision, present
value is generally determined using three
24-month average interest rates (“segment
rates”), each of which applies to cash flows
during specified periods. To the extent pro-
vided under § 430(h)(2)(C)(iv),these seg-
ment rates are adjusted by the applicable
percentage of the 25-year average seg-
ment rates for the period ending Sep-
tember 30 of the year preceding the cal-
endaryear in which the plan year begins.
1
However, an election may be made under
§ 430(h)(2)(D)(ii) to use the monthly
yield curve in place of the segment rates.
Notice 2007– 81, 2007– 44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond seg-
ment rates used to compute the target nor-
mal cost and the funding target. Consis-
tent with the methodology specified in
Notice 2007– 81, the monthly corporate
bond yield curve derived from April 2017
data is in Table I at the end of this notice.
The spot first, second, and third segment
rates for the month of April 2017 are,
respectively, 1.96, 3.78, and 4.66.
The 24-month average segment rates de-
termined under §430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year average
segment rates. For plan years beginning
before 2021, the applicable minimum per-
centage is 90% and the applicable maxi-
mum percentage is 110%. The 25-year
average segment rates for plan years be-
ginning in 2015, 2016, and 2017 were
published in Notice 2014 –50, 2014 – 40
I.R.B. 590, Notice 2015– 61, 2015–39
I.R.B. 408, and Notice 2016 –54, 2016 –
40 I.R.B. 429, respectively.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for May
2017 without adjustment for the 25-year
average segment rate limits are as follows:
Applicable MonthFirst SegmentSecond SegmentThird Segment
May 20171.683.834.77
Based on § 430(h)(2)(C)(iv), the 24-
month averages applicable for May 2017
adjusted to be within the applicable min-
imum and maximum percentages of the
corresponding 25-year average segment
rates, are as follows:
For Plan Years Beginning In
Adjusted 24-Month Average Segment Rates
Applicable MonthFirst SegmentSecond SegmentThird Segment
2016May20174.435.916.65
2017May20174.165.726.48
30-YEAR TREASURY SECURITIES
INTEREST RATES
Generally for plan years beginning af-
ter 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation
described in § 431(c)(6)(A), based on
theplan’s current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 per-
cent below the weighted average of the
rates of interest on 30-year Treasury se-
curities during the four-year period ending
on the last day before the beginning of the
plan year. Notice 88 –73, 1988 –2 C.B.
383, provides guidelines for determining
1
Pursuant to § 433(h)(3)(A), the 3
rd
segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).
Bulletin No. 2017–22May 30, 2017
1253

the weighted average interest rate. The
rate of interest on 30-year Treasury secu-
rities for April 2017 is 2.94 percent. The
Service determined this rate as the aver-
age of the daily determinations of yield on
the 30-year Treasury bond maturing in
February 2047. For plan years beginning
in the month shown below, the weighted
average of the rates of interest on 30-year
Treasury securities and the permissible
range of rates used to calculate current
liability are as follows:
For Plan Years Beginning in
30-Year Treasury Weighted Average
Permissible Range
MonthYear90%to105%
May20172.912.623.05
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007– 81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-
ment rates determined for April 2017 are
as follows:
First SegmentSecond SegmentThird Segment
1.963.784.66
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further
information regarding this notice, contact
Mr. Morgan at 202-317-6700 or Tony
Montanaro at 202-317-8698 (not toll-free
numbers).
Table I
Monthly Yield Curve for April 2017
Derived from April 2017 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.51.2820.54.3940.54.6960.54.7980.54.85
1.01.4721.04.4041.04.6961.04.8081.04.85
1.51.6521.54.4241.54.7061.54.8081.54.85
2.01.8022.04.4342.04.7062.04.8082.04.85
2.51.9422.54.4442.54.7062.54.8082.54.85
3.02.0623.04.4543.04.7163.04.8083.04.85
3.52.1723.54.4643.54.7163.54.8183.54.85
4.02.2824.04.4744.04.7164.04.8184.04.85
4.52.4024.54.4844.54.7264.54.8184.54.86
5.02.5125.04.4945.04.7265.04.8185.04.86
5.52.6325.54.5045.54.7265.54.8185.54.86
6.02.7426.04.5146.04.7366.04.8186.04.86
6.52.8626.54.5246.54.7366.54.8186.54.86
7.02.9827.04.5347.04.7367.04.8287.04.86
7.53.0927.54.5447.54.7467.54.8287.54.86
8.03.2028.04.5548.04.7468.04.8288.04.86
8.53.3028.54.5648.54.7468.54.8288.54.86
9.03.4029.04.5649.04.7469.04.8289.04.86
9.53.5029.54.5749.54.7569.54.8289.54.86
10.03.5830.04.5850.04.7570.04.8290.04.87
10.53.6630.54.5850.54.7570.54.8390.54.87
May 30, 2017Bulletin No. 2017–22
1254

Table I
Monthly Yield Curve for April 2017
Derived from April 2017 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
11.03.7431.04.5951.04.7671.04.8391.04.87
11.53.8131.54.6051.54.7671.54.8391.54.87
12.03.8732.04.6052.04.7672.04.8392.04.87
12.53.9332.54.6152.54.7672.54.8392.54.87
13.03.9833.04.6253.04.7673.04.8393.04.87
13.54.0333.54.6253.54.7773.54.8393.54.87
14.04.0734.04.6354.04.7774.04.8394.04.87
14.54.1134.54.6354.54.7774.54.8494.54.87
15.04.1535.04.6455.04.7775.04.8495.04.87
15.54.1835.54.6455.54.7875.54.8495.54.87
16.04.2136.04.6556.04.7876.04.8496.04.87
16.54.2436.54.6556.54.7876.54.8496.54.87
17.04.2637.04.6657.04.7877.04.8497.04.88
17.54.2837.54.6657.54.7877.54.8497.54.88
18.04.3038.04.6758.04.7978.04.8498.04.88
18.54.3238.54.6758.54.7978.54.8498.54.88
19.04.3439.04.6859.04.7979.04.8599.04.88
19.54.3639.54.6859.54.7979.54.8599.54.88
20.04.3740.04.6960.04.7980.04.85100.04.88
Credit for Carbon Dioxide
Sequestration
2017 Section 45Q Inflation
Adjustment Factor
Notice 2017–32
SECTION 1. PURPOSE
This notice publishes the inflation ad-
justment factor for the credit for carbon
dioxide (CO
2
) sequestration under § 45Q
of the Internal Revenue Code (§ 45Q
credit) for calendar year 2017. The infla-
tion adjustment factor is used to determine
the amount of the credit allowable under
§ 45Q. This notice also publishes the ag-
gregate amount of qualified CO
2
taken
into account for purposes of § 45Q.
SECTION 2. BACKGROUND
Section 45Q(a)(1) allows a credit of
$20 per metric ton of qualified CO
2
that is
captured by the taxpayer at a qualified
facility, disposed of by the taxpayer in
secure geological storage, and not used by
the taxpayer as a tertiary injectant. Section
45Q(a)(2) allows a credit of $10 per
metric ton of qualified CO
2
that is cap
-
tured by the taxpayer at a qualified fa-
cility, used by the taxpayer as a tertiary
injectant in a qualified enhanced oil or
natural gas recovery project, and dis-
posed of by the taxpayer in secure geo-
logical storage.
Section 45Q(b)(1) defines the term
“qualified carbon dioxide” as CO
2
cap
-
tured from an industrial source that would
otherwise be released into the atmosphere
as industrial emission of greenhouse gas,
and that is measured at the source of cap-
ture and verified at the point of disposal or
injection. Qualified CO
2
includes the ini
-
tial deposit of captured CO
2
used as a
tertiary injectant but does not include CO
2
that is re-captured, recycled, or otherwise
re-injected as part of the enhanced oil and
natural gas recovery process.
Section 45Q(c) defines the term
“qualified facility” as an industrial facil-
ity that is owned by the taxpayer, where
carbon capture equipment is placed in
service, and where at least 500,000 met-
ric tons of CO
2
is captured during the
taxable year.
Section 45Q(d)(2) provides that the
Secretary, in consultation with the Admin-
istrator of the Environmental Protection
Agency (EPA), the Secretary of Energy,
and the Secretary of the Interior, shall
establish regulations for determining ade-
quate security measures for the geological
storage of CO
2
under § 45Q(a)(1)(B) or
(a)(2)(C) such that the CO
2
does not es
-
cape into the atmosphere. See section 5 of
Notice 2009 – 83, 2009 –2 C.B. 588, for
procedures regarding secure geological
storage.
Section 45Q(d)(5) allows the § 45Q
credit to the person that captures and
physically or contractually ensures the
disposal of or the use as a tertiary injectant
of the qualified CO
2
.
Under § 45Q(d)(7), for taxable years
beginning in a calendar year after 2009,
the dollar amount contained in § 45Q(a)
must be adjusted for inflation by multiply-
ing such dollar amount by the inflation
adjustment factor for such calendar year
Bulletin No. 2017–22May 30, 2017
1255

determined under § 43(b)(3)(B), deter-
mined by substituting “2008” for “1990.”
Section 43(b)(3)(B) defines the term
“inflation adjustment factor” as, with re-
spect to any calendar year, a fraction the
numerator of which is the GNP implicit
price deflator for the preceding calendar
year and the denominator of which is the
GNP implicit price deflator for 1990. For
purposes of § 45Q(d)(7), with respect to
2017 calendar year, the inflation adjust-
ment factor is a fraction the numerator of
which is the GNP implicit price deflator
for 2016 (111.528) and the denominator
of which is the GNP implicit price deflator
for 2008 (99.239).
Section 45Q(e) provides that the § 45Q
credit will apply with respect to qualified
CO
2
before the end of the calendar year in
which the Secretary, in consultation with
the EPA, certifies that 75,000,000 metric
tons of qualified CO
2
have been taken into
account in accordance with § 45Q(a).
SECTION 3. INFLATION
ADJUSTMENT FACTOR
The inflation adjustment factor for cal-
endar year 2017 is 1.1238. The § 45Q
credit for calendar year 2017 is $22.48 per
metric ton of qualified CO
2
under §45Q(a)(1)
and $11.24 per metric ton of qualified CO
2
under § 45Q(a)(2).
SECTION 4. TAX CREDIT
UTILIZATION
Section 6 of Notice 2009 – 83 requires
taxpayers to file annual reports that pro-
vide (among other information) the
amounts (in metric tons) of qualified CO
2
for the taxable year that has been taken
into account for purposes of claiming the
§ 45Q credit. The annual reports must be
filed with the Service not later than the
last day of the second calendar month
following the month during which the tax
return on which the § 45Q credit is
claimed was due (including extensions).
Based on the annual reports filed with
the Service as of May 10, 2017, the ag-
gregate amount of qualified CO
2
taken
into account for purposes of § 45Q is
52,831,877 metric tons.
SECTION 5. DRAFTING
INFORMATION
The principal author of this notice is
Jennifer C. Bernardini of the Office of
Associate Chief Counsel (Passthroughs &
Special Industries). For further informa-
tion regarding this notice contact Jennifer
C. Bernardini on (202) 622-3120 (not a
toll-free number).
Credit for Renewable
Electricity Production and
Refined Coal Production,
and Publication of Inflation
Adjustment Factor and
Reference Prices for
Calendar Year 2017
Notice 2017–33
This notice publishes the inflation ad-
justment factor and reference prices for
calendar year 2017 for the renewable elec-
tricity production credit and the refined
coal production credit under section 45 of
the Internal Revenue Code. For calendar
year 2017, the credit period for Indian
coal production has expired. The 2017
inflation adjustment factor and reference
prices are used in determining the avail-
ability of the credits. The 2017 inflation
adjustment factor and reference prices ap-
ply to calendar year 2017 sales of kilowatt
hours of electricity produced in the United
States or a possession thereof from qual-
ified energy resources and to calendar
year 2017 sales of refined coal produced
in the United States or a possession
thereof.
BACKGROUND
Section 45(a) provides that the renew-
able electricity production credit for any
tax year is an amount equal to the product
of 1.5 cents multiplied by the kilowatt
hours of specified electricity produced by
the taxpayer and sold to an unrelated per-
son during the tax year. This electricity
must be produced from qualified energy
resources and at a qualified facility dur-
ing the 10-year period beginning on the
date the facility was originally placed in
service.
Section 45(b)(1) provides that the
amount of the credit determined under
section 45(a) is reduced by an amount
which bears the same ratio to the amount
of the credit as (A) the amount by which
the reference price for the calendar year in
which the sale occurs exceeds 8 cents, bears
to (B) 3 cents. Under section45(b)(2), the
1.5 cent amount in section 45(a), the 8
cent amount in section 45(b)(1), the
$4.375 amount in section 45(e)(8)(A),
and, in section 45(e)(8)(B)(i), the refer-
ence price of fuel used as feedstock (within the
meaning of section45(c)(7)(A)) in 2002 are
each adjusted by multiplying the amount
by the inflation adjustment factor for the
calendar year in which the sale occurs. If
any amount as increased under the preced-
ing sentence is not a multiple of 0.1 cent,
the amount is rounded to the nearest mul-
tiple of 0.1 cent. In thecase of electricity
produced in open-loop biomass facilities,
small irrigation power facilities, landfill gas
facilities, trash facilities, qualified hydro-
power facilities, and marine and hydroki-
netic renewable energy facilities, section
45(b)(4)(A) requires the amount in ef-
fect under section 45(a)(1) (before
rounding to the nearest 0.1 cent) to be
reduced by one-half.
Section 45(b)(5) provides that in the
case of any facility using wind to produce
electricity, the amount of the credit deter-
mined under section 45(a) (determined af-
ter the application of section 45(b)(1), (2),
and (3) and without regard to section
45(b)(5)) shall be reduced by (A) in the
case of any facility the construction of
which begins after December 31, 2016,
and before January 1, 2018, 20 percent,
(B) in the case of any facility the construc-
tion of which begins after December 31,
2017, and before January 1, 2019, 40 per-
cent, and (C) in the case of any facility the
construction of which begins after De-
cember 31, 2018, and before January 1,
2020, 60 percent.
Section 45(c)(1) defines qualified en-
ergy resources as wind, closed-loop bio-
mass, open-loop biomass, geothermal en-
ergy, small irrigation power, municipal
solid waste, qualified hydropower produc-
tion, and marine and hydrokinetic renew-
able energy.
Section 45(d)(1) defines a qualified fa-
cility using wind to produce electricity as
any facility owned by the taxpayer that is
May 30, 2017Bulletin No. 2017–22
1256

originally placed in service after Decem-
ber 31, 1993, and the construction of
which begins before January 1, 2020. See
section 45(e)(7) for rules relating to the
inapplicability of the credit to electricity
sold to utilities under certain contracts.
Section 45(d)(2)(A) defines a qualified
facility using closed-loop biomass to pro-
duce electricity as any facility (i) owned
by the taxpayer that is originally placed in
service after December 31, 1992, and the
construction of which begins before Jan-
uary 1, 2017, or (ii) owned by the tax-
payer which before January 1, 2017, is
originally placed in service and modified
to use closed-loop biomass to co-fire with
coal, with other biomass, or with both, but
only if the modification is approved under
the Biomass Power for Rural Develop-
ment Programs or is part of a pilot project
of the Commodity Credit Corporation as
described in 65 Fed. Reg. 63052. For pur-
poses of section 45(d)(2)(A)(ii), a facility
shall be treated as modified before Janu-
ary 1, 2017, if the construction of such
modification begins before such date. Sec-
tion 45(d)(2)(C) provides that in the case
of a qualified facility described in section
45(d)(2)(A)(ii), (i) the 10-year period re-
ferred to in section 45(a) is treated as
beginning no earlier than the date of en-
actment of section 45(d)(2)(C)(i) (October
22, 2004), and (ii) if the owner of the
facility is not the producer of the electric-
ity, the person eligible for the credit al-
lowable under section 45(a) is the lessee
or the operator of the facility.
Section 45(d)(3)(A) defines a qualified
facility using open-loop biomass to pro-
duce electricity as any facility owned by
the taxpayer which (i) in the case of a
facility using agricultural livestock waste
nutrients, (I) is originally placed in service
after the date of enactment of section
45(d)(3)(A)(i)(I) (October 22, 2004) and
the construction of which begins before
January 1, 2017, and (II) the nameplate
capacity rating of which is not less than
150 kilowatts, and (ii) in the case of any
other facility, the construction of which
begins before January 1, 2017. In the case
of any facility described in section
45(d)(3)(A), if the owner of the facility is
not the producer of the electricity, section
45(d)(3)(C) provides that the person eligi-
ble for the credit allowable under section
45(a) is the lessee or the operator of the
facility.
Section 45(d)(4) defines a qualified fa-
cility using geothermal energy to produce
electricity as any facility owned by the
taxpayer which is originally placed in ser-
vice after the date of enactment of section
45(d)(4) (October 22, 2004) and the con-
struction of which begins before January
1, 2017. A qualified facility using geother-
mal energy does not include any property
described in section 48(a)(3) the basis of
which is taken into account by the tax-
payer for purposes of determining the en-
ergy credit under section 48.
Section 45(d)(5) defines a qualified fa-
cility using small irrigation power to pro-
duce electricity as any facility owned by
the taxpayer which is originally placed in
service after the date of enactment of sec-
tion 45(d)(5) (October 22, 2004) and be-
fore October 3, 2008.
Section 45(d)(6) defines a qualified fa-
cility using gas derived from the biodeg-
radation of municipal solid waste to pro-
duce electricity as any facility owned by
the taxpayer which is originally placed in
service after the date of enactment of sec-
tion 45(d)(6) (October 22, 2004) and the
construction of which begins before Jan-
uary 1, 2017.
Section 45(d)(7) defines a qualified fa-
cility (other than a facility described in
section 45(d)(6)) that burns municipal
solid waste to produce electricity as any
facility owned by the taxpayer which is
originally placed in service after the date
of enactment of section 45(d)(7) (October
22, 2004) and the construction of which
begins before January 1, 2017. A qualified
facility burning municipal solid waste in-
cludes a new unit placed in service in
connection with a facility placed in ser-
vice on or before the date of enactment of
section 45(d)(7), but only to the extent of
the increased amount of electricity pro-
duced at the facility by reason of such new
unit.
Section 45(d)(8) provides, in the case
of a facility that produces refined coal
(other than a facility producing steel in-
dustry fuel), the term “refined coal pro-
duction facility” means any facility pro-
ducing refined coal placed in service after
the date of the enactment of the American
Jobs Creation Act of 2004 (October 22,
2004) and before January 1, 2012.
Section 45(d)(9) defines a qualified fa-
cility producing qualified hydroelectric
production described in section 45(c)(8)
as (i) any facility producing incremental
hydropower production, but only to the
extent of its incremental hydropower pro-
duction attributable to efficiency improve-
ments or additions to capacity described
in section 45(c)(8)(B) placed in service
after the date of enactment of section
45(d)(9)(A)(i) (August 8, 2005) and be-
fore January 1, 2017, and (ii) any other
facility placed in service after the date of
enactment of section 45(d)(9)(A)(ii) (Au-
gust 8, 2005) and the construction of
which begins before January 1, 2017. Sec-
tion 45(d)(9)(B) provides that, in the case
of a qualified facility described in section
45(d)(9)(A), the 10-year period referred to
in section 45(a) is treated as beginning on
the date the efficiency improvements or
additions to capacity are placed in service.
Section 45(d)(9)(C) provides that for pur-
poses of section 45(d)(9)(A)(i), an effi-
ciency improvement or addition to capac-
ity is treated as placed in service before
January 1, 2017, if the construction of
such improvement or addition begins be-
fore such date.
Section 45(d)(11) provides in the case
of a facility producing electricity from
marine and hydrokinetic renewable en-
ergy, the term “qualified facility” means
any facility owned by the taxpayer which
(A) has a nameplate capacity rating of at
least 150 kilowatts, and (B) which is orig-
inally placed in service on or after the date
of the enactment of section 45(d)(11)(B)
(October 3, 2008) and the construction of
which begins before January 1, 2017.
Section 45(e)(8)(A) provides that the
refined coal production credit is an
amount equal to $4.375 per ton of quali-
fied refined coal (i) produced by the tax-
payer at a refined coal production facility
during the 10-year period beginning on
the date the facility was originally placed
in service, and (ii) sold by the taxpayer (I)
to an unrelated person and (II) during
the 10-year period and the tax year.
Section 45(e)(8)(B) provides that the
amount of credit determined under sec-
tion45(e)(8)(A) is reduced by an amount
which bears the same ratio to the amount
of the increase as (i) the amount by which
the reference price of fuel used as feed-
stock (within the meaning of section
Bulletin No. 2017–22May 30, 2017
1257

45(c)(7)(A)) for the calendar year in
which the sale occurs exceeds an amount
equal to 1.7 multiplied by the reference
price for such fuel in 2002, bears to (ii)
$8.75.
Section 45(e)(2)(A) requires the Secre-
tary to determine and publish in the Fed-
eral Register each calendar year the infla-
tion adjustment factor and the reference
price for the calendar year. The inflation
adjustment factor and the reference prices
for the 2017 calendar year were published
in the Federal Register on April 12, 2017.
Section 45(e)(2)(B) defines the infla-
tion adjustment factor for a calendar year
as the fraction the numerator of which is
the GDP implicit price deflator for the
preceding calendar year and the denomi-
nator of which is the GDP implicit price
deflator for the calendar year 1992. The
term “GDP implicit price deflator” means
the most recent revision of the implicit
price deflator for the gross domestic prod-
uct as computed and published by the
Department of Commerce before March
15 of the calendar year.
Section 45(e)(2)(C) provides that the
reference price is the Secretary’s determi-
nation of the annual average contract price
per kilowatt hour of electricity generated
from the same qualified energy resource
and sold in the previous year in the
United States. Only contracts entered
into after December 31, 1989, are taken
into account.
Under section 45(e)(8)(C), the determi-
nation of the reference price for fuel used as
feedstock within the meaning of section
45(c)(7)(A) is made according to rules sim-
ilar to the rules under section 45(e)(2)(C).
INFLATION ADJUSTMENT
FACTOR AND REFERENCE
PRICES
The inflation adjustment factor for cal-
endar year 2017 for qualified energy re-
sources and refined coal is 1.5792.
The reference price for calendar year
2017 for facilities producing electricity
from wind (based upon information pro-
vided by the Department of Energy) is
4.55 cents per kilowatt hour. The refer-
ence prices for fuel used as feedstock
within the meaning of section 45(c)(7)(A),
relating to refined coal production (based
upon information provided by the Depart-
ment of Energy) are $31.90 per ton for
calendar year 2002 and $51.09 per ton for
calendar year 2017. The reference prices
for facilities producing electricity from
closed-loop biomass, open-loop biomass,
geothermal energy, small irrigation
power, municipal solid waste, qualified
hydropower production, and marine and
hydrokinetic energy have not been deter-
mined for calendar year 2017.
PHASEOUT CALCULATION
Because the 2017 reference price for
electricity produced from wind (4.55 cents
per kilowatt hour) does not exceed 8 cents
multiplied by the inflation adjustment fac-
tor (1.5792), the phaseout of the credit
provided in section 45(b)(1) does not ap-
ply to such electricity sold during calendar
year 2017. However, refer to section
45(b)(5) for an additional phaseout of the
credit for wind facilities the construction
of which begins after December 31, 2016.
Because the 2017 reference price of fuel
used as feedstock for refined coal ($51.09)
does not exceed $85.64 (which is the
$31.90 reference price of such fuel in
2002 multiplied by the inflation adjust-
ment factor (1.5792) and 1.7), the phase-
out of the credit provided in section
45(e)(8)(B) does not apply to refined coal
sold during calendar year 2017. Further,
for electricity produced from closed-loop
biomass, open-loop biomass, geothermal
energy, small irrigation power, municipal
solid waste, qualified hydropower produc-
tion, and marine and hydrokinetic energy,
the phaseout of the credit provided in sec-
tion 45(b)(1) does not apply to such elec-
tricity sold during calendar year 2017.
CREDIT AMOUNT BY QUALIFIED
ENERGY RESOURCE AND
FACILITY AND REFINED COAL
As required by section 45(b)(2), the 1.5
cent amount in section 45(a)(1), and the
$4.375 amount in section 45(e)(8)(A) are
each adjusted by multiplying such amount
by the inflation adjustment factor for the
calendar year in which the sale occurs. If
any amount as increased under the preced-
ing sentence is not a multiple of 0.1 cent,
such amount is rounded to the nearest
multiple of 0.1 cent. In the case of elec-
tricity produced in open-loop biomass fa-
cilities, small irrigation power facilities,
landfill gas facilities, trash facilities, qual-
ified hydropower facilities, and marine
and hydrokinetic renewable energy facil-
ities, section 45(b)(4)(A) requires the
amount in effect under section 45(a)(1)
(before rounding to the nearest 0.1 cent) to
be reduced by one-half. Under the calcu-
lation required by section 45(b)(2), the
credit for renewable electricity production
for calendar year 2017 under section 45(a)
is 2.4 cents per kilowatt hour on the sale
of electricity produced from the qualified
energy resources of wind, closed-loop
biomass, and geothermal energy, and 1.2
cents per kilowatt hour on the sale of
electricity produced in open-loop biomass
facilities, small irrigation power facilities,
landfill gas facilities, trash facilities, qual-
ified hydropower facilities, and marine
and hydrokinetic energy facilities. Under
the calculation required by section 45(b)(2),
the credit for refined coal production
for calendar year 2017 under section
45(e)(8)(A) is $6.909 per ton on the sale
of qualified refined coal.
DRAFTING AND CONTACT
INFORMATION
The principal author of this notice is
Jennifer A. Records of the Office of As-
sociate Chief Counsel (Passthroughs &
Special Industries). For further informa-
tion regarding this notice contact Ms. Re-
cords at (202) 317-6853 (not a toll-free
number).
26 CFR 601.201: Rulings and Determination Letters
(Also: Part I, §§ 355 and 361.)
Rev. Proc. 2017–38
SECTION 1. PURPOSE
This revenue procedure modifies Rev.
Proc. 2017–3, 2017–1 I.R.B. 130, which
sets forth areas of the Internal Revenue
Code (Code) on which the Internal Reve-
nue Service (Service) will not issue letter
rulings or determination letters (no-rule
areas).
SECTION 2. BACKGROUND
In the interest of sound tax administra-
tion, the Service answers written inquiries
from individuals and organizations re-
garding the tax effects of their acts or
transactions by issuing letter rulings or
determination letters. See sections 2.01
May 30, 2017Bulletin No. 2017–22
1258

and 2.03 of Rev. Proc. 2017–1, 2017–1
I.R.B. 1. There are, however, areas in
which the Service will not issue letter
rulings or determination letters because
the issues are inherently factual or for
other reasons. The Service publishes guid-
ance setting forth these no-rule areas
throughout the year and incorporates them
annually into the third revenue procedure
of the year, currently Rev. Proc. 2017–3.
Section 5 of Rev. Proc. 2017–3 sets
forth those areas in which the Service is
temporarily not issuing rulings or deter-
mination letters because those matters are
under study. Section 2.01 of Rev. Proc.
2017–3.
SECTION 3. PROCEDURE
Rev. Proc. 2017–3, 2017–1 I.R.B 130,
is modified by deleting section 5.01(4)
(providing that whether § 355 or § 361
applies to a distributing corporation’s dis-
tribution of stock or securities of a con-
trolled corporation in exchange for, and in
retirement of, any putative debt of the
distributing corporation if such distribut-
ing corporation debt is issued in anticipa-
tion of the distribution, is an area under
study in which a ruling letter will not
be issued) and section 5.01(6) (cross-
referencing section 5.01(4)).
The Service continues to study matters
concerning issues in this area. However, it
has been determined that issuing private
letter rulings or determination letters in
this area would be in the interest of sound
tax administration.
SECTION 4. EFFECTIVE DATE
This revenue procedure is effective
May 9, 2017.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2017–3 is modified.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Jean R. Broderick of the Of-
fice of Associate Chief Counsel (Corpo-
rate). For further information regarding
this revenue procedure contact John P.
Stemwedel on (202) 317-5363 (not a toll-
free number).
Bulletin No. 2017–22May 30, 2017
1259

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2017–22May 30, 2017
i

Numerical Finding List
1
Bulletin 2017–1 through 2017–22
Action on Decision:
2017-1, 2017-7 I.R.B.868
2017-2, 2017-15 I.R.B.1072
2017-3, 2017-15 I.R.B.1072
2017-4, 2017-15 I.R.B.1073
Announcements:
2017-01, 2017-08 I.R.B.941
2017-02, 2017-10 I.R.B.1007
2017-03, 2017-15 I.R.B.1077
2017-04, 2017-16 I.R.B.1106
Notices:
2017-1, 2017-2 I.R.B.367
2017-2, 2017-4 I.R.B.539
2017-3, 2017-2 I.R.B.368
2017-4, 2017-4 I.R.B.541
2017-5, 2017-6 I.R.B.779
2017-6, 2017-3 I.R.B.422
2017-7, 2017-3 I.R.B.423
2017-8, 2017-3 I.R.B.423
2017-9, 2017-4 I.R.B.542
2017-10, 2017-4 I.R.B.544
2017-12, 2017-5 I.R.B.742
2017-13, 2017-6 I.R.B.780
2017-14, 2017-6 I.R.B.783
2017-15, 2017-6 I.R.B.783
2017-16, 2017-7 I.R.B.913
2017-17, 2017-15 I.R.B.1074
2017-18, 2017-9 I.R.B.997
2017-19, 2017-9 I.R.B.1000
2017-20, 2017-11 I.R.B.1010
2017-21, 2017-13 I.R.B.1026
2017-22, 2017-13 I.R.B.1033
2017-23, 2017-16 I.R.B.1100
2017-24, 2017-17 I.R.B.1127
2017-25, 2017-17 I.R.B.1127
2017-26, 2017-17 I.R.B.1129
2017-27, 2017-19 I.R.B.1232
2017-28, 2017-19 I.R.B.1235
2017-29, 2017-20 I.R.B.1243
2017-30, 2017-21 I.R.B.1248
2017-31, 2017-22 I.R.B.1253
2017-32, 2017-22 I.R.B.1255
2017-33, 2017-22 I.R.B.1256
Proposed Regulations:
REG-137604-07, 2017-7 I.R.B.923
REG-128276-12, 2017-2 I.R.B.369
REG-103477-14, 2017-5 I.R.B.746
REG-112324-15, 2017-4 I.R.B.547
REG-127203-15, 2017-7 I.R.B.918
REG-131643-15, 2017-6 I.R.B.865
Proposed Regulations:—Continued
REG-134438-15, 2017-2 I.R.B.373
REG-112800-16, 2017-4 I.R.B.569
REG-123829-16, 2017-5 I.R.B.764
REG-123841-16, 2017-5 I.R.B.766
REG-133353-16, 2017-2 I.R.B.372
REG-134247-16, 2017-5 I.R.B.744
REG-135122-16, 2017-9 I.R.B.1005
Revenue Procedures:
2017-1, 2017-1 I.R.B.1
2017-2, 2017-1 I.R.B.106
2017-3, 2017-1 I.R.B.130
2017-4, 2017-1 I.R.B.146
2017-5, 2017-1 I.R.B.230
2017-7, 2017-1 I.R.B.269
2017-12, 2017-3 I.R.B.424
2017-13, 2017-6 I.R.B.787
2017-14, 2017-3 I.R.B.426
2017-15, 2017-3 I.R.B.437
2017-16, 2017-3 I.R.B.501
2017-18, 2017-5 I.R.B.743
2017-19, 2017-7 I.R.B.913
2017-21, 2017-6 I.R.B.791
2017-22, 2017-6 I.R.B.863
2017-23, 2017-7 I.R.B.915
2017-24, 2017-7 I.R.B.916
2017-25, 2017-14 I.R.B.1039
2017-26, 2017-13 I.R.B.1036
2017-27, 2017-14 I.R.B.1042
2017-28, 2017-14 I.R.B.1061
2017-29, 2017-14 I.R.B.1065
2017-30, 2017-18 I.R.B.1131
2017-31, 2017-16 I.R.B.1104
2017-32, 2017-17 I.R.B.1109
2017-33, 2017-19 I.R.B.1236
2017-35, 2017-21 I.R.B.1250
2017-36, 2017-21 I.R.B.1251
2017-37, 2017-21 I.R.B.1252
2017-38, 2017-22 I.R.B.1258
Revenue Rulings:
2017-1, 2017-3 I.R.B.377
2017-2, 2017-2 I.R.B.364
2017-3, 2017-4 I.R.B.522
2017-4, 2017-6 I.R.B.776
2017-5, 2017-9 I.R.B.1000
2017-6, 2017-12 I.R.B.1011
2017-7, 2017-10 I.R.B.1009
2017-8, 2017-14 I.R.B.1037
2017-9, 2017-21 I.R.B.1244
2017-10, 2017-17 I.R.B.1108
2017-11, 2017-19 I.R.B.1230
Treasury Decisions:
9794, 2017-2 I.R.B.273
9795, 2017-2 I.R.B.326
Treasury Decisions:—Continued
9796, 2017-3 I.R.B.380
9801, 2017-2 I.R.B.355
9802, 2017-2 I.R.B.361
9803, 2017-3 I.R.B.384
9804, 2017-3 I.R.B.406
9806, 2017-4 I.R.B.524
9807, 2017-5 I.R.B.573
9808, 2017-5 I.R.B.580
9809, 2017-5 I.R.B.664
9810, 2017-6 I.R.B.775
9811, 2017-7 I.R.B.869
9814, 2017-7 I.R.B.878
9815, 2017-9 I.R.B.944
9817, 2017-9 I.R.B.968
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016 –27 through 2016 –52 is in Internal Revenue Bulletin
2016 –52, dated December 26, 2016.
May 30, 2017Bulletin No. 2017–22
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2017–1 through 2017–22
Notices:
2002-1
Amplified by
Notice 2017-1, 2017-2 I.R.B.367
2010-46
Obsoleted by
Notice 2017-1, 2017-2 I.R.B.367
2016-29
Modified by
Notice 2017-6, 2017-3 I.R.B.422
Revenue Procedures:
2013-22
Clarified by
Rev. Proc. 2017-18, 2017-05 I.R.B.743
2015-57
Modified by
Rev. Proc. 2017-24, 2017-07 I.R.B.916
2017-3
Modified by
Rev. Proc. 2017-38, 2017-22 I.R.B.1258
Treasury Decisions:
2010-46
Obsoleted by
T.D. 9815 2017-09 I.R.B.944
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016 –27 through 2016 –52 is in Internal Revenue Bulletin
2016 –52, dated December 26, 2016.
Bulletin No. 2017–22May 30, 2017
iii

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available atwww.irs.gov/irb/.
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